CAYENTA INC, S-1/A, 2000-03-31

CAYENTA INC
S-1/A, 2000-03-31
BUSINESS SERVICES, NEC

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 31, 2000
REGISTRATION NO. 333-93789

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

CAYENTA, INC.
(Exact name of Registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 7379 33-0884182
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>

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

225 BROADWAY, SUITE 1500
SAN DIEGO, CA 92101
(619) 228-2100
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
------------------------------

DAVID PORRECA
PRESIDENT/CEO
CAYENTA, INC.
225 BROADWAY, SUITE 1500
SAN DIEGO, CA 92101
(619) 228-2100
(619) 228-2182

(Name, address, including zip code, and telephone and facsimile numbers,
including area code, of agent for service)

COPIES TO:

<TABLE>
<S> <C> <C>
NICHOLAS J. COSTANZA BARBARA L. BORDEN, ESQ. LAURIE A. SMILEY, ESQ.
GENERAL COUNSEL MATTHEW T. BROWNE, ESQ. CHRISTOPHER J. VOSS, ESQ.
CAYENTA, INC. COOLEY GODWARD LLP MARC S. MARCHIEL, ESQ.
225 BROADWAY, SUITE 1500 4365 EXECUTIVE DRIVE, SUITE 1100 STOEL RIVES LLP
SAN DIEGO, CA 92101 SAN DIEGO, CA 92121 600 UNIVERSITY STREET, 36TH FLOOR
(619) 552-9500 (858) 550-6000 SEATTLE, WA 98101-3197
FAX: (858) 552-9759 FAX: (858) 453-3555 (206) 624-0900
FAX: (206) 386-7500
</TABLE>

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
------------------------------

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act") check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) of the Securities Act, please check the following box
and list the Securities Act registration serial number of the earlier effective
registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) SHARE(2) PRICE(2) REGISTRATION FEE(3)
<S> <C> <C> <C> <C>
Class A common stock ($.001 par value).... 7,475,000 $13.00 $97,175,000 $25,654
</TABLE>

(1) Includes 975,000 shares of Common Stock which may be purchased by the
Underwriters to cover over-allotments, if any.

(2) Estimated in accordance with Rule 457(o) promulgated under the Securities
Act.

(3) Includes $18,480 paid as part of the Registrant's filing of December 29,
1999.

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.

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- --------------------------------------------------------------------------------
<PAGE>

SUBJECT TO COMPLETION, DATED MARCH , 2000

The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>

6,500,000 Shares

[LOGO]

Cayenta, Inc.

Class A Common Stock

-----------

Cayenta, Inc. is offering shares of its Class A common stock. We have two
classes of authorized common stock, Class A common stock and Class B common
stock. The rights of the holders of Class A common stock and Class B common
stock are identical, except with respect to voting and conversion. Each share of
Class A common stock is entitled to one vote per share. Each share of Class B
common stock is entitled to ten votes per share and is convertible at any time
into one share of Class A common stock.

We are a majority-owned subsidiary of The Titan Corporation. Upon completion
of this offering, Titan will own all of our Class B common stock, which will
represent more than 61% of our outstanding common stock and more than 94% of our
voting power, and will continue to control us.

Prior to this offering, there has been no public market for our shares. The
initial public offering price of our Class A common stock is expected to be
between $12.00 and $14.00 per share. We have applied to list our Class A common
stock on The Nasdaq Stock Market's National Market under the symbol "CYTA."

The underwriters have an option to purchase a maximum of 975,000 additional
shares of our Class A common stock to cover over-allotments.

Investing in our Class A common stock involves risks. See "Risk Factors" on
page 8.

<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public Commissions Cayenta, Inc.
-------------- -------------- --------------
<S> <C> <C> <C>
Per Share............................................ $ $ $
Total................................................ $ $ $
</TABLE>

Delivery of the shares of Class A common stock will be made on or about
, 2000.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

Credit Suisse First Boston

Donaldson, Lufkin & Jenrette

A.G. Edwards & Sons, Inc.

The date of this prospectus is , 2000.
<PAGE>

[INSIDE FRONT COVER]

[Picture of concentric circles with textual overlay as follows: In the
rapidly-changing digital economy, companies are searching for and demanding
total solutions. There is a new formula for success---]

<PAGE>

[INSIDE FRONT COVER PULL-OUT]

<S> <C>
[A description of the information technology
products and services that we provide that
we believe make us a total services
provider, written as an equation: EAI [Hub-and-spoke depiction of the individual
(Enterprise Application Integration) + ASP parts of our total services provider
(Application Service Provider) + NOC offering]
(Network Operations Center) + BSM (Business
Services Management) = TSP (Total Services
Provider)]

[A description, separated into individual
phases, of our approach to creating our
information technology products and [Our logo]
services]
</TABLE>

<PAGE>
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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUMMARY...................... 3
RISK FACTORS............................ 8
FORWARD-LOOKING STATEMENTS.............. 17
USE OF PROCEEDS......................... 17
DIVIDEND POLICY......................... 17
CAPITALIZATION.......................... 18
DILUTION................................ 19
SELECTED HISTORICAL ACTUAL AND PRO FORMA
FINANCIAL INFORMATION................. 20
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND OPERATING
RESULTS............................... 22
BUSINESS................................ 30
</TABLE>

<TABLE>
MANAGEMENT.............................. 42
<CAPTION>
PAGE
--------
<S> <C>
RELATIONSHIP WITH TITAN AND CERTAIN
TRANSACTIONS.......................... 51
PRINCIPAL STOCKHOLDERS.................. 54
DESCRIPTION OF CAPITAL STOCK............ 56
SHARES ELIGIBLE FOR FUTURE SALE......... 60
UNDERWRITING............................ 62
NOTICE TO CANADIAN RESIDENTS............ 65
LEGAL MATTERS........................... 66
EXPERTS................................. 66
ADDITIONAL INFORMATION.................. 66
INDEX TO FINANCIAL STATEMENTS........... F-1
</TABLE>

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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS MAY BE USED ONLY WHERE IT IS
LEGAL TO SELL THESE SECURITIES. THE INFORMATION IN THIS PROSPECTUS MAY ONLY BE
ACCURATE ON THE DATE OF THIS DOCUMENT.

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

Except in the financial statements of Cayenta or as otherwise indicated, all
information in this prospectus assumes:

- the underwriters' over-allotment option will not be exercised; and

- a 2.065 for 1 split in our Class A and Class B common stock that will
become effective prior to the effectiveness of this registration
statement.

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DEALER PROSPECTUS DELIVERY OBLIGATION

UNTIL , 2000 (25 DAYS AFTER THE COMMENCEMENT OF THE OFFERING),
ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS
IN ADDITION TO THE DEALER'S OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS AN
UNDERWRITER AND WITH RESPECT TO UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

2
<PAGE>
PROSPECTUS SUMMARY

THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS.
THIS SUMMARY DOES NOT CONTAIN ALL OF THE INFORMATION YOU SHOULD CONSIDER BEFORE
BUYING SHARES IN THIS OFFERING. YOU SHOULD READ THE ENTIRE PROSPECTUS, AND
ESPECIALLY THE "RISK FACTORS" SECTION, CAREFULLY.

THE COMPANY

OUR BUSINESS

- We provide information technology consulting services tailored to our
customers' business processes. These services include understanding our
customers' business processes, determining which software applications are
best suited for their needs and integrating these software applications
into our customers' existing systems and business processes.

- Based on our customers' requirements, we either use our proprietary
software applications or third party software applications and tailor
these for specific business processes.

- We deploy and manage these software applications at either our proprietary
network operating centers in San Diego, California and Reston, Virginia or
at the data centers of companies such as Exodus Communications, Intel and
Qwest with whom we have hosting agreements. These facilities have advanced
telecommunications and server infrastructure which gives them advanced
web, software application and data center capabilities. In addition, our
network operating center in San Diego can also manage software
applications that are hosted at third-party facilities.

We believe that by providing this complement of information technology
consulting services, proprietary and third-party software applications and
hosting capabilities we are able to rapidly build, deploy and maintain
information technology products and services that meet our customers' needs. Our
customers have the option of purchasing our products and services under
long-term contracts or licensing our software applications directly. We believe
that this flexible approach provides our customers with lower and more
predictable capital and operating costs in addressing their information
technology requirements.

We currently have proprietary software applications and offer related
business services management expertise which consist of the following:

- E-commerce: We offer a complete e-business package by integrating a
customer's web site and business support systems with our proprietary
software applications for order processing, catalog management, customer
service, inventory management, order fulfillment, billing and collections
and account settlement. We have historically provided these services to
business-to-consumer companies and have recently begun to offer these
services for business-to-business companies. For example, under our recent
agreements with Penton Media, Inc., we are building and plan to host a
business-to-business Internet marketplace serving the natural health
products industry for its division, Healthwell.com.

- Revenue Cycle Management: We offer software applications that allow our
customers to better track, collect and settle billing and payment
transactions with their customers and trading partners. These software
applications address our customers' needs relating to customer enrollment,
credit worthiness, purchasing, contract management, bill generation, bill
presentment, collections and settlement.

3
<PAGE>

- Equipment Maintenance and Monitoring: Our software applications and
services enable our customers to more efficiently manage their equipment
maintenance processes including scheduling, materials and parts management
and work order processing.

We target industries with complex business processes and information
technology requirements. We also target emerging companies seeking to do
business on the Internet, known as e-business. We have expertise in multiple
industries, including utilities, telecommunications, and retail. We intend to
further penetrate these industries by establishing strategic alliances and joint
ventures with industry leaders. We also have supply and service programs with
leading providers of software, hardware and other parts of our TSP offering.

During 1999, we completed four acquisitions. Each of the acquired businesses
provides proprietary software applications and related consulting services. We
also have entered into hosting agreements with Exodus Communications, Intel and
Qwest. We believe that the expanded capabilities added by these acquisitions and
hosting agreements combined with our consulting expertise and hosting
capabilities have enabled us to become a TSP.

We have proprietary network operating centers in San Diego, California and
Reston, Virginia. We work with our customers at facilities located in Burnaby,
British Columbia, Orlando, Florida, Reston, Virginia, Salt Lake City, Utah, San
Diego, California, Washington, D.C., and Woodland Hills, California. Customers
from whom we derived 1.0% or more of revenues during 1999 on a pro forma basis
include 800.com, Dean & DeLuca, the District of Columbia, the Federal Aviation
Administration, Icon Health and Fitness, Oreck, Sempra Energy, Waste Management,
the City of Henderson, Nevada and Energy America. We currently have
approximately 314 professionals developing and implementing our services.

For the year ended December 31, 1999, we had net losses of $5.6 million on a
pro forma basis. We expect to incur losses for the foreseeable future. In
addition, three of our customers, Sempra Energy, the District of Columbia
government and the FAA, accounted for approximately 85.8% of our revenues on an
actual basis and 55.2% of our revenues on a pro forma basis during 1999.
Furthermore, the industry in which we compete, the information technology
services industry, is highly competitive.

OUR MARKET OPPORTUNITY

The rapid growth of the Internet and increased frequency of e-business
transactions is creating significant new opportunities and challenges for
businesses. Businesses are using the Internet to improve communications
internally and with their trading partners, to enhance operational efficiencies
and to strengthen customer relationships. The complexity of e-business
transactions has accelerated with the widespread adoption of the Internet and
the introduction of Internet marketplaces for business-to-business transactions.
Businesses face significant technical challenges in their efforts to capitalize
on the opportunities presented by the Internet, including integrating
proprietary and third party systems with new software applications and linking
web sites with accounting and fulfillment systems. Companies must meet these
challenges while overcoming a number of obstacles, including: capital
constraints, technological obsolescence of many current systems, and the need to
attract and retain qualified information technology professionals.

International Data Corporation, an independent research firm, expects the
worldwide market for Internet services to grow from $16.5 billion in 1999 to
$102.7 billion in 2004. In addition, International Data Corporation expects the
application service provider market to grow from $300 million in 1999 to
$7.7 billion in 2004.

4
<PAGE>

OUR STRATEGY

- Build our TSP customer base

- Continue to enhance our TSP offering

- Target specific industries

- Promote the Cayenta brand

- Attract and train qualified personnel

- Continue to develop core competencies

OUR HISTORY

We were formed as a wholly-owned subsidiary of The Titan Corporation in 1997
when Titan separated its business that focused on integrating commercial
software applications with customers' systems from its other information
technology services. Upon completion of this offering, Titan will own all of our
Class B common stock, which will represent more than 61% of our outstanding
common stock and more than 94% of our voting power, and will be able to control
the election of our directors and all other matters requiring stockholder
approval. Titan is a publicly traded company, and its filings with the
Securities and Exchange Commission, or SEC, are available to the public over the
Internet at the SEC's web site at http://www.sec.gov, at the SEC's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
regional offices of the SEC located at 7 World Trade Center, Suite 1300, New
York, New York 10048 and at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Titan's SEC recording number is 1-6035. Our relationship with
Titan is described more fully in the "Relationship with Titan and Certain
Transactions" section of this prospectus.

Our principal executive offices are located at 225 Broadway, Suite 1500, San
Diego, CA 92101, and our telephone number is (619) 228-2100.

RECENT DEVELOPMENTS

On March 30, 2000, we entered into a series of agreements with Penton Media,
Inc. pursuant to which Penton engaged us to serve as the TSP for the
development, hosting and support of a business-to-business Internet marketplace
serving the natural health products industry for its division, Healthwell.com.
As part of these agreements, the companies agreed to discuss a total of ten
additional e-commerce projects for which Penton could choose us to serve as the
TSP. Penton is also providing us with marketing opportunities, including
advertising in its publications, which include INTERNET WORLD, BOARDWATCH and
INDUSTRY WEEK magazines, and exhibit space at its industry tradeshows, which
include the INTERNET WORLD and ISPCON shows. These marketing opportunities will
be provided by Penton to us without charge for two years in an amount that has a
value, at prevailing rates, equal to $1.0 million per year. In connection with
these agreements, Penton purchased 516,250 shares of our Class A common stock at
a price per share of $12.34.

5
<PAGE>
THE OFFERING

<TABLE>
<S> <C>
Class A common stock offered.............. 6,500,000 shares

Common stock to be outstanding after the
offering

Class A common stock.................... 13,028,410 shares

Class B common stock.................... 20,650,000 shares

Total................................. 33,678,410 shares

Use of proceeds........................... For operating activities, including expansion of our sales
and marketing programs and continued development of our
proprietary software applications, and for capital
expenditures and general corporate purposes.

Proposed Nasdaq National Market Symbol.... CYTA
</TABLE>

SHARES OUTSTANDING AFTER THE OFFERING

The number of shares of common stock to be outstanding after the offering is
based upon the number of shares of Class A common stock and Class B common stock
outstanding as of March 30, 2000, giving effect to the conversion of all of our
outstanding shares of preferred stock into 4,842,425 shares of Class A common
stock upon the closing of this offering, and does not include the following:

- 7,124,250 shares of Class A common stock reserved for issuance under our
1997 and Nonstatutory Stock Option Plans, of which 5,195,024 shares were
covered by outstanding options as of March 28, 2000 at a weighted average
exercise price of $1.69 per share; and

- 1,023,827 shares of Class A common stock subject to warrants outstanding
as of March 28, 2000, at a weighted average exercise price of $6.35 per
share.

6
<PAGE>
SUMMARY HISTORICAL ACTUAL AND PRO FORMA FINANCIAL INFORMATION

The following financial information should be read together with the
"Selected Historical Actual and Pro Forma Financial Information" and
"Management's Discussion and Analysis of Financial Condition and Operating
Results" included elsewhere in this prospectus. The unaudited pro forma
statement of operations information for the year ended December 31, 1999 assumes
that we completed our acquisitions of Mainsaver, Assist Cornerstone and SFG
Technologies as of January 1, 1999. The unaudited pro forma statement of
operations information is based on our historical actual operating results and
those of Mainsaver, Assist Cornerstone and SFG Technologies for the period
presented and gives effect to the amortization of goodwill related to the
acquisitions, the interest expense relating to the acquisitions, and the
resulting provision for income taxes. Our historical actual statement of
operations information for the year ended December 31, 1999 and balance sheet
information as of December 31, 1999 are derived from our audited financial
statements, which are included elsewhere in this prospectus.

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1999
-------------------------
PRO FORMA
ACTUAL (UNAUDITED)(1)
-------- --------------
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
<S> <C> <C>
CONSOLIDATED STATEMENTS OF OPERATIONS INFORMATION:
Revenues.................................................... $40,262 $65,578
Gross profit................................................ 11,907 27,775
Income (loss) from operations............................... 7,524 2,319
Net income (loss)........................................... 3,392 (5,606)
Diluted earnings (loss) per share(2)........................ $ 0.26 $ (0.53)
Weighted average common shares and common share equivalents
used in computing diluted earnings per share(2)........... 13,182 10,521
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1999
----------------------------------------
PRO FORMA
PRO FORMA(3) AS ADJUSTED(4)
ACTUAL (UNAUDITED) (UNAUDITED)
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(IN THOUSANDS)
<S> <C> <C> <C>
BALANCE SHEET INFORMATION:
Cash........................................................ $ 6,938 $ 13,311 $ 90,411
Working capital............................................. (8,239) (1,866) 75,234
Total assets................................................ 100,930 107,303 184,403
Total long-term obligations................................. 57,451 57,451 57,451
Total stockholders' equity.................................. 12,050 18,423 95,523
</TABLE>

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

(1) The pro forma column gives effect to the acquisitions of Mainsaver, Assist
Cornerstone and SFG Technologies as if they had occurred as of January 1,
1999.

(2) For the number of shares used in the per share calculations, see the
historical pro forma Cayenta financial statements and Note 2 to the
historical actual Cayenta financial statements.

(3) The pro forma column gives effect to the issuance of 516,250 shares of our
Class A common stock to Penton for cash of approximately $6.4 million as if
that issuance had occured on December 31, 1999.

(4) The pro forma as adjusted column gives effect to the conversion of all of
our outstanding shares of preferred stock into shares of Class A common
stock upon the closing of this offering and reflects our receipt of the net
proceeds from the offering (at an assumed initial public offering price of
$13.00 per share), after deducting underwriting discounts and commissions
and estimated offering expenses.

7
<PAGE>
RISK FACTORS

THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CONSIDER CAREFULLY
THE RISKS AND UNCERTAINTIES DESCRIBED BELOW AND THE OTHER INFORMATION IN THIS
PROSPECTUS, INCLUDING THE FINANCIAL STATEMENTS AND RELATED NOTES, BEFORE
DECIDING TO INVEST IN SHARES OF OUR COMMON STOCK. IF ANY OF THE FOLLOWING RISKS
OR UNCERTAINTIES ACTUALLY OCCURS, OUR BUSINESS, FINANCIAL CONDITION AND
OPERATING RESULTS WOULD LIKELY SUFFER. IN THAT EVENT, THE MARKET PRICE OF OUR
COMMON STOCK COULD DECLINE, AND YOU COULD LOSE ALL OR PART OF THE MONEY YOU PAID
TO BUY OUR COMMON STOCK.

RISKS RELATED TO OUR BUSINESS

OUR TSP OFFERING IS RELATIVELY NEW AND UNTESTED, AND WE WILL BE UNABLE TO GROW
OUR BUSINESS AS WE EXPECT IF OUR TSP OFFERING DOES NOT MEET WITH MARKET
ACCEPTANCE OR IF WE DO NOT EXECUTE OUR BUSINESS STRATEGY.

We have not previously generated revenues from our TSP offering. We may be
unable to sell our TSP offering to existing customers of our software
applications and consulting services or to new customers. We cannot be certain
that a market for our TSP offerings will develop. Our business strategy requires
that we integrate the software we recently acquired in the Mainsaver, Assist
Cornerstone and SFG Technologies acquisitions into our TSP offering, adopt a
sales, pricing, and support strategy and build our employee and facility
resources. If our TSP offering does not meet with market acceptance or if we
fail to execute our business strategy, we may incur substantial additional costs
or delays in the further development and launch of our TSP offering or be
prevented from capitalizing on the market opportunity that we believe exists.

BECAUSE OUR TSP OFFERING IS NEW, OUR ACTUAL AND PRO FORMA HISTORICAL REVENUES
WERE NOT DERIVED FROM IT, WHICH MAKES AN EVALUATION OF OUR BUSINESS DIFFICULT.

To date, none of our actual or pro forma historical revenues were derived
from direct sales by us of our TSP offering. Our only TSP-related revenues have
resulted from providing TSP services to customers of Soliance, a joint venture
in which we own a 10% interest. Accordingly, we expect that our actual and pro
forma historical financial results will be of only limited value in projecting
our future financial results.

WE EXPECT TO INCUR LOSSES WHILE WE ARE INVESTING IN THE FURTHER DEVELOPMENT AND
IMPLEMENTATION OF OUR TSP OFFERING AND WE MAY NEVER RECOVER THE COSTS ASSOCIATED
WITH THOSE INVESTMENTS.

We intend to invest approximately $40 million to $50 million over the next
twelve months in further developing and implementing our TSP offering by:

- establishing and staffing regional facilities where we will develop our
information technology products and services in collaboration with our
customers;

- establishing and staffing other centers from which we will monitor, manage
and support information technology products and services that we have
deployed for our customers;

- entering into arrangements with third party suppliers of elements of our
TSP offering;

- developing process and software applications and industry-specific
templates; and

- expanding our sales and marketing activities.

We expect to invest additional amounts in periods following the next twelve
months to further develop our TSP offering. For the year ended December 31,
1999, we had net losses of $5.6 million on a pro forma basis. We expect to incur
losses for the forseeable future. Our future profitability will depend on our
ability to generate and sustain substantial revenues from our TSP offering while
maintaining

8
<PAGE>

reasonable expense levels. The investments described above may not result in
increased revenues and the revenues from these efforts may not be enough to
compensate for their cost. If we are profitable in the future, we may not be
able to sustain or increase profitability on a quarterly or annual basis.

WE MAY NOT BE ABLE TO DELIVER KEY ELEMENTS OF OUR TSP OFFERING IF OUR MANAGEMENT
FAILS TO INTEGRATE ANY OF OUR THREE RECENT ACQUISITIONS.

If we are unable to integrate any of the software we recently acquired in
the Mainsaver, Assist Cornerstone and SFG Technologies acquisitions into our TSP
offering, including by providing that software over the Internet, our ability to
provide our TSP offering may be impaired. Further, we could incur unexpected
liabilities or expenses in connection with these acquisitions that exceed or are
not covered by our indemnification arrangements with the sellers of these
businesses and that could increase our anticipated integration costs for the
acquired software.

OUR GROWTH MAY SLOW OR STOP IF WE FAIL TO EFFECTIVELY MANAGE OUR RAPID
EXPANSION.

Since our acquisition of Transnational Partners II on January 1, 1999, we
have acquired three companies, which represented approximately 38.6% of our pro
forma revenues during 1999. We have also added 353 employees. If we cannot
manage our expanding operations to minimize strains on our management, our
technical, operating and financial systems, and our sales, marketing and
administrative resources, our operations could be disrupted, we may be unable to
grow or we may grow at a slower pace than we anticipate. We expect that
significant expansion of our operations will continue as we further develop and
market our TSP offering and add additional customers and facilities.

WE MAY BE UNABLE TO DELIVER OUR TSP OFFERING IN A TIMELY MANNER IF THIRD PARTIES
DO NOT PROVIDE US WITH KEY COMPONENTS OF OUR INFRASTRUCTURE AND FOR OUR SOFTWARE
APPLICATIONS.

We depend on third parties to supply computer and telecommunications
equipment and services and software applications that we use to provide our TSP
offering. Our failure to maintain a continuous supply of any of these elements
would temporarily prevent us from delivering our TSP offering. A disruption in
our ability to provide our TSP offering could keep us from maintaining required
standards of service and cause us to incur contractual penalties.

OUR ABILITY TO SELL OUR TSP OFFERING WILL SUFFER IF GROWTH IN E-BUSINESS
DECLINES.

Market acceptance of our TSP offering, and our ability to increase our
related revenues, will depend on continuing acceptance of use of the Internet
and related technologies for e-business. This acceptance may be limited without
the further development of the Internet's infrastructure and related
technologies. This continued development includes maintenance of reliable
networks with the necessary speed, data capacity and security to provide viable
marketplaces for e-business, as well as timely development of complementary
products for providing reliable, easy-to-use access and services. Other factors
that may affect the growth of the Internet and related technologies as media for
e-business include:

- increases in access costs;

- government regulation;

- uncertainty regarding intellectual property ownership;

- reluctance to adopt new business methods; and

- costs associated with the obsolescence of existing infrastructure.

9
<PAGE>
We cannot be certain that the Internet and related technologies will provide
viable marketplaces for e-business in the long term.

OUR OPERATING MARGINS MAY DECLINE IF WE FAIL TO ACCURATELY ESTIMATE THE
RESOURCES NECESSARY TO MEET OUR OBLIGATIONS UNDER FIXED-TIME, FIXED-PRICE
CONTRACTS.

We have historically derived a majority of our revenues from fixed-time,
fixed-price contracts. For example, during 1999, we derived 70% of our revenues
from fixed-time, fixed-price contracts. If we fail to accurately estimate the
resources required for us to fulfill our obligations under fixed-time, fixed-
price contracts or fail to satisfy those obligations, then our costs under those
contracts will be greater than expected and our related profit, if any, will be
less. We have occasionally had to commit unanticipated additional resources to
complete customer projects, and we may have to take similar action in the
future.

WE MAY BE UNABLE TO INCREASE REVENUES AS PLANNED IF OUR EFFORTS TO DEVELOP AND
MAINTAIN POSITIVE BRAND AWARENESS ARE NOT SUCCESSFUL.

To promote awareness of our brand, we intend to spend significant amounts,
including some portion of the proceeds of this offering that we are allocating
to our sales and marketing programs, on an aggressive brand-enhancement
campaign, which we expect to initiate during the second quarter of 2000. Our
spending on this brand-enhancement campaign may cause our operating margins to
decline if revenues derived from this campaign are not sufficient to offset its
associated costs. The value of our brand may be damaged if information
technology products and services that we develop for customers become associated
with those customers' business difficulties.

WE HAVE RELIED ON A SMALL NUMBER OF CUSTOMERS FOR MOST OF OUR REVENUES, AND OUR
REVENUES WILL DECLINE SIGNIFICANTLY IF WE CANNOT KEEP OR REPLACE THESE
CUSTOMERS.

During 1999, revenues from the District of Columbia accounted for
approximately 38.1% of our actual revenues and approximately 23.4% of our pro
forma revenues. We provide information technology products and services to the
District of Columbia on a purchase order basis. In 1999, revenues from Sempra
Energy accounted for approximately 26.8% of our actual revenues and
approximately 18.9% of our pro forma revenues, and were derived from our
provision of information technology products and services to Sempra Energy under
two contracts that expire on December 31, 2000. In 1999, revenues from the FAA
accounted for approximately 21.0% of our actual revenues and approximately 12.9%
of our pro forma revenues. Our contract with the FAA has expired although we
continue to provide services to the FAA under the terms of the expired contract.
If Sempra Energy terminates its contract with us, the District of Columbia does
not order additional information technology products or services from us, or the
FAA terminates its relationship with us or renews our contract with it under
less favorable terms to us than our prior contract, we will lose a substantial
portion of our revenues.

WE COULD LOSE A SUBSTANTIAL PORTION OF OUR REVENUES IF ANY OF OUR CONTRACTS OR
PURCHASE ORDERS WITH OUR GOVERNMENT CUSTOMERS ARE MODIFIED OR TERMINATED FOR ANY
REASON.

Since 1995, we have earned a substantial portion of our revenues under
contracts and purchase orders with the FAA and the District of Columbia. For
example, for 1999, revenues from the District of Columbia accounted for
approximately 38.1% of our actual revenues and 23.4% of our pro forma revenues,
and revenues from the FAA accounted for approximately 21.0% of our actual
revenues and 12.9% of our pro forma revenues. These contracts are typically
funded on an annual basis. We currently provide information technology products
and services to the FAA although our contract with it has expired. If the FAA
terminates its relationship with us or our FAA contract is renewed under less
favorable terms to us than our prior contract, we could lose a substantial
portion of our revenues. Any

10
<PAGE>

contract we do enter into with the FAA will likely be cancellable at any time by
the FAA without penalty, and the FAA may change its contract requirements or
contract budgets. In addition, the District of Columbia is not obligated to
continue ordering information technology products or services from us under our
purchase order arrangement with them. Any cancellations or modifications of our
government contracts or purchase orders for any reason could cause us to lose a
substantial portion of our revenues.

OUR QUARTERLY REVENUES AND OPERATING RESULTS ARE VOLATILE AND DIFFICULT TO
FORECAST, WHICH MAY CAUSE THE MARKET PRICE OF OUR COMMON STOCK TO DECLINE.

Our quarterly revenues and operating results have fluctuated significantly
in the past, and we expect these fluctuations to continue. Factors that may
cause our quarterly revenues and operating results to fluctuate, and all of
which are to some extent outside our control, include:

- the amount and timing of demand for our TSP offering;

- the degree of utilization of our consultants;

- the length of our sales cycle for our information technology products and
services;

- our ability to manage costs, including sales and marketing, infrastructure
development, general and administrative and personnel costs;

- the timing and cost of anticipated openings of new facilities; and

- unanticipated costs associated with the integration of recently acquired
businesses.

It is likely that in some future quarter or quarters our operating results will
be below the expectations of investors. If so, the market price of our common
stock may decline significantly.

OUR GROWTH COULD BE LIMITED IF WE ARE UNABLE TO ATTRACT AND RETAIN QUALIFIED
PERSONNEL.

Our growth requires us to substantially increase sales of our TSP offering,
and to generate these increased sales we must attract and retain highly skilled
sales and marketing personnel. To develop and implement the increasing number of
TSP offerings that we anticipate developing and installing in collaboration with
our customers, we must attract and retain technical and consulting personnel
with the requisite technical skills to perform those functions. Accordingly, our
growth could be constrained if we cannot attract and retain sufficient numbers
of highly skilled technical, consulting, sales and marketing personnel to
execute our business strategy. Our growth could also be constrained and our
operations disrupted if we do not attract and retain a sufficient number of
highly skilled management personnel to manage our anticipated expansion of our
business.

OUR FAILURE TO DELIVER ERROR-FREE INFORMATION TECHNOLOGY PRODUCTS AND SERVICES
COULD RESULT IN LOSSES AND NEGATIVE PUBLICITY.

Many of our information technology products and services relate to systems
that are critical to our customers' businesses. For example, an e-business
retailer for whom we developed and installed our complete e-business system
would depend on that product to manage and monitor many of its internal business
processes and its interactions with its customers. Similarly, a utility for whom
we developed and installed our software application for the transactions that
compose that utility's revenue cycle would depend on that product to manage and
monitor those transactions. If our products were to fail for any reason, the
financial and operating impact on our customers could be severe, and our
customers could react by withholding payments due to us or by pursuing
litigation against us that may not be covered by our insurance policies or
limited by the contractual terms of the engagement. Our customers could also
react by demanding refunds or additional information technology products or
services from us at no charge that compensate for the failure. In addition, a
failure of our information

11
<PAGE>

technology products or services for a specific customer, particularly in one of
our target industries, could make other companies reluctant to engage us to
undertake projects for them.

OUR INFORMATION TECHNOLOGY PRODUCTS WILL BE LESS COMPETITIVE IF THEY ARE NOT
COMPATIBLE WITH THIRD-PARTY SOFTWARE APPLICATIONS.

We believe that our ability to compete successfully depends on the continued
compatibility of our information technology products with software applications
provided by third-party vendors. Our failure to maintain compatibility with
these software applications could limit the capacity of our information
technology products to integrate different systems and make our products less
attractive to potential users. If we were to lack sufficient qualified technical
personnel or financial resources to commit to maintaining such compatibility,
our information technology products could become incompatible with changing or
newly-introduced software standards. We cannot be sure that we will be able to
conform to new or changed software standards, or that information technology
products or services developed by others will not make our own software and
services noncompetitive or obsolete.

IF WE ARE UNABLE TO REUSE OUR PROCESS AND SOFTWARE APPLICATIONS, OUR
INDUSTRY-SPECIFIC TEMPLATES, AND OUR SOFTWARE ENGINEERING PRACTICES, WE MAY BE
UNABLE TO DELIVER OUR INFORMATION TECHNOLOGY PRODUCTS AND SERVICES RAPIDLY AND
COST-EFFECTIVELY.

We generally develop our information technology products and services based
on reusable processes, software, industry-specific templates, and software
engineering practices. If we generally are unable to negotiate customer
contracts that permit us to reuse our processes, software, templates and
software engineering practices, we may be unable to provide our information
technology products and services to our customers at a cost and within time
frames that they consider acceptable. We may work with customers who prohibit us
from such reuse or who may severely limit reuse. In addition, we may provide
information technology products and services to the utility industry only
through our Soliance joint venture. If we were to sell our membership interest
in the Soliance joint venture, the terms of the agreement establishing that
joint venture prohibit us from selling our information technology products and
services to the utility industry for 15 months from the date of our sale.

OUR MARKETS ARE HIGHLY COMPETITIVE AND OUR COMPETITORS' STRENGTHS MAY PREVENT US
FROM EXECUTING OUR BUSINESS STRATEGY.

Our current competitors include:

- application service providers, such as Breakaway Solutions and
USinternetworking;

- information technology service providers, such as Andersen Consulting,
Answerthink, Cambridge Technology, EDS, KPMG, Sapient and Tanning
Technology; and

- Internet professional service providers, such as Proxicom, Scient and US
Interactive.

Many of our competitors are substantially larger than we are and have
substantially greater financial, infrastructure and personnel resources than we
have. Furthermore, many of our competitors have well established, large and
experienced marketing and sales capabilities and greater name recognition than
we have. As a result, our competitors may be in a stronger position to respond
quickly to new or emerging technologies and changes in customer requirements.
They also may develop and promote their services more effectively than we do.
Moreover barriers to entry, particularly in the areas of information technology
consulting and integrating software applications, are low. We therefore expect
additional competitors to enter these markets.

12
<PAGE>
OUR OPERATIONS WILL SUFFER IF WE ARE UNABLE TO INTEGRATE AND RETAIN OUR SENIOR
MANAGERS.

Our success depends on the continued contributions of the principal members
of our senior management team, including David P. Porreca and Gregory R. Smith,
all of whom joined us in 1999. Some of these individuals have not worked
together previously and are currently becoming integrated as a management team.
As a result, our senior managers may not work together effectively. In addition,
due to the competitive nature of our industry, we may be unable to retain all of
our senior managers. Of our senior management team, only Messrs. Porreca,
Gregory R. Smith, Atkinson and Lake have employment agreements with us. If our
senior managers do not work together effectively, or terminate their
relationships with us, our business operations could be significantly disrupted.

GOVERNMENT AUDITS OF OUR GOVERNMENT CONTRACTS COULD CAUSE A MATERIAL NEGATIVE
ADJUSTMENT TO OUR REVENUES.

All companies that do work under government contracts are subject to audit.
Our work for the FAA may be audited by those entities or by their controlling
entities. These audits may occur several years after completion of the audited
work, and could result in modifications to our revenues from that work. While we
are not aware of any contemplated audits of that work, it could be audited in
the future and any such audit could result in a negative material adjustment to
our revenues.

INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS AGAINST US, EVEN WITHOUT MERIT, COULD
BE EXPENSIVE TO DEFEND AND MAY DIVERT MANAGEMENT'S ATTENTION.

We cannot be certain that the information technology products that we
deliver or the software or processes used in those products do not or will not
infringe valid patents, copyrights or other intellectual property rights held by
third parties. If there is infringement, we could be liable for substantial
damages. Any infringement claim, even one without merit, can be time consuming
and expensive to defend. Infringement claims may divert management's attention
and resources and could cause delays in implementing our information technology
products and services. If we are found to infringe a third party's intellectual
property rights, we may need to enter into royalty or licensing agreements.

IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS,
OUR BUSINESS COULD BE ADVERSELY AFFECTED.

Our intellectual property includes our trade secrets, copyrights, trademarks
and other proprietary information. We believe that our intellectual property is
important to our success and our competitive position, and we try to protect it.
However, our efforts may be inadequate. In addition, we may be unable to detect
unauthorized use of our intellectual property and take appropriate steps to
enforce our rights. Also, protection of intellectual property in many foreign
countries is weaker and less reliable than in the United States. Accordingly, if
our business expands further into foreign countries, risks associated with
protecting our intellectual property will increase.

BECAUSE WE OPERATE IN CANADA, WE FACE ADDITIONAL RISKS RELATED TO FOREIGN
POLITICAL AND ECONOMIC CONDITIONS.

As a result of our acquisition of SFG Technologies, a portion of our
operations is now conducted in Canada, and we are subject to risks that are
inherent in operating in a foreign jurisdiction. These risks that are most
applicable to our Canadian operations involve:

- unexpected changes in regulatory requirements;

- challenges in staffing and managing foreign operations;

- differing technology standards;

13
<PAGE>

- fluctuations in currency exchange rates; and

- potentially adverse tax consequences.

The effect of any of the risks referred to above could adversely affect our
operations.

RISKS RELATED TO OUR RELATIONSHIP WITH TITAN
FOLLOWING THIS OFFERING, TITAN'S CONTROL OF OUR COMPANY COULD MAKE IT DIFFICULT
FOR ANOTHER COMPANY TO ACQUIRE US, WHICH COULD DEPRESS OUR STOCK PRICE.

Following this offering, Titan will own all of our outstanding shares of
Class B common stock, which has ten votes per share, representing more than 94%
of our voting power. As a result, Titan will have the ability to control the
outcome of all matters requiring stockholder approval, including the election
and removal of our board of directors, approval of any merger, consolidation or
sale of all or substantially all of our assets. Titan also will have the ability
to control our management and affairs. This control could discourage others from
initiating any potential merger, takeover or other change of control transaction
that may otherwise be beneficial to our business or our stockholders. As a
result, this control could reduce the price that investors are willing to pay in
the future for shares of our Class A common stock.

OUR BUSINESS MAY BE DISADVANTAGED OR HARMED IF TITAN'S INTERESTS RECEIVE
PRIORITY OVER OUR INTERESTS.

Conflicts of interest may arise between Titan and us in a number of areas
relating to our past and ongoing relationships. Titan is a diversified
technology company whose offerings include information technology products and
services that it markets to defense, intelligence and other government agencies.
Titan also recently entered into an agreement to acquire AverStar, Inc., a
provider of information technology consulting services to business and
government customers. It is possible that we will compete directly with Titan in
the future. Other potential factors that may create a conflict of interest
between Titan and us include the following:

- the terms of the intercompany agreements that we have entered into with
Titan in connection with this offering, which include a corporate services
agreement, a facilities sharing agreement and a tax allocation agreement;

- sales or distributions by Titan of all or any portion of its ownership
interest in us;

- Titan's ability to control our management and affairs; and

- two of our directors and three of our executive officers are also
directors or executive officers of Titan.

We cannot guarantee that all conflicts will be resolved in a manner that is
favorable to us or that such conflicts will not result in harmful consequences
to our business or prospects.

SOME OF OUR DIRECTORS AND EXECUTIVE OFFICERS ARE ALSO DIRECTORS OR EXECUTIVE
OFFICERS OF TITAN, WHICH COULD CAUSE TITAN'S INTERESTS TO RECEIVE PRIORITY OVER
OUR INTERESTS.

Two of our directors and three of our executive officers are also directors
or executive officers of Titan. Because our financial results will be included
in Titan's consolidated financial statements, these directors and executive
officers may consider not only the short-term and long-term impact of financial
and operating decisions on us, but also the impact of these decisions on Titan's
consolidated financial results and its stockholders. In some instances, the
impact of these decisions could be disadvantageous to us while advantageous to
Titan. We cannot guarantee that all conflicts will be resolved in a manner that
is favorable to us or that such conflicts will not result in harmful
consequences to our business or prospects.

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<PAGE>

WE MAY BE UNABLE TO RAISE CAPITAL OR ISSUE COMMON STOCK IN CONNECTION WITH
ACQUISITIONS IN THE FUTURE BECAUSE OF OUR RELATIONSHIP WITH TITAN.

Because Titan may seek to maintain its beneficial ownership percentage of
our common stock for tax planning purposes or otherwise and may not desire to
acquire additional shares of common stock in connection with future financing
transactions, we may be constrained in our ability to raise equity capital in
the future or to issue common stock or other equity securities in connection
with future acquisitions.

OUR BUSINESS MAY SUFFER BECAUSE WE ENTERED INTO AFFILIATE AGREEMENTS WITH TITAN
THAT ARE NOT BASED ON ARM'S LENGTH NEGOTIATIONS.

Prior to the completion of this offering, we expect to enter into various
intercompany agreements with Titan including a corporate services agreement,
facilities sharing agreement and tax allocation agreement. Because we are
currently a majority-owned subsidiary of Titan, none of these agreements will
result from arm's length negotiations. These agreements may include terms and
conditions that may be more or less favorable to us than terms contained in
similar agreements negotiated with third parties.

RISKS RELATED TO THIS OFFERING

OUR STOCK PRICE COULD BE VOLATILE, WHICH COULD RESULT IN SUBSTANTIAL LOSSES FOR
INVESTORS PURCHASING SHARES IN THIS OFFERING.

