Exhibit 10.33

 

AMENDMENT NO. 1 TO

 

SEPARATION AGREEMENT AND GENERAL RELEASE

 

This Amendment No. 1 (this “Amendment”) to the Separation Agreement and General
Release documents an agreement by and between Daou Systems, Inc., a Delaware
corporation (the “Company”), and Neil R. Cassidy (“Executive”) that became
effective March 31, 2003.

 

WHEREAS, the Company and Executive have entered into that certain Separation
Agreement and General Release (the “Separation Agreement and General Release”)
by and between the Company and Executive dated December 31, 2002; and

 

WHEREAS, the Company determined that it is in the best interest of the Company,
and the Executive has agreed, to extend the date that Executive will resign his
position as the Chief Financial Officer of the Company; and

 

WHEREAS, on March 31, 2003, the Company and the Executive agreed to amend the
Separation Agreement and Release in the manner set forth in this Amendment; and

 

WHEREAS, the members of the Company’s Board of Directors, and the Compensation
Committee of the Company’s Board of Directors, have heretofore approved the
execution and delivery of this Amendment;

 

NOW THEREFORE, the parties hereto, in consideration of the promises and mutual
covenants and agreements contained herein, and other good and valuable
consideration, voluntarily and knowingly, and intending to be legally bound
hereby, covenant and agree as follows:

 

1. Date of Resignation. Recital A of the Separation Agreement and General
Release shall be amended and restated in its entirety to read as follows:

 

“Cassidy will resign his position as Chief Financial Officer of the Company
effective June 30. 2003 (the “Separation Date”). As of the Separation Date,
Cassidy’s rights and obligations as an employee will cease, except as set forth
in this Agreement.”

 

2. Bonus Payment. Section 1.2 of the Separation Agreement and General Release is
hereby amended by deleting the language “After execution of this Agreement,” and
by inserting in place of that language “After the Separation Date,”. In addition
to the Severance Payment specified in Section 1.2 of the Separation Agreement
and General Release, Cassidy shall receive a bonus payment in the amount of
$25,000 to be paid on June 15, 2003.

 

3. Section 1.5 of the Separation Agreement and General Release shall be amended
and restated in its entirety to read as follows:

 

“Stock Options and Restricted Share. On the Separation Date, all unexercised
stock options previously granted to Cassidy which have not vested as of the
Separation Date and which are set forth on Exhibit A, will not expire but shall
continue in effect and shall expire on the date set forth in the related stock
option agreement; and any unvested stock options among the Options granted to
Cassidy on May 17, 2002 immediately will vest and become exercisable on the
Separation Date. Executive purchased 150,000 restricted shares of Executive’s
common stock, par value $.001 per share (the “Shares”) in accordance with the
terms of the Restricted Stock Agreement (the “Purchase Agreement”). Upon
execution of this Agreement, Cassidy shall acquire a vested interest in and the
Company’s Right of Repurchase shall lapse with respect to all of the Shares. In
all other respects, the Purchase Agreement remains in full force and effect.”

 

1

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

4. Successors and Assigns. Executive and the Company understand and agree that
this Agreement shall bind and benefit their heirs, employees, parent
corporation, subsidiaries, affiliates, controlled corporations, sister
corporations, agents, representatives, predecessors, successors, and assigns.
The Company’s successors shall include (without limitation) any person,
corporation or other entity who or which enters into a Corporate Transaction
with the Company (hereinafter “Company Successor”). For purposes of this
Agreement, a “Corporate Transaction” is defined to mean a transaction in which
any person, corporation or other entity acquires, directly or indirectly, all or
substantially all of the stock, business or assets of the Company, whether by
way of merger, consolidation, sale, transfer or otherwise.

 

5. Entire Agreement. This Amendment and the Separation Agreement and General
Release set forth the entire understanding among the parties hereto, and shall
supercede all prior employment, severance and change of control agreements and
any related agreements that Executive has with the Company or any subsidiary, or
any predecessor company.

 

6. No Other Changes. Upon signing, this Amendment is incorporated into the
Separation Agreement and General Release by reference herein, and, except as
expressly modified hereby, all other terms of the Separation Agreement and
General Release remain the same unless agreed to in writing.

 

7. Severability. In the event that any provision or portion of this Amendment or
the Separation Agreement and General Release shall be determined to be invalid
or unenforceable for any reason, in whole or in part, the remaining provisions
of this Amendment and the Separation Agreement and General Release shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.

 

8. Survivorship. The respective rights and obligations of the parties hereunder
shall survive any termination of this Amendment or the Separation Agreement and
General Release to the extent necessary to the intended preservation of such
rights and obligations.

 

IN WITNESS WHEREOF, the Company and Executive have executed this Amendment on
and as of the date set forth below.

 

DAOU SYSTEMS, INC.

           

/s/    DANIEL J. MALCOLM        

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

      Date  

June 25, 2003

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

Daniel J. Malcolm,

Chief Executive Officer

           

 

EXECUTIVE

           

/s/    NEIL R. CASSIDY        

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

      Date  

June 25, 2003

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

Neil R. Cassidy            

 

2