Exhibit 10.1

Fursa Alternative Strategies LLC

200 Park Avenue, 54th Floor

New York, NY 10166

January 31, 2007

Via Telecopy and Overnight Express

Integral Systems, Inc.

5000 Philadelphia Way, Suite A

Lanham, MD 20706-4417

Attention: Mr. Peter Gaffney

Dear Pete:

This will confirm that Fursa Alternative Strategies LLC (“Fursa”), William F.
Harley, III (“Harley”) and Chartwell Capital Investors II, L.P. (“Chartwell”)
will not initiate or support a change in the membership of the Board of Integral
Systems, Inc. (“Integral”) prior to 2008 in view of our mutual commitment to the
following effect:

 

  •  

By prompt Board action, Integral will undo the by-law changes made by the
Company in the Summer of 2006, including de-staggering the Board and reinstating
the prior by-laws regarding the calling of special meetings and removing
directors as they existed prior to March, 2006 (except that the changes made by
Integral last summer to the section of the by-laws addressing the conduct of
meetings (Section 8 of Article II) shall remain in effect).

 

  •  

Harley will join the Board at the next Board meeting, now scheduled for
February 7, 2007 (but in any event, by a date sufficiently prior to the Annual
Meeting this April to permit the Company to timely provide its proxy materials),
and will be included in the Company’s slate of Directors recommended for
election at that Annual Meeting.

 

  •  

Prior to mailing proxy materials for the next Annual Meeting, the Board will
agree upon a slate of eight (8) directors for election at such meeting, of which
Harley will be one (1), and the remaining seven (7) other nominees will be
currently serving Directors. A new outside Chairman would be selected from among
the existing Directors by the Board prior to the Annual Meeting.

 

  •  

Beginning at the next Board meeting, the entire Board will work together to
identify available strategic alternatives, and set goals for enhancing
shareholder value, including potential acquisitions, mergers, dispositions,
recapitalizations and plans for internal growth.

 

  •  

Chartwell agrees to withdraw its shareholder proposal submitted to Integral on
November 17, 2006.

 

  •  

Harley will honor his responsibilities as a Director of Integral including
confidentiality of Board deliberations and of Integral’s proprietary
information. Harley acknowledges that his responsibilities include compliance
with Integral’s Insider Trading Policy.

 

  •  

The next Annual Meeting will be conducted in accordance with the provisions of
the Addendum attached hereto.

--------------------------------------------------------------------------------

Integral Systems, Inc.

January 31, 2007

Page 2

 

While Harley is a member of the Board, and the Company agrees to include him in
its slate for election at the upcoming Annual Meeting, Harley, Fursa and
Chartwell will abide by the foregoing commitment with the understanding and on
the condition that the Company will do likewise. As the obligations of the
parties hereto are interdependent, any failure by the Company to honor the
foregoing commitment shall release Harley, Fursa and Chartwell from their
respective commitments. As fiduciaries for our investors, we note that nothing
here binds Fursa to vote its shares in any particular manner on any issue
requiring shareholder action, except that Fursa will agree to vote for the Slate
of Directors described above.

[Remainder of Page Intentionally Blank]

--------------------------------------------------------------------------------

Integral Systems, Inc.

January 31, 2007

Page 3

 

 

Very truly yours, Fursa Alternative Strategies LLC By:  

/s/ William F. Harley, III

Name:   William F. Harley, III Title:   Chief Investment Officer

 

Chartwell Capital Investors II, L.P. By:  

/s/ Kenneth E. Purcell

Name:   Kenneth E. Purcell Title:   Managing Director

 

William F. Harley, III, Individually

/s/ William F. Harley, III

AGREED:

 

Integral Systems, Inc. By:  

/s/ Peter J. Gaffney

Name:   Peter J. Gaffney Title:   Chief Executive Officer

--------------------------------------------------------------------------------

Addendum

Agreement Governing Conduct of Annual Meeting

1. The chairman of the meeting (the “Chairman”) of the 2007 Annual Meeting of
Stockholders of Integral Systems, Inc., currently scheduled to be held in April
2007 (together with any adjournment(s) or postponement(s) of such Annual
Meeting, the “Meeting”), who will preside at the Meeting, will be designated by
a majority vote of Integral’s Board of Directors. To the extent that this
paragraph 1 is inconsistent with Section 7 of Article II of the Amended and
Restated By-Laws of Integral, as amended and currently in effect (the “Bylaws”),
such Section of the Bylaws shall be amended to the extent necessary to be
consistent with this paragraph 1.

2. The Chairman will be impartial in the conduct of the Meeting, maintain the
orderly conduct of the Meeting, and adhere to this Agreement Governing Conduct
of Meeting.

3. Each of Fursa, Harley, Chartwell and Integral will conduct themselves in a
professional manner and in accordance with this Agreement.

4. Each of Elaine M. Brown and Albert Alderete, or such other person(s) as may
be designated by a majority vote of Integral’s Board of Directors, will be
appointed by Integral’s Board of Directors, with full power of substitution and
resubstitution in each of them, to serve as proxies on behalf of the
stockholders of the Company in connection with the Meeting.

5. The only matters to be voted on by the stockholders of the Company at the
Meeting, and the only business to be considered at the Meeting, shall be as
follows: (1) the election of eight (8) directors and (2) consideration of any
stockholder proposal previously made in accordance with the advance notice
procedures set forth in the By-Laws and not withdrawn prior to the Meeting. Any
other business shall be deemed to have not been properly brought before the
Meeting and shall not be transacted.

6. The Chairman will not accept or consider any motions, nominations or
proposals from the floor.

7. The agenda for the meeting shall be as follows:

 

  A. Meeting called to order

 

  B. Welcoming remarks

 

  C. Procedural matters, including proof of due notice of Meeting, determination
of quorum and examination of proxies, reading and disposing of minutes of last
meeting of stockholders; and announcement of purposes for which the meeting was
called

 

  D. Election of Directors (as set forth in paragraph 5 above)

 

  E. Consideration of Stockholder Proposal (as set forth in paragraph 5 above)

 

i

--------------------------------------------------------------------------------

  F. Question and Answer Period

 

  G. Adjournment

 

  H. Report of Officers to Stockholders

8. During the Question and Answer Period specified in the Agenda set forth in
paragraph 7 above, any stockholder or proxy holder may ask appropriate questions
from the floor and receive appropriate answers, which questions shall not be
more than three (3) minutes. All questions shall be directed to the Chairman who
shall answer them or, if the Chairman shall determine, refer them to the
appropriate person or persons for response. The questioners shall be asked to
identify themselves by name and to state on whose behalf they are speaking, if
other than themselves.

 

ii