UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 312, 2010

QuadraMed Corporation

(Exact name of registrant as specified in its charter)

Delaware

001-32283

52-1992861

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(I.R.S. Employer

Identification No.)

12110 Sunset Hills Road, Suite 600, Reston, VA 20190

(Address of principal executive office and zip code)

(703) 709-2300

(Registrant’s telephone number, including area code)

(Not Applicable)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

ITEM 1.01	ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.	3
ITEM 8.01	OTHER EVENTS.	3
ITEM 1.02	TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.	3
SIGNATURES		6
ITEM 9.01	FINANCIAL STATEMENTS AND EXHIBITS.	4
EXHIBIT INDEX		7
SIGNATURES		5
EXHIBIT 99.1	Pirrello v. James et al. Amended Complaint, filed in Delaware Court of Chancery on January 21, 2010.
EXHIBIT INDEX		6
EXHIBIT 99.2	LC Capital Master Fund, Ltd. v. James et al. Complaint, filed in Delaware Court of Chancery on January 19, 2010.
EXHIBIT 99.1	SEPARATION AGREEMENT AND RELEASE DATED AS OF FEBRUARY 5, 2010, BETWEEN STEVEN V. RUSSELL AND QUADRAMED CORPORATION.
EXHIBIT 99.3	Preferred Stockholder Letter, dated January 22, 2010.

ITEM 1.01

ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

On ~~February~~January 35, 2010, QuadraMed Corporation, ~~a Delaware corporation~~ (the “Company” ~~or “QuadraMed”~~), ~~entered~~disclosed ~~into~~in ~~an Application~~a ~~Partner~~Current ~~Profile~~Report ~~and~~on ~~Application~~Form ~~Partner~~8-K ~~Agreement~~filed with ~~InterSystems Corporation (“InterSystems”) (collectively~~ the ~~“Agreements”).~~Securities ~~The~~and ~~Agreements~~Exchange ~~supersede~~Commission, ~~all~~the ~~previous~~involuntary ~~agreements~~termination ~~between~~of Steven V. ~~QuadraMed and InterSystems~~Russell, ~~including~~ ~~without~~the ~~limitation~~Company’s ~~all~~Senior ~~previous~~Vice ~~Application Partner Agreements~~President, ~~the~~Corporate Development, ~~Agreement~~effective ~~dated April~~January 1529, ~~2003,~~2010. ~~and~~On ~~the amendment dated August~~February 812, ~~2005~~2010, ~~which~~Mr. Russell ~~were~~executed ~~assigned~~a toSeparation ~~QuadraMed~~Agreement onand ~~September 4,~~Release ~~2007.~~(the ~~The~~“Separation ~~Agreements~~Agreement”) ~~were~~with ~~entered~~the ~~into~~Company in ~~the~~connection ~~ordinary~~with ~~course~~this ofinvoluntary ~~the Company’s business~~termination.

The ~~Application~~Separation ~~Partner~~Agreement, ~~Profile~~dated ~~specifies~~as ~~the InterSystems software products and license types and services that the Company may resell to end user customers~~ of ~~the Company’s products~~February 5, ~~pricing terms, support for such products and other customary reseller provisions. The Application Partner~~ Agreement grants the Company a nonexclusive and nontransferable right to offer InterSystems licenses and services to end user customers of the Company’s products that incorporate InterSystems software2010, ~~with~~includes ~~such licenses to be between InterSystems and~~ the ~~end user, and features other customary terms and conditions. The Agreements have a five year initial term,~~ following ~~which~~material ~~term~~provisions: ~~they renew annually or can be terminated by either party upon 30 days prior written notice.~~

~~ITEM 8.01~~• ~~OTHER~~Cash ~~EVENTS~~severance of $288,750, which is equal to one year of Mr. Russell’s current base salary, payable pursuant to the Company’s payroll schedule over the twelve months following the Termination Date (defined as January 29, 2010);

