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Contract - State of Colorado and ARIS Corp.

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                                                   STATE OF COLORADO
                                              DEPARTMENT OF HUMAN SERVICES
                                       OFFICE OF INFORMATION TECHNOLOGY SERVICES
                                                 DEPT #
                                                 ROUTING # 99 IHA 00458
                                     -------------------------------------------


                                    CONTRACT


        THIS CONTRACT, made this 2nd day of October, 1998, by and between the
State of Colorado for the use and benefit of the DEPARTMENT OF HUMAN SERVICES,
Office of Information Technology Services, 1575 Sherman St., 7th Floor, Denver,
Colorado 80203, hereinafter referred to as the State, and ARIS CORPORATION, P.O.
Box 4424, Bellevue, WA 98009-4224, (with a local business office at 717
Seventeenth Street, Suite 1510, Denver, CO 80202), hereinafter referred to as
the Contractor.

        WHEREAS, authority exists in the Law and Funds have been budgeted,
appropriated and otherwise made available and a sufficient unencumbered balance
thereof remains available for payment in Fund Number 100, Appropriation Code
240; and

        WHEREAS, required approval, clearance and coordination- has been
accomplished from and with appropriate agencies; and

        WHEREAS, in accordance with the terms hereof, the parties desire to have
Contractor engineer, design, acquire, install, develop, test, and implement all
required hardware and software, develop and deliver training, and provide
helpdesk support considered necessary for the County Financial Management
System, hereinafter called CFMS, an automated financial management system for
use by the State and counties of Colorado; and

        WHEREAS, in accordance with the terms hereof, the parties desire to have
Contractor provide maintenance of CFMS (application software, host environment
hardware/software, training, and helpdesk support) for one year and up to four
additional years at the State's option; and

        WHEREAS, on July 27, 1998 the State issued Request for Proposal #
IHANC907015ITSX (the "RFP") seeking proposals from vendors for services for the
CFMS project; and

        WHEREAS, in response to the RFP, the Contractor submitted its proposal
(the "Proposal") which was determined to be the most advantageous to the State,
taking into consideration the price and evaluation facto set forth in the RFP.



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<PAGE>   2


NOW THEREFORE, it is here by agreed that

I.      Statement of Work

        A. The parties understand and agree that Exhibit A attached hereto
        consists of the RFP and that Exhibit B attached hereto consists of the
        Proposal The Contractor shall provide to the State the services and
        deliverables set forth herein and in Exhibits A and B, at the prices and
        rates set forth in Exhibits B and C.

        B. In the event of conflict between the terms of this Agreement and the
        provisions of Exhibits A and/or B, the terms of this Agreement shall
        control. In the event of a conflict between the provisions of Exhibit A
        and the provisions of Exhibit B, the provisions of Exhibit A shall
        control.

        C. The Contractor shall provide the services hereunder in accordance
        with the workplan with deliverables schedule and costs attached hereto
        as Exhibit C. In the event of conflict between the terms of this
        Agreement and the provisions of Exhibit C, the terms of this Agreement
        shall control. In the event of a conflict between the provisions of
        Exhibit C and the provisions of Exhibits A and/or B, the provisions of
        Exhibit C shall control.

II.     PROJECT STAFF

        In the performance hereunder, unless otherwise approved by the State,
        which approval by the State shall not unreasonably withhold, the
        Contractor shall use and provide the key project staff proposed in
        Exhibit B. It is agreed that the key project staff proposed shall be
        provided by the Contractor for this project and approved by the State
        and any changes in key staffing must also be approved by the State.

        The State shall retain the right to request, within a reasonable period
        of time, the replacement of any of the Contractor personnel whose
        qualifications or performance does not meet the qualifications or
        performance necessary for the successful and timely completion of the
        project. Upon receipt of such written request, the Contractor shall
        comply with such a request within 30 days, or take other corrective
        action as may be negotiated with the State.

III.    Ownership of Materials and Information

        A. During the term of this Agreement, as a result of Contractor's
        efforts under this Agreement, Contractor may generate ideas, inventions,
        suggestions, copyrightable materials or other information ("Intellectual
        Property") which fall into one of two categories:



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<PAGE>   3

        1.      Intellectual Property specifically related to the subject
                mattes of Contractor's efforts under this Agreement, and
                directly related to, of incorporated into, the work product to
                be produced by Contractor and delivered to the State under this
                Agreement Title to Intellectual Property described in this
                paragraph 111.A I., that is developed solely by Contractor, or
                jointly by Contractor and the State, shall remain in the State
                at all times Contractor agrees to disclose and assign to the
                State, in a term satisfactory to the State, all such
                Intellectual Property, whether made alone or in conjunction with
                others, and to render such assistance as the State may
                reasonably require to perfect such assignments and to protect
                such Intellectual Property. The parties understand and agree
                that any such property, if developed from federal funds, may be
                the property of the Federal Government. If such be the case, the
                State reserves a royalty-free, non-exclusive, and irrevocable
                license to reproduce, publish, and otherwise use and to
                authorize others to use for the State's and for the Federal
                Government's purposes, any such intellectual property; and

        2.      Intellectual Property of general applicability, whether or not
                related to, or incorporated into, the work product to be
                produced by Contractor and delivered to the State under this
                Agreement. Title to Intellectual Property described in this
                paragraph III.A.2., including any Intellectual Property
                developed by Contractor prior to or outside of this Agreement,
                shall remain in Contractor. To the extent such Intellectual
                Property is incorporated into the work product to be produced by
                Contractor and delivered to the State under this Agreement,
                Contractor grants and the State hereby accepts, a perpetual,
                worldwide, royalty-free, non-exclusive license to use all such
                Intellectual Property as incorporated into the Contractor work
                product."

        B. The State will be the owner of the license provided by the contractor
        on all third party proprietary operating and vendor software package(s)
        which are provided to the State hereunder.

        C. The State grants the Contractor, to the extent authorized by law,
        rights to royalty-free use of the CFMS Project software and
        documentation in the bidding and performance of other government system
        transfer or development projects, provided such use does not result in
        any additional cost to the State, compromise the performance of this or
        any other State project, or disclose any restricted State or personal
        data obtained by the Contractor in performance of this contract.



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<PAGE>   4

        D. Records Retention and Availability All contractor records. documents,
        communications and other materials related to the performance of this
        contract shall remain the property of tile Contractor to ensure the
        Contractor "s ability to comply with all State, Federal and SIC
        corporate reporting requirement, but shall be made available to the
        State for review and audit as defined in Section VI paragraph H of this
        Contract "Inspection". All such records shall be maintained by the
        contractor, for a period of 4 years from November I, 1998.

        E. Approval Process for Deliverables: The State agrees to review the
        final deliverable document, product, or service within five (5) to ten
        (10) working days of receipt, as applicable, thereof by the State.
        Acceptance/rejection by the State will be indicated by a Letter of
        Acceptance/Rejection citing the specific deliverables that are
        approved/or not approved. Any approvals required by the Federal
        government are excluded from this agreement and may add additional time
        for review. Should protracted review by the Federal government result in
        an impact on the project schedule, parties agree to negotiate a revised
        schedule based on the delay.

IV.     MANDATORY FIXED PRICE DELIVERABLES

        The Contractor shall provide an operational system that meets the
        requirements specified in the RFP (EXHIBIT A), and in accordance with
        the requirements (technical and functional) defined in the detailed
        design, required under Exhibit C, and accepted and approved by the State
        for an amount not to exceed $5,170,937.

        The development process for the system shall take no longer than eight
        (8) months from November 2, 1998 and the Contractor shall allow for a
        subsequent six (6) month acceptance period. The Contractor shall
        provide, upon acceptance of a fully operational system, one (1) year of
        mandatory maintenance, support and operation for the system as defined
        in the RFP (warranty period).

        All fixed price deliverables are subject to the State's acceptance
        before they can be determined as "final". The list of fixed price
        deliverables for the System is included in EXHIBIT C.

V.      OPTIONAL MAINTENANCE AND SUPPORT

        The Contractor shall provide support (including, but not limited to
        on-going application software, host environment hardware/software,
        training, and help desk support) for up to four (4) years, at the
        State's option, exercisable on a year by year basis, beginning at the
        conclusion of the warranty period, and ending December 31, 2004 This
        request for maintenance and support can be made on a year by year basis
        up to four (4) years as specified in the RFP (EXHIBIT A)



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<PAGE>   5

        Optional Maintenance acrd Support for the System is not to exceed
        $4,054,253 for a period of 4 years ($9 9,372 for Year l - 2001, $986,890
        for Year 2 - 2002, $1,()37,969 for Year 3 - 2003, and $1,090,022 for
        Year 4 - 2004). to be exercised at the State's option This amount is the
        Contractor's fixed price bid for up to 4 years of maintenance and
        support The additional 4 years of optional support and maintenance will
        require a plan set forth by the Contractor for the State's approval,
        which lists deliverables This plan and the procedure for the
        year-by-year exercise of the optional maintenance and support shall be
        finalized between the parties by a formal amendment hereto. The
        Contractor shall provide the plan to the State not later than September
        30, 2000

        Financial obligations of the State of Colorado payable after the current
        fiscal year are contingent upon funds for that purpose being
        appropriated, budgeted, and otherwise made available

VI.     MISCELLANEOUS PROJECT PROVISIONS

        A.      BILATERAL CHANGE ORDER LETTERS

                Bilateral changes within the general scope of the contract may
                be executed using the simplified change order letter process
                described in this paragraph and the model letter attached as
                EXHIBIT D for any of the following reasons:

                1.      Where the agreed changes result in no adjustment to the
                        price, delivery schedule, or other terms and conditions
                        of the contract, the change letter will contain a mutual
                        release of claims for adjustment of price, cost, time
                        for performance, or other terms and conditions, whether
                        based on costs of changed work or direct or indirect
                        impacts on unchanged work, as a result of the change; or

                2.      Where the changes to the contract are price based on the
                        unit prices to be paid for the goods or services in
                        EXHIBIT C of the contract (unit prices refers to such in
                        EXHIBIT B); or

                3.      Where the changes to the contract are priced based on
                        the established catalog prices generally extended to the
                        public, or on prices or rates set by law or regulation.



