UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
DAOU SYSTEMS, INC.
------------------
(Name of Issuer)
COMMON STOCK, $.001 PAR VALUE PER SHARE
---------------------------------------
(Title of Class of Securities)
237015102
---------------------
(CUSIP Number)
Bruce F. Wesson
Senior Managing Member
Claudius, L.L.C.
610 Fifth Avenue, 5th Floor
New York, NY 10020
(212) 218-4990
--------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
JULY 26, 1999
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this Schedule because of Rule 13d-
1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934, as amended (the "Act") or
otherwise subject to the liabilities of that section of the Act
but shall be subject to all provisions of the Act (however, see
the Notes).
Page 1 of 19 Pages
<PAGE>
SCHEDULE 13D
CUSIP NO. 237015102 PAGE 2 OF 19 PAGES
------------- --- ----
-------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Galen Partners III, L.P.
-------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
-------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
-------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(E) [ ]
-------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
1,993,234 (see Item 5(a))
SHARES -----------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY -----------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
1,993,234
REPORTING -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON WITH
0
-------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,993,234
-------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.0%
-------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
-------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
CUSIP NO. 237015102 PAGE 3 OF 19 PAGES
------------- --- ----
-------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Galen Partners International III, L.P.
-------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
-------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
-------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(E) [ ]
-------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
180,422 (see Item 5(a))
SHARES -----------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY -----------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
180,422
REPORTING -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON WITH
0
-------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
180,422
-------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.9%
-------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
-------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
CUSIP NO. 237015102 PAGE 4 OF 19 PAGES
------------- --- ----
-------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Galen Employee Fund III, L.P.
-------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
-------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
-------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(E) [ ]
-------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
-------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
8,162 (see Item 5(a))
SHARES -----------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY -----------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
8,162
REPORTING -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON WITH
0
-------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,162
-------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
-------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
CUSIP NO. 237015102 PAGE 5 OF 19 PAGES
------------- --- ----
-------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
William R. Grant
-------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
-------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
-------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(E) [ ]
-------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
-------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
0
SHARES -----------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY -----------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
0
REPORTING -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON WITH
0
------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
-------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0
-------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
-------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
CUSIP NO. 237015102 PAGE 6 OF 19 PAGES
------------- --- ----
-------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Bruce F. Wesson
-------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
-------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
-------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(E) [ ]
-------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
-------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
22,389 (see Item 5(a))
SHARES -----------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY -----------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
22,389
REPORTING -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON WITH
0
-------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
22,389
-------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
-------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
-------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
CUSIP NO. 237015102 PAGE 7 OF 19 PAGES
------------- --- ----
-------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
L. John Wilkerson
-------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
-------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
-------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(E) [ ]
-------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
-------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
7,010 (see Item 5(a))
SHARES -----------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY -----------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
7,010
REPORTING -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON WITH
0
-------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,010
-------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
-------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
CUSIP NO. 237015102 PAGE 8 OF 19 PAGES
------------- --- ----
-------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Srini Conjeevaram
-------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
-------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
-------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(E) [ ]
-------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
India (see Item 2)
-------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
1,000 (see Item 5(a))
SHARES -----------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY -----------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
1,000
REPORTING -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON WITH
0
-------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,000
-------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
-------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
-------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
CUSIP NO. 237015102 PAGE 9 OF 19 PAGES
------------- --- ----
-------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
David Jahns
-------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
-------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
-------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(E) [ ]
-------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
-------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
21,045 (see Item 5(a))
SHARES -----------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY -----------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
21,045
REPORTING -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON WITH
0
-------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
21,045
-------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
-------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
-------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
CUSIP NO. 237015102 PAGE 10 OF 19 PAGES
------------- --- ----
-------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Zubeen Shroff
-------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
-------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
-------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(E) [ ]
-------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
-------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
2,000 (see Item 5(a))
SHARES -----------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY -----------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
2,000
REPORTING -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON WITH
0
-------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,000
-------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
-------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
-------------------------------------------------------------------
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This statement covers a total of 2,235,262 fully
diluted shares of Common Stock, $.001 par value per share (the
"Common Stock"), of Daou Systems, Inc., a Delaware corporation
(the "Issuer"). The Reporting Persons (as defined in Item 2
hereof) as of the date hereof hold an aggregate of (i) 32,399
shares of Common Stock (the "Common Shares"), (ii) 2,181,818
shares of Series A Convertible Preferred Stock, $.001 par value
per share, of the Issuer (the "Preferred Shares"), which as of
the date hereof are convertible into an aggregate of 2,181,818
shares of Common Stock, and (iii) options for the purchase of
21,045 shares of Common Stock (the "Options"), which as of the
date hereof may be exercised for an aggregate of 21,045 shares of
Common Stock. The Common Shares, Preferred Shares and Options
are referred to herein, collectively, as the "Securities".