The trading price of our Class A common stock could be volatile. Prices for
our Class A common stock will be based in part on our quarterly revenues and
operating results, which we expect to fluctuate for the reasons discussed above
in this "Risk Factors" section. In addition, as a provider of information
technology products and services, our stock price could be impacted by general
volatility in the stock prices for technology companies that has from time to
time been experienced in the markets. Investors may be unable to sell their
Class A common stock at or above our initial public offering price. We also
cannot be sure that an active public market for our Class A common stock will
develop or continue after this offering.

MANAGEMENT HAS BROAD DISCRETION AS TO THE USE OF THE PROCEEDS OF THIS OFFERING
AND MAY NOT USE THE PROCEEDS IN WAYS WHICH ENHANCE OUR MARKET VALUE OR RESULTS
OF OPERATIONS.

Our management will retain broad discretion to allocate the proceeds of this
offering. Management's failure to apply these funds effectively could have an
adverse effect on our ability to implement our strategy.

SHARES BECOMING AVAILABLE FOR SALE COULD ADVERSELY AFFECT OUR STOCK PRICE.

Sales of a substantial number of shares of our common stock in the public
market after this offering could depress the market price of our Class A common
stock and could impair our ability to raise capital through the sale of
additional equity securities. After this offering, we will have outstanding
13,028,410 shares of our Class A common stock. All the shares sold in this
offering will be freely tradable. Of the remaining 6,528,410 shares of Class A
common stock outstanding after this offering, 4,945,675 of such shares will be
eligible for sale in the public market beginning 181 days after the date of this
prospectus under Rules 144 and 701 of the Securities Act. After this offering,
we will also have outstanding 20,650,000 shares of our Class B common stock, all
of which is held by Titan and is convertible at Titan's option into shares of
our Class A common stock on a one-to-one basis. If Titan were to convert its
Class B shares into Class A shares, all of the Class A shares it would receive
upon such conversion would also be eligible for sale in the public market
beginning 181 days after the date of this prospectus under Rule 144 of the
Securities Act. In addition, after completion of this offering

15
<PAGE>

and giving effect to the exercise of warrants outstanding to purchase
1,023,827 shares of Class A common stock, the holders of 2,606,562 shares of our
Class A common stock will be entitled to cause us to register their shares on
Form S-3 under the Securities Act when we are eligible to do so, so long as the
value of the registered shares is $4.0 million or more. These holders, along
with the holders of all of our outstanding preferred stock that will convert
into 4,842,425 shares of our Class A common stock upon the closing of this
offering, also have "piggyback" registration rights if we register any of our
Class A common stock under the Securities Act following this offering. Except
for shares purchased by our affiliates, registration of these shares under the
Securities Act would result in these shares becoming eligible for sale in the
public market immediately upon the effectiveness of the registration. After this
offering, we also intend to register up to 7,124,250 additional shares of our
Class A common stock for sale upon the exercise of outstanding stock options
issued pursuant to, or reserved for future issuance under, our 1997 and
Nonstatutory Stock Option Plans.

YOU WILL SUFFER IMMEDIATE AND SUBSTANTIAL DILUTION.

Purchasers of Class A common stock in this offering will pay a price per
share which is substantially higher than the per share value of our assets after
subtracting our liabilities. In addition, assuming a price per share of $13.00,
purchasers of Class A common stock in this offering will have contributed
approximately 86.1% of the aggregate price paid by all purchasers of our stock
but will own only approximately 19.3% of our common stock outstanding after this
offering.

WE MAY NEED ADDITIONAL CAPITAL, WHICH MAY NOT BE AVAILABLE TO US, AND WHICH, IF
RAISED, MAY HURT OUR EXISTING STOCKHOLDERS.

We may need to raise additional funds through public or private equity or
debt financings in order to:

- support additional capital expenditures;

- take advantage of acquisition or expansion opportunities;

- develop new information technology products or services; or

- address additional working capital needs.

If we raise additional funds through the issuance of equity or debt securities
that have rights senior to those of our existing stockholders, our stockholders
may experience additional dilution or may lose other rights. We cannot be
certain that additional financing will be available to us on favorable terms
when required, or at all. If we cannot raise funds on acceptable terms, if and
when needed, we may be forced to curtail some or all of the above activities and
may not be able to grow our business or respond to competitive pressures or
unanticipated developments.

WE HAVE ANTI-TAKEOVER DEFENSES THAT COULD DELAY OR PREVENT AN ACQUISITION AND
COULD ADVERSELY AFFECT THE PRICE OF OUR CLASS A COMMON STOCK.

Provisions of our amended certificate of incorporation and bylaws and
provisions of Delaware law could delay, defer or prevent an acquisition or
change of control involving us or otherwise adversely affect the price of our
Class A common stock. For example, our board of directors is staggered in three
classes, so that only one-third of the directors can be replaced at any annual
meeting. Additionally, our bylaws eliminate the ability of stockholders to call
a special meeting. Our amended certificate of incorporation also permits our
board of directors to issue shares of preferred stock without stockholder
approval. In addition to delaying or preventing an acquisition, the issuance of
a substantial number of preferred shares could adversely affect the price of the
Class A common stock.

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<PAGE>

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve risks and
uncertainties. These statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology including "could," "may," "will," "should," "expect," "intend,"
"plan," "anticipate," "believe," "estimate," "predict," "potential," "continue"
or "opportunity," the negative of these terms or other comparable terminology.
These statements are only predictions. Actual events or results may differ
materially. In evaluating these statements, you should specifically consider
various factors, including the risks described above and in other parts of this
prospectus. These factors may cause our actual results to differ materially from
any forward-looking statement.

Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot and do not guarantee future results, levels
of activity, performance or achievements.

USE OF PROCEEDS

Assuming an initial public offering price of $13.00 per share, we estimate
that the net proceeds to us from this offering will be approximately
$77.1 million, after deducting the underwriting discounts and commissions and
estimated offering expenses. We estimate that the net proceeds to us from this
offering will be $88.9 million if the underwriters' over-allotment option is
exercised in full.

We intend to use the net proceeds from this offering as follows:

- approximately $20 million to expand our sales and marketing programs,
including brand identity enhancement;

- approximately $5 million to continue the development of our proprietary
software applications;

- approximately $20 million for capital expenditures, which we anticipate
will include capital expenditures for hardware and infrastructure related
to our TSP offering;

- approximately $4.3 million in aggregate that we will pay in May 2001 and
June 2001 to the former owners of Mainsaver and Assist Cornerstone,
subject to the satisfaction of indemnification obligations owed to us by
them under our agreements to acquire these companies; and

- and the balance for general corporate purposes, including to fund
administrative costs and operating costs of our network operating centers.

Our management will retain broad discretion in the allocation of the net
proceeds of this offering. The amounts we actually spend will depend on a number
of factors, including the amount of our future revenues and other factors
described elsewhere in this prospectus. We may also use a portion of the net
proceeds to invest in additional businesses, business development, products and
technologies, or to establish joint ventures that we believe will complement our
current or future business. However, we have no specific plans, agreements or
commitments to do so and are not currently engaged in any negotiations for any
acquisition or joint venture. Pending these uses, we will invest the net
proceeds of this offering in short-term, interest-bearing, investment-grade
securities.

DIVIDEND POLICY

We have never declared or paid any cash dividends on our capital stock. We
currently intend to retain any future earnings to finance the growth and
development of our business and therefore do not anticipate paying any cash
dividends in the foreseeable future. Any future determination to pay cash
dividends will be at the discretion of our board of directors and will be
dependent upon our financial condition, results of operations, capital
requirements, general business conditions and other factors that the board of
directors may deem relevant.

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<PAGE>
CAPITALIZATION

The following table sets forth our capitalization as of December 31, 1999:

- on an actual basis, without giving effect to a 2.065 to 1 split in our
Class A and Class B common stock that will become effective prior to the
closing of this offering;

- on a pro forma basis after giving effect to the issuance of
516,250 shares of our Class A common stock to Penton as if that issuance
had occurred on December 31, 1999 and an amendment to our certificate of
incorporation to increase our authorized Class A common stock to
250,000,000 shares and to increase our authorized Class B common stock to
103,250,000 shares; and

- on a pro forma as adjusted basis, giving effect to the conversion of all
of our outstanding shares of preferred stock into 4,842,425 shares of
Class A common stock upon the closing of this offering and to our issuance
of the Class A common stock offered hereby at an assumed price of
$13.00 per share and the application of the net proceeds therefrom.

This information should be read in conjunction with our financial statements
and related notes thereto included elsewhere in this prospectus.

<TABLE>
<CAPTION>
DECEMBER 31, 1999
----------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
-------- --------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Long-term debt, less current portion........................ $57,451 $57,451 $ 57,451
------- ------- --------
Stockholders' equity (1):
Preferred stock, $.001 par value; 17,345,000 authorized;
Series A convertible preferred stock, $.001 par value;
2,345,000 shares authorized and 2,345,000 issued and
outstanding, actual; 4,842,425 shares authorized and
4,842,425 shares issued and outstanding, pro forma;
4,842,425 shares authorized and none issued and
outstanding, pro forma as adjusted.................... 2 5 --
Class A common stock, $.001 par value;
100,000,000 shares authorized, 566,458 issued and
outstanding, actual; 250,000,000 shares authorized and
1,685,985 shares issued and outstanding, pro forma;
250,000,000 shares authorized and 13,028,410 shares
issued and outstanding, pro forma as adjusted......... 1 2 13
Class B common stock, $.001 par value;
50,000,000 shares authorized and 10,000,000 shares
issued and outstanding, actual; 103,250,000 shares
authorized and 20,650,000 shares issued and
outstanding, pro forma and pro forma as adjusted...... 10 21 21
Additional paid-in capital.................................. 7,248 13,606 90,700
Deferred compensation....................................... (1,675) (1,675) (1,675)
Foreign currency translation................................ (33) (33) (33)
Retained earnings........................................... 6,497 6,497 6,497
------- ------- --------
Total stockholders' equity........................ 12,050 18,423 95,523
------- ------- --------
Total capitalization.......................... $69,501 $75,874 $152,974
======= ======= ========
</TABLE>

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

(1) Other than the issuance to Penton described above, share numbers in the
table do not include issuances subsequent to December 31, 1999 or the
following shares:

- 7,124,250 shares of Class A common stock reserved for issuance under our
1997 and Nonstatutory Stock Option Plans, of which 5,195,024 shares were
covered by outstanding options at a weighted average exercise price of
$1.69 per share at March 28, 2000; and

18
<PAGE>

- 1,023,827 shares of our Class A common stock issuable upon exercise of
outstanding warrants at a weighted average exercise price of $6.35 per
share.

DILUTION

As of December 31, 1999, our pro forma as adjusted net tangible book value
deficit, after giving effect to the conversion of our preferred stock then
outstanding and our issuance of 516,250 shares of our Class A common stock to
Penton, was approximately $51.0 million, or $1.88 per share of common stock. Our
pro forma as adjusted net tangible book value deficit is equal to, after giving
effect to the adjustments described in the previous sentence, our total tangible
assets minus our total liabilities, divided by the number of shares of common
stock outstanding. After giving effect to the sale of our Class A common stock
offered by this prospectus at an assumed initial public offering price of
$13.00 per share, and after deducting underwriting discounts and commissions and
our estimated offering expenses, our pro forma as adjusted net tangible book
value as of December 31, 1999 would have been approximately $26.1 million, or
$0.77 per share. This represents an immediate increase in pro forma as adjusted
net tangible book value of $2.65 per share to existing stockholders and an
immediate dilution of $12.23 per share to new investors. The following table
illustrates this per share dilution:

<TABLE>
<CAPTION>
PER SHARE
-------------------------------
<S> <C> <C>
Assumed initial public offering price...................... $ 13.00
Pro forma as adjusted net tangible book value deficit
before the offering.................................... $ (1.88)
Increase attributable to new investors................... 2.65
--------------
Pro forma as adjusted net tangible book value after this
offering................................................. 0.77
--------------
Dilution to new investors.................................. $ 12.23
==============
</TABLE>

The following table summarizes, on a pro forma as adjusted basis as of
December 31, 1999, the differences between existing stockholders and the new
investors with respect to the number of shares of common stock purchased from
us, the total consideration paid to us and the average price per share paid
before deducting underwriting discounts and commissions and our estimated
offering expenses.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
------------------------- --------------------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
----------- -------- ------------------- -------- --------------
<S> <C> <C> <C> <C> <C>
Existing stockholders (1)......... 27,178,410 80.7% $ 13,606,000 13.9% $ 0.50
New investors..................... 6,500,000 19.3 $ 84,500,000 86.1% $ 13.00
----------- ----- ------------------- -----
Total........................... 33,678,410 100.0% $ 98,106,000 100.0%
=========== ===== =================== =====
</TABLE>

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

(1) Gives effect to the conversion of all of our outstanding preferred stock
into 4,842,425 shares of Class A common stock upon the closing of this
offering and our issuance of 516,250 shares of our Class A common stock to
Penton, and assumes no exercise of stock options outstanding as of
December 31, 1999. As of December 31, 1999, there were options outstanding
to purchase a total of 5,195,024 shares of our Class A common stock, with a
weighted average exercise price of $1.69 per share. We also currently have
warrants outstanding to purchase a total of 1,023,827 shares of our Class A
common stock at a weighted average exercise price of $6.35 per share. If any
of these options or warrants are exercised, there will be further dilution
to new investors.

19
<PAGE>
SELECTED HISTORICAL ACTUAL AND PRO FORMA FINANCIAL INFORMATION

The following selected financial information should be read in conjunction
with the Cayenta, Transnational Partners II, Mainsaver, Assist Cornerstone and
SFG Technologies financial statements and the related notes thereto and
"Management's Discussion and Analysis of Financial Condition and Operating
Results" included elsewhere in this prospectus. The pro forma statement of
operations information for the year ended December 31, 1999 should be read in
conjunction with the unaudited pro forma financial statements included elsewhere
in this prospectus. That information assumes that we completed the acquisitions
of Mainsaver, Assist Cornerstone and SFG Technologies as of January 1, 1999. The
unaudited pro forma statement of operations information is based on our
historical operating results and those of Mainsaver, Assist Cornerstone and SFG
Technologies for the period presented and gives effect to the amortization of
goodwill related to the acquisitions, the interest expense relating to the
acquisitions, and the resulting provision for income taxes. Our statement of
income information for the years ended December 31, 1996, 1997, 1998 and 1999
are derived from our audited financial statements, which are included elsewhere
in this prospectus for the years ended December 31, 1997, 1998 and 1999. Our
balance sheet information as of December 31, 1996, 1997, 1998 and 1999 are
derived from our audited financial statements, which are included elsewhere in
this prospectus for the years ended as of December 31, 1998 and 1999. Our
statement of income information for the year ended December 31, 1995 and the
balance sheet information as of December 31, 1995 are derived from our unaudited
financial statements. The unaudited financial statements have been prepared on
substantially the same basis as the audited financial statements and include all
adjustments, consisting only of normal recurring adjustments, that we consider
necessary for a fair presentation of the financial position and results of
operations for the periods.

Prior to our acquisitions of Mainsaver, Assist Cornerstone and SFG
Technologies, we were a profitable company. For example, we had net income of
$1.3 million for the year ended December 31, 1998 and net income of $2.6 million
for the nine months ended September 30, 1999. With our acquisitions of
Mainsaver, Assist Cornerstone and SFG Technologies during late 1999, each of
which has historically been unprofitable, we have begun to have losses and
expect our losses to continue for the foreseeable future. We expect that the
sources of our future losses will be different from the sources of Mainsaver's,
Assist Cornerstone's and SFG Technologies' historical losses, which we are
attempting to eliminate by consolidating many of the selling, administrative and
research and development activities of those individual businesses. We expect
that our future losses will result primarily from our efforts to further develop
our TSP offering. As part of our efforts to further develop our TSP offering, we
expect our selling, general and administrative expenses to increase
significantly as we expand our recruiting and sales and marketing efforts,
increase our direct sales staff and build our administrative infrastructure. We
also expect our research and development expenses to increase as we integrate
the software we acquired in the Mainsaver, Assist Cornerstone and SFG
Technologies acquisitions into our TSP offering. We also expect that our future
losses will result from the increased interest expense associated with the
borrowings that funded our recent acquisitions and the related amortization of
goodwill associated with those acquisitions. For the year ended December 31,
1999, on a pro forma basis, our goodwill amortization expense was $3.1 million.
We anticipate that our future revenue sources will also be different from
Mainsaver's, Assist Cornerstone's and SFG Technologies' historical revenue
sources. Mainsaver, Assist Cornerstone and SFG Technologies have all
historically derived a substantial portion of their revenues from licensing
software and sales of hardware. While we will continue to license our software
and the software developed by Mainsaver, Assist Cornerstone and SFG Technologies
separately, we expect that an increasing percentage of our future revenues will
be generated by periodic recurring fees from sales of our TSP offering under
long-term contracts, and a decreasing percentage of our future revenues will be
generated by licensing of software and hardware sales. Given these expected
changes in the sources of our future losses and revenues from what we have
historically experienced, we believe that our

20
<PAGE>

historical and pro forma historical financial information is not, and should not
be relied upon as, a meaningful indicator of our future financial performance.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------
1995 1999
(UNAUDITED) 1996 1997 1998 1999 (UNAUDITED)
----------- -------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
PRO
ACTUAL FORMA(1)
-------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENTS OF OPERATIONS INFORMATION:
Revenues........................................... $ 5,145 $ 8,633 $10,191 $12,095 $40,262 $65,578
Cost of revenues................................... 3,806 6,068 6,514 7,413 28,335 37,803
------- ------- ------- ------- ------- -------
Gross profit..................................... 1,339 2,565 3,677 4,682 11,907 27,775

Operating expenses:
Selling, general and administrative.............. 700 1,831 1,705 2,259 4,367 21,579
Research and development......................... -- -- -- -- 16 3,877
------- ------- ------- ------- ------- -------
Income (loss) from operations...................... 639 734 1,972 2,423 7,524 2,319
Interest expense................................... 72 116 139 204 1,740 7,155
------- ------- ------- ------- ------- -------
Income (loss) before tax........................... 567 618 1,833 2,219 5,784 (4,836)
Income tax provision............................... 198 247 734 908 2,392 770
------- ------- ------- ------- ------- -------
Net income (loss).................................. $ 369 $ 371 $ 1,099 $ 1,311 $ 3,392 $(5,606)
======= ======= ======= ======= ======= =======
Diluted earnings (loss) per share.................. $ 0.04 $ 0.04 $ 0.11 $ 0.13 $ 0.26 $ (0.53)
======= ======= ======= ======= ======= =======
Weighted average common shares and common share
equivalents used in computing diluted earnings
per share (2).................................... 10,000 10,000 10,030 10,148 13,182 10,521(3)
======= ======= ======= ======= ======= =======
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------------------
1995
(UNAUDITED) 1996 1997 1998 1999
----------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET INFORMATION:
Cash........................................................ $ -- $ -- $ -- $ -- $ 6,938
Working capital (deficit)................................... 1,196 3,164 3,086 8,036 (8,239)
Total assets................................................ 1,296 3,280 4,641 11,923 100,930
Total long-term obligations................................. 198 216 -- -- 57,451
Total stockholders' equity.................................. 1,098 3,064 3,980 8,906 12,050
</TABLE>

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

(1) The pro forma column gives effect to the acquisitions of Mainsaver, Assist
Cornerstone and SFG Technologies as if they had occurred as of January 1,
1999.

(2) For the number of shares used in the per share calculations, see the
historical pro forma Cayenta financial statements and Note 2 to the
historical actual Cayenta financial statements.

(3) Assumes the issuance of our shares of Class A common stock to complete the
acquisition of Assist Cornerstone as if such issuance had occurred at
January 1, 1999.

21
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND OPERATING RESULTS

THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE "SELECTED
HISTORICAL ACTUAL AND PRO FORMA FINANCIAL INFORMATION" AND THE AUDITED AND
UNAUDITED ACTUAL AND PRO FORMA HISTORICAL FINANCIAL STATEMENTS INCLUDED
ELSEWHERE IN THIS PROSPECTUS. THIS DISCUSSION AND ANALYSIS CONTAINS
FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. EXAMPLES OF
FORWARD-LOOKING STATEMENTS INCLUDE STATEMENTS REGARDING OUR FUTURE FINANCIAL
RESULTS AND OPERATING RESULTS, OUR BUSINESS STRATEGY, OUR PROJECTED COSTS, OUR
FUTURE INFORMATION TECHNOLOGY PRODUCTS AND SERVICES (INCLUDING OUR TSP
OFFERING), OUR PLANS TO INTEGRATE RECENTLY ACQUIRED BUSINESSES, OUR COMPETITIVE
POSITION AND THE PLANS AND OBJECTIVES OF OUR MANAGEMENT FOR FUTURE OPERATIONS.
OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE
FORWARD-LOOKING STATEMENTS AS A RESULT OF RISKS AND UNCERTAINTIES AND OTHER
IMPORTANT FACTORS, INCLUDING THOSE SET FORTH UNDER "RISK FACTORS" INCLUDED
ELSEWHERE IN THIS PROSPECTUS.

INTRODUCTION

Our objective is to be a total services provider of comprehensive
information technology products and services for our customers' business
functions. We define a total services provider, or TSP, as an information
technology services company that expands upon the delivery and hosting of
standard third party software applications generally provided by companies
called application service providers. Our TSP offering combines standard and
proprietary software applications that we tailor for our customers' business
processes with operational, hosting, management and support services that we
provide for those software applications. Our information technology products and
services address the following business processes of our customers: e-business,
finance, accounting, customer billing and collection, contract management,
supply chain management and equipment monitoring and maintenance. We believe our
TSP offering provides our customers with a number of benefits over internally
developed and hosted systems, including lower and more predictable capital and
operating costs, quicker deployment and greater adaptability, scalability and
reliability.

We have historically derived our revenues from our consulting services and
from sales of our proprietary software applications. Our revenues from our
consulting services represented 94.6% of our actual revenues during 1999 and our
revenues from sales of our software applications represented 5.4% of our actual
revenues during 1999. Our consulting services include evaluations of our
customers' information technology strategies and existing system designs,
redesign of those existing systems, and systems integration. Our proprietary
software applications include applications for e-business, finance, accounting,
customer billing and collection, contract management, supply chain management
and equipment monitoring and maintenance. We provide our services primarily on a
fixed-time, fixed-price basis and, to a lesser extent, on a time and materials
basis. Under our fixed-time, fixed-price contracts, we recognize revenues on a
percentage of completion basis. Our fixed-time, fixed-price contracts usually
require an advance payment from our customer with additional payments due on
achievement of specific milestones or on a predetermined schedule. Revenues
earned but not yet billed are recorded as unbilled receivables. Under our time
and materials contracts, we are paid at an agreed upon hourly rate for the
actual time spent on a customer's projects, and revenues are recorded at the
time services are performed. For the twelve months ended December 31, 1999,
revenues from fixed-time, fixed-price contracts represented 70.0% of our actual
consulting revenues and revenues from time and materials contracts represented
30.0% of our actual consulting revenues. Each of Mainsaver, Assist Cornerstone
and SFG Technologies recognizes revenues from the sale of its proprietary
software when the software is delivered and accepted, in accordance with the
American Institute of Certified Public Accountants' Statement of Position 97-2,
"Software Revenue Recognition". The related software support and maintenance is
billed at the beginning of the maintenance period, recognized ratably over the
term of the applicable contract, and recorded as deferred revenues until
recognized.

22
<PAGE>

For the year ended December 31, 1999, revenues from the District of Columbia
accounted for approximately 38.1% of our actual revenues and approximately 23.4%
of our pro forma revenues, revenues from Sempra Energy accounted for
approximately 26.8% of our actual revenues and approximately 18.9% of our pro
forma revenues, and revenues from the FAA accounted for approximately 21.0% of
our actual revenues and approximately 12.9% of our pro forma revenues. We expect
to continue to derive a significant portion of our revenues from a limited
number of customers during 2000 as we focus our sales and marketing efforts on
our TSP offering, particularly to Global 1000 companies. As we expand the
portion of our business that is based on our TSP offering, we intend to enter
into contracts with terms of between three and five years, and anticipate that
any such contracts we enter into with Global 1000 companies will likely
represent a significant portion of our revenues during 2000. To the extent that
we enter into contracts of this type, we expect that our revenues from
consulting services on a standalone basis and separate sales of software
applications will decrease as a percentage of total revenues. We also have
several existing contracts that we believe will provide significant revenues
during 2000. We expect revenues from our TSP offering to consist of periodic
recurring fees from ongoing services that will be recognized ratably over the
applicable contract's term. In addition, we expect to receive consulting fees
that will be recognized in accordance with our revenue recognition policies
discussed above.

Our cost of revenues consists primarily of the salaries, benefits and
non-billable direct expenses of our consulting personnel and fees paid to
independent consultants. The number of consultants we assign to a project varies
according to the size, complexity, duration and demands of the project. Our cost
of revenues has included costs under one significant subcontract for our work
for the District of Columbia. We expect subcontract costs to decline in the
future.

Our selling, general and administrative expenses consist primarily of
non-project personnel costs, occupancy costs, staff recruiting costs, travel
expenses, depreciation expenses, and sales, marketing and promotional costs.
Administrative expenses also include an expense allocation from Titan for its
performance on our behalf of routine corporate services, including financial,
insurance, accounting, employee benefits, payroll, tax and legal services. Prior
to completion of this offering, we will enter into a corporate services
agreement with Titan under which Titan will provide these services for a term of
one year from the date of the agreement unless the agreement is renewed in
accordance with its terms. We expect our selling, general and administrative
expenses to increase significantly as we expand our recruiting and sales and
marketing efforts, further develop and launch our TSP offering, increase our
direct sales staff and build our administrative infrastructure.

Historically, we have not incurred significant research and development
expenses because most of our software applications were created as part of our
consulting business or were developed by Mainsaver, Assist Cornerstone or SFG
Technologies before we acquired them. We expect our research and development
expenses to increase as we integrate recently acquired software into, and
further develop, our TSP offering.

Historically, our interest expense has related to borrowings from Titan to
fund our acquisitions and working capital requirements. As of March 28, 2000, we
owed approximately $68.4 million to Titan on which we will make quarterly
interest payments at the greater of the rate of 10% per annum or Titan's
effective weighted average interest rate under its senior credit facility,
subject to applicable limits on interest rates established by law. Titan's
effective weighted average interest rate is calculated at any given period of
time by multiplying the daily balance of Titan's total bank debt outstanding
times the applicable interest rate for that day, which yields an interest
expense for that day. The sum of the daily interest expense amounts is divided
by the sum of the daily balances of the total bank debt outstanding to yield a
daily effective weighted average interest rate which is then multiplied by 365
to yield an annual effective weighted average interest rate. Titan's effective
weighted average interest rate under its senior credit facility as of March 28,
2000 was 9.44%.

23
<PAGE>
ACQUISITIONS AND STRATEGIC INVESTMENTS

We completed four acquisitions in 1999. Each of the acquired businesses
develops software that businesses use to streamline and control various business
processes. We intend to integrate the software developed by these companies into
our TSP offering.

TRANSNATIONAL PARTNERS II. In January 1999, we acquired substantially all
of the assets of Transnational Partners II, a consulting company that focused on
system integration and architecture. We acquired these assets for an initial
installment of $7.0 million in cash and 4,842,425 shares of our convertible
preferred stock. We also paid off an additional $2.8 million note that we issued
as part of our acquisition of Transnational Partners II, plus 7% interest
thereon, in February 2000.

MAINSAVER. In November 1999, we acquired J.B. Systems, a company doing
business under the name Mainsaver that sells software that enables its customers
to efficiently manage their equipment maintenance processes. We acquired
Mainsaver for $11.7 million in cash, of which $8.2 million was paid at the
closing, $500,000 was retained by Cayenta to satisfy a working capital shortfall
in February 2000 and $3.0 million is due in May 2001, after satisfaction of
possible working capital adjustments or indemnification obligations. In
addition, we paid approximately $3.4 million to reduce outstanding indebtedness
of Mainsaver.

ASSIST CORNERSTONE. In December 1999, we acquired Assist Cornerstone, a
company that sell e-commerce software. We acquired Assist Cornerstone for
1,066,485 shares of our Class A common stock and approximately $12.9 million in
cash, of which $9.9 million was paid at the closing, $1.7 million was paid in
March 2000 and $1.3 million is due in June 2001, after satisfaction of possible
working capital adjustments or indemnification obligations. In addition, we paid
approximately $3.2 million to retire outstanding indebtedness of Assist
Cornerstone and redeem all of its outstanding redeemable preferred stock.

SFG TECHNOLOGIES. In December 1999, we acquired SFG Technologies, a company
that sells software to utilities that utilities use to manage and monitor their
revenue cycles. We acquired SFG Technologies for $11.6 million in cash, of which
$9.5 million was paid at the closing, $600,000 was paid in March 2000 and
$1.5 million is due in June 2001, after satisfaction of possible working capital
adjustments or indemnification obligations. In addition, we paid approximately
$3.1 million to retire outstanding indebtedness of SFG Technologies and redeem
all of its outstanding redeemable preferred stock.

Each of these acquisitions was accounted for using the purchase method,
resulting in approximately $66.4 million of goodwill. The goodwill from the
Transnational Partners II acquisition is being amortized over a 30 year period
from the date of acquisition. Goodwill related to the Mainsaver, Assist
Cornerstone and SFG Technologies acquisitions is being amortized over a 20 year
period from the date of each of the respective acquisitions.

In addition, in September 1999, together with Sempra Energy Information
Solutions, a subsidiary of Sempra Energy, and modis, a company that focuses on
implementing software applications for its customers, we established Soliance,
which markets and delivers information technology products and services,
including TSP offerings, to customers in the utility industry. We invested
$5.0 million in cash for a 10% equity interest in the joint venture. We could
also be required to make up to $2.5 million in additional capital contributions
based upon the unanimous vote of ourselves, Sempra Energy Information Solutions
and modis if Soliance requires additional capital.

PRO FORMA RESULTS

Prior to our acquisitions of Mainsaver, Assist Cornerstone and SFG
Technologies, we were a profitable company. For example, we had net income of
$1.3 million for the year ended December 31,

24
<PAGE>

1998 and net income of $2.6 million for the nine months ended September 30,
1999. With our acquisitions of Mainsaver, Assist Cornerstone and SFG
Technologies during late 1999, each of which has historically been unprofitable,
we have begun to have losses and expect our losses to continue for the
foreseeable future. We expect that the sources of our future losses will be
different from the sources of Mainsaver's, Assist Cornerstone's and SFG
Technologies' historical losses, which we are attempting to eliminate by
consolidating many of the selling, administrative and research and development
activities of those individual businesses. We expect that our future losses will
result primarily from our efforts to further develop our TSP offering. As part
of our efforts to further develop our TSP offering, we expect our selling,
general and administrative expenses to increase significantly as we expand our
recruiting and sales and marketing efforts, increase our direct sales staff and
build our administrative infrastructure. We also expect our research and
development expenses to increase as we integrate the software we acquired in the
Mainsaver, Assist Cornerstone and SFG Technologies acquisitions into our TSP
offering. We also expect that our future losses will result from the increased
interest expense associated with the borrowings that funded our recent
acquisitions, and the related amortization of goodwill associated with those
acquisitions. For the year ended December 31, 1999, on a pro forma basis, our
goodwill amortization expense was $3.1 million. We anticipate that our future
revenue sources will also be different from Mainsaver's, Assist Cornerstone's
and SFG Technologies' historical revenue sources. Mainsaver, Assist Cornerstone
and SFG Technologies have all historically derived a substantial portion of
their revenues from licensing software and sales of hardware. While we will
continue to license our software and the software developed by Mainsaver, Assist
Cornerstone and SFG Technologies separately, we expect that an increasing
percentage of our future revenues will be generated by periodic recurring fees
from sales of our TSP offering under long-term contracts, and a decreasing
percentage of our future revenues will be generated by licensing of software and
hardware sales. Given these expected changes in the sources of our future losses
and revenues from what we have historically experienced, we believe that our
historical and pro forma historical financial information is not, and should not
be relied upon as, a meaningful indicator of our future financial performance.

RESULTS OF OPERATIONS

COMPARISON OF YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
----------------------------
1998 1999
------------ ----------
(IN THOUSANDS)
<S> <C> <C>
CONSOLIDATED STATEMENTS OF INCOME INFORMATION:
Revenues.................................................... 100.0% 100.0%
Cost of revenues............................................ 61.3 70.4
----- -----
Gross profit.............................................. 38.7 29.6
Selling, general and administrative expenses................ 18.7 10.7
----- -----
Income from operations...................................... 20.0% 18.9%
</TABLE>

REVENUES. Revenues increased to $40.3 million for the year ended
December 31, 1999 from $12.1 million for the year ended December 31, 1998. This
increase in revenues was primarily a result of a significant new contract with
the District of Columbia that accounted for $15.3 million in revenues in the
period, $12.5 million in revenues contributed by the Transnational Partners II
business that was acquired in January 1999, and $2.5 million in revenues
contributed as a result of the acquisition of three companies in the fourth
quarter of 1999.

COST OF REVENUES. Cost of revenues increased to $28.4 million for the year
ended December 31, 1999 from $7.4 million for the year ended December 31, 1998,
primarily as a result of an increase in

25
<PAGE>

our work under our consulting contracts and growth in our number of billable
personnel, including independent consultants, as a result of our acquisition of
Transnational Partners II. Our subcontract costs in our consulting business
increased from $3.2 million for the year ended December 31, 1998 to
$13.9 million for the year ended December 31, 1999 primarily because of our use
of a subcontractor for a majority of the work under our contract with the
District of Columbia.

GROSS PROFIT MARGIN. Our gross profit margin decreased to 29.6% for the
year ended December 31, 1999 from 38.7% for the year ended December 31, 1998.
This decrease was primarily due to the increase in subcontract costs described
above. We anticipate that our gross profit margin will increase because we
expect to reduce our subcontract costs, increase our billable rates, and
generate higher margin sales from our TSP offering.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased to $4.4 million for the year ended
December 31, 1999 from $2.3 million for the year ended December 31, 1998. This
increase primarily related to increased personnel costs and lease expense as a
result of our acquisition of four companies in 1999. Selling, general and
administrative expenses as a percentage of revenues decreased to 10.9% for the
year ended December 31, 1999 from 18.7% for the year ended December 31, 1998.
This percentage decrease resulted from a higher proportion of our administrative
costs being billable to customers under some of our contracts. We expect
selling, general and administrative expenses to increase significantly as we
expand our recruiting efforts, further develop and launch our TSP offering,
increase our direct sales staff, and build our administrative infrastructure.

STOCK-BASED COMPENSATION. During 1999, we granted 4,344,141 options for
shares of our Class A common stock with an average exercise price of $1.69 per
share. These option grants resulted in deferred compensation to us calculated as
the difference between the fair market value of the shares of common stock
underlying the option at the date of grant and the option exercise price. The
deferred compensation is amortized over the vesting period of the underlying
option which is four years. Accordingly, we recorded non-cash compensation
expense of $0.2 million and deferred $1.6 million for the year ended
December 31, 1999. We expect that there will be an additional charge related to
deferred compensation at the time the initial public offering closes, and that
this charge will be material.

INTEREST EXPENSE. Interest expense increased to $1.7 million for the year
ended December 31, 1999 from $204,000 for the year ended December 31, 1998. This
increase in interest expense primarily related to borrowings from Titan to fund
our four acquisitions in 1999 and our working capital requirements.

INCOME TAX PROVISION. For 1999, we will be included in Titan's consolidated
federal income tax return. The provision for income taxes for the year ended
December 31, 1999 was $2.4 million compared to $908,000 for the year ended
December 31, 1998. Following completion of this offering, we expect to file
separate federal income tax returns beginning with our return for the year 2000.

26
<PAGE>

COMPARISON OF YEARS ENDED DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
----------------------
1997 1998
-------- --------
(IN THOUSANDS)
<S> <C> <C>
STATEMENT OF INCOME INFORMATION:
Revenues.................................................... 100.0% 100.0%
Cost of revenues............................................ 63.9 61.3
------- -------
Gross profit.............................................. 36.1 38.7
Selling, general and administrative expenses................ 16.7 18.7
------- -------
Income from operations...................................... 19.4% 20.0%
</TABLE>

REVENUES. Revenues increased 18.7% to $12.1 million for the year ended
December 31, 1998 from $10.2 million for the year ended December 31, 1997. The
increase in revenues was primarily a result of an increase in work for our
principal customer. In 1998 and 1997, substantially all of our revenues were
derived from the FAA.

COST OF REVENUES. Cost of revenues increased 13.8% to $7.4 million for the
year ended December 31, 1998 from $6.5 million for the year ended December 31,
1997. The increase in cost of revenues was primarily as a result of an increase
in our work under our consulting contract and related growth in our number of
billable personnel, including independent consultants.

GROSS PROFIT MARGIN. Our gross profit margin increased to 38.7% for the
year ended December 31, 1998 from 36.1% for the year ended December 31, 1997.
This improvement primarily related to increased productivity under our
fixed-time, fixed-price contracts.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased 32.5% to $2.3 million for the year ended
December 31, 1998 from $1.7 million for the year ended December 31, 1997. As a
percentage of revenues, selling, general and administrative expenses increased
to 18.7% for the year ended December 31, 1998 from 16.7% for the year ended
December 31, 1997. This increase was due to an increase in our marketing efforts
which did not generate revenues in the same period.

INTEREST EXPENSE. Interest expense increased to $204,000 for the year ended
December 31, 1998 from $139,000 for the year ended December 31, 1997. The
increase in interest expense related to borrowings from Titan to fund our
working capital requirements.

INCOME TAX PROVISION. In each of 1998 and 1997, we were included in Titan's
consolidated federal income tax return. The provision for income taxes for the
year ended December 31, 1998 was $908,000, compared to $734,000 for the year
ended December 31, 1997.

LIQUIDITY AND CAPITAL RESOURCES

We have used cash principally to acquire businesses and to fund working
capital. Our cash requirements have been met primarily through loans from Titan
and cash flows from operations. As of March 28, 2000, we owed approximately
$68.4 million to Titan under a subordinated, unsecured promissory note. We can
have a maximum of $70.0 million of indebtedness outstanding under this
promissory note at any one time. The promissory note is due in December 2004 and
bears interest, payable quarterly, at the greater of the rate of 10% per annum
or Titan's effective weighted average interest rate under its senior credit
facility, subject to applicable limits on interest rates established by law.
Titan's effective weighted average interest rate is calculated at any given
period of time by multiplying the daily balance of Titan's total bank debt
outstanding times the applicable interest rate

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for that day, which yields an interest expense for that day. The sum of the
daily interest expense amounts is divided by the sum of the daily balances of
the total bank debt outstanding to yield a daily effective weighted average
interest rate which is then multiplied by 365 to yield an annual effective
weighted average interest rate. Titan's effective weighted average interest rate
under its senior credit facility as of March 28, 2000 was 9.44%. We can prepay
amounts outstanding under the promissory note at any time without penalty. We
may, with Titan's approval, prepay amounts outstanding under the promissory note
with the net proceeds of any asset sales we make that are not in the ordinary
course of business or if we obtain a credit facility from a third party lender
and the facility permits the use of proceeds to repay existing indebtedness. We
cannot use any of the proceeds of this offering to pay amounts outstanding under
the promissory note or under any indebtedness we incur to refinance the
promissory note.

In December 1999, Titan contributed its software integration division to us.
As part of this transaction, Titan contributed $7.0 million in cash and
eliminated $10.0 million of the division's debt to Titan for $17.0 million of
the division's accounts receivable.

Our operating activities provided cash of $16.4 million for the year ended
December 31, 1999, primarily due to an increase in our accounts receivables and
other accrued liabilities.

Our investing activities used cash of $54.1 million for the year ended
December 31, 1999, primarily to fund the acquisitions we completed during 1999.

Our financing activities provided cash of $44.6 million for the year ended
December 31, 1999. This amount is comprised of amounts borrowed by us from Titan
to fund our operating and investing activities discussed above.

At December 31, 1999, we had $6.9 million of cash, negative working capital
of $7.8 million and debt outstanding of $50.5 million. In February 2000, we
entered into a long term lease agreement on our corporate headquarters and
network operating center facility that requires future minimum lease payments
totaling $6.6 million over the next seven years. On March 30, 2000, we received
approximately $6.4 million of net proceeds in connection with the sale of shares
of Class A common stock.

We expect to incur additional costs and expenditures as we further develop
and launch our TSP offering. We also have additional commitments of up to
approximately $4.3 million that we will pay to the former owners of Mainsaver
and Assist Cornerstone, subject to the satisfaction of indemnification
obligations owed to us by them under our agreements to acquire those companies.
Of this $4.3 million, $3.0 million is payable in May 2001 and $1.3 million is
payable in June 2001. We anticipate using a portion of the proceeds of this
offering to pay these amounts.

