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Exhibit 4.10
THIS SUBORDINATED SECURITY (THE "SECURITY") HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES NOT TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) UNLESS SUCH OFFER, SALE OR OTHER TRANSFER IS (A)
TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION
S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF SUBPARAGRAPH (A)(1), (A)(2), (A)(3) OR (A)(7) OF RULE 501 UNDER
THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR
THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE THEN HOLDER OF
THIS SECURITY AFTER THE RESALE RESTRICTION TERMINATION DATE.
THE HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, IS DEEMED TO HAVE AGREED TO
BE BOUND BY THE PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT, DATED AS OF
APRIL 27, 1998, BY AND AMONG THE COMPANY, XXXXXXX XXXXX XXXXXX, XXXXX XXXXXX
INC., BEAR, XXXXXXX & CO. INC. AND BT ALEX. XXXXX INCORPORATED (THE
"REGISTRATION RIGHTS AGREEMENT").
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NO. _____ CUSIP NO. 00000XXX0
$____________
QUADRAMED CORPORATION
5.25% CONVERTIBLE SUBORDINATED DEBENTURE DUE May 1, 2005
QuadraMed Corporation, a corporation duly organized and existing under
the laws of Delaware (herein called the "Company," which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to Xxxxx Xxxxxx Inc., or registered assigns,
the principal sum of --------------------------- ($-------) on May 1, 2005, and
to pay interest thereon from and including the date of initial issuance of
Securities under the Indenture, or from and including the most recent Interest
Payment Date to which interest has been paid or duly provided for, semiannually
on May 1 and November 1 in each year, commencing November 1, 1998, at the rate
of 5.25% per annum, until the principal hereof is paid or made available for
payment. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security is registered at the close of business on the
Regular Record Date for such interest, which shall be the April 15 or October 15
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Payment of the principal of (and premium, if any) and
interest on this Security will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
and in such other cities, if any, as the Company may designate in writing to the
Trustee, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Company payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee (as defined below) under the Indenture (as defined
below), by the manual signature of one of its authorized officers, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
Capitalized terms used in this Security which are defined in the
Indenture shall have the respective meanings assigned to them in the Indenture.
Pursuant to the Registration Rights Agreement, if a Registration Default
(as defined in the Registration Rights Agreement) has occurred, the Company has
agreed to pay liquidated
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damages to each Holder of Transfer Restricted Securities (as defined in the
Registration Rights Agreement) which has complied with its obligations under the
Registration Rights Agreement. The amount of liquidated damages payable during
any period in which a Registration Default shall have occurred and be continuing
is that amount which is equal to one-quarter of one percent (25 basis points)
per annum per $1,000 principal amount or $2.50 per annum per 30.075 shares of
common stock (subject to adjustment in the event of a stock split, stock
recombination, stock dividend and the like) constituting Transfer Restricted
Securities for the first 90 days during which a Registration Default has
occurred and is continuing and 50 basis points per annum per $1,000 principal
amount of Securities or $5.00 per annum per 30.075 shares of Common Stock
(subject to adjustment as set forth above) constituting Transfer Restricted
Securities for any additional days during which a Registration Default has
occurred and is continuing. The Company will pay all accrued liquidated damages
by wire transfer of immediately available funds or by federal funds check on
each Damages Payment Date (as defined in the Registration Rights Agreement).
Following the cure of a Registration Default, liquidated damages will cease to
accrue with respect to such Registration Default.
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NO RECOURSE SHALL BE HAD FOR THE PAYMENT OF THE PRINCIPAL OF OR THE
INTEREST ON THIS DEBENTURE OR FOR ANY CLAIM BASED HEREON, OR OTHERWISE IN
RESPECT HEREOF, OR BASED ON OR IN RESPECT OF THE INDENTURE OR ANY INDENTURE
SUPPLEMENTAL THERETO AGAINST ANY INCORPORATOR, STOCKHOLDER, OFFICER OR DIRECTOR,
AS SUCH, PAST OR PRESENT OR FUTURE OF THE COMPANY OR OF ANY SUCCESSOR THEREOF,
WHETHER BY VIRTUE OF ANY CONSTITUTION, STATUTE OR RULE OF LAW, OR BY THE
ENFORCEMENT OF ANY ASSESSMENT OR PENALTY OR OTHERWISE, ALL SUCH LIABILITY BEING,
BY THE ACCEPTANCE HEREOF AND AS PART OF THE CONSIDERATION FOR THE ISSUE HEREOF,
EXPRESSLY WAIVED AND RELEASED.