The Company's principal executive offices are located
at 5120 Shoreham Place, San Diego, CA 92122.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is being filed by Galen Partners III,
L.P. ("Galen"), Galen Partners International III, L.P. ("Galen
Intl"), Galen Employee Fund III, L.P. ("GEF"), each of which is a
Delaware limited partnership, William R. Grant ("Grant"), Bruce
F. Wesson ("Wesson"), L. John Wilkerson ("Wilkerson"), David
Jahns ("Jahns"), Srini Conjeevaram ("Conjeevaram") and Zubeen
Shroff ("Shroff"), each of whom is a natural person (each, a
"Reporting Person" and collectively, the "Reporting Persons").
Each of Galen, Galen Intl and GEF is a private investment fund
engaged in the business of making investments in the securities
of companies in the health care industry. Grant, Wesson,
Wilkerson, Jahns, Conjeevaram and Shroff are all members of
Claudius, L.L.C. ("Claudius"), the general partner of each of
Galen and Galen Intl. Bruce F. Wesson is the President of Wesson
Enterprises, Inc. ("Wesson Enterprises"), which is the general
partner of GEF. Mr. Wesson is the sole executive officer, sole
director and sole shareholder of Wesson Enterprises. Each of
Messrs, Grant, Wesson, Wilkerson, Jahns, Conjeevaram and Shroff
are principally engaged in the business conducted by Galen, Galen
Intl and GEF and affiliated private investment partnerships.
Under the definition of "beneficial owner" in Rule 13d-3
promulgated under the Securities Exchange Act of 1934 (the
"Act"), each Reporting Person may be deemed to beneficially own
the Securities owned by the other Reporting Persons and therefore
may be deemed under Rule 13d-5 promulgated under Act to be a
member of a "group" with the other Reporting Persons. The filing
of this statement is not intended as, and should not be deemed,
an acknowledgement of shared voting or dispositive power by any
Reporting Person with respect to any of the Securities held by
the other Reporting Persons.
Messrs. Grant, Wesson, Wilkerson, Jahns and Shroff are
all citizens of the United States of America; Mr. Conjeevaram is
a lawful permanent resident of the United States of America and a
citizen of India. Claudius and Wesson Enterprises, are referred
to herein, collectively, as the "Related Persons".
-11-
<PAGE>
The principal place of business and the principal
office of each of the Reporting Persons and Related Persons are
at 610 Fifth Avenue, 5th Floor, New York, New York 10020. During
the last five years, none of the Reporting Persons or the Related
Persons has been (i) convicted in a criminal proceeding, (ii) a
party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding has
not been subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The funds for the acquisition of the Securities were
allocated from the working capital or personal funds of the
Reporting Persons and were not obtained by means of a loan or
other borrowing arrangement.
The Common Shares were acquired by certain of the
Reporting Persons in open market purchases from time to time, as
well as by means of partner distributions made by private
investment funds that formerly held Common Shares of the Issuer.
