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                                                                   Exhibit 10.16
                              EMPLOYMENT AGREEMENT
                              --------------------

     This Employment Agreement ("Agreement") is made as of the 1st day of June,
2001 between QuadraMed Corporation, a Delaware corporation with a principal
place of business at 22 Pelican Way, San Rafael, California 94901 ("Company")
Frank Pecaitis, an individual residing at 3 Arrive Drive, Mission Viejo,
California 92692 ("Employee").

                             PART ONE - DEFINITIONS

     Definitions. For purposes of this Agreement, the following definitions will
be in effect:

     "Change in Control" means:

     (i)   a merger or acquisition in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is to change the
Company's state of incorporation;

     (ii)  a stockholder approved sale, transfer or other disposition of all or
substantially all of the assets of the Company;

     (iii) a transfer of all or substantially all of the Company's assets
pursuant to a partnership or joint venture agreement or similar arrangement
where the Company's resulting interest is less than fifty percent (50%);

     (iv)  any reverse merger in which the Company is the surviving entity but
in which fifty percent (50%) or more of the Company's outstanding voting' stock
is transferred to holders different from those who held the stock immediately
prior to such merger;

     (v)   on or after the date hereof, a change in ownership of the Company
through an action or series of transactions, such that any person is or becomes
the beneficial owner, directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the securities of the combined
voting power of the Company's outstanding securities; or

     (vi)  a majority of the members of the Board are replaced during any
twelve-month period by directors whose appointment or election is not endorsed
by a majority of the members of the Board prior to the date of such appointment
or election.

     "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

     "Company" means QuadraMed Corporation, a Delaware corporation.

     "Effective Date" shall mean March 1, 2001

     "Employee" means Frank Pecaitis.

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     "Employee Benefit Plan" shall have the meaning given the term under Section
3 of ERISA.

     "Employment Period" means the period of Employee's employment with the
Company governed by the terms and provisions of this Agreement.

     "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
in effect from time to time.

     "Involuntary Termination" means the termination of the Employee's
employment with the Company:

     (i)   involuntarily upon Employee's discharge or dismissal or the Company's
failure to renew this Agreement pursuant to Section 3 of Part Two, whether or
not in connection with a Change in Control; or

     (ii)  voluntarily or involuntarily, provided such termination occurs in
connection with (a) a change in Employee's position with the Company or any
successor which materially reduces Employee's level of responsibility, (b) a
material reduction in Employee's level of compensation (including base salary,
fringe benefits and any non-discretionary bonuses or other incentive payments
earned pursuant to objective standards or criteria) or (c) a relocation of
Employee's principal place of employment by more than forty-five (45) miles and
such change, reduction or relocation is effected without Employee's written
concurrence.

     "Option" means any option or share purchase right granted to Employee under
the Stock Option Plan that is outstanding at the time of a Change in Control or
Employee's Involuntary Termination.

     "Stock Option Plan" means collectively the Company's 1996 Stock Incentive
Plan (including the predecessor 1994 Stock Option Plan), as amended through the
date hereof and the company's 1999 Stock Incentive Plan, as amended through the
date hereof.

     "Term" shall mean the term beginning on the Effective Date and ending on
the first anniversary thereof, subject to the provisions of Section 3 and 4 of
Part Two.

     "Termination for Cause" will mean an Involuntary Termination of Employee's
employment for (i) one or more alleged acts of fraud, embezzlement,
misappropriation of proprietary information, misappropriation of the Company's
trade secrets or other confidential information, a breach of Employee's
fiduciary duties to the Company or any other misconduct adversely affecting the
business reputation of the Company in a material manner; or (ii) Employee's
failure to adhere to any written Company policy or the terms of this Agreement
or Employee's failure to adhere to any written Company policy or the terms of
this Agreement or Employee's failure to perform the material duties of
Employee's position following written notice from the Company describing the
failure and a reasonable opportunity to cure such failure, if such failure is
susceptible of cure.

                                   Page 2 of 12

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                  PART TWO - TERMS AND CONDITIONS OF EMPLOYMENT

     The following terms and conditions will govern Employee's employment with
the Company throughout the Employment Period and will also, to the extent
expressly indicated below, remain in effect following Employee's termination
date.