THE PROVISIONS OF THIS SECURITY ARE CONTINUED ON THE REVERSE SIDE HEREOF
AND SUCH CONTINUED PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS
THOUGH FULLY SET FORTH AT THIS PLACE.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile.
QUADRAMED CORPORATION
By
-------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities
referred to in the
within-mentioned Indenture.
The Bank of New York, as Trustee
By
-------------------------------
Authorized Signatory
Dated:___________________________
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REVERSE SIDE OF DEBENTURE
This Security is one of a duly authorized issue of Securities of the
Company designated as its 5.25% Convertible Subordinated Debentures due 2005
(herein called the "Securities"), limited in aggregate principal amount to
$115,000,000 (including the initial purchasers' over-allotment option), issued
and to be issued under a Subordinated Indenture, dated as of May 1, 1998, the
resolution adopted by the Company's Board of Directors on April 7, 1998, and the
Officers' Certificate dated May 1, 1998 (herein collectively called the
"Indenture"), between the Company and The Bank of New York, as Trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee, the holders of
Senior Indebtedness and the Holders of the Securities, and of the terms upon
which the Securities are, and are to be, authenticated and delivered.
Subject to and upon compliance with the provisions of the Indenture, the
Holder of this Security is entitled, at his option, at any time on or before the
close of business on May 1, 2005, or in case this Security or a portion hereof
is called for redemption or repurchase, then in respect of this Security or such
portion hereof until and including, but (unless the Company defaults in making
the payment due upon redemption or repurchase, as the case may be) not after,
the close of business on the second business day preceding the Redemption Date
or the close of business on the Repurchase Date, respectively, to convert this
Security (or any portion of the principal amount hereof which is $1,000 or an
integral multiple thereof), at the principal amount hereof, or of such portion,
into fully paid and non-assessable shares (calculated as to each conversion to
the nearest 1/100 of a share) of Common Stock of the Company at a conversion
price equal to $33.25 aggregate principal amount of securities for each share of
Common Stock (or at the current adjusted conversion price if an adjustment has
been made as provided in the Indenture) by surrender of this Security, duly
endorsed or assigned to the Company or in blank, to the Company at its office or
agency in the Borough of Manhattan, The City of New York, and in such other
cities, if any, as the Company may designate in writing to the Trustee, with the
form of conversion notice hereon executed by the Holder hereof evidencing such
Holder's election to convert this Security, or if less than the entire principal
amount hereof is to be converted, the portion hereof to be converted, and, in
case such surrender shall be made during the period from the close of business
on any Regular Record Date next preceding any Interest Payment Date to the close
of business on such Interest Payment Date (unless this Security or the portion
thereof being converted has been called for redemption on a Redemption Date
within such period), also accompanied by payment
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in New York Clearing House or other funds acceptable to the Company of an amount
equal to the interest payable on such Interest Payment Date on the principal
amount of this Security then being converted. Subject to the aforesaid
requirement for payment and, in the case of a conversion after the Regular
Record Date next preceding any Interest Payment Date and on or before such
Interest Payment Date, to the right of the Holder of this Security of record at
such Regular Record Date to receive an installment of interest (with certain
exceptions provided in the Indenture), no payment or adjustment is to be made on
conversion for interest accrued hereon or for dividends on the Common Stock
issued on conversion. No fractions of shares or scrip representing fractions of
shares will be issued on conversion, but instead of any fractional interest the
Company shall pay a cash adjustment as provided in the Indenture. The conversion
price is subject to adjustment as provided in the Indenture. In addition, the
Indenture provides that in case of certain consolidations or mergers to which
the Company is a party or the transfer of substantially all of the assets of the
Company, the Indenture shall be amended, without the consent of any Holders of
Securities, so that this Security, if then outstanding, will be convertible
thereafter, during the period this Security shall be convertible as specified
above, only into the kind and amount of debentures, cash and other property
receivable upon the consolidation, merger or transfer by a holder of the number
of shares of Common Stock into which this Security might have been converted
immediately prior to such consolidation, merger or transfer (assuming such
holder of Common Stock failed to exercise any rights of election and received
per share the kind and amount received per share by a plurality of non-electing
shares).
The Securities are subject to redemption upon not less than 30 nor more
than 60 days' notice by first class mail, at any time on or after May 4, 2001,
as a whole or in part, at the election of the Company, at the following
Redemption Prices (expressed as percentages of the principal amount):
If redeemed during the 12-month period beginning May 1 of the years indicated
(May 4, in the case of 2001), the redemption price shall be:
Redemption
Year Price
---- -----
2001 103.00%
2002 102.25%
2003 101.50%
2004 100.75%
2005 100.00%
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together in the case of any such redemption with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities, or
one or more Predecessor Securities, of record at the close of business on the
Regular Record Dates referred to on the face hereof, all as provided in the
Indenture.