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                        The written bilateral change order letter WILL be
                        substantially in tile form at EXHIBIT D, must bear tile
                        signature of' tile authorized agency official tile
                        contractor, and--except where the parties agree on the
                        face of' tile change order that no price/cost, schedule,
                        or other contract adjustments are due the contractor-the
                        State Controller or Ills designee The change order
                        letter shall refer to the basic contract and include a
                        detailed description of' the changes to the contract,
                        tile price or cost of ceiling adjustment, the effective
                        date, and (where applicable) the time within which the
                        changed work must be done. Other bilateral modifications
                        to this contract not within the scope of this paragraph
                        must be executed by formal amendment to the contract,
                        approved in accordance with State law.

        B       LIQUIDATED DAMAGES

        In the event the Contractor does not perform its obligations under this
        Contract, the State will incur major costs to maintain the functions
        that would have otherwise been performed by the Contractor. The parties
        understand and agree that the damages herein provided for are difficult
        to establish and the below stated damages are a reasonable approximation
        of actual damages.

        If the Contractor fails to meet the performance specifications herein,
        liquidated damages may be imposed by the State against the Contractor
        for Project Delays, System Down Time, Contractor Nonresponsiveness
        and/or Late Deliverables. The State may require direct payment of such
        liquidated damages from the Contractor. The parties agree that the
        damages from breach of this contract are difficult to prove or estimate,
        and the amount of liquidated damages specified herein represents a
        reasonable estimation of damages that will be suffered by the State from
        late performance, including costs of additional inspection and
        oversight, and lost opportunity for additional efficiencies that would
        have attended on-time completion of performance. The following represent
        circumstances under which liquidated damages may be imposed on the
        Contractor by the State:

                1.      LIQUIDATED DAMAGES FOR SYSTEM DOWN TIME AND NON
                        RESPONSIVENESS

                        The parties understand and agree that it is critical for
                        the CFMS host system to maintain continuous online
                        availability which meets the response time requirements
                        in Section 5 of the RFP (EXHIBIT A). It is also critical
                        that system support be available seven (7) days a week,
                        twenty-four (24) hours a day. Therefore, at any time
                        where due to the fault of the Contractor, the
                        Contractor's unscheduled production host environment
                        [host system(s) and back-up system(s)] is unavailable,
                        the liquidated damages shall be as follows:



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<PAGE>   7


                        a Down time during the business day 7:00 am to 7 pm.
                        Monday - Friday) in excess of two (2) hours $1,00 per
                        hour

                        b Down time other than business day in excess of' four
                        (4) hours $ 1,000 per hour

                        Commencing with the roll-out of the application software
                        into production, during the term hereof, the following
                        schedule applies for any continuous 24 month period
                        beginning on the date of the first individual occurrence
                        of down time:

                                Damages for the first individual occurrence of
                                down time shall be assessed at a factor of 75%.
                                Thereafter, successive instances of down time
                                shall have damages assessed at a factor as
                                follows.

                                Second and Third - 85%
                                Fourth through Sixth - 95%
                                Seventh through Twelfth - 125%
                                Thirteenth and above - 200%

                        c. The damage provisions of this section shall be
                        limited to the amount as set forth in section VI(E)(2)
                        of this Agreement.

        2.      LATE DELIVERABLES

                Subject to the limitations of liability provisions as set forth
                in section VI(E)(2) of this Agreement, in the event that the
                Contractor fails to complete and submit a required deliverable
                as defined in Exhibits C or E, $3,000 per day liquidated damages
                may be applied by the State for the late submission of the
                deliverable for each day beyond the scheduled due date for the
                deliverable. This provision also applies to deliverables that
                are deemed unacceptable by the State and the re-submission of
                the deliverable is late due to the State's rejection. This
                provision shall be limited to those items in EXHIBITS C and E
                identified by an asterisk (*).

                The remedy specified in this clause does not limit the State's
                right to exercise other remedies under this contract, or at law
                or equity.



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<PAGE>   8

        3.      FAILURE TO MEET SYSTEM IMPLEMENTATION DATE

                In the event the Contractor fails to have CFMS functioning on
                July I, 1999 in accordance with the CFMS Project Workplan, a
                $10,000 per day liquidated damages may he applied by the State
                for each day beyond July 1, 1999 This section shall be limited
                to the amounts as set forth in Section (Vl)(E-)(2) of this
                Agreement

C       BILLING, AND PAYMENT TERMS

        1.      The Contractor shall bill the State according to the agreed-upon
                payment schedule in EXHIBITS C and E.

        2.      Payment pursuant to this contract shall be made as earned, in
                whole or in part, from available funds in an amount not to
                exceed * for the purchase of the within described hardware,
                software, and consulting services, and the mandatory fixed price
                and optional maintenance and support for 4 years after
                expiration of the mandatory 12 month warranty period. The
                liability of the State, at any time shall be limited to the
                encumbered amount remaining of such funds.



                                                                   
                    *
                    *
                    *
                    *
                    *
                    *
                    *








                No unused funds in any one fiscal year may be extended for use
                in a subsequent year without the prior written consent of the
                State.

                See the "Dollar Analysis" section of Exhibit C for a full
                reconciliation of prices, use of funds, and time periods.

                3.      The State may establish forms to be followed and used by
                        the Contractor in billing for services, equipment, and
                        deliverables provided hereunder. Invoices shall be
                        submitted to the State by the Contractor on a monthly
                        basis for work performed in the previous month. The
                        State shall pay amounts due within 45 days of the
                        receipt of correct billings.

                        Financial obligations of the State of Colorado payable
                        after the current fiscal year are contingent upon funds
                        for that purpose being appropriated, budgeted, and
                        otherwise made available


*Portions of this agreement have been omitted pursuant to a request for
 confidential treatment pursuant to SEC Rule 24b-2, to be filed separately with
 the SEC no later than April 10, 2001.

                                  Page 8 of 33
<PAGE>   9

                4       Trough system implementation, for deliverables by the
                        Contractor, as set forth in Exhibit C, there shall be up
                        to a twenty percent (20%) holdback, excluding hardware.
                        non-CFMS software, and facility costs, to be retained by
                        the State pending roll-out, integration and acceptance
                        of each of' the major subsystems The 20% holdback will
                        be distributed after the System is fully operational and
                        accepted by the State, and the integrated solution as
                        identified in the RFP, has been delivered according to
                        the terms and specifications hereof Payments for
                        Facilities and Facilities Support shall be made based on
                        the expenses incurred and as billed monthly by the
                        contractor. Hardware and non-CFMS software will be
                        billed as expenses incurred and paid based on the
                        State's acceptance and approval of the deliverable.
                        Expenses subject to this provision shall be limited to
                        those items in Exhibit C identified by a pound sign (#).

D.      TAXES

        The State is exempt from all federal excise taxes and from all state and
        local government use taxes. When materials are purchased by the
        Contractor for the benefit of the State, such exemptions apply except
        that in certain political subdivisions (for example - City of Denver)
        the Contractor may be required to pay sales or use taxes even though the
        ultimate product or service is provided to the State. These sales or use
        taxes will not be reimbursed by the State.

E.      DAMAGES

        1.      Notwithstanding any language to the contrary, no interpretation
                hereof shall be allowed to find the State or any agency thereof
                has agreed to the payment of damages or penalties upon the
                occurrence or non-occurrence of a contingency.

        2.      This section is hereby made bold and conspicuous for the benefit
                of both parties. In no event shall the contractor's contractual
                liability to the State for damages of any nature exceed the
                total charges payable under this contract, as it may be amended
                from time to time. This limitation of liability provision, and
                any other limitation or exclusion of damages in this contract,
                do not limit or exclude the contractor's liability for
                infringement or for death or bodily injury or damage to tangible
                property arising out of contract performance and caused by the
                contractor, its employees, agents, or subcontractors.



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<PAGE>   10

        F.      WARRANTY OF DELIVERABLES

                1       Notwithstanding prior acceptance by the State of any
                        deliverables) under this contract, the Contractor
                        expressly warrants all documentation, reports and other
                        items as correct and complete within the terms of this
                        contract The Contractor shall warrant custom application
                        software free of significant problems or bugs after the
                        State operates the System through a complete 12 month
                        cycle or through December 31, 2000, whichever comes
                        later. The commencement date of operation of the System
                        shall be determined by the parties based upon the
                        acceptance protocol developed under Task 8 of EXHIBIT C.
                        No provision hereof shall be given effect which attempts
                        to exclude, modify, disclaim or otherwise attempts to
                        limit implied warranties of merchantability and fitness
                        for a particular purpose by the Contractor.