     1.   Employment and Duties. The Company will employ Employee as Senior Vice
President of Sales, Enterprise Division. Employee's office is located in Irvine,
California. Employee agrees to continue in such employment for the duration of
the Employment Period and to perform in good faith and to the best of Employee's
ability all services which may be required of Employee in Employee's executive
position and render such services at all reasonable times and places in
accordance with reasonable directives and assignments issued by the Board and
the Company's Enterprise Division President. During Employee's Employment
Period, Employee will devote Employee's full time and effort to the business and
affairs of the Company within the scope of Employee's executive office.

     2.   At Will Employee. The Company hereby employs the Employee, and the
Employee hereby accepts employment by the Company, upon the terms and conditions
set forth in this Agreement. Employee shall be an employee "at will," terminable
at any time by the Company for cause or without cause.

     3.   Term: Automatic Extension: Etc. The initial term of this Agreement
shall be one (1) year from the Effective Date. Commencing on the anniversary of
the Effective Date, and on each succeeding anniversary, the term of this
Agreement shall automatically be extended for one (1) additional year unless,
not less than one (1) month preceding such anniversary date, either party to
this Agreement shall have given written notice to the other party pursuant to
Section 12 of Part Three that such party will not extend the term of this
Agreement.

     4.   Compensation.

          A.   For service in the 2000 calendar year on or after the Effective
Date, Employee's base salary will be paid at the annual rate of One Hundred
Eighty Thousand ($180,000) Dollars. Employee's annual rate of base salary may be
subject to adjustment each calendar year by the Board.

          B.   Employee's base salary will be paid at periodic intervals in
accordance with the Company's payroll practices for salaried employees.

          C.   Commissions payable under the QuadraMed Corporation Sales
Compensation Plan.

          D.   The Company will deduct and withhold, from the compensation
payable to Employee hereunder, any and all applicable federal, state and local
income and employment withholding taxes and any other amounts required to be
deducted or withheld by the Company under applicable statute or regulation.

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     5.   Expense Reimbursement. Employee will be entitled to reimbursement from
the Company for all customary, ordinary and necessary business expenses incurred
by Employee in the performance of Employee's duties hereunder; provided Employee
furnishes the Company with vouchers, receipts and other substantiation of such
expenses in accordance with Company policies.

     6.   Fringe Benefits. During the Employment Period, Employee will be
eligible to participate in any group life insurance plan, group medical and/or
dental insurance plan, accidental death and dismemberment plan, short-term
disability program and other employee benefit plans, including profit sharing
plans, cafeteria benefit programs and stock purchase and option plans, which are
made available to executives and for which Employee qualifies.

     7.   Vacation. Employee will accrue four (4) weeks of paid vacation
benefits during each calendar year of the Employment Period in accordance with
the Company policy in effect for executive officers.

     8.   Death or Disability.

          A.   Upon Employee's death or disability during the Employment Period,
the employment relationship created pursuant to this Agreement will immediately
terminate and no further compensation will become payable to Employee pursuant
to Part Two, Section 4. In connection with such termination by reason of death,
the Company will only be required to pay Employee (or Employee's estate) any
unpaid compensation earned under Part Two, Section 4 for services rendered
through the date of Employee's death. In connection with such termination by
reason of disability, the Company will be required to pay to Employee any unpaid
compensation earned under Part Two, Section 4 for services rendered through the
date of Employee's disability, together with any income continuation payments
provided Employee under any disability income/insurance policies or programs
funded by the Company on Employee's behalf.

          B.   Employee will be deemed disabled if Employee is so characterized
pursuant to the terms of the Company's disability policies or programs
applicable to Employee from time to time, or if no such policy is applicable, if
Employee is unable to perform the essential functions of Employee's duties for
physical or mental reasons for one hundred twenty (120) consecutive days, or one
hundred eighty (180) days during any twelve (12) month period.

          C.   Upon death or disability of Employee, the relevant terms of the
Stock Option Plan will apply.

     9.   Severance Benefits. Notwithstanding anything herein to the contrary,
Employee will be entitled to receive only the severance benefits specified below
in the event there should occur a termination of Employee's employment:

          A.   Severance Benefit. If Employee is terminated by reason of an
Involuntary Termination of Employee's employment (other than a Termination for
Cause), the Company will make a severance payment to Employee equal to twelve
(12)

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months of Employee's current rate of base salary in monthly installments over a
twelve (12) month period following the date of Employee's Involuntary
Termination.