The Indenture provides that if a Repurchase Event (as defined therein)
occurs, each Holder of Securities shall have the right, in accordance with the
provisions of the Indenture, to require the Company to repurchase all of such
Holder's Securities, or any portion thereof that is an integral multiple of
$1,000, for cash at a price equal to 100% of the principal amount of such
Securities to be repurchased, together with accrued interest to the Repurchase
Date, but any interest installment the Stated Maturity of which is on or prior
to such Repurchase Date will be payable to the Holders of such Securities, or
one or more Predecessor Securities, of record at the close of business on the
Regular Record Dates referred to on the face hereof, all as provided in the
Indenture.
In the event of redemption, conversion or repurchase of this Security in
part only, a new Security or Securities for the portion hereof not redeemed,
converted or repurchased will be issued in the name of the Holder hereof upon
the cancellation hereof.
The indebtedness evidenced by this Security is, to the extent and in the
manner provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full of all amounts then due on all Senior Indebtedness of
the Company, and this Security is issued subject to such provisions of the
Indenture with respect thereto. Each Holder of this Security, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and (c) appoints the
Trustee his attorney-in-fact for any and all such purposes.
If an Event of Default shall occur and be continuing, the principal of
all the Debentures and interest accrued thereon may be declared due and payable
in the manner and with the effect provided in the Indenture. The Indenture
provides that in certain events such declaration and its consequences may be
waived by the holders of a majority in aggregate principal amount of the
Debentures then outstanding.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with
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respect to the Securities, the Holders of not less than 25% in principal amount
of the Securities at the time Outstanding shall have made written request to the
Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not
have received from the Holders of a majority in principal amount at the time
Outstanding a written direction inconsistent with such request, and the Trustee
shall have failed to institute any such proceeding for 60 days after receipt of
such notice, request and offer of indemnity. The foregoing shall not apply to
any suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof or any premium or interest hereon on or after the
respective due dates expressed herein or of the right to convert this Security
in accordance with the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed or to convert this Security as provided in the
Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
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The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
THE INDENTURE AND THIS DEBENTURE SHALL BE DEEMED TO BE A CONTRACT UNDER
THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO THE CONFLICTS OF LAW
PRINCIPLES THEREOF.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Security, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -___ CUSTODIAN _____
TEN ENT - as tenants by the (Cust) (Cust)
entireties under Uniform Gifts to Minors Act______
JT TEN - as joint tenants with (State)
right of Survivorship
and not as tenants in
common
Additional abbreviations may also be used though not in the above list.
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------------------------------------------------------
(Please print or typewrite name and address including
postal zip code of assignee)
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this Security and all rights thereunder hereby irrevocably constituting
and appointing
_________________________________________________________ , Attorney, to
transfer this Security on the books of the Trustee, with full power of
substitution in the premises.
Dated:___________________________ ___________________________________
___________________________________
Notice: The signature(s) on this
Assignment must correspond with the
name(s) as written upon the face of
this Security in every particular,
without alteration or enlargement or
any change whatsoever.
Signature Guaranty:_______________
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[FORM OF CONVERSION NOTICE.]
The undersigned Holder of this Security hereby irrevocably exercises the
option to convert this Security, or portion hereof (which is $1,000 or an
integral multiple thereof) below designated, into shares of Common Stock in
accordance with the terms of the Indenture, and directs that the shares issuable
and deliverable upon such conversion, together with any check in payment for
fractional shares and any Securities representing any unconverted principal
amount hereof, be issued and delivered to the undersigned unless a different
name has been indicated below. If this Notice is being delivered on a date after
the close of business on a Regular Record Date and prior to the opening of
business on the related Interest Payment Date (unless the Security or the
portion thereof being converted has been called for redemption on a Redemption
Date within such period), this Notice is accompanied by payment in funds
acceptable to the Company, of an amount equal to the interest payable on such
Interest Payment Date of the principal of the Security to be converted. If
shares or Securities are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Security.
Principal Amount to be Converted
(in an integral multiple of
$1,000, if less than all):
$______________________________
Dated________________________________ _____________________________
Signature (s)
Fill in for registration of shares of Common Stock and Security if to be
issued otherwise than to the registered holder.
_____________________________ Social Security or other
Taxpayer Identification Number
_____________________________
(Name)
_____________________________
(Address)
_____________________________
Please print Name and Address
(including zip code number)
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