According to the docket, on July 30, 2004, U.S. District Judge Samuel Conti approved the class settlement. On August 6, 2005, the Court entered the Judgment on the settlement and the civil case was terminated. The Court further entered that day the Order for reimbursement of attorneys' fees and expenses. By the Notice Of Pendency and Proposed Settlement of Class Action and Settlement Hearing, the settlement amount was $5,250,000 in cash.

As reported by the Company’s Form 10-Q for the quarterly period ended March 31, 2004, on May 3, 2004, the final settlement agreement related to the securities class action litigation was filed with the court. The agreement is subject to a statutory notice and opt-out period, a final hearing is scheduled for July 30, 2004. As of April 21, 2004, the final settlement agreement relating to the shareholders derivative litigation was approved by the court. QuadraMed expects that the settlement amounts will be principally covered by its insurance. Approximately $1.3 million was accrued as of March 31, 2004 related to these settlements, representing the portion of settlement not expected to be covered by insurance.

Earlier, according to the same SEC filing, in October 2002, a series of securities law class action complaints was filed in the United States District Court, California Northern District, by certain of our shareholders against QuadraMed and certain of its officers and directors. The plaintiffs in these actions allege, among other things, violations of the Securities Exchange Act of 1934 due to issuing a series of allegedly false and misleading statements concerning QuadraMed’s business and financial condition between May 11, 2000 and August 11, 2002. Also in October 2002, a shareholders derivative suit was filed on QuadraMed’s behalf in Marin County Superior Court of California against QuadraMed as a nominal defendant and certain of its current and former officers and directors. The derivative action plaintiffs allege that certain of QuadraMed’s current and former officers and directors breached their fiduciary duties to QuadraMed based on assertions similar to those in the federal securities class action litigation. Both actions seek unspecified monetary damages and other relief.

The original complaint charges QuadraMed and certain of its officers and directors with violations of the Securities Exchange Act of 1934. QuadraMed is a healthcare information and technology company that provides software solutions and consulting services to hospitals and medical providers to meet their medical records, business and compliance needs. On August 12, 2002, QuadraMed issued a press release entitled, "QuadraMed to File For Extension For Form 10- Q." The press release stated in part: "QuadraMed Corporation announced today that it will file with the U.S. Securities and Exchange Commission ("SEC") for an automatic 5-day extension of the deadline for submitting its second quarter 2002 Quarterly Report on Form 10-Q. The Company will use the additional five calendar days to complete a restatement of its consolidated financial statements for the fiscal years ended December 31, 2000, 2001, and for the interim period ended March 31, 2002."