          B.   Welfare Benefits. For a period of twelve (12) months, or until
such time as Employee qualifies for comparable benefits with a subsequent
employer - whichever first occurs, the Company shall provide Employee (and
Employee's dependents, as applicable) with the same health benefits to which
Employee was entitled as an employee immediately before the Involuntary
Termination. To the maximum extent permitted by applicable law, the benefits
provided under this Section 9.B. shall be in discharge of any obligations of the
Company or any rights of Employee under the benefit continuation provisions
under Section 4980A of the Code and Part VI of Title I of ERISA ("COBRA") or any
other legislation of similar import.

          C.   Option Acceleration Upon Involuntary Termination. In connection
with the Involuntary Termination of Employee's employment (other than
Termination for Cause), whether before or after a Change in Control transaction,
each of Employee's Options under the Stock Option Plan and all restricted or
unvested Common Stock granted by the Company will (to the extent not then
otherwise exercisable or vested) automatically accelerate and vest and any
repurchase rights with respect thereto will terminate so that each such Option
or share of restricted or unvested Common Stock will become immediately and
fully exercisable or vested as of the date of termination. Each such accelerated
Option, together with all of Employee's other vested Options, will remain
exercisable for a period of three (3) years following Employee's Involuntary
Termination and may be exercised for any or all of the option shares, including
the accelerated shares, in accordance with the exercise provisions of the Option
agreement evidencing the grant.

          D.   Release of Company. Receipt of severance benefits pursuant to
this Section 10 shall be in lieu of all other amounts payable by the Company to
Employee and in settlement and complete release of all claims Employee may have
against the Company or its directors, officers, or shareholders, other than
those arising out of the severance benefits due and payable under Sections 10
and 16 of Part Two of this Agreement and Employee's rights under Part Three of
this Agreement. Employee acknowledges and agrees that execution of a general
release of claims by Employee in a form reasonably acceptable to the Company
shall be a condition precedent to the Company's obligation to pay severance
benefits hereunder.

     10.  Option/Vesting Acceleration upon Change in Control.

          A.   To the extent the acquiring company in any Change in Control
transaction does not assume or otherwise continue in full force and effect the
Employee's outstanding Options under the Stock Option Plan, those Options shall
automatically accelerate and vest so that each such Option will, immediately
prior to the Change in Control, become fully exercisable for all the option
shares and shall terminate immediately after the Change in Control transaction.

          B.   The following provisions shall govern any Options that are to be
assumed or otherwise continued in effect in the Change in Control and any
restricted or unvested shares of Common Stock held by the Employee at the time
of the Change in Control.

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          The Options shall accelerate and vest at the time of the Change in
Control so that each Option will become exercisable for all of the Option shares
immediately prior to the Change in Control transaction, except to the extent the
Option parachute payment attributable to such accelerated vesting would
otherwise result in an excess parachute payment under Code Section 280G. Any
Option that does not accelerate and vest at the time of the Change in Control by
reason of the foregoing limitation shall continue to become exercisable and vest
in accordance with the vesting schedule applicable to that Option immediately
prior to the Change in Control.

          Any restricted or unvested shares of Common Stock held by the Employee
at the time of the Change in Control shall immediately vest at that time and the
Company's repurchase rights with respect to those shares shall terminate, except
to the extent the parachute payment attributable to such accelerated vesting,
when added to the parachute payment attributable to the acceleration of the
Employee's outstanding Options, would result in an excess parachute payment
under Code Section 280G. The Company's repurchase rights with respect to any
restricted or unvested shares which do not vest at the time of the Change in
Control by reason of the foregoing limitation shall continue in effect and shall
be assigned to any successor entity in the Change in Control transaction, and
Employee shall continue to vest in those shares in accordance with the vesting
schedule in effect for the shares immediately prior to the Change in Control.

