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                            CONFIDENTIAL TREATMENT

DIAMOND-Registered Trademark- 950 C/S SOFTWARE LICENSE AGREEMENT 

1.   PARTIES AND PURPOSE OF AGREEMENT

     1.1  PARTIES:  This license agreement (the "Agreement") is entered into
          between California Physicians' Service d.b.a. Blue Shield of
          California ("Customer") and Health Systems Design-TM- Corp.
          ("HSD"), a California Corporation, the owner and developer of the
          managed healthcare software known as Diamond-Registered Trademark-
          950C/S (the "Software") and shall be effective as of December 31,
          1998 (the "Effective Date").  

     1.2  PURPOSE:  The purpose of this Agreement is to specify the terms
          under which Customer is authorized to possess and use the Software
          licensed to Customer by HSD.

2.   DEFINED TERMS

     2.1  AFFILIATE:  Any present or future entity or association controlled
          by Customer.  For the purposes of this definition, the term
          "control" shall mean the ownership of voting stock or other equity
          interest entitling the Customer to exercise more than fifty
          percent (50%) of the voting rights of the entity or association.

     2.2  CUSTOMER:  The entity identified in Section 1, above, which is
          licensed to possess and use the Software under the terms of this
          Agreement.  For ease of reference, HSD or Customer may be referred
          to individually as a "Party" and collectively as the "Parties".

     2.3  DEFINED TERMS: The words or phrases defined in this Section 2
          which words or phrases will be capitalized when used in the text
          of this Agreement in order to identify them as "Defined Terms". 
          Words and phrases that are defined within later sections of this
          Agreement will be identified with quotation marks and will be
          capitalized when used thereafter.

     2.4  DESIGNATED SYSTEM(S): The computer hardware and its associated
          operating system(s) specified in Schedule A on which the Software
          may be installed and operated. 

     2.5  DOCUMENTATION: The applicable user Documentation and installation
          manual which may be referred to collectively as "Documentation"
          and shall be included within the scope of the defined term
          "Software".  The user Documentation describes the use of the
          Software at the keyword reference level and provides overview
          descriptions of a number of major functions.  In conjunction with
          HSD user training, the Documentation is sufficient for the use of
          the Software by Customer's users.  Technical Documentation as
          described in Section 2.15 below shall be included within the
          meaning of the defined term Documentation. 
     
     2.6  ENHANCEMENTS: Changes or additions to the Software including
          modifications, corrections and/or new Releases of the Software.
     
     2.7  INSTALLATION: The initial loading of the Software delivered to the
          Customer in conjunction with the execution of this Agreement onto
          the Customer's Designated System and will include the loading of
          Diamond Tables and

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          Tablespaces ("Tables") which Tables are incorporated into an 
          made a part of the Agreement as Attachment 2.7.
     
     2.8  INSTALLATION LOCATION(S): The location(s) of Customer's Designated
          System(s). 

     2.9  INTELLECTUAL PROPERTY RIGHTS: All copyrights, patents, trademarks,
          trade names, commercial symbols, logos, service marks and other
          proprietary rights including Trade Secrets (as defined in Section
          4.4.2, below) belonging to either Party.

     2.10 LICENSE FEE(S): The amounts set forth in Schedule A to be paid by
          Customer pursuant to Section 5 in consideration of the rights of
          possession and use of the Software granted to Customer by HSD with
          respect to the Software (and applicable "Third Party Software").

     2.11 OBJECT CODE: The machine-readable/executable version of the
          Software.

     2.12 PRODUCTION: The use of the Software to process live Customer data 
          as Customer's system of record for a line of business and/or 
          business function. For purposes of this Agreement, the terms 
          "Go-Live" and/or "First Production Use" shall have the same meaning 
          as "Production".  For purposes of this Agreement, the use of 
          Customer data for testing purposes prior to the live-use of the 
          Software shall not be considered to be "Production". 

     2.13 RELEASE: An increase in any such numerical identifier for the
          Software which occurs when another iteration of the Software is
          distributed.

          (a)  General Release: A General Release typically contains a
               large number of functional Enhancements as well as bug
               fixes.  A General Release may include architectural changes
               to the Software and/or migration to later/more current
               versions of the Oracle Database and/or Power Builder.   A
               General Release is identified by an increase in the value
               of the numeral to the left of the decimal point. 

          (b)  Interim Release: An iteration of the Software which
               includes Enhancements and/or bug fixes and which is
               identified by an increase in the value of the numeral to
               the right of the decimal point. 

          (c)  Supported Release: the most recent iteration (highest
               numeral of the General Release or an Interim Release) and
               the highest numbered prior Release number (whether it is an
               Interim or a General Release).

     2.14 SOFTWARE: The software modules identified in Schedule A, in Object 
          Code, as well as subsequent Enhancements including any copies 
          thereof, whether partial or complete, developed by or on behalf of 
          HSD at HSD's request for general distribution to its Customers with 
          the understanding that Customer will be entitled to Enhancements as 
          and when released under the Support Agreement (and applicable 
          extensions thereto) entered into in conjunction with this 
          Agreement.  The Software may include additional functionality 
          developed for Customer's use at the time of Customer's initial 
          Production as well as any additional functionality developed for 
          Customer and delivered thereafter (such as Customer-Specific-Software 
          as provided for in Section 4.2, below [*] as defined in Section 
          4.2.1, below).  Source Code shall be included within the meaning of 
          the defined term "Software" with the understanding that the terms and 
          conditions for the licensing of the Source Code are set forth in the 
          Source Code Addendum, dated December 31, 1998, to this Agreement.
     
     


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     2.15 SOURCE CODE: The human-readable/human language form of the
          Software (as opposed to the object/machine readable/compiled
          Software) and relevant Technical Documentation.  For purposes of
          this definition "Technical Documentation" shall include the entity
          relationship model and the data dictionary (consisting of a
          SilverRun document representing the logical referential links of
          the Software and a Word document organized by topics and
          describing the Oracle tables and fields used in the Software).
     
     2.16 SPECIFICATIONS: The Documentation, and the performance standards
          ("Performance Standards") which performance standards will include
          items such as expected transaction through-put, scalability and
          average response time which said performance standards shall
          become Attachment 2.16 to the Agreement when finalized and
          accepted by the Parties.

     2.17 SUBSIDIARY: Any present or future entity controlled by or owned by
          Customer.  For the purposes of this definition, the term "control"
          shall mean the ownership of voting stock or other equity interest
          entitling the Customer to exercise more than fifty percent (50%)
          of the voting rights of the entity or association.

     2.18 THIRD PARTY SOFTWARE: Those software applications (including
          software tools) for which HSD holds the right to sublicense.  All
          such Third Party Software, being sublicensed/distributed to
          Customer under this Agreement are listed in Schedule A and
          identified therein as "Third Party Software".

     2.19 VERIFIED PROGRAM ERROR: A failure of a Supported Release of the
          Software to function in a manner consistent with its
          Specifications, which failure HSD is able to replicate using
          Customer supplied information/data.

     2.20 WARRANTY PERIOD: The period of time the Software is covered by the
          warranty set forth in Section 6.1, below.
     

3.   RIGHTS AND SCOPE OF USE GRANTED, RESTRICTIONS ON COPYING

     3.1  GRANT AND SCOPE.  HSD hereby grants to Customer and Customer
          accepts a non-exclusive, non-transferable (except as otherwise
          provided in this Agreement) license to use the Software in Object
          Code form on the Designated System(s) which must be located within
          the United States, for its internal purposes as set forth in this
          Section 3.  The terms and conditions for the licensing of the
          Source Code are set forth in the Source Code Addendum to this
          Agreement.

     3.2  AFFILIATES AND SUBSIDIARIES.  The rights of use granted under
          Section 3.1, above, shall extend to Affiliates and Subsidiaries
          subject to all other applicable terms of this Agreement.

     3.3  USE DURING DISPUTES.  Customer's rights of use under this
          Agreement will continue in effect during any dispute between HSD
          and Customer except to the extent that the subject mater of any
          such dispute is an uncured breach of: (1) the 
          rights to use the Source Code; or (2) the rights of 
          use/confidentiality obligations of either Party regarding Trade 
          Secrets, or (3) the unauthorized use, disclosure and/or 
          distribution of Strategic Customer Enhancements. Should either 
          Party seek equitable relief for any such uncured breach, any such 
          requested relief shall be specific to the situation giving rise to 
          the applicable cause of action and 


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          should HSD be the Party seeking the relief, any such relief sought 
          or granted shall not otherwise enjoin Customer's use of the Software 
          except to the extent necessary to address the situation giving rise 
          to HSD's request for any such relief.

     3.4  CUSTOMER'S USE FOR ITS CUSTOMERS.  Customer may allow access to
          the Object Code to organizations, entities and/or individuals with
          which Customer has contractual/business relationships that
          directly relate to Customer's business provided that any such
          access is in all applicable respects consistent with the
          requirements of this Agreement.  Access to the Software and Source
          Code by Customer's IT Service Provider (as defined in Section4.5,
          below), shall be governed by Section 4. 

     3.5  INSTALLATION LOCATIONS.  Customer may use the Software at [*] on a
          Designated System (or on other than a Designated System as set
          forth in Section3.5.3, below) with the understanding that Customer
          shall provide HSD with written notice of each Installation
          Location prior to Customer's installation of the Software at each
          Installation Location.

          3.5.1  ADDITIONAL INSTALLATION LOCATIONS.  It is mutually 
                 understood and agreed that each additional Installation 
                 Location may require separate implementation services the 
                 nature, extent and fees for which will be determined on a 
                 case-by case basis. 

          3.5.2  ADDITIONAL SUPER USER LOCATIONS.  It is mutually understood 
                 and agreed that each additional Installation Location may 
                 require separate/additional Super Users (as defined in 
                 Section 3.4.1 of the Support Agreement). 

          3.5.3  DESIGNATED SYSTEM.  The Designated System may include more 
                 than one make/brand and model of computer and operating 
                 system provided that HSD has expressly agreed to support 
                 each such combination/configuration as an operating 
                 environment for its Software.  Customer may use other than 
                 Designated System(s) with the understanding that HSD does 
                 not warrant the use of the Software on other than a 
                 Designated System and will not be required to support any 
                 such use. 

     3.6  COPIES OF OBJECT CODE/DOCUMENTATION.  Customer may make [*] copies
          of the Object Code and its non-Technical Documentation [*] to
          support its use and operation of the Software.  All Software
          copies will include HSD's copyright and proprietary rights notices
          as they appear in the Software and/or its Documentation.  The
          media containing copies shall be labeled with HSD's copyright and
          proprietary rights notices.
     
     3.7  DELIVERY OF SOFTWARE.  The Software (in both Object Code and
          Source Code formats) will be delivered to Customer within three
          (3)  days of the full execution of this Agreement and Customer's
          tender of the License Fees then due and payable as specified in
          Schedule A. 

     3.8  DELIVERY OF DOCUMENTATION.  HSD shall deliver five (5)
          hard/printed copies of the Documentation to Customer within ten
          (10) days of the full execution of this Agreement and Customer's
          tender of the License Fees then due and payable as specified in
          Schedule A.  HSD shall timely revise and deliver such

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          Documentation as necessary to reflect any Enhancements made by HSD
          to the Software, provided Customer is under an HSD Support
          Agreement.  In addition,  a copy of any such Documentation will
          also be delivered to Customer on computer-readable media or
          electronically/via email.

     3.9  USE OF DOCUMENTATION.  Customer may incorporate the Documentation
          in works prepared for Customer's business endeavors so long as
          Customer includes all copyright, trademark and other notices of
          HSD in the same form as they appear on or in the Documentation.
     
     3.10 ADDITIONAL AUTHORIZED USE OF THE SOFTWARE/THIRD PARTY
          ADMINISTRATIVE SERVICES AND OUT-SOURCE SERVICES

          3.10.1 CUSTOMER SERVICES.  Customer may provided services as, or 
                 similar to those provided by, a third-party administrator 
                 ("TPA") whereby Customer processes claims or otherwise uses 
                 the Software for the benefit of third-party entities ("TPA 
                 Clients") who purchase or use health care services provided, 
                 or arranged for, by Customer ("TPA Services") provided that 
                 the use of the Software for the TPA Clients shall be limited 
                 to the core functions of the Software, e.g. confirming 
                 membership status, eligibility and payment of claims.  It is 
                 understood and agreed that these core functions of the 
                 Software will, at all times, be performed exclusively by 
                 Customer or its IT Provider personnel (as opposed to TPA 
                 Client personnel) located at a Customer owned/controlled 
                 facility(ies). 

          3.10.2 LIMITATION ON CUSTOMER'S SERVICES.  Customer's rights to 
                 serve as a TPA will not include the right to serve as a TPA 
                 for non-TPA Clients (except as set forth in Subsection 
                 3.10.3 below).

          3.10.3 LIMITED USE OF EXCEPTION.  Notwithstanding anything to the 
                 contrary in this Section 3.10 and its subsections, Customer 
                 is authorized to provide temporary/interim TPA Services to 
                 non-TPA Clients (for a maximum period of 180 days).  It is 
                 understood and agreed that Customer and HSD, before or 
                 during the period Customer is providing the 
                 temporary/interim TPA Services, will mutually agree upon a 
                 TPA license fee (the "TPA Fee"), which TPA fee will apply to 
                 the use of the Software granted under this Section 3.10.3 
                 only and will be negotiated in good-faith by the Parties 
                 based on relevant factors existing at the time of any such 
                 negotiation.

     3.11 ALL RIGHTS OF USE AND POSSESSION.  The rights of possession and/or
          use granted to the Customer under this Agreement constitute all of
          the rights imparted to the Customer hereunder with the
          understanding that those rights not expressly granted are retained
          by HSD.

4.   PROPRIETARY RIGHTS, ENHANCEMENTS, PROHIBITION AGAINST REVERSE
     ENGINEERING, CONFIDENTIALITY AND LIMITED RIGHT OF ASSIGNMENT

     4.1  PROPRIETARY RIGHTS.  Customer acknowledges that the Software is
          proprietary and the property of HSD and that this Agreement grants
          specified rights of possession and use to Customer.  Customer
          further acknowledges that the unauthorized use and/or possession
          of the Software would likely expose HSD to irreparable harm for
          which the payment of money damages may not serve as an adequate
          and/or complete remedy.  

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     4.2  ENHANCEMENTS/CUSTOMER SPECIFIC SOFTWARE.  HSD will retain
          ownership of any Enhancements and/or Customer-specific software
          based on the design of the Software and/or otherwise integrated
          into/made an integral part of the Software. For purposes of this
          Section 4.2 (and its subsections) "Customer-Specific-Software"
          shall be defined as Software which has been developed to address
          business practices that are unique to Customer and are therefore
          not likely to be generally required by HSD's customers.  Any such
          Customer-Specific-Software shall be included within the meaning of
          the defined term Software with the understanding that HSD shall
          not be required to provide support services for any such Customer
          Specific Software which HSD does not incorporate into a Release
          and distribute generally to its customers.  The provisions of this
          Section 4.2 shall not apply to those aspects of Interfaces (as
          defined in Section 3.7.2 of the Implementation Agreement) which
          serve as the entry and exit points between the Software and other
          applications/software the ownership and distribution rights of
          which shall be retained by HSD as "Derivative Works" (as defined
          in Attachment 4.2.5 of this Agreement).

          4.2.1  [*]

          4.2.2  [*]

          4.2.3  [*]DEVELOPED BY CUSTOMER.  In the event that Customer 
                 develops any such [*] independent of HSD, HSD will own the 
                 [*] with the understanding that HSD will not have any rights 
                 to distribute these [*] and HSD will not be required to 
                 provide support services related thereto under the Support 
                 Agreement entered into in conjunction with this Agreement, 
                 and that Customer will have an exclusive no fee license to 
                 use these [*] for the term of the Agreement and any renewals 
                 thereof. 

          4.2.4  CUSTOMER/THIRD PARTY DEVELOPED STAND ALONE SOFTWARE.  For 
                 purposes of this Agreement, software developed by Customer, 
                 HSD or third parties which is not integrated into the 
                 Software and thereby can be used independently/stand-alone 
                 of the Software (such as application program interfaces), 
                 shall not be included within the meaning of the defined term 
                  Software and HSD shall have no ownership interest therein.

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          4.2.5  REFERENCE TABLE. For ease of reference and understanding, 
                 Attachment 4.2.5 provides a quick-reference table that 
                 summarizes the ownership, use and support of the Enhancements 
                 as addressed in this Section 4.2.
     
          4.2.6  [*]  HSD shall distribute and support the [*] under its 
                 agreements with its customers and/or under the Support 
                 Agreement with Customer.  [*]

     4.3  PROHIBITED ACTIONS.  Customer may not disassemble, decompile
          and/or reverse engineer the Object Code.

     4.4  CONFIDENTIAL INFORMATION.  Each Party agrees that it shall not,
          without the prior written consent of the other Party, use (except
          as permitted under the terms of this Agreement), reproduce,
          disclose, or provide to third parties any Confidential Information
          obtained from the other Party. 

          4.4.1  CONFIDENTIAL INFORMATION DEFINED.  For purposes of this 
                 Agreement, "Confidential Information" shall be defined as 
                 those terms and conditions of this Agreement that are not 
                 subject to public disclosure under relevant statutes and/or 
                 regulations (such as SEC reporting requirements), and also 
                 includes but is not limited to, any and all financial, 
                 sales, marketing, pricing and personnel information relative 
                 to either Party as well as present or future products or 
                 plans of either Party that have not been generally released 
                 to the public by means that does not constitute a breach of 
                 this Agreement.