We expect capital expenditures to increase with the growth of our employee
and customer base. Capital expenditures for the next twelve months are currently
estimated to be $20.0 million. While we currently have no material commitments
for capital expenditures, we anticipate making capital expenditures for hardware
and infrastructure related to our TSP offering. We expect our sales and
marketing expenditures for the next twelve months to be approximately
$20.0 million, a portion of which we expect to use for a brand enhancement
campaign. We also expect to spend approximately $5.0 million to continue
developing our proprietary software applications. We anticipate using a portion
of the proceeds of this offering to pay these amounts.

We expect to experience significant growth in our operating expenses for the
foreseeable future. Accordingly, we currently anticipate that our operating
expenses, primarily general, administrative and network operating center
expenditures, and payroll and related costs will constitute a material use of
future cash resources. Without the expected proceeds from this offering, we
would seek to finance operations by requesting an increase in the amount
available to us under our subordinated promissory note with Titan. In addition,
subject to the approval of our board of directors, we would seek

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additional investments from companies in industries that are attractive for our
TSP offering, like Penton. If we did not complete this offering and were unable
to secure any such financing, we would be unable to sustain our current level of
growth and operations.

In periods after the next twelve months, we expect that we will continue to
evaluate our need for funds based on our assessment of access to public or
private capital markets and the timing of our need for funds. Other than any
cash flow from operations, we have not identified any specific sources of
liquidity or capital resources that we will use during periods that are after
the next twelve months. We may seek to raise additional funds through private or
public debt or equity financings. Titan may be opposed to us raising additional
capital when we believe it is desired or required. Additional capital may not be
available or, if available, may not be on terms we deem reasonable. Any future
financings may be dilutive in ownership, preferences, rights or privileges to
our stockholders.

QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

We currently are exposed to market risks related to changes in interest
rates. Some of the proceeds of this offering may be invested in short-term,
interest-bearing, investment grade securities. The value of these securities
will be subject to interest rate risk and could fall in value if interest rates
rise. Additionally, our future borrowings will have a variable component that
will fluctuate as interest rates change. If market interest rates were to
increase immediately and uniformly by 10%, there would not be a material impact
on our results of operations or on our balance sheet.

We began receiving a portion of our revenues, and paying a portion of our
expenses, in Canadian dollars after our aquisition of SFG Technologies. Revenues
from our other international operations are denominated in U.S. dollars. At this
time, we do not believe that our international operations subject us to material
risks from fluctuations in currency exchange rates.

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BUSINESS

OVERVIEW

Our objective is to be a TSP of comprehensive information technology
products and services for our customers' business functions. We define a TSP as
an information technology services company that expands upon the delivery and
hosting of standard third party software applications provided by companies
called application service providers. We expand on these delivery and hosting
services in the following ways:

- Based on our customers' requirements, we either use our proprietary
software applications or third party software applications and tailor
these for specific business processes.

- We deploy and manage these software applications at either our
Cayenta-managed proprietary network operating centers in San Diego,
California and Reston, Virginia or at the data centers of companies such
as Exodus Communications, Intel and Qwest with whom we have hosting
agreements. These facilities have advanced telecommunications and server
infrastructure which gives them advanced web, software application and
data center capabilities. In addition, our network operating center in San
Diego can also manage software applications that are hosted at third-party
facilities.

We have proprietary network operating centers in San Diego, California and
Reston, Virginia. We work with our customers at facilities located in Burnaby,
British Columbia, Orlando, Florida, Reston, Virginia, Salt Lake City, Utah, San
Diego, California, Washington, D.C., and Woodland Hills, California. Customers
from whom we derived 1.0% or more of our revenues during 1999 on a pro forma
basis include 800.com, Dean & DeLuca, the District of Columbia, the Federal
Aviation Administration, Icon Health and Fitness, Oreck, Sempra Energy, Waste
Management, the City of Henderson, Nevada and Energy America. We currently have
approximately 314 professionals developing and implementing our services.

INDUSTRY BACKGROUND

The complexity of e-business transactions has accelerated with the
widespread adoption of the Internet and the introduction of Internet
marketplaces for business-to-business transactions. For example, these
transactions frequently contain complex billing mechanics and settlement terms
that involve multiple parties who participate in the supply and fulfillment
chain. Tracking these payments and settlements requires scalable and reliable
information technology systems that facilitate the flow of information both
within organizations and externally. Businesses face significant technical
challenges in their efforts to capitalize on the opportunities presented by the
Internet, including:

- developing comprehensive end-to-end e-business solutions that link web
sites with accounting and fulfillment systems and accommodate and account
for complex billing, settlement and supply-chain transactions;

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- tailoring standard software applications to their business processes while
ensuring that these applications are compatible with those of their
trading partners;

- solving integration and compatibility issues caused by the patchwork of
proprietary and third party systems that businesses often implemented
without a focused information technology strategy;

- integrating data from disparate systems to increase its value; and

- adopting and integrating new and rapidly changing technologies while
preserving investments in existing systems.

Companies must meet these challenges while overcoming a number of obstacles,
including:

- capital constraints and total cost of ownership;

- technological obsolescence of many current systems;

- ensuring that e-business applications are available at all times;

- meeting increased online customer service demands; and

- attracting and retaining qualified information technology professionals.

International Data Corporation expects the worldwide market for Internet
services to grow at a five year compounded annual growth rate of 44.2% from
$16.5 billion in 1999 to $102.7 billion in 2004. International Data Corporation
defines Internet services as the consulting, design, systems integration,
support, management and outsourcing services associated with the development,
deployment and management of Internet sites. In addition, International Data
Corporation expects the application service provider market to grow from
$300 million in 1999 to $7.7 billion in 2004.

Many businesses currently have to manage multiple software applications,
systems integrators and service vendors to address their e-business challenges.
Many information technology companies specialize in only a single aspect of
services delivery, such as web design, software application development, systems
integration or hosting of commercially available software applications. For
example, application service providers generally only host and manage standard
third party software applications at a centrally managed facility. We believe
that the complexity of combining all of these elements from different providers
makes it difficult for businesses to implement e-business packages of
information technology products and services in a cost-effective and timely
manner.

Accordingly, we believe that businesses will increasingly demand that
information technology services companies understand their business processes
and deliver tailored products and services that combine strategies for improving
business processes, systems integration, hosting and support. We believe that
this demand is largely unmet in the information technology service provider and
application service provider marketplaces.

THE CAYENTA SOLUTION

We offer tailored information technology products and services for customers
seeking timely delivery of cost-effective and comprehensive solutions for their
business requirements. We believe that the following features of our information
technology products and services differentiate us from our competitors:

WE OFFER A COMPLETE TSP OFFERING. We operate, host, manage and support
standard and proprietary software applications tailored for our customers'
business processes, including e-business, finance, accounting, customer billing
and collection, contract management, supply chain management and equipment
maintenance and monitoring. We expand upon the delivery and hosting of standard
third party software applications generally provided by companies called
application service providers. We

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tailor and enhance these software applications to our customers' requirements,
and make our customers' internal and hosted software applications compatible
with their internal systems and with the systems of their trading partners. We
also offer our customers management services for their systems, including
monitoring and control of software applications, interfaces, servers, networks
and customer work stations. Our TSP offering is based on software engineering
practices that we have developed over time, our expertise in integrating and
implementing systems and software applications, and our experience with
particular industries. We believe our TSP offering provides our customers with a
number of benefits over internally developed and hosted systems, including lower
and more predictable capital and operating costs, quicker deployment and greater
adaptability, scalability and reliability. We also offer most elements of our
TSP offering separately. For example, our customers can lease or license
specific software applications without purchasing our complete TSP offering.

WE OFFER A COMPLETE E-BUSINESS PACKAGE OF INFORMATION TECHNOLOGY PRODUCTS
AND SERVICES. We integrate a customer's existing web site and business support
systems with our proprietary software applications for order processing, catalog
management, customer service, inventory management, order fulfillment, billing,
collections, and account settlement. We also maintain relationships with third
party vendors that provide many of the supporting services used in e-business,
including banking, shipping, credit verification and telecommunications. This
e-business package provides our customers with a single point of contact for
managing and monitoring all of their e-business transactions.

WE OFFER SOFTWARE APPLICATIONS THAT MANAGE CUSTOMERS' REVENUE CYCLES. We
offer software applications that allow our customers to better track, collect
and settle billing and payment transactions with their customers and trading
partners. These software applications address our customers' needs relating to
customer enrollment, credit worthiness, purchasing, contract management, bill
generation, bill presentment, collections and settlement. We have tailored these
software applications for utilities and basic service providers, such as waste
disposal companies, as well as customers doing business over the Internet. Our
software also provides audit and compliance functions that accommodate the
complex contract terms prevalent in e-business and permit our customers to more
effectively monitor their receivables and manage the fulfillment process. By
using our software for their revenue cycles, our customers are better able to
analyze and improve their cost structure.

WE INCREASE THE OPERABILITY AND ADAPTABILITY OF OUR CUSTOMERS' SYSTEMS. We
design server operating systems and software applications that permit our
customers to integrate different systems within their organizations and between
their organizations and those of their trading partners. Our information
technology products and services also accommodate customer technology
preferences for server operating systems, and facilitate accessibility of
software applications over the Internet. These features of our information
technology products and services are based in part on our software, which
supports multiple open source software standards. We use open source systems
such as Linux because these systems have underlying computer code that is
accessible to software developers and contributes to the development of systems
that can communicate and operate with other systems. By providing our customers'
systems with greater operability, our information technology products and
services reduce their manual and redundant business processes and related costs,
and enable them to use their systems to help create new business relationships
with other companies. By being adaptable, our information technology products
and services permit our customers to add or change software applications rapidly
as their businesses evolve.

WE TAILOR OUR INFORMATION TECHNOLOGY PRODUCTS AND SERVICES FOR OUR
CUSTOMERS' BUSINESS PROCESSES. We allow our customers to add additional
functions to standard software applications that are specific to their business
needs. We add these functions by using separate, tailored software applications
that extend the capabilities of standard software applications. For example,
based on our expertise in specific industries, such as utilities and retailing,
we have created software applications that are tailored for those industries.
When we use those software applications for particular customers in those

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industries, we then further modify them so as to better address those customers'
specific business needs. Our industry expertise helps us accurately define and
deliver tailored information technology products and services that address our
customers' industries and markets. In addition, our customers benefit from
reusable software applications and processes that enable us to deliver our
information technology products and services more quickly and reliably.

CAYENTA STRATEGY

Our objective is to become the leading TSP. In order to achieve this
objective, we intend to pursue the following strategies:

BUILD OUR TSP CUSTOMER BASE. We intend to market our TSP offering to
existing customers of our software applications or consulting services as they
replace or upgrade systems or increase their e-business activities. We will also
market our TSP offering to new customers by developing an industry-focused
direct sales force specializing in TSP sales. We will provide special incentives
to our sales force to increase sales of our TSP offering to existing customers
of our software applications or consulting services. We also intend to create
new sales channels for our TSP offering by developing relationships with hosting
companies and third party software providers. We believe our TSP offering will
allow us to establish stronger relationships with customers, provide a recurring
revenue stream, and enable us to sell additional services.

CONTINUE TO ENHANCE OUR TSP OFFERING. We intend to expand our TSP offering
by establishing additional centers where we will monitor, manage and support
information technology products and services that we have deployed for our
customers, including elements of our TSP offering provided by third parties. We
also intend to establish additional facilities near our customers where our
customers will collaborate with us in developing the information technology
products and services that we will provide to them. We further intend to enhance
our TSP offering by adding functions that address other business processes, such
as customer relationship management. We plan to add these new functions by
establishing strategic alliances, entering into supply and service agreements
with industry and technology leaders, and enhancing our current software
applications.

TARGET SPECIFIC INDUSTRIES. We target industries with complex business
processes and related information technology requirements. We currently have
expertise in multiple industries, including utilities, telecommunications and
retail. We intend to further penetrate these industries by establishing
strategic alliances and joint ventures with industry leaders and by hiring
senior executives from within these industries. As part of these efforts, we
intend to develop information technology products and services tailored for
particular industries in collaboration with participants in those industries. We
also expect to enter into joint arrangements with customers to resell
information technology products and services that we have developed for those
customers. For example, through Soliance we provide TSP services to Soliance's
customers in the utility industry. We expect that these ventures will provide us
with opportunities to broaden our technical offerings and to create new sales
and marketing channels. We believe that focusing on several specific industries
provides us with a competitive advantage in developing information technology
products and services for those industries, and expands our market coverage
while decreasing our dependence on individual industries.

PROMOTE THE CAYENTA BRAND. Our goal is to create brand recognition of
Cayenta as the leading TSP. To promote our brand and attempt to differentiate
ourselves from our competitors, we intend to expand our corporate marketing and
advertising efforts, with the specific objective of targeting selected
industries.

PURSUE RESCUE MISSIONS. We plan to provide rescue services for customers
faced with failing information technology projects and to use these rescue
projects to establish long-term customer

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relationships. We believe that providing these services will result in sustained
revenues and future opportunities to sell our TSP offering.

ATTRACT AND TRAIN QUALIFIED PERSONNEL. To expand our business and satisfy
anticipated increases in customer demand for our TSP offering, we intend to
aggressively recruit new staff. We also may add new staff through strategic
acquisitions. We believe opening new facilities that allow us to support our
customers locally will relieve our staff's travel burdens and be attractive to
potential technical and consulting employees.

CONTINUE TO DEVELOP CORE COMPETENCIES. We will expand our expertise in
building and deploying software applications and in integrating our customers'
internal systems with one another and with those of their trading partners. We
intend to continue incorporating technologies that support our customers'
complex information technology needs into both standard and tailored software
applications that we design and implement for customers. We seek out and test
new technologies as part of our internal research activities and in conjunction
with customer projects. We augment our software offerings by utilizing open
source software that is publicly published and available for reuse from
Internet-based and other software development initiatives. We believe that our
ability to successfully implement information technology products and services
for our customers that incorporate leading technology enables us to gain insight
into the relative strengths and weaknesses of competing technologies and to sell
value-added consulting and integration services.

THE CAYENTA APPROACH

We have a specific delivery approach that enables us to predictably and
efficiently deliver our information technology products and services. Our
approach facilitates early identification of customers' needs, the scope of
required solutions, and the time and resources necessary to complete the
project. We structure our projects into distinct phases and iteratively develop
our information technology products and services in collaboration with our
customers. Our approach results in the delivery of quality information
technology products and services that evolve to accommodate the continually
changing nature of business and technical environments. Our approach is
comprised of five separate, related phases--assessment, design, construction,
production staging and operations.

ASSESSMENT. We begin all of our projects by performing a strategic needs
assessment analysis to ensure that the information technology products and
services we create and provide meet our customers' business needs. Based on our
strategic needs assessment analysis, we create a blueprint for a comprehensive
solution to the identified needs of our customers. The blueprint combines
software applications, system configuration information, specialized software
and hardware specifications. These blueprints serve as the guide for our future
design and development work.

DESIGN. Our designs are based on principles that we believe provide a
critical foundation for the successful design, development, implementation,
operation and evolution of our information technology products and services.
These principles include strict separation of software, utilization of open
source systems and avoidance of proprietary vendor systems. These principles
permit implementation of our information technology products and services across
multiple computers and networks. Our system designs include both functional
aspects that facilitate a quality end-user experience and management aspects
that system administrators seek to help ensure reliability and scalability.

CONSTRUCTION. During construction, we write software and configure software
applications based on our designs. As part of the construction process, we test
the information technology products and services that we have created against
the requirements defined during our strategic needs assessment. We construct our
software applications in part from existing, proven software both to minimize
time-consuming software development and to increase system reliability.

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PRODUCTION STAGING. The production staging phase of our approach is
designed to ensure the successful deployment into operations of our information
technology products and services. This phase includes the configuration of
system servers and networks, including Internet and intranet connections. We
also conduct parallel testing with existing systems when necessary, and conduct
final performance testing and refinement. We institute procedures needed to
support those products and services during operations and provide training for
end-users and system administrators.

OPERATIONS. We provide ongoing operational support of our information
technology products and services. We provide both systems administration
functions, like back-up and maintenance of software applications and networks,
and other value-added services for our customers. Value-added services include
management of third party suppliers, such as telecommunications, credit
checking, printing and transportation providers. We also apply our industry
expertise to perform business functions that are supported by information
technology products and services we have developed and implemented for customers
when those customers request those services. For example, utility customers who
use our software applications for monitoring and managing their revenue cycles
may ask us to help them implement a rate change.

Key competitive advantages of our approach include:

USE OF STATISTICAL ANALYSIS. We have used a variety of statistical
techniques from the fields of operations research, management science and
systems engineering to help design information technology products and
services for our customers. These techniques enable us to develop blueprints
for our customers' problems and select the systems and services that best
fit the customers' requirements.

REUSABLE PROCESS AND SOFTWARE APPLICATIONS. Our process and software
applications enable our engineers to reuse rather than reinvent process and
software applications that have proven to be effective for our customers.
This allows us to provide our information technology products and services
more efficiently to customers and to readily share staff across projects.
Our use of reusable process and software applications also improves the
quality of the information technology products and services that we deliver
to our customers because those applications are refined over time as they
are included in products and services that we deliver to multiple customers.

INDUSTRY EXPERTISE. We continue to increase our technical staff with
industry expertise in our target markets. This industry experience helps us
to develop process and software applications that we use in templates for
industry-specific information technology products and services. These
templates contain model problem-solving approaches, project plans, software
configuration settings, interfaces, and system integration components that
we can reuse for customers in those industries. We believe that using these
templates permits us to rapidly deploy proven information technology
products and services that reflect best practices in a particular industry
for our customers in that industry.

COLLABORATION WITH CUSTOMERS. We develop our information technology
products and services in collaboration with our customers at facilities that
we maintain for that purpose. These facilities provide complete access to
our shared process and software applications and industry-specific
templates. We believe that these facilities enable us to provide high
quality customer service and that our work with our customers at these
facilities helps us to develop long-term customer relationships.

CUSTOMER SOLUTIONS

The following case studies are representative of the different types of
information technology products and services that we provide our customers. Each
of the customers selected represented at least 1.0% of our 1999 revenues on a
pro forma basis.

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SEMPRA ENERGY CHALLENGE:

To facilitate the integration of the information technology operations of
two large utilities whose parent companies merged and develop information
technology products and services to support Sempra Energy's operations in the
deregulated industry.

OUR SOLUTION:

As an initial step, we developed software tools to support Sempra Energy's
migration from a mainframe-based system to a system that distributes processing
and software applications to servers, mainframes and desktops. We then linked
third-party supply chain management software with Sempra Energy's
mainframe-based software systems in less than 200 days, developed a new billing
and contract management system for the deregulated utility environment, and
deployed Internet business applications for our customer. We also created
training and mentoring programs to assist Sempra Energy's information technology
staff.

ENERGY AMERICA CHALLENGE:

To quickly deploy and integrate software applications for the revenue cycle
of a rapidly growing retailer of gas and electricity, and to provide ongoing
operational support as a TSP through Soliance.

OUR SOLUTION:

We provided customer enrollment, contract management, and customer billing
and care software applications to Energy America that are reusable and
facilitate its entrance into new markets. We also integrated Energy America's
systems for accounting and wholesale commodity purchases with the systems of its
banking, utility, and printing service providers. As part of our TSP offering
through Soliance, we assist Energy America in developing new rates, resolving
customer disputes, and performing analysis of its operations. Energy America
uses this analysis both for internal use as well as to help satisfy certain
regulatory requirements.

FEDERAL AVIATION ADMINISTRATION CHALLENGE:

To create a unified information system to monitor and analyze the status of
the U.S. air traffic control system for the FAA.

OUR SOLUTION:

We developed a web based software application that utilizes our systems
integration, data warehousing, and web technology to link major information
systems of the FAA. By using our software application, data from the FAA's
disparate operational and reporting systems can be organized, consolidated and
segmented, and users can gain insight on the operating performance of the U.S.
air traffic control system. This software application is accessible on the FAA's
intranet using standard browser technology.

WASTE MANAGEMENT CHALLENGE:

To provide Waste Management with scalable information technology products
and services that integrate operations resulting from its merger and acquisition
activity.

OUR SOLUTION:

In one week, we created web-based tracking and status tools that enable
Waste Management to monitor financial and key operational measures. We also
provided a complete information technology blueprint to help Waste Management
develop an information technology strategy and enhance its

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information technology environment, including recommendations for software
applications, system integration and management, data warehousing, and Internet
strategy. We also recommended improvements in Waste Management's revenue cycle
management process. We continue to build and deploy Internet-based tools to help
Waste Management better manage its core operations.

800.COM CHALLENGE:

To create a scalable end-to-end e-business system for a leading Internet
retailer of consumer electronics and home entertainment products.

OUR SOLUTION:

We installed our e-business software applications for 800.com's order
processing and other revenue cycle transactions. We integrated our e-business
software applications with 800.com's web site and its back-end accounting and
fulfillment systems. The resulting system reduces 800.com's manual business
processes, and enables it to handle over 10,000 orders per day and provide
customer care over the Internet and through its call centers. With our system,
800.com can recognize and process an order as soon as it is placed.

HISTORY

We trace our history to the commercial software systems division of Titan
formed in 1997 in Reston, Virginia, and to Transnational Partners II formed in
1996 in San Diego, California. Titan's software systems division was formed to
perform software integration, data warehousing and other information technology
services for non-defense governmental agencies and commercial customers. Since
1997, the division has provided a total of $24.6 million in services to the FAA.
Transnational Partners II was formed by our Chief Executive Officer and our
Chief Technology Officer to perform a multi-year contract for Sempra Energy to
redesign its technology infrastructure from a mainframe environment into a
distributed processing environment. Cayenta continues to provide services to the
FAA and Sempra Energy.

Through the combination of the Titan division and the Transnational
Partners II business, Cayenta gained critical size in the number of professional
personnel it needed to perform more contracts for the large customers it
targets. Through its work with these large customers, Cayenta gained insight
into its customers' need for a service provider that would have a greater
understanding of the customer's information technology strategy and systems and
provide more customized and comprehensive services than specialty vendors who
focus on a single application or service. As a result, Cayenta decided to become
a TSP. In order to deliver a comprehensive package, Cayenta determined that it
should acquire certain critical software applications that it could offer as
part of its TSP offering. As a result, Cayenta identified software applications
supporting e-commerce as an essential part of the offering and acquired Assist
Cornerstone. Cayenta also acquired Mainsaver and SFG Technologies to acquire
equipment maintenance and revenue cycle software applications. These
acquisitions added approximately 240 additional personnel. The software
applications that we acquired are described below.

MAINSAVER--EQUIPMENT MAINTENANCE AND MONITORING SOFTWARE. Mainsaver's
software enables customers to improve their equipment maintenance processes.
This software addresses maintenance scheduling, materials and parts management,
and work order processing. We believe that the addition of Mainsaver's software
to our TSP offering will increase the attractiveness of our TSP offering to
industries whose substantial asset bases require maintenance and repair, such as
utilities, transportation, and facilities management operations.

ASSIST CORNERSTONE--E-COMMERCE SOFTWARE. Assist Cornerstone's software
provides general ledger, accounts receivable, accounts payable, financial report
preparation, order entry, purchasing, customer care, inventory management, and
sales and order analysis functions, allowing customers engaged in

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e-commerce to immediately monitor transactions from order receipt to
fulfillment. Assist Cornerstone's software integrates these functions with a
customer's e-commerce web site.

SFG TECHNOLOGIES--REVENUE CYCLE SOFTWARE. SFG Technologies provides
software for utilities' revenue generating and third party settlement
transactions. This software supports delivery of multiple utility services, such
as electric, gas and water, and enables utilities to improve productivity,
expand business capacity, and enhance customer service. Prior to our acquisition
of SFG Technologies, we included its software applications as part of the
information technology products and services that we provided for Sempra Energy
and Energy America.

CUSTOMERS

The following is a list of customers from whom we derived 1.0% or more of
our revenues during 1999 on a pro forma basis :

<TABLE>
<S> <C>
800.com Icon Health and Fitness
Dean & DeLuca Oreck Corporation
District of Columbia Sempra Energy
Federal Aviation Administration Waste Management
City of Henderson, Nevada Energy America
</TABLE>

We believe that we will continue to derive a significant portion of our
revenues from a limited number of customers during 2000. We expect to focus our
sales and marketing efforts on entering into large, multi-year contracts for our
TSP offering with Global 1000 companies. Any such contracts we enter into will
likely represent a significant portion of our revenues during 2000. In addition,
we have several existing contracts that we also expect to provide significant
revenues during 2000. If any of these customers do not need or want to engage us
to develop and implement additional information technology products and services
for them or cancel or modify their contracts with us and we are not able to sell
our information technology products and services to new customers at comparable
or greater levels, our revenue will decline significantly.

PROFESSIONAL ENVIRONMENT

Our success depends in substantial part on our ability to recruit, train and
retain qualified information technology services professionals. In order to do
so, we strive to create a professional environment in which our employees can be
creative and enhance their skills. These efforts consist of:

- offering opportunities for rotation between technical assignments to
ensure that our employees do not feel their opportunities for professional
growth are limited;

- developing "Cayenta University" which will include formal product training
for the technologies and products that we use and support; and

38
<PAGE>

- allowing our professionals opportunities to use leading technologies which
provide them with continuing intellectual challenge and maintain and
enhance their skills.

In addition, we have a result-oriented culture that rewards employees for
successfully fulfilling customer expectations. These incentives include
merit-based compensation, on-the-spot bonuses for effective problem-solving
under pressure, and additional stock options.

We believe that the availability of these opportunities and incentives helps
maintain the entrepreneurial nature of our organization and provides our
employees with tangible evidence that we value their work and commitment. We
also believe that these opportunities and incentives have played and will
continue to play a significant role in our ability to attract and retain talent.
This new talent will supplement our core group of professionals who have worked
together in a variety of organizations for several years.

To attract qualified personnel, we maintain an internal recruiting
organization and use professional search firms. We also make extensive use of
Internet job search sites and grant special bonuses to our employees for
successful recruiting efforts.

MARKETING, SALES AND RELATED ALLIANCES

MARKETING. Our marketing goal is to generate significant brand awareness of
Cayenta and our TSP offering. We target industries with complex business
processes and related information technology requirements. Our internal
marketing and advertising staff is working with a professional communications
firm that we have retained to establish our brand identity.

Our direct marketing activities include direct mail, e-mail and seminars
targeted at senior executives of Global 1000 companies that are seeking to
establish an e-business presence or that require redesigned e-business systems.
We also target emerging Internet companies that seek a scalable end-to-end
e-business system. We participate in cooperative marketing and trade show
programs with providers of software, hardware and other parts of our TSP
offering. In addition, we seek opportunities for our executives and technical
staff to publish articles and speak at industry forums.

SALES. We have organized our sales teams to execute our strategy of
increasing sales of our TSP offering to existing customers of our software
applications or consulting services. We have recently created a staff of
business development professionals who are teamed with our field sales
representatives to sell our TSP offering to existing and prospective customers.

Our information technology products and services are offered broadly in
North America through a direct sales organization based in the United States,
and on a limited basis in Europe through a dedicated distributor based in the
United Kingdom. Currently, we have approximately 50 sales and business
development representatives located in cities throughout North America,
including Atlanta, Georgia, Boston, Massachusetts, Chicago, Illinois, Dallas,
Texas, Los Angeles, California, Orlando, Florida, Reston, Virginia, Salt Lake
City, Utah, Seattle, Washington and Vancouver, British Columbia. We intend to
expand our sales organization both domestically and internationally. To date,
our revenues from sales of our information technology products and services to
customers located outside the United States have not been significant.

We have developed programs to attract and retain high quality, motivated
business development, sales, pre-sales, and post-sales support personnel. The
complexity of our customers' information technology requirements neccessitates
that we hire personnel with a high degree of technical knowledge. We seek people
who have selling skills in addition to technical expertise. We also intend to
recruit executives in selected industries whose reputation and relationships
within those industries will create opportunities for sales of our TSP offering.

39
<PAGE>

RELATED ALLIANCES. We have service relationships with web hosting and
service suppliers such as Exodus Communications, Intel and Qwest, and intend to
market our information technology products and services to their customers. We
plan to pursue strategic alliances with software, telecommunications and
hardware providers, as well as leading companies in selected industries. As part
of these efforts, we intend to develop joint sales and marketing arrangements
that will enable us to offer our information technology products and services to
their customers and develop additional marketing and sales channels.

We market our TSP offering to the utility industry through our Soliance
joint venture, which in general provides information technology products and
services to utilities. Each member of the joint venture contributes its unique
expertise to the information technology products and services that the joint
venture provides to its customers. Sempra Energy Information Solutions provides
knowledge of the utility industry and operational support. Modis provides its
expertise in implementing software applications. We provide our expertise in
developing and implementing software applications and in integrating Soliance's
customers' internal systems with one another and those of their trading
partners. In addition, each of Sempra Energy Information Solutions, modis and us
provide Soliance's customers' with consulting services based on our respective
areas of expertise.

We have entered into supply and service agreements with leading technology
companies, including:

- hardware: Hewlett-Packard, IBM, and Sun Microsystems;

- software: Microsoft, Oracle, SAP, Cognos, Harbinger, and QAD; and

- business providers: Doculink, Group 1 Software, Tava Technologies, Metamor
Worldwide, and modis.

These agreements allow us to resell or incorporate these companies'
technology into our information technology products and services and provide us
with insight into industry trends.

COMPETITION

The information technology services business is intensely competitive and
subject to rapid technological change. We expect the competition to continue and
intensify. Our competitors include:

- application service providers, such as Breakaway Solutions and
USinternetworking;

- information technology service providers, such as Andersen Consulting,
Answerthink, Cambridge Technology, EDS, KPMG, Sapient and Tanning
Technology; and

- Internet professional service providers, such as Proxicom, Scient, and US
Interactive.

In comparison with us, many of our competitors are larger, and have more
brand recognition and substantially greater financial, infrastructure, personnel
and marketing resources. In addition, there are low barriers to entry into our
business. We do not own any technologies that preclude or inhibit competitors
from entering our industry. Existing or future competitors may independently
develop and patent or copyright technologies that are superior or substantially
similar to our technologies. The costs to develop and to provide information
technology services are relatively low. Moreover, barriers to entry,
particularly in the areas of information technology consulting and integrating
software applications, are low. Therefore, we expect to continue to face
additional competition from new entrants into our industry. For example, we
expect software product companies to become a competitor in the future.

We believe that the principal competitive factors in our business are:

- client value and service;

- the reputation and experience of personnel delivering solutions and
services;

40
<PAGE>
- the success and reliability of the delivered solution and service;

- technical knowledge and creative skills; and

- the ability to attract and retain professionals.

We believe that we presently compete favorably with respect to each of these
factors. The market for our information technology products and services is
evolving, however, and we cannot be certain that we will compete successfully in
the future.

INTELLECTUAL PROPERTY

We have developed proprietary process and software applications,
industry-specific templates, software engineering practices, and tools in
connection with delivering our information technology products and services. We
rely on a combination of trade secret, copyright and trademark laws to protect
our proprietary rights. In particular, we require each of our key employees to
sign an invention and non-disclosure agreement which provides that they must
maintain the confidentiality of our intellectual property, and that any
intellectual property which they develop while employed by us is our property.

EMPLOYEES

As of March 24, 2000, we had a total of 407 employees, consisting of 16 in
our network operating center group, 90 in our software development and
documentation group, 55 in our customer service group, 153 in our consulting
group, 48 in the sales and marketing group and 45 in the, administrative group.
No employees are represented by a labor union, and we consider our employee
relations to be good.

FACILITIES

Our principal executive offices are located in San Diego, California, and
cover approximately 7,150 square feet under a lease expiring in March 2004. We
currently have facilities where we develop our information technology products
and services in collaboration with our customers in Burnaby, British Columbia,
Orlando, Florida, Reston, Virginia, Salt Lake City, Utah, San Diego, California,
Washington, D.C., and Woodland Hills, California. These facilities have square
footage which ranges between 3,600 and 52,496 square feet and are under leases
expiring over the next seven years. We have also leased a 45,000 square foot
facility in San Diego that we use as a center to monitor, manage and support
information technology products and services that we have developed and
implemented for our customers. We intend to add facilities and, to a lesser
extent, centers to serve the purposes described above in locations near our
customers, and will need to obtain access to appropriate facilities in order to
do so. In addition, while we consider our current and planned facilities in San
Diego and elsewhere adequate for current operations, we expect that we will need
to lease additional facilities in those locations as our operations expand.

LEGAL PROCEEDINGS

We are not presently involved in any material legal proceedings. However, we
are subject to litigation from time to time in the ordinary course of our
business, and we may in the future become subject to litigation that may have a
material adverse affect on our business.

41
<PAGE>
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information about our directors,
executive officers and key employees as of March 29, 2000:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- -------- --------
<S> <C> <C>
David P. Porreca.......................... 58 President, Chief Executive Officer and Director

Gene W. Ray............................... 61 Chairman of the Board of Directors

William G. Atkinson....................... 46 Senior Vice President, Sales and Marketing

Nicholas J. Costanza...................... Senior Vice President, General Counsel and
44 Secretary

Eric M. DeMarco........................... 36 Executive Vice President

Edward M. Lake............................ 45 Senior Vice President and Chief Financial Officer

Curtis R. Smith........................... 43 Senior Vice President, Finance and Operations

Gregory R. Smith.......................... 42 Chief Technical Officer

Robert E. La Blanc........................ 66 Director
</TABLE>

DAVID P. PORRECA has served as our Chief Executive Officer and as one of our
directors since January 12, 1999. From June 1995 to December 1998 he served as
Chief Executive Officer and Senior Member of Transnational Partners II, a
company that focused on systems integration and architecture. From August 1989
to June 1995 he served as Chief Executive Officer of Expersoft Corporation, a
software development and services company. Mr. Porreca received a Bachelor of
Science from Niagara University and a Master of Science from Alfred University.

GENE W. RAY has served as one of our Directors and our Chairman since
September 1997. He was a co-founder of Titan Systems, Inc., the parent of which
merged into The Titan Corporation in 1985. He served as a Director, Chief
Executive Officer and President of Titan Systems from its inception in 1981
until the merger. He has been President and Chief Executive Officer of The Titan
Corporation since the merger and became Chairman of the Board in 1999. He
currently serves on the board of directors of The Titan Corporation, a
diversified technology company that provides information technology,
communications and electron beam food pasteurization and medical product
sterilization systems and services. Dr. Ray received a Bachelor of Science from
Murray State and a Master of Science and Ph.D. from the University of Tennessee.

WILLIAM G. ATKINSON has served as our Senior Vice President, Sales and
Marketing since October 1999. From March 1999 to October 1999 he served as
Senior Vice President of Worldwide Sales of Vertel Corporation, a
telecommunications software company. From October 1996 to March 1999 he served
in various positions, including Vice President Worldwide Sales, Chief Financial
Officer, Chief Executive Officer and Chairman of the Board of Directors of
Expersoft Corporation, a software development and services company. Prior to
October 1996, he held a variety of sales and management positions with Arbor
Software, a financial applications software company, and Dun & Bradstreet
Software, an enterprise resource planning application software company.
Mr. Atkinson received his Bachelor of Science from Northern Illinois University.

NICHOLAS J. COSTANZA has served as our Senior Vice President, General
Counsel and Secretary, since August 1999. Mr. Costanza has also served as Senior
Vice President, General Counsel and Secretary of The Titan Corporation since
August 1999. From mid-1998 to the end of 1998 he was Executive Vice President,
General Counsel and Secretary of Enfinity Corporation, a manufacturing company.
From 1980 to early 1998, he held various positions at Exide Electronics Group,
Inc., a manufacturing company, most recently as Vice President, Chief
Administrative Officer, General

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<PAGE>

Counsel and Secretary. Mr. Costanza received a Bachelor of Arts from Rutgers
University and a Juris Doctor from Villanova University.

ERIC M. DEMARCO has served as our Executive Vice President since September
1997. He served as our Chief Financial Officer from September 1997 to December
1999. He served as Senior Vice President and Chief Financial Officer of The
Titan Corporation from January 1997 to August 1998 and has been Executive Vice
President and Chief Financial Officer of The Titan Corporation since August
1998. From June 1986 to January 1997, he held various positions at Arthur
Andersen LLP, most recently as a Senior Manager. Mr. DeMarco received a Bachelor
of Science from the University of New Hampshire.

EDWARD M. LAKE has served as our Senior Vice President and Chief Financial
Officer since December 1999. From October 1998 to September 1999, he served as
Executive Vice President and Chief Financial Officer for Woodfin Suite Hotels, a
hotel property and management company. From December 1996 to April 1998, he
served as Vice President, Chief Financial Officer and Secretary for Optimay
Corporation, a mobile telecommunications software company. From February 1992 to
April 1996, he served as Executive Vice President, Chief Financial Officer and
Secretary for Intelligent Surgical Lasers, Inc., a medical device company. Mr.
Lake received a Bachelor of Science from San Diego State University and is a
Certified Public Accountant in the State of California.

CURTIS R. SMITH has served as our Senior Vice President, Finance and
Operations since January 1999. From July 1996 to December 1998, he served as the
Director of Shared Services and Controller for the non-defense divisions of The
Titan Corporation. From June 1995 to May 1996 he served as Chief Financial
Officer and Chief Operating Officer of Chelsea Companies, a wholesale
distribution company. Prior to June 1995, he was Vice President of Finance and
Operations for Heating and Cooling Supply, Inc., a supplier of climate control
products. Mr. Smith received a Bachelor of Science from San Diego State
University and is a Certified Public Accountant in the State of California.

GREGORY R. SMITH has served as our Chief Technical Officer since
January 12, 1999. From September 1996 to December 1998 he served as Senior
Member of Transnational Partners II, LLC, a company that focused on systems
integration and architecture. From July 1995 to August 1996, Mr. Smith provided
independent information technology consulting services as the founder of Select
Systems Analysis. From September 1991 to June 1995 he served as Vice President
of Product Development at Expersoft Corporation, a software development and
services company. Mr. Smith received a Bachelor of Arts from the University of
California at San Diego.

ROBERT E. LA BLANC has served as one of our Directors since September 1997.
He was a General Partner with Salomon Brothers, an investment banking firm, from
1969 to 1979. From 1979 to 1981 he was Vice Chairman of Continental
Telecom, Inc., after which he founded and has been the President of Robert E. La
Blanc Associates, Inc., a financial and technologies consulting firm. He
currently serves on the board of directors of The Titan Corporation, a
diversified technology company that provides information technology,
communications and electron beam food pasteurization and medical product
sterilization systems and services. Salient 3 Communications, Inc., a
telecommunications equipment and services company, Storage Technology Corp., a
provider of network computing storage, Tribune Company, a media company,
Chartered Semiconductor Manufacturing Ltd., a semiconductor manufacturer, and a
family of Prudential mutual funds. Mr. La Blanc received a Bachelor of Science
from Manhattan College and a Master in Business Administration from New York
University.

BOARD COMMITTEES

Our board of directors currently has no committees. Prior to completion of
the offering, the board of directors will seek to appoint to the board at least
three individuals who are independent from Cayenta or Titan. Concurrent with
these appointments, the board expects to create audit and compensation
committees, the members of which will be independent directors.

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<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 1999, we did not have a compensation committee. The board of
directors made all decisions concerning executive compensation during 1999.

COMPENSATION OF DIRECTORS

Our directors do not currently receive any cash compensation for services on
the board of directors or any committee thereof, but directors may be reimbursed
for expenses incurred in connection with attendance at board and committee
meetings. All directors are eligible to participate in our 1997 Stock Option
Plan.

EXECUTIVE COMPENSATION IN FISCAL 1999

This table does not include medical, group life insurance or other benefits
which are available generally to all of our salaried employees and certain
perquisites and other personal benefits received which do not exceed the lesser
of $50,000 or 10% of the salary and bonus of the named executive officers listed
in this table as disclosed here. This table also does not include our executive
officers who were also executive officers of Titan during 1999 and whose
compensation was paid by Titan for services rendered in all capacities to Titan
and Cayenta.

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
--------------------- -----------------------------------------
SECURITIES SECURITIES
UNDERLYING UNDERLYING
TITAN CAYENTA ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) OPTIONS(#) OPTIONS(#) COMPENSATION(3)
- --------------------------- -------- --------- --------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
David P. Porreca ............ 1999 $351,797 300,000 45,000(4) 258,125(5) 43,084
President and Chief
Executive Officer

Gregory R. Smith ............ 1999 $228,732 225,000 30,000(6) 258,125(7) 30,544
Chief Technical Officer

Curtis R. Smith ............. 1999 $117,630 0 2,000(8) 154,875(9) 14,969
Senior Vice President,
Finance and Operations
</TABLE>

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

(1) Amounts shown include cash compensation earned and received by executive
officers as well as amounts earned but deferred at the election of those
officers.

(2) Amounts shown include bonus cash compensation earned by executive officers
for each fiscal year whether received in the fiscal year it was earned or in
the subsequent fiscal year.