          Any Option which does not accelerate, and any restricted or unvested
shares of Common Stock which do not vest at the time of the Change in Control by
reason of the foregoing limitations shall immediately vest in full pursuant to
the provisions of Section 1l.C. upon any Involuntary Termination of Employee's
employment following the Change in Control (other than a Termination for Cause).
Each such accelerated Option, together with each of the Employee's other vested
Options shall remain exercisable and outstanding for a period of three (3) years
and may be exercised for any or all of the Option shares, including the
accelerated shares, in accordance with the provisions of the Option agreement
evidencing such Option.

          All determinations concerning the application of the parachute payment
provisions of Code Section 280G to the accelerated vesting of Options and shares
pursuant to this Section 11 shall be made by the Company's independent certified
public accountant, whose determination shall be binding.

          Each Option which is assumed or otherwise continued in effect will be
appropriately adjusted to apply to the number and class of securities which
would have been issued to Employee in the consummation of the Change in Control
transaction had the Option been exercised immediately prior to such transaction,
and appropriate adjustments will be made to the Option exercise price payable
per share, provided the aggregate exercise price will remain the same.

     11.  Restrictive Covenant. During the Employment Period, Employee will not
directly or indirectly, whether for Employee's own account or as an employee,
director, consultant or advisor, provide services to any business enterprise
other than the Company, unless otherwise authorized by the Company in writing.

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     12.  Non-Solicitation and Non-Disparagement. During any period for which
Employee is receiving compensation payments pursuant to Part Two, Section 4 and
two (2) years thereafter, Employee will not directly or indirectly (i) solicit
any Company employee, independent contractor or consultant to leave the
Company's employ or otherwise terminate such person's relationship with the
company for any reason or interfere in any other manner with the employment or
other relationships at the time existing between the Company and its current
employees, independent contractors or consultants, (ii) solicit any of the
Company's customers for products or services substantially similar to those
offered by the Company, or (iii) disparage the Company or any of its
stockholders, directors, officers, employees or agents.

     13.  Confidentiality.

          A.   Employee hereby acknowledges that the Company may, from time to
time during the Employment Period, disclose to Employee confidential or
proprietary information pertaining to the Company's business and affairs and
client base or prospects, including (without limitation) customer lists and
accounts, other similar items indicating the source of the Company's income and
information pertaining to the salaries, duties and performance levels of the
Company's employees. Employee will not, at any time during or after such
Employment Period, disclose to any third party or directly or indirectly make
use of any such confidential information, including (without limitation) the
names, addresses and telephone numbers of the Company's customers, other than in
connection with, and in furtherance of, the Company's business and affairs.
Nothing contained in this section shall be construed to prevent Employee from
disclosing the amount of Employee's salary.

          B.   All documents and data (whether written, printed or otherwise
reproduced or recorded) containing or relating to any such confidential or
proprietary information of the Company which come into Employee's possession
during the Employment Period will be returned by Employee to the Company
immediately upon the termination of the Employment Period or upon any earlier
request by the Company, and Employee will not retain any copies, notes or
excerpts thereof. Notwithstanding the foregoing, Employee shall be entitled to
retain Employee's file or Rolodex containing names, addresses and telephone
numbers and personal diaries and calendars; provided, however, that Employee
shall continue to be bound by the terms of Section 14.A. above to the extent
such retained materials constitute confidential information.

          C.   Employee's obligations under this Section 14 will continue in
effect after the termination of Employee's employment with the Company, whatever
the reason or reasons for such termination, and the Company will have the right
to communicate with any of Employee's future or prospective employers concerning
Employee's continuing obligations under this Section 14.

     14.  Ownership Rights.

          A.   All materials, ideas, discoveries and inventions pertaining to
the Company's business or clients,  including  (without  limitation) all patents
and copyrights,  patent  applications,  patent  renewals and  extensions,  trade
secrets,

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software and the names, addresses and telephone numbers of customers and
prospects, will belong solely to the Company.

          B.   All materials, ideas, discoveries and inventions which Employee
may devise, conceive, develop or reduce to practice (whether individually or
jointly with others) during the Employment Period will be the sole property of
the Company and are hereby assigned by Employee to the Company, except for any
idea, discovery or invention (i) for which no Company equipment, supplies,
facility or trade secret information is used, (ii) which is developed entirely
on Employee's own time and (iii) which neither (a) relates at the time of
conception or reduction to practice, to the Company's business or any actual or
demonstrably-anticipated research or development program of the Company nor (b)
results from any work performed by Employee for the Company. The foregoing
exception corresponds to the assignment of inventions precluded by California
Labor Code Section 2870, attached as Exhibit A.