          4.4.2  CONFIDENTIAL INFORMATION INCLUDES SOURCE CODE/TECHNICAL 
                 DOCUMENTATION/INTELLECTUAL PROPERTY RIGHTS/STRATEGIC 
                 CUSTOMER ENHANCEMENTS.  In addition, Confidential 
                 Information shall include the Source Code and its Technical 
                 Documentation (including, without limitation all know-how 
                 and relating to, contained in, or embodied in the Software), 
                 Intellectual Property Rights, technical, research, 
                 development or other business data and information, 
                 memoranda, position descriptions, handbooks, financial 
                 statements, client lists, and/or audio or visual recordings 
                 of either Party as well as concepts related to Customer's 
                 Strategic Customer Enhancements, the actual Strategic 
                 Customer Enhancements and their specifications (the actual 
                 Strategic Customer Enhancements and specifications are 
                 included within the term "Strategic Customer Enhancements"). 
                  For purposes of this Section and this Agreement, the term 
                 "Trade Secrets" shall be defined as Confidential Information 
                 belonging to either Party which (1) affords the Party 
                 economic value (actual or potential) from its not being 
                 generally known to the public and/or in the Party's industry 
                 (2) and is the subject of efforts which are reasonable under 
                 the circumstances to maintain its secrecy. 

          4.4.3  ADDITIONAL CONFIDENTIAL INFORMATION.  Confidential 
                 Information shall also include information/material that (a) 
                 either Party has marked as confidential or proprietary, (b) 
                 either Party, orally or in writing, has 

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                 advised the other Party to be confidential, or (c) the 
                 notes, memoranda, analysis, compilations, data, studies, 
                 and workpapers prepared by one Party based on information 
                 obtained or received from the other Party or (d) due to 
                 its character or nature, a reasonable person in a like 
                 position and under like circumstances would treat as 
                 confidential, whether communicated orally, visually, in 
                 writing, or in any other recorded or tangible form 
                 (including this Agreement, the Implementation Agreement 
                 and the Support Agreement as well as any attachments thereto),
                 except to the extent that either Party is authorized to 
                 disclose any such information as provided under Section 
                 4.4.7, below and its applicable subsections.

          4.4.4  GENERAL PRECAUTIONS.  In addition to the process/procedures 
                 otherwise set forth in this Section 4, Customer agrees to 
                 generally take reasonable and appropriate precautions to help
                 ensure the continued confidentiality of the Source Code, which
                 precautions shall include informing Customer's applicable 
                 personnel of the proprietary nature of the Source Code.
          
          4.4.5  ADDITIONAL CONFIDENTIAL INFORMATION REQUIREMENTS.  Except as 
                 expressly permitted by this Agreement, neither Party will 
                 use the other Party's Confidential Information or disclose 
                 such information to any third party without the prior 
                 written consent of the other Party.  Should either Party be 
                 merged into or acquired by a competitor of the other Party, 
                 the Party being merged (if not the surviving entity) or 
                 acquired shall maintain the confidentiality of the other 
                 Party's Confidential Information and shall return to the 
                 other Party all of that Party's Confidential Information 
                 (other than the Software, Source Code and HSD Trade Secrets 
                 which are addressed in Sections 4.7 and4.8) prior to the 
                 closing of the merger or acquisition.
     
          4.4.6  EXCEPTIONS.  The provisions of this Section 4 (and its 
                 subsections) will not apply to Confidential Information if 
                 such information:

                 (a)  Was in the possession of the receiving Party prior
                      to the initial Non-Disclosure Agreement entered into
                      between the Parties;

                 (b)  Is or becomes available to the public/enters the
                      public domain separate and apart from any
                      disclosures by the receiving Party that are
                      expressly authorized under the terms of this
                      Agreement;

                 (c)  Is required to be disclosed under applicable laws,
                      regulations by court order, or orders of any
                      governmental authority (including, without
                      limitation, the rules and regulations of the
                      Securities and Exchange Commission relating to the
                      filing of exhibits to filings required under the
                      Securities Act of 1933, as amended, or the
                      Securities Exchange Act of 1934, as amended) or for
                      accreditation purposes.  If disclosure is required
                      by law, regulation or governmental or court
                      authority/order, the Party being required to
                      disclose shall advise the other Party as reasonably
                      practical of the required disclosure so that Party
                      may take legal action to prevent the disclosure;

                 (e)  Is learned by the receiving Party from a third Party
                      entitled to disclose such information, provided the
                      receiving Party complies with any restrictions
                      imposed by the third Party; or

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                 (f)  Is independently developed by the receiving Party. 
                      Any such claim of independent development will be
                      subject to the Party providing credible evidence
                      thereof.

          4.4.7  PERMITTED DISCLOSURES.  Either Party may disclose 
                 Confidential Information contained in this Agreement and the 
                 transactions contemplated hereby, including providing a 
                 redacted copy of this Agreement as follows:

                 (a)  In connection with the due diligence review of a Party 
                      by potential business partners, purchasers, investors, 
                      investment bankers and to their employees, agents, 
                      attorneys and auditors with the understanding  that the 
                      party receiving the Confidential Information will be 
                      bound by the applicable confidentiality/non-disclosure 
                      provisions of this Agreement. 

                 (b)  In connection with quarterly and annual financial or 
                      tax audits to the Party's public accounting firm but 
                      only to the extent necessary and relevant to any such 
                      accounting/reporting actions.

                 (c)  In connection with obtaining legal advice regarding 
                      this Agreement or any related matters, to the Party's 
                      outside legal advisors, in all cases subject to the 
                      applicable confidentiality restrictions of this 
                      Agreement.

          4.4.8  RETURN OF CONFIDENTIAL INFORMATION.  Upon termination of 
                 this Agreement by either Party for any reason, but subject 
                 to the provisions of Section 12.4 RETENTION OF LICENSE/USE 
                 OF SOFTWARE below, each Party shall, within twenty (20) days 
                 return any and all Confidential Information (together with 
                 any and all copies thereof) to the other Party. Following 
                 termination, the Parties shall remain obligated not to use, 
                 disclose or provide any such Confidential Information to 
                 third-parties for as long as any such Confidential 
                 Information is not generally known in the disclosing Party's 
                 industry and/or otherwise remains confidential, but in no 
                 event longer than a period of ten (10) years following the 
                 termination and/or expiration of this Agreement.  
     
     4.5  CUSTOMER'S IT SERVICE PROVIDERS.  HSD understands that Customer's
          information technology services are provided by [*]and that
          consultants/contractors will also be selected by Customer to
          assist with the Software implementation and its use.  For purposes
          of this Agreement, [*] and any successor entity which provides
          information/technology services to Customer shall be referred to
          as Customer's "IT Service Provider".  The terms of this Agreement
          with respect to IT Service Provider(s) will apply to any IT
          Service Provider. 

          4.5.1  HSD WILL WORK COOPERATIVELY WITH IT SERVICE PROVIDER/OTHERS. 
                 HSD acknowledges that the IT Service Provider and any such 
                 consultantS and/or contractors will be instrumental in 
                 implementing and operating the Software and agrees to make 
                 commercially reasonable efforts to work cooperatively with 
                 the IT Service Provider and Customer's 
                 consultants/contractors in providing services to Customer 
                 required by this Agreement and the Implementation and 
                 Support Agreements. 

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          4.5.2  CUSTOMER'S IT SERVICE PROVIDER/ OTHERS.  In addition, 
                 Customer agrees to make commercially reasonable efforts to 
                 obtain the commitment of the IT Service Provider and 
                 Customer's consultants to work cooperatively with HSD in 
                 providing services required under this Agreement and the 
                 Implementation and Support Agreements for the benefit of the 
                 Customer.

     4.6  IT SERVICE PROVIDERS/THIRD PARTY ACCESS TO CONFIDENTIAL 
          INFORMATION.  Given the sensitive and proprietary nature of the 
          Confidential Information which includes the Source Code, 
          third-party access, including access granted to the IT Service 
          Provider, will be allowed on a strict "need to know basis" subject 
          to the following procedures.  
          
          4.6.1  NON-DISCLOSURE AGREEMENT REQUIREMENTS.  Access to the Source 
                 Code and/or the Confidential Information belonging to either 
                 Party will be provided only after a non-disclosure agreement 
                 ("NDA" in form and substance equivalent to the NDAs attached 
                 hereto as Attachment 4.6.1 - A (Customer's NDA to be used for 
                 disclosure of Customer's Confidential Information) and 
                 Attachment 4.6.1 - B (HSD's NDA to be used for disclosure of 
                 HSD's Confidential Information) has been executed on behalf 
                 of any such third party, by both a duly authorized and 
                 empowered officer and by any/all personnel granted access to 
                 the Source Code or the Confidential Information.  In 
                 situations in which personnel have been engaged by an entity 
                 that has executed a master NDA with Customer and/or HSD the 
                 requirement that any such entity personnel execute 
                 individual NDAs will not apply.
          
          4.6.2  STAND ALONE PROGRAMS.  Notwithstanding Section 4.6.1 in the 
                 event that the services to be rendered by any such third 
                 party involves stand-alone software programs that operate 
                 independently of the Software (such that the third party is 
                 not made privy to any of HSD's Confidential Information 
                 and/or Source Code) the requirements of Section 4.6.1, 
                 above, will not apply. 

          4.6.3  COPIES OF NON-DISCLOSURE AGREEMENTS.  Each party shall 
                 provide the other Party with copies of each fully executed 
                 NDA required under this Agreement upon request, which copies 
                 shall be provided in a manner consistent with the Notice 
                 provisions of this Agreement. 

          4.6.4  RECORD RETENTION OF NON-DISCLOSURE AGREEMENTS.  Each Party 
                 shall retain written records of any such access granted to 
                 personnel of entities that are not covered by a master NDA 
                 (including name, address, company affiliation, the nature of 
                 the access granted and the purpose of any such access 
                 together with a fully executed NDA).   The Party granting 
                 any such third party access will provide the other Party 
                 with a copy of the executed NDA upon request ,which copies 
                 shall be provided in a manner consistent with the Notice 
                 provisions of this Agreement.  
     
     4.7  USE OF SOFTWARE BY AFFILIATE OR SUBSIDIARY BEING
          MERGED/REORGANIZED OR SELLING SUBSTANTIALLY ALL OF ITS ASSETS.  In
          the event of a merger or reorganization or the sale of
          substantially all of the assets of an Affiliate or Subsidiary of
          the Customer that has access to/is using the Software under this
          Agreement, to a "Non-Customer Entity"(which for purposes of this
          Agreement shall be defined as an entity which is not owned,
          controlled and/or under the common control of the Customer), and
          the Affiliate or Subsidiary is not the surviving entity, HSD will
          grant such Affiliate or Subsidiary a temporary license for its
          continued use of the 

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          Software on an interim/transitional basis following the closing of 
          any such merger, reorganization, or sale of substantially all of 
          the assets of the Affiliate or Subsidiary of the Customer to a 
          Non-Customer Entity.  The duration of any such temporary/interim 
          license will be determined by and between HSD and any such 
          Affiliate or Subsidiary (with the understanding that the duration 
          is not anticipated to be for a period to exceed six (6) months) 
          under mutually acceptable license and support terms with the 
          understanding that any such Affiliate or Subsidiary's interim use 
          will continue during the good-faith negotiation of the terms of 
          the temporary/interim use license. Notwithstanding anything to the 
          contrary in this Section 4.7 and subject to the applicable 
          provisions of Subsections 4.7.1 and 4.7.2 below, should the Affiliate
          or Subsidiary be the surviving entity of any such merger or 
          reorganization or sale of substantially all of its assets or 
          should the merger, reorganization or sale of substantially all of 
          its assets be with or to the Customer, an Affiliate or Subsidiary, 
          the Affiliate's or Subsidiary's rights of use shall continue as they 
          existed prior to any such merger or reorganization or the sale of 
          substantially all of the assets of the Affiliate or Subsidiary.

          4.7.1  USE BY HSD COMPETITOR.  Notwithstanding anything to the 
                 contrary in Section 4.7, above, should the merger, 
                 reorganization, or sale of substantially all of the assets 
                 of an Affiliate or Subsidiary of the Customer to a 
                 Non-Customer Entity involve the transfer of a majority 
                 ownership interest and/or a controlling interest in the 
                 Affiliate or Subsidiary to an HSD Competitor (as defined in 
                 Section 4.8.5, below), HSD shall not be required to grant 
                 any such temporary license and/or allow any such Affiliate 
                 or Subsidiary to continue its use of the Software under this 
                 Agreement after the merger, reorganization or sale of 
                 substantially all of the assets of the Affiliate or 
                 Subsidiary, should any such access/use include access to 
                 and/or use of the Source Code.  

          4.7.2  EXCEPTION TO USE BY HSD COMPETITOR.  Notwithstanding 
                 anything to the contrary in Section4.7.1, above, HSD will 
                 consider providing a period of transitional use to an 
                 Affiliate or Subsidiary that is being merged into or 
                 acquired by an HSD Competitor which will obtain the majority 
                 ownership or controlling interest of the Affiliate or 
                 Subsidiary provided that the HSD Competitor provides HSD 
                 with a written plan/proposal to ensure HSD's Confidential 
                 Information and HSD's Source Code are fully protected.  It 
                 is mutually understood and agreed that HSD will make a 
                 good-faith evaluation of any such plan/proposal with the 
                 understanding that HSD's approval of any such plan shall not 
                 be unreasonably withheld and/or delayed.  
          
     4.8  USE OF SOFTWARE BY CUSTOMER WHEN CUSTOMER MERGING, REORGANIZING OR 
          SELLING SUBSTANTIALLY ALL OF ITS ASSETS.  In the event of a merger 
          or reorganization, in which Customer is not the surviving entity or 
          the sale of substantially all of the assets of Customer to a 
          Non-Customer Entity, HSD agrees this license to use the Software 
          under the same terms and conditions of this Agreement will transfer 
          to the new owner-entity subject to the following sub-provisions of 
          this Section 4.8

          4.8.1  Any transfer of this Agreement under Section 4.8 above shall 
                 be subject to the new owner-entity's agreement to be bound 
                 by its terms and further provided that should the new-owner 
                 entity be an HSD Competitor (as defined below) the 
                 new-owner-entity will not be entitled to any rights of 
                 possession, use and/or access to the Source Code.

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          4.8.2  In the event such a transfer of this Agreement under Section 
                 4.8.1 above  is to an HSD Competitor, Customer will provide 
                 HSD with prior notice of the closing of any such merger, 
                 reorganization or sale to the extent feasible and consistent 
                 with applicable law and/or regulation.

          4.8.3  Prior to the completion of any transfer of this Agreement to 
                 an HSD Competitor under Section 4.8 above , Customer will 
                 deliver the Source Code (both the HSD unmodified Source Code 
                 and the Customer-modified versions thereof together with any 
                 associated Technical Documentation) to an independent third 
                 party that is not an HSD Competitor (such as the Integrator 
                 which for the purpose of this Agreement means the entity 
                 assisting Customer with the implementation of, and related 
                 services for, the Software).   Any such third-party entity 
                 will be authorized under an agreement with HSD to possess 
                 and use the Software (including the Source Code) for the 
                 balance of the term of this Agreement and any renewal term 
                 for the purpose of supporting the new owner-entity's licensed 
                 use of the Software and HSD agrees to negotiate with this 
                 third party in good-faith in recognition of the need to 
                 timely complete any such agreement concerning the third 
                 party's possession and use of the Software and Source Code 
                 to assist the new owner prior to the completion of the 
                 transfer of the Agreement. The rights of use granted to any 
                 such third party by HSD will be consistent with the applicable 
                 rights granted to Customer under this Agreement for the 
                 purpose of allowing the new-owner to continue to use the 
                 Object Code in a manner that protects HSD's Trade Secrets, 
                 Source Code and other confidential proprietary interests.

          4.8.4  Prior to the completion of any transfer of this Agreement 
                 under Section 4.8.1 above to an HSD Competitor Customer will 
                 delete any/all Source Code on any of its internal systems 
                 and certify to HSD that all such material has been timely 
                 deleted/destroyed. 

          4.8.5  For purposes of this Agreement, an "HSD Competitor" is 
                 defined as any of the entities as set forth in Attachment 
                 4.8.5 to this Agreement, which Attachment may be updated 
                 from time to time as necessary/applicable subject to the 
                 mutual agreement of the Parties.

     4.9  ASSIGNABILITY.  Customer may assign this Agreement to a Subsidiary
          or Affiliate and HSD may likewise assign this Agreement to a
          subsidiary or affiliate, provided that the other Party is given at
          least thirty (30) days prior written notice of any such intended
          assignment and provided that the prospective assignee is not an
          HSD Competitor other than as provided for in Sections 4.7 and 4.8
          or Customer competitor which for the purpose of this Agreement is
          considered to be any entity that provides the same services or
          similar services as is provided by Customer and its Subsidiaries
          and Affiliates.  Any such assignment shall be subject to the prior
          written agreement of the entity to which the assignment is being
          made affirming that it will abide by the terms of this Agreement.

5.   TERM OF AGREEMENT, TERM OF RELATED AGREEMENTS AND LICENSE FEES

     5.1  TERM.  The term of this Agreement shall be ten (10) years from the
          Effective Date unless terminated as provided under the applicable
          termination provisions of this Agreement. The Agreement may be
          extended for two additional ten (10) year renewal terms in
          consideration of the license renewal fee specified in Schedule A.

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     5.2  TERM OF RELATED AGREEMENTS  Any Implementation Agreement and/or 
          Support Agreement which is in-force at the time of any termination 
          of the License Agreement (or the expiration of its term or any 
          extension thereof) will automatically terminate as of the date of 
          any such termination or expiration of the term of the License 
          Agreement. 

     5.3  LICENSE FEES.  The Software license fees ("License Fees") are
          specified in Schedule A, which Schedule is attached hereto and
          incorporated into/made a part of this Agreement by this reference.

