Document:

EXHIBIT 4.1

        THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER
ANY STATE SECURITIES LAWS. NEITHER THIS WARRANT NOR ANY OF SUCH SECURITIES MAY BE SOLD, ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER SAID ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR EXEMPTIONS THEREFROM. THIS
WARRANT MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT UPON THE CONDITIONS SPECIFIED IN THIS WARRANT, AND NO SALE, ASSIGNMENT, TRANSFER, OR OTHER DISPOSITION OF THIS WARRANT SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH
CONDITIONS SHALL HAVE BEEN COMPLIED WITH.

DAOU SYSTEMS, INC.

Common Stock Purchase Warrant No. 2000-___

Warrant to Purchase ________ Shares
(subject to adjustment) of Common Stock of
DAOU Systems, Inc. 

Void after 5:00 p.m.
Pacific Time
November ___, 2005

        THIS IS TO CERTIFY THAT, for value received, _________________________ (the “Holder”), upon due exercise of this Warrant, is entitled to purchase from DAOU Systems,
Inc., a Delaware corporation (the “Company”), at any time after the date hereof but prior to 5:00 p.m., Pacific time, on November ____, 2005 (the “Expiration Date”) up to_______________ (______) shares (subject to adjustment as
hereinafter provided) (the “Shares”) of fully paid and non-assessable common stock, par value $.001 per share (the “Common Stock”), of the Company, at an exercise price of $.01 per share (such price as from time to time to be adjusted
as hereinafter provided being referred to herein as the “Exercise Price”). This Warrant is subject to the following terms, provisions and conditions:

        1.  Exercise of Warrant.

        (a)  Subject to subsection 1(b) below, the Holder may exercise this Warrant in whole at any time or in part from time to time, but only in such multiples as are required
to permit the issuance by the Company of one or more full Shares, by surrender of this Warrant with the Form of Subscription attached hereto duly executed to the Company no later than 5:00 P.M. Pacific time on the Expiration Date together with the payment
of the Exercise Price for each of the Shares for which this Warrant is exercised. Payment for the Shares to be purchased upon exercise of this Warrant may be made by wire transfer of Fed Funds or by the delivery of a certified or cashier’s check
payable to the Company for the aggregate Exercise Price of the Shares purchased. In case of the exercise of this Warrant in part prior to the Expiration Date, the Company will deliver to the Holder a new Warrant of like tenor in the name of the Holder
evidencing the right to purchase the number of Shares as to which this Warrant has not been exercised.

        (b)  The Warrant may not be exercised by the Holder unless, at the time of exercise, (i) there is either (A) a registration statement or prospectus covering the Shares
that is effective under (1) the Act and (2) the securities laws of the state of the address of record of such Holder, or (B) an exemption available from such registration for the Warrant exercise and issuance of Shares in the opinion of counsel reasonably
satisfactory to the Company provided by the Holder to the Company, and (ii) such exercise and issuance would otherwise be in compliance with applicable law in the opinion of such counsel provided to the Company. The Warrant may not be, directly or
indirectly, transferred to, or exercised by, any person in any state where such transfer or exercise would violate any law, including securities laws, of such state. Legends as required by applicable federal and state laws may be placed on the
certificates representing the Shares. The Holder agrees to execute such documents and 

instruments as counsel for the Company reasonably deems necessary to effect compliance of the issuance of this Warrant and any Shares issued upon exercise hereof with applicable federal and state securities laws.

        (c)  The exercise of the Warrant will be deemed to have been effected at 5:00 P.M., Pacific time on the day the Holder complies with the terms of subsection 1(a) above.

        2.  Covenants and Conditions.

        (a)  The Company hereby covenants and agrees as follows:

        (i)  All Shares will, upon issuance, be legally and validly issued, fully paid, and non-assessable and free from preemptive rights, all taxes, liens and charges
with respect to the issue thereof.

        (ii)  During the period within which this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of issue upon
exercise of this Warrant, a sufficient number of shares of Common Stock to provide for the exercise of this Warrant.

        (iii)  The Company shall pay all expenses, transfer taxes and other charges payable in connection with the preparation, issue and delivery of stock certificates
issued pursuant to this Warrant, except that, in case such stock certificates shall be registered in a name or names other than the name of the Holder, funds sufficient to pay all stock transfer taxes which shall be payable upon the issuance of such stock
certificate or certificates shall be paid by the Holder at the time of delivering the notice of exercise mentioned above.