                2.      Upon its recognition of any significant error,
                        deficiency, or defect in the performance by the
                        Contractor, the State shall give notice to the
                        Contractor in writing, and cite in the notice the
                        specific deficiency. After such notice, the Contractor
                        shall promptly respond with a plan to correct any
                        deficiencies cited in the notice. If, in the exercise of
                        its reasonable discretion, the State finds that the plan
                        is inadequate to correct the deficiency, or if the
                        Contractor fails to diligently implement the plan or
                        correct the error, deficiency or defect, or the error
                        recurs, the State upon written notification to the
                        Contractor may act to correct the problem. Should the
                        State so act, the Contractor shall reimburse the State
                        for any costs it incurs from so acting and/or the State
                        may consider such deficiency(s) by the Contractor to be
                        a breach of this Contract.

                3.      The Contractor warrants that the software, firmware, or
                        supplies delivered, or services performed, under this
                        contract to be used before, during, and after the turn
                        of the century (January 1, 2000) are "Year 2000
                        compliant." "Year 2000 compliant" means fault-free
                        performance in the processing of date and date-related
                        (including, but not limited to calculating, comparing,
                        and sequencing) by all software products, firmware, and
                        supplies, individually and in combination as a system,
                        when used in accordance with the product documentation
                        provided by the Contractor. Fault-free performance
                        means:



                                 Page 10 of 33
<PAGE>   11


                        -       Nor invalid car incorrect results or abnormal
                                termination prior to, during, and after January
                                1, 2000 as a result of date or date-related data
                                or data processing that represents or references
                                different centuries or more than one century;
                                and

                        -       Proper calculation and handling of leap years;
                                and

                        -       Except for normal user interfaces (e.g. four
                                digit date entry) identified in the Contractor's
                                documentation, such as date data processing
                                shall be transparent to the user.

                In the event this warranty is breached, the State may elect to
                (1) return the software or supply and receive a refund of the
                purchase price (in the case of delivered software or supplies)
                or (2) require the contractor to make all code revisions or
                repairs/replacements or firmware or supplies, as well as
                revisions to associated documentation, at no cost to the State
                in order to ensure that the software, firmware or supplies are
                Year 2000 compliant so long as notice of such defect is provided
                no later than 90 days after discovery. This warranty shall
                survive acceptance of the software, firmware, or supplies and is
                not subject to any disclaimer or limitation of warranty or other
                limitation of the contractor's or vendor's liability which may
                be specified in this contract or purchase -order, or exhibits,
                appendices, or any other document attached or incorporated in
                this contract by reference. The remedies specified therein shall
                not be exclusive remedies and shall not limit any other remedy
                at law or equity available to the State.

                All remedies are cumulative and may be selectively and
                collectively enforced by the State. Enforcement of one remedy
                does not preclude enforcement of any or all other remedies.

        G.      FORCE MAIEURE

                Neither the Contractor nor the State shall be liable to the
                other for any delay in, or failure of performance of, any
                covenant or promise contained in this contract, nor shall any
                delay of failure constitute default or give rise to any
                liability for damages if, and only to the extent that, such
                delay or failure is caused by "force majeure." As used in this
                contract "force majeure" means fire, explosion, action of the
                elements, strike, interruption of transportation, government
                interference, rationing, court action, illegality, or any other
                cause which is beyond the control of the party affected and
                which, by the exercise of reasonable diligence, could not have
                been prevented by the party affected. The existence of such
                causes of delay or failure shall extend the period for
                performance to such extent as may be necessary to enable the
                complete performance in the exercise of reasonable diligence
                after the causes of delay or failure have bee n removed. Nothing



                                 Page 11 of 33
<PAGE>   12

                in this paragraph shall prevent the State from covering its
                requirements from another Contractor during the period of delay.

        H.      INSPECTION

                Upon notification, except in exceptional circumstances, the
                State or its authorized representatives has the right to inspect
                or otherwise evaluate all phases of performance under this
                contract and in any premises in which it is being performed

                Upon ten (10) days notice, except in exceptional circumstances,
                by the State to the Contractor, during any working day between
                the hours of 7:30am - 5:00pm, all documentation, including
                accounting records, related to this Contract shall be available
                locally, within the Denver metro area, for and subject to
                review, inspection, copying, and audit by the State or any other
                personnel duly authorized by the State.

                The authorized parties inspecting or otherwise evaluating
                performance, the Contractor's documents shall abide by the
                Contractor's security policies.

        I.      FUNCTIONALITY

                EXHIBIT A shall govern as to functionality to be contained in
                CFMS. EXHIBIT B shall govern as to how that functionality will
                be provided in CFMS. After approval thereof by the State, the
                provisions of the Detailed Design Document (a deliverable
                hereunder) shall control over the provisions of EXHIBITS A and
                B.

        J.      TERM

                This contract shall be effective from November 2, 1998 to
                December 31, 2004.

                In the performance herein by the Contractor, time shall be of
                the essence.

        K.      PRIME CONTRACTOR AND SUBCONTRACTORS

        1.      The Contractor shall assume ALL responsibility for the delivery
                and quality of the products and services provided by this
                contract, regardless of whether or not the Contractor hires
                subcontractors. The Contractor shall be the sole point of
                contact with the State with regard to all matters covered by
                this contract. The Contractor shall not subcontract any work or
                services provided by this contract without the express written
                consent of the State prior to initiating the subcontract.
                Subcontracts permitted by the State shall be subject to the
                requirements of this Contract, and the



                                 Page 12 of 33
<PAGE>   13

                Contractor is responsible for all subcontracting arrangements
                and the delivery of services as set forth in this Contract
                Contractor shall be responsible for the performance of' any
                subcontractor Failure of the subcontractor to provide services
                in accordance with the requirements of this contract shall be
                the responsibility of the Contractor. Contractor warrants and
                agrees that any subcontract resulting from its performance under
                the terms and conditions of this Contract, shall include a
                provision requiring the said subcontractor to abide by the terms
                and conditions hereof, as well as all other applicable federal
                and State laws, and rules and regulations pertinent hereto that
                have been or may hereafter be established. Also, Contractor
                warrants and agrees that all subcontracts shall include a
                provision that the subcontractor shall indemnify and hold
                harmless the State of Colorado, Department of Human Services.

        2.      The parties understand and agree that the September 2, 1998
                memorandum from ARIS's Legal Department (in Tab 8 of Exhibit B)
                shall not apply to this contract. The license(s) from Oracle
                Corporation to be supplied hereunder by the contractor to the
                State shall comply with the terms and conditions of the sample
                agreement attached hereto as Exhibit F.

        L.      SUPPORT

                At the option of the State, support and maintenance of the
                state-wide software applications can be out-sourced with the
                Contractor. The State retains the option to exercise these 4
                optional years of maintenance and support. It is expected that
                the Contractor will provide the maintenance and support for the
                first year as part of this contract and the 4 optional years
                will be exercised in one year increments.

        M.      NOTICE AND REPRESENTATIVES

                Representatives

                For the purposes of this Contract, the individuals identified
                below are hereby designated representatives of the respective
                parties. Either party may from time to time designate in writing
                a new or substitute representative(s):

                For the State:                       For the Contractor:
                Patrick Horton                       Mark Devlin
                Manager, Office of Operations        Regional Consulting Manager
                1575 Sherman, 60th Floor             717 17th St., Suite 1510
                Denver, CO 80203                     Denver, CO 80202
                and
                Henry D. Wharton
                Chief Information Officer




                                 Page 13 of 33
<PAGE>   14

                1575 Sherman, 7th Floor
                Denver, CO 80203

                Notice

                All notice required to be given by the parties hereunder shall
                be given by certified or registered mail, return receipt
                requested, to the individuals at the addresses set forth below.
                Either party may from time to time designate in writing a
                substitute person(s) or address to whom such notices shall be
                sent

        N.      DISPUTES

                Except as herein specifically provided otherwise, disputes
                concerning the performance of this Contract which cannot be
                resolved by the designated contract representatives shall be
                referred in writing to a senior departmental management staff
                designated by the department and a senior manager designated by
                the Contractor. Failing resolution at that level, disputes shall
                be presented in writing to the executive director and contractor
                chief executive officer for resolution. This process is not
                intended to supersede any other process for the resolution of
                controversies provided by law.

        O.      REMEDIES

                The Executive Director of the State or designee may exercise the
                following remedial actions, in addition to all other remedial
                actions authorized by law or found in this contract, should s/he
                find the Contractor substantially failed to satisfy the scope of
                work, following written notification to the Contractor.
                Substantial failure to satisfy the scope of work shall be
                defined to mean incorrect or improper activities or inaction by
                Contractor. These remedial actions are as follows:

                1.      Withhold payment of disputed amounts to Contractor until
                        the necessary services or corrections in performance are
                        satisfactorily completed;

                2.      Request the removal from work on the contract of
                        employee(s) and/or agent(s) of Contractor whom the
                        Executive Director or designee reasonably justifies as
                        being incompetent, careless, insubordinate, unsuitable,
                        or otherwise unacceptable, or whose continued employment
                        on the contract s/he deems to be contrary to the public
                        interest or not in the best interest of the State;

                3.      Deny payment or recover reimbursement for those services
                        or deliverables which have not been performed and which
                        due to circumstances caused by Contractor cannot be
                        performed or if performed would be of no value to the
                        State. Denial of the amount of payment shall be
                        reasonably related to the amount of work or deliverable
                        lost to the State;



                                 Page 14 of 33
<PAGE>   15

                4.      Incorrect payments to the Contractor due to omission,
                        error, fraud, and/or defalcation shall be recovered from
                        the Contractor by deduction from subsequent payments
                        under this Contract or other contracts between the State
                        and the Contractor, or by the State as a debt due to the
                        State or otherwise as provided by law

                5.      Terminate the Contract for cause without compensation
                        for termination costs If the State terminates the
                        Contract for cause, it WILL first give written notice to
                        the Contractor, stating the reasons for cancellation,
                        procedures to correct problems, if any, and date the
                        Contract will be terminated in the event problems have
                        not been corrected.