     5.4  GROWTH OF MEMBERSHIP.  In the event that Customer incurs
          membership growth that will be processed by, and use, the
          Software, whether the growth is by the Customer acquiring or
          merging with another entity or the growth occurs from the purchase
          of Customer by a third party, [*] 

     5.5  THIRD PARTY SOFTWARE.  It is mutually understood and agreed that
          for any third-party software products acquired in conjunction with
          the Software, Customer will be required to obtain rights of use in
          a manner consistent with the practices of each such third party
          vendor.

     5.6  TAXES.  All local, state, and federal sales, use, personal
          property, or other similar taxes or duties relating to this
          license or to Customer's operation of the Software, (excluding
          taxes based on HSD's revenue, profit or income) shall be the
          exclusive obligation of Customer.  Payment of said taxes shall be
          Customer's obligation independent of its obligation to pay License
          Fees.

6.   WARRANTIES

     HSD represents and warrants to Customer as follows:

     6.1  CONFORMANCE TO DOCUMENTATION AND SPECIFICATIONS.  The Software
          used in Production by Customer in Release Sequence 1a of
          Attachment  6.1 of this Agreement (the "[*] Release Sequence"),
          will perform in a manner consistent with its Specifications for a
          period of thirty (30) days from the date of its first Production
          use  (the "Warranty Period") when installed and operated on a
          Designated System. 

     
          6.1.1  REMEDIES/CORRECTIVE ACTION.  It is mutually understood and 
                 agreed that the remedies/corrective action for any breach of 
                 the warranty set forth in Section 6.1 will be as set forth 
                 in Sections 2.6.1, Section 2.7.1(a) and 2.7.1(b) of the 
                 Support Agreement entered into in conjunction with this 
                 Agreement.
          
          6.1.2  WARRANTY PERIOD EXTENSION.  In the event that Customer 
                 encounters a Priority 1 or Priority 2 Verified Program Error 
                 (as described in the Diamond Issues Classification Table in 
                 Section 2.6.1 of the Support Agreement) the Warranty Period 
                 will be extended by the amount of the time that Production 
                 is halted as a result of any such Verified Program Error 
                 ("The Warranty Period Extension").

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     6.2  [*] RELEASE SEQUENCE - ADDITIONAL SUPPORT AGREEMENT FEES
          PROVISION. 
          HSD warrants that its Support Agreement Fees set forth in Section
          III of Schedule A will be billed to Customer as specified in said
          Section III.  HSD further warrants that the billing increments for
          "[*] Release Sequence 1c ("Claims & Capitation") and "[*] Release
          Sequence 2 ("Membership") as identified in Attachment 6.1 to this
          Agreement will not be required to be paid by Customer for the
          first thirty (30) days of Production of the Software included in
          [*] Release Sequences 1c and 2 as specified in Section III of
          Schedule A.
     
          6.2.1  Remedies/EXTENSION OF SUPPORT FEE PROVISIONS.  In the event 
                 that Customer encounters a Priority 1 or Priority 2 Verified 
                 Program Error (as described in the Diamond Issues 
                 Classification Table in Section 2.6.1 of the Support
                 Agreement) in using each additional Release in Production as 
                 described in Section 6.2, above, Section 2.7.1 of the 
                 Support Agreement shall be applicable and the thirty (30) 
                 day period in which the Support Agreement fees are not 
                 payable will be extended by the amount of time that 
                 Production is halted as a result of any such Priority 1 or 
                 Priority 2 Verified Program Errors. 
          
     6.3  CONDITIONS OF WARRANTIES.  The warranties set forth in Sections
          6.1 and 6.2 above shall be conditional upon the Software being
          operated on a Designated System and the Software not having been
          modified other than by HSD, [*] (in its capacity as the
          Integrator) by or on behalf of HSD at HSD's request, or by an IT
          Service Provider in its capacity described in Sections 4.5 and
          4.6, above. 

     6.4  EXCEPTIONS TO WARRANTIES IN SECTION 6.1 AND 6.2.  Notwithstanding
          Section 6.3 above, the warranties set forth in Sections 6.1 and
          6.2 will remain in effect in the event that HSD can/will not
          support the Software as required under the Support Agreement (and
          any renewal thereof).  Should Customer find it necessary to engage
          a third party to render such support services, Customer will make
          commercially reasonable efforts to have any such replacement
          services rendered by a nationally recognized and/or well-known
          company and will use commercially reasonable efforts to obtain
          written non-disclosure/confidentiality agreements as part of any
          such support service arrangements in order to help protect the
          Source Code.

     6.5  YEAR 2000 WARRANTY.  HSD warrants the Software provided under this
          Agreement will automatically and accurately process calendar dates
          (including leap year dates) and date calculations for all dates
          prior to, through and beyond January 1, 2000 and that any such
          processing shall not require Customer to invoke special procedures
          (hereinafter referred to as "Year 2000 Compliant" or alternatively
          "Y2K Compliant").  In addition, HSD warrants that the Software
          operates on versions of the UNIX operating system, PowerBuilder
          (or a successor development tool) and Oracle database which have
          been certified by their respective vendors to be Year 2000
          Compliant. 

     6.6  OPERATING SYSTEM.  HSD will make commercially reasonable efforts
          to remain on the current version of the UNIX operating system of
          the Designated System(s), PowerBuilder (or a successor development
          tool) and the Oracle database during the term of the Support
          Agreement associated with this Agreement.  In the alternative the
          Software will remain compatible with a vendor supported version of
          the UNIX operating system of the Designated System(s),
          PowerBuilder (or a successor development tool) and the Oracle
          database for the term of the Support Agreement associated with the
          Agreement.

     6.7  RESTRICTIVE DEVICES.  HSD warrants the Software does not and will   
          not contain, at 

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          the time of delivery to Customer, any disability virus, self-help 
          code, program dependency feature or other device or software routine 
          (including any "back door," "time bomb," "Trojan horse," "worm," 
          "drop dead device," "virus" or other computer software routines) 
          designed to permit unauthorized access to, disable (whether through 
          the passage of time or under the control of a Person other than 
          Customer), erase or otherwise harm or interrupt the continued usage 
          of the Software.

     6.8  SOFTWARE MEDIA.  HSD warrants the media in which the Software is
          provided shall be new media/previously unused and of good quality.

     6.9  TITLE TO SOFTWARE.  HSD warrants it owns and/or has full license
          or marketing rights to the Software and has the right to grant the
          license hereunder and the other rights contained herein. 

     6.10 NO BREACH OF ANY OTHER AGREEMENT.  HSD warrants the execution and
          delivery of this Agreement by HSD and the performance of this
          Agreement by HSD does not and will not constitute a breach of any
          agreement binding on HSD. 

     6.11 NON-DISTURBANCE IN USE OF SOFTWARE.  HSD warrants Customer shall
          be entitled to use the Software without disturbance, subject to
          its continued and ongoing compliance with the terms of this
          Agreement.

     6.12 EXCEPTIONS TO WARRANTIES.  The foregoing warranties other than as
          provided for in Section 6.3 above, shall not be deemed to cover
          any components of the Software created by Customer and/or on
          Customer's behalf by other than HSD or on behalf of HSD at HSD's
          request.

     6.13 THIRD PARTY INFRINGEMENT.  To the best of HSD's knowledge, the use
          by Customer of the Software in accordance with the terms of this
          Agreement does not violate or infringe any patent rights or other
          intellectual property rights of any third party; provided,
          however, that this representation shall not be deemed to cover any
          components of the Software created by Customer and/or on
          Customer's behalf by other than HSD or created on behalf of HSD at
          HSD's request.

     6.14 NO ACTIONS, SUITS OR PROCEEDINGS.  HSD warrants there are no
          actions, suits, or proceedings, pending or threatened, which will
          have a material adverse effect on HSD's ability to fulfill its
          obligations under this Agreement.  HSD further warrants that it
          will timely notify Customer should HSD become aware of any action,
          suit or proceeding, pending or threatened, which will have a
          material adverse effect of HSD's ability to fulfill its
          obligations to Customer under this Agreement. 

     6.15 CAPABILITY TO PERFORM.  HSD warrants that it is financially
          capable of fulfilling all requirements of this Agreement, is
          appropriately staffed to fulfill its obligations under this
          Agreement and the Support and Implementation Agreements and that
          HSD is a validly organized entity authorized to enter into the
          Agreement.

     6.16 EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, THE
          PRECEDING IS HSD'S ONLY WARRANTIES CONCERNING THE SOFTWARE, AND
          ARE MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES AND
          REPRESENTATIONS, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
          WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY OR
          OTHERWISE.
     
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7.   THIRD-PARTY INTELLECTUAL PROPERTY INFRINGEMENT WARRANTY

     7.1  DEFENSE AND PAYMENT.  At HSD's expense, HSD shall defend,
          indemnify and hold harmless Customer and its Subsidiaries and
          Affiliates against any claim that the Software infringes the
          intellectual property rights of another person or entity and shall
          pay all costs, damages, losses, liabilities and expenses awarded
          as a result of such claim.  To qualify for such defense and
          payment, Customer shall comply with the applicable
          procedure/process set forth in Section 8, below.


     7.2  LIMITATION ON HSD'S INDEMNIFICATION OBLIGATIONS.  HSD's liability
          or obligation under the preceding Section 7.1 shall be reduced or
          eliminated (on a comparative fault basis) to the extent that any
          such claim is based upon (i) the misuse and/or modification of the
          Software by other than HSD (or on behalf of HSD at HSD's request);
          (ii) Customer's use of the Software in combination with other than
          a Designated System or Third Party Software specified for use with
          the Software in the Documentation and/or as otherwise approved in
          writing by HSD for use with the Software, (iii) Customer's failure
          to timely use/employ corrections and/or Enhancements to the
          Software made available by HSD with the understanding that any
          such corrections and/or Enhancements will be provided to the
          Customer at no additional fee.
     
     7.3  CUSTOMER'S DEFENSE OF HSD.  In the event of any such infringement
          claim against HSD arising under Section 7.2, above, Customer shall
          defend HSD against any such claim and pay all costs and damages
          awarded as a result of such claim provided that HSD complies with
          the procedure/process set forth in Section 8, below to the extent
          that HSD incurs any liability, cost and/or expense attributable to
          any such infringement claim. 
     
     7.4  ALTERNATIVE INFRINGEMENT REMEDY.  If any portion of the Software
          becomes the subject of an infringement claim that results in a
          curtailment of Customer's use of the Software, HSD shall use
          commercially reasonable efforts to: (i) on an expedited basis seek
          to procure for Customer the right to continue to use the Software;
          or (ii) replace the Software with non-infringing alternatives that
          are substantially equivalent on all material functions of the
          Software; or (iii) modify the Software in a manner which causes it
          to function substantially the same as it had prior to modification
          so that it becomes non-infringing.  For the purpose of this
          Section 7.4,  it is mutually agreed that commercially reasonable
          efforts shall mean that HSD will incur costs up to the dollar
          value of the License Fees paid by Customer to HSD under this
          Agreement, (including the Source Code License Fee) with these
          costs being reduced each year from the Effective Date of the
          Agreement by the amount of the annual amortization of the
          Software, based on a ten (10) year straight line amortization
          schedule beginning as of the Effective Date of this Agreement. 

     7.5  ALTERNATIVE ARRANGEMENTS.  Should HSD be unable to secure any of
          the options specified in Section 7.4, above, the Parties will meet
          and confer in order to explore other alternatives to allow
          Customer's use of the Software.
     
8.   INDEMNIFICATION PROCEDURE FOR THIRD-PARTY INTELLECTUAL PROPERTY CLAIMS
          
     8.1  PROCEDURE.  Within five (5) days after receipt of written notice
          by the party seeking indemnification (the "Indemnitee") of the
          assertion or the commencement of any Claim, demand, action, cause
          of action or other proceeding by a third-party, whether by legal
          process or otherwise (a "Claim") with respect to any matter within
          the scope of Section 7, above, the Indemnitee 

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          shall give written notice thereof to the Party from whom 
          indemnification is sought pursuant hereto (the "Indemnitor") and 
          shall thereafter keep the Indemnitor reasonably informed with respect
          thereto; provided, however, that the failure of the Indemnitee to 
          give the Indemnitor such prompt written notice will not relieve the 
          Indemnitor of its obligations hereunder except to the extent such 
          failure results in prejudice to Indemnitor's defense of such Claim. 
          Within ten (10) days following receipt of written notice from the 
          Indemnitee relating to any Claim, but no later than ten (10) days 
          before the date on which any response to a complaint or summons is 
          due, the Indemnitor shall notify the Indemnitee in writing that the 
          Indemnitor shall assume control of the defense and settlement of 
          such Claim.

     8.2  SOLE CONTROL.  The Indemnitor will be entitled to have sole
          control over the defense and settlement of any such Claim;
          provided, however, that the Indemnitee will be entitled to
          participate in the defense of such Claim and to employ counsel at
          its own expense to assist in the handling of such Claim. 
          
     8.3  FAILURE TO PROVIDE DEFENSE.  If the Indemnitor fails to assume or
          provide a reasonable defense of any such Claim, then the
          Indemnitee may assume the defense of any such Claim at the cost
          and expense of the Indemnitor.  The Indemnitor shall reimburse
          Indemnitee for its costs and expenses incurred as a result of
          Indemnitor's failure to assume or provide a reasonable defense of
          such Claim subject to a determination under Section 15, below
          (Dispute Resolution) that a duty of indemnity was owed to the
          Indemnitee.
          
     8.4  ASSISTANCE.  The Indemnitee shall provide reasonable assistance to
          the Indemnitor (at the Indemnitor's expense), including reasonable
          assistance from the Indemnitee's employees, agents and independent
          contractors, as applicable.
     
     8.5  INFRINGEMENT INDEMNIFICATION OBLIGATIONS.  The provisions of
          Section 7 above state the entire obligation of the Parties to each
          other with respect to the claims as defined in Section 7. The
          requirements of this Section 8 shall apply to the extent they do
          not conflict with any of the provisions of Section 7, above.

9.0  GENERAL INDEMNIFICATION.

     9.1  INDEMNIFICATION.  Subject to the conditions specified in Section
          9.2, below, the Parties will indemnify, defend, and hold each
          other and their respective Affiliates, Subsidiaries, directors,
          officers, employees and agents harmless from and against any and
          all claims, losses, liabilities, obligations and expenses
          including reasonable attorneys fees, based on bodily injury,
          including death, or damage to property resulting from the
          negligence or willful misconduct of the other Party's employees or
          agents.  Each Party shall also at its expense, indemnify, defend
          and hold the other Party harmless from and against any claim with
          respect to withholding taxes, workmens' compensation, employee's
          benefits or any other claim, demand, liability, damage or loss of
          any nature relating to any of its employees or agents.

     9.2  INDEMNIFICATION PROCEDURE.  The procedure for seeking
          indemnification shall be as set forth in Section 8.
          Indemnification Procedure for Third Party Intellectual Property
          Claims.
     
     9.3  EXCEPTION.  The Parties obligations under this Section 9 shall not
          apply to the extent that any claim is covered by the Indemnitee's
          workers' compensation insurance coverage.  The Parties herewith
          agree to a mutual waiver of subrogation with respect to any such
          claims covered by their respective workers' compensation insurance
          coverage.

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10.  LIMITATION OF LIABILITY

     10.1 CONSEQUENTIAL/INDIRECT/INCIDENTAL DAMAGES.  IN NO EVENT SHALL
          EITHER PARTY BE LIABLE FOR CONSEQUENTIAL, INDIRECT, INCIDENTAL,
          EXEMPLARY OR PUNITIVE DAMAGES ARISING FROM OR RELATED TO THIS
          AGREEMENT, REGARDLESS OF THE TYPE OF CLAIM, WHETHER IN CONTRACT,
          EQUITY, NEGLIGENCE OR OTHERWISE AND REGARDLESS OF THE CAUSE OF
          SUCH DAMAGES EVEN IF SUCH DAMAGES WERE FORESEEABLE.

     10.2 DOLLAR LIMITATION OF LIABILITIES.  IF EITHER PARTY SHALL BECOME
          LIABLE TO THE OTHER PARTY FOR ANY MATTER RELATING TO OR ARISING
          FROM THIS AGREEMENT, WHETHER BASED UPON AN ACTION OR CLAIM IN
          CONTRACT, EQUITY, NEGLIGENCE OR OTHERWISE, THE AGGREGATE AMOUNT OF
          DAMAGES RECOVERABLE AGAINST THE LIABLE PARTY WITH RESPECT TO ANY
          AND ALL BREACHES, PERFORMANCE, NONPERFORMANCE, ACTS OR OMISSIONS
          HEREUNDER SHALL NOT EXCEED AN AMOUNT EQUAL TO THE TOTAL AMOUNT OF
          THE LICENSE FEE AND SOURCE CODE LICENSE FEE THAT HAVE BEEN PAID BY
          CUSTOMER (OR ARE OWED TO HSD) UNDER THIS AGREEMENT.

     10.3 EXCEPTIONS.  NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
          SECTION 10, IN THE EVENT OF A MATERIAL BREACH OF THIS AGREEMENT
          RELATING TO THE SOURCE CODE, EITHER PARTY'S TRADE SECRETS
          INCLUDING THE UNAUTHORIZED USE OR DISCLOSURE AND/OR DISTRIBUTION
          OF STRATEGIC CUSTOMER ENHANCEMENTS, THE AMOUNT OF ANY DAMAGES
          CLAIMED AND/OR AWARDED HEREUNDER SHALL NOT BE SUBJECT TO THE
          DOLLAR LIMITATION OF LIABILITY RECOVERABLE UNDER SECTION 10.2,
          ABOVE.

11.  NON-SOLICITATION OF PERSONNEL

     Neither Party shall solicit the employment/engagement of the services of,
     offer employment to, employ or contract with the other Party's  personnel
     who are performing such activities and services under this Agreement in
     any capacity (including as an employee, consultant or independent
     contractor) without first obtaining the written permission of the Party
     employing/engaging any such individual.  The term of this provision shall
     be for the duration of each such individual's involvement in providing
     any services related to this Agreement and for a period of 12 months
     following the termination of that individual's  rendering of any such
     services.