        (b)  Neither this Warrant nor the Shares have been registered under the Act or any state securities laws. This Warrant and the Shares have been acquired for investment
purposes and not with a view to distribution or resale and the Shares may not be made subject to a security interest, pledged, hypothecated, sold, or otherwise transferred without an effective registration statement therefor under the Act and such
applicable state securities laws or an opinion of counsel (which opinion and counsel rendering same shall be reasonably acceptable to the Company) that registration is not required under the Act and under any applicable state securities laws. The
certificates representing the Shares shall bear substantially the following legend:

             THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR ANY APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED FOR THE PRIVATE INVESTMENT OF THE HOLDER HEREOF AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED UNTIL A REGISTRATION STATEMENT UNDER THE ACT OR SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE
BECOME EFFECTIVE WITH REGARD THERETO, OR IN THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY REGISTRATION UNDER THE ACT OR SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED OFFER, SALE OR TRANSFER.

        Other legends as required by applicable federal and state laws may be placed on such certificates. The Holder and the Company agree to execute such documents and instruments as
counsel for the Company reasonably deems necessary to effect compliance of the issuance of this Warrant and any Shares issued upon exercise hereof with applicable federal and state securities laws. Holder agrees that the Company may decline to permit a
transfer of this Warrant if the proposed transferee does not meet then applicable qualifications for investors in securities offerings exempt from registration.

        3.  Stock Dividends Reclassifications, Reorganization, Anti-Dilution Provisions, Etc.

This Warrant is subject to the following further provisions:

        (a)  Stock Dividends and Stock Splits. In case, after the date hereof and prior to the expiration of this Warrant by exercise or by its terms, the Company issues
any shares of its Common Stock as a stock dividend or distribution or divides the number of shares of Common Stock, then, in either of such cases, the Exercise Price per share of the Shares purchasable pursuant to this Warrant in effect at the time of
such action will be proportionately reduced and the number of the Shares at that time purchasable pursuant to this Warrant shall be proportionately increased; and conversely, in the event the Company shall combine such shares of its Common Stock into a
smaller 

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number of shares, then, and in such event, the Exercise Price per share of the Shares purchasable pursuant to this Warrant in effect at the time of such action shall be proportionately increased and the number of Shares at that
time purchasable pursuant to this Warrant shall be proportionately decreased.

        (b)  Certain Corporate Events. In case, after the date hereof and prior to the expiration of this Warrant by exercise or by its terms, (i) the Company is
recapitalized by reclassifying its outstanding Common Stock into stock with a different par value or by changing its outstanding Common Stock with par value to stock without par value, (ii) the Company or a successor entity consolidates or merges with or
conveys all or substantially all of its or of any successor entity’s property and assets to one or more, or any combination of, corporations, partnerships, limited liability companies, joint ventures or other entities (any such entity being included
within the meaning of the term “successor entity” in the event of any consolidation or merger of any such entity with, or the sale of all or substantially all of the property of any such entity to, another entity or entities) or (iii) the
Company or a successor entity dissolves, liquidates or winds up its affairs, the Holder of this Warrant will thereafter receive, upon the terms and conditions and during the time specified in this Warrant, in lieu of the Shares theretofore purchasable
upon the exercise of this Warrant, the kind and amount of shares of stock, other securities and/or assets receivable upon such recapitalization or consolidation, merger, conveyance, dissolution, liquidation or winding up by the holder of the number of
shares of Common Stock which the Holder of this Warrant might have purchased, immediately prior to such recapitalization or consolidation, merger, conveyance, dissolution, liquidation or winding up after deduction or payment of the appropriate Exercise
Price.

        (c)  Computation of Adjustments. Upon the occurrence of each event requiring an adjustment of the Exercise Price and/or of the number of Shares purchasable
pursuant to this Warrant in accordance with, and as required by, the terms of this Section 3, the Company shall compute, or if requested by the Holder shall forthwith employ a firm of certified public accountants (who may be the regular accountants for
the Company) who shall compute, the adjusted Exercise Price and the adjusted number of Shares purchasable at such adjusted Exercise Price by reason of such event in accordance with the provisions of this Section 3 and shall prepare a certificate setting
forth such adjusted Exercise Price and the adjusted number of Shares and showing in detail the facts upon which such conclusions are based. All such calculations shall be to the nearest ten-thousandths; provided that any adjusted Exercise Price shall not
be less than the par value for the Common Stock at such time. Any adjusted number of Shares shall be rounded to the nearest whole Share. The Company shall mail forthwith to the Holder of this Warrant a copy of such certificate, and thereafter said
certificate shall be conclusive and shall be binding upon such Holder unless contested by such Holder by written notice to the Company within 10 days after receipt of the certificate by such Holder.