Such distributions were made at various times on a pro rata basis
and without consideration. The Preferred Shares were acquired by
certain of the Reporting Persons from the Issuer in a transaction
completed on July 26, 1999 at a purchase price of $5.50 per share
for an aggregate amount of $12,000,000 in cash. Each such
Reporting Person paid its pro rata share of the acquisition price
of the Preferred Shares it received. The Options were granted to
a Reporting Person who is a Director of the Issuer at various
times under the terms of a stock option plan for the benefit of
the Directors of the Issuer.
ITEM 4. PURPOSE OF TRANSACTION.
Each of the Reporting Persons acquired its Securities
as long-term investments. None of the Reporting Persons
presently intends to acquire control of the Issuer. However, if
any Reporting Person believes that further investment in the
Issuer is attractive, whether because of the market price of the
Issuer's securities or otherwise, such Reporting Person may
acquire additional securities of the Issuer. Similarly, any
Reporting Person, subject to applicable law and depending upon
market and other factors, may from time to time determine to
dispose some or all of the securities.
The Reporting Persons have no present intention to
engage or cause the Issuer to engage in any of the transactions
or activities specified in paragraphs (a) through (j) of this
Item 4 other than as set forth in the immediately preceding
paragraph. However, each Reporting Person reserves the right,
either individually or together with other persons, to act in
respect of its interest in the Issuer in accordance with its best
judgment in light of the circumstances existing at that time.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Each Reporting Person owns or has the right to
acquire the number of securities shown opposite its name:
=================================================================
(1) (2) (3) (4)
Number of
Number of Shares of
Shares of Common Stock
Common Stock which may be
Number of into which acquired
Shares of Owned Preferred pursuant to
Reporting Common Stock Stock is exercise of
Person Owned Convertible Options
-----------------------------------------------------------------
Galen 0 1,993,234 0
-----------------------------------------------------------------
Galen Intl 0 180,422 0
-----------------------------------------------------------------
GEF 0 8,162 0
-----------------------------------------------------------------
Wesson 22,389 0 0
-----------------------------------------------------------------
Wilkerson 7,010 0 0
-----------------------------------------------------------------
Jahns 0 0 21,045
-----------------------------------------------------------------
Conjeevaram 1,000 0 0
-----------------------------------------------------------------
Shroff 2,000 0 0
-----------------------------------------------------------------
Total 32,299 2,181,818 21,045
=================================================================
===================================
(5) (6)
Percentage of
Total of Outstanding Shares of
Columns (2), Common Stock (see
(3) and (4) Note below)
-----------------------------------
1,993,234 10.0%
-----------------------------------
180,422 0.9%
-----------------------------------
8,162 0.1%
-----------------------------------
22,389 0.1%
-----------------------------------
7,010 0.1%
-----------------------------------
21,045 0.1%
-----------------------------------
1,000 0.1%
-----------------------------------
2,000 0.1%
-----------------------------------
2,235,262 11.5%
===================================
Note: The percentages shown in each row of column (6)
were calculated, for each respective row, by (i) adding the
totals in the bottom row of columns (3) and (4) to 17,689,728
(the number of shares of Common Stock outstanding as of June 30,
1999, such number having been provided by the Issuer to the
Reporting Persons) (the "Total Adjusted Outstanding Shares"),
then (ii) dividing the amount in column (5) by the Total Adjusted
Outstanding Shares, and then (iii) expressing such quotient in
terms of a percentage.
(b) Each Reporting Person possesses the sole power to
vote and to dispose of its respective Securities.
(c) See Item 3.
-13-
<PAGE>
(d) None.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
None.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Joint Filing Agreement and Power of Attorney, dated
August 4, 1999, by the Reporting Persons and the Related Persons.
-14-
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
the statement is true, complete and correct.
Date: August 4, 1999 GALEN PARTNERS III, L.P.
By: Claudius, L.L.C.
By: /s/ Bruce F. Wesson
--------------------------
Managing Member
GALEN PARTNERS
INTERNATIONAL III, L.P.
By: Claudius, L.L.C.