12.  TERMINATION.

     12.1 MATERIAL DEFAULT/BREACH.  In the event of a claim of a material
          default/breach, the Party alleging any such material
          default/breach shall give written notice of the alleged material
          default/breach, which notice shall specify the nature of any such
          material default/breach in sufficient detail to allow the
          receiving Party to investigate same in the interest of being able
          to respond thereto.

     12.2 CURE PERIOD.  This Agreement may be terminated by the Party
          alleging a material breach/default sixty (60) days after the date
          of such notice is given to the other Party (the "Cure Period")
          unless: (a) the material default/breach is corrected within such
          sixty (60) day period; or (b) if it is not possible to correct
          within such 

 [*] Confidential portions omitted and filed separately with the Commission
BSCA-HSD DIAMOND 950 C/S LICENSE AGREEMENT FINAL EXECUTABLE (12-31-98)-PAGE 18
<PAGE>

          sixty (60) days, the defaulting Party commences correction within 
          sixty (60) days and proceeds diligently to a cure, or (c) the matter 
          remains a subject of disagreement between the Parties and the process 
          of dispute resolution has been initiated under Section 15 below. The 
          general cure provision of this Section 12.2 shall not apply to 
          those provisions of this Agreement which have provided for specific 
          remedies for a breach of those provisions.  For a material breach 
          relating to the Source Code, Trade Secrets and/or the unauthorized 
          use, disclosure and/or distribution of [*] any such breach will be 
          subject a [*] Cure Period.  Notwithstanding anything to the 
          contrary in the preceding sentence, the Cure Period may be extended 
          in the discretion of the Party alleging the breach on the basis of 
          an action plan to cure the alleged breach which action plan is 
          acceptable to the Party alleging the material default/breach. 

     12.3 REMEDIES/RETURN OF SOFTWARE.  Subject to Section 12.4 below, upon
          termination or expiration of this Agreement, the Customer shall,
          within ten (10) days, return the Software to HSD.  Termination of
          this Agreement or any license granted herein shall not limit
          either Party from pursuing any other remedies available to it at
          law or in equity, subject to the limitations set forth in this
          Agreement.

     12.4 RETENTION OF LICENSE/USE OF SOFTWARE.  Notwithstanding anything to
          the contrary in this Agreement, in the event of an uncured
          material/default breach of this Agreement by HSD that is confirmed
          under Section 15 (Dispute Resolution) below, this Agreement and
          the Source Code Addendum shall not terminate and Customer's use of
          the Software, including the Source Code, shall continue subject to
          the terms and conditions of this Agreement for the balance of its
          remaining term and any applicable renewal terms (should Customer
          elect to renew), with the exception of the fees provision of
          Section 5.  The determination of whether Customer owes any unpaid
          license fees to HSD after the date of the uncured breach will be
          determined by the Dispute Resolution mechanism as set forth in
          Section 15.

13.  THIRD-PARTY SOFTWARE PRODUCTS

     Third-party Software license fees for software products used in
     conjunction with HSD's Diamond Software are specified in Schedule A. 
     Applicable third-party licenses are provided to Customer as attachments
     to Schedule A.
          
14.  SUPPORT AND IMPLEMENTATION AGREEMENTS

     Separate Support and Implementation Agreements will be executed by the 
     Parties at the time of the execution of this License Agreement and/or at 
     such time as the Parties may otherwise mutually agree.

15.  DISPUTE RESOLUTION

     15.1 INFORMAL RESOLUTION.  Prior to the initiation of formal dispute
          resolution procedures, the Parties shall first attempt to resolve
          any dispute, controversy or claim arising under or in connection
          with this Agreement (a "Dispute") informally, as follows:

          15.1.1 MEETING.  Representatives of HSD and Customer shall meet as 
                 promptly, as often, and for such duration as the Parties 
                 deem necessary to discuss the Dispute and negotiate in good 
                 faith in an effort to resolve the Dispute.

 [*] Confidential portions omitted and filed separately with the Commission
BSCA-HSD DIAMOND 950 C/S LICENSE AGREEMENT FINAL EXECUTABLE (12-31-98)-PAGE 19
<PAGE>

          15.1.2 REFERRAL TO STEERING COMMITTEE.  If the HSD and Customer 
                 representatives are unable to resolve the Dispute within 15 
                 days after the referral of the Dispute to them, then the 
                 matter will be referred to the Executive Steering Committee 
                 (referred to below in Section 15.2) which will meet as 
                 promptly, as often, and for such duration as the Parties 
                 reasonably deem necessary to discuss the Dispute and 
                 negotiate in good faith in an effort to resolve the Dispute.

     15.2 EXECUTIVE STEERING COMMITTEE.  The Parties shall establish a
          steering committee (the "Executive Steering Committee") to monitor
          and address issues arising with respect to the Software and the
          performance by the Parties of their obligations hereunder.  The
          Executive Steering Committee will serve as a second level for
          Dispute resolution should the Parties be unable to resolve the
          Dispute at an informal level.
          
          15.2.1 REPRESENTATIVES ON THE EXECUTIVE STEERING COMMITTEE.  The 
                 Parties shall mutually determine the number of 
                 representatives they will assign to the Executive Steering 
                 Committee.  Each Party may replace its members of the 
                 Executive Steering Committee after providing the other Party 
                 with reasonable advance written notice and after 
                 consultation with the other Party.  Each Party shall use 
                 reasonable efforts to minimize the turnover of individuals 
                 serving on the Executive Steering Committee.
          
          15.2.2 MEETINGS.  The Executive Steering Committee shall meet at 
                 such times and places as are agreed upon by the Parties. 
                 Each Party's representatives on the Executive Steering 
                 Committee shall have the responsibility to notify that 
                 Party's senior management of material issues considered and 
                 material actions taken, by the Executive Steering Committee. 
          
          15.2.3 IMPLEMENTATION OF ARBITRATION.  Implementing arbitration to
                 resolve the Dispute may not be commenced until the earlier
                 of:

                 (a)  The good faith determination by the Executive Steering 
                      Committee that an amicable resolution through continued 
                      negotiation of the matter does not appear likely; or
          
                 (b)  Thirty (30) days following the date that the Dispute 
                      was first referred to the Executive Steering Committee.

     15.3 ARBITRATION PROCESS.  In the event that the Dispute is not
          resolved after a good faith effort under the process described
          above in this Sections 15.1 and 15.2, then, at the request of
          either Party to this Agreement, the Dispute shall be subject to
          final and binding arbitration pursuant to the rules of the
          American Arbitration Association under the procedure specified
          below.

          15.3.1 Any Dispute submitted to arbitration shall be convened at 
                 the location of the city of the headquarters of the Party 
                 not initiating the arbitration and shall be conducted by a 
                 three-person arbitration panel from a commercial alternative 
                 dispute resolution organization.  The Parties shall each 
                 choose one arbitrator from the list of arbitrators supplied 
                 by the dispute resolution organization, which panel must 
                 include arbitrators with large system software industry 
                 experience.  The two selected arbitrators will then select 
                 the third member of the panel and the arbitration hearing 
                 will be scheduled within 30 days of the initiation of the 
                 arbitration process.

 [*] Confidential portions omitted and filed separately with the Commission
BSCA-HSD DIAMOND 950 C/S LICENSE AGREEMENT FINAL EXECUTABLE (12-31-98)-PAGE 20
<PAGE>

          15.3.2 California law shall be applied in any such arbitration 
                 without reference to its choice of law statutes and the 
                 arbitrators' findings will include a detailed summary of the 
                 law as it applied to the award and/or findings of the 
                 arbitration panel.  Depositions may be taken and discovery 
                 may be conducted in any arbitration under this Agreement 
                 subject to limitations imposed by the arbitrators.

          15.3.3 Any judgment upon any award and/or findings rendered by the 
                 arbitrators may be entered by any state or federal court 
                 having jurisdiction thereof and the attorney fees and cost 
                 provisions of this section shall also apply to the entering 
                 of judgment and/or its enforcement.

     15.4 EQUITABLE RELIEF.  Notwithstanding anything to the contrary in
          this Section15, it is jointly acknowledged and understood that
          either Party may seek expedited equitable judicial remedies such
          as temporary restraining orders with respect to any material
          breach/actions that exposes either Party to the prospect of
          irreparable harm (such as a breach relative to the use or
          protection of the Source Code, Trade Secrets and/or Strategic
          Customer Enhancements).

     15.5 VENUE.  Disputes under Section 15.4, above, shall be subject to
          judicial action under California law with venue in Oakland,
          California except to the extent preempted by applicable federal
          law, notwithstanding anything to the contrary in this Section 15.     

     15.6 ATTORNEY FEES.  The prevailing Party under any arbitration and/or
          judicial action under this Section 15 shall be entitled to an
          award of its attorney fees and applicable costs, including those
          associated with appeals of any judgment and/or actions associated
          with the enforcement of any such judgment, the entry of judgment
          based on an arbitration award and/or the enforcement of any such
          award.

     15.7 CONTINUED PERFORMANCE.  Notwithstanding anything to the contrary
          in this Section 15, both HSD and Customer's will continue to
          perform their obligation under this Agreement and the Support and
          Implementation Agreements during the dispute resolution process. 
          Customer's use of the Software and/or associated HSD services
          (such as implementation, support and/or consulting) will not be
          suspended during the dispute resolution process provided that
          Customer continues to otherwise perform as required under this
          Agreement and/or any associated agreement (such as the Support and
          Implementation Agreements).  Customer's continued performance
          referenced in the preceding sentence shall include the timely
          payment of amounts invoiced by HSD for services rendered and
          expenses incurred except with respect to any amounts which are
          subject to a good-faith dispute of which HSD has received prior
          written notice. 
     
16.  GENERAL PROVISIONS

     16.1 NOTICES.  All notices given hereunder shall be in writing and sent
          by telefax/facsimile and/or an internationally recognized courier
          such as DHL to the addresses and/or telephone numbers below, which
          information may be changed by notice conforming to the requirements 
          of this Notice Section. Notices delivered by telefax and/or courier 
          shall be deemed received on the date of 

 [*] Confidential portions omitted and filed separately with the Commission
BSCA-HSD DIAMOND 950 C/S LICENSE AGREEMENT FINAL EXECUTABLE (12-31-98)-PAGE 21
<PAGE>

          successful transmission thereof if received during business hours or 
          otherwise on the next business day following its receipt.
          
          CUSTOMER: California Physicians' Service 
          dba Blue Shield of California
          50 Beale St.
          San Francisco, CA 94105
          Attention:  President
          Facsimile:  415-229-5056

          HSD: Health Systems Design Corp.
          
          1330 Broadway, Suite 1200
          Oakland, California 94612
          Attention:  Legal Department
          Facsimile:  510 763-2081

     16.2 INSURANCE.  HSD has and shall retain in effect during the term of
          this Agreement, errors and omissions insurance ("E&O") in the
          minimum amount of Five Million Dollars ($5,000,000) per claim in
          any one policy year and Five Million Dollars ($5,000,000) annual
          aggregate for itself and general liability insurance in the amount
          of Three Million Dollars ($3,000,000), and workers compensation in
          the statutory amount or if none, a reasonable amount for a company
          of similar size to HSD.  The liability insurance shall:  (i) name
          Customer as an additional insured, including without limitation,
          as an insured with respect to third party claims or actions made
          or brought directly against Customer or against Customer and HSD
          as co-defendants and arising out of or in connection with this
          Agreement, (ii) contain a provision that Customer, although named
          an insured, shall nonetheless be entitled to recovery for any loss
          suffered by Customer as a result of HSD's negligence, (iii) be
          written as a primary policy not contributing with any other
          coverage which Customer may carry, and (iv) stipulate that
          Customer shall receive thirty (30) days prior written notice of
          any cancellation or reduction in coverage.  HSD shall provide
          Customer with a copy of its insurance policies, upon request.  Any
          insurance proceeds payable and/or other benefit to Customer that
          becomes payable/is received under this Section 16.2 shall be
          subject to Section 10. Limitation of Liability set forth in this
          Agreement.

     16.3 WAIVER.  No term and/or provision of the Agreement, the Source
          Code Addendum, the Support Agreement, and the Implementation
          Agreement shall be deemed waived and/or any breach excused unless
          such waiver or consent is specified in writing and signed by the
          Party claimed to have waived and/or consented.  No such consent
          and/or waiver, whether express or implied, shall constitute a
          consent, waiver and/or excuse for any other, different or
          subsequent breach.

     16.3 INDEPENDENT CONTRACTORS.  The Parties specifically acknowledge and
          agree that, in the exercise of their rights and the performance of
          their duties under this Agreement, they are and will be
          independent contractors.  Neither Party will bind or attempt to
          bind the other Party to any contract or other obligation, and
          neither Party will represent to any third party that it is
          authorized to act on behalf of, or bind, the other Party.

 [*] Confidential portions omitted and filed separately with the Commission
BSCA-HSD DIAMOND 950 C/S LICENSE AGREEMENT FINAL EXECUTABLE (12-31-98)-PAGE 22
<PAGE>

    16.4  FORCE MAJEURE.  The obligations of the Parties to perform under
          this Agreement shall be suspended to the extent that any such
          performance cannot be rendered by reason of matters beyond the
          control of the affected Party, including Acts of God, war and/or
          insurrection.

    16.6  HEADINGS.  The headings and subheadings in this Agreement are
          provided for convenience only and will not control the
          interpretation of the Agreement.

    16.7  SEVERABILITY.  In the event that any provision of this Agreement
          is found invalid or unenforceable pursuant to a final judicial
          decree or decision, the remainder of this Agreement will remain
          valid and enforceable according to its terms and the Parties will
          attempt in good faith to agree upon a substitute provision for the
          invalid or unenforceable provision. 

    16.8  SUCCESSORS AND ASSIGNS.  This Agreement will be binding upon and
          will inure to the benefit of the Parties and their respective
          successors and permitted assigns.

    16.9  GOVERNING LAW.  This Agreement will be governed by and construed
          in accordance with the laws of the State of California without
          regard to the conflicts of laws provisions thereof.  Both Parties
          hereby consent to the personal jurisdiction of the courts located
          in the State of California for the resolution of those disputes,
          which are subject to judicial resolution under the terms of this
          Agreement.

    16.10 SURVIVAL.  The provisions of those Sections hereof regarding
          indemnification, remedies, limitation of liability, dispute
          resolution and this provision regarding survival shall survive any
          termination or expiration of this Agreement for a period of ten
          (10) years.  The post-termination survival of the provisions
          relating to Confidential Information shall be governed by Section
          4, above. 

    16.11 RULE OF CONSTRUCTION.  In the event any dispute arises with regard
          to the interpretation of any term of this Agreement, or any other
          document referred to herein, the Parties agree that the drafting
          of this Agreement or any other instrument referred to herein,
          shall not be deemed that of any one Party or their agent and that
          any rules of construction to the effect that any ambiguities are
          to be resolved against the drafting Party shall not be applicable.

    16.12 AMENDMENTS.  Changes to this Agreement shall be valid only if in
          written form and signed by the Parties.

    16.13 USE OF NAMES AND MARKS.  The Parties each reserve the right to
          control the use of their respective business names,
          trademarks/servicemarks currently existing or later established
          and neither Party shall use the other's name, trademarks or
          servicemarks without the other's prior written consent, which
          consent shall not be unreasonably withheld and/or delayed.  This
          provision shall also apply to logos and commercial symbols
          generally/publicly known to be associated with either Party.

    16.14 ENTIRE AGREEMENT.  This Agreement and the Schedules and
          Attachments referenced herein together with the Source Code
          Addendum, Support Agreement and Implementation Agreement represent
          the entire understanding between the Parties and supersedes any and 
          all prior understandings between the Parties, whether verbal or 
          written. Referenced Schedules and/or Attachments shall be deemed 
          incorporated into and made a part of this Agreement by reference.

 [*] Confidential portions omitted and filed separately with the Commission
BSCA-HSD DIAMOND 950 C/S LICENSE AGREEMENT FINAL EXECUTABLE (12-31-98)-PAGE 23
<PAGE>

17.  EXECUTION

This Agreement shall be effective as of the Effective Date notwithstanding any
date to the contrary associated with its execution by the duly authorized
signatories specified below. This Agreement may be executed in counterparts,
each of which will be deemed an original, but which together constitute one and
the same instrument.

CUSTOMER: California Physicians' Service          HSD:
          dba Blue Shield of California

Signed    /s/ Thomas S. Fischer         Signed   /s/ Russell J. Harrison
       ------------------------                 -------------------------
Name:     Thomas S. Fischer             Name:      Russell J. Harrison
Title:    SVP & CAO                     Title:     President & CEO

Date      12/31/98                      Date        12/31/98
       ------------------------                 -------------------------


 [*] Confidential portions omitted and filed separately with the Commission
BSCA-HSD DIAMOND 950 C/S LICENSE AGREEMENT FINAL EXECUTABLE (12-31-98)-PAGE 24

<PAGE>

SCHEDULE A TO THE BSCA - HSD SOFTWARE LICENSE AGREEMENT 
--------------------------------------------------------------------------------

I.     DIAMOND SOFTWARE 950C/S (CURRENT VERSION) CORE SOFTWARE [*]

       CONCURRENT USERS:

       (Subject to the provisions of Section 3 of this Agreement)

STANDARD SOFTWARE MODULES CONSIST OF THE FOLLOWING: 

Membership
Group
Utilization Management
Claims
Capitation
Premium Billing/Accounts Receivable
Accounts Payable
EDI (Eligibility & Claims)
Providers
Letters
Customer Service and Management Reporting
                                DIAMOND LICENSE FEES        [*]

LICENSE RENEWAL FEES:

The Agreement may be extended for two additional ten (10) year renewal terms in
consideration of the payment of additional license renewal fees of [*] per
renewal term.