        (d)  Notice. In case:

        (i)  of any classification, reclassification or other reorganization of the capital stock of the Company, consolidation or merger of the Company with or into
another entity where the Company is not the surviving entity, or conveyance of all or substantially all of the assets of the Company;

        (ii)  of the voluntary or involuntary dissolution, liquidation or winding up of the Company; or

        (iii)  of a proposal by the Company to take any action of the type described in this Section 3 (but only if the action of the type described in this
Section 3 would result in an adjustment in the Exercise Price or the number of Shares into which this Warrant is exercisable or a change in the type of securities or property to be delivered upon exercise of this Warrant),

the Company shall give notice to the Holder, which notice shall specify the record date, if any, with respect to any such action and the approximate date on which such action is to take place. Such notice shall also set forth
the facts with respect thereto as shall be reasonably necessary to indicate the effect on the Exercise Price and the number, kind or class of shares or other securities or property which shall be deliverable upon exercise of this Warrant. In the case of
any action which would require the fixing of a record date, such notice shall be given at least 10 days prior to the date so fixed, and in case of all other action, such notice shall be given at least 15 days prior to the taking of such proposed action.
Failure to give such notice, or any defect therein, shall not affect the legality or validity of any such action.

        4.  Non-transferability. Except to an “accredited investor,” as defined under the Securities Act, and in compliance with all applicable federal and
state securities laws, this Warrant may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent and distribution. 

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Any Shares issued hereunder may not be transferred in violation of any applicable securities laws. Any attempted assignment, transfer, pledge, hypothecation or other encumbrance of this Warrant and any Shares issued upon
exercise hereof contrary to the provisions hereof, and any execution, attachment or similar process upon this Warrant, will be null, void and of no effect.

        5.  No Rights or Liabilities as a Shareholder. This Warrant shall not entitle the Holder hereof to any voting rights or other rights whatsoever as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative action by the Holder hereof to purchase the Shares, and no mere enumeration herein of the rights or privileges of the Holder hereof, shall give rise to any liability of such
Holder for the Exercise Price or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

        6.  Loss, Theft, Destruction or Mutilation. Upon receipt by the Company of evidence satisfactory to it (in the exercise of its reasonable discretion) of the
ownership of and the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) of an indemnity from the Holder satisfactory to the Company (in the exercise of its reasonable discretion), and (in the case of
mutilation) upon surrender and cancellation thereof, the Company, at its expense, will execute and deliver to the Holder in lieu thereof, a new Warrant of like tenor.

        7.  Register. The Company shall maintain, at its principal office located at 5120 Shoreham Place, San Diego, California 92122 (or such other office or agency of
the Company as it may designate by notice to the Holder hereof), a register for this Warrant, in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each
transferee as may be permitted under the terms of this Warrant and each prior owner of this Warrant.

        8.  Exercise or Transfer Without Registration. Anything in this Warrant to the contrary notwithstanding if, at the time of the surrender of this Warrant in
connection with any exercise, transfer or exchange of this Warrant, this Warrant shall not be registered under the Act and under applicable state securities laws, the Company may require, as a condition of allowing such exercise, transfer or exchange,
that (i) the Holder of this Warrant, furnish to the Company a written opinion of counsel, which opinion and counsel are acceptable to the Company, to the effect that such exercise, transfer or exchange may be made without registration under said Act and
under applicable state securities laws; provided that, if the Holder is the original Holder hereof, no opinion shall be required upon the exercise of this Warrant, and (ii) the Holder execute and deliver to the Company an investment letter in form and
substance acceptable to the Company. The Holder of this Warrant, by taking and holding the same, hereby represents to the Company that such Holder is an “accredited investor” as defined under the Act and is acquiring this Warrant for investment
and not with a view to the distribution thereof.

        9.  Notices. All notices requests and other communications required or permitted to be given or delivered hereunder to the Holder of this Warrant or to the Holder
of Shares acquired upon exercise of this Warrant shall be in writing, and shall be personally delivered or shall be sent by first class, certified or registered mail, postage prepaid and addressed to such Holder at the address shown for such Holder on the
books of the Company, or at such other address as shall have been furnished to the Company by notice from such Holder. All notices, requests and other communications required or permitted to be given or delivered hereunder to the Company shall be in
writing, and shall be personally delivered or shall be sent by first class, certified or registered mail, postage prepaid and addressed, to the office of the Company at 5120 Shoreham Place, San Diego, California 92122, Attention: Corporate Secretary, or
at such other address as shall have been furnished to the Holder of this Warrant or to the Holder of Shares acquired upon exercise of this Warrant by notice from the Company. Any such notice, request, or other communication may be sent by telegram,
facsimile or telex, but shall in such case be subsequently confirmed by a writing personally delivered or sent by first class, certified or registered mail as provided above. All notices, requests, and other communications shall be deemed to have been
given either at the time of the delivery thereof to (or the receipt by, in the case of a telegram, facsimile or telex) the person entitled to receive such notice at the address of such person for purposes of this Section 9, or, if mailed, at the
completion of the third full business day following the time of such mailing thereof to such address, as the case may be.