          C.   Employee will, at all times whether during or after the
Employment Period, assist the Company, at the Company's sole expense, in
obtaining, maintaining, defending and enforcing all legal rights and remedies of
the Company, including, without limitation, patents, copyrights and other
proprietary rights of the Company. Such assistance will include (without
limitation) the execution of documents and assistance and cooperation in legal
proceedings.

          D.   Employee will execute and be bound by all the terms and
provisions of the Company's standard Proprietary Information Agreement, which is
incorporated in whole herein by this reference. Nothing in this document will be
deemed to modify or affect Employee's duties and obligations under those other
agreements, which shall be deemed to be obligations under this Agreement.

     15.  Termination of Employment.

          A.   The Company (or any successor entity resulting from a Change in
Control) may terminate Employee's employment under this Agreement at any time
for any reason, with or without cause, by providing Employee with at least seven
(7) days prior written notice. However, such notice requirement will not apply
in the event there is a Termination for Cause under subsection D below.

          B.   In the event there is a termination of Employee's employment by
reason of an Involuntary Termination of Employee's employment with the Company
(other than Termination for Cause) during the Term, Employee will become
entitled to the benefits specified in Part Two, Section 10 in addition to any
unpaid compensation earned by Employee under Part Two, Section 4.A. for services
rendered prior to such termination.

          C.   Should Employee's employment with the Company terminate by reason
of Employee's death or disability during the Employment Period, no severance
benefits will be payable to Employee under Part Two, Section 10, and only the
limited death or disability benefits provided under Part Two, Section 9 will be
payable.

          D.   The Company may at any time, upon written notice, terminate
Employee's employment hereunder for any act qualifying as a Termination for
Cause

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or at any time following the expiration of the Term. Such termination will be
effective immediately upon such notice.

          E.   Upon such Termination for Cause or at any time following the
expiration of the Term, the Company will only be required to pay Employee any
unpaid compensation earned by Employee pursuant to Part Two, Section 4.A. for
services rendered through the date of such termination, and no termination or
severance benefits will be payable to Employee under Part Two, Section 10.

                      PART THREE - MISCELLANEOUS PROVISIONS

     1.   Mitigation. Employee shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by seeking other
employment or otherwise and no future income earned by Employee from employment
or otherwise shall in any way reduce or offset any payments due to Employee
hereunder. The provisions of this Agreement, and any payment provided for
hereunder, shall not reduce any amounts otherwise payable, or in any way
diminish Employee's existing rights which would accrue solely as a result of the
passage of time, under any Company Employee Benefit Plan, "Payroll practice" (as
defined in ERISA), compensation arrangement, incentive plan, stock option or
other stock-related plan.

     2.   Indemnification. The indemnification provisions for officers and
directors under the Company's Bylaws and any applicable indemnification
agreement between Employee and the Company will (to the maximum extent permitted
by law) be extended to Employee, during the period following Employee's
Involuntary Termination, with respect to any and all matters, events or
transactions occurring or effected during Employee's Employment Period.

     3.   Miscellaneous. The provisions of this Agreement will be construed and
interpreted under the laws of the State of California. This Agreement
incorporates the entire Agreement between Employee and the Company relating to
the terms of Employee's employment and the subject of severance benefits and
supersedes all prior agreements and understandings with respect to such subject
matter. This Agreement may only be amended by written instrument signed by
Employee and an authorized executive officer of the Company.

     4.   Injunctive Relief and Additional Remedy. Employee acknowledges that
the injury that would be suffered by the Company as a result of a breach of the
provisions of Sections 12, 13, 14 and 15 of Part Two would be irreparable and
that an award of monetary damages to the Company for such a breach would be an
inadequate remedy. Consequently, the Company will have the right, in addition to
any other rights it may have, to obtain injunctive relief to restrain any breach
or threatened breach or otherwise to specifically enforce any provision of this
Agreement, and the Company will not be obligated to post bond or other security
in seeking such relief.

