VOTING AGREEMENT
This VOTING AGREEMENT (the "AGREEMENT") is made and entered into this 26th
day of July 1999, by and among DAOU Systems, Inc., a Delaware corporation (the
"COMPANY"), Daniel J. Daou and Georges J. Daou (the "SHAREHOLDERS"), and the
persons listed on EXHIBIT A hereto (the "INVESTORS").
WITNESSETH:
WHEREAS, the Shareholders are the beneficial owners of shares of the Common
Stock of the Company; and
WHEREAS, the Company proposes to sell shares of its Series A Preferred
Stock (the "SERIES A PREFERRED STOCK") to the Investors pursuant to the Series A
Preferred Stock Purchase Agreement of even date herewith (the "FINANCING"); and
WHEREAS, in connection with the consummation of the Financing, the Company,
the Shareholders and the Investors have agreed to provide for the future voting
of capital stock of the Company, solely with respect to (1) the election of
directors of the Company, as set forth below, and (2) certain corporate
transactions, described below;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
VOTING
1.01. The Shareholders each agree to hold all shares of voting capital
stock of the Company registered in their respective names or beneficially owned
by them as of the date hereof or hereafter acquired (hereinafter collectively
referred to as the "VOTING SHARES") subject to, and to vote the Voting Shares in
accordance with, the provisions of this Agreement.
1.02. Each time the shareholders of the Company meet, or act by written
consent in lieu of meeting, for the purpose of electing directors, each of the
Shareholders agrees to vote the Voting Shares and to otherwise use their
respective best efforts for the election of one nominee designated by Galen
Partners III, L.P. ("GALEN") as a director of the Company (collectively, the
"INVESTORS' NOMINEE").
Each of the Shareholders shall vote for the Investors' Nominee as many of
the Voting Shares as are necessary to elect such Nominee as a director of the
Company, assuming that each Investor also votes all of its shares as set forth
in this Section 1.02. The Company shall furnish written notice to the
Shareholders and the Investors at least twenty (20) days prior to any such
meeting or proposed action by written consent in lieu of meeting. Galen shall
furnish written notice to each of the Shareholders and to the Board of
Directors, no later than ten (10) days following receipt of the Company's notice
of any such meeting, or proposed action by written
consent in lieu of meeting, of the name of the Investor's Nominee designated
by them. In the absence of such notice, the director then serving on behalf
of and/or previously nominated by Galen in accordance with this Section 1.02
shall be deemed to be the Investors' Nominee.
1.03. Each time the shareholders of the Company meet, or act by written
consent in lieu of meeting, for the purpose of voting on the dissolution and
liquidation of the Company or a merger or consolidation of the Company with or
into, or the sale of all or substantially all of the Company's Common Stock or
assets to another corporation or entity (each, a "LIQUIDATION"), each of the
Shareholders agrees to vote the Voting Shares and to otherwise use their
respective best efforts in favor of such Liquidation, provided that a majority
of directors then constituting the Board of Directors have voted to approve such
Liquidation.
1.04. Except as provided by this Agreement, each Shareholder shall
exercise the full rights of a shareholder with respect to the Voting Shares.
ARTICLE II
EFFECT; TERMINATION
2.01. This Agreement shall continue in full force and effect with respect
to the Voting Shares from the date hereof through the earliest of the following
dates, on which it shall terminate in its entirety;
(a) ten (10) years from the date hereof;
(b) the date as of which Investors holding at least a majority
in interest of all shares of the Company's stock then held by all Investors
agree in writing to the termination of this Agreement;
(c) the date as of which Galen, together with its affiliates,
cease to hold, in the aggregate, at least twenty-five percent (25%) of the
Series A Preferred Stock which it originally purchased in the Financing or a
corresponding amount of the Company's Common Stock into which the Series A
Preferred Stock is convertible.
ARTICLE III
MISCELLANEOUS
3.01. Each Shareholder represents and warrants to the Investors hereto
that such Shareholder has full power and capacity to execute, deliver and
perform this Agreement, which has been duly executed and delivered by, and
evidences the valid and binding obligation of, such Shareholder enforceable in
accordance with its terms, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors.
3.02. The parties hereto hereby declare that the terms of this Agreement
shall be specifically enforceable.
-2-
3.03. This Agreement, and the rights of the parties hereto, shall be
governed by and construed in accordance with the laws of the State of Delaware.
3.04. This Agreement may be amended only by an instrument in writing
signed by a majority in interest of the Investors, provided that no amendment
shall be made which would adversely affect a Shareholder without such
Shareholder's written consent.
3.05. If any provision of this Agreement is held to be invalid or
unenforceable, the validity and enforceability of the remaining provisions of
this Agreement shall not be affected thereby.
3.06. This Agreement may be executed in one or more counterparts, each of
which will be deemed an original but all of which together shall constitutes one
and the same agreement.
3.07. No waivers of any breach of this Agreement extended by any party
hereto to any other party shall be construed as a waiver of any rights or
remedies of any other party hereto or with respect to any subsequent breach.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-3-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
DAOU SYSTEMS, INC.
By: /s/ Larry D. Grandia
------------------------------------
President
SHAREHOLDERS:
/s/ Georges J. Daou
---------------------------------------
Georges J. Daou
/s/ Daniel J. Daou
---------------------------------------
Daniel J. Daou
INVESTORS:
GALEN PARTNERS III, L.P.
By: /s/ Bruce F. Wesson
------------------------------------
Title
----------------------------------
GALEN PARTNERS INTERNATIONAL III,
By: /s/ Bruce F. Wesson
------------------------------------
Title
----------------------------------
GALEN EMPLOYEE FUND III, L.P.
By: /s/ Bruce F. Wesson
------------------------------------
Title
----------------------------------
-4-
[SIGNATURE PAGE TO VOTING AGREEMENT]
-5-
EXHIBIT A
TO
VOTING AGREEMENT
Galen Associates III, L.P.
Galen Associates International III, L.P.
Galen Employee Fund III, L.P.
-6-