        10.  Governing Law. This Warrant shall be construed and enforced in accordance with and governed by the laws of the State of Delaware.

        11.  Net Issuable Exchange.

        (a)  In addition to and without limiting the rights of the Holder under the terms of this Warrant, the Holder shall have the right (the “Conversion Right”) to
convert this Warrant or any portion hereof into Shares as 

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provided in this Section 11 at any time or from time to time prior to the Expiration Date. Upon exercise of the Conversion Right with respect to a particular number of Shares subject to this Warrant (the “Converted
Warrant Shares”), the Company shall deliver to the Holder, without payment by the Holder of any exercise price or any cash or consideration other than the surrender of the right to exercise this Warrant as to the Converted Warrant Shares, a number of
Shares determined by multiplying the number of Converted Warrant Shares by the following:

FMV — Exercise Price
FMV

        FMV shall be the Market Price (as defined below) of the Common Stock as of the Conversion Date and the Exercise Price shall be determined as of the close of business on the
Conversion Date (as defined below).

        (b)  For purposes of this Warrant, the “Market Price” of a share of Common Stock as of a particular date shall mean, if the Common Stock is traded on a
securities exchange or quoted on the Nasdaq National Market or the Nasdaq SmallCap Market, the closing sale price of the Common Stock on such exchange or market for the date in question. If the Common Stock is not traded on a securities exchange or quoted
on the Nasdaq National Market or the Nasdaq SmallCap Market, but bid and asked prices in the over-the-counter market are reported by the National Association of Securities Dealers, Inc. Automated Quotations System, Inc. (or if not so reported, by the
National Quotation Bureau Incorporated) for the Common Stock, then the “Market Price” of a share of Common Stock shall be the average mean of such reported bid and asked prices on the date in question. If at any time the Common Stock is not
traded on an exchange or quoted on the Nasdaq National Market or the Nasdaq SmallCap Market or otherwise traded in the over-the-counter market, the Conversion Right may only be exercised once and the Market Price shall be deemed to be the fair market
value thereof determined in good faith by any firm of independent public accountants or a nationally recognized independent investment banking firm selected by the Board of Directors of the Company.

        (c)  The Conversion Right may be exercised by the Holder by surrendering this Warrant at the principal office of the Company together with a written statement specifying
that the Holder thereby intends to exercise the Conversion Right and indicating the number of Shares subject to this Warrant which are being surrendered (referred to in subsection (a) above as the Converted Warrant Shares) in exercise of the
Conversion Right. Such conversion shall be effective upon receipt by the Company of this Warrant together with the aforesaid written statement or on such later date as is specified therein (the “Conversion Date”), but not later than the
Expiration Date. Certificates for the Shares issuable upon exercise of the Conversion Right and, in the case of a partial exercise, a new warrant certificate evidencing the Shares remaining subject to this Warrant shall be issued as of the Conversion Date
and shall be delivered to the Holder within 15 days following the Conversion Date.

        12.  Miscellaneous.

        (a)  Amendments. This Warrant or any provision hereof may not be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by
the party (or any predecessor in interest thereof) against which enforcement of the same is sought.

        (b)  Descriptive Headings. The descriptive headings of the several sections of this Warrant are inserted for purposes of reference only, and shall not affect the
meaning or construction of any of the provisions hereof.

        (c)  Successors and Assigns. This Warrant shall be binding upon any entity succeeding to the Company by merger, consolidation or acquisition of all or
substantially all the Company’s assets.

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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer on this 9th day of November, 2000.

	

	 	  	DAOU SYSTEMS, INC.

		 	By:  	
		 	  	

	
  	 	  	Name:  Neil R. Cassidy 
Title:  Executive Vice President and
             Chief Financial Officer

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FORM OF SUBSCRIPTION

Dated: _________, ___.

