Exhibit 10.1
Fursa Alternative Strategies
LLC
200 Park Avenue,
54 th
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:
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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).
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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.
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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.
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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.
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Chartwell agrees to withdraw its
shareholder proposal submitted to Integral on November 17,
2006.
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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.
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The next Annual Meeting will be
conducted in accordance with the provisions of the Addendum
attached hereto.
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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 foregoin
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