(3) Amounts shown consist of (i) Titan's matching contribution to its 401(k)
Retirement Plan; (ii) Titan's matching contribution to its Supplemental
Retirement Plan for Key Executives; (iii) Titan's contribution to its
Employee Stock Ownership Plan and (iv) interest earned in Titan's
Supplemental Retirement Plan for Key Executives that exceeded 120% of the
applicable federal long-term rate with compounding (as prescribed under
Section 1274(d) of the Internal Revenue Code). Amounts shown for fiscal year
1999 for each named executive officer consist of the following elements of
compensation: Mr. Porreca: (i) $8,000; (ii) $35,000; (iii) $0 and (iv) $84;
Mr. Gregory R. Smith: (i) $8,000; (ii) $22,500; (iii) $0 and (iv) $54; and
Mr. Curtis R. Smith: (i) $6,709; (ii) $0; (iii) $8,260 and (iv) $0.

(4) 30,000 options vest as follows: 25% on February 17, 2000, 25% on
February 17, 2001, 25% on February 17, 2002 and 25% on February 17, 2003.
15,000 options vest as follows: 25% on August 12, 2000, 25% on August 12,
2001, 25% on August 12, 2002 and 25% on August 12, 2003.

44
<PAGE>

(5) These options vest as follows: 25% on February 17, 2000, 25% on
February 17, 2001, 25% on February 17, 2002 and 25% on February 17, 2003.

(6) These options vest as follows: 25% on February 17, 2000, 25% on
February 17, 2001, 25% on February 17, 2002 and 25% on February 17, 2003.

(7) These options vest as follows: 25% on February 17, 2000, 25% on
February 17, 2001, 25% on February 17, 2002 and 25% on February 17, 2003.

(8) These options vest as follows: 25% on August 11, 2000, 25% on August 11,
2001, 25% on August 11, 2002 and 25% on August 11, 2003.

(9) These options vest as follows: 25% on August 11, 2000, 25% on August 11,
2001, 25% on August 11, 2002 and 25% on August 11, 2003.

CAYENTA OPTION GRANTS IN FISCAL 1999

The following table sets forth grants of Cayenta stock options made during
1999 under Cayenta's Nonstatutory Stock Option Plan to the named executive
officers:

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE AT
----------------------------------------------------------------------- ASSUMED ANNUAL RATES OF STOCK
PERCENT OF EXERCISE OR PRICE APPRECIATION FOR
NUMBER OF SECURITIES TOTAL CAYENTA OPTIONS BASE PRICE OPTION TERM(4)
UNDERLYING CAYENTA GRANTED TO EMPLOYEES (PER EXPIRATION ------------------------------
NAME OPTIONS GRANTED(1) IN 1999(2) SHARE) DATE(3) 5% 10%
---- -------------------- --------------------- ----------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
David P. Porreca..... 258,125 5.9% $0.18 2/17/09 $5,423,206 $8,644,606
Gregory R. Smith..... 258,125 5.9% $0.18 2/17/09 $5,423,206 $8,644,606
Curtis R. Smith...... 154,875 3.6% $0.18 8/11/09 $3,363,885 $5,186,764
</TABLE>

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

(1) Nonstatutory stock options granted by Cayenta in 1999 were granted at fair
market value and are exercisable starting 12 months after grant date, with
25% of the options becoming exercisable at that time and with an additional
25% of the options becoming exercisable on each successive anniversary date,
with full vesting occurring on the fourth anniversary date. If Cayenta were
acquired by another company, the options would automatically vest in full
unless the acquiring company assumes the options.

(2) In 1999, employees of Cayenta and Titan received stock options covering a
total of 4,344,141 shares of Cayenta under the 1997 Stock Option Plan and
the Nonstatutory Stock Option Plan.

(3) The options described above were granted for a term of 10 years, subject to
earlier termination in certain events related to termination of employment.

(4) Present value was calculated using an assumed annual growth over the term of
the option of 5% and 10%, respectively. Use of this model should not be
viewed in any way as a forecast of the future performance of Cayenta's
stock, which will be determined by future events and unknown factors.

45
<PAGE>

TITAN OPTION GRANTS IN FISCAL 1999

The following table sets forth each grant of stock options by Titan during
1999 under Titan's long-term incentive program to the named executive officers:

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
PERCENT OF ASSUMED ANNUAL RATES OF STOCK
TOTAL TITAN OPTIONS PRICE APPRECIATION FOR
NUMBER OF SECURITIES GRANTED TO EXERCISE OR OPTION TERM(4)
UNDERLYING TITAN EMPLOYEES BASE PRICE EXPIRATION ------------------------------
NAME OPTION GRANTED(1) IN FISCAL 1999(2) (PER SHARE) DATE(3) 5% 10%
---- -------------------- ------------------- ----------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
David P. Porreca..... 30,000 2.6% $5.69 2/17/09 $ 107,314 $ 271,956
15,000 1.3% $9.75 8/11/09 $ 91,975 $ 233,084
Gregory R. Smith..... 30,000 2.6% $5.69 2/17/09 $ 107,314 $ 271,956
Curtis R. Smith...... 2,000 0.2% $9.75 8/12/09 $ 12,263 $ 31,078
</TABLE>

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

(1) Incentive stock options granted by Titan in 1999 were granted at fair market
value and are exercisable starting 12 months after grant date, with 25% of
the options becoming exercisable at that time and with an additional 25% of
the options becoming exercisable on each successive anniversary date, with
full vesting occurring on the fourth anniversary date. If Titan were
acquired by another company, the options would automatically vest in full
unless the acquiring company assumes the options.

(2) In 1999, employees of Titan and its subsidiaries received stock options for
Titan common stock covering a total of 1,140,000 shares.

(3) The options described above were granted for a term of 10 years, subject to
earlier termination in certain events related to termination of employment.

(4) Present value was calculated using an assumed annual compounded growth over
the term of the option of 5% and 10%, respectively. Use of this model should
not be viewed in any way as a forecast of the future performance of Titan's
stock, which will be determined by future events and unknown factors.

AGGREGATED CAYENTA OPTION EXERCISES IN FISCAL 1999 AND FISCAL YEAR-END OPTION
VALUES

The table below sets forth information regarding the number and value of
unexercised Cayenta options held by the named executive officers as of
December 31, 1999, as well as the number and value of Cayenta shares acquired by
the named executive officers pursuant to stock options exercised during 1999:

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT FISCAL
SHARES AT FISCAL YEAR-END YEAR-END
ACQUIRED VALUE --------------------------- -------------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
David P. Porreca........... -- -- -- 258,125 $5,423,206 $8,644,606
Gregory R. Smith........... -- -- -- 258,125 $5,423,206 $8,644,606
Curtis R. Smith............ -- -- 5,162 170,363 $3,579,315 $5,505,433
</TABLE>

No stock appreciation rights were owned or exercised by any of the named
executive officers during 1999.

Dollar values in the table above are calculated by taking the fair market
value of Cayenta's common stock as of the date of exercise, subtracting the per
share exercise price of the option and multiplying the result by the number of
shares. Options were granted at an exercise price equal to the fair market value
of our common stock, as determined by our board of directors on the date of
grant.

46
<PAGE>

AGGREGATED TITAN OPTION EXERCISES IN FISCAL 1999 AND FISCAL YEAR-END OPTION
VALUES

The following table sets forth, with respect to the named executive
officers, information regarding the number and value of securities underlying
unexercised options for Titan's common stock held by them as of December 31,
1999, as well as the number and value of Titan shares acquired by the named
executive officers pursuant to stock options exercised during 1999.

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT FISCAL
SHARES AT FISCAL YEAR-END YEAR-END(1)
ACQUIRED VALUE --------------------------- -------------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
David P. Porreca......... -- -- -- 45,000 -- 1,812,195
Gregory R. Smith......... -- -- -- 30,000 -- 1,248,750
Curtis R. Smith.......... -- -- -- 2,000 -- 75,126
</TABLE>

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

(1) Market value of underlying securities at year-end, minus the exercise or
base price.

Dollar values in the table above are calculated by taking the fair market
value of Titan's common stock as of the date of exercise, subtracting the per
share exercise price of the option and multiplying the result by the number of
shares. Options were granted at an exercise price equal to the fair market value
of Titan's common stock, as determined by Titan's board of directors on the date
of grant.

EMPLOYMENT AGREEMENTS

On January 12, 1999, we entered into an Employment Agreement with David P.
Porreca, our Chief Executive Officer. This agreement has a three year term
commencing on January 1, 1999. It provides for an annual base salary of $350,000
per year and for an annual performance bonus of up to $300,000. In addition,
Mr. Porreca is also eligible to receive options to purchase 258,125 shares of
our Class A common stock at an exercise price of $.18 per share, options to
purchase 30,000 shares of Titan common stock at an exercise price of $5.69 per
share, and options to purchase 15,000 shares of Titan common stock at an
exercise price of $9.75 per share. Both the Cayenta stock options and the Titan
stock options vest at a rate of 25% per year for four years, with the first 25%
vesting on the first anniversary of the beginning of the vesting period and an
additional 25% vesting on each subsequent anniversary of that date. Further,
Mr. Porreca is entitled to receive all other employment benefits generally
available to our other executive and managerial employees. This agreement
further provides that Mr. Porreca can terminate his employment with us only upon
six months written notice. We may terminate Mr. Porreca's employment for cause
at any time. Mr. Porreca's employment agreement does not terminate in the event
of a dissolution, merger or transfer of all or substantially all of our assets.

On January 12, 1999, we entered into an Employment Agreement with Gregory R.
Smith, our Chief Technology Officer. This agreement has a three year term
commencing on January 1, 1999. It provides for an annual base salary of $225,000
per year and for an annual bonus of up to $225,000. Mr. Smith is also entitled
to receive options to purchase 258,125 shares of our Class A common stock at an
exercise price of $.18 per share and options to purchase 30,000 shares of Titan
common stock at an exercise price of $5.69 per share. Both the Cayenta stock
options and the Titan stock options vest at a rate of 25% per year for four
years, with the first 25% vesting on the first anniversary of the beginning of
the vesting period and an additional 25% vesting on each subsequent anniversary
of that date. Further, Mr. Smith is entitled to all other employee benefits
generally available to our other executive and managerial employees. Mr. Smith
can terminate his employment with us only upon six months written notice. We can
terminate Mr. Smith's employment for cause at any time. Mr. Smith's employment
agreement does not terminate in the event of a dissolution, merger or transfer
of all or substantially all of our assets.

47
<PAGE>

On October 31, 1999, we entered into a letter agreement with William G.
Atkinson, our Senior Vice President, Sales and Marketing regarding the terms of
his employment. This agreement provides for an annual base salary of $220,000
and provides that Mr. Atkinson is entitled to participate in our standard
benefit programs generally available to all of our executive and managerial
employees. In addition, Mr. Atkinson is entitled to options to purchase
154,875 shares of our Class A common stock at an exercise price of $3.19 per
share and options to purchase 5,000 shares of Titan common stock at an exercise
price of $22.38 per share. Both the Cayenta stock options and the Titan stock
options vest at a rate of 25% per year for four years, with the first 25%
vesting on the first anniversary of the beginning of the vesting period and an
additional 25% vesting on each subsequent anniversary of that date. In addition,
Mr. Atkinson shall receive 10,325 shares of our Class A common stock for each
major customer that Mr. Atkinson develops which leads to $10 million or more in
revenues. Mr. Atkinson will also receive options to purchase 2,065 shares of our
Class A common stock for each $5 million in annual revenues that the customer
generates per annum thereafter.

On December 18, 1999, we entered into a letter agreement with Edward M.
Lake, our Senior Vice President and Chief Financial Officer regarding the terms
of his employment. This agreement provides for an annual base salary of $250,000
and provides that Mr. Lake is entitled to participate in our standard benefit
programs generally available to all of our executive and managerial employees.
In addition, Mr. Lake is entitled to options to purchase 206,500 shares of our
Class A common stock at an exercise price of $3.19 per share. These options vest
at a rate of 25% per year for four years, with the first 25% vesting on the
first anniversary of the beginning of the vesting period and an additional 25%
vesting on each subsequent anniversary of that date. If we terminate Mr. Lake's
employment within the first two years, Mr. Lake shall receive one year of base
salary at the then current rate plus medical benefits for one year.

1997 STOCK OPTION PLAN

Our 1997 Stock Option Plan was adopted by the board of directors on
September 16, 1997 and approved by the sole shareholder on September 16, 1997.
The 1997 plan will terminate on September 15, 2007 unless our board of directors
terminates it sooner.

The 1997 plan provides for the grant of stock options, including:

- incentive stock options, as defined in Section 422 of the Internal Revenue
Code of 1986, as amended, that may be granted solely to employees,
including officers; and

- nonstatutory stock options that may be granted to employees, including
officers, non-employee directors and consultants.

STOCK OPTIONS. Stock options are granted pursuant to stock option
agreements. The exercise price for an incentive stock option cannot be less than
100% of the fair market value of the common stock on the date of grant. The
exercise price for a nonstatutory stock option cannot be less than 85% of the
fair market value of the common stock on the date of grant. Options granted
under the 1997 plan vest at the rate specified in the option agreement.

In general, the term of stock options granted under the 1997 plan may not
exceed 10 years. Unless the terms of an optionee's stock option agreement
provide for earlier termination, in the event an optionee's service relationship
with us, or any affiliate of ours, ceases due to disability or death, the
optionee or his beneficiary may exercise any vested options up to twelve months
after the date such service relationship ends. If an optionee's relationship
with us, or any affiliate of ours, ceases for any reason other than disability
or death, the optionee may exercise any vested options up to 90 days from
cessation of service, unless the terms of the stock option agreement provide for
earlier termination.

Acceptable consideration for the purchase of common stock issued under the
1997 plan is determined by our board of directors and may include cash, common
stock previously owned by the

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optionee, a deferred payment arrangement and other legal consideration approved
by our board of directors.

Generally, an optionee may not transfer a stock option other than by will or
the laws of descent or distribution unless the optionee holds a nonstatutory
stock option that provides otherwise. However, an optionee may designate a
beneficiary who may exercise the option following the optionee's death.

TAX LIMITATIONS ON STOCK OPTION GRANTS. Under current tax laws, incentive
stock options may be granted only to our employees. The aggregate fair market
value, determined at the time of grant, of shares of our common stock underlying
incentive stock options that are exercisable for the first time by an optionee
during any calendar year under all of our stock plans may not exceed $100,000.
No incentive stock option may be granted to any person who, at the time of the
grant, owns or is deemed to own stock possessing more than 10% of the total
combined voting power of Cayenta or any affiliate unless the following
conditions are satisfied:

- the option exercise price must be at least 110% of the fair market value
of the stock subject to the option on the date of grant; and

- the term of any incentive stock option award must not exceed five years
from the date of grant.

Further, prior to our stock being publicly traded, no nonstatutory stock
options may be granted to such persons unless the above conditions are met.

SECTION 162(m). Section 162(m) of the Code generally denies a corporate tax
deduction to publicly held corporations for some compensation paid to specified
employees in a taxable year to the extent that the compensation exceeds
$1,000,000 and is not paid based on performance. When we become subject to
Section 162(m), no person may be granted options under the 1997 plan covering
more than 1,032,500 shares of common stock in any calendar year. In the event
that our board of directors exercises its authority to reprice outstanding
options or to offer optionees the opportunity to replace outstanding options
with new options for the same or a different number of shares, then both the
original and new options will count toward the Section 162(m) limitation.

CHANGES IN CONTROL. Under specified changes in control, all outstanding
options under the 1997 plan either will be assumed, continued or substituted for
by any surviving entity. If the surviving entity does not assume, continue or
substitute for these awards, the vesting provisions of these stock awards will
be accelerated and these stock awards will be terminated upon the change in
control if not previously exercised.

AUTHORIZED SHARES. An aggregate of 5,827,430 shares of Class A common stock
currently are authorized for issuance under the 1997 plan. As of March 28, 2000,
options to purchase a total of 3,898,204 shares of our Class A common stock were
held by all participants under the 1997 plan, and 1,929,226 shares of our
Class A common stock remain available for grant. Shares subject to stock options
that have expired or otherwise terminated without having been exercised in full
again become available for the grant of awards under the 1997 plan.

PLAN ADMINISTRATION. Our board of directors administers the 1997 plan. Our
board of directors may delegate authority to administer the 1997 plan to a
committee. Subject to the terms of the plan, our board of directors or its
authorized committee determines recipients, the numbers and types of stock
awards to be granted, and the terms and conditions of the stock awards including
the period of their exercisability and vesting. Subject to the plan limitations,
our board of directors or its authorized committee also determines the exercise
price of options granted.

Our board of directors or its designated committee may, in its sole
discretion, include additional provisions in any option or award granted or made
under the 1997 plan that are not inconsistent with the 1997 plan or applicable
law. Our board of directors or its designated committee may also, in its

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sole discretion, accelerate or extend the date or dates on which all or any
particular option or options granted under the 1997 plan may be exercised. In
the event of a decline in the value of our common stock, our board of directors
or its designated committee has the authority to offer optionees the opportunity
to replace outstanding higher priced options with new lower priced options.

NONSTATUTORY STOCK OPTION PLAN

Our Nonstatutory Stock Option Plan will terminate on September 15, 2007. An
aggregate of 1,296,820 shares of Class A common stock currently are authorized
for issuance under the Nonstatutory Stock Option Plan. As of March 28, 2000,
options to purchase a total of 1,296,820 shares of our Class A common stock were
held by all participants under the Nonstatutory Stock Option Plan, and no shares
of our Class A common stock remained available for grant.

Our Nonstatutory Stock Option Plan provides for grants of nonstatutory stock
options to our officers and directors and the officers and directors of Titan.
Our Nonstatutory Stock Option Plan provides that we have a right to repurchase
shares received on the exercise of an option at the book value of those shares
if the purchaser terminates service prior to the completion of our initial
public offering and the listing of our stock on either The New York Stock
Exchange or The Nasdaq Stock Market.

In 1999 several optionees agreed to exchange their options pursuant to our
1997 Stock Option Plan for options under our Nonstatutory Stock Option Plan.
Other than the provision described above, all substantive provisions of the
options, like the exercise price, the vesting period and the vesting
commencement date, remained the same as the exchanged options granted under our
1997 Stock Option Plan.

TAX QUALIFIED PLANS

We are a participating employer in The Titan Corporation Consolidated
Retirement Plan. The Consolidated Plan is composed of two portions: (1) the
401(k) portion of the Consolidated Plan and (2) the Employee Stock Ownership
Plan portion of the Consolidated Plan as set forth below:

- 401(k) PLAN. The 401(k) portion of the Consolidated Plan is intended to be
a tax-qualified defined contribution plan under Subsections 401(a) and
401(k) of the Code. All employees who are at least 21 years old are
eligible to participate and may enter the 401(k) plan as of any
January 1, April 1, July 1 or October 1. Each participant may contribute
up to 15% of his or her pre-tax compensation to the savings plan, subject
to statutorily prescribed annual limits. We match employee contributions
dollar-for-dollar, up to a maximum of 5% of each participant's
compensation. Each participant's contributions, the matching
contributions, and the corresponding investment earnings, are generally
not taxable to the participants until withdrawn. Employee contributions
and our matching contributions are held in trust and invested by the
savings plan trustee as required by law. Individual participants may
direct the trustee to invest their accounts in authorized investment
alternatives.

- EMPLOYEE STOCK OWNERSHIP PLAN. The Employee Stock Ownership Plan portion
of the Consolidated Plan is intended to be a tax-qualified defined
contribution plan under Subsection 401(a) and an employee stock ownership
plan under 4975(e)(7) of the Code. This portion of the plan is designed to
invest primarily in employer securities. All employees who are at least
21 years old and employed on December 31 of any plan year in which we make
a discretionary contribution are eligible to receive a portion of such
contribution. Our contributions are discretionary. Our contributions, and
the corresponding investment earnings, are generally not taxable to the
participants until withdrawn. Contributions are held in trust as required
by law. Certain individual participants who are at least 55 years old and
have participated in the Employee Stock Ownership Plan portion of the
Consolidated Plan for at least 10 years may direct the trustee to invest
up to 50% of their accounts in authorized investment alternatives.

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RELATIONSHIP WITH TITAN AND CERTAIN TRANSACTIONS

Titan has adopted a strategy of selling a minority interest in subsidiary
companies to outside investors as a means of financing the growth of its
commercial businesses.

GENERAL

As long as Titan beneficially owns a majority of our voting power, Titan
will have the ability to elect all of the members of the board of directors and
ultimately control our management. Titan may control or influence all decisions
relating to our acquisitions, dispositions, credit facilities and borrowing
levels, the sale of our equity or debt securities, and the declaration and
payment of any dividends on our common stock. In addition, Titan will be able to
determine the outcome of any matter submitted to a vote of our stockholders for
approval and to cause or prevent us from engaging in a transaction that involves
a change in control. Dr. Gene Ray, the chairman of our board of directors, was
during our fiscal year ended December 31, 1999 and is currently the chairman of
the board of directors, president and chief executive officer of Titan. Robert
La Blanc, another one of our directors, was during our fiscal year ended
December 31, 1999 and is currently a director of Titan. Furthermore, Messrs.
Porreca, Costanza and DeMarco, each of whom is one of our executive officers,
are also executive officers of Titan.

Titan could decide to sell or otherwise dispose of all or a portion of our
common stock that it holds, whether those shares be Class B or Class A common
stock.

Titan has advised us that its current intent is to continue to hold all of
its outstanding shares of Class B common stock. Titan has also generally agreed,
in connection with this offering, not to sell or otherwise dispose of any shares
of our common stock or any security convertible into or exchangeable or
exercisable for our common stock for a period of 180 days after the date of this
prospectus, without the prior written consent of Credit Suisse First Boston.
After such 180-day period, Titan may sell or otherwise dispose of its Class B
common stock.

Titan must beneficially own at least 80% of the total voting power of our
capital stock and 80% of any class of nonvoting capital stock to be able to
effect a tax-free distribution of its Cayenta stock to its stockholders in the
future. We currently do not have any class of nonvoting capital stock. Neither
Titan nor Cayenta currently contemplates that Titan will distribute its majority
interest to the Titan stockholders. We expect that Titan will continue to own at
least 80% of the total voting power of our capital stock after completion of
this offering. Titan may limit our future sale of equity securities to preserve
its ownership percentage and control of us.

Our bylaws provide that we shall indemnify our directors and officers to the
fullest extent permitted by Delaware law, including in circumstances in which
indemnification is otherwise discretionary under Delaware law. We also intend to
enter into indemnification agreements with our officers and directors. These
agreements may require us to pay or reimburse directors or officers for claims
brought against them and to advance expenses incurred by them in defending
claims. We also will maintain directors' and officers' insurance if available on
reasonable terms.

CONTRACTUAL ARRANGEMENTS

Our relationship with Titan is also governed by a Corporate Services
Agreement, a Tax Allocation Agreement and a Facilities Agreement. We have not
negotiated these agreements at arm's length. As a result, the prices we pay to
Titan for these services may be higher or lower than the costs we would incur
from purchasing these services from third parties or hiring additional staff to
perform these services.

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The following are summaries of these agreements, which have been filed as
exhibits to the registration statement relating to this prospectus.

CORPORATE SERVICES AGREEMENT

Titan provides to us routine and ordinary corporate services, including
financial, insurance, accounting, employee benefits, payroll, tax and legal
services. Titan also provides us corporate planning, government relations and
corporate quality assurance services. We share certain Titan systems, including
its accounting system and human resource system. Because Titan engages in
government contracts work, Titan allocates costs to its subsidiaries based upon
government cost accounting requirements. We pay Titan for human resources
services based upon our percentage of the total number of Titan group employees.
We pay for other corporate services based upon the average of three
percentages: (1) the percentage of our payroll to the total payroll of the Titan
group, (2) the percentage of our operating revenues to the total operating
revenues of the Titan group and (3) the percentage of our average net book value
which is the sum of our tangible capital assets plus inventories to the total
average net book value of the tangible capital assets plus inventory of the
Titan group as of the end of the last fiscal year and as of the final day of
each calendar quarter in the current fiscal year. Titan may adjust its fees
based upon its assessment of our relative use of these services.

The initial term of the Corporate Services Agreement is one year. This
agreement renews automatically unless we elect not to renew by giving Titan
notice. We intend to build our own administrative infrastructure and end our
Corporate Services Agreement with Titan by the end of 2000. If the agreement is
terminated, we cannot guarantee that we will be able to replace these services
in a timely manner or at comparable cost.

TAX ALLOCATION AGREEMENT

As long as Titan maintains beneficial ownership of at least 80% of the total
voting power of our capital stock and 80% of the total value of our outstanding
common stock, we will be included in Titan's consolidated federal income tax
returns. Following completion of this offering, we expect to file separate
federal income tax returns.

We and Titan have entered into a Tax Allocation Agreement. Under the Tax
Allocation Agreement, we have agreed to pay to the applicable tax authorities an
amount generally equal to the tax liability that we would have incurred if we
had prepared and filed a separate return. Titan has broad discretion in
determining the amount of separate taxable income and tax liability that we
would realize on such a separate return. In computing this separate tax
liability, our tax attributes, including net operating loss and tax credit
carryovers, will be deemed to be the amount that we would have had if we had
always owned the businesses transferred to us by Titan.

As a member of the Titan group for purposes of filing consolidated federal
income tax returns, we will be liable for the federal income tax of the Titan
group if Titan or any member of the group fails to pay its taxes.

FACILITIES AGREEMENT

We have subleased approximately 26,000 square feet in Reston, Virginia from
Titan. Under the Facilities Agreement, Titan provides us rent, maintenance,
property taxes, utilities, landlord pass-through expenses, property insurance,
reception desk services, telephone services and centralized mail and postage and
other services. We pay Titan an annual fee determined by our percentage of
Titan's annual costs for this facility. Our percentage is based upon the
percentage of the total square feet in the facility that we occupy.

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ALLOCATED COSTS

Tax administrative, corporate services and facilities costs were $284,000
for the year ended December 31, 1997, $230,000 for the year ended December 31,
1998 and $438,000 for the year ended December 31, 1999. Because the Corporate
Services Agreement, Tax Allocation Agreement and Facilities Agreement were not
in place for any of the years then ended, these costs were allocated to us by
Titan. Had the Corporate Services Agreement, Tax Allocation Agreement and
Facilities Agreement been in place for any of the years then ended, the costs
allocated to us by Titan for those years would have been determined pursuant to
the provisions of those agreements.

SUBORDINATED PROMISSORY NOTE

As of March 28, 2000, we owed approximately $68.4 million to Titan under a
subordinated, unsecured promissory note. We can have a maximum of $70.0 million
of indebtedness outstanding under this promissory note at any one time. The
promissory note is due in December 2004 and bears interest, payable quarterly,
at the greater of the rate of 10% per annum or Titan's effective weighted
average interest rate under its senior credit facility, subject to applicable
limits on interest rates established by law. Titan's effective weighted average
interest rate is calculated at any given period of time by multiplying the daily
balance of Titan's total bank debt outstanding times the applicable interest
rate for that day, which yields an interest expense for that day. The sum of the
daily interest expense amounts is divided by the sum of the daily balances of
the total bank debt outstanding to yield a daily effective weighted average
interest rate which is then multiplied by 365 to yield an annual effective
weighted average interest rate. Titan's effective weighted average interest rate
under its senior credit facility as of March 28, 2000 was 9.44%. We can prepay
amounts outstanding under the promissory note at any time without penalty. We
may, with Titan's approval, prepay amounts outstanding under the promissory note
with the net proceeds of any asset sales we make that are not in the ordinary
course of business or if we obtain a credit facility from a third party lender
and the facility permits the use of proceeds to repay existing indebtedness. We
cannot use any of the proceeds of this offering to pay amounts outstanding under
the promissory note or under any indebtedness we incur to refinance the
promissory note.

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PRINCIPAL STOCKHOLDERS

The following table contains information about the beneficial ownership of
our Class A common stock before and after our initial public offering for:

- each person who beneficially owns more than five percent of the Class A
common stock;

- each of our directors;

- each of our named executive officers; and

- all directors and executive officers as a group.

Unless otherwise indicated, the address for each person or entity named
below is c/o Cayenta, Inc., 225 Broadway, Suite 1500, San Diego, CA 92101.

In calculating beneficial ownership percentages, we assumed all 20,650,000
shares of Class B common stock outstanding as of March 30, 2000 were converted
into 20,650,000 shares of Class A common stock, so that 22,335,985 shares of
Class A common stock were outstanding as of such date, and added to that amount
4,842,425 shares of Class A common stock that are issuable upon the conversion
of all of our outstanding preferred stock upon the closing of this offering.
Accordingly, we based our beneficial ownership percentage calculations on
27,178,410 shares of Class A common stock outstanding as of March 30, 2000.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Except as indicated by footnote, and subject
to community property laws where applicable, the persons named in the table
below have sole voting and investment power with respect to all shares of
Class A common stock shown as beneficially owned by them.

The table assumes no exercise of the underwriters' over-allotment option. If
the underwriters' over-allotment option is exercised in full, we will sell up to
an aggregate of 975,000 additional shares of our common stock, and up to
34,653,410 shares of common stock will be outstanding after the completion of
this offering.

<TABLE>
<CAPTION>
NUMBER OF
SHARES OF CLASS A
COMMON STOCK PERCENTAGE OWNED
BENEFICIALLY OWNED -------------------
TITAN, DIRECTORS AND ------------------ PRIOR TO AFTER
NAMED EXECUTIVE OFFICERS NUMBER OFFERING OFFERING
- ------------------------ ------------------ -------- --------
<S> <C> <C> <C>
The Titan Corporation....................................... 20,650,000(1) 76.0% 61.3%
3033 Science Park Road
San Diego, CA 92121
Transnational Partners II, LLC.............................. 4,842,425(2) 17.8% 14.4%
David P. Porreca............................................ 2,737,549(3) 10.0% 7.9%
Gene W. Ray................................................. 103,250 * *
Curtis R. Smith............................................. 5,162(4) * *
Gregory R. Smith............................................ 1,846,543(5) 6.7% 5.3%
Robert E. La Blanc.......................................... 5,162(6) * *
All directors and officers as a group (9 persons)........... 4,738,966(7) 17.3% 13.6%
</TABLE>

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

* Represents beneficial ownership of less than 1%.

(1) Represents shares of Class A common stock issuable upon conversion of
20,650,000 shares of Class B common stock currently held by Titan. Titan has
pledged its shares of our Class B common stock as security for its
obligations under its credit facility. If an unremedied default occurs under
that credit facility, the bank group could cause all the shares of our
Class B common stock held by Titan to be registered in the name of its
agent, which would result in a change of control of us.

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<PAGE>

(2) Consists of 4,842,425 shares of Class A common stock issuable upon
conversion of 4,842,425 shares of preferred stock currently held by
Transnational Partners II. Mr. Porreca and Mr. Smith own 55.2% and 36.8%,
respectively, of Transnational Partners II.

(3) Includes 64,531 shares issuable upon exercise of options exercisable within
60 days of March 30, 2000 and 2,673,018 shares of Class A common stock
issuable upon conversion of 2,673,018 shares of preferred stock held by
Transnational Partners II that Mr. Porreca may be deemed to have beneficial
ownership of based on his 55.2% interest in Transnational Partners II. These
options are exercisable at a price per share of $0.18, and vest 25% after
one year and 25% each year for three years thereafter on the applicable
anniversary date of the beginning of their vesting period.

(4) Includes 5,162 shares issuable upon exercise of options exercisable within
60 days of March 30, 2000. These options are exercisable at a price per
share of $0.18, and vest 25% after one year and 25% each year for three
years thereafter on the applicable anniversary date of the beginning of
their vesting period.

(5) Includes 64,531 shares issuable upon exercise of options exercisable within
60 days of March 30, 2000 and 1,782,012 shares of Class A common stock
issuable upon conversion of 1,782,012 shares of preferred stock held by
Transnational Partners II that Mr. Smith may be deemed to have beneficial
ownership of based on his 36.8% interest in Transnational Partners II. These
options are exercisable at a price per share of $0.18, and vest 25% after
one year and 25% each year for three years thereafter on the applicable
anniversary date of the beginning of their vesting period.

(6) Includes 5,162 shares issuable upon exercise of options exercisable within
60 days of March 30, 2000. These options are exercisable at a price per
share of $0.18, and vest 25% after one year and 25% each year for three
years thereafter on the applicable anniversary date of the beginning of
their vesting period.

(7) Includes 180,686 shares issuable upon exercise of options exercisable within
60 days of March 30, 2000 and 4,455,030 shares of Class A common stock
issuable upon conversion of 4,455,030 shares of preferred stock held by
Transnational Partners II that Mr. Porreca and Mr. Smith may be deemed to
have beneficial ownership of based on their respective 55.2% and 36.8%
interests in Transnational Partners II. These options are exercisable at a
price per share of $0.18, and vest 25% after one year and 25% each year for
three years thereafter on the applicable anniversary date of the beginning
of their vesting period.

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DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of 250,000,000 shares of Class A
common stock, $0.001 par value per share, 103,250,000 shares of Class B common
stock, $0.001 par value per share, and 17,345,000 shares of preferred stock,
$0.001 par value per share, 4,842,425 of which shares are designated Series A
preferred stock. These figures for our authorized Class A and Class B common
stock reflect the increases in our authorized common stock described in the
"Capitalization" section of this prospectus. As of the date hereof,
1,685,985 shares of our Class A common stock, 20,650,000 shares of our Class B
common stock and 4,842,425 shares of our Series A preferred stock are issued and
outstanding. All of our Class B common stock is held by Titan. Upon completion
of this offering, all of our outstanding Series A preferred stock will convert
into 4,842,425 shares of Class A common stock. We also have 1,023,827 shares of
Class A common stock subject to warrants outstanding. Of the 250,000,000 shares
of Class A common stock authorized, 6,500,000 are being offered in this
offering, 103,250,000 shares will be reserved for issuance upon conversion of
Class B common stock into Class A common stock and 7,124,250 shares have been
reserved for issuance pursuant to certain employee benefits plans. An additional
975,000 shares of Class A common stock will be offered in this offering if the
underwriters' over-allotment is exercised in full. The following summary
description of the capital stock of Cayenta is qualified by reference to our
certificate of incorporation and bylaws, copies of which are filed as exhibits
to the registration statement relating to this prospectus.

COMMON STOCK

VOTING RIGHTS. The holders of Class A common stock and Class B common stock
generally have identical rights except that holders of Class A common stock are
entitled to one vote per share while holders of Class B common stock are
entitled to ten votes per share on all matters to be voted on by stockholders.
Holders of shares of Class A common stock and Class B common stock are not
entitled to cumulate their votes in the election of directors. Generally, all
matters to be voted on by stockholders must be approved by a majority of the
votes entitled to be cast by all shares of Class A common stock and Class B
common stock present in person or represented by proxy, voting together as a
single class, subject to any voting rights granted to holders of any preferred
stock. Except as otherwise provided by law, and subject to any voting rights
granted to holders of any outstanding preferred stock, amendments to our
certificate of incorporation generally must be approved by a majority of the
combined voting power of all Class A common stock and Class B common stock
voting together as a single class. However, amendments to our certificate of
incorporation that would alter or change the powers, preferences or special
rights of the Class A common stock or the Class B common stock so as to affect
them adversely also must be approved by a majority of the votes entitled to be
cast by the holders of the shares affected by the amendment, voting as a
separate class. Notwithstanding the foregoing, any amendment to our certificate
of incorporation to increase the authorized shares of any class or authorize the
creation, authorization or issuance of any securities convertible into, or
warrants or options to acquire, shares of any class or classes of stock shall be
approved by the affirmative vote of the holders of a majority of the Class A
common stock and Class B common stock, voting together as a single class.

Effective as of the first time at which Titan shall cease to be the
beneficial owner of an aggregate of at least a majority of the voting power of
the voting stock of Cayenta then outstanding, amendments to certain provisions
of the certificate of incorporation will require the approval of 80% of the
combined voting power of all Class A common stock and Class B common stock,
voting together as a single class.

DIVIDENDS. Holders of Class A common stock and Class B common stock will
share in an equal amount per share in any dividend declared by the board of
directors, subject to any preferential rights of any outstanding preferred
stock. Dividends consisting of shares of Class A common stock and

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<PAGE>

Class B common stock may be paid only as follows: (1) shares of Class A common
stock may be paid only to holders of Class A common stock and shares of Class B
common stock may be paid only to holders of Class B common stock and (2) shares
shall be paid proportionally with respect to each outstanding share of Class A
common stock and Class B common stock.

CONVERSION. Each share of Class B common stock is convertible at the
holder's option into one share of Class A common stock. Additionally, each share
of Class B common stock shall automatically convert into one share of Class A
common stock if at any time prior to a tax-free spin-off the number of
outstanding shares of Class B common stock owned by Titan, any of its
subsidiaries, any single unrelated person who receives shares of Class B common
stock representing more than 50% of our outstanding common stock from Titan or
any of its subsidiaries in a single transaction, or any subsidiary of that
unrelated person represents less than 50% of the total voting power of Cayenta.
We refer to any such unrelated person herein as a "Class B transferee".

Except as provided below, any shares of Class B common stock transferred to
a person other than Titan or any of its subsidiaries or any Class B transferee
shall automatically convert to shares of Class A common stock upon such
disposition. Shares of Class B common stock representing more than 50% of the
outstanding common stock of Cayenta transferred by Titan or any of its
subsidiaries in a single transaction to a Class B transferee or any subsidiary
of the Class B transferee shall not automatically convert to shares of Class A
common stock upon such disposition. Any shares of Class B common stock retained
by Titan or its subsidiaries following any such transfer of shares of Class B
common stock to the Class B transferee shall automatically convert into shares
of Class A common stock upon such transfer.

If Cayenta later determines that it is in its best interest to have Titan
spin-off its Class B common stock to the stockholders of Titan and Titan elects
to effect the spin-off, then the Class B common stock shall no longer be
convertible into shares of Class A common stock at the option of the holder
thereof. The shares of Class B common stock shall automatically convert into
shares of Class A common stock on the fifth anniversary of the tax-free
spin-off, unless prior to such transaction, Titan, or the Class B transferee, as
the case may be, delivers to Cayenta an opinion of counsel reasonably
satisfactory to Cayenta to the effect that (1) such conversion could adversely
affect the ability of Titan, or the Class B transferee, as the case may be, to
obtain a favorable ruling from the Internal Revenue Service that the transfer
would be a tax-free spin-off or (2) the Internal Revenue Service has adopted a
general non-ruling policy on tax-free spin-offs and that such conversion could
adversely affect the status of the transaction as a tax-free spin-off, in which
case no such conversion shall take place.

OTHER RIGHTS. On liquidation, dissolution or winding up of Cayenta, after
payment in full of the amounts required to be paid to holders of preferred
stock, if any, all holders of common stock, regardless of class, are entitled to
share ratably in any assets available for distribution to holders of shares of
common stock. No shares of either class of common stock are subject to
redemption or have preemptive rights to purchase additional shares of common
stock. Upon consummation of the offering, all the outstanding shares of Class A
common stock and Class B common stock will be legally issued, fully paid and
nonassessable.

PREFERRED STOCK

Upon the closing of this offering, all outstanding shares of preferred stock
will be converted into 4,842,425 shares of Class A common stock. Under our
certificate of incorporation, the board has the authority, without further
action by stockholders, to designate shares of preferred stock in one or more
series and to fix the rights, preferences, privileges, qualifications and
restrictions granted to or imposed upon the preferred stock, including dividend
rights, conversion rights, voting rights, rights and terms of redemption,
liquidation preference and sinking fund terms, any or all of which may be
greater than the rights of the common stock. The issuance of preferred stock
could adversely affect the voting power of holders of common stock and reduce
the likelihood that common stockholders will receive dividend

57
<PAGE>

payments and payments upon liquidation. The issuance could have the effect of
decreasing the market price of the common stock. The issuance of preferred stock
also could have the effect of delaying, deterring or preventing a change in
control of Cayenta. We have no present plans to issue any additional shares of
preferred stock.

REGISTRATION RIGHTS

TRANSNATIONAL PARTNERS II REGISTRATION RIGHTS. In connection with that
certain Asset Purchase Agreement dated as of January 1, 1999, between us and
Transnational Partners II, we granted registration rights to these investors
covering the 4,842,425 shares of our Class A common stock that their preferred
stock will convert into upon the closing of the offering. These investors have
"piggyback" registration rights. If we propose to register any of our securities
under the Securities Act, the investors may require us to use our best efforts
to include all or a portion of their registrable securities in such
registration. The managing underwriter, if any, of any such offering will have
the right to limit or exclude registrable securities from such registration. In
connection with this offering, Transnational Partners II waived their right to
our obligations under the above mentioned registration rights to cause their
shares of our Class A common stock to be included in this offering and to comply
with the specific notice requirements of the registration rights with respect to
this offering.

ASSIST CORNERSTONE REGISTRATION RIGHTS. In connection with the Assist
Cornerstone transaction and pursuant to the Investor Rights Agreement between
us, Titan and the shareholders of Assist Cornerstone, holders of an aggregate of
1,066,485 shares of our Class A common stock have registration rights and can
require us to file no more than one registration statement on Form S-3. We are
not required to affect any registrations on Form S-3 unless the aggregate price
to the public is $4.0 million or more. These investors also have "piggyback"
registration rights. Other than pursuant to this initial public offering, if we
propose to register any of our securities under the Securities Act, the
investors may require us to use our best efforts to include all or a portion of
their registrable securities in such registration. The managing underwriter, if
any, of any such offering will have the right to limit or exclude registrable
securities from such registration. All of these registration rights will
terminate on the earlier of December 13, 2004 or the date on which an investor
may sell all of its or his shares under Rule 144(k) of the Securities Act or
during any 90-day period under Rule 144 of the Securities Act.