To: _______________________________

        The undersigned, pursuant to the provisions set forth in the within Warrant Number ________ hereby agrees to purchase ______ shares of Common Stock covered by such Warrant, and
makes payment herewith in full therefor at the price per share provided by such Warrant in cash or by certified or official bank check in the amount of $_______________. Please issue a certificate of certificates for such shares of Common Stock in the
following name:

        Name:      ________________________

        Address:________________________

                        ________________________

        Signature:_______________________

        Title of Signing Officer or Agent (if any):

Note:	The above signature should correspond exactly with the name on the face of the within Warrant and, if said number of shares of Common Stock shall not be all the shares purchasable under the within Warrant, a new
Warrant is to be issued in the name of said Holder covering the balance of the shares purchasable thereunder.EXHIBIT 10.1

INVESTMENT AGREEMENT

        Agreement entered into as of November 9, 2000, by and between Galen Partners III, L.P., a Delaware limited partnership (“Galen Partners”), Galen Partners International
III, L.P., a Delaware limited partnership (“Galen International”), Galen Employee Fund III, L.P., a Delaware limited partnership (“Employee Fund”), and DAOU Systems, Inc., a Delaware corporation (the “Company”). Galen
Partners, Galen International, Employee Fund, and the Company are referred to collectively herein as the “Parties.”

        WHEREAS, each of Galen Partners, Galen International, and the Employee Fund (collectively, the “Investors”) owns all of the issued and outstanding shares of
Series A Preferred Stock, par value $0.001 per share, of the Company (the “Series A Preferred Stock”) set forth opposite its name on Schedule 1;

        WHEREAS, the Series A Preferred Stock is redeemable at the option of the holders upon the occurrence of certain events; and

        WHEREAS, the Investors have agreed to waive such redemption rights now and hereafter in return for the grant of certain warrants to purchase common stock, par value $0.001
per share, of the Company (the “Common Stock”) and the payment of $2,000,000 in cash as an advisory fee to Galen Associates, a Delaware general partnership.

        NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein
contained, the Parties agree as follows:

1.  Issuance of Warrants.

        (a)  Basic Transaction. Subject to the terms and conditions of this Agreement, at the Closing (as defined below) the Company will issue to the Investors warrants
exercisable for an aggregate of 3,540,000 shares of the Company’s Common Stock allocated among the Investors as set forth on Schedule 1, which warrants will be substantially in the form set forth on Exhibit A hereto.

        (b)  The Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of DAOU Systems, Inc.
at 5120 Shoreham Place, San Diego, CA 92122, or such other place as the Parties may mutually determine on November 9, 2000 (the “Closing Date”).

2.  Representations And Warranties Concerning The Transaction.

        (a)  Representations and Warranties of the Company. The Company represents and warrants to each Investor that the statements contained in this §2(a) are
correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this §2(a)) with respect to
itself.

              (i)  Organization of the Company. The Company is a corporation duly organized, validly existing, and in good standing under
the laws of the jurisdiction of its formation.

              (ii)  Authorization of Transaction. The Company has full power and authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms. The Company need not give any
notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement.

              (iii)  Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which the Company is subject or any provision of
its charter or bylaws.

        (b)  Representations and Warranties of the Investors. Each Investor represents and warrants to the Company that the statements contained in this §2(b) are
correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date with respect to such Investor (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this
§2(b)).

              (i)  Organization of the Investor; Ownership of Series A Preferred Stock. The Investor is a limited partnership duly formed
and validly existing and in good standing under the laws of the jurisdiction of its incorporation. The Investor owns all of the Series A Preferred Stock set forth opposite its name on Schedule 1 and has not assigned, pledged, hypothecated, or otherwise transferred any of the shares of Series A Preferred Stock acquired from the Company regardless of whether or not set forth on Schedule 1 hereto.

              (ii)  Authorization of Transaction. The Investor has full power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Investor, enforceable against the Investor in accordance with its terms. The Investor need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement.

              (iii)  Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which the Investor is subject or any provision of
its charter documents.

              (iv)  Acquired Entirely for Own Account. This Agreement is made with each Investor in reliance upon such Investor’s
representation to the Company, which by such Investor’s execution of this Agreement such Investor hereby confirms, that the Warrant to be received by such Investor and the Common Stock issuable upon exercise thereof (collectively, the “
Securities”) will be acquired for investment for such Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that such Investor has no present intention of selling, granting
any participation in, or otherwise distributing the same. By executing this Agreement, each Investor further represents that such Investor does not have any contract, undertaking, agreement, or arrangement with any person to sell, transfer, or grant
participations to such
person or to any third person, with respect to any of the Securities.