                        a)      In the event this Contract is terminated for
                                cause, the State will only reimburse the
                                Contractor for acceptable work or deliverables
                                received to date of termination

                        b)      In the event this Contract is terminated for
                                cause, final payment to the Contractor may be
                                withheld at the discretion of the State until
                                completion of a final audit.

                6.      This contract is subject to immediate termination by the
                        State in the event that the State determines that the
                        health, safety, or welfare of persons receiving CDHS
                        services may be in jeopardy. Additionally, the state may
                        immediately terminate this contract upon verifying that
                        the Contractor has engaged in or is about to participate
                        in fraudulent acts.

        P.      TERMINATION

                Should the State exercise its right hereunder to terminate this
                Contract for Financial Exigency or for Convenience, within 10
                days of the termination date (or such other period as the
                parties may mutually agree upon), the Contractor shall be
                entitled to be paid a reasonable amount for costs incurred. The
                Contractor shall submit to the State a statement of outstanding:
                1) reasonable and necessary costs incurred in the performance of
                the work up to the effective termination date, 2) reasonable and
                necessary costs of settling and paying termination settlement
                proposals not to exceed 30 days pay for each subcontractor, 3)
                reasonable profit on the completed, but undelivered work up to
                the date of termination and, 4) reasonable and necessary
                accounting, legal, clerical and other expenses necessary for
                preparation of termination settlement proposals.



                                 Page 15 of 33
<PAGE>   16

        Q.      Exhibits

                The following exhibits are made part of this Contract

                    EXHIBIT A     Request for Proposal (RI,_P) - because of its
                                  voluminous size, this EXHIBIT A is not
                                  attached hereto, however, each party
                                  acknowledges being in possession of an
                                  original copy of EXHIBIT A.

                    EXHIBIT B     Technical and Cost Proposal - because of its
                                  voluminous size, this EXHIBIT B is not
                                  attached hereto, however, each party
                                  acknowledges being in possession of an
                                  original copy of EXHIBIT B.

                    EXHIBIT C     Deliverable Schedule and Costs - attached
                                  hereto

                    EXHIBIT D     Task Order Format - attached hereto

                    EXHIBIT E     To Be Added after Detailed Design for the
                                  Optional Years Deliverable Schedule and Costs

                    EXHIBIT F     Sample Oracle Corporation license agreement

                    GENERAL PROVISIONS

                    SPECIAL PROVISIONS



                                 Page 16 of 33
<PAGE>   17

                                                                   [Insert 6-5]



                               GENERAL PROVISIONS

        The following clauses apply to this contract. In some instances, these
        general clauses have been expanded upon in other sections of this
        contract. To the extent that other provisions of the contract provide
        more specificity than these general clauses, the more specific provision
        shall control.

A.      Federal Funds Contingency

        Payment pursuant to this contract, if in federal funds, whether in whole
        or in part, is subject to and contingent upon the continuing
        availability of federal funds for the purposes hereof. In the event that
        said funds, or any part thereof, become unavailable as determined by the
        State, the State may immediately terminate this contract or amend it
        accordingly.

B.      INDEPENDENT CONTRACTOR

        THE CONTRACTOR SHALL PERFORM ITS DUTIES HEREUNDER AS AN INDEPENDENT
        CONTRACTOR AND NOT AS AN EMPLOYEE. NEITHER THE CONTRACTOR NOR ANY AGENT
        OR EMPLOYEE OF THE CONTRACTOR SHALL BE OR SHALL BE DEEMED TO BE AN AGENT
        OR EMPLOYEE OF THE STATE. CONTRACTOR SHALL PAY WHEN DUE ALL REQUIRED
        EMPLOYMENT TAXES AND INCOME TAX WITHHOLDING, INCLUDING ALL FEDERAL AND
        STATE INCOME TAX AND LOCAL HEAD TAX ON ANY MONIES PAID PURSUANT TO THIS
        CONTRACT. CONTRACTOR ACKNOWLEDGES THAT THE CONTRACTOR AND ITS EMPLOYEES
        ARE NOT ENTITLED TO UNEMPLOYMENT INSURANCE BENEFITS UNLESS THE
        CONTRACTOR OR A THIRD PARTY PROVIDES SUCH COVERAGE AND THAT THE STATE
        DOES NOT PAY FOR OR OTHERWISE PROVIDE SUCH COVERAGE. CONTRACTOR SHALL
        HAVE NO AUTHORIZATION, EXPRESS OR IMPLIED, TO BIND THE STATE TO ANY
        AGREEMENTS, LIABILITY, OR UNDERSTANDING EXCEPT AS EXPRESSLY SET FORTH
        HEREIN. CONTRACTOR SHALL PROVIDE AND KEEP IN FORCE WORKER'S COMPENSATION
        (AND SHOW PROOF OF SUCH INSURANCE) AND UNEMPLOYMENT COMPENSATION
        INSURANCE IN THE AMOUNTS REQUIRED BY LAW, AND SHALL BE SOLELY
        RESPONSIBLE FOR THE ACTS OF THE CONTRACTOR, ITS EMPLOYEES AND AGENTS.



                                 Page 17 of 33
<PAGE>   18

C.      Beneficiary

        Except as herein specifically provided otherwise, this contract shall
        inure to the benefit of and be binding upon the parties hereto and their
        respective successors and assigns.

        It is expressly understood and agreed that the enforcement of the terms
        and conditions of this contract and all rights of action relating to
        such enforcement, shall be strictly reserved to the State and the named
        contractor. Nothing contained in this agreement shall give or allow any
        claim or right of action whatsoever by any other third person. It is the
        express intention of the State and the contractor that any such person
        or entity, other than the State or the contractor, receiving services or
        benefits under this agreement shall be deemed an incidental beneficiary
        only.

D.      Insurance - Contractor

        1.      During the term of this contract, and any extension(s) hereof,
                contractor agrees that it will keep in force an insurance policy
                or policies, issued by a company authorized to do business in
                Colorado, in the kinds and minimum amounts specified below
                unless specifically waived herein. In the event of cancellation
                of any such coverage, the contractor shall immediately notify
                the State of such cancellation.

                a.      Standard Worker's Compensation and Employers' Liability
                        as required by State statute, including occupational
                        disease; covering all employees on or off the work site,
                        acting within the course and scope of their employment.

                b.      General, Personal Injury, Professional, Automobile
                        Liability (including bodily injury, personal injury and
                        property damage) with minimum coverage of:

                        (1)     Occurrence basis policy: combined single limit
                                of $600,000 or Claims-Made policy: combined
                                single limit of $600,000; plus an endorsement,
                                certificate, or other evidence that extends
                                coverage two years beyond the performance period
                                of the contract.

                        (2)     Annual Aggregate Limit policy: Not less than
                                $1,000,000 plus agreement that the contractor
                                will purchase additional insurance to replenish
                                the limit to $1,000,000 if claims reduce the
                                annual aggregate below $600,000.



                                 Page 18 of 33
<PAGE>   19


        2.      The State of Colorado shall be named as an additional insured on
                all liability policies.

        3.      The insurance shall include provisions preventing cancellation
                without thirty (30) calendar days prior written notice to the
                State by certified mail.

        4.      Upon execution of this contract, the contractor shall provide to
                the State additional insured endorsements and certificates of
                the required insurance coverage.

        5.      The contractor shall provide such other insurance as may be
                required by law, or in a specific solicitation.

        6.      If the contractor is a "public entity" within the meaning of the
                Colorado Governmental Immunity Act, 24-10-101, et seg.. C.R.S..
                as amended ("Act"); the contractor shall maintain such
                insurance, by commercial policy or selfinsurance, as is
                necessary to meet the contractor's liabilities under-the Act.
                Proof of such insurance shall be provided upon request by the
                State.

E.      Contractor Representations - Licenses/Approvals/insurance

        The contractor certifies that, at the time of entering into this
        contract, it has currently in effect all necessary licenses,
        certifications, approvals, insurance, etc. required to properly provide
        the services and/or supplies covered by this contract. Additionally, all
        employees of the contractor performing services under this contract
        shall hold the required license or certification, if any, to perform
        their responsibilities. Any revocation, withdrawal or nonrenewal of
        necessary license, certification, approval, insurance, etc. required for
        the contractor to properly perform this contract, shall be grounds for
        termination of this contract by the State.

        The contractor further certifies that, if a foreign corporation, a
        limited liability company, a limited liability partnership or a limited
        liability limited partnership, it currently has a Certificate of Good
        Standing or Certificate of Existence to do business in Colorado. Proof
        of such certification shall be provided upon request by the State.