OPTIONAL DIAMOND SOFTWARE:

HSD will provide, at no charge, the following currently available API's:
Authorizations, Membership, Professional Claims and Institutional Claims

----------------------------------------------------------------------
II.  DIAMOND 950C/S SOURCE CODE

Diamond 950C/S Source Code

(includes Data Dictionary and
Entity Relationship Model)                                        [*]
----------------------------------------------------------------------
III.  DIAMOND SOFTWARE SUPPORT MONTHLY FEES: 

DIAMOND 950C/S CORE SOFTWARE :

[*] RELEASE SEQUENCE 1a - Provider Module:
(includes three (3) HSD [*] Personnel)                            [*]
----------------------------------------------------------------------
[*] RELEASE SEQUENCE 1c
Provider, Claims and Capitation Modules:
     (includes four (4) HSD [*] Personnel)                        [*]
----------------------------------------------------------------------
[*] RELEASE SEQUENCE 2
 - Provider, Claims, Capitation, and Membership Modules:
     (includes five (5) HSD [*] Personnel)                        [*]
----------------------------------------------------------------------

 [*] Confidential portions omitted and filed separately with the Commission
            BSCA/HSD - Schedule A-Draft Ex-(12-30-98) - Page 1
<PAGE>

NOTE: To accommodate Customer's plans to implement the Software per the [*]
Release Sequence, the above Monthly Fees reflect the total fees due based 
upon the [*] Release Sequence approach..  In the event that the Software is 
implemented on a basis that differs from that specified in this Section III 
(including changes in the [*]Release Sequence as it exists as of December 
1998), the maximum monthly fee that will apply at the conclusion of any such 
alternative implementation approach will not exceed the [*] specified above 
(subject to applicable annual support fee increases as set forth in the 
Support Agreement). 

OPTIONAL PAGER SUPPORT AS PROVIDED IN THE SUPPORT AGREEMENT: 

Off-Hours Pager Support:                                                  [*]

------------------------------------------------------------------------------

IV.  THIRD PARTY SOFTWARE LICENSES FEES 

IQ Report Writer for Windows License for up to 5  users:           [*]

PowerBuilder Development License (1)                               N/A

"C" Compiler (2)                                                   N/A

Oracle7 Database Software Full Use License  (3)                    N/A

(1)  This quote does not include the cost of a PowerBuilder Development 
     License
(2)  Customer may desire to license a "C" Compiler for use with the Diamond 
     Software. This quote does not include the cost of a "C" Compiler (this 
     is not distributed by HSD).
(3)  Customer is required to license and install a Full Use version of 
     Oracle7 Database software to be able to use the Diamond Software.  This 
     quote does not include the price for the Oracle software and assumes 
     Customer will be licensing it through another distributor

------------------------------------------------------------------------------

V.  DESIGNATED SYSTEM

HARDWARE AND OPERATING SYSTEM SOFTWARE
SUN/SOLARIS, IBM RISC6000/AIX, HP9000/HP-UX, SEQUENT/DYNAX 
(Designated System To Be Determined by Customer)

------------------------------------------------------------------------------

VI.  MANNER OF PAYMENT

      1.    [*]

   [*] Confidential portions omitted and filed separately with the Commission
            BSCA/HSD - Schedule A-Draft Ex-(12-30-98) - Page 2
<PAGE>

2.   DIAMOND SOURCE CODE LICENSE FEE:

     [*] is due upon delivery of the Source Code

3.   3RD PARTY SOFTWARE:

     None licensed at this time.


4.   PROFESSIONAL/CONSULTING SERVICES:

     Billed monthly as incurred.  Payment due within thirty (30) days of 
     receipt of invoice by Customer.


5.   ADDITIONAL WEEKEND AND/OR HOLIDAY SUPPORT COVERAGE AS ADDRESSED IN THE 
     SUPPORT AGREEMENT

     Additional weekend and/or holiday Support coverage for planned 
     operational support is available at a rate of $1000 per day (the "Base 
     Week-End Daily Fee") and $200 per hour with the understanding that the 
     first two (2) hours of service of each weekend day is included as part 
     of the $1,000 Base Week-End Daily Fee.  It is further understood and 
     agreed that the availability of additional week-end/holiday service 
     shall be subject HSD being provided at least ten (10) days notice of its 
     request for any such extended coverage.

6.   OUT OF POCKET EXPENSES:

     Out of Pocket Expenses such as travel/living expenses are not included 
     as part of the Implementation and Support Agreements fees and are billed 
     monthly as incurred.  Payment is due within fifteen (15) days of receipt 
     of invoice by Customer.  All travel and out-of-pocket expenses will be 
     subject to the HSD Travel Policy and Procedures set forth in Attachment 
     3.1.5 to the Implementation Agreement.

7.   LATE PAYMENTS:

     If Customer fails to make any payment within thirty (30) days of receipt 
     of HSD's invoice, HSD may give written notice to Customer ("Notice") and 
     Customer shall have five (5) days from the date of Customer's receipt of 
     such notice to cure the default.  Past due amounts will be subject to a 
     late fee, calculated at an annual rate of 12% or the maximum amount 
     allowable under applicable law (whichever is the lesser amount). 

     It is mutually understood and agreed that the failure to timely remit 
     payment shall be considered a material breach of this Agreements shall 
     be subject to the Section 12.2 of the License Agreement.


   [*] Confidential portions omitted and filed separately with the Commission
            BSCA/HSD - Schedule A-Draft Ex-(12-30-98) - Page 3
<PAGE>

DIAMOND-Registered Trademark- 950 C/S SOFTWARE SOURCE CODE ADDENDUM
------------------------------------------------------------------------------

1.0    PARTIES, PURPOSE, EFFECTIVE DATE AND RULE OF INTERPRETATION 


       1.1    PARTIES.  This addendum (the "Source Code Addendum") is part 
              of, and shall serve to modify, the Diamond Software License 
              Agreement ("Agreement") between California Physicians' Service 
              dba Blue Shield of California ("Customer") and Health Systems 
              Design-TM-Corp. ("HSD"), a California Corporation, the owner 
              and developer of the managed healthcare software known as 
              Diamond 950 C/S (the "Software") and shall be effective as of 
              December 31, 1998 (the "Effective Date").

       1.2    PURPOSE.  The purpose of this Source Code Addendum is to 
              specify the terms and conditions applicable to Customer's 
              rights of possession and use of the Software Source Code 
              licensed to Customer.

       1.3    TERMS OF THE AGREEMENT.  This Addendum shall be governed by the 
              terms and conditions of the Agreement which shall remain in 
              full force and effect and in the event of any conflict between 
              the terms of this Addendum and the Agreement, the terms of this 
              Source Code Addendum shall control. 

       1.4    CAPITALIZED TERMS.  All capitalized/defined terms in this 
              Source Code Addendum shall have the same meaning as that 
              ascribed to them in the Agreement.

2.     RIGHTS AND SCOPE OF USE GRANTED

       2.1    LICENSE GRANTED.  HSD hereby grants to Customer and Customer 
              accepts a non-exclusive, non-transferable license to use the 
              Source Code within the United States for its internal purposes 
              as set forth in this Section 2, the term of which shall 
              coincide with the term of the Agreement referenced in Section 
              1.1, above, subject to the terms and conditions of the 
              Agreement.

       2.2    SCOPE OF USE.  Customer may use the Source Code as necessary to 
              support and enhance its use of the Object Code under the terms 
              of the Agreement.  Those uses shall include, without 
              limitation, the rights to modify the Software, create 
              derivative works and develop interfaces between the Software 
              and other software applications. Ownership of the Intellectual 
              Property Rights in works created by Customer (or Customer's 
              authorized third-party agents) shall be governed by the 
              applicable sections of the Agreement. 

       2.3    INTERNAL USE.  Customer may use the Source Code as necessary to 
              provide internal assistance to Customer's employees, including 
              technical staff, the IT Service Provider, management and/or 
              Customer personnel who will use or service the Object Code of 
              the Software in Production.

       2.4    THIRD PARTY ACCESS.  Customer may allow third party consultants 
              to access and use the Source Code to assist Customer as 
              necessary to its Customer's use of the Software as authorized 
              under this Addendum.  Any such access and use shall be subject 
              to the confidentiality provisions set forth in this Addendum 
              and as otherwise specified in the Agreement. 

       2.5    COPIES.  Customer may make [*] copies of, or reproduce, the 
              Source Code version of the Software and the Technical 
              Documentation [*]to support its internal use of the Software 
              including one onsite backup, one archival and one offsite 
              backup for each Customer location where the 

   [*] Confidential portions omitted and filed separately with the Commission
             BSCA/HSD - Diamond 950 C/S Source Code Addendum-
                       Final Executable (12/31/98) - Page 1
<PAGE>

              Source Code is located.  All such copies will include HSD's 
              copyright and proprietary rights notices as they appear in the 
              Software and/or its Documentation.  The media containing copies 
              shall be labeled with HSD's copyright and proprietary rights 
              notices.

3.0    CONFIDENTIALITY, PROPRIETARY RIGHTS PROTECTION

       3.1    CONFIDENTIALITY.  Customer agrees to take all reasonable 
              precautions to ensure the continued confidentiality of the 
              Source Code, which precautions shall include informing 
              Customer's applicable personnel of the proprietary nature of 
              the Source Code and maintaining the Source Code and Technical 
              Documentation in locked/limited-access facilities.

       3.2    RECORDS.  In recognition of the confidential and highly 
              proprietary nature of the Source Code, Customer agrees to make 
              and retain written records of access granted to third parties 
              (including name, address, company affiliation, nature and 
              purpose of the access granted). 

              3.2.1  In the event that the entity/person to which any such 
                     access is granted is not subject to a current 
                     non-disclosure agreement ("NDA") then Customer will 
                     obtain an NDA from any such third-party entity prior to 
                     granting access to the Source Code any person affiliated 
                     with the entity (including its employees, officers 
                     and/or consultants/contractors).  The form(s) of NDA to 
                     be used for purposes of compliance with the NDA 
                     requirement of this subsection is Attachments 4.6.1- A 
                     and 4.6.1 - B to the Agreement. 

              3.2.2  Customer records required under Sections 3.2 and 3.2.1 
                     shall be made available to HSD upon not less than ten 
                     (10) days prior written notice. 

4.0.   UPDATES

The Source Code will be refreshed and promptly given to Customer whenever HSD 
makes a Software update to the Object Code, a bug fix, and Enhancement or 
issues a new Release of the Software provided that there is a valid Support 
Agreement in effect between Customer and HSD at the time of any such new 
Release of the Software.

5.0.   EXECUTION

This Source Code Addendum shall be effective as of the Effective Date 
notwithstanding any date to the contrary associated with its execution by the 
duly authorized signatories specified below.  This Agreement may be executed 
in counterparts, each of which will be deemed an original, but which together 
constitute one and the same instrument.

CUSTOMER:  California Physicians'         HSD:
            Service
           dba Blue Shield of 
           California 


Signed    /s/ Thomas S. Fischer           Signed   /s/ Russell J. Harrison
       ------------------------------            ------------------------------
Name:         Thomas S. Fischer           Name:         Russell J. Harrison
Title:        SVP & CAO                   Title:        President & CEO
Date          12/31/98                    Date           12/31/98
     --------------------------------          --------------------------------





   [*] Confidential portions omitted and filed separately with the Commission
             BSCA/HSD - Diamond 950 C/S Source Code Addendum-
                       Final Executable (12/31/98) - Page 2

<PAGE>

DIAMOND-Registered Trademark- IMPLEMENTATION AGREEMENT 
-------------------------------------------------------------------------------

1.     PARTIES AND PURPOSE OF AGREEMENT 
       
       1.1    PARTIES.  This Diamond Implementation Agreement (the
              "Implementation Agreement") is effective December 31, 1998
              ("Effective Date") and is entered into between the undersigned
              Customer and Health Systems Design-TM- Corp. ("HSD") in
              conjunction with the Diamond Software License Agreement (the
              "Agreement") executed by and between the Customer and HSD with an
              effective date of December 31, 1998 
       
       1.2    PURPOSE.  The purpose of the Implementation Agreement is to
              specify the terms under which Customer will receive implementation
              services from HSD.


       1.3    CAPITALIZED TERMS.  Capitalized terms in this Implementation
              Agreement shall have the same meaning as specified in the
              Agreement.

       1.4    SURVIVAL OF DEFINED TERMS.  Defined Terms or references created
              under this Implementation Agreement will survive the termination
              or expiration of this Implementation Agreement to the extent that
              any such Defined Terms or references are used in the surviving
              Agreement and/or the Support Agreement.


2.     IMPLEMENTATION MANAGEMENT

       2.1    OVERALL MANAGEMENT.  The general/overall management of the
              implementation of the Software (hereinafter "Implementation" or
              "Implementation Project") will be done by Customer.  HSD and the
              Integrator will report to Customer in its capacity as the client
              of both entities. 

       2.2    PROGRAM MANAGEMENT OFFICE.  Customer has established a management
              committee (the "Program Management Office" or "PMO") to oversee
              the implementation of the Software and related activities. 

       2.3    PROGRAM MANAGEMENT OFFICE MEETINGS.  The PMO will meet as
              necessary and appropriate for the effective management of the
              Implementation, including the discussion and handling of
              operational matters/issues that are not resolved by the joint
              efforts of HSD and Customer's Implementation Project managers.  In
              the event that HSD disagrees with a PMO resolution the matter will
              be subject to the dispute resolution process set forth in Section
              15 of the License Agreement. 

3.     RESPONSIBILITIES OF HEALTH SYSTEMS DESIGN


       3.1.   ASSIGNMENT OF HSD PROJECT MANAGER, ADDITIONAL STAFFING, TRAVEL AND
              OUT OF POCKET EXPENSES

              3.1.1. HSD RESPONSIBILITIES.  HSD will support Customer and/or the
                     Integrator in the day to day aspects of the 
                     Implementation, working with the Customer's onsite 
                     project manager and the Integrator's project manager. 
                     The HSD Project Manager (as is more fully addressed in 
                     Section 3.1.2 below) will be assigned to Customer's 
                     Implementation Project on a full-time basis and will 
                     function as an HSD contact for all Customer questions 
                     and issues concerning the Software during the 
                     Implementation process.  HSD will use the Customer 
                     and/or Integrator tools and methodology 

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                     ("Customer Methodology") in assisting in the management of
                     the Implementation process to enable the Integrator to give
                     Customer reports in a consistent format.

              3.1.2. HSD PROJECT MANAGER.  HSD will assign a Project Manager 
                     (the "PM") to the Customer's Implementation Project for 
                     the period beginning with the Implementation Project 
                     Meeting (as further described in Section 3.2.1 below) 
                     and continuing until Customer transitions from 
                     Implementation to support as per the process described 
                     in Section 6. of the Agreement. When the PM is not 
                     onsite at Customer's location, the PM can be contacted 
                     through HSD's Oakland offices during standard business 
                     hours/days (8 a.m. to 5 p.m. Pacific Time).

              3.1.3. HSD PERSONNEL.  HSD personnel will be assigned to the
                     Implementation Project as mutually agreed/specified by the
                     Parties, which personnel will render services under this
                     Implementation Agreement in a good and workmanlike manner.

                     (a)    HSD PERSONNEL EXPERIENCE.  Any such personnel will 
                            have professional experience as necessary and 
                            appropriate to the effective performance of the 
                            duties each is to perform under the Workplan and a 
                            summary of their relevant qualifications will be 
                            made available to Customer upon request.

                     (b)    HSD PERSONNEL CONTINUITY.  HSD shall make 
                            commercially reasonable efforts to maintain the 
                            continuity of personnel assigned to Customer's 
                            Implementation Project and provide sufficient 
                            project and technical resources to perform the 
                            tasks specified in the Workplan(s).

              3.14   REMOVAL OF HSD PERSONNEL.  If in Customer's reasonable and
                     good faith judgment that the results to be obtained 
                     under the Implementation Agreement may be impaired 
                     because an HSD employee who has significant contact 
                     with Customer in connection with the provision of 
                     services under this Implementation Agreement is not 
                     performing services in a reasonably satisfactory 
                     manner, then Customer may provide written notice of 
                     its objective basis for any such determination to 
                     HSD's Vice President - Client Services.  If HSD 
                     decides to remove any such employee, HSD shall timely 
                     initiate commercially reasonable efforts to replace 
                     the individual with a person of suitable ability and 
                     qualifications.
                     
              3.1.5  TRAVEL AND RELATED EXPENSES. Travel and out-of-pocket
                     expenses for HSD Implementation Project personnel are not
                     included in the monthly Implementation fees and will be
                     billed separately as incurred. All expenses will be subject
                     to the HSD Travel Policy, which is attached as Attachment
                     3.1.5 to the Agreement and incorporated by reference in
                     this Implementation Agreement. 

       3.2    IMPLEMENTATION PROJECT MEETING AND WORKPLANS

              3.2.1  IMPLEMENTATION PROJECT MEETING.  Although Implementation
                     work has been, and is being, done by HSD for Customer, an
                     Implementation Project planning session (the
                     "Implementation Project Meeting") will be scheduled at
                     Customer's location at a date and time mutually acceptable
                     to Customer, Integrator and HSD following the signing of
                     the License Agreement and this Implementation Agreement. 
                     The Implementation 

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                     Project Meeting will include, but not be limited to, a 
                     detailed walkthrough of the Software for Customer's 
                     Implementation team.  A primary purpose of the 
                     Implementation Project Meeting is to continue the process
                     of working with Customer and the Integrator to further
                     develop the Implementation workplan (the "Workplan") which
                     Workplan will become Attachment 3.2.1 of this Agreement
                     when finalized.  
                            