              (v)  Due Diligence; Disclosure of Information. Each Investor has performed a due diligence investigation of the Company and
its industry. Each Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Securities. Each Investor believes it has received all of the
information it considers necessary in order to enter into this Agreement and consummate the transactions contemplated hereby.

              (vi)  Investment Experience. Each Investor is a professional investor with substantial knowledge about the industry in which
the Company functions. Accordingly, each Investor has such knowledge and experience regarding the industry of the Company and in financial or business matters that it is capable of evaluating fully the merits and risks of the investment in the Securities.
Each Investor acknowledges that it is able to fend for itself and can bear the economic risk of its investment, and each Investor also represents that it has not been organized for the purpose of acquiring the Securities. Each Investor represents and
warrants that it maintains its principal place of business at the address indicated for such Investor on Schedule 1 of this Agreement and that it is organized under the laws of the state of Delaware.

              (vii)  Accredited Investor; Investor Status. Each Investor is an “accredited investor” within the meaning of SEC
Rule 501 of Regulation D, as presently in effect. Each of Galen Partners, Galen International and the Employee Fund is an institutional buyer as referenced in the General Business Law of the State of New York.

              (viii)  Restricted Securities. Each Investor understands that the Securities are characterized as “restricted
securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration
under the Securities Act of 1933, as amended (the “Act”), only in certain limited circumstances. In this connection, each Investor represents that it is familiar with SEC Rule 144, as presently in effect, and understands the resale limitations
imposed thereby and by the Act. In addition, each Investor agrees that it will not transfer any Securities in violation of any state or federal securities law.

              (ix)  Legends. It is understood that the certificates evidencing the Warrant (and the Common Stock issuable upon exercise
thereof) may bear one or all of the following legends as appropriate in substantially the form set forth below:

                     (A)  THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY STATE SECURITIES LAWS. NEITHER THIS WARRANT NOR ANY OF SUCH SECURITIES MAY BE SOLD, ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
REGISTRATION UNDER SAID ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR EXEMPTIONS THEREFROM. THIS WARRANT MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT UPON THE CONDITIONS SPECIFIED IN THIS WARRANT, AND NO SALE, ASSIGNMENT,
TRANSFER, OR OTHER DISPOSITION OF THIS WARRANT SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL SUCH CONDITIONS SHALL HAVE BEEN COMPLIED WITH.

                     (B)  THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED FOR THE PRIVATE INVESTMENT OF THE HOLDER HEREOF AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED UNTIL A REGISTRATION STATEMENT UNDER THE
ACT OR SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR IN THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY REGISTRATION UNDER THE ACT OR SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH
SUCH PROPOSED OFFER, SALE OR TRANSFER.

                     (C)  THE SHARES EVIDENCED HEREBY ARE SUBJECT TO CERTAIN VOTING RIGHTS AND RESTRICTIONS WITH
RESPECT TO THE ELECTIONS OF DIRECTORS AS MORE FULLY SET FORTH IN THE INVESTMENT AGREEMENT, DATED NOVEMBER 9, 2000, BY AND BETWEEN THE CORPORATION AND THE SHAREHOLDERS PARTY THERETO.

                     (D)  Any legend required by the laws of the State of California, including any legend
required by the California Department of Corporations and Sections 417 and 418 of the Code.

                     (E)  Any other legend required to comply with applicable state securities laws.

              (x)  Securities Law Compliance. Each Investor acknowledges and understands that the Company is relying on the representations
and warranties set forth above in this §2 for compliance with applicable federal and state securities laws.

3.  Waiver of Redemptive Rights.

        (a)  Each Investor unequivocally and irrevocably waives any and all rights that such Investor now has, or hereafter may have, pursuant to Section 3 of the Certificate of
Designations, Preferences and Relative Rights of Preferred Stock and Qualifications, Limitations, and Restrictions thereof of Series A Preferred Stock, dated July 22, 1997 (the “Series A Certificate of Designations”) concerning rights of redemption with respect to the Series A Preferred Stock and agrees not to exercise such rights now or in the
future. Each Investor agrees that it shall not transfer any interest in the Series A Preferred Stock unless such transferee agrees to be bound by this Section 3 and shall cause each transferee to comply with this Section 3. In addition, each Investor
agrees (i) to vote its Voting Securities (as defined below) in favor of any amendment to the Company’s Certificate of Incorporat
ion the purpose of which is to remove such provisions from the Series A Certificate of Designations and (ii) to exchange, if so requested by the Board, its Series A Preferred Stock for preferred stock of the Company that is identical to the
Series A Preferred Stock except that such preferred stock does not contain a right of redemption.