F.      Records Maintenance

        The contractor shall maintain a complete file of all records, documents,
        communications, and other materials which pertain to the operation of
        the



                                 Page 19 of 33
<PAGE>   20

        program/project or the delivery of services under this contract. Such
        files shall be sufficient to properly reflect all direct and indirect
        costs of labor, materials, equipment, supplies and services, and other
        costs of whatever nature for which a contract payment was made. These
        records shall be maintained according to generally accepted accounting
        principles and shall be easily separable from other contractor records.

G.      Records Retention and Availability

        All such records, documents, communications, and other materials shall
        be the property of the State unless otherwise specified herein and shall
        be maintained by the contractor, for a period of three (3) years from
        the date of final payment or submission of the final federal expenditure
        report under this contract, unless the State requests that the records
        be retained for a longer period, or until an audit has been completed
        with the following qualification. If an audit by or on behalf of the
        federal and/or state government has begun but is not completed at the
        end of the three (3) year period, or if audit findings have not been
        resolved after a three (3) year period, the materials shall be retained
        until the resolution of the audit findings.

H.      Performance Monitoring

        The contractor shall permit the State and any other governmental agency
        authorized by law, or their authorized designee to monitor all
        activities conducted by the contractor pursuant to the terms of this
        contract. As the monitoring agency may in its sole discretion deem
        necessary or appropriate, such monitoring may consist of intemal
        evaluation procedures, reexamination of program data, special analyses,
        on-site verification, formal audit examinations, or any other reasonable
        procedures. All such monitoring shall be performed in a manner that will
        not unduly interfere with contract work.

I.      Audits

        1.      General. The contractor authorizes the State or its
                representatives to perform audits and/or inspections of its
                records at any reasonable time during the term of this contract
                and for a period of three (3) years, (unless the State
                determines a longer timeframe is required) following the date of
                final payment under this contract, to assure compliance with its
                terms and/or to evaluate the contractor's performance.



                                  Page 20 of 33
<PAGE>   21


                Any amounts which have been paid by the State which are found to
                be improper in accordance with other terms of this contract
                shall be immediately returned to the State or may be received in
                accordance with other remedies.

        2.      Single Audit Clause. All state and local governments and
                non-profit organizations receiving more than $300,000 from all
                funding sources, that are defined as federal financial
                assistance for single audit purposes, shall comply with the
                audit requirements of OMB Circular A-128 (Audits of State and
                Local Governments) or A-133 (Audits of Institutions of Higher
                Education and Other Non-profit Organizations), whichever
                applies.

J.      Confidential of Records

        The contractor shall protect the confidentiality of all records. and
        other materials containing personally identifying information that are
        maintained in accordance with this contract. Except as provided by law,
        no information in possession of the contractor about any individual
        constituent shall be disclosed in a form including identifying
        information without the prior written consent of the person in interest,
        a minor's parent, or guardian. The contractor shall have written
        policies- -governing access to, duplication and dissemination of, all
        such information. The contractor shall advise its employees, agents and
        subcontractors, if any, that they are subject to these confidentiality
        requirements. The contractor shall provide its employees, agents and
        subcontractors, if any, with a copy or written explanation of these
        confidentiality requirements before access to confidential data is
        permitted.

K.      Conflict of Interest

        During the term of this contract, the contractor shall not engage in any
        business or personal activities or practices or maintain any
        relationships which conflict in any way with the contractor fully
        performing his/her obligations under this contract.

        Additionally, the contractor acknowledges that, in governmental
        contracting, even the appearance of a conflict of interest is harmful
        -to the interests of the State.

        Thus, the contractor agrees to refrain from any practices, activities or
        relationships which could reasonably be considered to be in conflict
        with the contractor's fully performing his/her obligations to the State
        under the terms of this contract, without the prior written approval of
        the State.

        In the event that the contractor is uncertain whether the appearance of
        a conflict of interest may reasonably exist, the contractor shall submit
        to the State a full



                                 Page 21 of 33
<PAGE>   22


        disclosure statement setting forth the relevant details for the State's
        consideration and direction. Failure to promptly submit a disclosure
        statement or to follow the State's direction in regard to the apparent
        conflict shall be grounds for termination of the contract.

        Further, the contractor (and subcontractors or subgrantees permitted
        under the terms of this contract) shall maintain a written code of
        standards governing the performance of its employees engaged in the
        award and administration of contracts. No employee, officer or agent of
        the contractor, subcontractor, or subgrantee shall participate in the
        selection, or in the award or administration of a contract or
        subcontract supported by Federal funds if a conflict of interest, real
        or apparent, would be involved. Such a conflict would arise when:

                a.      The employee, officer or agent;

                b.      Any member of the employee's immediate family;

                c.      The employee's partner; or

                d.      An organization which employees, or is about to employ,
                        any of the above,

        has a financial or other interest in the firm selected for award. The
        contractor's, subcontractor's, or subgrantee's officers, employees, or
        agents will neither solicit nor accept gratuities, favors, or anything
        of monetary value from contractor's potential contractors, or parties to
        subagreements.

L.      Conformance with Law

        The contractor shall at all times during the term of this contract
        strictly adhere to all applicable federal and state laws and
        implementing regulations as they currently exist and may hereafter be
        amended. The contractor shall also require compliance with these
        statutes and regulations in subcontract and subgrant agreements, if any,
        permitted under this contract. Without limitation, these federal laws
        and regulations include:

        -       Age Discrimination Act of 1975, 42 U.S.C. Sections 6101 et. se
                q. and its implementing regulation, 45 C.F.R. Part 91;

        -       Age Discrimination in Employment Act of 1967, 29 U.S.C. 621-634;

        -       Americans with Disabilities Act of 1990 (ADA), 42 U.S.C. 12101
                et sea.;

        -       The Drug Free Workplace Act of 1988, 1988,41 U.S.C. 701 et seg.;



                                 Page 22 of 33
<PAGE>   23


        -       Equal Pay Act of 1963, 29 U_S.C. 206(d);

        -       Immigration Reform and Control Act of 1986, 8 U.S.C. 1324b;

        -       Pro-Children Act of 1994, 20 U.S.C. 6081 et seg.;

        -       Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794, as
                amended, and implementing regulation 45 C.F.R. Part 84;

        -       Titles VI & VII of the Civil Rights Act of 1964, 42 U.S.C. 2000d
                & e;

        -       Title IX of the Education Amendments of 1972, 20 U.S.C. 1681 et
                seg.;

        -       Section 24-34-302, et sea., Colorado Revised Statutes 1993, as
                amended;

        -       The "Uniform Administrative Requirements for Grants and
                Cooperative Agreements to State and Local Governments (Common
                Rule), at 49 Code of Federal Regulations, Part 18;

        -       Office of Management and Budget Circulars A-87, A-21 or A-122,
                and A-102 or A-110, whichever is applicable.

        -       The Hatch Act (5 USC 1501-1508 and Public Law 95-454 Section
                4728. These statutes state that federal funds cannot be used for
                partisan political purposes of any kind by any person or
                organization involved in the administration of
                federally-assisted programs.

        The contractor also shall comply with any and all laws and regulations
        prohibiting discrimination in the specific program(s) which is/are the
        subject of this contract. In consideration of and for the purpose of
        obtaining any and all federal and/or state financial assistance, the
        contractor makes the following assurances, upon which the State relies.

        1.      The contractor will not discriminate against any person on the
                basis of race, color, national origin, age, sex, religion and
                handicap, including Acquired Immune Deficiency Syndrome (AIDS)
                or AIDS related conditions, in performance of work under this
                contract.

        2.      At all times during the performance of this contract, no
                qualified individual with a disability shall, by reason of such
                disability, be excluded from participation in, or denied
                benefits of the service, programs, or activities




                                 Page 23 of 33
<PAGE>   24

                performed by the contractor, or be subjected to any
                discrimination by the contractor.

        3.      The contractor shall take all necessary affirmative steps, as
                required by 45 CFR 92.36(e), Colorado Executive Orders D0055 87
                and D0005 94 and State Procurement Rules, to assure that small
                and minority businesses and women's business enterprises are
                used, when possible, as sources of supplies, equipment,
                construction, and services purchased under this contract.

M.      Assignment/Delegation/Subcontracting

        Except as herein specifically provided otherwise, the duties and
        obligations of the contractor arising hereunder cannot be assigned,
        delegated nor subcontracted except with the express prior written
        consent of the State. The subcontracts permitted by the State shall be
        subject to the requirements of this contract, and the contractor is
        responsible for all subcontracting arrangements and the delivery of
        services as set forth in this contract. The contractor shall be
        responsible for the performance of any subcontractor. Failure of the
        subcontractor to provide services in accordance with the requirements of
        this contract shall be the responsibility of the contractor. . The
        contractor warrants and agrees that any subcontract resulting from its
        performance under the terms and conditions of this contract, shall
        include a provision that the said subcontractor shall abide by the terms
        and conditions hereof, as well as all other applicable federal and State
        laws, and rules and regulations pertinent hereto that have been or may
        hereafter be established. Also, the contractor warrants and agrees that
        all subcontracts shall include a provision that the subcontractor shall
        indemnify and hold harmless the State. The subcontractors must be
        certified to work on any equipment for which their services are
        obtained.