BATCHELDER & PARTNERS REGISTRATION RIGHTS. In connection with the
engagement of Batchelder & Partners, Inc. for certain advisory and consulting
services, we granted Batchelder warrants to purchase up to 1,023,827 shares of
our Class A common stock. The shares of Class A common stock issuable upon
exercise of these warrants have certain registration rights. These registration
rights can require us to file no more than one registration statement on
Form S-3. We are not required to affect any registrations on Form S-3 unless the
aggregate price to the public is $4.0 million or more. These investors also have
"piggyback" registration rights. Other than pursuant to this initial public
offering, if we propose to register any of our securities under the Securities
Act, the investors may require us to use our best efforts to include all or a
portion of their registrable securities in such registration. The managing
underwriter, if any, of any such offering will have the right to limit or
exclude registrable securities from such registration. All of these registration
rights will terminate on the earlier of December 13, 2004 or the date on which
an investor may sell all of its or his shares under Rule 144(k) of the
Securities Act or during any 90-day period under Rule 144 of the Securities Act.

PENTON REGISTRATION RIGHTS. In connection with the Penton transaction and
pursuant to the Investor Rights Agreement between us and Penton, holders of an
aggregate of 516,250 shares of our Class A common stock have registration rights
and can require us to file no more than one registration statement on Form S-3.
We are not required to affect any registrations on Form S-3 unless the aggregate
price to the public is $4.0 million or more. These investors also have
"piggyback" registration rights. Other than pursuant to this initial public
offering, if we propose to register any of our securities

58
<PAGE>

under the Securities Act, the investors may require us to use our best efforts
to include all or a portion of their registrable securities in such
registration. The managing underwriter, if any, of any such offering will have
the right to limit or exclude registrable securities from such registration. All
of these registration rights will terminate on the earlier of March 30, 2005 or
the date on which an investor may sell all of its or his shares under
Rule 144(k) of the Securities Act or during any 90-day period under Rule 144 of
the Securities Act.

All registration expenses incurred in connection with the above
registrations would be borne by us, including, without limitation, all fees and
disbursements of counsel for the selling investors. Each selling investor would
pay all underwriting discounts and selling commissions applicable to the sale of
his or its registrable securities, as well as any fees and disbursements of
counsel.

ANTI-TAKEOVER PROVISIONS

DELAWARE LAW. We are governed by the provisions of Section 203 of the
Delaware General Corporation Law. In general, Section 203 prohibits a public
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner. A "business
combination" includes mergers, asset sale or other transactions resulting in a
financial benefit to the stockholder. An "interested stockholder" is a person
who, together with affiliates and associates, owns or, within three years, did
own, 15% or more of the corporation's voting stock. The statute could have the
effect of delaying, deferring or preventing a change in our control.

CERTIFICATE OF INCORPORATION AND BYLAW PROVISIONS. Our certificate of
incorporation and bylaws, provide that the board of directors will be divided
into three classes of directors, with each class serving a staggered three-year
term. The classification system of electing directors may tend to discourage a
third party from making a tender offer or otherwise attempting to obtain control
of us and may maintain the composition of the board of directors, as the
classification of the board of directors generally increases the difficulty of
replacing a majority of directors. Our certificate provides that any action
required or permitted to be taken by our stockholders must be effected at a duly
called annual or special meeting of stockholders and may not be effected by any
consent in writing. In addition, our bylaws provide that special meetings of our
stockholders may be called only by the Chairman of the board of directors, our
Chief Executive Officer, or by the board of directors pursuant to a resolution
adopted by a majority of the total number of authorized directors. Our
certificate also specifies that the authorized number of directors may be
changed only by resolution of the board of directors and does not include a
provision for cumulative voting for directors. Under cumulative voting, a
minority stockholder holding a sufficient percentage of a class of shares may be
able to ensure the election of one or more directors. These and other provisions
contained in our amended certificate and bylaws could delay or discourage
certain types of transactions involving an actual or potential change in control
of us or our management, including transactions in which stockholders might
otherwise receive a premium for their shares over then current prices. Such
provisions could also limit the ability of stockholders to remove current
management or approve transactions that stockholders may deem to be in their
best interests and could adversely affect the price of our common stock.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our Class A common stock is American
Stock Transfer & Trust Co.

THE NASDAQ STOCK MARKET'S NATIONAL MARKET

We have applied to list our Class A common stock on The Nasdaq National
Market under the trading symbol "CYTA."

59
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no market for our Class A common
stock, and we cannot assure you that a significant public market for our
Class A common stock will develop or be sustained after this offering. As
described below, no shares currently outstanding will be available for sale
immediately after this offering due to certain contractual and securities law
restrictions on resale. Sales of substantial amounts of our Class A common stock
in the public market after the restrictions lapse could adversely affect the
prevailing market price and our ability to raise equity capital in the future.

Upon completion of this offering, we will have 13,028,410 outstanding shares
of our Class A common stock, assuming no exercise of the underwriters'
over-allotment option and no exercise of outstanding options. Of these shares,
the shares offered for sale through the underwriters will be freely tradable
without restriction under the Securities Act unless purchased by our affiliates
or covered by a separate lock-up agreement with the underwriters.

The remaining 6,528,410 shares of our Class A common stock held by existing
stockholders are restricted securities. We also have outstanding
20,650,000 shares of our Class B common stock, all of which is held by Titan and
is convertible at Titan's option into shares of our Class A common stock on a
one-to-one basis. If Titan were to convert its Class B shares into Class A
shares, all of the Class A shares it would receive upon such conversion would
also be restricted securities. Restricted securities may be sold in the public
market only if registered or if they qualify for an exemption from registration
described below under Rules 144, 144(k) or 701 promulgated under the Securities
Act.

As a result of the lock-up agreements and the provisions of Rules 144,
144(k) and 701 described below, these restricted shares will be available for
sale in the public market as follows:

- no shares may be sold prior to 180 days from the date of this prospectus;

- 4,945,675 shares of our Class A common stock will have been held long
enough to be sold under Rule 144 or Rule 701 beginning 181 days after the
date of this prospectus; and

- the remaining shares may be sold under Rule 144 or 144(k) once they have
been held for the required time.

LOCK-UP AGREEMENTS. Stockholders who hold 6,453,023 shares of our Class A
common stock and Titan have agreed not to transfer or dispose of, directly or
indirectly, any shares of our Class A common stock or any securities convertible
into or exercisable or exchangeable for shares of our Class A common stock, for
a period of 180 days after the date the registration statement of which this
prospectus is a part is declared effective. Transfers or dispositions can be
made sooner with the prior written consent of Credit Suisse First Boston
Corporation. Titan's lock-up agreement covers the 20,650,000 shares of our
Class B common stock that it holds.

RULE 144. In general, under Rule 144, a person who has beneficially owned
restricted securities for at least one year would be entitled to sell within any
three-month period a number of shares that does not exceed the greater of:

- 1% of the number of shares of our Class A common stock then outstanding
which will equal approximately 130,284 shares immediately after this
offering; or

- the average weekly trading volume of our common stock on The Nasdaq Stock
Market's National Market during the four calendar weeks preceding the
filing of a notice on Form 144 with respect to the sale.

Sales under Rule 144 are also limited by manner-of-sale provisions and
notice requirements and requirements regarding the availability of current
public information about us.

60
<PAGE>
RULE 144(k). Under Rule 144(k), a person who is not deemed to have been one
of our affiliates at any time during the 90 days preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two years is
entitled to sell these shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144 discussed above.

RULE 701. In general, under Rule 701, any of our employees, consultants or
advisors who purchases or receives shares from us under a compensatory stock
purchase plan or option plan or other written agreement will be eligible to
resell their shares beginning 90 days after the date of this prospectus.
Non-affiliates will be able to sell their shares subject only to the
manner-of-sale provisions of Rule 144. Affiliates will be able to sell their
shares without compliance with the holding period requirements of Rule 144.

REGISTRATION RIGHTS. Giving effect to the conversion of all of our
outstanding preferred stock into 4,842,425 shares of Class A common stock and
the exercise of warrants outstanding to purchase 1,023,827 shares of Class A
common stock, we will have, upon completion of this offering, 14,052,237 shares
of Class A common stock outstanding. Holders of 7,448,987 of these shares will
be entitled to rights with respect to the registration of their shares under the
Securities Act. See "Description of Capital Stock--Registration Rights." Except
for shares purchased by our affiliates, registration of their shares under the
Securities Act would result in these shares becoming freely tradable without
restriction under the Securities Act immediately upon the effectiveness of the
registration.

STOCK OPTIONS. Immediately after this offering, we intend to file a
registration statement under the Securities Act covering the shares of our
Class A common stock reserved for issuance upon exercise of outstanding options.
The registration statement is expected to be filed and become effective as soon
as practicable after the closing of this offering. Accordingly, shares
registered under the registration statement will be available for sale in the
open market beginning 181 days after the effective date of the registration
statement of which this prospectus is a part, except with respect to Rule 144
volume limitations that apply to our affiliates.

61
<PAGE>
UNDERWRITING

Under the terms and subject to the conditions contained in an underwriting
agreement dated , 2000, we have agreed to sell to the underwriters
named below, for whom Credit Suisse First Boston Corporation, Donaldson,
Lufkin & Jenrette Securities Corporation and A.G. Edwards & Sons, Inc. are
acting as representatives, the following respective numbers of shares of
Class A common stock:

<TABLE>
<CAPTION>
Number
Underwriters of shares
------------ ---------
<S> <C>
Credit Suisse First Boston Corporation....................
Donaldson, Lufkin & Jenrette Securities Corporation.......
A.G. Edwards & Sons, Inc..................................

---------
Total................................................... 6,500,000
=========
</TABLE>

The underwriting agreement provides that the underwriters are obligated to
purchase all the shares of our Class A common stock in the offering if any are
purchased, other than those shares covered by the over-allotment option
described below. The underwriting agreement also provides that if an underwriter
defaults the purchase commitments of non-defaulting underwriters may be
increased or the offering of our Class A common stock may be terminated.

We have granted to the underwriters a 30-day option to purchase on a pro
rata basis up to 975,000 additional shares of Class A common stock from us at
the initial public offering price less the underwriting discounts and
commissions. The option may be exercised only to cover any over-allotments of
our Class A common stock.

The underwriters propose to offer the shares of our Class A common stock
initially at the public offering price on the cover page of this prospectus and
to selling group members at that price less a concession of $ per share. The
underwriters and selling group members may allow a discount of $ per share
on sales to other broker/dealers. After the initial public offering, the public
offering price and concession and discount to dealers may be changed by the
representatives.

The following table summarizes the compensation and estimated expenses of
$ that we will pay. The underwriting fee will be equal to the public
offering price per share of the Class A common stock less the amount paid by the
underwriters to us per share of Class A common stock. The

62
<PAGE>

underwriting discount per share will be equal to % of the initial public
offering price per share of Class A common stock.

<TABLE>
<CAPTION>
Per share Total
------------------------------- -------------------------------
Without With Without With
over-allotment over-allotment over-allotment over-allotment
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Underwriting discounts and commissions
paid by us.............................. $ $ $ $
Expenses payable by us.................... $0.25 $0.22 $1,650,000 $1,650,000
</TABLE>

The underwriters have informed us that they do not expect sales to accounts
over which any underwriter exercises discretionary authority to exceed
five percent of the shares of our Class A common stock being offered.

We, our officers and directors and some of our existing stockholders have
agreed that we will not dispose of or announce the intention to dispose of,
directly or indirectly, any additional shares of our Class A common stock or
securities convertible into or exchangeable or exercisable for any of our common
stock, without the prior written consent of Credit Suisse First Boston
Corporation for a period of 180 days after the date of this prospectus, except
issuances pursuant to the exercise of employee stock options outstanding on the
date of this prospectus.

The underwriters have reserved for sale, at the initial public offering
price up to 585,000 shares of common stock for employees, directors and other
persons associated with us who have expressed an interest in purchasing our
Class A common stock in the offering. The number of shares available for sale to
the general public in the offering will be reduced to the extent these persons
purchase such reserved shares. Any reserved shares not so purchased will be
offered by the underwriters to the general public on the same terms as the other
shares.

We and Titan have agreed to indemnify the underwriters against liabilities
under the Securities Act, or to contribute to payments which the underwriters
may be required to make in that respect.

We have applied to list our Class A common stock on The Nasdaq Stock
Market's National Market under the trading symbol "CYTA."

Prior to this offering, there has been no public market for our Class A
common stock. The initial public offering price will be determined by
negotiation between us and the representatives. The principal factors to be
considered in determining the public offering price include the following:

- the information included in this prospectus and otherwise available to the
representatives;

- market conditions for initial public offerings;

- the history and the prospects for the industry in which we will compete;

- the ability of our management;

- the prospects for our future earnings;

- the present state of our development and our current financial condition;

- the general condition of the securities markets at the time of this
offering; and

- the recent market prices of, and the demand for, publicly traded common
stock of generally comparable companies.

We can offer no assurance that the initial public offering price will
correspond to the price at which our Class A common stock will trade in the
public market subsequent to the offering or that an active trading market for
our Class A common stock will develop and continue after the offering.

63
<PAGE>
The representatives may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids in accordance with
Regulation M under the Securities Exchange Act of 1934.

- Over-allotment involves syndicate sales in excess of the offering size,
which creates a syndicate short position.

- Stabilizing transactions permit bids to purchase the underlying security
so long as the stabilizing bids do not exceed a specified maximum.

- Syndicate covering transactions involve purchases of the securities in the
open market after the distribution has been completed in order to cover
syndicate short positions.

- Penalty bids permit the representatives to reclaim a selling concession
from a syndicate member when the securities originally sold by the
syndicate member are purchased in a syndicate covering transaction to
cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids
may cause the price of the common stock to be higher than it would otherwise be
in the absence of these transactions. These transactions may be effected on The
Nasdaq Stock Market's National Market or otherwise and, if commenced, may be
discontinued at any time.

64
<PAGE>
NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

The distribution of our Class A common stock in Canada is being made only on
a private placement basis exempt from the requirement that we prepare and
file a prospectus with the securities regulatory authorities in each province
where trades of common stock are effected. Accordingly, any resale of our
Class A common stock in Canada must be made in accordance with applicable
securities laws which will vary depending on the relevant jurisdiction, and
which may require resales to be made in accordance with available statutory
exemptions or pursuant to a discretionary exemption granted by the applicable
Canadian securities regulatory authority. Purchasers are advised to seek legal
advice prior to any resale of our Class A common stock.

REPRESENTATIONS OF PURCHASERS

Each purchaser of our Class A common stock in Canada who receives a purchase
confirmation will be deemed to represent to us and the dealer from whom such
purchase confirmation is received that: (1) such purchaser is entitled under
applicable provincial securities laws to purchase our Class A common stock
without the benefit of a prospectus qualified under such securities laws,
(2) where required by law, such purchaser is purchasing as principal and not as
agent, and (3) such purchaser has reviewed the text above under "Resale
Restrictions."

RIGHTS OF ACTION (ONTARIO PURCHASERS)

The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.

ENFORCEMENT OF LEGAL RIGHTS

All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against the issuer or such persons in Canada
or to enforce a judgment obtained in Canadian courts against such issuer or
persons outside of Canada.

NOTICE TO BRITISH COLUMBIA RESIDENTS

A purchaser of common stock to whom the SECURITIES ACT (British Columbia)
applies is advised that such purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
common stock acquired by such purchaser pursuant to this offering. Such report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #95/17, a copy of which may be obtained from us. Only one such report
must be filed in respect of common stock acquired on the same date and under the
same prospectus exemption.

TAXATION AND ELIGIBILITY FOR INVESTMENT

Canadian purchasers of our Class A common stock should consult their own
legal and tax advisors with respect to the tax consequences of an investment in
the common stock in their particular circumstances and with respect to the
eligibility of the common stock for investment by the purchaser under relevant
Canadian legislation.

65
<PAGE>
LEGAL MATTERS

Cooley Godward LLP, San Diego, California will pass upon the validity of the
shares of our Class A common stock offered by this prospectus for us. The
underwriters have been represented by Stoel Rives LLP, Seattle, Washington.

EXPERTS

The consolidated financial statements of Cayenta, Inc. as of December 31,
1998 and 1999 and for each of the three years in the period ended December 31,
1999, the financial statements of Transnational Partners II, LLC for the period
from February 9, 1997 (commencement of operations) through December 31, 1997 and
for the year ended December 31, 1998 and the financial statements of JB Systems,
Inc. (d.b.a. Mainsaver), for each of the two years in the period ended
December 31, 1998 and for the ten months ended October 31, 1999, included in
this prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.

The financial statements of Assist Cornerstone Technologies, Inc. as of
December 12, 1999 and December 31, 1998, and for the period ended December 12,
1999 and for each of the two years in the period ended December 31, 1998,
included in this prospectus and registration statement have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
appearing elsewhere herein, and are included in reliance upon such report given
on the authority of such firm as experts in accounting and auditing.

The consolidated financial statements of SFG Technologies, Inc. as of
December 21, 1999 and December 31, 1998 and for the period from January 1, 1999
to December 21, 1999 and for the eight months ended December 31, 1998 and for
the years ended April 30, 1996, 1997 and 1998, included in this prospectus and
registration statement have been audited by KPMG LLP, independent auditors, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of such firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

We have filed with the Securities and Exchange Commission a registration
statement on Form S-1 under the Securities Act, with respect to our Class A
common stock offered by this prospectus. As permitted by the rules and
regulations of the Commission, this prospectus, which is a part of the
registration statement, omits certain information, exhibits, schedules and
undertakings set forth in the registration statement. For further information
pertaining to us and our Class A common stock offered hereby, reference is made
to such registration statement and the exhibits and schedules thereto.
Statements contained in this prospectus as to the contents or provisions of any
contract or other document referred to herein are not necessarily complete, and
in each instance reference is made to the copy of such contract or other
document filed as an exhibit to the registration statement, each such statement
being qualified in all respects by such reference. A copy of the registration
statement may be inspected without charge at the Commission's Public Reference
Room at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
regional offices located at the Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and Seven World Trade Center,
13th Floor, New York, New York 10048. You may obtain information on the
operation of the Commission's Public Reference Room by calling the Commission at
1-800-SEC-0330. Copies of all or any part of the registration statement may be
obtained from such offices upon the payment of the fees prescribed by the
Commission. In addition, registration statements and certain other filings made
with the Commission through its Electronic Data Gathering, Analysis and
Retrieval ("EDGAR") system, including our registration statement and all
exhibits and amendments to our registration statements, are publicly available
through the Commission's Web site at http://www.sec.gov.

66
<PAGE>
CAYENTA, INC.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
CAYENTA, INC.
Pro Forma Financial Statements (Unaudited):
Pro Forma Condensed Combined Statement of Operations
(Unaudited)............................................ F-2
Notes to Pro Forma Condensed Combined Financial
Statements (Unaudited)................................. F-3
Consolidated Financial Statements:
Report of Independent Public Accountants................ F-6
Consolidated Balance Sheets............................. F-7
Consolidated Statements of Income....................... F-8
Consolidated Statements of Stockholders' Equity......... F-9
Consolidated Statements of Cash Flows................... F-10
Notes to Consolidated Financial Statements.............. F-11
TRANSNATIONAL PARTNERS II, LLC
Report of Independent Public Accountants.................. F-25
Statements of Income...................................... F-26
Statements of Member's Equity............................. F-27
Statements of Cash Flows.................................. F-28
Notes to Financial Statements............................. F-29

JB SYSTEMS, INC.
Report of Independent Public Accountants.................. F-31
Statements of Operations.................................. F-32
Statements of Stockholders' Deficit....................... F-33
Statements of Cash Flows.................................. F-34
Notes to Financial Statements............................. F-35

ASSIST CORNERSTONE TECHNOLOGIES, INC.
Report of Independent Auditors............................ F-41
Balance Sheets............................................ F-42
Statements of Operations.................................. F-43
Statements of Shareholders' Equity (Deficit).............. F-44
Statements of Cash Flows.................................. F-45
Notes to Financial Statements............................. F-46

SFG TECHNOLOGIES, INC.
Auditors Report........................................... F-57
Balance Sheets............................................ F-58
Consolidated Statements of Operations..................... F-59
Consolidated Statements of Deficit........................ F-60
Consolidated Statements of Cash Flows..................... F-61
Notes to Consolidated Financial Statements................ F-62
</TABLE>

F-1
<PAGE>

CAYENTA, INC.

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1999

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

<TABLE>
<CAPTION>
HISTORICAL
------------------------------------------------- PRO FORMA
ASSIST SFG ADJUSTMENTS PRO FORMA
CAYENTA MAINSAVER CORNERSTONE TECHNOLOGIES (NOTE 4) COMBINED
-------- --------- ----------- ------------ ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenues.......................... $40,262 $ 6,698 $11,869 $6,749 $ -- $65,578
Cost of revenues.................. 28,355 1,835 6,265 1,348 -- 37,803
------- ------- ------- ------ ------- -------
Gross profit.................... 11,907 4,863 5,604 5,401 -- 27,775

Operating expenses:
Selling, general and
administrative................ 4,367 5,526 5,915 3,234 2,537 (a) 21,579
Research and development........ 16 1,004 612 2,245 -- 3,877
------- ------- ------- ------ ------- -------
Total operating expenses...... 4,383 6,530 6,527 5,479 2,537 25,456
------- ------- ------- ------ ------- -------
Income (loss) from operations..... 7,524 (1,667) (923) (78) (2,537) 2,319
Interest expense.................. 1,740 383 454 337 4,241 (b) 7,155
------- ------- ------- ------ ------- -------
Income (loss) before tax.......... 5,784 (2,050) (1,377) (415) (6,778) (4,836)
Income tax provision (benefit).... 2,392 -- (138) -- (1,484)(c) 770
------- ------- ------- ------ ------- -------
Net income (loss)................. $ 3,392 $(2,050) $(1,239) $ (415) $(5,294) $(5,606)
======= ======= ======= ====== ======= =======
Basic earnings (loss) per share... $ 0.34 $ (0.53)
======= =======
Weighted average shares--basic.... 10,047 474 10,521
======= ======= =======
Diluted earnings (loss) per
share........................... $ 0.26 $ (0.53)(d)
======= =======
Weighted average
shares--diluted................. 13,182 2,661 (d) 10,521
======= ======= =======
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED PRO FORMA
FINANCIAL STATEMENTS.

F-2
<PAGE>

CAYENTA, INC.

NOTES TO PRO FORMA FINANCIAL STATEMENTS

(UNAUDITED)

1. GENERAL

Cayenta, Inc. ("Cayenta" or the "Company") was formed as a wholly-owned
subsidiary of The Titan Corporation ("Titan") in 1997. Cayenta acquired
Transnational Partners II, LLC on January 1, 1999 and three additional companies
in 1999 ("the 1999 Acquired Companies") (see Note 3). Effective December 13,
1999, Titan contributed its software integration division to the Company. This
transaction has been accounted for as a combination of entities under common
control on a historical cost basis in a manner similar to a pooling of interests
for all periods presented. The Company is currently a majority-owned subsidiary
of Titan.

2. BASIS OF PRESENTATION

The accompanying unaudited pro forma condensed consolidated statement of
operations are based on adjustments to the historical consolidated financial
statements of Cayenta to give effect to the acquisitions described in Note 3
below. The pro forma condensed consolidated statements of operations assumes the
acquisitions were consummated as of the beginning of 1999. The pro forma
condensed consolidated statement of operations is not necessarily indicative of
results that would have occurred had the acquisitions been consummated as of the
beginning of 1999 or the results that may be attained in the future.

Certain information normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States
has been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. The pro forma condensed consolidated
statement of operations should be read in conjunction with the historical
consolidated financial statements of Cayenta, the historical financial
statements of the 1999 Acquired Companies and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere
herein.

The information in the unaudited pro forma condensed consolidated statement
of operations for the year ended December 31, 1999 has been derived from
(i) the audited statements of operations of Cayenta for the year ended December
31, 1999 and each of the 1999 Acquired Companies through their respective
acquisition dates.

The financial statements of SFG Technologies are translated from Canadian
dollars to U.S. dollars based on the end of the period exchange rate for balance
sheet items and average for the period rates for statement of operations data.
There are significant differences between U.S. and Canadian GAAP relative to SFG
Technologies.

3. ACQUISITIONS

All acquisitions were accounted for as purchases. Accordingly the operating
results are reflected in the consolidated results of Cayenta from the date of
acquisition. Summary information on the acquisitions follows:

THE 1999 ACQUIRED COMPANIES

MAINSAVER. In November 1999, Cayenta acquired J.B. Systems, Inc., an
enterprise asset management, or EAM, company doing business under the name
Mainsaver. The Company acquired Mainsaver for $11.7 million in cash, of which
$8.2 million was paid at the closing. Of the $3.5 million

F-3
<PAGE>

CAYENTA, INC.

NOTES TO PRO FORMA FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

3. ACQUISITIONS (CONTINUED)

withheld at the closing, $500,000 was used to satisfy a working capital
shortfall and $3.0 million is due in May 2001, after satisfaction of possible
additional working capital adjustments or indemnification obligations. In
addition, the Company paid approximately $3.4 million to reduce outstanding
indebtedness of Mainsaver.

ASSIST CORNERSTONE. In December 1999, Cayenta acquired Assist Cornerstone,
an e-commerce solutions and software company. The Company acquired Assist
Cornerstone for 516,000 shares of Cayenta Class A common stock and approximately
$12.9 million in cash, of which $9.9 million was paid at the closing. Of the
$3.0 million withheld at the closing, $1.7 million was paid in March 2000 and
$1.3 million is due in June 2001, after satisfaction of possible working capital
adjustments or indemnification obligations. In addition, the Company paid
approximately $3.2 million to retire outstanding indebtedness of Assist
Cornerstone and redeem all of its outstanding redeemable preferred stock.

SFG TECHNOLOGIES. In December 1999, Cayenta acquired SFG Technologies, a
solutions and software provider focusing on revenue cycle services for the
utility industry. The Company acquired SFG Technologies for $11.6 million in
cash, of which $9.5 million was paid at the closing. Of the $2.1 million placed
into escrow at the closing, $600,000 was released from escrow in March 2000 and
$1.5 million is due in June 2001, after satisfaction of possible working capital
adjustments or indemnification obligations. In addition, the Company paid
approximately $3.1 million to retire outstanding indebtedness of SFG
Technologies and redeem all of its outstanding redeemable preferred stock.

Acquisition costs related to the 1999 Acquired Companies approximated $5.1
million which includes approximately $2.1 million of estimated fair value
assigned to 495,800 warrants granted to an investment advisor for certain
advisory services performed in connection with these acquisitions. Goodwill
related to these acquisitions amounted to approximately $53.7 million and is
being amortized over 20 years.

4. ADJUSTMENTS TO HISTORICAL FINANCIAL STATEMENTS

The following pro forma adjustments have been made to the historical
condensed consolidated statement of operations as if the acquisitions described
in Note 3 were consummated as of January 1, 1999:

STATEMENT OF OPERATIONS

(a) To reflect incremental amortization (on a straight-line basis over
20 years) of goodwill related to the purchase of the 1999 Acquired
Companies.

(b) To reflect incremental interest expense on advances under our
subordinated promissory note to fund the cash portion of the purchase prices
of the 1999 Acquired Companies and to reflect interest expense related to
holdback amounts for the 1999 Acquired Companies.

(c) To reflect the change in income taxes related to pro forma
adjustments (excluding goodwill amortization) at an effective tax rate of
35%.

F-4
<PAGE>

CAYENTA, INC.

NOTES TO PRO FORMA FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

4. ADJUSTMENTS TO HISTORICAL FINANCIAL STATEMENTS (CONTINUED)

(d) Pro forma increases in diluted earnings per share reflect the
issuance of 2,345,000 convertible preferred shares to former shareholders of
TNP and the effect of stock options issued of 790,000 shares. The impact of
the 2,345,000 convertible preferred shares and Cayenta's potentially
dilutive stock options have been eliminated in the pro forma earnings per
share as their impact would be anti-dilutive.

F-5
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Cayenta, Inc.:

We have audited the accompanying consolidated balance sheets of Cayenta,
Inc. (a Delaware Corporation and a majority-owned subsidiary of The Titan
Corporation) and subsidiaries as of December 31, 1998 and 1999, and the related
consolidated statements of income, stockholders' equity and cash flows for each
of the three years in the period ended December 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Cayenta, Inc. and
subsidiaries as of December 31, 1998 and 1999 and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1999 in conformity with accounting principles generally accepted in
the United States.

ARTHUR ANDERSEN LLP

San Diego, California
January 31, 2000 (Except with respect
to the matters discussed in Note 12,
as to which the date is March 30, 2000)

F-6
<PAGE>
CAYENTA, INC.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PAR VALUES)

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1998 1999
-------- --------
<S> <C> <C>
ASSETS
Current Assets:
Cash...................................................... $ -- $ 6,938
Accounts receivable....................................... 10,984 14,121
Prepaid expenses and other................................ 54 2,131
------- --------
Total current assets.................................... 11,038 23,190
Property and equipment--net................................. 649 3,009
Goodwill--net............................................... 236 69,412
Investment in joint venture and other....................... -- 5,319
------- --------
Total assets............................................ $11,923 $100,930
======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable.......................................... $ 2,634 $ 9,256
Accrued compensation and benefits......................... 367 2,272
Income taxes payable...................................... -- 2,934
Notes payable............................................. 0 5,473
Other current liabilities................................. 1 11,186
Current portion of long-term debt......................... 0 308
------- --------
Total current liabilities............................... 3,002 31,429
------- --------
Long-term debt.............................................. 0 1,585
Deferred income tax liability............................... 15 0
Other non-current liabilities............................... 0 5,477
Subordinated promissory note................................ -- 50,389

Commitments and contingencies
Stockholders' Equity:
Preferred Stock, $.001 par value 17,345 shares authorized
Series A Convertible Preferred Stock, 2,345 shares
authorized,
0 and 2,345 issued and outstanding...................... -- 2
Class A Common Stock, $.001 par value, 100,000 shares
authorized, 0 and 566 issued and outstanding.............. -- 1
Class B Common Stock, $.001 par value, 50,000 shares
authorized,
10,000 and 10,000 issued and outstanding.................. 10 10
Additional paid-in-capital.................................. 83 7,248
Deferred compensation....................................... (49) (1,675)
Parent company investment................................... 5,757 --
Cumulative foreign currency translation adjustment.......... -- (33)
Retained earnings........................................... 3,105 6,497
------- --------
Total stockholders' equity.............................. 8,906 12,050
------- --------
Total liabilities and stockholders' equity.............. $11,923 $100,930
======= ========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED BALANCE
SHEETS.

F-7
<PAGE>
CAYENTA, INC.

CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------------------
1997 1998 1999
------- ------- -------
<S> <C> <C> <C>
Revenues.................................................... $10,191 $12,095 $40,262
Cost of revenues............................................ 6,514 7,413 28,355
------- ------- -------
Gross profit.............................................. 3,677 4,682 11,907
Selling, general and administrative expenses................ 1,705 2,259 4,383
------- ------- -------
Income from operations...................................... 1,972 2,423 7,524
Interest expense-net........................................ 139 204 1,740
------- ------- -------
Income before taxes......................................... 1,833 2,219 5,784
Income tax provision........................................ 734 908 2,392
------- ------- -------
Net income.................................................. $ 1,099 $ 1,311 $ 3,392
======= ======= =======
Basic earnings per share.................................... $ 0.11 $ 0.13 $ 0.34
======= ======= =======
Weighted average shares--basic.............................. 10,000 10,000 10,047
======= ======= =======
Diluted earnings per share.................................. $ 0.11 $ 0.13 $ 0.26
======= ======= =======
Weighted average shares--diluted............................ 10,030 10,148 13,182
======= ======= =======
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

F-8
<PAGE>
CAYENTA, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(IN THOUSANDS)

<TABLE>
<CAPTION>
CUMULATIVE
SERIES A FOREIGN
CONVERTIBLE COMMON STOCK ADDITIONAL PARENT CURRENCY
PREFERRED --------------------- PAID-IN- DEFERRED COMPANY TRANSLATION
STOCK CLASS A CLASS B CAPITAL COMPENSATION INVESTMENT ADJUSTMENT
----------- --------- --------- ---------- ------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at January 1, 1997........ $ -- $ -- $ 10 $ -- $ -- $ 2,283 --
Net income....................... -- -- -- -- -- -- --
Distribution to Titan, net....... -- -- -- -- -- (107) --
---- ---- ---- ------ ------- ------- ---
Balances at December 31, 1997...... -- -- 10 -- -- 2,176 --
Net income....................... -- -- -- -- -- -- --
Titan investment, net............ -- -- -- -- -- 3,581 --
Deferred compensation related to
the issuance of stock
options........................ -- -- -- 83 (83) -- --
Amortization of deferred
compensation................... -- -- -- -- 34 -- --
---- ---- ---- ------ ------- ------- ---
Balances at December 31, 1998...... -- -- 10 83 (49) 5,757 --
Net income....................... -- -- -- -- -- -- --
Deferred compensation related to
the issuance of stock
options........................ -- -- -- 1,852 (1,852) -- --
Amortization of deferred
compensation................... -- -- -- -- 226 -- --
Foreign currency translation
adjustment....................... -- -- -- -- -- -- (33)
Conversion of parent company
investment into subordinated
promissory note.................. -- -- -- -- -- (5,757) --
Issuance of preferred stock in
connection with the acquisition
of TNP......................... 2 -- 1,898 -- -- --
Issuance of common stock in
conjunction with exercise of
stock options.................. -- -- -- 18 -- -- --
Issuance of common stock in
connection with the acquisition
of Assist Cornerstone
Technologies, Inc.............. -- 1 -- 3,397 -- -- --
---- ---- ---- ------ ------- ------- ---
Balances at December 31, 1999...... $ 2 $ 1 $ 10 $7,248 $(1,675) $ 0 (33)
==== ==== ==== ====== ======= ======= ===

RETAINED
EARNINGS TOTAL
-------- --------
<S> <C> <C>
Balances at January 1, 1997........ $ 695 $ 2,988
Net income....................... 1,099 1,099
Distribution to Titan, net....... -- (107)
------ -------
Balances at December 31, 1997...... 1,794 3,980
Net income....................... 1,311 1,311
Titan investment, net............ -- 3,581
Deferred compensation related to
the issuance of stock
options........................ -- --
Amortization of deferred
compensation................... -- 34
------ -------
Balances at December 31, 1998...... 3,105 8,906
Net income....................... 3,392 3,392
Deferred compensation related to
the issuance of stock
options........................ -- --
Amortization of deferred
compensation................... -- 226
Foreign currency translation
adjustment....................... -- (33)
Conversion of parent company
investment into subordinated
promissory note.................. -- (5,757)
Issuance of preferred stock in
connection with the acquisition
of TNP......................... -- 1,900
Issuance of common stock in
conjunction with exercise of
stock options.................. -- 18
Issuance of common stock in
connection with the acquisition
of Assist Cornerstone
Technologies, Inc.............. -- 3,398
------ -------
Balances at December 31, 1999...... $6,497 $12,050
====== =======
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

F-9
<PAGE>
CAYENTA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
------------------------------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.................................................. $ 1,099 $ 1,311 $ 3,392
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization............................. 375 286 1,040
Deferred income taxes..................................... 20 10 436
Deferred compensation charge.............................. -- 34 225
Foreign currency translation adjustment................... -- -- (33)
Change in operating assets and liabilities, net of effects
of businesses acquired:
Accounts receivable....................................... (487) (7,333) (2,309)
Prepaid expenses and other................................ (71) 17 77
Accounts payable.......................................... 93 2,541 1,932
Income tax payable........................................ -- -- 2,934
Accrued compensation and benefits......................... 520 (153) 1,905
Other accrued liabilities................................. (264) (42) 6,792
------- ------- --------
Net cash provided by (used in) operating activities..... 1,285 (3,329) 16,391
------- ------- --------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................................ (883) (252) (975)
Payment for purchase of businesses, net of cash acquired.... (295) -- (48,110)
Purchase of investment...................................... -- -- (5,000)
------- ------- --------
Net cash used in investing activities................... (1,178) (252) (54,085)
------- ------- --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Subordinated promissory note................................ -- -- 50,389
Titan investment (distribution), net........................ (107) 3,581 (5,757)
------- ------- --------
Net cash provided by (used in) financing activities......... (107) 3,581 44,632
------- ------- --------
Net change in cash.......................................... -- -- 6,938
Cash at beginning of year................................. -- -- --
------- ------- --------
Cash at end of year....................................... $ -- $ -- $ 6,938
======= ======= ========
Acquisitions of TNP, Mainsaver, Assist and SFG:
Premium paid in excess of assets acquired........... $ -- $ -- $ 66,408
Notes payable....................................... -- -- (10,900)
Series A Convertible Preferred Stock................ -- -- (1,900)
Class A common stock................................ -- -- (3,398)
Warrants to Financial Advisor....................... -- -- (2,100)
------- ------- --------
Cash................................................ $ -- $ -- $ 48,110
======= ======= ========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

F-10
<PAGE>
CAYENTA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF THE BUSINESS

Cayenta, Inc. ("Cayenta" or the "Company") was formed as a wholly-owned
subsidiary of The Titan Corporation ("Titan") in 1997. In January 1999, the
Company acquired substantially all of the assets and liabilities of
Transnational Partners II, LLC ("TNP"), an enterprise application integration
consulting company, to broaden its systems integration capabilities and access
its customer base. Effective December 13, 1999, Titan contributed its software
integration division to the Company. This transaction has been accounted for as
a combination of entities under common control on a historical cost basis in a
manner similar to a pooling of interests for all periods presented. The Company
is currently a majority-owned subsidiary of Titan.

In September 1999, together with a Sempra Energy subsidiary and modis, the
Company established Soliance LLC ("Soliance"), a joint venture that markets and
delivers systems and solutions, including total services provider ("TSP")
offerings, to the utility industry. The Company owns a 10% equity interest in
Soliance which is being accounted for under the cost method. Cayenta has a
Management Services Agreement with Soliance pursuant to which the Company
provides TSP services to Soliance's customers in the utility industry.

During late 1999, the Company acquired all of the capital stock of JB
Systems, Inc., an enterprise asset management, or EAM, company doing business
under the name Mainsaver. Also during late 1999, the Company acquired all of the
capital stock of Assist Cornerstone Technologies, Inc., an e-commerce solutions
and software company, and SFG Technologies, Inc., a solutions and software
company focusing on revenue cycle services for the utility industry.

Cayenta has historically derived its revenues from application integration
and consulting services and from sales of its proprietary software solutions.
Historically, the Company has provided services primarily on a fixed-time,
fixed-price basis and, to a lesser extent, on a time and materials basis.

On a historical basis, the Company's principal business risks generally
result from its dependence upon a small number of customers and the
uncertainties inherent in government contracting. As the Company launches its
TSP offering, the Company faces a number of new risks, including but not limited
to:

- The market for TSP offerings is new and undeveloped. Furthermore, the
Company has no history of generating revenues from its TSP offering.

- The development of the Company's TSP offering is highly dependent upon the
successful integration of the products recently acquired from Mainsaver,
Assist Cornerstone Technologies, Inc., and SFG Technologies, Inc.

- The Company's TSP strategy will require a significant investment in
infrastructure, sales and marketing, processes and solutions. As a result,
the Company expects to incur losses for the foreseeable future.

See "Risk Factors" in the accompanying prospectus for a more complete
discussion of risks faced by the Company.

F-11
<PAGE>
CAYENTA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include
the accounts of Cayenta and its subsidiaries. All significant intercompany
transactions and balances have been eliminated in consolidation.

USE OF ESTIMATES. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

REVENUE RECOGNITION. Revenues for consulting services are recorded at the
time services are performed, except for fixed-price contracts, which are
accounted for using the percentage-of-completion method. Estimated losses on
fixed-price contracts are recorded in the period the losses are determinable. In
determining the applicability of the percentage of completion method to
accounting for fixed price contracts the company considers the risks associated
with estimating its costs to complete a contract if the estimate are deemed
unreliable or contain a significant degree of risk the company will seek to
modify the contract to time and materials or use the completed contract method.

The Company also generates revenues from licensing the rights to use its
software products primarily to end users. The Company further generates revenues
from post-contract support (maintenance), consulting and training services
performed for customers who license its products.

DEFERRED REVENUES. Deferred revenues consists principally of customer
deposits and payments for software maintenance agreements with customers whereby
the Company receives payment in advance of performing the service. Revenues from
the contracts is recognized ratably over the contract period.

FOREIGN CURRENCY TRANSLATION. The financial statements of the Company's one
foreign subsidiary are measured using the local functional currency. Assets and
liabilities of the subsidiary are translated at exchange rates in effect as of
the balance sheet date. Revenues and expenses are translated at average rates of
exchange in effect during the year. The resulting cumulative translation
adjustments have been recorded as a separate component of stockholders' equity.
Foreign currency transaction gains and losses are included in consolidated net
income.