        (b)  Each Investor agrees to have the following legend placed on each and every Certificate, either now held by the Investor or hereinafter issued to the Investor,
representing Series A Preferred Stock:

              THESE SHARES EVIDENCED HEREBY ARE SUBJECT TO CERTAIN RESTRICTIONS, INCLUDING RESTRICTIONS ON THEIR RIGHT OF REDEMPTION, AS SET FORTH IN THAT
CERTAIN INVESTMENT AGREEMENT, DATED NOVEMBER 9, 2000 BY AND BETWEEN THE CORPORATION AND THE SHAREHOLDERS PARTY THERETO.

3

4.  Additional Agreements.

        (a)  Voting. Except as otherwise provided herein, each Investor shall take such action as may be required so that all shares of Common Stock, Series A Preferred
Stock or any other securities generally entitled to vote in matters brought before the stockholders of the Company (collectively, the “Voting Securities”) owned directly or indirectly by it or any Affiliate shall be present for quorum purposes,
in person or represented by proxy (or consent) at every meeting of holders of Common Stock (or, if applicable, in any matter to be voted upon by consent of stockholders without a meeting). Nothing set forth in this Section 4(a) shall limit or otherwise
restrict how any Investor votes its Voting Securities at a meeting of stockholders or by consent of stockholders without a meeting.

        (b)  Directorship. Galen Partners shall not nominate more than one person for election to the Board of Directors of the Company if the election of all such
nominees would result in such nominees, if elected, comprising over 25% of the membership of the Board. If at any time, more than one such nominee sits on the Board and such nominees comprise over 25% of the membership of the Board, a sufficient number of
nominees shall promptly resign so that any remaining nominees comprise 25% or less of the membership of the Board. If an Investor nominee resigns or is removed, except if the replacement of such nominee will result in Galen Partners having more than one
nominee on the Board and such nominees will represent over 25% of the membership of the Board, Galen Partners shall be entitled to select a replacement. The Board of Directors shall approve such replacement. Without the consent of Galen Partners, which
such consent
 shall not be unreasonably withheld, the number of Directors constituting the Board of Directors shall not exceed five.

5.  Pre-Closing Covenants. The Parties agree as follows with respect to the period between the execution of this Agreement and the Closing.

        (a)  General. Each of the Parties will use its commercially reasonable efforts to take all action and to do all things necessary in order to consummate and make
effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the closing conditions set forth in §6 below).

        (b)  Notices and Consents. Each of the Parties will give any notices to, make any filings with, and use its commercially reasonable efforts to obtain any
authorizations, consents, and approvals of, governments and governmental agencies in connection with the matters referred to in §2(a)(ii) and (iii) and §2(b)(ii) and (iii), above.

6.  Conditions to Obligation to Close.

        (a)  Conditions to Obligation of the Investors. The obligation of the Investors to consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:

              (i)  the representations and warranties set forth in §2(a) above shall be true and correct in all material respects at and as of
the Closing Date;

              (ii)  the Company shall have performed and complied with all of its covenants hereunder in all material respects through the Closing;
and

              (iii)  there shall not be any injunction, judgment, order, decree, ruling, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement.

Each Investor may waive any condition specified in this §6(a) if it executes a writing so stating at or prior to the Closing.

        (b)  Conditions to Obligation of the Company. The obligation of the Company to consummate the transactions to be performed by it in connection with the Closing is
subject to satisfaction of the following conditions:

              (i)  the representations and warranties set forth in §2(b) above shall be true and correct in all material respects at and as of
the Closing Date;

              (ii)  the Investors shall have performed and complied with all of their covenants hereunder in all material respects through the
Closing; and

4

              (iii)  there shall not be any injunction, judgment, order, decree, ruling, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement.

The Company may waive any condition specified in this §6(b) if it executes a writing so stating at or prior to the Closing.

7.  Termination.

        (a)  The Company and the Investors may terminate this Agreement by mutual written consent at any time prior to the Closing.

        (b)  The Agreement will automatically terminate when the Investor Group beneficially owns less than 10% of the Voting Securities; provided that Sections 2 and 3 hereof
will survive such termination.

8.  Miscellaneous.

        (a)  Press Releases and Public Announcements. No Party shall issue any press release or make any public announcement relating to the subject matter of this
Agreement prior to the Closing without the prior written approval of the other Parties; provided, however, that any Party may make any public disclosure it believes in good faith is required by applicable law.