              3.2.2  WORKPLAN.  Customer has advised HSD that the Workplan will:
                     (1) define the specific tasks necessary to complete the 
                     Implementation; (2) designate the Party responsible for 
                     each such task; (3) specify scheduled completion dates 
                     associated with those tasks; (4) contain the HSD and 
                     Customer developed and/or approved performance 
                     standards/metrics, scalability, testing network loads, 
                     and testing procedures which will be incorporated into 
                     the Workplan as and when completed in a manner 
                     acceptable to the Parties pursuant to the process 
                     described in Attachment 3.10.4(B) to this 
                     Implementation Agreement; (5) project planning; (6) 
                     module training;(7) Software setup/configuration;(8) 
                     gap analysis; (9) unit and regression system 
                     testing;(10) assistance with Customer policies and 
                     procedures documentation and; (11) end-user training 
                     ("train-the-trainer approach").

              3.2.3  WORKPLAN REVISIONS. The Parties understand and agree that
                     the initial Workplan may be replaced with a revised
                     Workplan(s) as mutually agreed which subsequent Workplan(s)
                     will become a part of this Agreement when approved by the
                     Parties.  Requirements/services that are outside of the
                     scope of the Workplan will be subject to separate
                     agreements as to fees for any such additional services.

              3.2.4  WORKPLAN DISPUTE RESOLUTION  In the event that the HSD and
                     the Integrator are unable to agree upon mutually acceptable
                     HSD services to be included in the Workplan within ninety
                     (90) days of the Implementation Project Meeting the matter
                     will be referred to the PMO.  If a Workplan is not agreed
                     upon within fifteen (15) days of the commencement of the
                     PMO's direct involvement in the process then the matter
                     will be referred to the Customer for final resolution.

              3.2.5  CUSTOMER METHODOLOGY.  HSD will make reasonable efforts to
                     use the Customer Methodology as defined in Section 3.1.1,
                     above, in preparing its work to be incorporated into the
                     Workplan.

       3.3    TECHNICAL PRE-INSTALLATION AUDIT

              3.3.1  TECHNICAL INSTALLATION CONFERENCE.  To facilitate the
                     initial Software installation at Customer's location, a
                     technical installation telephone conference will occur
                     prior to the loading of the Software (which Software will
                     be delivered to Customer within three (3) business days
                     following the execution of the Agreement or as otherwise
                     determined in the Workplan).

                     During this conference HSD will review a 
                     pre-installation checklist that will have been 
                     previously provided to the Customer as part of the 
                     Implementation process.  The pre-installation checklist 
                     specifies both hardware and Software related tasks, 
                     which Customer must complete prior to HSD's 
                     installation of the Software and any Third Party 
                     Software obtained through HSD and/or to be implemented 
                     by HSD and this pre-installation checklist will be 
                     included as Attachment 3.3.1 to this Implementation 
                     Agreement. 

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              3.3.2  CUSTOMER'S RESPONSIBILITIES.  As part of the 
                     pre-installation checklist, Customer will ensure that 
                     all necessary peripheral devices (such as printers) are 
                     installed and available on the Customer's network and 
                     at least one workstation is available for HSD's remote 
                     access.  After Customer notifies HSD that all tasks on 
                     the pre-installation checklist have been completed, HSD 
                     will perform a system audit (the "Initial Technical 
                     Audit") to ensure that the Customer's system is 
                     properly configured and stable prior to the loading of 
                     the Software. When completed, the Initial Technical 
                     Audit documentation will be included as Attachment 
                     3.3.2 to this Implementation Agreement.

              3.3.3  CUSTOMER/INTEGRATOR/IT SERVICE PROVIDER USE OF SOFTWARE. 
                     The activities specified in Sections 3.3.1 and 3.3.2 above
                     will be performed when necessary/appropriate should
                     Customer elect to temporarily use/access the Software on
                     the Integrator's or IT Service Provider's hardware or the
                     Software that is made available and temporarily used by the
                     Integrator or IT Service Provider to facilitate Customer's
                     Implementation. 
       
       3.4    TECHNICAL INSTALLATION OF SOFTWARE
              
              3.4.1  INSTALLATION AND TRAINING.  Upon the successful completion
                     of the Initial Technical Audit, HSD system engineers 
                     will conduct both installation and technical training 
                     activities at the Customer's site.  Customer's 
                     technical staff members identified in the Workplan, are 
                     required to be on site and available during the 
                     installation process.  For the Software, this Customer 
                     staffing requirement will include an experienced, 
                     Oracle-trained DBA.
              
              3.4.2  INSTALLATION ACTIVITIES.  Installation activities include 
                     the installation and configuration of the Software on 
                     the Customer's or Customer's designee or IT Service 
                     Provider's server and installation of one or two client 
                     workstations.  Unless specified otherwise, Customer or 
                     Customer's designee or IT Service Provider will be 
                     responsible for loading the Software onto all other 
                     client workstations.
              
              3.4.3  DIAMOND ENVIRONMENTS.  HSD will install three Diamond
                     environments: training, test, and Production on Customer's
                     Designated System.
                     
                     (a)    TRAINING ENVIRONMENT.  The training environment will
                            contain HSD data that is used during the
                            Implementation process for base module training,
                            demos, and user practice.
                     
                     (b)    TEST ENVIRONMENT.  The test environment will be
                            composed of a development architecture and a run
                            time architecture, also referred to as "Model
                            Office".  This environment will initially be
                            empty/unpopulated and will be used to develop
                            programs and complete both unit and integration
                            testing during the implementation process and
                            thereafter when the Software is in Production for
                            on-going Enhancements or changes as-needed.  The
                            test environment is also used to install and test
                            new Software releases and Enhancements prior to
                            their installation into the Customer's Production
                            environment.
                     
                     (c)    PRODUCTION ENVIRONMENT.  The Production, sometimes
                            referred to as the Operations, environment remains
                            empty/unpopulated until the later stages of the
                            Implementation process/Workplan when it is 

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                            populated with data from the test environment in 
                            preparation for the initial Production use of the 
                            Software. Each of the three Diamond environments 
                            specified in this Section 3.4.3 must be maintained 
                            during the Implementation process and continued 
                            throughout Customer's Production use of the 
                            Software.
       
       3.5    TECHNICAL TRAINING

              Technical training is conducted at Customer's, Customer's designee
              or IT Service Provider site and typically requires three (3) days.
              It is designed for Customer's technical personnel, (such as DBA,
              UNIX and LAN administrators) and includes the following subject
              areas:
              
              (a)    How to install Software updates
              (b)    How to install Software workstations
              (c)    System architecture overview
              (d)    Software structure
              (e)    Network considerations
              (f)    Security setup
              (g)    Back-up procedures
                            

       3.6    USER TRAINING SESSIONS

              The PM and/or HSD analyst will train Customer's Implementation
              team members at the Customer's location for the fees set forth in
              this Implementation Agreement.  Training sessions generally
              require a total of 20 to 25 days and typically cover the following
              topics:

              (a)    Software overview
              (b)    Group and membership
              (C)    Claims processing
              (d)    Provider contracts
              (e)    Utilization review functions
              (f)    Premium billing 
              (g)    Accounts receivable
              (h)    Accounts payable 
              (i)    Medical Definitions
              (j)    Adjudication
              (k)    Customer Service
              (l)    Letters
              (m)    Parameters/System management
              (n)    Capitation
              (o)    Member EDI
              (p)    Professional Pricing

       3.7    CONSULTING SERVICES

              3.7.1  DEFINED/AVAILABILITY.  Consulting services are not 
                     included in the standard Implementation fees.  
                     Consulting Services are defined as any actions or 
                     services not specifically covered by this 
                     Implementation Agreement and/or the Workplan(s) such as 
                     technical training other than as provided in Section 
                     3.5, above, and assistance in the assessment of 
                     Customer's technical staffing. Consulting services will 
                     be provided by HSD during and after the Implementation 
                     Project with the prior written authorization by the 
                     Customer and will be provided at HSD's then-current 
                     rates under terms mutually acceptable to Customer and 
                     HSD.  At Customer's request, 

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                     HSD will provide consulting services in subject areas such 
                     as the identification of types of required interfaces and 
                     collaborating with third-party vendors to assist in the 
                     timely development of interfaces to the Software.
       
              3.7.2  HSD COOPERATION IN INTERFACE DESIGN. HSD will cooperate 
                     with Customer (and/or its designees) in designing 
                     system interfaces between the Software and Customer's 
                     systems/third-party software. HSD acknowledges the 
                     importance of the interfaces to the Customer's 
                     effective use of the Software and agrees to timely and 
                     effectively assist Customer to accomplish its 
                     objectives as they become known.  Given the sensitive 
                     nature of information that HSD will likely provide 
                     (such as the underlying structure/design of its 
                     Software), it is mutually understood and agreed that 
                     HSD will take precautions consistent with Section 4.4 
                     of the Agreement to protect its Confidential 
                     Information/Trade Secrets that are disclosed during the 
                     course of any such cooperation.  For purposes of this 
                     Implementation Agreement an "Interface" shall be 
                     defined as the automated passing of information between 
                     two or more software applications which definition 
                     shall also apply to the Implementation Agreement and 
                     the Agreement.
              
              3.7.3  INTERFACE SUPPORT.  It is mutually understood and agreed 
                     that the vendor that actually builds any interface as 
                     described in Sections 3.7.1 and 3.7.2 above will be the 
                     entity that warrants and supports any such interface. 
       
       3.8    SYSTEM SET UP ASSISTANCE

              In addition to user training, HSD, as part of the Implementation,
              will provide assistance (as a specified Workplan element) on
              Software system set up, including but not limited to:
              recommendations on group coding schemes, suggestions for medical
              definitions and adjudication rule set up, recommendations on
              capitation model set up, and the implications of Customer's
              business policy and practice (of which HSD has been apprised) on
              the Software. 
                     
       3.9    LEGACY DATA CONVERSION

              3.9.1  ASSISTANCE WITH CONVERSION.  HSD's on-site Implementation
                     Project Management staff will assist the Customer to
                     develop an approach for converting data in existing Legacy
                     systems for the use of any such data with the Software. 
                     That assistance typically consists of mapping data from 
                     the Legacy system to the Software on a field by field 
                     basis that specifies where specific Legacy data fields 
                     are to be placed in the Software.

              3.9.2  ADDITIONAL CONVERSION SERVICES.  HSD does not typically
                     perform the actual conversion services necessary to
                     electronically submit data to the Software for initial file
                     loads. Should Customer wish to obtain those services
                     through HSD they will be provided at HSD's then-standard
                     rates for such services and rendered under mutually agreed
                     to terms subject to the reasonable availability of the
                     required HSD resources/personnel. 


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       3.10   TECHNICAL PRE-PRODUCTION CERTIFICATION
              
              3.10.1 CUSTOMER REQUIREMENTS.  Customer will be required to
                     prepare its operations and the Software for use in a
                     Production environment, which preparations will include the
                     transfer of all data built in the test environment to the
                     Production environment. 
              
              3.10.2 HSD ASSISTANCE.  While Customer is undertaking the 
                     requirements set forth in Section 3.10.1 above, HSD's 
                     system engineers will be available to guide and assist 
                     Customer in activities associated with creating and sizing
                     the Production environment.  Once the Production 
                     environment is established, HSD's systems engineers will 
                     be available to assist in the transfer of data from the 
                     test to the Production environment. 

              3.10.3 TECHNICAL AUDIT.  In addition to confirming the Production
                     readiness of the Customer's database, HSD's technical
                     Implementation staff will conduct a technical audit of the
                     Customer's system operations. This audit and subsequent 
                     technical audit review session will typically address some
                     (or all) of the following topics:
                     
                     (a)    Ability to add and remove users
                     (b)    System security setup
                     (c)    Backup schedule and operational procedures
                     (d)    Typical problem-solving scenarios
                     (e)    Data import/export concepts
                     (f)    Remote support access
                     
              3.10.4 PRE-PRODUCTION TESTING.  Pre-Production testing will
                     be done to confirm that the Software functions in a 
                     manner consistent with the Specifications and to 
                     confirm that the Software operates in a manner nsistent 
                     with applicable Customer "Model Office" 
                     requirements/protocols which Model Office 
                     requirements/protocols will become Attachment 3.10.4(A) 
                     to this Implementation Agreement as and when they are 
                     jointly developed. It is understood and agreed that the 
                     Performance Standards will be jointly determined by HSD 
                     and Customer and will include variables such as testing 
                     procedures, the determination of applicable performance 
                     measures for the specification on the Designated System 
                     and the technical requirements for any additional 
                     Software functionality as more fully described in 
                     Attachment 3.10.4(B) to this Implementation Agreement. 

4.     RESPONSIBILITIES OF CUSTOMER
       
       4.1    MEETING SCHEDULE
       
              The Customer's project manager and PM will attend meetings as
              required by Customer. 
              
              

       4.2    TECHNICAL/CUSTOMER IMPLEMENTATION STAFF

              4.2.1  CUSTOMER PROJECT MANAGER.  A qualified project manager must
                     be assigned as the primary contact between Customer and 
                     HSD. The Customer's project manager is responsible for
                     assigning and maintaining Customer's Implementation team
                     members to complete the Customer assigned tasks as
                     described in the Workplan.  The Customer's project manager
                     will provide daily user and technical support to Customer's

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                     implementation team members.  The Customer's project
                     manager is also responsible for the training of Customer's
                     staff members outside of the Implementation team and for
                     the updating of Customer's procedure manuals, as
                     necessary/appropriate.

              4.2.2  CUSTOMER'S STAFF.  To help ensure a successful and timely
                     Implementation, Customer through its staff or by use of the
                     Integrator or, its IT Service Provider other
                     vendors/consultants, agrees to have qualified technical
                     staff available on an ongoing basis to work with HSD during
                     the Implementation Project.  The Workplan will identify the
                     specific technical staff requirements for each phase of the
                     Implementation Project. Generally, these technical staff
                     requirements will include a System Administrator, a Network
                     Administrator, and an experienced Oracle Database
                     Administrator ("DBA").  When HSD's PM is onsite, Customer's
                     designated technical staff must be available on reasonable
                     notice to facilitate implementation tasks such as release
                     installation, user profile set-up, ensuring remote/dial-up
                     access and to resolve system issues such as
                     security/access.

              4.2.3  CHANGE IN CUSTOMER'S STAFF.  HSD reserves the right to
                     request that Customer assign replacement technical
                     staff/Implementation Project staff if in HSD's good-faith
                     professional opinion, assigned Customer personnel lack the
                     minimum basic required skills to successfully proceed with
                     the implementation.  Any such request will be submitted in
                     writing to Customer's CIO by HSD's Vice President of Client
                     Services and will specify the objective reason(s) for any
                     such request. 

       4.3    REMOTE ACCESS
              
              4.3.1  CUSTOMER COMMUNICATIONS EQUIPMENT.  One week prior to the
                     Installation of the Software, Customer must have 
                     installed and available to HSD a means of remote access 
                     to Customer's computer system/Software environment.  
                     Current HSD communication equipment and protocols 
                     require that the Customer have at least one dedicated 
                     modem (with a baud rate of 56,000), dedicated phone 
                     line and PCAnywhere communications software to 
                     facilitate dial-in point-to-point protocol ("PPP") 
                     access.  Customer agrees to make  diligent efforts to 
                     keep the remote access communication equipment in good 
                     working order at all times during the Implementation 
                     process and to timely address any operational 
                     issues/failures.
              
              4.3.2  HSD REMOTE ACCESS.  Remote access is required for all
                     technical support in diagnosing and addressing Software
                     and/or data problems, and may be used for the delivery of
                     Software updates.  In order to facilitate this process,
                     Customer grants HSD the right to remotely access the
                     Customer's test environment during the Implementation with
                     the understanding that HSD will notify Customer, obtain
                     Customer's approval prior to accessing the Customer's test
                     environment and abide by the Confidential Information
                     provisions of the Agreement.
              
              4.3.3  ACCESS PROBLEMS.  The Implementation will be considered
                     suspended should HSD be repeatedly unable to remotely
                     access the system due to problems attributable to
                     Customer's equipment (or lack of equipment) unless such
                     problems are beyond Customer's reasonable control.  Any

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                     such suspension will be subject to Section 5 of this
                     Implementation Agreement.

       4.4    SYSTEM ENVIRONMENT

              4.4.1  PRODUCTION ENVIRONMENTS.  As specified in Section 3.4.3
                     above, Customer must maintain separate training, test and
                     Production environments of the Software.
                     
              4.4.2  MAINTENANCE OF PRODUCTION ENVIRONMENTS.  Given the
                     importance of maintaining these three distinct environments
                     throughout the entire Implementation process to the success
                     of the Implementation process, the failure of Customer to
                     comply with this requirement may result in a suspension of
                     the Implementation Project pending the correction of any
                     such situation.
                     
              4.4.3  HSD ASSISTANCE WITH CUSTOMER'S PRODUCTION ENVIRONMENTS.  In
                     the event that Customer requests HSD's assistance in
                     addressing situations associated with the Customer's
                     failure to properly maintain these three environments, any
                     such assistance will be treated as a consulting function. 
                     Any such consulting services will be rendered on a time and
                     materials basis at HSD's then current rates.

       4.5    ISSUES MANAGEMENT

              
              Should Customer encounter Software and/or system issues, the
              following procedures will apply, with the understanding that HSD
              will make reasonable efforts to comply with Customer's
              Methodology.
              
              4.5.1  NOTICE.  As soon as feasible, Customer will complete HSD's
                     implementation issues tracking form (an example of such
                     will be presented by the PM at the onset of the 
                     Implementation Project) and routes the completed form to 
                     the PM. 
              
              4.5.2  DOCUMENTATION.  In addition, Customer will provide all
                     necessary screen prints that illustrate the issue and
                     related Diamond keywords that may be involved. 
              
              4.5.3  TEST.  Customer shall ensure that a Diamond "test"
                     environment is available that reasonably mirrors the
                     Production environment. 
              