PROPERTY AND EQUIPMENT. Property and equipment are stated at acquisition
cost. Depreciation is provided using the straight-line method, with estimated
useful lives of two to eight years for leasehold improvements (or the life of
the lease if shorter) and three to seven years for machinery and equipment and
furniture and fixtures.

F-12
<PAGE>
CAYENTA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

SOFTWARE DEVELOPMENT COSTS. In accordance with Statement of Financial
Accounting Standards No. 86, "Accounting for the costs of computer software to
be sold, leased or otherwise marketed", software development costs are
capitalized from the time the product's technological feasibility has been
established until such time as the product is released for sale to the general
public. Amortization of capitalized software is generally recorded on a
straight-line basis over four years. No amounts were capitalized in the years
ended December 31, 1997, 1998 and 1999.

GOODWILL. The excess of the cost over the fair value of net assets of
purchased businesses ("goodwill") is amortized on a straight-line basis over
lives ranging from five to thirty years. The Company periodically re-evaluates
the original assumptions and rationale utilized in the establishment of the
carrying value and estimated lives of its goodwill. The criteria used for these
evaluations include management's estimate of the asset's continuing ability to
generate positive income from operations and positive cash flow in future
periods as well as the strategic significance of the intangible asset to the
Company's business objectives.

IMPAIRMENT OF LONG-LIVED ASSETS. Periodically, the Company reviews for
possible impairment of its long-lived assets and certain identifiable
intangibles to be held and used. Whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be fully recoverable,
asset values are adjusted accordingly. In evaluating whether an impairment
exists, the Company compares the carrying value of the asset to the estimated
undiscounted future cash flows. If an impairment is deemed to exist, the asset's
carrying value is adjusted to the present value of its estimated future cash
flows.

STOCK-BASED COMPENSATION. The Company has elected to adopt the
disclosure-only provisions of Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation" ("SFAS 123"). Accordingly, the
Company will continue to account for its stock-based compensation plans under
the provisions of APB No. 25.

INCOME TAXES. The Company accounts for income taxes under Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes", which
requires the use of the liability method of accounting for deferred income
taxes. Under this method, deferred income taxes are recorded to reflect the tax
consequences on future years of temporary differences between the tax bases of
assets and liabilities and their financial reporting amounts at each year-end.
If it is more likely than not that some portion or all of a deferred tax asset
will not be realized, a valuation allowance is recognized.

The Company and Titan intend to enter into a tax allocation agreement under
which the Company will be included in Titan's consolidated federal and certain
state income tax returns. The Company believes that the agreement will be
structured so that in the years in which the Company has taxable income, it will
pay Titan amounts comparable to the taxes the Company would have paid if it had
filed separate tax returns. For so long as Titan maintains beneficial ownership
of at least 80% of the total voting power and 80% of the total value of the
outstanding Common Stock, the Company will be included in the consolidated
federal and certain state income tax returns filed by Titan.

PER SHARE INFORMATION. Basic and diluted earnings per share are presented
in conformity with Statement of Financial Accounting Standards No. 128,
"Earnings per Share" ("SFAS 128"), for all periods presented. In accordance with
SFAS 128, basic earnings per share has been computed using the weighted-average
number of shares of common stock outstanding during the period. Diluted earnings

F-13
<PAGE>
CAYENTA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
per share include the effects of potentially dilutive securities using the
as-converted and treasury stock methods.

The following data summarize information relating to the per share
computations for continuing operations before the cumulative effect of a change
in accounting principle:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1999
----------------------------------------
INCOME SHARES (000'S) PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNTS
----------- -------------- ---------
<S> <C> <C> <C>
Basic EPS:
Net Income...................................... $ 3,392 10,047 $ .34
Effect of dilutive securities:
Stock Options................................... -- 790 (.03)
Series A Preferred Stock........................ -- 2,345 (.05)
------- ------ -----
Diluted EPS:
Net Income plus assumed conversions............. $ 3,392 13,182 $ .26
======= ====== =====

<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1998
----------------------------------------
INCOME SHARES (000'S) PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNTS
----------- -------------- ---------
<S> <C> <C> <C>
Basic EPS:
Net Income...................................... $ 1,311 10,000 $ .13
Effect of dilutive securities: Stock Options...... -- 148 --
------- ------ -----
Diluted EPS:
Net Income plus assumed conversions............. $ 1,311 10,148 $ .13
======= ====== =====

<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1997
----------------------------------------
INCOME SHARES (000'S) PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNTS
----------- -------------- ---------
<S> <C> <C> <C>
Basic EPS:
Net Income...................................... $ 1,099 10,000 $ .11
Effect of dilutive securities: Stock Options.... -- 30 --
------- ------ -----
Diluted EPS:
Net Income plus assumed conversions............. $ 1,099 10,030 $ .11
======= ====== =====
</TABLE>

FAIR VALUE OF FINANCIAL INSTRUMENTS. The carrying amounts of the Company's
financial instruments, including cash, accounts receivable, and accounts payable
and accrued liabilities approximate their fair values due to their short term
nature. Financial instruments which potentially subject the Company to
concentrations of credit risk consist primarily of trade accounts receivable.
The Company believes it is not exposed to any significant credit risk on its
accounts receivable.

COMPREHENSIVE INCOME. Effective January 1, 1998, the Company adopted
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" ("SFAS 130"). This statement establishes standards for reporting and
display of comprehensive income and its components in a full

F-14
<PAGE>
CAYENTA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

set of general purpose financial statements. The objective of the statement is
to report a measure of all changes in equity of an enterprise that result from
transactions and other economic events of the period other than transactions
with owners. Comprehensive income is the total of net income and all other
nonowner changes in equity.

During the year ended December 31, 1999, the Company's only element of other
comprehensive income resulted from foreign currency translation adjustments in
1999, which are reflected in the consolidated statements of changes in
stockholders' equity as foreign currency translation adjustments.

START-UP COSTS. The Company expenses the costs of start-up activities as
incurred in accordance with the provisions of AICPA Statement of Position 98-5,
"Reporting on the Costs of Start-Up Activities".

PARENT COMPANY INVESTMENT. The cash receipts and disbursements of the
Company's operations have historically been combined with other Titan cash
transactions and balances. Titan funded all of the Company's cash requirements
through December 31, 1999.

NEW ACCOUNTING STANDARDS. In December 1999, the Securities and Exchange
Commission ("SEC") issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue
Recognition in Financial Statements." This SAB summarizes the SEC's view in
applying generally accepted accounting principles to revenue recognition in
financial statements. This SAB is effective for all registrants during the
second quarter of fiscal 2000. Management is currently assessing the impact, if
any, which the adoption of the provisions of SAB 101 might have on the Company's
financial statements.

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133").
This statement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives), and for hedging activities.
It requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. In June 1999, the effective date of SFAS 133 was amended to be
effective for all fiscal quarters of all fiscal years beginning after June 15,
2000 by Statement of Financial Accounting Standards No. 137, "Accounting for
Derivative Instruments and Hedging Activities -- Deferral of Effective Date of
FASB Statement No. 133". The Company anticipates that the adoption of SFAS 133
will not have a material impact on the Company's financial position or results
of operations.

NOTE 3. ACQUISITIONS AND JOINT VENTURE.

In September 1999, together with a Sempra Energy subsidiary and modis, the
Company established Soliance, a joint venture that markets and delivers systems
and solutions, including TSP offerings, to the utility industry. In exchange for
a $5.0 million investment, the Company received a 10% equity interest in
Soliance which is being accounted for under the cost method. Cayenta has a
Management Services Agreement with Soliance pursuant to which the Company
provides TSP services to Soliance's customers in the utility industry. Under
certain circumstances, the Company may also be required to make up to
$2.5 million in additional capital contributions.

On January 1, 1999, the Company acquired certain assets of TNP for a
purchase price of $9.8 million, consisting of $7.0 million cash, a $2.8 million
note due January 2000 (bearing interest at

F-15
<PAGE>
CAYENTA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 3. ACQUISITIONS AND JOINT VENTURE. (CONTINUED)

7%), subject to certain post-closing adjustments, and 2,345 shares of Series A
convertible preferred stock representing a minority interest in Cayenta. The
transaction was accounted for as a purchase. The excess of the purchase price
over the estimated fair value of net assets acquired, approximately
$12.3 million, net at September 30, 1999, is being amortized on a straight-line
basis over 30 years. TNP's results of operations have been consolidated with the
Company's results of operations since January 2, 1999.

In November 1999, Cayenta acquired J.B. Systems, an EAM company doing
business under the name Mainsaver. The Company acquired Mainsaver for
$11.7 million in cash, of which $8.2 million was paid at the closing. Of the
$3.5 million withheld at the closing, $500,000 is due in February 2000 and
$3.0 million is due in May 2001, after satisfaction of possible working capital
adjustments or indemnification obligations. In addition, the Company paid
approximately $3.4 million to reduce outstanding indebtedness of Mainsaver.

In December 1999, Cayenta acquired Assist Cornerstone Technologies, Inc., an
e-commerce solutions and software company. The Company acquired Assist
Cornerstone for 516,000 shares of Cayenta Class A common stock and approximately
$12.9 million in cash, of which $9.9 million was paid at the closing. Of the
$3.0 million withheld at the closing, $1.7 million is due in March 2000 and
$1.3 million is due in June 2001, after satisfaction of possible working capital
adjustments or indemnification obligations. In addition, the Company paid
approximately $3.2 million to retire outstanding indebtedness of Assist
Cornerstone and redeem all of its outstanding redeemable preferred stock.

In December 1999, Cayenta acquired SFG Technologies, Inc., a solutions and
software provider focusing on revenue cycle services for the utility industry.
The Company acquired SFG Technologies for $11.6 million in cash, of which
$9.5 million was paid at the closing. Of the $2.1 million placed into escrow at
the closing, $600,000 is due in March 2000 and $1.5 million is due in June 2001,
after satisfaction of possible working capital adjustments or indemnification
obligations. In addition, the Company paid approximately $3.1 million to retire
outstanding indebtedness of SFG Technologies and redeem all of its outstanding
redeemable preferred stock.

All of these acquisitions have been funded by Titan during the year ended
December 31, 1999.

In connection with the acquisitions described above, except for the
acquisition of TNP, the Company has issued warrants to a financial advisor to
purchase up to 496,000 shares of Class A common stock for $13.11 per share. The
warrants are exercisable at any time and expire in 5 years.

All of the above acquisitions were accounted for under the purchase method,
accordingly their results of operations have been included from the date of
acquisition.

Goodwill of approximately $200 at December 31, 1999 relates to an
acquisition in 1997, and is being amortized over five years.

F-16
<PAGE>
CAYENTA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 3. ACQUISITIONS AND JOINT VENTURE. (CONTINUED)

Unaudited pro forma data for the years ended December 31, 1998 and 1999
giving effect to the purchase of TNP, Mainsaver, Assist and SFG, as if they had
been acquired at the beginning of 1998 and 1999 are shown below:

<TABLE>
<CAPTION>
TWELVE MONTHS
ENDED
DECEMBER 31,
-------------------
1998 1999
-------- --------
<S> <C> <C>
Revenues.................................................... $41,348 $65,578
Net income (loss)........................................... (4,466) (5,606)
Basic earnings (loss) per share............................. $ (0.42) $ (0.53)
Diluted earnings (loss) per share........................... (0.42) (0.53)
</TABLE>

NOTE 4. OTHER FINANCIAL DATA

Following are details concerning certain balance sheet accounts as of
December 31, 1998 and 1999:

<TABLE>
<CAPTION>
1998 1999
----------- -----------
<S> <C> <C>
Accounts Receivable:
Billed........................................... $ 1,297,000 $10,796,000
Unbilled......................................... 9,687,000 3,325,000
----------- -----------
$10,984,000 $14,121,000
=========== ===========
</TABLE>

Unbilled receivables represent work-in-process that will be billed in
accordance with contract terms and delivery schedules. Also included in unbilled
receivables are amounts billable upon final execution of contracts, contract
completion, milestones or completion of rate negotiations. Generally, unbilled
receivables are expected to be collected within one year.

<TABLE>
<CAPTION>
1998 1999
---------- -----------
<S> <C> <C>
Property and Equipment:
Machinery and equipment................................... $1,190,000 $ 2,885,000
Furniture, fixtures and leasehold improvements............ 152,000 1,136,000
---------- -----------
1,342,000 4,021,000
Less accumulated depreciation and amortization.............. (693,000) (1,012,000)
---------- -----------
$ 649,000 $ 3,009,000
========== ===========
</TABLE>

NOTE 5. RELATED PARTY TRANSACTIONS

CORPORATE SERVICES AGREEMENT. Titan provides to the Company routine and
ordinary corporate services, including financial, insurance, accounting,
employee benefits, payroll, tax and legal services. Titan also provides the
Company corporate planning, government relations and corporate quality assurance
services. The Company shares certain Titan systems, including its accounting
system and human resource system. Because Titan engages in government contracts
work, Titan allocates costs to its subsidiaries based upon government cost
accounting requirements. The Company pays Titan for

F-17
<PAGE>
CAYENTA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 5. RELATED PARTY TRANSACTIONS (CONTINUED)
human resources services based upon the Company's percentage of the total number
of Titan group employees. The Company pays for other corporate services based
upon the average of three percentages: (1) the percentage of the Company's
payroll to the total payroll of the Titan group, (2) the percentage of the
Company's operating revenues to the total operating revenues of the Titan group
and (3) the percentage of the Company's average net book value which is the sum
of the Company's tangible capital assets plus inventories to the total average
net book value of the tangible capital assets plus inventory of the Titan group
as of the end of the last fiscal year and as of the final day of each calendar
quarter in the current fiscal year. Titan may adjust its fees based upon its
assessment of the Company's relative use of these services.

The initial term of the Corporate Services Agreement is one year. This
agreement renews automatically unless the Company elects not to renew by giving
Titan notice. The Company intends to build its own administrative infrastructure
and end the Corporate Services Agreement with Titan by the end of 2000. Amounts
aggregating $284,000, $230,000 and $438,000 are included in the Company's
results of operations in the accompanying consolidated financial statements for
the years ended December 31, 1997, 1998 and 1999, respectively. Management
believes that these allocations have been and will be reasonable.

TAX ALLOCATION AGREEMENT As long as Titan maintains beneficial ownership of
at least 80% of the total voting power of the Company's capital stock and 80% of
the total value of the Company's outstanding common stock, the Company will be
included in Titan's consolidated federal income tax returns. Following
completion of this offering, the Company expects to file separate federal income
tax returns.

Cayenta and Titan intend to enter into a Tax Allocation Agreement. Under the
Tax Allocation Agreement, the Company will agree to pay to the applicable tax
authorities an amount generally equal to the tax liability that the Company
would have incurred if it had prepared and filed a separate return. Titan will
have broad discretion in determining the amount of separate taxable income and
tax liability that the Company would realize on such a separate return. In
computing this separate tax liability, the Company's tax attributes, including
net operating loss and tax credit carryovers, will be deemed to be the amount
that it would have had had it always owned the businesses transferred to the
Company by Titan.

As a member of the Titan group for purposes of filing consolidated federal
income tax returns, the Company will be liable for the federal income tax of the
Titan group if Titan or any member of the group fails to pay its taxes.

FACILITIES AGREEMENT The Company has subleased approximately 26,000 square
feet in Reston, Virginia from Titan. Under the Facilities Agreement, Titan
provides the Company rent, maintenance, property taxes, utilities, landlord
pass-through expenses, property insurance, reception desk services, telephone
services and centralized mail and postage and other services. The Company pays
Titan an annual fee determined by the Company's percentage of Titan's annual
costs for this facility. This percentage is based upon the percentage of the
total square feet in the facility that the Company occupies. Amounts aggregating
$227,000, $145,000 and $424,000 are included in the Company's results of
operations in the accompanying consolidated financial statements for the years
ended December 31, 1997, 1998 and 1999, respectively.

F-18
<PAGE>
CAYENTA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 5. RELATED PARTY TRANSACTIONS (CONTINUED)
EMPLOYEE BENEFIT PLANS The Company's employees are eligible to participate
in the Titan benefit plans. Those plans include a 401(k) plan, an employee stock
ownership plan, a non-qualified executive deferred compensation plan, an
employee stock purchase plan, and a health and welfare cafeteria plan. The
direct cost of these plans for the Company's employees are charged by Titan to
the Company.

SUBORDINATED PROMISSORY NOTE As of December 31, 1999, the Company owed
$50.4 million to Titan under a subordinated, unsecured promissory note. The
Company can have a maximum of $70.0 million of indebtedness outstanding under
this promissory note at any one time. The promissory note is due in December
2004 and bears interest, payable quarterly, at the greater of the rate of 10%
per annum or Titan's effective weighted average interest rate under its senior
credit facility. The Company can repay amounts outstanding under the promissory
note at any time without penalty. At Titan's option, the Company may repay
amounts outstanding under the promissory note with the net proceeds of any asset
sales the Company makes that are not in the ordinary course of business or if
the Company obtains a credit facility from a third party lender and the lender
and the facility permits the use of proceeds to repay existing indebtedness. The
Company cannot use any of the proceeds of its initial public offering to repay
amounts outstanding under the promissory note or under any indebtedness the
Company incurs to refinance the promissory note.

OTHER In December 1999, Titan contributed its software integration division
to Cayenta (Note 1). As part of this transaction, Titan contributed
$7.0 million in cash and eliminated $10.0 million of the division's debt to
Titan for $17.0 million of the division's accounts receivable.

NOTE 6. SIGNIFICANT CUSTOMERS

Sales to a single federal agency were $8.8 million, $11.2 million and
$8.5 million for the years ended December 31, 1997, 1998 and 1999, respectively.
Sales to another local government customer and to a single utility customer were
$15.3 million and $10.8 million respectively, for the year ended December 31,
1999. For all periods presented, substantially all accounts receivable were due
from these customers.

Sales to a single commercial customer were $1.4 million for the year ended
December 31, 1997.

No other single customer accounted for 10% or more of the revenues for these
periods.

NOTE 7. COMMITMENTS AND CONTINGENCIES

The Company periodically is a defendant in cases incidental to its business
activities. Furthermore, providers of products and services to the U.S.
government are generally subject to multiple levels of audit and investigation
by various U.S. government agencies. In the opinion of management, the amount of
ultimate liability, if any, with respect to these actions will not materially
affect the financial position or results of operations of the Company.

During 1999, the Company entered into employment agreements with certain key
officers of Cayenta. The agreements specify, among other things, an annual base
salary, annual bonus and entitlement to receive options to purchase shares of
the Company's Class A common stock at $0.36 per share. These agreements also
provide eligibility to receive options to purchase Titan common shares.

F-19
<PAGE>
CAYENTA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 7. COMMITMENTS AND CONTINGENCIES (CONTINUED)

The Company leases office space from an unrelated third party under a
noncancelable operating lease expiring in 2004. Rent expense for this lease was
$825,000 for the year ended December 31, 1999. The related future minimum lease
payments as of December 31, 1999 are as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDING:
- ------------
<S> <C>
2000........................................................ $ 647,000
2001........................................................ 508,000
2002........................................................ 424,000
2003........................................................ 414,000
2004........................................................ 135,000
Thereafter.................................................. --
----------
$2,128,000
==========
</TABLE>

Future minimum rentals under capital leases as of December 31, 1999 are
approximately as follows:

<TABLE>
<CAPTION>
YEAR ENDING:
- ------------
<S> <C>
2000........................................................ $382,000
2001........................................................ 254,000
2002........................................................ 116,000
2003........................................................ 81,000
2004........................................................ 10,000
Thereafter.................................................. --
--------
Total future minimum lease payments......................... 843,000
Less amount representing interest........................... (125,000)
--------
Present value of minimum lease payments..................... 718,000
Current portion of capital lease obligations................ (323,000)
--------
Long-term capital lease obligations......................... $395,000
========
</TABLE>

Long-term capital lease obligations are included in the Other non-current
liabilities in the accompanying balance sheet as of December 31, 1999.

The Company has also guaranteed certain obligations of Titan, see Note 5.

F-20
<PAGE>
CAYENTA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 8. INCOME TAXES

The components of the income tax provision are as follows:

<TABLE>
<CAPTION>
1997 1998 1999
-------- -------- ----------
<S> <C> <C> <C>
Current:
Federal................................... $641,000 $780,000 $2,515,000
State..................................... 113,000 138,000 440,000
-------- -------- ----------
754,000 918,000 2,955,000
Deferred.................................... (20,000) (10,000) (563,000)
-------- -------- ----------
$734,000 $908,000 $2,392,000
======== ======== ==========
</TABLE>

Following is a reconciliation of the income tax provision expected (based on
the United States federal income tax rate applicable in each year) to the actual
tax provision on income:

<TABLE>
<CAPTION>
1997 1998 1999
-------- -------- ----------
<S> <C> <C> <C>
Expected federal income tax provision....... $623,000 $750,000 $1,991,000
State income taxes, net of federal income
tax benefits.............................. 110,000 132,000 351,000
Goodwill amortization....................... -- -- 83,000
Other....................................... 1,000 26,000 (33,000)
-------- -------- ----------
Actual income tax provision................. $734,000 $908,000 $2,392,000
======== ======== ==========
</TABLE>

The net deferred tax asset (liability) as of December 31, 1998 and 1999,
result from the following temporary differences:

<TABLE>
<CAPTION>
1998 1999
-------- -----------
<S> <C> <C>
Loss carryforward..................................... $ -- $ 1,746,000
Accrued payroll and employee benefits................. 42,000 232,000
Deferred compensation................................. 7,000 --
Reserves.............................................. -- 980,000
Depreciation.......................................... (64,000) (183,000)
-------- -----------
Deferred tax asset (liability)........................ (15,000) 2,775,000
Valuation allowance................................... -- (2,227,000)
-------- -----------
Net deferred tax asset (liability).................... $(15,000) $ 548,000
======== ===========
</TABLE>

NOTE 9. STOCKHOLDERS' EQUITY

The Company has two classes of authorized common stock, Class A common stock
and Class B common stock. The rights of the holders of Class A common stock and
Class B common stock are identical, except with respect to voting and
conversion. Each share of Class A common stock is entitled to one vote per
share. Each share of Class B common stock is entitled to ten votes per share and
is convertible into one share of Class A common stock. As of December 31, 1999
Titan owns 100% of the

F-21
<PAGE>
CAYENTA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 9. STOCKHOLDERS' EQUITY (CONTINUED)

issued and outstanding Class B common stock. As of December 31, 1999,
566,000 shares of Class A common stock were issued and outstanding.

The Company also has 17,345,000 authorized shares of $.001 par value
preferred stock with voting rights. Each preferred share is convertible into one
Class A common share. As of December 31, 1999, 100% of the 2,345,000 issued
preferred shares are held by the former owners of TNP. These preferred shares
have no dividend requirements and automatically convert to 2,345,000 shares of
Class A common stock upon the occurrence of an initial public offering of the
Company's Class A common stock. The Board of Directors has the authority,
without further action by the shareholders to issue any authorized but
undesignated series of preferred stock in one or more series and to fix all the
terms, including rights, preferences, restrictions and redemptions.

NOTE 10. STOCK-BASED AND OTHER COMPENSATION PLANS

The Company provides stock-based compensation to officers, directors and key
employees through two stock option plans. The Company's board of directors has
options available for grant under the 1997 Stock Option Plan (the "1997 Plan")
of 934,250 shares and no shares available under the Nonstatutory Stock Option
Plan (the "1999 Plan") adopted in December 1999. Total options authorized for
grant under the 1997 Plan are 2,500,000. The total options authorized for grant
under the 1999 Plan are 628,000. Under the Plans, an option's maximum term is
ten years, and the exercise price of each option under the 1997 Plan equals the
fair market value of the Company's stock on the date of grant. For the 1999
Plan, exercise price shall not be less than book value and the date of the
grant. Employee options may be granted throughout the year. All options vest in
four equal annual increments beginning one year after the grant date.

A summary of the status of the Company's 1997 and 1999 Plans as of December
31, 1997, 1998 and 1999, and changes during the periods ended on those dates is
presented below:

<TABLE>
<CAPTION>
1997 1998 1999
------------------------- ------------------------- --------------------------
WEIGHTED-AVG. WEIGHTED-AVG. WEIGHTED-AVG.
SHARES EXERCISE PRICE SHARES EXERCISE PRICE SHARES EXERCISE PRICE
OPTIONS -------- -------------- -------- -------------- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning
of period............... -- $0.36 419,000 $0.36 503,000 $3.49
Granted................... 419,000 84,000 2,103,700
Exercised................. -- -- (50,000)
Terminated................ -- -- (40,950)
------- ------- ---------
Outstanding at end of
period.................. 419,000 503,000 2,515,750
======= ======= =========
Options exercisable at end
of period............... 105,000 230,000 210,000
======= ======= =========
</TABLE>

F-22
<PAGE>
CAYENTA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 10. STOCK-BASED AND OTHER COMPENSATION PLANS (CONTINUED)

The following table summarizes information about stock options outstanding
at December 31, 1999:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
------------------------------
WEIGHTED-AVERAGE
EXERCISE OUTSTANDING REMAINING
PRICE AT 12/31/99 CONTRACTUAL LIFE
- -------- ----------- ----------------
<S> <C> <C>
$0.36 1,247,250 9.2
6.58 1,268,500 10.0
</TABLE>

Under the 1999 Plan, certain employees who qualify as sophisticated
investors have agreed to resell any shares purchased under their options back to
the Company at book value. This constitutes a variable plan under APB No. 25.
Accordingly, deferred compensation has been recorded to the extent that book
value exceeds the exercise price of the options at the date of grant. Deferred
compensation is also recorded for changes in book value occurring subsequent to
the initial grant date. Compensation expense related to these grants is
recognized as these options vest. Compensation expense amounted to $0, $34,000
and $143,000 for the years ended December 31, 1997, 1998 and 1999, respectively.
There are 628,000 options outstanding at December 31, 1999 subject to this
buyback provision.

On August 12, 1999, the Company issued 245,000 options at $0.36 per share to
employees under the 1997 Plan. On this date the deemed fair value of a share of
common stock was $2.46 per share. Accordingly, the Company has recognized
deferred compensation related to these grants of $514,000 on August 12, 1999. On
November 8, 1999 the Company issued 175,500 shares under the 1997 Plan. On this
date the fair value of a share of common stock was $5.55 per share. Accordingly,
the Company has recognized deferred compensation related to these grants of
$911,000, in connection therewith. This deferred charge will be amortized to
expense over the four year vesting period of these options $82,000 of such
expense was recognized in 1999. Of the remaining 284,000 options granted, 26,000
and 258,000 were granted in February 1998 and September 1997, respectively.
These options were granted at exercise prices which the Company believes
approximated fair value at the date of grant. The fair value of these option
grants were estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted-average assumptions used for
grants in 1997, 1998 and 1999: zero dividend yield; expected volatility of 0%; a
risk-free interest rate of 5.5%; and an expected life of five years.

As permitted, the Company has adopted the disclosure only provisions of SFAS
123. Accordingly, no compensation expense, except as specifically described
above, has been recognized for the stock option plans. Had compensation expense
been determined based on the fair value at the date of the grant for the years
ended December 31, 1997, 1998 and 1999 consistent with the provisions of SFAS

F-23
<PAGE>
CAYENTA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 10. STOCK-BASED AND OTHER COMPENSATION PLANS (CONTINUED)
123, the Company's net income and net income per share would have been reported
as the pro forma amounts indicated below:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
------------------------------------
1997 1998 1999
---------- ---------- ----------
<S> <C> <C> <C>
Net income--as reported.................. $1,099,000 $1,311,000 $3,392,000
Net income--pro forma.................... 1,099,000 1,153,000 2,496,000
Basic Earnings per share--as reported.... $ 0.11 $ 0.13 $ 0.34
Basic Earnings per share--pro forma...... 0.11 0.12 0.25
Diluted Earnings per share - as
reported............................... $ 0.11 $ 0.13 $ 0.26
Diluted Earnings per share - pro forma... $ 0.11 $ 0.11 $ 0.19
</TABLE>

Certain officers and key employees participate in the Titan non-qualified
executive deferred compensation plan. The Company also has performance bonus
plans for certain of its employees. Related expense for these two plans amounted
to approximately $152,000, $189,000 and $557,000 in years ended December 31,
1997, 1998 and 1999, respectively.

NOTE 11. GEOGRAPHIC OPERATIONS

The Company has historically operated in one business segment, application
integration and consulting services, exclusively in North America and
principally the United States.

NOTE 12. SUBSEQUENT EVENTS

In February 2000, the Company entered into a new long-term lease agreement
with an entity affiliated with Titan which requires future minimum lease
payments of approximately $6.6 million over 7 years. There is additional space
in the facilities which, if vacant or desired by the Company, could obligate the
Company for additional future minimum lease payments of approximately
$0.7 million over the 7 years. Titan is a guarantor on this lease.

On March 30, 2000 the Company executed a Stock Purchase Agreement with
Penton Media ("Penton") whereby Penton purchased 250,000 shares of Class A
common stock for $6.4 million. In addition Penton agreed to provide up to
$2 million in marketing services to Cayenta.

F-24
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Cayenta, Inc.:

We have audited the accompanying statements of income, members' equity, and
cash flows for the period from commencement of operations (February 9, 1997) to
December 31, 1997 and for the year ended December 31, 1998 of Transnational
Partners II, LLC, a California limited liability company, (the "Company"). These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the results of operations and cash flows for the
period from commencement of operations (February 9, 1997) to December 31, 1997
and for the year ended December 31, 1998 of Transnational Partners II, LLC in
conformity with accounting principles generally accepted in the United States.

ARTHUR ANDERSEN LLP

San Diego, California
December 28, 1999

F-25
<PAGE>

TRANSNATIONAL PARTNERS II, LLC
STATEMENTS OF INCOME
(IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM
FEBRUARY 9, 1997
(COMMENCEMENT
OF OPERATIONS) TO YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1998
----------------- ------------
<S> <C> <C>
Revenues.................................................... $2,850 $5,644
Cost of revenues............................................ 2,211 4,067
------ ------
Gross profit.............................................. 639 1,577
Selling, general, and administrative expenses............... 31 146
------ ------
Income from operations...................................... 608 1,431
Interest income............................................. 5 9
------ ------
Income before tax........................................... 613 1,440
Provision for income tax.................................... 5 5
------ ------
Net income.................................................. $ 608 $1,435
====== ======
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-26
<PAGE>
TRANSNATIONAL PARTNERS II, LLC
STATEMENTS OF MEMBERS' EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
MEMBERS' RETAINED
CAPITAL EARNINGS TOTAL
-------- -------- --------
<S> <C> <C> <C>
Balances at February 9, 1997 (Commencement of Operations.... $ -- $ -- $ --
Membership contributions.................................. 20 -- 20
Net income................................................ 608 608
Distributions............................................. -- (360) (360)
------- ------- -------
Balances at December 31, 1997............................... 20 248 268
Membership contributions.................................. 2 -- 2
Repurchase of membership shares........................... (2) -- (2)
Net income................................................ 1,435 1,435
Distributions............................................. -- (1,280) (1,280)
------- ------- -------
Balances at December 31, 1998............................... $ 20 $ 403 $ 423
======= ======= =======
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-27
<PAGE>
TRANSNATIONAL PARTNERS II, LLC
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM
FEBRUARY 9, 1997
(COMMENCEMENT
OF OPERATIONS) TO YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1998
----------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................ $ 608 $ 1,435
Adjustments to reconcile net income to net cash provided
by operating activities:
Changes in operating assets and liabilities:
Accounts receivable................................... (370) (242)
Accounts payable and accrued expenses................. 285 163
----- -------
Net cash provided by operating activities................... 523 1,356
----- -------

CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of membership shares................................. 20 2
Repurchase of membership shares........................... -- (2)
Distributions to members.................................. (360) (1,280)
----- -------
Net cash used in financing activities....................... (340) (1,280)
----- -------
Net increase in cash........................................ 183 76
Cash at beginning of period................................. -- 183
----- -------
Cash at end of period....................................... $ 183 $ 259
===== =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
State income taxes paid................................... $ 1 $ 4
===== =======
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-28
<PAGE>
TRANSNATIONAL PARTNERS II, LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1998

(IN THOUSANDS)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Transnational Partners II, LLC a California limited liability company, (the
"Company") is an enterprise application integration consulting company. The
Company was formed on September 25, 1996, with the execution of a limited
liability company operating agreement (the "Agreement"), commenced operations on
February 9, 1997. In January 1999, Cayenta, Inc. acquired substantially all of
the assets and liabilities of the Company.

REVENUE RECOGNITION The majority of the Company's revenues are derived from
time and material contracts and are recognized as services are performed.
Revenues derived from fixed-price contracts are recognized under the
percentage-of-completion method. Estimated losses on fixed-price contracts are
recorded in the period the losses are determinable.

USE OF ESTIMATES The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

INCOME TAXES The Company is treated as a partnership for income tax
reporting purposes, rather than an association taxable as a corporation.
Accordingly, no provision for federal taxes has been included in the
accompanying statements of income. Such taxes are imposed on the individual
members for their respective shares of the Company's income. The tax returns and
amounts of distributable income or loss of the Company are subject to
examination by federal and state taxing authorities. If such examination results
in a change in the Company's income tax status or in a change to distributable
income or loss of the Company, the tax liability of the Company or of the
members could be changed accordingly.

DISTRIBUTIONS Membership interests of the members reflect capital
contributions made in accordance with the Agreement. Distributions or
allocations of assets are made in proportion to the partner's respective
membership interest, and are made at the sole discretion of the Company's
management.

FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts of the Company's
financial instruments, including cash, accounts receivable, and accounts payable
approximate their fair values due to the short-term nature. Financial
instruments which potentially subject the Company to concentrations of credit
risk consist primarily of trade accounts receivable. The Company believes it is
not exposed to any significant credit risk on its accounts receivable.

2. CREDIT RISK

All of the Company's revenues are from a single customer. Accounts
receivable due from this customer totaled $612 and $370 at December 31, 1998 and
1997, respectively. Historically, the Company has not incurred credit losses.

F-29
<PAGE>
TRANSNATIONAL PARTNERS II, LLC

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 1998

(IN THOUSANDS)

3. SALE OF LLC MEMBERSHIP UNITS

The Company was formed with a contribution of $20 made by the two senior
(voting) members for 60% and 40% of the membership units, respectively.

On April 2, 1998, the Company sold associate membership units to 16
individuals. Associate membership units are non-voting but are otherwise
entitled to all the benefits afforded to associated members as defined in the
agreement. The units were sold for $0.1 and entitled the member to 0.5% of the
equity of the Company.

4. SUBSEQUENT EVENT

In January 1999, the Company was acquired by Cayenta, Inc., a wholly owned
subsidiary of The Titan Corporation, for $9.8 million in a transaction that was
accounted for as a purchase. The purchase price consisted of $7.0 million cash,
a $2.8 million note due January 2000 (bearing interest at 7%), subject to
certain post-closing adjustments, and 2,345 shares of convertible preferred
stock of Cayenta, Inc.

F-30
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Cayenta, Inc.:

We have audited the accompanying statements of operations, stockholders'
deficit and cash flows for each of the two years in the period ended December
31, 1998 and for the ten months ended October 31, 1999 of JB Systems, Inc.,
d.b.a. Mainsaver (a California corporation). These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the results of operations and cash flows for each of
the two years in the period ended December 31, 1998 and for the ten months ended
October 31, 1999 of JB Systems, Inc. in conformity with accounting principles
generally accepted in the United States.

ARTHUR ANDERSEN LLP

San Diego, California
February 4, 2000

F-31
<PAGE>

JB SYSTEMS, INC.

(D.B.A. MAINSAVER)

STATEMENTS OF OPERATIONS

(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED TEN MONTHS
DECEMBER 31, ENDED
------------------- OCTOBER 31,
1997 1998 1999
-------- -------- -----------
<S> <C> <C> <C>
Revenues.................................................... $6,162 $ 7,218 $ 6,698
Cost of revenues............................................ 2,459 2,387 1,835
------ ------- -------
Gross profit.............................................. 3,703 4,831 4,863
------ ------- -------
Operating expenses:
Selling, general and administrative....................... 2,932 4,892 5,312
Research and development.................................. 778 946 1,004
Depreciation and amortization............................. 274 295 214
------ ------- -------
Total operating expenses................................ 3,984 6,133 6,530
------ ------- -------
Loss from operations........................................ (281) (1,302) (1,667)
Interest expense............................................ 75 165 383
------ ------- -------
Net loss.................................................. $ (356) $(1,467) $(2,050)
====== ======= =======
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-32
<PAGE>
JB SYSTEMS, INC.

(D.B.A. MAINSAVER)

STATEMENTS OF STOCKHOLDERS' DEFICIT

(IN THOUSANDS)

<TABLE>
<CAPTION>
COMMON STOCK
--------------------
NUMBER ACCUMULATED
OF SHARES AMOUNT DEFICIT TOTAL
--------- -------- ----------- --------
<S> <C> <C> <C> <C>
Balances at January 1, 1997............................ 1,286 $ 210 $ (1,632) $(1,422)
Net loss............................................. -- -- (356) (356)
Repurchase of common stock and stockholder
distributions...................................... (15) (1) (14) (15)
Stock compensation charge............................ -- 6 -- 6
Exercise of stock options and warrants............... 1 1 -- 1
Issuance of common stock............................. -- -- -- --
------ ------ -------- -------
Balances at December 31, 1997.......................... 1,272 216 (2,002) (1,786)
Net loss............................................. -- -- (1,467) (1,467)
Repurchase of common stock and stockholder
distributions...................................... (1,272) (216) (5,885) (6,101)
Issuance of common stock............................. 1,174 5,800 -- 5,800
------ ------ -------- -------
Balances at December 31, 1998.......................... 1,174 5,800 (9,354) (3,554)
------ ------ -------- -------
Net loss............................................. -- -- (2,050) (2,050)
Issuance of warrants................................. -- 397 -- 397
Balances at October 31, 1999........................... 1,174 $6,197 $(11,404) $(5,207)
====== ====== ======== =======
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-33
<PAGE>
JB SYSTEMS, INC.

(D.B.A. MAINSAVER)

STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED TEN MONTHS
DECEMBER 31, ENDED
------------------- OCTOBER 31,
1997 1998 1999
-------- -------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $(356) $(1,467) $(2,050)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization........................... 274 295 278
Stock compensation charge............................... 6 -- --
Amortization of debt discount........................... -- -- 83
Loss on disposal of assets.............................. -- 8 --
Changes in operating assets and liabilities:
Accounts receivable, net.............................. 145 (207) (502)
Prepaid expenses and other current assets............. 18 (59) (10)
Accounts payable...................................... (50) 333 656
Accrued expenses...................................... (41) (50) 282
Deferred revenues..................................... 249 (129) 241
Other assets.......................................... -- (79) 118
----- ------- -------
Net cash provided by (used in) operating
activities........................................ 245 (1,355) (904)
----- ------- -------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment........................ (67) (352) (44)
----- ------- -------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net line of credit borrowings (repayments)................ (200) 1,192 664
Change in bank overdraft.................................. 192 -- (192)
Net (repayments) borrowings on note payable to
stockholder............................................. 404 (502) 600
Repayment of capital lease obligations.................... (59) (73) (124)
Net repayments on long term debt.......................... (502) -- --
Proceeds from issuance of common stock.................... 1 5,800 --
Repurchase of Common Stock................................ (15) -- --
Distributions to stockholders............................. -- (4,701) --
----- ------- -------
Net cash provided by (used in) financing
activities........................................ (179) 1,716 948
----- ------- -------
Net increase (decrease) in cash............................. (1) 9 --
Cash, beginning of year..................................... 16 15 24
----- ------- -------
Cash, end of year........................................... $ 15 $ 24 $ 24
===== ======= =======

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
Interest................................................ 59 139 301
Income taxes............................................ -- -- 1

SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS:
Redemption of common stock in exchange for note payable to
stockholder in connection with the leveraged
recapitalization........................................ -- 1,400 --
Acquisition of equipment financed by capital lease
obligations............................................. 32 125 347
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

F-34
<PAGE>
JB SYSTEMS, INC.

(D.B.A. MAINSAVER)
NOTES TO FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS

JB Systems, Inc. (the "Company") is an enterprise asset management, or EAM,
company whose software enables customers to efficiently manage their equipment
maintenance processes.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REVENUE RECOGNITION The Company generates revenues from licensing the
rights to use its software products primarily to end users. The Company also
generates revenues from post-contract support (maintenance), consulting and
training services performed for customers who license its products.

Revenues from software license agreements are recognized currently, provided
that all of the following conditions are met: a noncancelable license agreement
has been signed, the software has been delivered, there are no material
uncertainties regarding customer acceptance, collection of the resulting
receivable is deemed probable and the risk of concession is deemed remote, and
no other significant vendor obligations exist. Revenues from maintenance
services are recognized ratably over the term of the maintenance period,
generally one year. Maintenance revenues which are bundled with license
agreements are unbundled using vendor specific objective evidence. Consulting
revenues are primarily related to implementation services performed on a time
and material basis under separate service agreements for the installation of the
Company's software products. Revenues from consulting and training services are
recognized as the respective services are performed.

DEFERRED REVENUES Deferred revenues consists principally of customer
deposits and payments for software maintenance agreements with customers whereby
the Company receives payment in advance of performing the service. Revenues from
the contracts is recognized ratably over the contract period.