By: /s/ Bruce F. Wesson
--------------------------
Managing Member
GALEN EMPLOYEE FUND III, L.P.
By: Wesson Enterprises, Inc.
By: /s/ Bruce F. Wesson
--------------------------
President
[Signatures continued on next page.]
-15-
<PAGE>
CLAUDIUS, L.L.C.
By: /s/ Bruce F. Wesson
--------------------------
Managing Member
WESSON ENTERPRISES, INC.
By: /s/ Bruce F. Wesson
--------------------------
President
/s/ William R. Grant
-----------------------------
WILLIAM R. GRANT
/s/ Bruce F. Wesson
-----------------------------
BRUCE F. WESSON
/s/ L. John Wilkerson
-----------------------------
L. JOHN WILKERSON
/s/ David Jahns
-----------------------------
DAVID JAHNS
/s/ Srini Conjeevaram
-----------------------------
SRINI CONJEEVARAM
/s/ Zubeen Shroff
-----------------------------
ZUBEEN SHROFF
-16-
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT DESCRIPTION
------- -----------
1 Joint Filing Agreement and Power of Attorney
Exhibit 1
JOINT FILING AGREEMENT
----------------------
AND POWER OF ATTORNEY
---------------------
In accordance with Rule 13d-1(f) under the Securities
Exchange Act of 1934, the persons named below agree to the joint
filing on behalf of each of them of a Statement on Schedule 13D
(including exhibits and thereto) with respect to the acquisition
of, or the right to acquire, the Common Stock of Daou Systems,
Inc., a Delaware corporation. This Agreement shall be included
as an Exhibit to such joint filing. In evidence thereof, each of
the undersigned, being duly authorized, hereby executes this
Agreement this 4th day of August, 1999.
Each person whose signature appears below hereby
constitutes and appoints Bruce F. Wesson as his or its true and
lawful attorney-in-fact and agent, with full power and authority,
including power of substitution and resubstitution, and in his or
its name, place and stead in any and all capacities, to execute
in the name of each such person, and to file, with all exhibits
thereto and other documents in connection therewith, with the
Securities and Exchange Commission, any and all amendments to
this Statement on Schedule 13D as such attorney-in-fact and
agent, or its substitutes, executing such amendments deem
necessary or advisable to enable each person whose signature
appears below to comply with the Securities Exchange Act of 1934
and any rules, regulations and requirements of the Securities and
Exchange Commission in respect thereof, granting to said
attorney-in-fact, agents and substitutes full power and authority
to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all
intents and purposes as they might or could do in person, and
does hereby ratify and confirm all that such attorney-in-fact,
agents or substitutes, or any of them separately, may lawfully do
or cause to be done by virtue thereof.
GALEN PARTNERS III, L.P.
By: Claudius, L.L.C.
By: /s/ Bruce F. Wesson
--------------------------
Managing Member
[Signatures continued on next page.]
<PAGE>
GALEN PARTNERS
INTERNATIONAL III, L.P.
By: Claudius, L.L.C.
By: /s/ Bruce F. Wesson
--------------------------
Managing Member
GALEN EMPLOYEE FUND III, L.P.
By: Wesson Enterprises, Inc.
By: /s/ Bruce F. Wesson
--------------------------
President
CLAUDIUS, L.L.C.
By: /s/ Bruce F. Wesson
--------------------------
Managing Member
WESSON ENTERPRISES, INC.
By: /s/ Bruce F. Wesson
--------------------------
President
/s/ William R. Grant
-----------------------------
WILLIAM R. GRANT
/s/ Bruce F. Wesson
-----------------------------
BRUCE F. WESSON
/s/ L. John Wilkerson
-----------------------------
L. JOHN WILKERSON
[Signatures continued on next page.]
-2-
<PAGE>
/s/ David Jahns
-----------------------------
DAVID JAHNS
/s/ Srini Conjeevaram
-----------------------------
SRINI CONJEEVARAM
/s/ Zubeen Shroff
-----------------------------
ZUBEEN SHROFF
-3-