              4.5.4  HSD ACTION.  Upon receipt of the material specified in the
                     preceding subsections, the PM (or designee) will initiate
                     the process of replicating the reported issue/problem in a
                     comparable Diamond offsite environment in an effort to
                     determine the source of the reported problem.  Based on the
                     outcome of this initial review and work-up, the PM will
                     review the application set-up, explore potential
                     workarounds, and/or submit the issue to HSD Engineering for
                     further evaluation and disposition.
              
              4.5.5  REPORTS.  The PM will provide periodic status updates to
                     the Customer for any items that have been submitted to HSD
                     engineering for evaluation and disposition.

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5.     IMPLEMENTATION DELAYS

       5.1    DELAYS.  The Parties acknowledge that it is mutually beneficial
              for the Implementation to proceed as scheduled without
              interruption.

       5.2    CUSTOMER CREATED DELAYS.  Should the Implementation Project be
              materially delayed/negatively impacted by factors attributable to
              Customer, (such as Customer's failure to provide effective
              technical staff based on objective/observable failures and/or
              remote access situations as generally described in this
              Implementation Agreement) HSD reserves the right to temporarily
              suspend applicable Implementation services and related activities
              upon ten (10) days written notice (the "Notice/Cure Period") to
              Customer unless the situation giving rise to such notice is
              corrected/cured within the Notice/Cure Period.  Any such
              suspension of Implementation services shall continue until such
              time as any such situation has been corrected with the
              understanding that HSD will make commercially reasonable efforts
              to modify the priority of Workplan task(s) assigned to HSD and to
              re-deploy the HSD personnel assigned to the Workplan activities to
              other Workplan tasks in an effort to continue the Implementation
              process during the ten (10) day notice period specified in the
              preceding sentence.

       5.3    CUSTOMER'S ELECTION.  Should HSD suspend Implementation services,
              Customer may either (1) continue to pay HSD for its Implementation
              personnel and HSD will continue to make these personnel available
              to Customer until released by Customer's written authorization, or
              (2) stop paying HSD for its Implementation personnel as of the
              date of HSD's suspension of services and HSD may reassign these
              personnel to non-Customer functions, provided it has made
              commercially reasonable efforts to assign these personnel to other
              applicable Workplan activities as provided for in Section 5.2
              above.

       5.4    HSD DELAY.  Should the Workplan be delayed and/or suspended for
              reasons attributable to HSD, the Implementation fees will be 
              pro-rated and/or suspended/abated to the extent that any such 
              delay and/or suspension is attributable to HSD and HSD 
              personnel will not be reassigned from the Implementation 
              Project.

6.     IMPLEMENTATION FEES

       The estimated duration and cost of the Implementation are specified in
       Schedule A of this Implementation Agreement.  Fees for fully
       dedicated/full-time personnel are billed on a monthly basis starting with
       the month that the Implementation Project Meeting is held.  The initial
       month will be billed on a pro-rata basis in the event that Implementation
       services begin after the fifth day of the first month of the
       Implementation Project or end prior to the end of the month.

7.     TRANSITION FROM IMPLEMENTATION TO SUPPORT SERVICES

       7.1    After completion of the Implementation and the expiration of the
              "Warranty Period" the support of Customer's Production use of the
              Software will transition to HSD's Support Services Department. 
              Thereafter, Customer will receive all support services from HSD's
              Support Services department under the Support Agreement entered in
              conjunction with the Diamond License Agreement.

8.     ENHANCEMENTS

       8.1    The Workplan will address the development of Customer requested
              Enhancements and provide for their integration into the Software
              in a timely 


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BSCA/HSD Diamond Implementation Agreement-(Final Executable (12/31/98) - Page 10
<PAGE>

              manner.  HSD's process for the development of Customer requested 
              Enhancements is set forth in Attachment 8.1 to this Implementation
              Agreement.  Attachment 8.1 also includes a comprehensive list of 
              the Customer requested Enhancements which classifies them in terms
              of their importance to the Customer and sets forth the sequence 
              in which they are to be developed and implemented.  [*]

9.     TERMINATION

       9.1    TERMINATION FOR CONVENIENCE  Customer may terminate this
              Implementation Agreement at any time for any reason by providing
              HSD with sixty (60) days prior written notice of such termination
              (the "Termination Notice Period "). 

              9.1.1  COMPENSATION DURING TERMINATION NOTICE PERIOD.  In the
                     event of any such termination for convenience, Customer
                     will compensate HSD for its Implementation services which
                     were rendered prior to and during the Termination Notice
                     Period.

              9.1.2  PAYMENT OF LICENSE FEES.  In the event of any such
                     termination for convenience, all License Fees shall become
                     due and payable within thirty (30) days of following HSD's
                     receipt of any such termination notice. 

       9.2    TERMINATION FOR CAUSE.   In the event that Customer
              terminates for cause, Customer shall provide HSD with
              written notice thereof setting forth the reason(s) for
              Customer's action.  HSD shall have a ten (10) day cure
              period (the "Cure Period") in which to correct any/all such
              specified basis for termination and/or otherwise address
              the matters under the Dispute Resolution procedures of the
              Agreement.

              9.2.1  COMPENSATION DURING CURE PERIOD.  In the event that
                     Customer terminates for cause, HSD will be compensated at
                     its applicable rates as set forth in Schedule A to this
                     Implementation Agreement for services rendered during the
                     Cure Period.

              9.2.2  PAYMENT OF LICENSE FEES.  In the event of any such
                     termination for cause License Fees will remain due and
                     payable as set forth in Schedule A to the License
                     Agreement.

       9.3    AGREEMENT/IMPLEMENTATION AGREEMENT TERMINATES.  Should the
              Agreement terminate, this Implementation Agreement will
              automatically terminate on the termination date of the
              Agreement. Upon such termination, Customer will remain
              obligated to pay HSD for implementation services rendered
              through the date of any such expiration/termination as
              provided for in Section 9.1.1 and 9.2.1.
       
       
       9.4    TERMINATION FOR FAILURE TO MEET THE PERFORMANCE STANDARDS. 
              Notwithstanding any provision in the Agreement, the Support
              Agreement or this Implementation Agreement, should the Software
              fail to substantially comply with Performance Standards , as
              provided for in Section 4.0 of Attachment 3.10.4 (B) (under the
              Test Plan referenced in Attachment 3.10.4(B)) of this
              Implementation Agreement, the Customer may immediately terminate
              the Agreement, the Support Agreement and the Implementation
              Agreement and will pay HSD the Implementation Agreement fees and
              travel and out of pocket expenses for services rendered by HSD up
              to the date of termination.  HSD shall retain the License Fees
              paid prior to the date of termination and the Source Code Fee but
              as of the date of termination, Customer shall owe no further
              payments to HSD.  Customer shall also return the Software and
              Source Code to HSD.
       

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BSCA/HSD Diamond Implementation Agreement-(Final Executable (12/31/98) - Page 11
<PAGE>
       
10.    INCORPORATION OF PROVISIONS OF LICENSE AGREEMENT BY REFERENCE
       
       10.1   The Agreement's terms and conditions are incorporated into and
              made a part of this Implementation Agreement by reference with the
              exception of those that are specific to the Agreement or are
              specifically provided for in this Implementation Agreement 
       
       10.2   Should there be a conflict between the terms and conditions of the
              Implementation Agreement and the Agreement, the terms and
              conditions of the Implementation Agreement shall control.

11.    EXECUTION

This Agreement shall be effective as of the date of the signature by the duly 
authorized signatories specified below.  The Parties agree that this 
Agreement may be executed in counterparts, each of which will be deemed an 
original, but which togetherand the same instrument.

CUSTOMER:     California Physicians' Service            HSD:
              dba Blue Shield of California

Signed /s/  Thomas S. Fischer             Signed /s/ Russell J. Harrison
       -----------------------                   -------------------------
Name:        Thomas S. Fischer            Name:        Russell J. Harrison
Title:       SVP & CAO                    Title:       President & CEO

Date           12/31/98                   Date         12/31/98
       -----------------------                   -------------------------

 [*] Confidential portions omitted and filed separately with the Commission
BSCA/HSD Diamond Implementation Agreement-(Final Executable (12/31/98) - Page 12

<PAGE>

                    SCHEDULE A TO IMPLEMENTATION AGREEMENT
                              IMPLEMENTATION FEES
-------------------------------------------------------------------------------

IMPLEMENTATION & TRAINING: 

Implementation fees and expenses are billed on a monthly basis beginning with 
the first month and continuing until the completion of the last applicable [*]
Release Sequence.

The Implementation Fees listed below do not include taxes imposed upon or 
with respect to goods or services delivered pursuant to this Implementation 
Agreement. Any applicable taxes (such as property taxes) imposed upon or with 
respect to the Software, equipment or other deliverables under this Agreement 
shall be the responsibility of Customer.

-    Senior Project Manager (required for term of Implementation):    [*]

-    Project Manager  (required for term of Implementation):          [*]

-    Senior Technical Resource Consulting:                            [*]


REQUIRED HSD CLASSROOM TRAINING (NOT INCLUDED IN IMPLEMENTATION COSTS):
Software Group Training On-Site for up to 30 Attendees
(Additional attendees will require additional trainer/class)          [*]


<TABLE>
<CAPTION>
Other Professional Services                                DAILY RATE       HOURLY RATE
                                                           ----------       -----------
<S>                                                     <C>               <C>

Oracle DBA                                                     [*]               [*]

Technical Architecture and Performance
Review/Testing                                                 [*]               [*]

Other Professional Services                             To Be Determined  To Be Determined
</TABLE>

Daily rates are base on an eight (8) hour day average over the life of the
engagement. Additional hours (for those hours in excess of eight (8) hours per
day) will be billed at the above-specified hourly rate if the average hours
exceeds ninday in any month.

   [*] Confidential portions omitted and filed separately with the Commission
            BSCA/HSD - Schedule 1 to Implementation Agreement
                        Final Executable (12-31-98)


<PAGE>

Diamond-Registered Trademark- Support Agreement
-------------------------------------------------------------------------------

1.     PURPOSE OF AGREEMENT, PARTIES AND DEFINED TERMS

       1.1    PARTIES.  The undersigned ("Customer") hereby enters into a
              Support Agreement with Health Systems Design Corp. ("HSD"), a
              California corporation, to be effective December 31, 1998
              ("Effective Date"), in conjunction with the Software License
              Agreement (the "Agreement") entered into between Customer and HSD
              effective December 31, 1998.

       1.2    PURPOSE.  The purpose of the Support Agreement is to specify the
              terms under which Customer shall receive support services from
              HSD.

       1.3    CAPITALIZED/DEFINED TERMS.  All capitalized/Defined Terms in this
              Support Agreement shall have the same meaning as that ascribed to
              them in the  Agreement.
       

       1.4    SURVIVAL OF DEFINED TERMS.  Defined Terms created under or
              references to this Support Agreement will survive the termination
              or expiration of this Support Agreement to the extent that any
              such Defined Terms or references are used in the surviving
              Agreement and/or the Implementation Agreement


2.     SERVICES

       2.1    CUSTOMER SOFTWARE PROBLEMS.  HSD shall address Customer observed-
              reported errors/situations which prevent a Supported Release of
              the Software from functioning in a manner consistent with the
              Specifications as defined in the Section 2.19 of the License
              Agreement ("Verified Program Error").

              2.1.1  HSD'S SERVICES.  HSD's services will be rendered in a
                     manner consistent with the Diamond Issues Classification
                     Table in Section 2.6.1 below and as otherwise required
                     under the terms of this Support Agreement

              2.1.2  HSD'S OBLIGATIONS.  HSD's obligation to provide support
                     services under this Support Agreement shall include the
                     Supported Releases of the Software as well as Enhancements
                     to the Software that are created by HSD (and/or on HSD's
                     behalf at HSD's request) which HSD incorporates into the
                     Software and HSD makes generally available to its Diamond
                     950 C/S Customers.

              2.1.3  SUPPORT FOR CUSTOMER SPECIFIC SOFTWARE.  In addition to
                     HSD's obligation specified in Section 2.1.2, above HSD will
                     provide support services for Customer-Specific Software (as
                     defined in Section 4.2. of the Agreement). 

       2.2    REPORTING OF PROBLEM.  The Verified Program Error as set forth
              inSection 2.1 above, will be provided by Customer's Super User(s)
              (to the extent feasible) and shall contain a description of the
              Customer observed-reported errors/situations in sufficient detail
              to allow HSD to replicate/attempt to replicate the reported non-
              compliance on the  Supported Release of the Software that the
              Customer is using in Production at the time of any such Verified
              Program Error. 

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<PAGE>

       2.3    HSD ASSISTANCE FOR NON-REPLICATED ERRORS.  In the event that HSD
              is unable to replicate the reported error and/or if the reported
              error/situation involves other than Customer's Supported Release
              of the Software in Production, HSD will continue to work with
              Customer to help identify/isolate the source of any such Customer
              reported errors/situations and assist Customer in addressing its
              correction.  Services rendered under this Section 2.3 will be on a
              time and materials basis. 

       2.4    HSD TELEPHONE ASSISTANCE.  HSD will provide direct telephone
              assistance to Customer between the hours of 6:30 AM and 5:00 PM
              Pacific Coast time during regular HSD business days (Monday
              through Friday). The purpose of telephone assistance is to explain
              the Software's features and use; clarify the user Documentation,
              provide guidance in the use of the Software to assist in
              identifying and to address Software problems (such as observed
              failures of the Software to function in a manner consistent with
              its applicable Documentation or Specifications).

              2.4.1  HSD HOLIDAYS.  HSD currently recognizes New Year's Day,
                     Martin Luther King Day, Presidents' Day, Memorial Day,
                     Independence Day, Labor Day, Thanksgiving and the day after
                     Thanksgiving, the day before Christmas and Christmas Day as
                     holidays.  HSD will provide Customer with an updated list
                     of observed holidays on an annual basis at the beginning of
                     each year that this Support Agreement is in effect.

              2.4.2  HSD PAGER COVERAGE.  In addition, pager coverage will be
                     provided 365 days per year for the days/hours outside of
                     HSD's normal business days/hours specified in the Section
                     2.4 and 2.4.1 above, at an additional fee as specified in
                     Schedule A of the Agreement. Pager coverage may be
                     initiated or terminated upon twenty (20) days prior written
                     notice from Customer.  Pager coverage is limited to
                     problems in the Customer's Production environment which
                     are of a Priority Level 1 or 2 as defined in the Diamond
                     Issues Classification Table in Section2.6.1, below.

              2.4.3  SUPPORT OBLIGATIONS.  HSD's support obligations shall apply
                     to those aspects of the Software/modules that were
                     installed and fully implemented by HSD (or on HSD's behalf
                     at HSD's request) or an HSD approved entity. HSD shall
                     provide Customer with a toll-free "800" phone number for
                     such telephone assistance, which service will include
                     multiple trunk lines.  

              2.4.4  WEEKEND/HOLIDAY COVERAGE.  Additional weekend and/or
                     holiday coverage (to provide non-emergency service for
                     circumstances such as Customer's installation of a new
                     Release) is available at rates specified in Schedule A of
                     the Agreement, subject to Customer providing HSD at least
                     ten (10) days prior notice of any such request for the
                     coverage described in this Section 2.4.4. 

       2.5    Staffing

              2.5.1  HSD PERSONNEL.  HSD will [*] whose primary responsibility
                     will be to render services to Customer as specified in this
                     Support Agreement. HSD will assign up to [*] as per 
                     Section III of Schedule A of the Agreement at the time 
                     that all Software Core modules in Schedule A of the 
                     Agreement are in Production and have complied with the 
                     Specifications.  The qualifications for [*] will 
                     include experience that is relevant 

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   BSCA/HSD Diamond Support Agreement-(Final Executable (12/31/98) - Page 2

<PAGE>

                     to the duties required of [*] In addition, HSD will, to 
                     the extent feasible, involve [*] in the later stages of 
                     the implementation of the Software.

              2.5.2  [*]

              2.5.3  NUMBER OF HSD PERSONNEL.  During the term of this Support
                     Agreement HSD [*] per Section III of Schedule A of the
                     Agreement and technical resources to perform as required
                     under this Support Agreement.

              2.5.4  PERFORMANCE.  If in Customer's reasonable and good faith
                     judgment Customer determines that the results to be
                     obtained under this Support Agreement may be impaired
                     because [*] not performing required services in a
                     satisfactory manner, then Customer will provide written
                     notice of its objective basis for any such determination to
                     HSD's Vice President - Support Services. 

              2.5.5  REPLACEMENT.  If HSD decides to remove such personnel, HSD
                     shall initiate efforts to replace the individual with a
                     person who meets the qualifications specified in Section
                     2.5.1 qualifications.  In such event HSD will, within ten
                     (10) business days, provide Customer with temporary/interim
                     coverage/personnel who meets the qualifications specified
                     in Section2.5.1, which coverage will continue until
                     replacement [*] are available.

       2.6    Software problems will be handled in accordance with the following
              procedures:

              2.6.1  HSD RESPONSE.  HSD will respond to the Customer's telephone
                     or pager communications when received with the
                     understanding that it is HSD's intent to have Customer's
                     calls answered by [*].  Customer calls will be triaged
                     (pursuant to a priority list consisting solely of Customer
                     issues/problem reports) in order to meet critical needs
                     efficiently with the understanding that Customer and HSD
                     will mutually determine the Classification Priority to be
                     assigned to the reported error per the following table.  In
                     the event of a disagreement as to the Classification
                     Priority the matter will be escalated for determination by
                     Customer's Support/Help Desk Manager and HSD's Manager of
                     Support Services at time of any such disagreement.  In the
                     event that Customer's Support/Help Desk Manager and HSD's
                     Manager of Support Services are unable to agree on the
                     classification the matter will be escalated to 

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   BSCA/HSD Diamond Support Agreement-(Final Executable (12/31/98) - Page 3
<PAGE>

                     Customer's CIO for final determination (or to the CIO's 
                     designated direct report).