N.      Litigation

        The contractor shall promptly notify the State in the event that the
        contractor learns of any actual litigation in which it is a party
        defendant in a case which involves services provided under this
        contract. The contractor, within five (5) calendar days after being
        served with a summons, complaint, or other pleading which has been filed
        in any federal or state court or administrative agency, shall deliver
        copies of such document(s) to the State's Executive Director. The term
        "litigation" includes an assignment for the benefit of creditors, and
        filings in bankruptcy, reorganization and/or foreclosure.



                                 Page 24 of 33
<PAGE>   25

O.      Disputes

        Except as herein specifically provided otherwise, disputes concerning
        the performance of this contract which cannot be resolved by the
        designated contract representatives shall be referred in writing to a
        senior departmental management staff designated by the department and a
        senior manager designated by the contractor. Failing resolution at that
        level, disputes shall be presented in writing to the Executive Director
        and the contractor chief executive officer for resolution. This process
        is not intended to supersede any other process for the resolution of
        controversies provided by law.

P.      Remedies

        The Executive Director of the State or designee may exercise the
        following remedial actions, in addition to all other remedial actions
        authorized by law, should s/he find the contractor substantially failed
        to satisfy the scope of work found in this contract. Substantial failure
        to satisfy the scope of work shall be defined to mean incorrect or
        improper activities or inaction by the contractor.

        These remedial actions are as follows:

        1.      Withhold payment to the contractor until the necessary services
                or corrections in performance are satisfactorily completed;

        2.      Request the removal from work on the contract of employee(s)
                and/or agent(s) of the contractor whom the Executive Director or
                designee justifies as being incompetent, careless,
                insubordinate, unsuitable, or otherwise unacceptable, or whose
                continued employment on the contract s/he deems to be contrary
                to the public interest or not in the best interest of the State;

        3.      Deny payment or recover reimbursement for those services or
                deliverables which have not been performed and which due to
                circumstances caused by the contractor cannot be performed or if
                performed would be of no value to the State. Denial of the
                amount of payment shall be reasonably related to the amount of
                work or deliverables lost to the State;

        4.      Incorrect payments to the contractor due to omission, error,
                fraud, and/or defalcation shall be recovered from the contractor
                by deduction from subsequent payments under this contract or
                other contracts between the State and the contractor, or by the
                State as a debt due to the State or otherwise as provided by
                law.



                                  Page 25 of 33
<PAGE>   26

Q.      Termination

        1.      Termination for Default. The State may terminate the contract
                for cause without compensation for termination costs. If the
                State terminates the contract for cause, it will first give ten
                (10) days prior written notice to the contractor, stating the
                reasons for cancellation, procedures to correct problems, if
                any, and the date the contract will be terminated in the event
                problems have not been corrected.

                a.      In the event this contract is terminated for cause, the
                        State will only reimburse the contractor for acceptable
                        work or deliverables received up to the date of
                        termination.

                b.      In the event this contract is terminated for cause,
                        final payment to the contractor may be withheld at the
                        discretion of the State until completion of final audit.

        2.      Termination for Convenience. The State shall have the right to
                terminate this contract by giving the contractor at least thirty
                (30) days prior written notice. If notice is so given, this
                contract shall terminate on the expiration of the specified time
                period, and the liability of the parties hereunder for further
                performance of the terms of this contract shall thereupon cease,
                but the parties shall not be released from the duty to perform
                their obligations up to the date of termination.

        3.      Immediate Termination. This contract is subject to immediate
                termination by the State in the event that the State determines
                that the health, safety, or welfare of persons receiving
                services may be in jeopardy. Additionally, the State may
                immediately terminate this contract upon verifying that the
                contractor has engaged in or is about to participate in
                fraudulent acts.

        4.      Termination for Financial Exigency. The State shall have the
                right to terminate this contract for financial exigency by
                giving the contractor at least thirty (30) days prior written
                notice. For the purposes of this provision, a financial exigency
                shall be a determination made by the Colorado legislature or its
                Joint Budget Committee that the financial circumstances of the
                State are such that it is in the best interest of the State to
                terminate this contract. If notice of such termination is so
                given, this contract shall terminate on the expiration of the
                time period specified in the notice, and the liability of the
                parties hereunder for further performance of the terms of this
                contract shall



                                 Page 26 of 33
<PAGE>   27

                thereupon cease, but the parties shall not be released from the
                duty to perform their obligations up to the date of termination.

R.      Severability

        To the extent that this contract may be executed and performance of the
        obligations of the parties may be accomplished within the intent of the
        contract, the terms of this contract are severable, and should any term
        or provision hereof be declared invalid or become inoperative for any
        reason, such invalidity or failure shall not affect the validity of any
        other term or provision hereof. The waiver of any breach of a term
        hereof shall not be construed as a waiver of any other term, or the same
        term upon subsequent breach.

S.      Integration of Understandings.

        This contract is intended as the complete integration of all
        understandings between the parties. No prior or contemporaneous
        addition, deletion, or other amendment hereto shall have any force or
        effect whatsoever, unless embodied herein in writing. No subsequent
        novation, renewal, addition, deletion, or other amendment hereto shall
        have any force or effect unless embodied in a written contract executed
        and approved pursuant to the State Fiscal Rules.

T.      Proprietary Information

        1.      Proprietary information for the purpose of this contract is
                information relating to a party's research, development, trade
                secrets, business affairs, internal operations and management
                procedures and those of its customers, clients or affiliates,
                but does not include information lawfully obtained from third
                parties, that which is in the public domain, or that which is
                developed independently.

        2.      Neither party shall use or disclose directly or indirectly
                without prior written authorization any proprietary information
                concerning the other party obtained as a result of this
                contract. Any proprietary information removed from the State's
                site by the contractor in the course of providing services under
                this contract will be accorded at least the same precautions as
                are employed by the contractor for similar information in the
                course of its own business.

U.      Discrimination Complaints

        Any person who feels that s/he has been discriminated against relating
        to the services provided under this contract has the right to file a
        complaint with the



                                 Page 27 of 33
<PAGE>   28

        Colorado Department of Human Services, the Colorado Civil Rights
        Commission, and/or the US Commission on Civil Rights.

V.      If any of the payments hereunder are from federal funds, where
        applicable, the following provisions shall apply to this contract.

        1.      Press Releases

                Pursuant to Section 511 of P.L. 101-166, when issuing
                statements, press releases, requests for proposals, bid
                solicitations and other documents describing projects or
                programs funded in whole or in part with federal funds, the
                contractor shall clearly state (i) that the activity is funded
                in whole or in part by federal funds, (ii) the percentage of the
                total costs of the program or project which will be financed
                with federal money, (iii) percentage and dollar amount of the
                total costs of the project or program that will be financed by
                non-federal sources.

        2.      Debarment Certification To the extent applicable, if any payment
                pursuant to this contract is in federal funds, the following
                provisions apply to this contract.

                a.      The contractor certifies to the best of its knowledge
                        and belief that the contractor, its principals and
                        authorized subcontractors: (i) are not presently
                        debared, suspended, proposed for debarment declared
                        ineligible, or voluntarily excluded from participation
                        in this transaction by any federal department or agency;
                        (ii) have not within a three year period preceding this
                        contract been convicted of or had a civil judgment
                        rendered against it for commission of fraud or a
                        criminal offense in connection with obtaining,
                        attempting to obtain, or performing a public (Federal,
                        State, or local) transaction or contract under a public
                        transaction; (iii) have not violated a Federal or State
                        antitrust statutes or committed embezzlement, theft,
                        forgery, bribery, falsification or destruction of
                        records, or made false statements; or received stolen
                        property; (iv) are not presently indicted for, or
                        otherwise criminally or civilly charged by a
                        governmental entity (Federal, State, or local) with
                        commission of any of the offenses enumerated in
                        sub-paragraph (iii) of this certification; and, (v) have
                        not within a three year period preceding this contract
                        had one or more public transactions (Federal, State, or
                        local) terminated for cause or default.

                        Further, the contractor shall include, without
                        modification, the following Certification Clause in the
                        contract of any subcontractor obligated to perform
                        services pursuant hereto:



                                 Page 28 of 33
<PAGE>   29

                        The prospective lower tier participant certifies, by
                        submission of this contract, that neither it nor its
                        principals is presently debared, suspended, proposed for
                        debarment, declared ineligible, or voluntarily excluded
                        from participation in this transaction by any Federal
                        Department or agency."

        b.      Where the prospective lower tier participant is unable to
                certify to any of the statements in this certification, such
                prospective participant shall attach an explanation to this
                contract.

        c.      "Lower tier participant" is defined to include the contractor
                and its principals, agents, and subcontractors who are obligated
                to perform services pursuant to the terms of this contract.

3.      Payments made to the contractor from Federal funds under this contract
        shall supplement and not supplant state or local expenditures that would
        have been made in the absence of such federal support.

4.      The contractor shall not use federal funds to satisfy federal cost
        sharing and matching requirements unless approved in writing by the
        appropriate federal agency.

5.      In accordance with the requirements of P.L. 101-166, none of the federal
        funds provided under this contract may be used to pay the salary of any
        individual at a rate in excess of $125,000 per year.

6.      Rights in Data and Copyright - Federal Reserved Rights

Except for its own internal use, the contractor shall not publish or reproduce
any data/information, in whole or part, that is recorded in any form or medium
whatsoever and that is delivered or specified to be delivered under this
contract, nor may it authorize or permit others to do so, without the written
consent of the federal government, through the State, until such time as the
federal government may have released such data/information to the public.