SOFTWARE DEVELOPMENT COSTS In accordance with Statement of Financial
Accounting Standards No. 86, "Accounting for the costs of computer software to
be sold, leased or otherwise marketed", software development costs are
capitalized from the time the product's technological feasibility has been
established until such time as the product is released for sale to the general
public. Amortization of capitalized software is generally recorded on a
straight-line basis over four years. No amounts were capitalized in the years
ended December 31, 1997, 1998 or in the ten month period ended October 31, 1999,
respectively. Amortization of capitalized software amounted to $137,000,
$137,000, and $46,000 in such periods.

PROPERTY AND EQUIPMENT Property and equipment are stated at cost.
Depreciation and amortization of property and equipment are provided for using
the straight-line method over the estimated useful lives of the assets of five
years. Leasehold improvements are amortized on a straight-line basis over the
shorter of the lease term or estimated useful life of the leasehold improvement.

INCOME TAXES

Deferred income taxes are provided for temporary differences between the
financial statement and income tax bases of the Company's assets and
liabilities, based on statutory tax rates. A valuation allowance is provided
when it is more likely than not that some portion or all of the deferred income
tax assets will not be realized.

F-35
<PAGE>
JB SYSTEMS, INC.

(D.B.A. MAINSAVER)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CONCENTRATION OF CREDIT RISK

Financial instruments that subject the Company to credit risk consist
primarily of accounts receivable. The Company performs ongoing credit
evaluations of its customers and maintains an allowance for potential credit
losses.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, and
disclosure of contingent assets and liabilities, at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company evaluates long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of the asset may not
be recoverable. If the sum of the expected future undiscounted cash flows is
less than the carrying amount of the asset, the Company recognizes an impairment
loss. The amount of the impairment loss is calculated as the difference between
the carrying value of the asset and the present value of the expected future
cash flows.

3. RECAPITALIZATION

On August 11, 1998, the Company completed a leveraged buyout
recapitalization (the "Recapitalization") pursuant to a Plan of Merger (the
"Merger") among JBS Acquisition, Inc. ("Newco") as a purchaser, and both the
Company and the founder and majority stockholder of the Company (the "Founder")
as sellers. Under the Recapitalization, Newco was merged with and into the
Company, and the separate corporate existence of Newco ceased, resulting in the
Company as the surviving corporation. Each share of common stock of Newco issued
and outstanding immediately prior to the Merger was converted into one share of
common stock of the Company.

Under the Recapitalization, each share of the Company's stock issued and
outstanding immediately prior to the merger, other than the Founder's 25%
retained interest, was canceled and extinguished and converted automatically
into the right to receive Merger consideration as follows: (a) the Founder
received a note in the principal amount of $2.0 million and a cash payment of
$1.9 million and (b) the minority stockholders of the Company who owned common
stock prior to the Merger received a cash payment of $2.3 million. The
Recapitalization was financed through cash contributions of $5.0 million by
stockholders of Newco in exchange for Newco common stock. These transactions are
being accounted for as a recapitalization under which the existing basis of
accounting will be continued, and assets and liabilities of the continuing
business are being carried forward.

On April 30, 1999, as a result of certain disputes, the Company, its
stockholders and the Founder agreed to reduce the note payable to the Founder
from $2.0 million to $1.4 million, which has been recorded as a $600,000
reduction in note payable to stockholder and repurchase of common stock in the
accompanying financial statements.

F-36
<PAGE>
JB SYSTEMS, INC.

(D.B.A. MAINSAVER)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3. RECAPITALIZATION (CONTINUED)

On August 11, 1998, one of the stockholders of Newco entered into a Purchase
Option Agreement with the Company and each of the other stockholders of the
Company, whereby the stockholder is entitled to buy out the other stockholders
of the Company. The purchase price of the option paid to the stockholders was
$757,000 in aggregate, which the stockholders used to acquire additional shares
of stock from the Company. The purchase option expired upon the acquisition of
the Company by Cayenta, Inc. (See Note 12.)

Sources and uses of cash in connection with the Recapitalization are
summarized below:

<TABLE>
<S> <C>
Sources of cash:
Newco common stock issued................................. $5,043,000
Purchase option agreement................................. 757,000
----------
$5,800,000
==========

Uses of cash:
Payment to founder........................................ $1,924,000
Payment to minority stockholders.......................... 2,326,000
Repayment of debt and accrued interest.................... 772,000
Transaction costs......................................... 421,000
Remaining cash............................................ 357,000
----------
$5,800,000
==========
</TABLE>

4. LINE OF CREDIT

The Company has a $2.0 million line of credit with a bank. Advances against
the line of credit bear interest at the bank's reference rate plus 0.75% (9% at
October 31, 1999). Interest is payable monthly. The line of credit matures April
2000 and is collateralized by substantially all of the assets of the Company.
The line of credit contained certain restrictions and financial covenants. The
line of credit was extinguished in connection with the Company being acquired by
Titan.

5. NOTES PAYABLE TO STOCKHOLDERS

At December 31, 1996, the Company had a note payable to an
officer/stockholder in the amount of $45,000 with interest payable quarterly at
8% and principal due on demand. Additionally, the Company had a note payable to
an officer/stockholder of $457,000, due in monthly installments of $11,000
including interest at 11.25%, maturing September 2002. Both of these notes were
extinguished in connection with the recapitalization (see Note 3).

On August 18, 1999, the Company entered into a Convertible Subordinated Loan
Agreement whereby a total of $600,000 was loaned to the Company by its
stockholders in amounts proportionate to their respective ownership percentages.
The loans are payable in $100,000 monthly installments commencing March 15,
2000, with a final payment due on August 15, 2000. Interest is payable monthly
commencing September 15, 1999 at eight %. The loan is subordinated to the credit
line the Company has with a bank.

F-37
<PAGE>
JB SYSTEMS, INC.

(D.B.A. MAINSAVER)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

5. NOTES PAYABLE TO STOCKHOLDERS (CONTINUED)

The stockholders may convert any unpaid balance on August 15, 2000 into a
certain number of Class A common stock determined by dividing the unpaid balance
by the conversion price of $3.71. The agreement also provides that, upon
repayment of the loans, the Company will issue the stockholders 59,000 warrants
of the Company's Class A common stock at an exercise price of $3.71 per share.
The warrants expire after ten years. The Company has recorded debt discount
related to these warrants of $397,000 as of August 1999 and has recorded related
amortization of $83,000 in the ten month period ended October 31, 1999.

In connection with the Recapitalization, the Company issued a note payable
to the Founder in the amount of $2.0 million, which was subsequently reduced to
$1.4 million (see Note 3), payable in full on September 1, 2001, plus interest
at a rate of ten percent per annum. The principal sum of this note may be
prepaid in whole or in part without penalty at any time by or on behalf of the
Company. Interest is payable monthly. This note was paid down to $500,000 in
connection with Cayenta's acquisition of the Company (see Note 12).

6. INCOME TAXES

As of October 31, 1999, the Company had net operating loss carryforwards of
approximately $3.6 million and $1.5 million for Federal and California reporting
purposes, respectively. The differences between the federal and the California
losses are primarily attributable to the 50% limitation on state carryforwards.
The Federal loss carryforwards will begin expiring in 2011, unless previously
utilized, while the California losses will begin expiring in 2003. Utilization
of the Company's net operating loss carryforwards may be limited as a result of
certain changes in the Company's ownership. The realization of the deferred tax
asset is dependant upon the Company generating sufficient taxable income prior
to expiration of its operating loss and credit carryforwards. Due to the
uncertainty regarding realization of the deferred tax asset, management has
provided a full valuation allowance against the net deferred tax asset.

7. COMMITMENTS

The Company leases its facilities under operating leases that require
minimum monthly payments of $24,000, as well as payment of all property taxes,
insurance and other costs. In addition, the Company leases certain office
equipment under operating leases through August 2001.

Property under capital leases at October 31, 1999 consists primarily of
computer and office equipment. Total cost of property under capital leases was
$658,000 at October 31, 1999. Accumulated depreciation related to property under
capital leases was $334,000 at October 31, 1999.

F-38
<PAGE>
JB SYSTEMS, INC.

(D.B.A. MAINSAVER)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

7. COMMITMENTS (CONTINUED)

Future minimum rentals under capital and operating leases as of October 31,
1999 are approximately as follows:

<TABLE>
<CAPTION>
CAPITAL OPERATING
--------- ---------
<S> <C> <C>
1999 (November and December)........................... $ 31,000 $ 51,000
2000................................................... 169,000 179,000
2001................................................... 144,000 6,000
2002................................................... 105,000 --
2003................................................... 75,000 --
2004................................................... 10,000 --
--------- --------
Total future minimum lease payments.................... 534,000 $236,000
========
Less amount representing interest...................... (96,000)
---------
Present value of minimum lease payments................ 438,000
Current portion of capital lease obligations........... (129,000)
---------
Long-term capital lease obligations.................... $ 309,000
=========
</TABLE>

8. EMPLOYEE BENEFIT PLANS

The Company maintains a 401(k) plan. Under the plan, qualified employees may
elect to defer up to 15% of their salaries, subject to the Internal Revenue Code
limits. The Company contributes a matching 30% of employee contributions for all
employees with annual incomes less than $80,000. Employees with annual incomes
of $80,000 or more do not receive matching contributions from the Company.
Company contributions to the Plan were $14,000, $36,000 and $46,000 during the
years ended December 31, 1997, 1998 and for the ten months ended October 31,
1999, respectively.

9. STOCK OPTIONS

The Company had an incentive stock option plan which was terminated in 1998,
and all outstanding options were canceled. The Company adopted a new stock
option plan (the "Plan") in 1998 to enable key employees and non-employees to
acquire shares of the Company's common stock. Up to 141,000 options may be
issued under the Plan at an exercise price of not less than 100% of the fair
market value at the date of grant. The stock options vest ratably over a
four-year period from the date of grant. The stock options may be granted with
expiration dates not to exceed ten years. The Company granted 118,000 and
14,000 stock options during the year ended 1998 and the ten month period ended
October 31, 1999, respectively, with an exercise price of $6.31 per share. No
options are exercisable at October 31, 1999.

Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting
for Stock-Based Compensation," defines and encourages the use of the fair-value
method of accounting for employee stock-based compensation, but allows the
continued use of the intrinsic value based method of accounting prescribed in
Accounting Principles Board Opinion No. 25 and related interpretations. As
permitted under SFAS No. 123, the Company continues to use the intrinsic method
of accounting for stock-based compensation. Had the compensation cost for the
Plan been determined using the

F-39
<PAGE>
JB SYSTEMS, INC.

(D.B.A. MAINSAVER)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

9. STOCK OPTIONS (CONTINUED)

fair-value method described in SFAS No. 123, the Company's net loss would not
have been substantially different from the reported net loss in 1997 and 1998.

10. RELATED PARTY TRANSACTIONS

The Company has a management agreement with one of its stockholders to
provide management and consulting services related to the operations of the
Company. The monthly service fee in connection with the agreement is $8,000 plus
out-of-pocket expenses, and will continue until the occurrence of certain events
as defined in the agreement. Additionally, the Company paid a $50,000
transaction fee to the stockholder in connection with the Recapitalization
described in Note 3.

Additionally, the Company entered into a consulting agreement with the
Founder to provide services commencing February 1999 at $17,000 per month, plus
benefits and out-of-pocket expenses, for one year.

11. LEGAL PROCEEDINGS

On September 14, 1998, a former distributor of the Company filed an action
alleging the Company wrongfully terminated its distribution agreement and is
claiming damages of not less than $650,000. Settlement negotiations are in
process. Management believes that the claim is without merit. Additionally, the
Company has received indemnification from loss on the claim from the Founder.

12. EVENTS SUBSEQUENT TO DECEMBER 31, 1998

In November 1999, the Company was acquired by Cayenta, Inc. for
$11.7 million cash of which approximately $8.2 million was paid at closing,
$500,000 due in February 2000 and $3.0 million due May 2001 after satisfaction
of possible working capital adjustments or indemnification obligations. In
addition, Cayenta paid approximately $3.4 million to reduce the outstanding
indebtedness of the Company. The Company entered into agreements with its option
and warrant holders pursuant to which all options and warrants of the Company
were terminated concurrently with the closing of the acquisition.

F-40
<PAGE>
REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Shareholders
Assist Cornerstone Technologies, Inc.

We have audited the accompanying balance sheets of Assist Cornerstone
Technologies, Inc. as of December 12, 1999 and December 31, 1998, and the
related statements of operations, shareholders' equity (deficit), and cash flows
for the period ended December 12, 1999 and each of the two years in the period
ended December 31, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Assist Cornerstone
Technologies, Inc. at December 12, 1999 and December 31, 1998, and the results
of its operations and its cash flows for the period ended December 12, 1999 and
for each of the two years in the period ended December 31, 1998 in conformity
with accounting principles generally accepted in the United States.

/s/ Ernst & Young LLP

Salt Lake City, Utah
February 11, 2000

F-41
<PAGE>
ASSIST CORNERSTONE TECHNOLOGIES, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 12, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash...................................................... $ 558,703 $ 741,701
Accounts receivable, less allowance of $215,991 in 1999,
$160,392 in 1998........................................ 2,388,948 2,813,220
Prepaid expenses.......................................... 290,664 77,328
Deferred income taxes..................................... 158,918 128,000
Other receivables......................................... 43,253 107,277
----------- ----------
Total current assets........................................ 3,440,486 3,867,526
Property and equipment:
Office furniture and equipment............................ 316,247 312,447
Leasehold improvements.................................... 45,122 45,122
Computer equipment........................................ 524,049 369,647
----------- ----------
885,418 727,216
Less accumulated depreciation............................. (603,918) (445,556)
----------- ----------
Net property and equipment.................................. 281,500 281,660
Loan fees, net of accumulated amortization of $131,888 in
1999 and $80,296 in 1998.................................. 247,261 298,853
Intangible asset, net of accumulated amortization of
$225,000 in 1998.......................................... -- 75,000
----------- ----------
$ 3,969,247 $4,523,039
=========== ==========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable.......................................... $ 1,740,912 $ 928,770
Accrued liabilities....................................... 646,871 397,353
Deferred revenue.......................................... 318,587 989,763
Current portion of capital leases......................... 87,955 74,490
Current portion of notes payable to related parties....... 160,000 160,000
----------- ----------
Total current liabilities................................... 2,954,325 2,550,376
Long-term portion of capital leases......................... 59,588 142,243
Notes payable to related parties............................ 2,300,000 1,845,617
Deferred income taxes....................................... -- 107,000
Other long-term liabilities................................. 106,091 151,558
Commitments and contingencies
Redeemable preferred stock:
Preferred stock, issuable in series, $.001 par value,
12,800 shares authorized; $100 per share liquidation
value:
Series A, redeemable preferred stock, 6,200 shares
authorized; 6,200 shares issued and outstanding in 1999
and 1998 (redemption value of $706,800)................ 706,800 197,963
Series B, redeemable preferred stock, 6,600 shares
authorized; 5,000 shares issued and outstanding in 1999
and 1998 (redemption value of $500,000)................ 500,000 107,148
Shareholders' equity (deficit):
Common stock, $.001 par value, 20,000,000 shares
authorized; 4,661,645 shares issued in 1999, 4,642,787
shares issued in 1998................................... 4,662 4,643
Additional paid-in-capital................................ -- --
Accumulated deficit....................................... (2,662,219) (583,509)
----------- ----------
Total shareholders' equity (deficit)........................ (2,657,557) (578,866)
----------- ----------
$ 3,969,247 $4,523,039
=========== ==========
</TABLE>

SEE ACCOMPANYING NOTES.

F-42
<PAGE>
ASSIST CORNERSTONE TECHNOLOGIES, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED DECEMBER 31
DECEMBER 12, -------------------------
1999 1998 1997
------------ ----------- -----------
<S> <C> <C> <C>
Revenues:
Licenses............................................ $ 2,253,900 $ 2,392,583 $ 2,105,301
Service and support................................. 6,068,965 4,604,541 3,399,074
Hardware............................................ 3,545,720 4,525,538 5,418,202
----------- ----------- -----------
Total revenues........................................ 11,868,585 11,522,662 10,922,577

Operating expenses:
Cost of license revenue............................. 425,090 498,031 527,082
Cost of service and support revenue................. 2,925,664 2,734,878 2,498,159
Cost of hardware revenue............................ 2,914,199 3,684,431 4,519,858
General and administrative.......................... 3,255,337 2,499,123 1,921,569
Sales and marketing................................. 2,659,657 1,978,027 1,588,379
Research and development............................ 611,988 396,965 139,144
----------- ----------- -----------
12,791,935 11,791,455 11,194,191
----------- ----------- -----------

Loss from operations.................................. (923,350) (268,793) (271,614)

Other income (expense):
Interest income..................................... 26,398 29,690 35,052
Interest expense.................................... (480,334) (318,716) (200,939)
Cumulative effect of change in taxable status of
entity............................................ -- -- (236,000)
----------- ----------- -----------
Loss before income taxes.............................. (1,377,286) (557,819) (673,501)
Income tax benefit (expense)........................ 137,918 179,794 (76,000)
----------- ----------- -----------
Net loss.............................................. (1,239,368) (378,025) (749,501)
Accretion of:
Series A preferred stock............................ (508,837) (131,971) (65,986)
Series B preferred stock............................ (392,852) (71,429) (35,714)
----------- ----------- -----------
Net loss applicable to common shareholders............ $(2,141,057) $ (581,425) $ (851,201)
=========== =========== ===========
</TABLE>

SEE ACCOMPANYING NOTES.

F-43
<PAGE>
ASSIST CORNERSTONE TECHNOLOGIES, INC.

STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
--------------------- PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT TOTAL
---------- -------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balances at January 1, 1997............ 8,500,000 $ 2,000 $ -- $ 1,118,142 $ 1,120,142
Issuance of common stock............. 97,112 97 43,403 -- 43,500
Issuance of common stock upon
exercise of preemptive right....... 315,430 315 (215) -- 100
Adjustment to par value for stock
split.............................. -- 6,501 (6,501) -- --
Issuance of Series A preferred
stock.............................. -- -- 619,994 -- 619,994
Issuance of Series B preferred
stock.............................. -- -- 499,995 -- 499,995
Issuance of warrant to purchase
2,166,377 common shares............ -- -- 198,100 -- 198,100
Shares acquired in shareholder
buyout............................. (4,250,000) (4,250) (1,053,434) (562,316) (1,620,000)
Accretion of Series A preferred
stock.............................. -- -- (65,986) -- (65,986)
Accretion of Series B preferred
stock.............................. -- -- (35,714) -- (35,714)
Net loss............................. -- -- -- (749,501) (749,501)
---------- ------- ----------- ----------- -----------
Balances at December 31, 1997.......... 4,662,542 4,663 199,642 (193,675) 10,630
Issuance of common stock for
services........................... 43,331 43 13,886 -- 13,929
Issuance of warrant to purchase
100,000 common shares.............. 18,000 -- 18,000
Shares acquired in shareholder
buyout............................. (63,086) (63) (39,937) -- (40,000)
Accretion of Series A preferred
stock.............................. -- -- (131,971) -- (131,971)
Accretion of Series B preferred
stock.............................. -- -- (59,620) (11,809) (71,429)
Net loss............................. -- -- -- (378,025) (378,025)
---------- ------- ----------- ----------- -----------
Balances at December 31, 1998.......... 4,642,787 4,643 -- (583,509) (578,866)
Issuance of common stock for
services........................... 3,056 3 7,497 -- 7,500
Issuance of common stock upon
exercise of stock options.......... 15,802 16 9,465 -- 9,481
Issuance of warrant to purchase
186,192 common shares.............. -- -- 42,824 -- 42,824
Issuance of warrant to purchase
256,126 common shares.............. -- -- 2,561 -- 2,561
Accretion of Series A preferred
stock.............................. -- -- (62,347) (446,490) (508,837)
Accretion of Series B preferred
stock.............................. -- -- -- (392,852) (392,852)
Net loss............................. -- -- -- (1,239,368) (1,239,368)
---------- ------- ----------- ----------- -----------
Balances at December 12, 1999.......... 4,661,645 $ 4,662 $ -- $(2,662,219) $(2,657,557)
========== ======= =========== =========== ===========
</TABLE>

SEE ACCOMPANYING NOTES.

F-44
<PAGE>
ASSIST CORNERSTONE TECHNOLOGIES, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
PERIOD ENDED 31,
DECEMBER 12, ---------------------
1999 1998 1997
------------ --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss.................................................... $(1,239,368) $(378,025) $(749,501)
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities:
Depreciation and amortization........................... 233,362 309,121 217,664
Amortization of loan fees............................... 51,592 53,950 26,346
Amortization of rental fees............................. 45,467 3,789 --
Accretion on note payable to related party for
warrant............................................... 156,944 28,284 15,333
Warrant issued for services............................. 42,824 -- --
Provision for bad debts................................. 66,895 219,153 9,023
Common stock issued for services........................ 7,500 13,929 --
Deferred income taxes................................... (137,918) (180,000) 159,000
Change in operating assets and liabilities:
Accounts receivable................................... 357,377 (458,598) (300,669)
Prepaid expenses and other receivables................ (149,312) (81,666) (43,339)
Accounts payable...................................... 812,142 68,722 286,404
Accrued liabilities and other long-term liabilities... 158,584 106,980 19,779
Deferred revenue...................................... (671,176) 342,001 349,047
Income taxes payable.................................. -- (132,821) 132,821
----------- --------- ---------
Net cash (used in) provided by operating activities......... (265,087) (85,181) 121,908

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment......................... (158,202) (68,638) (62,679)
Addition of intangible asset................................ -- -- (300,000)
----------- --------- ---------
Net cash used in investing activities....................... (158,202) (68,638) (362,679)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes to related parties...................... 460,000 160,000 --
Principal payments on notes to related parties.............. (160,000) (75,000) (25,000)
Proceeds from short-term financing.......................... 118,906 -- --
Payments on short-term financing............................ (118,906) -- --
Net proceeds from issuance of debt.......................... -- -- 1,638,851
Principal payments on line of credit........................ -- -- (200,000)
Net proceeds from lease buyout.............................. -- 155,347 --
Principal payments on capital lease obligations............. (69,190) (69,315) (61,182)
Net proceeds from issuance of common stock.................. 9,481 -- 43,600
Proceeds from issuance of preferred stock................... -- -- 500,000
Issuance of warrant......................................... -- -- 100
Shareholder buyout.......................................... -- (40,000) (900,000)
----------- --------- ---------
Net cash provided by financing activities................... 240,291 131,032 996,369
----------- --------- ---------
Net (decrease) increase in cash............................. (182,998) (22,787) 755,598
Cash at beginning of year................................... 741,701 764,488 8,890
----------- --------- ---------
Cash at end of period....................................... $ 558,703 $ 741,701 $ 764,488
=========== ========= =========
</TABLE>

SEE ACCOMPANYING NOTES.

F-45
<PAGE>
ASSIST CORNERSTONE TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS

Assist Cornerstone Technologies, Inc., (the Company) is a Utah Corporation
formed in December 1987. The Company develops financial accounting software
designed to run on the IBM AS/400. The Company has a working relationship with
IBM, which includes the remarketing of IBM hardware. The Company generates
revenue from three primary sources: license fees, consulting services and
software support, and hardware resales.

The Company is developing an e-commerce solution based on its current
developed technology.

The Company employs a direct sales force with salespersons located in
California, Florida, Illinois, Utah, Georgia, Washington, Maryland, Texas and
Massachusetts.

On June 11, 1997 the Company entered into a series of transactions, the net
effect of which was a recapitalization of the Company. The Company received
$2,500,100 from an outside group of investors. Of this total, $2,000,000 was
received in exchange for a promissory note (Note 4) bearing interest at twelve
percent and due in seven years; $500,000 was received in exchange for 5,000
shares of Series B Non-Cumulative Non-Voting Redeemable Preferred Stock; and,
$100 was received for 2,166,377 warrants convertible into common stock at zero
cost.

The Company used a portion of the proceeds to repurchase 4,250,000 shares of
common stock from a selling shareholder and also paid a portion of the proceeds
as consideration for a non-compete agreement. The selling shareholder received
additional consideration in the form of a $100,000 note payable and 6,200 shares
of Series A Cumulative Convertible Redeemable Exchangeable Non-Voting Preferred
Stock.

2. SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of financial statements in conformity with general accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts in the financial statements and the accompanying
notes. Actual results could differ from those estimates.

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform to the current
year presentation.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentration
of credit risk consist principally of cash and accounts receivable. Risks
associated with cash are mitigated by banking with creditworthy institutions.
The Company sells its products to distributors and end users. To reduce credit
risk, management performs periodic credit evaluations of its customers'
financial condition and requires deposits from new customers. The Company
maintains reserves for potential credit losses, but historically has not
experienced any significant losses related to end users or distributors.

SEGMENT INFORMATION

In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information." This
statement establishes standards for the way companies report information about
operating segments in financial statements. It also establishes

F-46
<PAGE>
ASSIST CORNERSTONE TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

standards for related disclosures about products and services, geographic areas,
and major customers. In accordance with the provisions of SFAS No. 131, the
Company has determined that it does not currently have any separately reportable
operating segments. Revenues from foreign operations have been insignificant.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, less accumulated depreciation.
Depreciation and amortization are determined using the straight-line method over
the estimated useful lives of the assets ranging from three to ten years.
Leasehold improvements are amortized over the shorter of the estimated lives or
the remaining lease term. Maintenance and repairs are expensed as incurred.

INTANGIBLE ASSETS

Intangible assets consist of a non-compete agreement that is stated at cost.
Amortization is calculated on the straight-line method, a rate based on an
estimated useful life of two years. The asset was fully depreciated by
December 12, 1999.

IMPAIRMENT OF LONG-LIVED ASSETS

In accordance with Statement of Financial Accounting Standards (SFAS)
No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS TO BE DISPOSED OF,
the Company reviews long-lived and intangible assets for impairment whenever
events or circumstances indicate the carrying value of an asset may not be
recoverable. In evaluating whether an impairment exists, the Company compares
the carrying value of the asset to the estimated undiscounted future cash flows.
If an impairment is deemed to exist, the asset's carrying value is adjusted to
the present value of its estimated future cash flows.

DEFERRED REVENUE

Service revenue is deferred and recognized ratably over the term of the
service contracts, on a straight-line basis. Costs for work performed under the
service contracts are charged to operations as incurred.

INCOME TAXES

The Company was an S Corporation from inception through June 11, 1997 and
therefore did not compute a federal or state income tax provision under current
tax laws prior to that date. Shareholders were taxed on their share of the
Company's income while the Company was an S Corporation. From June 12, 1997
forward the Company has operated as a C Corporation. The 1997 tax provision on
the financial statements reflects the cumulative effect of changing from an S
corporation and also provides for the period the Company was a C Corporation.

The Company uses an asset and liability approach to account for income taxes
which requires recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary differences between the financial
statement carrying amount and the tax bases of assets and liabilities and net
operating loss and tax credit carry forwards.

F-47
<PAGE>
ASSIST CORNERSTONE TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
STOCK OPTIONS

The Company has elected to follow Accounting Principles Board Opinion
No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES (APB 25) and related
Interpretations in accounting for its employee stock options rather than
adopting the alternative fair value accounting provided for under
FASB Statement No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION (SFAS 123).
Under APB 25, because the exercise price of the Company's stock options equals
the market price of the underlying stock on the date of grant, no compensation
expense is recognized.

REVENUE RECOGNITION

Revenue from software license agreements are recognized currently, provided
that all of the following conditions are met: A noncancelable license agreement
has been signed, the software has been delivered, there are no material
uncertainties regarding customer acceptance, collection of the resulting
receivable is deemed probable and the risk of concession is deemed remote, and
no other significant vendor obligations exist.

Support revenue is recognized ratably over the life of the support contract,
which is generally one year. Service revenue from consulting and custom
programming is recognized as the services are performed. No accrual for losses
on fixed price contracts was made at period end, as management believes that
expected future costs do not exceed anticipated future revenues. The associated
costs are included in the cost of service and support revenue. Hardware revenue
is recognized on the date IBM ships the hardware to the customer with the
associated costs included in cost of hardware revenue.

RESEARCH AND DEVELOPMENT

Research and development expenditures are charged to operations as incurred.
Statement of Financial Accounting Standards ("SFAS") No. 86, ACCOUNTING FOR THE
COSTS OF COMPUTER SOFTWARE TO BE SOLD, LEASED OR OTHERWISE MARKETED, requires
capitalization of certain software development costs subsequent to the
establishment of technological feasibility.

Based on the Company's product development process, technological
feasibility is established upon completion of a working model. Costs incurred by
the Company between completion of the working model and the point at which the
product is ready for general release have been insignificant.

ADVERTISING COSTS

Advertising costs are expensed in the period in which they are incurred.
Advertising costs were $275,272, $51,234 and $14,736, respectively for the
period ended December 12, 1999 and for the years ended December 31, 1998 and
1997.

COMPREHENSIVE INCOME

In 1998, the Company adopted SFAS No. 130, REPORTING COMPREHENSIVE INCOME,
which is effective for fiscal years beginning after December 15, 1997. SFAS
No. 130 requires that all items that are recognized under accounting standards
as components of comprehensive income be reported in a financial statement that
is displayed with the same prominence as other financial statements. The items
of other comprehensive income that are typically required to be displayed are
foreign currency items,

F-48
<PAGE>
ASSIST CORNERSTONE TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

minimum pension liability adjustments, and unrealized gains and losses on
certain investments in debt and equity securities. There were no items of other
comprehensive income in 1999 or prior.

INTERNALLY DEVELOPED SOFTWARE

In March 1998, the Accounting Standards Executive Committee issued Statement
of Position 98-1, Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use. SOP 98-1 requires all costs related to the
development of internal use software other than those incurred during the
application development stage to be expensed as incurred. Costs incurred during
the application development stage are required to be capitalized and amortized
over the estimated useful life of the software. The Company adopted SOP 98-1 on
January 1, 1999 and the costs eligible for capitalization have been
insignificant to date.

SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental disclosures of cash flow information were as follows:

<TABLE>
<CAPTION>
PERIOD YEAR ENDED DECEMBER
ENDED 31,
DECEMBER12, -------------------
1999 1998 1997
----------- -------- --------
<S> <C> <C> <C>
Cash paid for:
Interest.................................. $296,760 $288,075 $185,606
Income taxes.............................. -- -- 24,000

SCHEDULE OF NON CASH INVESTING AND FINANCING
ACTIVITIES
Issuance of warrant(s) in connection with
$300,000 note in 1999, $160,000 note in
1998 and $2,000,000 note in 1997........ 2,561 18,000 198,000
Issuance of warrant(s) in connection with
obtaining a binding financing commitment
in 1999................................. 42,824 -- --
Issuance of note in shareholder buyout.... -- -- 100,000
</TABLE>

3. COMMITMENTS AND CONTINGENCIES

The Company entered into a $345,000, sixty month lease agreement in
September 1996. The agreement was used to acquire furniture, a phone system, and
computer equipment for the new leased facilities and is collateralized by this
equipment. The ownership of the equipment passes to the Company at the end of
the lease period. The lease carries an annual interest rate of 10.4%. Annual
lease payments total $93,746.

The Company entered into a sixty month lease agreement in October 1995. The
Company acquired leasehold improvements valued at $20,255, and the lease is
collateralized by these improvements.

The Company entered into a non-cancellable operating lease with a related
party for its new headquarters in May 1996. Beginning November 1, 1998, the
Company agreed to modify the lease. In

F-49
<PAGE>
ASSIST CORNERSTONE TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3. COMMITMENTS AND CONTINGENCIES (CONTINUED)

exchange for consideration received of $155,347, the Company agreed to a monthly
rent increase of $4,205 through the remaining term of the lease. The
consideration received has been accrued and is being offset against future rent
expense on a straight-line basis over the remaining initial lease term. The
lease runs through April 30, 2004, and contains an option to renew the lease for
two, successive five year periods. The Company may exercise the option at any
time. The lease requires future annual payments of $201,856. The Company entered
into two other facilities leases in 1997. One lease is for a sales office in
Illinois, and the other is for a sales office in Southern California. Both
leases are on a month to month basis. Rent expense was approximately $166,000
for the period ended December 12, 1999 and $161,000 and $157,000 for the years
ended December 31, 1998 and 1997, respectively.

The following summarizes the future minimum lease payments required under
non-cancellable leases with initial terms greater than one year as of
December 12, 1999:

<TABLE>
<CAPTION>
OPERATING
YEAR ENDING DECEMBER 31 CAPITAL LEASES LEASE
- ----------------------- -------------- ----------
<S> <C> <C>
2000........................................................ $ 99,431 $ 207,993
2001........................................................ 66,521 201,856
2002........................................................ -- 201,856
2003........................................................ -- 201,856
2004........................................................ -- 67,285
Thereafter.................................................. -- --
-------- ----------
Total....................................................... 165,952 $ 880,846
==========
Amount representing interest................................ (18,409)
--------
Present value of minimum payments........................... 147,543
Current portion of capital leases........................... (87,955)
--------
Long-term portion of capital leases......................... $ 59,588
========
</TABLE>

Furniture and equipment includes assets recorded under capital leases of
approximately $328,950 at December 12, 1999 and December 31, 1998. Accumulated
depreciation on assets recorded under capital leases was $270,080 at
December 12, 1999 and $192,914 at December 31, 1998.

The Company is involved in various legal proceedings which arise from time
to time in connection with the conduct of the Company's business. In the opinion
of management, such proceedings will not have a material adverse effect on the
Company's financial condition, results of operations, or cash flows.

4. DEBT FINANCING

On June 11, 1997 the Company issued a $2,000,000 Note to an outside group of
investors. The Note is due in seven years and carries an interest rate of twelve
percent. Interest is due monthly with principal payments due quarterly over the
final three years of the Note. The Note is secured by all tangible and
intangible assets of the Company.

On February 13, 1998 the Company issued a $160,000 secured convertible
promissory note to an outside group of investors with a warrant to purchase up
to 100,000 common shares at $.45 per share. The note is convertible at any time
into 1,600 Series B preferred shares, subject to certain adjustments. In
addition, the Company will issue a warrant to purchase 257,341 common shares at
$.45 per share if certain events occur. The note was due in one year and carried
an interest rate of ten percent with interest due monthly. This note was paid on
March 26, 1999.

F-50
<PAGE>
ASSIST CORNERSTONE TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

4. DEBT FINANCING (CONTINUED)

In May of 1999 the Company issued an additional $160,000 secured convertible
promissory note to the same outside group of investors with substantially the
same terms as documented above except new warrants were not issued but the
warrants issued above were extended. The note is due May 12, 2000 and carries an
interest rate of ten percent.

In July of 1999 the Company signed an accounts receivable purchase agreement
with Silicon Valley Bank authorizing availability of up to $1,000,000 from
receivable balances less than 90 days past due to be purchased by Silicon Valley
Bank. Interest is charged at prime plus 4% and the agreement is effective for
one year. The Company borrowed approximately $118,900 during the period ended
December 12, 1999 and repaid all borrowings prior to December 12, 1999.

On September 22, 1999 the Company issued a note to a shareholder for cash of
$300,000. The Company agreed to a repayment schedule to coincide with the
repayment schedule for the $2,000,000 loan discussed above. As part of the
agreement the shareholder agreed to subordinate its security position to Silicon
Valley Bank, waive the original loan covenants under the $2,000,000 loan
agreement and modify the loan covenants. The Company is in compliance with the
modified loan covenants.

Interest payments on the Notes totaled $263,468, $252,000 and $134,667 for
the period ended December 12, 1999 and the years ended December 31, 1998 and
1997, respectively.

5. REDEEMABLE PREFERRED STOCK

On June 9, 1997 the Company authorized a total of 12,800 shares of
redeemable preferred stock, with a par value per share of $0.001 and a
liquidation value per share of $100. The redeemable preferred stock is issuable
in series consisting of 6,200 shares of Series A 7% Cumulative Convertible
Redeemable Exchangeable Non-Voting preferred stock (Series A Preferred) and
6,600 shares of Series B 8% Non-Cumulative Non-Voting redeemable preferred stock
(Series B Preferred).

In exchange for $100 and in connection with the recapitalization, the
Company issued a warrant convertible into 2,166,377 shares of common stock at
zero cost. An additional $500,000 was received in exchange for 5,000 shares of
Series B Preferred. The holder of the Series B Preferred and warrant is entitled
to designate two of the five directors to the Company's Board of Directors. The
Series B Preferred is mandatorily redeemable upon maturity, prepayment or
mandatory prepayment of the Note (See Note 4). Accretion totaling $392,852,
$71,429 and $35,714 have been recorded for the period ended December 12, 1999
and the years ended December 31, 1998 and 1997, respectively, as an increase to
the value of the Series B Preferred stock to reflect the redemption provision.

In June 1997, the Company used a portion of the proceeds from the
recapitalization to repurchase 4,250,000 shares of common stock from a selling
shareholder and also paid a portion of the proceeds as consideration for a
non-compete agreement. The selling shareholder received additional consideration
in the form of a $100,000 note payable (none of which remains outstanding at
December 31, 1998) issued by the Company and 6,200 shares of Series A Preferred
stock. The Series A Preferred stock is convertible on a share-for-share basis
into common stock at $1.50 per share. The Series A Preferred stock is
mandatorily redeemable if the Note is still outstanding at the end of the 85(th)
month from the original issue date. The preferred shares, however, cannot be
redeemed if the Note is in default or redemption of the preferred shares would
cause the Note to be in default or cause a reduction in the Company's capital to
less than the amount of capital required by law. For the period ended

F-51
<PAGE>
ASSIST CORNERSTONE TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

5. REDEEMABLE PREFERRED STOCK (CONTINUED)

December 12, 1999 and the years ended December 31, 1998 and 1997, the Company
accreted $508,837 $131,971 and $65,986, respectively, relating to the Series A
preferred shares.

6. SHAREHOLDERS' EQUITY (DEFICIT)

In March 1997, the Company authorized a 425 for one forward stock split. All
share amounts have been retroactively adjusted to reflect the forward stock
split.

At December 12, 1999, the Company had reserved 7,291,650 shares of common
stock for future issuance, including 413,333 shares reserved for the conversion
of Series A Preferred, 4,070,606 shares for exercise of warrants, and 2,807,711
shares for the exercise of stock options.

On June 9, 1997 the Company changed the par value per share of the Common
Stock from $0.0002 to $0.001 and increased the number of authorized shares of
the Company's Common Stock from 10,000,000 shares to 20,000,000 shares.

In 1997, a former shareholder exercised his preemptive right to purchase
5 percent of the Company's common stock for $100, which resulted from the sale
of ten percent or more of the then outstanding stock.

STOCK OPTION PLAN

On March 1, 1996, the Board of Directors adopted an employee stock option
plan which authorized 1,000,000 common shares for issuance under the provisions
of the plan. The stock option plan was subsequently amended to increase the
authorized number of common shares issuable to 2,807,711. During 1997, 410,830
options were granted to Company personnel and 31,602 options were issued to an
outside consultant. The stock options issued to the outside consultant were
granted at their deemed fair value ($.45). The options were valued at
approximately $6,200 using the Black-Scholes option valuation model. For the
year ended December 31, 1998 the company granted 207,900 options to employees.
For the period ended December 12, 1999, the Company granted 1,186,250 options of
which 530,000 were to board members and 656,250 were to employees. The options
issued to Company personnel vest three or four years from the date of grant and
expire no more than ten years from the date of grant.

F-52
<PAGE>
ASSIST CORNERSTONE TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. SHAREHOLDERS' EQUITY (DEFICIT) (CONTINUED)

A summary of stock option activity, and related information for the period
ended December 12, 1999 and the years ended December 31, 1998 and 1997 follows:

<TABLE>
<CAPTION>
OUTSTANDING STOCK
OPTIONS
SHARES --------------------- WEIGHTED-
AVAILABLE NUMBER OF PRICE PER AVERAGE
FOR GRANT SHARES SHARE EXERCISE PRICE
---------- --------- --------- --------------
<S> <C> <C> <C> <C>
Balance at January 1, 1997...................... 273,500 726,500 $ .60 $.60
Additional authorization...................... 1,807,711 -- -- --
Options granted............................... (442,432) 442,432 $ .45-.60 $.58
Options canceled.............................. 249,477 (249,477) $ .60 $.60
---------- ---------
Balance at December 31, 1997.................... 1,888,256 919,455 $ .45-.60 $.60
Options granted............................... (207,900) 207,900 $ .45 $.45
---------- ---------
Balance at December 31, 1998.................... 1,680,356 1,127,355 $ .45-.60 $.51
Options granted................................. (1,186,250) 1,186,250 $.45-1.00 $.99
Options canceled................................ 900,559 (900,559) $.45-1.00 $.61
---------- ---------
Balance at December 12, 1999.................... 1,394,665 1,413,046 $ $
========== =========
Exercisable at December 12, 1999................ 1,162,816 $.45-1.00 $.62
=========
</TABLE>

The weighted average fair value of options granted for the period ended
December 12, 1999 was $.39 and for the years ended December 31, 1998 and 1997
was $.18 and $.18, respectively. The weighted average remaining contractual life
of the options outstanding and options exercisable at December 12, 1999 was
8.9 years and 7.4 years, respectively.