        (b)  Third Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the Parties, and their respective successors and
permitted assigns.

        (c)  Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties and supersedes any prior
understandings, agreements, or representations by or among the Parties, written or oral, to the extent they have related in any way to the subject matter hereof.

        (d)  Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and
permitted assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other Parties.

        (e)  Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute
one and the same instrument.

        (f)  Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of
this Agreement.

        (g)  Notices. All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given if (and then five business days after) it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below:

	 	If to the Company:	

	 		Daou Systems, Inc.
5120 Shoreham Place
San Diego, California  92122
Attn.:  Chief Financial Officer
Facsimile:  858-452-2789

	 	with a copy to:	Baker & McKenzie
1301 McKinney Street, Suite 3300
Houston, Texas 77010-3019
Attn:  Alan Harvey
Facsimile:  713-427-5099

	 	If to the Investors:	

	 		To the address listed on Schedule 1

5

	 	with a copy to:	Thelen Reid & Priest LLP
40 West 57th Street
New York, New York  10019
Attn:  Peter K. Anglum
Facsimile:  212-603-2001

Any Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any Party may
change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

        (h)  Aggregation of Stock. All shares of the Series A Preferred Stock held or acquired by affiliated entities or persons will be aggregated together for the
purpose of determining the availability of any rights under this Agreement.

        (i)  Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Delaware without giving effect to any
choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

        (j)  Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by each of the Parties.
No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder
or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

        (k)  Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or
enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

        (l)  Expenses. Each of the Parties will bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby; provided that the Company will reimburse the Investors up to $30,000 for their costs and expenses.

        (m)  Specific Performance. Each of the Parties acknowledges and agrees that the other parties would be damaged irreparably in the event any of the provisions of
this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each Party agrees that the other Party shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the parties and the matter, in addition to any other remedy
to which they may be entitled, at law or in equity.

        (n)  Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any
reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.

        (o)  Further Assurances. The Parties agree (i) to furnish upon request to each other such further information, (ii) to execute and deliver to each other such
other documents, and (iii) to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the documents referred to in this Agreement.

        (p)  Incorporation of Exhibits, Annexes, and Schedules. The Exhibits, Annexes, and Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.

6

        IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

	

	 	  	THE COMPANY:

DAOU SYSTEMS, INC.

		 	By:  	/s/  Neil R. Cassidy
		 	  	

	 	 	  	Name:   Neil R. Cassidy
Title:   Executive Vice President and 
   Chief Financial Officer

	

	 	  	THE INVESTORS:

GALEN PARTNERS III, L.P.,
a Delaware Limited Partnership

		 	By:    	Claudius, L.L.C.,
a Delaware Limited Liability Company
		 	  	
	 	 	  	

	

	 	  	

		 	By:  	/s/  Bruce F. Wesson
		 	  	

	 	 	  	Name:   Bruce F. Wesson
Title:   Senior Managing Member

	

	 	  	GALEN PARTNERS INTERNATIONAL III, L.P., a Delaware Limited Partnership

		 	By:  	Claudius, L.L.C.,
a Delaware Limited Liability Company
		 	  	
	 	 	  	

	

	 	  	

		 	By:  	/s/  Bruce F. Wesson
		 	  	

	 	 	  	Name:   Bruce F. Wesson
Title:   Senior Managing Member

	

	 	  	GALEN EMPLOYEE FUND III, L.P., 
a Delaware Limited Partnership

		 	By:    	Wesson Enterprises, Inc.
		 	  	
	 	 	  	

	

	 	  	

		 	By:  	/s/  Bruce F. Wesson
		 	  	

	 	 	  	Name:   Bruce F. Wesson
Title:   President

7

SCHEDULE 1

			Shares Owned		Warrants	
			
		
	
	GALEN PARTNERS III, L.P.
   610 Fifth Avenue, 5th Floor
   New York, New York 10020
   Attn.: Bruce F. Wesson
   
Facsimile:	 	 	2,114,623	 	 	3,234,022	 
		 	 	 	 	 	 	 
	GALEN PARTNERS INTERNATIONAL III, L.P.
   610 Fifth Avenue, 5th Floor
   New York, New York 10020
   Attn.: Bruce F. Wesson
 
  Facsimile:	 	 	191,410	 	 	292,735	 
		 	 	 	 	 	 	 
	GALEN EMPLOYEE FUND III, L.P.
   610 Fifth Avenue, 5th Floor
   New York, New York 10020
   Attn.: Bruce F. Wesson
  
 Facsimile:	 	 	8,659	 	 	13,243

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