As authorized by 49 C.F.R. 18.34, the federal government, through the State,
reserves a royalty free, nonexclusive, and irrevocable license to reproduce,
publish or otherwise use, and to authorize the State and others to use; a) any
work developed under this contract or a resulting third party contract
irrespective of whether or not it is copyrighted; and b) any rights of copyright
to which a contractor, subrecipient, or third party contractor purchases
ownership with federal assistance.



                                 Page 29 of 33
<PAGE>   30


W.      Exhibits - Interpretation

        1.      Unless otherwise stated, all exhibits referenced herein are
                attached hereto and incorporated herein and made a part of this
                contract.

        2.      The terms of this contract shall control over any conflicting
                terms in any of its attached exhibits.

X.      Venue The parties agree that venue for any action related to performance
        of this contract shall be in the City and County of Denver, Colorado.

Y.      Vendor Offset The parties understand and agree that the State shall have
        the right to offset against payment due to the contractor hereunder, any
        debts owed by the contractor to the State or any child support payments
        owed by the contractor.



                                 Page 30 of 33
<PAGE>   31

        Colorado Contract Procedures and Management Manual - August 1997
================================================================================

D. SPECIAL PROVISIONS

--------------------------------------------------------------------------------
THESE SPECIAL PROVISIONS ARE REQUIRED BY FISCAL RULE 3-1 TO BE USED IN EVERY
STATE CONTRACT, INCLUDING GRANTS.
--------------------------------------------------------------------------------

                               SPECIAL PROVISIONS

CONTROLLER'S APPROVAL

1. This contract shall not be deemed valid until it shall have been approved by
the Controller of the State of Colorado or such assistant as he may designate.
This provision is applicable to any contract involving the payment of money by
the State.

FUND AVAILABILITY

 2. Financial obligations of the State of Colorado payable after the current
fiscal year are contingent upon funds for that purpose being appropriated,
budgeted, and otherwise made available.

BOND REQUIREMENT

 3. If this contract involves the payment of more than fifty thousand dollars
for the construction, erection, repair, maintenance, or improvement of any
building, road, bridge, viaduct, tunnel, excavation or other public work for
this State, the Contractor shall, before entering upon the performance of any
such work included in this contract, duly execute and deliver to the State
official who will sign the contract, a good and sufficient bond or other
acceptable surety to be approved by said official in a penal sum not less than
one-half of the total amount payable by the terms of this contract. Such bond
shall be duly executed by a qualified corporate surety conditioned upon the
faithful performance of the contract and in addition, shall provide that if the
Contractor or his subcontractors fail to duly pay for any labor, materials, team
hire, sustenance, provisions, provendor or other supplies used or consummed by
such Contractor or his subcontractor in performance of the work contracted to be
done or fails to pay any person who supplies rental machinery, tools, or
equipment in the prosecution of the work the surety will pay the same in an
amount not exceeding the sum specified in the bond, together with interest at
the rate of eight per cent per annum. Unless such bond is executed, delivered
and filed, no claim in favor of the Contractor arising under such contract shall
be audited, allowed or paid. A certified or cashier's check or a bank money
order payable to the Treasurer of the State of Colorado may be accepted in lieu
of a bond. This provision is in compliance with CRS 38-26-106.

INDEMNIFICATION

 4. To the extent authorized by law, the Contractor shall indemnify, save, and
hold harmless the State, its employees and agents, against any and all claims,
damages, liability and court awards including costs, expenses, and attorney
fees incurred as a result of any act or omission by the Contractor, or its
employees, agents, subcontractors, or assignees pursuant to the terms of this
contract.

DISCRIMINATION AND AFFIRMATIVE ACTION

 5. The Contractor agrees to comply with the letter and spirit of the Colorado
Antidiscrimination Act of 1957, as amended, and other applicable law respecting
discrimination and unfair employment practices (CRS 24-34-402), and as required
by Executive Order, Equal Opportunity and Affirmative Action, dated April 16,
1975. Pursuant thereto, the following provisions shall be contained in all
State contracts or subcontracts.

 During the performance of this contract, the Contractor agrees as follows:

 (a) The Contractor will not discriminate against any employee or applicant for
 employment because of race, creed, color, national origin, sex, marital
 status, religion, ancestry, mental or physical handicap, or age. The
 Contractor will take affirmative action to insure that applicants are
 employed, and that employees are treated during employment, without regard to
 the above mentioned characteristics. Such action shall include, but not be
 limited to the following: employment upgrading, demotion or transfer,
 recruitment or recruitment advertising: lay-offs or terminations; rates of pay
 or other forms of compensation; and selection for training, including
 apprenticeship. The Contractor agrees to post in conspicuous places, available
 to employees and applicants for employment, notices to be provided by the
 contracting officer setting forth provisions of this non-discrimination clause.

 (b) The Contractor will, in all solicitations or advertisements for employees
 placed by or on behalf of the Contractor, State that all qualified applicants
 will receive consideration for employment without regard to race, creed,
 color, national origin, sex, marital status, religion, ancestry, mental or
 physical handicap, or age.


                                 Page 31 of 33
<PAGE>   32
       Colorado Contract Procedures and Management Manual - August 1997
================================================================================

     (c)  The Contractor will sent to each labor union or representative of
     workers with which he has a collective bargaining agreement or other
     contract or understanding, notice to be provided by the contracting
     officer, advising the labor union or workers' representative of the
     Contractor's commitment under the Executive Order. Equal Opportunity and
     Affirmative Action, dated April 16, 1975, and rules, regulations, and
     relevant Orders of the Governor.

     (d)  The Contractor and labor unions will furnish all information and
     reports required by Executive Order, Equal Opportunity and Affirmative
     Action of April 16, 1975, and by the rules, regulations and Orders of the
     Governor, or pursuant thereto, and will permit access to his books,
     records, and accounts by the contracting agency and the office of the
     Governor or his designee for purposes of investigation to ascertain
     compliance with such rules regulations and orders.

     (e)  A labor organization will not exclude any individual otherwise
     qualified from full membership rights in such labor organization, or expel
     any such individual from membership in such labor organization or
     discriminate against any of its members in the full enjoyment work
     opportunity because of race, creed, color, sex, national origin, or
     ancestry.

     (f)  A labor organization, or the employees or members thereof will not
     aid, abet, incite, compel or coerce the doing of any act defined in this
     contract to be discriminatory or obstruct or prevent any person from
     complying with the provision of this contract or any order issued
     thereunder; or attempt, either directly or indirectly, to commit any act
     defined in this contract to be discriminatory.

     (g)  In the event of the Contractor's non-compliance with the
     non-discrimination clauses of this contract or with any of such rules,
     regulations, or orders, this contract may be canceled, terminated or
     suspended in whole or in part and the Contractor may be declared ineligible
     for further State contracts in accordance with procedures, authorized in
     Executive Order, Equal Opportunity and Affirmative Action of April 16, 1975
     and the rules, regulations, or orders promulgated in accordance therewith,
     and such other sanctions as may be imposed and remedies as may be invoked
     as provided in Executive Orders, Equal Opportunity and Affirmative Action
     of April 16, 1975, or by rules, regulations, or orders promulgated in
     accordance therewith, or as otherwise provided by law.

     (h)  The Contractor will include the provisions of paragraphs (a) through
     (h) in every subcontract and subcontractor purchase order unless exempted
     by rules, regulations, or orders issued pursuant to Executive Order,
     Equal Opportunity and Affirmative Action of April 16, 1975, so that such
     provisions will be binding upon each subcontractor or vendor. The
     Contractor will take such action with respect to any sub-contracting or
     purchase order as the contracting agency may direct, as a means of
     enforcing such provisions, including sanctions for non-compliance;
     provided, however, that in the event the Contractor becomes involved in,
     or is threatened with, litigation, with the subcontractor or vendor as a
     result of such direction by the contracting agency, the Contractor may
     request the State of Colorado to enter into such litigation to protect the
     interest of the State of Colorado.

COLORADO LABOR PREFERENCE

     6a.  Provisions of CRS 8-17-101 & 102 for preference of Colorado labor are
applicable to this contract if public works within the State are undertaken
hereunder and are financed in whole or in part be State funds.

     b.   When a construction contract for a public project is to be awarded to
a bidder, a resident bidder shall be allowed a preference against a
non-resident bidder from a State or foreign country equal to the preference
given or required by the State or foreign country in which the non-resident
bidder is a resident. If it is determined by the officer responsible for
awarding the bid that compliance with this subsection .06 may cause denial of
federal funds which would otherwise be available or would otherwise be
inconsistent with requirements of Federal law, this subsection shall be
suspended, but only to the extent necessary to prevent denial of the moneys or
to eliminate the inconsistency with Federal requirements (CRS 8-19-101 and 102).

GENERAL

     7.   The laws of the State of Colorado and rules and regulations issued
pursuant thereto shall be applied in the interpretation, execution, and
enforcement of this contract. Any provision of this contract whether or not
incorporated herein by reference which provides for arbitration by any
extra-judicial body or person or which is otherwise in conflict with said laws,
rules, and regulations shall be considered null and void. Nothing contained in
any provision incorporated herein by reference which purports to negate this or
any other special provision in whole or in part shall be valid or enforceable or
available in any action at law whether by way of complaint, defense, or
otherwise. Any provision rendered null and void by the operation of this
provision will not invalidate the remainder of this contract to the extent that
the contract is capable of execution.