~~Special~~• ~~Meeting~~In the event that the Company consummates a transaction that constitutes a Change in Control (as defined in Mr. Russell’s Employment Agreement, which would include the proposed transaction with affiliates of ~~Stockholders~~Francisco -Partners ~~Meeting~~as previously disclosed by the Company) within 90 days of the Termination Date, Mr. Russell’s cash severance shall be $433,125, which is equal to one year of Mr. Russell’s current base salary plus Mr. Russell’s maximum incentive compensation bonus amount, less any severance amounts paid to Mr. Russell prior to such Change in Control. This amount will be payable pursuant to the Company’s payroll schedule over the twelve months following such Change in Control;

On• ~~February 3,~~Continuation ~~2010, the Company’s Board~~ of ~~Directors~~welfare benefits (~~the~~other ~~“Board”)~~than ~~set~~disability ~~March 9, 2010 as the date of the special meeting of the Company’s common stockholders relating to the acquisition of the Company by Francisco Partners pursuant to the Agreement~~ and ~~Plan~~severance ofplan ~~Merger, dated as of December 7, 2009, by and among the Company, Bavaria Holdings Inc., a Delaware corporation controlled by Francisco Partners (the “Parent”~~benefits) ~~and~~for ~~Bavaria Merger Sub, Inc.,~~ a ~~Delaware~~period ~~corporation and~~of ~~wholly~~twelve ~~owned~~months ~~subsidiary~~after of the ~~Parent~~Termination ~~(“Merger Sub”).~~ Date;

~~Claims~~• (i) 15,000 options to purchase shares of the Company’s common stock held by Mr. Russell, all of which have previously vested pursuant to the terms of the Amended and ~~Litigation~~Restated ~~Related~~Inducement Stock Option Agreement originally dated November 21, 2005 and amended as of August 8, 2007 between the Company and Mr. Russell are and shall remain exercisable as of the Termination Date until January 29, 2011, and (ii) 85,000 options to purchase shares of the ~~Proposed~~Company’s ~~Merger~~common stock, all of which shall vest in full as of the Termination Date pursuant to the terms of option plans applicable thereto, and shall remain exercisable until January 29, 2012;

As• ~~previously~~Continuation ~~reported by the Company on its Current Report on Form 8-K dated December 8, 2009, the Company announced on December 8, 2009 its entry into an Agreement and Plan~~ of ~~Merger~~(i) ~~with~~indemnification ~~affiliates~~rights ofpreviously ~~Francisco~~afforded ~~Partners relating~~ to anMr. ~~acquisition~~Russell ofprior ~~the~~to ~~Company by Francisco Partners (~~the ~~“Transaction”).~~Termination AsDate ~~previously~~under ~~disclosed in~~ the Company’s ~~revised~~ ~~preliminary~~organizational ~~proxy~~documents ~~statement~~and ~~relating~~that tocertain ~~the~~Indemnification ~~Transaction~~Agreement ~~filed~~between ~~with~~ the ~~Securities~~Company and ~~Exchange~~Mr. ~~Commission on February 4~~Russell, ~~2010,~~dated ~~two~~as ~~purported~~of ~~stockholder~~September ~~class action complaints~~18, ~~one~~2008 ~~from an individual common stockholder~~ and ~~the~~(ii) ~~other from~~coverage anunder ~~individual holder of~~ the Company’s ~~Series~~directors’ A Cumulative Mandatory Convertible Preferred Stock (the “Preferred Stock”), have been filed in Delaware Court of Chancery against the Company, the Board members, the Francisco Partners acquisition entities and, inofficers’ ~~the~~insurance ~~Preferred~~policy ~~Stock~~until ~~complaint,~~December ~~Francisco Partners and affiliated entities~~30, ~~each~~2015 aswith ~~summarized~~respect ~~below.~~to Inacts ~~addition,~~occurring ~~the~~prior ~~Company has received a letter from holders purporting~~ to ~~own 91% of~~ the ~~outstanding~~Termination ~~Preferred Stock which threatens suit against the Board members, also as summarized below.~~ Date;