     5.   Representations and Warranties by Employee. Employee represents and
warrants to the Company that the execution and delivery by Employee of this
Agreement do not, and the performance by Employee of Employee's obligations

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hereunder will not, with or without the giving of notice or the passage of time,
or both: (a) violate any judgment, writ, injunction, or order of any court,
arbitrator, or governmental agency applicable to Employee or (b) conflict with,
result in the breach of any provisions of or the termination of, or constitute a
default under, any agreement to which Employee is a party or by which Employee
is or may be bound.

     6.   Waiver. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by either
party in exercising any right, power, or privilege under this Agreement will
operate as a waiver of such right, power, or privilege, and no single or partial
exercise of any such right, power, or privilege will preclude any other or
further exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable law,
(a) no claim or right arising out of this Agreement can be discharged by one
party, in whole or in part, by a waiver or renunciation of the claim or right
unless in writing signed by the other party; (b) no waiver that may be given by
a party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one party will be deemed to be a waiver
of any obligation of such party or of the right of the party giving such notice
or demand to take further action without notice or demand as provided in this
Agreement.

     7.   Binding Effect; Delegation of Duties. This Agreement shall be binding
upon and inure to the benefit of the Company and any successor of the Company,
including, without limitation, any corporation or corporations acquiring
directly or indirectly all or substantially all of the stock, business or assets
of the Company, whether by merger, consolidation, division, sale or otherwise
(and such successor shall thereafter be deemed the "Company" for purposes of
this Agreement). The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of he Company, by agreement in
form and substance satisfactory to Employee, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if such succession had not taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement
entitling Employee to the benefits hereunder, as though Employee was subject to
Involuntary Termination. This Agreement shall be binding and inure to the
benefit of Employee, Employee's successors, assigns, executors, administrators
or beneficiaries. The duties and covenants of Employee under this Agreement,
being personal, may not be delegated.

     8.   Entire Agreement; Amendments. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, between the
parties hereto with respect to the subject matter hereof. This Agreement may not
be amended orally, but only by an agreement in writing signed by the parties
hereto.

     9.   Arbitration. Any controversy which may arise between Employee and the
Company with respect to the construction, interpretation or application of any
of the terms, provisions, covenants or conditions of this Agreement or any claim
arising from or relating to this Agreement will be submitted to final and
binding arbitration in Los

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Angeles, California or in any other mutually acceptable location in accordance
with the rules of the American Arbitration Association then in effect.

     10.  Severability. If any court of competent jurisdiction holds any
provision of this Agreement invalid or unenforceable, the other provisions of
this Agreement shall remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree shall remain in
full force and effect to the extent not held invalid or unenforceable.

     11.  Counterparts; Facsimile. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement. To the maximum extent permitted by applicable law,
this Agreement may be executed via facsimile.

     12.  Notices. Any notice required to be given under this Agreement shall be
deemed sufficient, if in writing, and sent by certified mail, return receipt
requested, via overnight courier, or hand delivered to the Company at 22 Pelican
Way, San Rafael, California 94901, and to Employee at the most recent address
reflected in the permanent Company records.

     13.  Legal Costs. If any legal action or other proceeding is brought by
either party for the enforcement of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with any of the
provisions of this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys fees and other costs incurred in that action or proceeding.
Notwithstanding anything herein above to the contrary, as between Employee and
the Company, the Company shall bear all legal costs and expenses of defending
the validity of this Agreement against any third party. The Company shall bear
all legal costs and expenses incurred in the event the Company should contest or
dispute the characterization of any amounts paid pursuant to this Agreement as
being nondeductible under Section 280G of the Code or subject to imposition of
an excise tax under Section 4999 of the Code.

     IN WITNESS WHEREOF, the Company and Employee have executed this Agreement
as a sealed instrument as of the Effective Date.


QUADRAMED CORPORATION


By: /s/ Peter van der Grinten              /s/ Frank Pecaitis
    -----------------------------------    -------------------------------------
    Peter van der Grinten                  Frank Pecaitis
    Its Enterprise Division President


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                                    EXHIBIT A

     Section 2870. Employment agreements; assignment of rights.
     ----------------------------------------------------------

     (a)  Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:

          (1)  Relate at the time of conception or reduction to practice of the
invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer; or

          (2)  Result from any work performed by the employee for the employer.

(b)  To the extent a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this

                                  Page 12 of 12