     8.   At all times during the performance of this contract, the Contractor
shall strictly adhere to all applicable federal and State laws, rules, and
regulations that have been or may hereafter be established.

     9.   Pursuant to CRS 24-30-202.4 (as amended), the State Controller may
withhold debts owed to State agencies under the vendor offset intercept system
for: (a) unpaid child support debt or child support arrearages; (b) unpaid
balance of tax, accrued interest, or other charges specified in Article 22,
Title 39, CRS; (c) unpaid loans due to the Student Loan Division of the
Department of Higher Education; (d) owed amounts required to be paid to the
Unemployment Compensation Fund; and (e) other unpaid debts owing to the State
or any agency thereof, the amount of which is found to be owing as a result of
final agency determination or reduced to judgment as certified by the
controller.

                                 Page 32 of 33
<PAGE>   33
       Colorado Contract Procedures and Management Manual -- August 1997
--------------------------------------------------------------------------------

     10.  The signatories aver that they are familiar with CRS 18-8301, et.
seq., (Bribery and Corrupt Influences) and CRS 18-8-401, et. seq., (Abuse of
Public Office), and that no violation of such provisions is present.

     11.  The signatories aver that to their knowledge, no State employee has
any personal or beneficial interest whatsoever in the service or property
described herein:

IN WITNESS WHEREOF, the parties hereto have executed this Contract on the day
first above written.

Contractor: [ILLEGIBLE]                   STATE OF COLORADO

(Full Legal Name)  RICK E. BRAUEN         ROY ROMER, GOVERNOR

--------------------------------------
                                          [SIGNATURE ILLEGIBLE]
--------------------------------------    --------------------------------------
                                          EXECUTIVE DIRECTOR
Position (Title) Central Area Director
                ----------------------    FOR
                 91-14-7147
--------------------------------------    DEPARTMENT OF Human Services
  Social Security Number or Federal                    -------------------------
       Identification Number

If Corporation:)                          APPROVALS:
Attest (Seal)                             STATE CONTROLLER
                                          ARTHUR L. BARNHART
By  RICK E. BRAUEN                        By: [SIGNATURE ILLEGIBLE]
  ------------------------------------       -----------------------------------
    Corporate Secretary, or Equivalent,
    Town/City/Country Clerk

APPROVALS:

ATTORNEY GENERAL                          STATE CONTROLLER

By  C. RICHARD PENNINGTON                 By
  ------------------------------------      ------------------------------------
    C. Richard Pennington
    Assistant Attorney General
    State Services Section



                     Page 33 which is the last of 33 pages
<PAGE>   34
                                  CFMS PROJECT

                   EXHIBIT C - DELIVERABLE SCHEDULE AND COSTS



                                                         FIXED PRICE
                    DELIVERABLE                        PAYMENT AMOUNT      PLANNED DELIVERY MONTH
=================================================================================================
                                                                 
          Task 1
          ------
                                                                           Per month *
          Planning and Project Management Support           *              *
          Quarterly Status Reports*
          Monthly Status Reports
          Workplan updates
          Steering Committee
                                                       ------------------------------------------
          Project Management                               *
                                                       ------------------------------------------
          Task 2
          ------
2.01      Consultant Familiarization with CFMS             *                          *
2.02      Project Site & Initial Environment               *                          *
2.03      Familiarize CDHS Staff with COTS                 *                          *
2.04      Develop Implementation Strategies                *                          *
2.06      Project Initiation Meetings                      *                          *
                                                       ------------------------------------------
          Project Initiation                               *
                                                       ------------------------------------------

          Task 3
          ------
3.01      Document Baseline Requirements                    *                          *
3.02      Define AR Requirements                            *                          *
3.03      Design system functionality for CFMS              *                          *
3.04      Develop Software Architecture & Integration P     *                          *
3.05      Set Up Conference Room Pilot System               *                          *
3.06      Identify Application Gaps in COTS                 *                          *
3.07      Test GLDI Functions                               *                          *
3.08      Devise workarounds and customizations             *                          *
3.09      Design interfaces with existing legacy system     *                          *
3.11      Design Interfaces with New Systems                *                          *
3.12      Prepare for Development                           *                          *
3.13      Finalize detailed design of customizations        *                          *
3.15      Develop Security Strategy                         *                          *
3.16      Develop and implement change management           *                          *
3.17      Phase Management & Completion                     *                          *
                                                       ------------------------------------------
          System Analysis & Design                          *
                                                       ------------------------------------------
          Task 4
          ------
4.01      Prepare for System Testing                        *                          *
4.02      Develop GLDI Processes                            *                          *
4.03      Develop Reports                                   *                          *
4.04      Develop Calculations                              *                          *
4.05      Develop & Unit Test Custom Data Store and         *                          *
4.06      Develop Interface Software                        *                          *
4.07      Conduct Preliminary Capacity Analysis             *                          *
4.08      System Acceptance Test                            *                          *
4.09      Conduct Final Capacity Analysis                   *                          *
4.10      Finalize Documentation                            *                          *


* Portions of this agreement have been omitted pursuant to a request for
  confidential treatment pursuant to SEC Rule 24b-2, to be filed separately with
  the SEC no later than April 10, 2001.
<PAGE>   35
                                  CFMS PROJECT


                  EXHIBIT C -- DELIVERABLE SCHEDULE AND COSTS




                                            FIXED PRICE
             DELIVERABLE                   PAYMENT AMOUNT       PLANNED DELIVERY MONTH
--------------------------------------------------------------------------------------
                                                      
4.11      Disaster Recovery Plan             *                             *
4.12      Phase Management & Completion      *                             *
                                           -----------
          System Development & Testing       *
                                           -----------

          Task 5
          ------
5.01      Environment Planning               *                             *
5.02      Acquire Hardware                   *                             *
5.03      Configure Production Environment   *                             *
5.04      Configure production applications  *                             *
5.05      Phase Management & Completion      *                             *
                                           -----------
          Acquisition and Installation
            of Hardware                     *
                                           -----------

          Task 6
          ------
6.01      Initial Production Period          *                             *
6.02      Support of Network                 *                             *
6.03      Final System Acceptance            *                Monthly payments during
                                                              acceptance time
                                                              *
6.04      Finalize & turnover system
            documentation                    *                             *
6.05      Phase Management & Completion      *                             *
                                           -----------
          Initial Production Operation       *
                                           -----------

          Task 7
          ------
7.01      Plan User Training                  *                             *
7.02      Create Training Environment &
            Materials                         *                             *
7.03      Train CDHS & Other State
            Personnel                         *                             *
7.04      Phase Management & Completion       *                             *
                                           -----------
          User Support                        *
          and Technical Training           -----------

          Task 8
          ------
8.01      Warrant CFMS                         *                             *
8.03      Turnover Plan                        *                             *
8.04      Provide ongoing training             *                             *
8.06      Process contract deliverables        *                             *
8.08      Turnover system                      *                             *
                                           -----------
          Mandatory Post Implementation
            Support                            *
                                           -----------

          Task 9
          ------

9.01      Mandatory Post Implementation                      Per month *
            Support                            *                             *
                                           -----------
          Post Implementation Support          *
                                           -----------


# Deliverables subject to 20% holdback.
* Deliverables subject to late charge.

* Portions of this agreement have been omitted pursuant to a request for
  confidential treatment pursuant to SEC Rule 24b-2, to be filed separately with
  the SEC no later than April 10, 2001.
<PAGE>   36
                                  CFMS PROJECT


                  EXHIBIT C -- DELIVERABLE SCHEDULE AND COSTS




                                            FIXED PRICE
             DELIVERABLE                   PAYMENT AMOUNT          PLANNED DELIVERY MONTH
-----------------------------------------------------------------------------------------
                                                         
          Hardware Costs/Facilities
          HP Hardware Purchase Production      *                              *
          HP Hardware Purchase Development     *                              *
          HP Hardware Purchase
            Application Server                 *                              *
          HP Configuration                     *                              *
          HP Open View/ITO (Note 1)            *                              *
          Prepaid Support                      *                              *
                                             ------------
                                               *
          Network Costs                        *                              *
          Oracle Software & Tutor              *                              *
          Noetix Views                         *                              *
          Ring Master                          *                              *
                                             ------------
                                               *
          Oracle Software Support              *                              *
          Oracle Tutor                         *                              *
          Software Maintenance                 *                              *
                                             ------------
                                               *

                                                           Monthly facility cost *
          Facilities/Equipment                *                      *
                                                            Monthly facility cost *
          Facilities/Equipment                *                      *
                                                           Monthly Hardware Costs *
          Hardware Costs                      *                      *
          Training                            *                                   *
                                             ------------
          Hardware                           *
                                             ------------

                                             ------------
          Fixed Price Total                  *
                                             ------------


# Deliverables subject to 20% holdback.
* Deliverables subject to late charge.

Note 1: Facilitated by CDHS IS Department
Note 2: All AR customization, development, testing and production setups,
documentation, training and training materials, and production support for the
AR module have been eliminated.

*Portions of this agreement have been omitted pursuant to a request for
 confidential treatment pursuant to SEC Rule 24b-2, to be filed separately
 with the SEC no later than April 10, 2001.