On• ~~December 17,~~Acknowledgement ~~2009, a purported stockholder class action complaint was filed in the Delaware Court~~ of ~~Chancery against members of~~ the ~~Board~~post-employment non-solicitation, ~~the Company~~non-competition, ~~the~~non-disparagement ~~Parent~~ and ~~Merger~~confidentiality ~~Sub~~covenants ~~seeking~~by toMr. ~~enjoin~~Russell ~~the~~as ~~Transaction,~~set ~~entitled~~forth ~~Vincent~~in ~~Pirrello,~~that ~~Individually~~certain ~~and~~Proprietary OnInformation ~~Behalf~~and ofNon-Competition ~~All~~Agreement ~~Others Similarly~~between ~~Situated,~~the ~~Plaintiff,~~Company vand Mr. ~~Duncan James~~Russell, ~~James~~executed ~~Peebles,~~on ~~Robert~~November ~~Pevenstein~~21, ~~Lawrence~~2005; ~~English, Robert~~ and

•

Mutual general releases between the Company and Mr. Russell.

The foregoing description of the Separation Agreement is qualified in its entirety by reference to such agreement, the full text of which is filed herewith as Exhibit 99.1, and is incorporated herein by reference in response to Items 1.01 and 1.02, as applicable.

ITEM 1.02

TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.

As discussed above in Item 1.01, on February 12, 2010, Mr. Russell executed the Separation Agreement with the Company, dated as of February 5, 2010, which, among other items, provides for the termination of:

(i)

the Employment Agreement between the Company and Mr. Russell, dated November 21, 2005 and filed with the Securities and Exchange Commission (“SEC”) as Exhibit 99.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on November 28, 2005; and

~~Miller,~~(ii) ~~William~~the ~~Jurika,~~Amendment ~~QuadraMed Corporation, Bavaria Holdings Inc., and Bavaria Merger Sub, Inc., Defendants, C.A. No. 5149- VCS. The complaint seeks certification~~ of aEmployment ~~class~~Agreement ofbetween ~~all common stockholders of QuadraMed who have been allegedly harmed by~~ the ~~defendants’ actions challenged in the complaint. In particular, the complaint alleges that the defendant directors have breached their fiduciary and other duties and that the~~ Company and ~~Francisco Partners have aided and abetted such breaches of those fiduciary and other duties owed to the common stockholders~~Mr. ~~The complaint seeks entry of an order temporarily and permanently enjoining the Transaction~~Russell, ~~compensatory damages,~~dated ~~costs~~March ~~and disbursements~~26, ~~including~~2008 ~~plaintiff’s counsel’s fees~~ and ~~experts’~~filed ~~fees, and other relief. On January 21, 2010, following the January 4, 2010 filing of the Company’s preliminary proxy statement~~ with the SEC, ~~an amended complaint was filed, repeating substantially the same allegations~~ as ~~the~~Exhibit ~~original~~99.5 ~~complaint~~to ~~and further alleging that certain of~~ the Company’s ~~disclosures~~Current inReport ~~its~~on ~~preliminary~~Form ~~proxy~~8-K ~~statement~~on ~~were~~April ~~misleading~~1, or2008; ~~deficient.~~ and