             DIAMOND ISSUES CLASSIFICATION TABLE - SECTION 2.6.1

-------------------------------------------------------------------------------
PRIORITY   TYPE                            DESCRIPTION
-------------------------------------------------------------------------------
1        Urgent      A Priority 1 consists of any of the following:
                     (a)The Customer cannot carry on its daily business that is
                     supported by the Software.
                     (b) The Software is not functional, operations are halted
                     and/or the Customer cannot process transactions and/or
                     access the database.
--------------------------------------------------------------------------------
2      High          A Priority 2 consists of any of the following:
                     (a) The Customer remains able to carry on daily business
                     but a major component of the Software is not working
                     correctly, there has been a physical data loss, or data
                     integrity has been compromised.

                     (b)The Customer can still process claims but some damage
                     has occurred in the Software. Significant manual
                     intervention is required to correct the problems created by
                     the error/damage to the Software.

                     (c) The Software is functioning but not giving
                     expected/accurate results in functions dealing directly or
                     indirectly with money/payments.

                     (d)There is no "Work-Around". For purposes of this
                     Agreement a "Work-Around" is an interim/temporary process
                     for accomplishing the process/function in which the
                     reported error has occurred, which process may involve the
                     use of additional steps within the Software and/or manual
                     procedures that are done outside of the Software.
--------------------------------------------------------------------------------
3      Moderate      A Priority 3 consists of any of the following:

                     (a) The Software is functioning as designed/in a manner
                         consistent with its Specifications but not giving
                         expected/accurate results in functions other than those
                         dealing directly or indirectly with money or payment. 

                     (b) Function(s) that are not critical to the daily business
                         of the Customer are not operating correctly.  There is
                         a "Work-Around" which does not impose an undue burden
                         on Customer (either in terms of costs and the amount of
                         labor required).
--------------------------------------------------------------------------------
4      Low           A Priority 4 consists of the following:

                     Cosmetic and/or Documentation issues exist that effect the
                     "user-friendliness" of the Software but not its actual
                     function.  These issues may include items such as
                     misspellings in screens, reports or Documentation, missing
                     or incorrect online help, missing or incorrect
                     Documentation, non-standard colors, fonts or attributes of
                     fields. 
--------------------------------------------------------------------------------



       2.7    Handling of Priority 1 and 2 Situations 

              2.7.1  PROCEDURE TO ADDRESS SITUATIONS.  Following the
                     determination (per Section2.6.1, above) of a Priority 1 or
                     2 situation (as per Section 2.6.1 

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<PAGE>

                     above), HSD shall immediately thereafter address the 
                     reported problem pursuant to the procedures set forth 
                     in Sections 2.2 and 2.3 above with the understanding 
                     that HSD will modify the order in which such services 
                     are rendered under this Section 2.7.1 in order to 
                     ensure that the most critical situations are addressed 
                     first.

                     (a)    CONFIRMATION OF ERROR.  In the event that HSD is
                            able to confirm the existence of a Verified Program
                            Error then HSD will initiate the resolution of the
                            error and continue to work diligently with an
                            appropriate number of qualified resources until the
                            matter is resolved.

                     (b)    ATTEMPT TO RESOLVE.  In the event that HSD is unable
                            to timely, as reasonably determined by Customer,
                            resolve any such Verified Program Error  then
                            Customer will have the option of using the most
                            recent prior Release of the Software with the
                            understanding that HSD will provide support services
                            under this Support Agreement for any such prior
                            Release until the reported Verified Program Error(s)
                            are corrected and Customer is again in Production on
                            a Supported Release of the Software. 

                     (c)    TIME TO RESOLVE.  If within sixty (60) days after
                            Customer begins Production on a prior Release of the
                            Software, HSD is unable to correct the Customer's
                            Priority 1 and/or Priority 2 Verified Program
                            Error(s) in the Supported Release of the Software
                            that Customer was using in Production, HSD will
                            reduce its then-current monthly support fee by
                            twenty (20%) percent (which 20% reduction shall
                            apply even if Customer does not have the option of
                            using a prior Release of the Software in
                            Production).  Any such credit will apply
                            retroactively to the initial sixty (60) day use of
                            the prior Release of the Software in Production and
                            will continue until the Customer is in Production on
                            the Customer's Supported Release which is
                            functioning in a manner consistent with its
                            Specifications.  

                     (d)    REFUND.  In the event that Section 2.7.1 (b)
                            applies, HSD will refund any fees paid by Customer
                            for additional support services (services not
                            included as part of Customer's monthly/standard
                            support fees under this Support Agreement such as
                            those specified in the last sentence of
                            Section2.4.4, above) rendered by HSD to assist
                            Customer in its initial efforts to prepare to use
                            the Supported Release of the Software in Production.

              2.7.2  INABILITY TO REPLICATE PROBLEM/ASSISTANCE.  In the event
                     HSD is unable to recreate/replicate a Customer-reported
                     problem/situation and/or the problem is determined to have
                     been caused by factors such as use of the Software in a
                     manner and/or for a purpose not specified in the
                     Documentation, and/or the use of the Software on other than
                     a Designated System, network, communication, power supply
                     problems and/or the use of software/variations of the
                     Software not supported by HSD, HSD's services expended in
                     the effort to identify and/or correct any such problem(s) 
                     will be billed to the Customer on a time and materials 
                     basis at HSD's then current rates.

              2.7.3  NO BILLING.  Notwithstanding anything to the contrary in
                     Section 2.7.2 above, Customer will not be billed for
                     Software problems/errors 

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<PAGE>

                     encountered by Customer to the extent that any such 
                     Software problem/errors are the result of improper 
                     information and/or guidance provided to Customer by HSD 
                     (such as how to set up a support table or benefit rule) 
                     and/or action(s) taken directly by HSD on behalf of the 
                     Customer with respect to the Customer's use of the 
                     Software and/or Application Programming Interfaces 
                     provided by HSD. In addition Customer will not be billed 
                     for Software problems of the type summarized in this
                     Section 2.7.3 that are the result of actions not taken by
                     HSD which HSD should have taken pursuant to HSD's standard
                     procedures/practices.

       2.8    HSD DIAL-IN.  As necessary for technical reasons in accordance
              with HSD support staff judgment, HSD may dial-in to Customer's
              computer system in order to investigate, duplicate, and/or resolve
              reported problems.  Dial-in will take place as soon as feasible
              with the understanding that HSD will not remotely access
              Customer's system without first obtaining Customer's authorization
              for any such access and that any such access shall be subject to
              the applicable confidentiality provisions of the Agreement.  

       2.9    HANDLING OF PRIORITY 3 AND 4 SITUATIONS 

              2.9.1  PRIORITIZING.  HSD will immediately address Priority 3 and
                     4 Verified Program Errors with the understanding that any
                     outstanding Priority 1 and 2 Verified Program Errors will
                     take precedence.

              2.9.2  TIME AND MATERIAL ASSISTANCE.  Time/resources expended by
                     HSD to investigate/trouble shoot situations that are
                     determined in HSD's reasonable discretion to be other than
                     Verified Program Error(s) will be billable to Customer on a
                     time and materials under HSD's then current rates for any
                     such services rendered.

       2.10   ENHANCEMENTS.  During the term of this Support Agreement (and/or
              any renewal), HSD will provide Customer with Software Enhancements
              generally made available to HSD's other Customers.  In addition,
              HSD will promptly provide updated Documentation for any such
              Enhancements.  There will be no additional charge for any such
              Enhancements and/or Documentation with the understanding that
              charges may be imposed by third party vendors for upgrades and/or
              enhancements to their products.

       2.11   RELEASE ANNOUNCEMENTS.  HSD will provide Customer with a "Release
              Announcement" prior to the general availability of each new
              Release of the Software.  Each such Release Announcement will
              provide a preview and overview of the content of each such
              Release. 

       2.12   RELEASE NOTES.  Release notes will be distributed to Customer at
              the time of distribution of each Release.  Release notes will
              include a detailed description of items such as Software changes,
              Enhancements and applicable bug-fixes.

       2.13   OPERATING SYSTEM.  During the term of this Support Agreement, the
              Software will continue to operate on a version of the Operating
              System(s) of the Designated System(s) supported by the applicable 
              hardware manufacturer and the Oracle RDBMS supported by Oracle. 
              HSD shall timely notify Customer of the expected date of 
              incorporation of applicable Designated System Operating System 
              software updates and Oracle RDBMS releases that will be required 
              to operate the Supported Release of the (Diamond) Software. For 
              purposes of this Section 2.13 "Operating System" shall be 
              defined as the software specified by the hardware manufacturer 
              that is required to be installed on the hardware in order for 
              the hardware to operate. 

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<PAGE>

       2.14   PERFORMANCE OF SERVICES.  It is mutually understood and agreed
              that services rendered under this Support Agreement will be
              performed in a good and workmanlike manner.

3.     CUSTOMER OBLIGATIONS, HSD RECOMMENDATIONS

       3.1    CUSTOMER ENVIRONMENT.  HSD recommends that Customer maintain a
              proper onsite environment for the Software that includes separate
              test, training and Production environments.  

       3.2    CUSTOMER COMMUNICATIONS.  In addition HSD recommends that Customer
              maintain email/internet service as a means of expediting
              communication/rendering services under this Support Agreement.  

       3.3    BACKUP.  HSD recommends that Customer perform system and data
              backups in accordance with generally accepted industry practices. 
              In addition HSD recommends that Customer implement a disaster
              recovery plan/strategy to augment its data backup/archive
              practices.

       3.4    SUPPORTED RELEASE.  In order to remain entitled to receive support
              services under the monthly fees applicable to this Support
              Agreement, Customer shall remain on a Supported Release of the
              Software. In addition, HSD will provide new-Release training at a
              designated HSD facility for a maximum of two Super-Users per
              Installation Location (not to exceed a maximum of six (6) Super
              Users for each such new-Release training class).   Any such
              training will be on a no-fee basis with the understanding that
              Customer will cover its travel-related expenses.  Customer's Super
              User's (as defined in Section 3.4.1, below) will be required to
              participate in HSD's General Release training, which training will
              be scheduled in conjunction with each such Release. 

              3.4.1  SUPER USERS.  Customer will designate a sufficient number
                     of individuals who have received the HSD training (as
                     initially offered in conjunction with the Diamond
                     Implementation Agreement) to serve as the single point of
                     contact with HSD for support related/user issues.  For
                     purposes of this Agreement the designated individuals shall
                     be known as "Super Users" with the understanding that the
                     number of Super Users will be adjusted by Customer as
                     necessary to provide coverage adequate to meet Customer's
                     needs.  Customer's DBA and/or system/network administrator
                     may be used to meet the Super User requirement to cover
                     staffing shortages due to situations such as illness and/or
                     vacation.

              3.4.2  SUPER USER TRAINING.  The Super Users will participate in
                     the HSD training referenced in Section 3.4 in order to help
                     ensure that they have the information necessary to
                     guide/train Customer's personnel/users and interface with
                     HSD's support function/personnel. 

              3.4.3  SUPER USER PERSONNEL.  If HSD determines in its reasonable
                     and good faith judgment that any Super User is not
                     performing required services in a reasonably satisfactory
                     manner, then HSD may provide written notice of its
                     objective basis for any such determination to Customer and
                     request that the individual be replaced. 

                     (a)    Following receipt of HSD's notice, Customer and HSD
                            shall promptly discuss HSD's request and whether
                            there are alternatives to replacing the subject
                            Super User which would be reasonably acceptable to
                            HSD.  Alternatives would include actions 

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   BSCA/HSD Diamond Support Agreement-(Final Executable (12/31/98) - Page 7
<PAGE>

                            such as allowing the individual an opportunity to 
                            correct the alleged performance problems. 

                     (b)    If Customer does not propose any alternatives of the
                            type described in the preceding subsection or HSD
                            does not find any such alternatives to be reasonably
                            acceptable, Customer shall timely escalate the
                            matter to its CIO for resolution.

       3.5    REMOTE ACCESS.  Customer must have installed and available to HSD
              a means of remote access to the Customer's Designated
              System/Software test environment consisting of at least one
              dedicated modem (with a minimum baud rate of 56.6K), dedicated
              phone line and PCAnywhere communications software to facilitate
              dial-in point-to-point protocol ("PPP") access for each
              Installation Location.  

              3.5.1  Customer agrees to make diligent efforts to keep the remote
                     access communication equipment in good working order at all
                     times.  In addition, Customer understands and agrees that
                     it may be required to periodically upgrade and/or change
                     its remote access protocol to conform to HSD's then-current
                     standard with the understanding that the cost of any such
                     upgrade is anticipated to be nominal.  

              3.5.2  In the event that HSD modifies its standard remote access
                     protocol (or any portion thereof), Customer will be given a
                     sixty (60) day advance notice of the effective date any
                     such required remote access protocol modification.  Should
                     Customer not agree that the cost of any such modification
                     was "nominal" then Customer will not be required to upgrade
                     and HSD will remain obligated to provide remote access to
                     Customer on the previously approved remote access protocol.

              3.5.3  HSD will advise Customer when it desires to remotely access
                     the Designated System/Software and will obtain Customer's
                     authorization prior to any such remote access.

       3.6    MODIFICATIONS/VARIATIONS TO SOFTWARE.  Customer shall timely
              advise HSD support personnel of any modifications/variations from
              HSD's Supported Release that Customer is using in Production as
              well as any changes to its computing environment, such as changes
              to its Designated System(s), network and/or telecommunications
              protocols.

       3.7    TIME AND MATERIAL.  In the event that HSD renders services to
              diagnose, troubleshoot and/or otherwise address operational
              problems associated with changes/non-standard system/Software
              configurations such as those referenced in Section 3.6, above, 
              Customer will be billed on a time and materials basis for any 
              such services at HSD's then-current rates.

       3.8    TESTING NEW RELEASE/ENHANCEMENTS.  HSD recommends that Customer
              test new Releases, Enhancements/added functionality received from
              HSD as well as new/modified Customer practices in its test
              environment to confirm that it is operating correctly prior to its
              use in Production. 

       3.9    CUSTOMER'S STAFF.  It is mutually understood and agreed that
              Customer will have an experienced system/network administrator as
              well as an Oracle Database Administrator ("DBA") available to
              communicate with HSD's Support Personnel in the resolution of
              situations arising under this Support Agreement.  Should HSD be
              required to render system/network administrator and/or DBA
              services to 

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              Customer because Customer does not/did not have those required 
              technical resources, any such additional services will be billed 
              to Customer on a time and materials basis at HSD's then-current 
              rates.

4.     PRICE AND PAYMENT

       4.1    FEES.  The monthly fee for HSD's services under this Support
              Agreement is specified in Schedule A of the Agreement.

       4.2    TRAVEL/OTHER EXPENSES.  Customer shall reimburse HSD for
              reasonable and documented out-of-pocket expenses incurred by HSD
              in the performance of its duties, including items such as travel,
              lodging, meals and telephone charges.  All travel expenses will be
              subject to the HSD Travel Policy that serves as Attachment  3.1.5
              to the Implementation Agreement.

       4.3    BILLING.  Support fees and applicable out-of-pocket expenses shall
              be billed monthly as specified in Schedule A of the Agreement with
              the understanding that Customer will not be required to reimburse
              HSD for out of pocket expenses incurred by HSD in addressing
              Verified Program Errors.

5.     TERM, TERMINATION AND ASSIGNMENT 

       5.1    TERM.  The term of this Agreement shall commence upon the
              expiration of the Warranty Period as set forth in Section 6.1 of
              the Agreement and will continue for the balance of the unexpired
              term of the Agreement in one-year renewable increments.  Each such
              one-year renewal shall be at rates mutually acceptable to the
              Parties (which rates will be consistent with HSD's then-current
              Support Agreement) unless either party notifies the other party of
              its intent not to renew within three hundred sixty five (365) days
              prior to the expiration of the next one-year renewal term.

       5.2    TERMINATION FOR BREACH.  Should either party breach this Support
              Agreement, the non-breaching party shall give the breaching party
              written notice and ten (10) days to cure the breach.  Should the
              breaching party fail to cure the breach, the non-breaching party
              may terminate this Agreement.

       5.3    ASSIGNMENT.  HSD will not assign it obligations to perform under
              this Support Agreement and/or any renewal without obtaining
              Customer's prior written consent, which consent shall not be
              unreasonably withheld or delayed.

       5.4    AGREEMENT/SUPPORT AGREEMENT TERMINATES.  Should the Agreement
              terminate, this Support Agreement will automatically terminate on
              the termination date of the Agreement. Upon such termination, 
              Customer will remain obligated to pay HSD for support services 
              rendered through the date of any such expiration/termination

6.     INCORPORATION OF PROVISIONS OF LICENSE AGREEMENT BY REFERENCE,
       CONTROLLING DOCUMENT IN THE EVENT OF CONFLICT 

       6.1    The Agreement's terms and conditions are incorporated into and
              made a part of this Support Agreement by reference with the
              exception of those that are specific to the Agreement or are
              specifically provided for in this Support Agreement 

       6.2    Should there be a conflict between the terms and conditions of the
              Support Agreement and the Agreement, the terms and conditions of
              the Support Agreement shall control.

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7.     EXECUTION

This Agreement shall be effective as of the Effective Date notwithstanding any
date to the contrary associated with its execution by the duly authorized
signatories specified below. This Agreement may be executed in counterparts,
each of which will be deemed an original, but which together constitute one and
the same instrument.

CUSTOMER:     California Physicians' Service     HSD:
              dba Blue Shield of California

Signed    /s/ Thomas S. Fischer                 Signed  /s/ Russell J. Harrison
       ----------------------------                    ------------------------
Name:         Thomas S. Fischer                 Name:   Russell J. Harrison
Title:        SVP & CAO                         Title:  President & CEO

Date     12/31/98                               Date       12/31/98
       ----------------------------                    ------------------------


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