~~On January 19~~(together, ~~2010,~~the a“Employment ~~purported~~Agreements”), ~~stockholder~~excluding ~~class action was filed by a holder of Preferred Stock in the Delaware Court~~those ofprovisions ~~Chancery against members~~ of the ~~Board,~~Employment ~~the~~Agreements ~~Company,~~that ~~Francisco~~by ~~Partners,~~their ~~the~~terms ~~Parent~~survive ~~and Merger Sub entitled LC Capital Master Fund, Ltd~~termination., onThe ~~behalf~~Separation ofAgreement ~~itself~~provides ~~and~~for ~~all~~each ~~other holders~~ of the ~~Series~~severance ~~A Cumulative Mandatory Convertible Preferred Stock of QuadraMed Corporation~~payments, ~~Plaintiff,~~post-termination v.benefits Duncan James, James Peebles, Robert Pevenstein, Lawrence English, Robert Miller, William Jurika, QuadraMed Corporation, Francisco Partners II, L.P., Francisco Partners Parallel Fund II, L.P., Francisco Partners GP II, L.P., Francisco Partners GP II Management, LLC, Francisco Partners Management, LLC, Bavaria Holdings Inc., and ~~Bavaria~~conditions ~~Merger~~specified ~~Sub,~~in ~~Inc.,~~the ~~Defendants,~~Employment CAgreements. A. ~~No. 5214-VCS.~~description ~~The complaint seeks certification~~ of the amaterial ~~class~~terms of ~~all holders of~~ the ~~Preferred~~Separation ~~Stock~~Agreement ~~who~~is ~~have~~provided ~~allegedly~~above ~~been harmed by the defendants’ actions challenged~~ in ~~the complaint~~Item 1. ~~In particular~~01, ~~the~~which ~~complaint~~is ~~alleges~~incorporated ~~that~~herein ~~the~~by ~~defendant~~reference ~~directors~~in ~~have~~response breached their fiduciary and other duties, that the defendant directors and the Company have breached their duty of disclosure, and that the Company and Francisco Partners have aided and abetted such breaches of those fiduciary and other duties owed to ~~the~~this ~~holders of the Preferred Stock~~Item 1. The complaint seeks entry of an order temporarily and permanently enjoining the Transaction, compensatory damages, costs and disbursements, including plaintiff’s counsel’s fees and experts’ fees, and other relief02.

On January 23, 2010, the Board and Francisco Partners received a letter dated January 22, 2010 from a law firm purporting to represent MacKay Shields LLC, Zazove Associates, LLC and Concordia Partners, L.P., whose clients purportedly collectively own approximately 91% of the Preferred Stock. The letter alleges that the terms of the Preferred Stock do not permit the Company to cash out the Preferred Stock in the merger in the manner proposed by the Merger Agreement (by treating the Preferred Stock on an as-converted basis, resulting in merger consideration of $13.7097 per share of Preferred Stock). The letter further alleges that the Company’s Board has breached its fiduciary duties to the holders of the Preferred Stock, that the holders of Preferred Stock are not receiving adequate consideration in the merger and that the fair value of the Preferred Stock is higher than the as-converted consideration to be received by the holders of the Preferred Stock in the merger.

The Company, Board, Francisco Partners, the Parent, and Merger Sub believe these lawsuits and this threat of lawsuit are without merit and intend to defend the claims raised against them in these lawsuits and proposed to be raised against them in this letter vigorously.

The foregoing descriptions regarding the complaints and the Preferred Stock letter are only summaries of such complaints and letter and are qualified in their entirety by reference to these complaints and letter, the entire text of which are attached hereto as Exhibits 99.1, 99.2 and 99.3, respectively, and incorporated herein by reference in response to this Item 8.01.

ITEM 9.01

FINANCIAL STATEMENTS AND EXHIBITS.

(d)

Exhibits

Exhibit 99.1		Pirrello v. James et al. Amended Complaint, filed in Delaware Court of Chancery on January 21, 2010.
Exhibit 99.2		LC Capital Master Fund, Ltd. v. James et al. Complaint, filed in Delaware Court of Chancery on January 19, 2010.
Exhibit 99.3		Preferred Stockholder Letter, dated January 22, 2010.


Exhibit 99.1		Separation Agreement and Release dated as of February 5, 2010, between Steven V. Russell and QuadraMed Corporation.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: February 818, 2010

QuadraMed Corporation /sS/ ~~David~~DAVID L. ~~Piazza~~PIAZZA David L. Piazza, Executive Vice President, Chief Financial Officer and Chief Operating Officer

EXHIBIT INDEX

Exhibit No.		Description
99.1		~~Pirrello~~Separation v.Agreement ~~James~~and etRelease ~~al.~~dated ~~Amended~~as ~~Complaint,~~of ~~filed~~February in5, ~~Delaware~~2010, ~~Court~~between ofSteven ~~Chancery~~V. onRussell ~~January~~and ~~21,~~QuadraMed ~~2010~~Corporation.
99.2		LC Capital Master Fund, Ltd. v. James et al. Complaint, filed in Delaware Court of Chancery on January 19, 2010.
99.3		Preferred Stockholder Letter, dated January 22, 2010.

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