Pro forma information regarding net income (loss) is required by SFAS 123,
and has been determined as if the Company had accounted for its employee stock
options under the fair value method. The fair value of these options was
estimated at the date of grant using a Minimum Value option pricing model with
the following weighted average assumptions for the period ended December 12,
1999 and for the years ended December 31, 1998 and 1997, respectively: risk-free
interest rate of 5.0; dividend yield of 0%; and a weighted-average expected life
of the option of 10 years.

For purposes of pro forma disclosures, the estimated fair value of the
options is amortized over the options' vesting period. Because the effect of
SFAS No. 123 is prospective, the initial impact on pro forma net loss may not be
representative of compensation expense in future years.

For the period ended December 12, 1999 and the years ended December 31, 1998
and 1997, pro forma net loss was approximately $1,512,282, $343,000 and
$805,000, respectively.

Prior to December 12, 1999, all individuals holding stock options entered
into a "stock options exercise agreement," whereby stock options became fully
vested, or an "agreement to terminate the options," whereby the stock options
are exchanged for cash, contingent upon an acquisition of the Company.

F-53
<PAGE>
ASSIST CORNERSTONE TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. SHAREHOLDERS' EQUITY (DEFICIT) (CONTINUED)

WARRANTS

In connection with the issuance of a $2,000,000 Note to a related party, the
Company issued a warrant to purchase 2,166,377 shares of the Company's common
stock at zero cost. Each warrant is exercisable for a period of ten years from
the date of the closing of the Note. In addition, at closing, the Company issued
a warrant to acquire an additional 373,576 for $.10 per share to one individual

In June 1997 the Company also issued a warrant for services provided to
purchase 79,322 shares of common stock at $.10 per share.

In February 1998, the Company issued a warrant to purchase 100,000 common
shares at $.45 per share in connection with the issuance of a secured promissory
note for $160,000 to a related party. In conjunction with the issuance of the
warrant, the Company capitalized additional expense of $18,000 to loan fees in
the accompanying balance sheet. The warrant expired one year from the date of
the debt issuance but was extended with additional borrowings the next month.

On April 29, 1999, the Company entered into an agreement for services to be
provided and granted a warrant to purchase 837,864 shares of common stock at an
exercise price of $1.00. At the signing of the agreement 186,192 warrants to
purchase common stock vested. The remaining warrants vest as certain events take
place, which had not occurred at December 12, 1999.

During the period ended December 12, 1999, the Company issued additional
warrants to purchase common stock to a related party, in conjunction with
providing additional financing for the Company. These consisted of a contingent
warrants to purchase 257,341 shares of common stock with an exercise price of
$.45 and warrants to purchase 256,126 shares of common stock with an exercise
price of $1.00.

Warrants to purchase 3,161,593 and 2,719,275 shares of common stock were
outstanding at December 12, 1999 and December 31, 1998, respectively, with
contingent warrants to purchase 909,013 shares of common stock outstanding at
December 12, 1999.

F-54
<PAGE>
ASSIST CORNERSTONE TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

7. BENEFIT PLAN

The Company has a 401(k) savings plan that covers substantially all
full-time employees. Under the terms of the plan, the Company provides no match
of employee contributions. Employees are eligible for participation after one
month of service. The Company's administrative expenses relating to the 401(k)
plan was $3,532 for the period ended December 12, 1999 and $4,744 and $5,230 for
the years ended December 31, 1998 and 1997, respectively.

8. INCOME TAXES

The provision for income taxes is computed for the period June 11, 1997
(when the Company converted from Subchapter S to Subchapter C status) to
December 12, 1999 and consists of the following:

<TABLE>
<CAPTION>
YEARS ENDED
PERIOD ENDED DECEMBER 31,
DECEMBER 12, --------------------
1999 1998 1997
------------ --------- --------
<S> <C> <C> <C>
Current taxes:
Federal.................................. $ -- $ -- $127,000
State.................................... -- -- 26,000

Deferred taxes:
Federal.................................. (120,394) (164,000) (70,000)
State.................................... (17,524) (16,000) (7,000)
--------- --------- --------
$(137,918) $(180,000) $ 76,000
========= ========= ========
</TABLE>

Deferred income taxes are provided for temporary differences in recognizing
certain income and expense items for financial and tax reporting purposes.
Significant components of deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
YEARS ENDED
PERIOD ENDED DECEMBER 31,
DECEMBER 12, --------------------
1999 1998 1997
------------ -------- ---------
<S> <C> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts.......... $105,000 $ 60,000 $ 53,000
Accrued liabilities and other............ 70,000 80,000 42,000
Covenant not to compete.................. -- 73,000 24,000
Net operating loss carryforward and
carryback.............................. 369,000 -- --
-------- -------- ---------
Total deferred assets...................... 544,000 213,000 119,000

Deferred tax liabilities:
Change from Cash to Accrual.............. (77,000) (155,000) (232,000)
Depreciation............................. (1,000) (24,000) (32,000)
Other.................................... (3,000) (13,000) (14,000)
-------- -------- ---------
Total deferred liabilities................. (81,000) (192,000) (278,000)
-------- -------- ---------
Net deferred tax asset (liability)......... $463,000 $ 21,000 $(159,000)
======== ======== =========
</TABLE>

F-55
<PAGE>
ASSIST CORNERSTONE TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

8. INCOME TAXES (CONTINUED)

A valuation allowance is required by SFAS 109 if, based on the weight of the
available evidence, it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The need for the valuation allowance
is evaluated periodically by management. Based on available evidence, including
operating losses over the prior three years, management concluded that a
valuation allowance of $304,000 was necessary at December 12, 1999, to partially
offset the net deferred tax asset.

9. SUBSEQUENT EVENTS

On December 7, 1999, the Company signed a Stock Exchange and Stock Purchase
Agreement. This agreement entitles the selling shareholders to exchange their
common stock in the company for cash and stock in Cayenta, Inc. (Cayenta).

On December 13, 1999, the sale of the Company to Cayenta became effective.
Cayenta acquired the Company for 516,458 shares of Cayenta's Class A Common
Stock and approximately $12.9 million in cash, of which $9.9 million was paid at
the closing. Cayenta also paid approximately $3.2 million to retire outstanding
indebtedness with accrued interest and redeem all of the Company's outstanding
preferred stock.

In conjunction with the acquisition, the Company purchased 456,842 stock
options for $687,583 and the remaining stock options became fully vested and
were exercised into 956,204 shares of the Company's common stock. All warrants
were exercised into 4,707,606 shares of Assist common stock. All Assist common
shares issued and outstanding were exchanged for cash and stock in Cayenta.

F-56
<PAGE>

AUDITORS' REPORT

To the Board of Directors
SFG Technologies Inc.

We have audited the consolidated balance sheets of SFG Technologies Inc. as
at December 21, 1999 and December 31, 1998 and the consolidated statements of
operations, deficit and cash flows for the period from January 1, 1999 to
December 21, 1999, the eight months ended December 31, 1998 and the years ended
April 30, 1998 and 1997. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted
auditing standards. Those standards require that we plan and perform an audit to
obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.

In our opinion, these consolidated financial statements present fairly, in
all material respects, the financial position of the Company as at December 21,
1999 and December 31, 1998 and the results of its operations and cash flows for
the period from January 1, 1999 to December 21, 1999, the eight months ended
December 31, 1998 and the years ended April 30, 1998 and 1997 in accordance with
Canadian generally accepted accounting principles.

Significant measurement differences between Canadian and United States
accounting principles as they affect these consolidated financial statements are
explained and quantified in note 16.

KPMG LLP

Chartered Accountants

Vancouver, Canada

January 31, 2000

F-57
<PAGE>
SFG TECHNOLOGIES INC.

CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN U.S. DOLLARS)

<TABLE>
<CAPTION>
DECEMBER 21, DECEMBER 31,
1999 1998
------------ -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 277,094 $ 331,709
Accounts receivable....................................... 1,826,428 1,511,403
Investment tax credits receivable......................... 143,748 195,338
Prepaid expenses.......................................... 139,670 64,766
----------- -----------
2,386,940 2,103,216
Capital assets (note 4)..................................... 655,988 535,856
Investment.................................................. 67,705 130,225
Deferred charges.......................................... 289,776 --
----------- -----------
$ 3,400,409 $ 2,769,297
=========== ===========

LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities:
Bank indebtedness (note 6)................................ $ 1,029,113 $ 1,084,126
Accounts payable and accrued liabilities.................. 1,732,540 1,150,286
Current portion of deferred revenue (note 7).............. 860,237 653,348
Current portion of long-term debt (note 8)................ 185,119 318,454
Current portion of obligations under capital leases (note
9)...................................................... 106,047 161,777
----------- -----------
3,913,056 3,367,991
Deferred revenue (note 7)................................... 457,597 435,238
Long-term debt (note 8)..................................... 1,766,995 3,184,209
Obligations under capital leases (note 9)................... 56,971 39,125
----------- -----------
6,194,619 7,026,563
Shareholders' deficiency:
Share capital (note 10)................................... 5,063,248 3,013,364
Deficit................................................... (7,813,556) (7,398,286)
Foreign currency translation account...................... (43,902) 127,656
----------- -----------
(2,794,210) (4,257,266)
Commitments (note 12)
Subsequent event (notes 8, 10(b), (c), and 13)
Year 2000 Issue (note 15)
----------- -----------
$ 3,400,409 $ 2,769,297
=========== ===========
</TABLE>

See accompanying notes to consolidated financial statements

F-58
<PAGE>
SFG TECHNOLOGIES INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(EXPRESSED IN U.S. DOLLARS)

<TABLE>
<CAPTION>
PERIOD FROM
JANUARY 1, EIGHT MONTHS
1999 TO ENDED YEARS ENDED APRIL 30,
DECEMBER 21, DECEMBER 31, ------------------------
1999 1998 1998 1997
------------ ------------- ----------- ----------
<S> <C> <C> <C> <C>
Revenues............................................. $6,749,060 $3,604,916 $ 3,533,514 $7,188,855
Cost of sales........................................ 1,347,834 613,963 783,415 1,240,885
---------- ---------- ----------- ----------
Gross profit......................................... 5,401,226 2,990,953 2,750,099 5,947,970
Costs and expenses:
Selling, general and administrative................ 3,233,555 1,695,256 3,931,291 4,494,763
Research and development........................... 2,245,363 1,137,626 1,784,763 1,549,092
Write-down of deferred software development costs
(note 5)......................................... -- -- 2,653,486 --
Gain on sale of division (note 14)................. -- -- -- (424,366)
---------- ---------- ----------- ----------
5,478,918 2,832,882 8,369,540 5,619,489
---------- ---------- ----------- ----------
Operating profit (loss).............................. (77,692) 158,071 (5,619,441) 328,481
Interest expense..................................... 337,578 217,905 366,412 203,501
---------- ---------- ----------- ----------
Income (loss) before income tax expense.............. (415,270) (59,834) (5,985,853) 124,980
Income tax benefit (expense) (note 11)............... -- -- 397,445 (29,995)
---------- ---------- ----------- ----------
Net income (loss).................................... $ (415,270) $ (59,834) $(5,588,408) $ 94,985
========== ========== =========== ==========
</TABLE>

See accompanying notes to consolidated financial statements.

F-59
<PAGE>
SFG TECHNOLOGIES INC.

CONSOLIDATED STATEMENTS OF DEFICIT

(EXPRESSED IN U.S. DOLLARS)

<TABLE>
<CAPTION>
PERIOD FROM
JANUARY 1, EIGHT MONTHS
1999 TO ENDED YEARS ENDED APRIL 30,
DECEMBER 21, DECEMBER 31, -------------------------
1999 1998 1998 1997
------------ ------------- ----------- -----------
<S> <C> <C> <C> <C>
Deficit, beginning of period............... $(7,398,286) $(7,304,757) $(1,686,037) $(1,694,303)
Premium on redemption of shares
(note 10(d))............................. -- (33,695) (30,312) (86,719)
Net income (loss).......................... (415,270) (59,834) (5,588,408) 94,985
----------- ----------- ----------- -----------
Deficit, end of period..................... $(7,813,556) $(7,398,286) $(7,304,757) $(1,686,037)
=========== =========== =========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-60
<PAGE>
SFG TECHNOLOGIES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN U.S. DOLLARS)

<TABLE>
<CAPTION>
PERIOD FROM
JANUARY 1, EIGHT MONTHS
1999 TO ENDED YEARS ENDED APRIL 30,
DECEMBER 21, DECEMBER 31, -------------------------
1999 1998 1998 1997
------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)......................................... $ (415,270) $ (59,834) $(5,588,408) $ 94,985
Items not involving cash:
Amortization............................................ 213,610 100,877 197,545 1,479,420
Gain on sale of division................................ -- -- -- (424,366)
Loss on sale of asset................................... 37,592 -- -- 12,243
Common stock issued in exchange for services............ -- -- 19,534 --
Write-down of deferred software development costs....... -- -- 2,653,486 --
Deferred income taxes................................... -- -- (390,587) 29,477
Changes in non-cash operating working capital:
Accounts receivable................................... (315,025) (77,974) 386,758 (527,753)
Investment tax credits receivable..................... 51,590 -- 503,105 (140,855)
Prepaid expenses...................................... (74,904) (4,576) 43,886 (31,639)
Deferred software development costs................... -- -- -- (1,763,335)
Accounts payable and accrued liabilities.............. 582,254 (104,977) (404,731) 55,912
Deferred revenue...................................... 229,248 (174,731) (133,647) (576,982)
---------- --------- ----------- -----------
Net cash provided by (used in) operating activities....... 309,095 (321,215) (2,713,059) (1,792,893)
Cash flows from investing activities:
Purchase of capital assets................................ (402,416) (31,240) (106,423) (569,597)
Disposal of capital assets................................ 31,082 -- -- 4,964
Proceeds from sale of investment.......................... -- -- -- 210,224
Investment................................................ 62,520 -- -- --
---------- --------- ----------- -----------
Net cash used in investing activities..................... (308,814) (31,240) (106,423) (354,409)
Cash flows from financing activities:
Bank indebtedness......................................... (55,013) (35,811) 885,321 234,616
Proceeds from issuance of long-term debt.................. 438,390 893,191 2,663,509 453,789
Repayment of long-term debt............................... (91,925) (152,962) (498,112) (55,803)
Obligations under capital leases.......................... (37,884) (78,063) (100,869) 140,560
Issue of common shares for cash........................... 234,117 346 (100,098) 1,240,936
Redemption of common and preferred shares................. (81,247) (41,058) (30,312) (225,429)
Deferred charges.......................................... (289,776) -- -- --
---------- --------- ----------- -----------
Net cash provided by financing activities................. 116,662 585,643 2,819,439 1,788,669
Net effect of foreign exchange rate changes on cash......... (171,558) 1,613 96,951 (142)
---------- --------- ----------- -----------
Increase (decrease) in cash and cash equivalents............ (54,615) 234,801 96,908 (358,775)
Cash and cash equivalents, beginning of period.............. 331,709 96,908 -- 358,775
---------- --------- ----------- -----------
Cash and cash equivalents, end of period.................... $ 277,094 $ 331,709 $ 96,908 $ --
========== ========= =========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for taxes..................... $ -- $ -- $ -- $ --
Cash paid during the period for interest.................. $ 96,506 142,592 366,412 203,501
Supplemental disclosure of non-cash financing activities:
Common stock issued in exchange for services.............. $ -- $ -- $ 19,534 $ --
Common stock issued in exchange on debt conversion........ $1,897,014 -- -- --
</TABLE>

See accompanying notes to financial statements.

F-61
<PAGE>
SFG TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS)

PERIOD FROM JANUARY 1, 1999 TO DECEMBER 21, 1999
EIGHT MONTHS ENDED DECEMBER 31, 1998
YEARS ENDED APRIL 30, 1998 AND 1997

1. GENERAL:

SFG Technologies Inc. ("SFG" or the "Company") is a private company
incorporated under the Canada Business Corporations Act. Its principal business
activity is developing and marketing computing software for the utilities and
public sector markets.

2. SIGNIFICANT ACCOUNTING POLICIES:

(A) PRINCIPLES OF CONSOLIDATION:

The consolidated financial statements include the financial statements of
SFG Technologies Inc. and its wholly-owned subsidiaries Nissi Technologies
(U.S.A.) Inc. ("Nissi"), SFG Technologies Inc., and SFG Technologies Limited.
All material intercompany transactions and balances have been eliminated.

(B) CASH AND CASH EQUIVALENTS:

Cash and cash equivalents are highly liquid investments having terms of
maturity at the date of acquisition of not more than three months.

The Company generates and recognizes revenue as follows:

(I) SOFTWARE LICENCE FEES:

The Company licences software products to customers under perpetual
software licence agreements. The Company has two types of sales related to
licence fees.

Software licence fees from contracts that do not require significant
production, modification or customization are recognized when software is
delivered and implemented if persuasive evidence of an arrangement and customer
acceptance exists, collection is probable and the fees are fixed or
determinable.

Software licence fees from contracts involving significant production,
modification or customization of software are recognized as revenue using
the completed contract method. Contracts are considered complete when
customer acceptance of the software is obtained.

Cash received in advance of meeting the revenue recognition criteria is
recorded as deferred revenue.

(II) PROFESSIONAL SERVICES:

The Company provides consulting and implementation services to its
customers. Revenues from these services are recognized as the services are
performed in accordance with contract terms.

F-62
<PAGE>
SFG TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (CONTINUED)

PERIOD FROM JANUARY 1, 1999 TO DECEMBER 21, 1999
EIGHT MONTHS ENDED DECEMBER 31, 1998
YEARS ENDED APRIL 30, 1998 AND 1997

2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
(III) MAINTENANCE:

Maintenance agreements generally require that the Company provide
technical support and certain systems updates to customers. Revenue is
recognized proportionately over the maintenance period, typically one year.

(IV) SOFTWARE MODIFICATIONS:

The Company provides updates to software licensed to customers. Revenues
from these services are recognized as the services are performed in
accordance with contract terms.

(V) HARDWARE SALES:

Hardware sales are recognized as revenue upon delivery of the hardware
to customer locations.

(D) RESEARCH AND DEVELOPMENT COSTS:

The Company expenses research costs as incurred. Development costs are
deferred if they meet certain specified and stringent criteria; otherwise they
are expensed as incurred. At December 21, 1999, no development costs have been
deferred.

(E) CAPITAL ASSETS:

Capital assets are recorded at historical cost less applicable investment
tax credits and accumulated amortization. Amortization is computed using the
declining balance method over their estimated useful lives at the following
annual rates:

<TABLE>
<CAPTION>
CAPITAL ASSETS RATE
- -------------- ---------
<S> <C>
Automotive equipment........................................ 30%
Computer equipment.......................................... 30% - 40%
Office equipment............................................ 15% - 20%
</TABLE>

Leasehold improvements are amortized on a straight-line basis over the term
of the lease.

(F) INVESTMENT TAX CREDITS:

Investment tax credits are accounted for using the cost reduction method
whereby the benefit of the credits is recognized as a reduction to the carrying
value of the related asset or expenditure.

(G) INCOME TAXES:

The Company follows the tax allocation method of accounting for income taxes
under which deferred income taxes are recognized for the difference in the
timing of recognition of transactions in

F-63
<PAGE>
SFG TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (CONTINUED)

PERIOD FROM JANUARY 1, 1999 TO DECEMBER 21, 1999
EIGHT MONTHS ENDED DECEMBER 31, 1998
YEARS ENDED APRIL 30, 1998 AND 1997

2. SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)

income for accounting and income tax purposes. The major timing differences
relate primarily to capital assets and research and development expenditures.

(H) FOREIGN CURRENCY TRANSLATION:

The Canadian dollar is the functional currency of the Company and its
subsidiaries. Monetary assets and liabilities denominated in a foreign currency
have been translated into Canadian dollars at rates of exchange in effect at the
balance sheet date. Other assets and revenue and expense items are translated at
rates prevailing when they were acquired or incurred. Exchange gains and losses
arising on translation of assets and liabilities denominated in foreign
currencies are included in income.

For U.S. dollar reporting purposes, the balance sheet amounts as at
December 21, 1999 have been translated at the exchange rate in effect at the end
of December 21, 1999, and the income statement amounts for the period from
January 1, 1999 to December 21, 1999 have been translated at the average
exchange rate for the period. Differences arising on translation have been
recorded on the balance sheet in the foreign currency translation account in
shareholders' deficiency. The balance sheet amounts as at December 31, 1998 have
been translated at the exchange rate in effect at the end of December 31, 1998,
and the income statement amounts for the eight month period ended December 31,
1998 and the years ended April 30, 1998 and 1997 have been translated at the
average exchange rate for the eight month period ended December 31, 1998.
Differences arising on translation have been recorded on the balance sheet in
the foreign currency translation account in shareholders' deficiency.

(I) USE OF ESTIMATES:

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period.
Significant areas requiring the use of management estimates relate to the
valuation of accounts and investment tax credits receivable. Actual amounts may
differ from those estimates.

(J) INVESTMENT:

Investment is carried at the lower of cost and estimated fair value. Income
from the investment is recognized as receivable.

(K) DEFERRED CHARGES:

Deferred charges represent professional fees relating to the purchase of the
Company's shares by Cayenta, Inc. on December 22, 1999 (see note 13).

F-64
<PAGE>
SFG TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (CONTINUED)

PERIOD FROM JANUARY 1, 1999 TO DECEMBER 21, 1999
EIGHT MONTHS ENDED DECEMBER 31, 1998
YEARS ENDED APRIL 30, 1998 AND 1997

3. FINANCIAL INSTRUMENTS:

(A) FAIR VALUE:

Carrying amounts of certain of the Company's financial instruments,
including cash and cash equivalents accounts receivable, bank indebtedness and
accounts payable and accrued liabilities, approximate fair value due to their
short-term maturities or ability for prompt liquidation. Based on borrowing
notes available to the Company for loans with similar terms, management
estimates the carrying value of its long-term debt approximates fair value.

(B) FOREIGN EXCHANGE RISK:

Foreign exchange risk reflects the risk that the Company's earnings will
decline due to fluctuations in exchange rates. As payments on contracts billed
in United States dollars are due in the short-term the Company has determined
there is no significant exposure to its reported assets due to foreign exchange
fluctuations. At December 21, 1999, the Company does not have foreign exchange
hedges in place.

Credit risk reflects the risk that the Company may be unable to recover
contractual receivables. The Company has a significant number of individual
contracts and no one contract represents a concentration of credit risk. In
addition, the Company employs established credit approval practices to further
mitigate this risk.

4. CAPITAL ASSETS:

<TABLE>
<CAPTION>
ACCUMULATED NET BOOK
DECEMBER 21, 1999 COST AMORTIZATION VALUE
- ----------------- ---------- ------------ --------
<S> <C> <C> <C>
Automotive equipment....................... $ 40,702 $ 6,014 $ 34,688
Computer equipment......................... 1,546,140 1,109,752 436,388
Office equipment........................... 380,369 224,163 156,206
Leasehold improvements..................... 53,299 24,593 28,706
---------- ---------- --------
$2,020,510 $1,364,522 $655,988
========== ========== ========

<CAPTION>
ACCUMULATED NET BOOK
DECEMBER 31, 1998 COST AMORTIZATION VALUE
- ----------------- ---------- ------------ --------
<S> <C> <C> <C>
Automotive equipment....................... $ 22,131 $ 20,676 $ 1,455
Computer equipment......................... 1,324,154 990,404 333,750
Office equipment........................... 384,962 222,774 162,188
Leasehold improvements..................... 97,730 59,267 38,463
---------- ---------- --------
$1,828,977 $1,293,121 $535,856
========== ========== ========
</TABLE>

F-65
<PAGE>
SFG TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (CONTINUED)

PERIOD FROM JANUARY 1, 1999 TO DECEMBER 21, 1999
EIGHT MONTHS ENDED DECEMBER 31, 1998
YEARS ENDED APRIL 30, 1998 AND 1997

4. CAPITAL ASSETS: (CONTINUED)

Included in automotive, computer and office equipment are assets under
capital leases with a cost of $1,096,790 (December 31, 1998--$1,228,355) and
accumulated amortization of $909,027 (December 31, 1998--$890,257).

5. DEFERRED SOFTWARE DEVELOPMENT COSTS:

In years prior to 1998, the Company had in accordance with the accounting
policy described in note 2(d), deferred development costs related to certain
software products. As set out in note 16, such costs were expensed as incurred
for United States accounting purposes.

During the year ended April 30, 1998, criteria related to the availability
of sufficient resources to continue development was no longer met. Accordingly,
in the year ended April 30, 1998, the Company wrote-off all deferred software
development costs as recoverability of the costs was no longer reasonably
ensured.

6. BANK INDEBTEDNESS:

The Company has an operating loan facility with a credit limit of
approximately $1,500,000 (Canadian). The facility is due on demand, bears
interest at prime plus 2.25% and is secured by a general security agreement.
Subsequent to December 21, 1999, the loan facility was repaid.

7. DEFERRED REVENUE:

<TABLE>
<CAPTION>
DECEMBER 21, DECEMBER 31,
1999 1998
------------ -------------
<S> <C> <C>
Deferred maintenance................................ $1,317,834 $ 1,088,586
Less current portion................................ (860,237) (653,348)
---------- -----------
$ 457,597 $ 435,238
========== ===========
</TABLE>

F-66
<PAGE>
SFG TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (CONTINUED)

PERIOD FROM JANUARY 1, 1999 TO DECEMBER 21, 1999
EIGHT MONTHS ENDED DECEMBER 31, 1998
YEARS ENDED APRIL 30, 1998 AND 1997

8. LONG-TERM DEBT:

<TABLE>
<CAPTION>
DECEMBER 21, DECEMBER 31,
1999 1998
------------ -------------
<S> <C> <C>
Bank term loan, maturing December 2001, bearing interest at
prime plus 1.25% per annum payable monthly, principle
repayable in 30 equal installments beginning July 1999,
secured by a general security agreement................... $ 159,783 $ 192,000

Bank demand loan, maturing March 2002, bearing interest at
prime plus 2.0% per annum payable monthly, principle
repayable monthly in the amount of $10,516, secured by
SR&ED refund.............................................. 220,329 280,037

Promissory notes including accrued interest of $88,397
(December 1998--$44,387), maturing July 2002, bearing
interest at 5.0% until July 1999 and 13.0% per annum,
thereafter, payable monthly in arrears beginning
July 1999, secured by a general security agreement........ 1,085,689 1,672,203

Promissory notes including accrued interest of $33,727
(December 1998--$29,626), maturing July 2002, bearing
interest at 13.0% per annum payable monthly, secured by a
general security agreement, convertible into Class A
preferred shares at $2 (Canadian) per share............... 169,137 420,302

Promissory notes, bearing interest at 13.0% per annum....... -- 651,126

Promissory notes, including accrued interest of $2,963
maturing July 2002, bearing interest at 12.0% per annum
payable monthly in arrears beginning July 1999 or in event
of agreement default, secured by a general security
agreement, convertible into Class B preferred shares at
$100 (Canadian) per share................................. 172,225 162,782

Shareholder loan, bearing interest at prime plus 1.0% per
annum, no specific terms of repayment, unsecured,
shareholder has indicated that payment will not be
demanded within the next twelve months.................... 138,338 120,619

Other....................................................... 6,613 3,594
---------- ----------

1,952,114 3,502,663

Less current portion........................................ (185,119) (318,454)
---------- ----------

$1,766,995 $3,184,209
========== ==========
</TABLE>

On November 26, 1999, the Company converted 1,897,014 of promissory notes,
owing to Working Opportunity Fund (EVCC) Ltd., SCC Canada Inc., Ventures West
III--Canada Limited Partnership, and Discovery Enterprises Inc. into Class B
preferred shares (see note 10(b)) at a price of $0.05 (Canadian) per share and
Class C preferred shares (see note 10(b)) at a price of $100 (Canadian) per
share.

F-67
<PAGE>
SFG TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (CONTINUED)

PERIOD FROM JANUARY 1, 1999 TO DECEMBER 21, 1999
EIGHT MONTHS ENDED DECEMBER 31, 1998
YEARS ENDED APRIL 30, 1998 AND 1997

8. LONG-TERM DEBT: (CONTINUED)
The minimum aggregate amounts of principal payments required in each of the
next five years, assuming that the shareholder loan is not repaid, are as
follows:

<TABLE>
<S> <C>
2000........................................................ $ 185,119
2001........................................................ 184,658
2002........................................................ 1,443,998
2003........................................................ --
2004 and thereafter......................................... 138,339
----------
$1,952,114
==========
</TABLE>

Subsequent to December 21, 1999, $1,658,550 of debt outstanding was repaid.

9. OBLIGATIONS UNDER CAPITAL LEASES:

The Company has commitments under capital leases as follows:

<TABLE>
<S> <C>
2000........................................................ $ 113,510
2001........................................................ 43,216
2002........................................................ 11,340
2003........................................................ 6,211
---------
174,277
Less interest imputed at rates between 9% and 15%........... (11,259)
---------
163,018
Less current portion........................................ (106,047)
---------
$ 56,971
=========
</TABLE>

10. SHARE CAPITAL:

(A) AUTHORIZED:

Unlimited common shares, Class A, non voting, no par value

Unlimited common shares, Class B, voting, no par value

Unlimited common shares, Class X, voting, no par value, non participating

Unlimited preferred shares, Class A, voting, convertible, retractable,
redeemable

Unlimited preferred shares, Class B, voting, convertible, retractable,
redeemable

Unlimited preferred shares, Class C, voting, retractable, redeemable

Unlimited preferred shares, Class F, non voting, redeemable

F-68
<PAGE>
SFG TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (CONTINUED)

PERIOD FROM JANUARY 1, 1999 TO DECEMBER 21, 1999
EIGHT MONTHS ENDED DECEMBER 31, 1998
YEARS ENDED APRIL 30, 1998 AND 1997

10. SHARE CAPITAL: (CONTINUED)
Each Class A and Class B preferred share is convertible into one Class B
common share at the option of the holder and is entitled to one vote.

Dividends are provided at the discretion of the directors of the Company.
Only Class A and Class B common shareholders and Class A and Class B
preferred shareholders are entitled to dividends.

Class A, Class B and Class C preferred shares are retractable any time after
July 30, 2002 and under certain other instructions.

Class A, Class B and Class C preferred shares are redeemable at the
Company's option at any time, in whole or in part, after July 1, 2002 at the
issue price plus any unpaid dividends.

Class F preferred shares are redeemable at the Company's option at $1
(Canadian) per share (see note10(d)).

(B) ISSUED:

<TABLE>
<CAPTION>
NUMBER OF
SHARES AMOUNT
----------- ----------
<S> <C> <C>
Class A common shares:
Balance at April 30, 1996................................. 67,050 $ 34,211
Shares redeemed for cash.................................. (22,650) (8,486)
----------- ----------
Balance at April 30, 1997................................. 44,400 25,725
Shares issued for cash.................................... 8,231 22,374
Shares issued for services rendered....................... 3,614 19,534
Shares redeemed for cash.................................. (7,205) (5,268)
----------- ----------
Balance at April 30, 1998................................. 49,040 62,365
Shares issued for cash.................................... 133 345
Shares redeemed for cash.................................. (7,979) (7,363)
----------- ----------
Balance at December 31, 1998.............................. 41,194 55,347
Shares issued for cash on exercise of options (see
below).................................................. 6,900,000 234,117
----------- ----------
Balance at December 21, 1999.............................. 6,941,194 289,464
----------- ----------
Class B common shares:
Balance at April 30, 1996................................. 1,405,200 587,779
Shares issued in exchange for Class Z preferred shares.... 302,500 759,256
Shares issued for cash.................................... 271,673 1,322,337
----------- ----------
Balance at April 30, 1997, 1998 and December 31, 1998..... 1,979,373 2,669,372
Shares issued pursuant to price adjustment options (see
below).................................................. 759,037 --
----------- ----------
Balance at December 21, 1999.............................. 2,738,410 $2,669,372
</TABLE>

F-69
<PAGE>
SFG TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (CONTINUED)

PERIOD FROM JANUARY 1, 1999 TO DECEMBER 21, 1999
EIGHT MONTHS ENDED DECEMBER 31, 1998
YEARS ENDED APRIL 30, 1998 AND 1997

10. SHARE CAPITAL: (CONTINUED)

<TABLE>
<CAPTION>
NUMBER OF
SHARES AMOUNT
----------- ----------
<S> <C> <C>
Class X common shares:
Balance at April 30, 1995, 1996, 1997 and 1998............ -- --
Shares issued in conjunction with issuance of promissory
notes................................................... 20,000,000 1
----------- ----------
Balance at December 31, 1998.............................. 20,000,000 1
Shares redeemed for cash.................................. (20,000,000) (1)
Balance at December 21, 1999.............................. -- --
----------- ----------
Total common shares, December 21, 1999...................... 9,679,604 $2,958,836
----------- ----------

Class B preferred shares:
Balance at December 31, 1998.............................. -- --
Shares issued on debt conversion (note 8)................. 20,000,000 677,048
----------- ----------
Balance at December 21, 1999.............................. 20,000,000 677,048
----------- ----------
Class C preferred shares:
Balance at April 30, 1996, 1997, 1998 and December 31,
1998.................................................... -- --
Shares issued on debt conversion (note 8)................. 18,019 1,219,966
----------- ----------
Balance at December 21, 1999.............................. 18,019 1,219,966

Class F preferred shares:
Balance at April 30, 1996................................. 823,300 536,072
Shares redeemed for cash.................................. (200,000) (130,225)
----------- ----------
Balance at April 30, 1997................................. 623,300 405,847
Shares redeemed for cash.................................. (180,000) (117,203)
----------- ----------
Balance at April 30, 1998 and December 31, 1998........... 443,300 288,644
Shares redeemed for cash.................................. (120,000) (81,246)

Balance at December 21, 1999.............................. 323,300 207,398
----------- ----------
Class Z preferred shares:
Balance at April 30, 1996................................. 302,500 759,256
Shares redeemed in exchange for Class B common shares..... (302,500) (759,256)

Balance at April 30, 1997 and 1998, December 31, 1998 and
December 31, 1999....................................... -- --
----------- ----------
Total preferred shares, December 21, 1999................... 20,341,319 2,104,412
----------- ----------
Total common and preferred shares........................... $5,063,248
=========== ==========
</TABLE>

F-70
<PAGE>
SFG TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (CONTINUED)

PERIOD FROM JANUARY 1, 1999 TO DECEMBER 21, 1999
EIGHT MONTHS ENDED DECEMBER 31, 1998
YEARS ENDED APRIL 30, 1998 AND 1997

10. SHARE CAPITAL: (CONTINUED)

Share purchase options for 6,900,000 Class A common shares were exercised by
option holders on December 21, 1999. Included as cash and cash equivalents at
December 21, 1999 is funds held in trust, related to the exercise, that were
released from escrow on December 22, 1999.

Pursuant to a anti-dilution clause relating to equity financing, of a prior
year, 759,037 Class B common shares were issued in the period ended
December 21, 1999.

At December 21, 1999, 74,534 warrants were outstanding that entitle the
holders to purchase one Class B common share at a price of $0.01 (Canadian) per
share prior to July 30, 2002. Subsequent to December 21, 1999, these warrants
were exercised.

(D) PREMIUM ON REDEMPTION OF SHARES:

The Company records the excess of the purchase price over the par value of
shares redeemed as a charge against retained earnings.

11. INCOME TAXES:

<TABLE>
<CAPTION>
PERIOD FROM
JANUARY 1, EIGHT MONTHS
1999 TO ENDED YEARS ENDED APRIL 30,
DECEMBER 21, DECEMBER 31, -----------------------
1999 1998 1998 1997
------------ ------------- ---------- ----------
<S> <C> <C> <C> <C>
Current......................... $ -- $ -- $ -- $ --
Deferred........................ -- -- 397,445 (29,995)
---- ---- -------- --------
$ -- $ -- $397,445 $(29,995)
==== ==== ======== ========
</TABLE>

At December 21, 1999, the Company has Canadian non-capital losses carried
forward of approximately $1,250,000 which are available to reduce taxable income
of future years, the benefit of which has not been recorded in the accounts and
which expire as follows:

<TABLE>
<S> <C>
December 31, 2002........................................... $ 750,000
2005............................................ 500,000
----------
$1,250,000
==========
</TABLE>

As a result of the acquisition on December 22, 1999, the Canadian
non-capital losses can only be applied to subsequent profits from the sale of
similar products and services.

F-71
<PAGE>
SFG TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (CONTINUED)

PERIOD FROM JANUARY 1, 1999 TO DECEMBER 21, 1999
EIGHT MONTHS ENDED DECEMBER 31, 1998
YEARS ENDED APRIL 30, 1998 AND 1997

12. COMMITMENTS:

At December 21, 1999, the Company was committed to the following operating
lease payments for premises and equipment:

13. SUBSEQUENT EVENTS:

(a) Capital stock purchase:

On December 22, 1999 more than 99% of the common shares of the Company
outstanding at December 21, 1999 was acquired by Cayenta, Inc.

(b) Share redemption:

On December 22, 1999, the remaining balance of Class B, Class C and Class F
preferred shares in the amounts of $677,048, $1,219,966 and $207,398,
respectively, were redeemed for cash.

14. SALE OF DIVISION:

On April 30, 1997, the Company disposed of the net assets and operations of
its Govern division for proceeds of $340,449, which includes $130,225 of
preferred shares of the purchaser.

For the year ended April 30, 1997, the division incurred an operating loss
of $118,337 and revenues of $498,636.

The gain on sale of division comprises:

<S> <C>
Cash proceeds............................................... $210,224
Preferred shares............................................ 130,225
--------
Net proceeds................................................ 340,449
Net assets sold:
Accounts receivable....................................... (33,877)
Deferred revenue.......................................... 118,106
Fixed assets.............................................. (10,251)
Contract.................................................. 9,939
--------
83,917
--------
Gain on sale of the division................................ $424,366
========
</TABLE>

F-72
<PAGE>
SFG TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (CONTINUED)

PERIOD FROM JANUARY 1, 1999 TO DECEMBER 21, 1999
EIGHT MONTHS ENDED DECEMBER 31, 1998
YEARS ENDED APRIL 30, 1998 AND 1997

15. YEAR 2000 ISSUE:

The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information using
Year 2000 dates is processed. In addition, similar problems may arise in some
systems which use certain dates in 1999 to represent something other than a
date. The effects of the Year 2000 Issue may be experienced before, on, or after
December 31, 2000, and, if not addressed, the impact on operations and financial
reporting may range from minor errors to significant systems failure which could
affect an entity's ability to conduct normal business operations. It is not
possible to be certain that all aspects of the Year 2000 Issue affecting the
entity, including those related to the efforts of customers, suppliers, or third
parties, will be fully resolved.

16. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES:

These consolidated financial statements have been prepared in accordance
with Canadian generally accepted accounting principles ("GAAP") in Canada, of
which conform, in all material respects, with those in the United States except
as described below:

(a) Research and development:

For United States GAAP purposes, Statement of Financial Accounting Standards
No. 86, "Accounting for the Costs of Computer Software to be Sold, Leased,
or Otherwise Marketed," provides for the capitalization of certain software
development costs after technological feasibility of the software is
established. Under the Company's current practice of developing new products
and enhancements, the technological feasibility of the underlying software
is not established until substantially all product development is complete,
including the development of a working model. No such costs have been
capitalized as their impact would not be material.

Deferred software development costs of $2,153,130 which were capitalized
during the year ended April 30, 1997 would have been expensed as incurred
under U.S. accounting principles. As such, deferred software development
costs of $1,010,094 which were amortized during the year ended April 30,
1997 and the write-down of deferred software development costs in the year
ended April 30, 1998 of $2,653,486 would not have been required.

(b) Loss per share:

For United States GAAP purposes, Statement of Financial Accounting Standards
No. 128, "Earnings Per Share," requires the disclosure of basic and diluted
earnings per share for each period presented. Basic earnings per share is
computed by dividing the net loss by the weighted average number of all
classes of common shares outstanding during the period. Diluted earnings per
share is computed by dividing the net loss by the weighted average number of
all classes of common and dilutive common equivalent shares outstanding
during the period.

Excluded from the computation of diluted earnings per share for the period
from January 1, 1999 to December 21, 1999 and the eight months ended
December 31, 1998 and the years ended April 30, 1998 and 1997 are options
and warrants to acquire common shares and preferred shares convertible into
common shares, as their effects would be anti-dilutive.

F-73
<PAGE>
SFG TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (CONTINUED)

PERIOD FROM JANUARY 1, 1999 TO DECEMBER 21, 1999
EIGHT MONTHS ENDED DECEMBER 31, 1998
YEARS ENDED APRIL 30, 1998 AND 1997

16. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES: (CONTINUED)

Under the asset and liability method of United States Statement of Financial
Accounting Standards No. 109 ("FAS 109"), deferred income tax assets and
liabilities are measured using enacted tax rates for the future income tax
consequences attributable to differences between the financial statement
carrying amount of existing assets and liabilities and their respective tax
bases. The application of the provisions of FAS 109 on the Company's balance
sheet would result in no net difference in deferred taxes from that reported
under Canadian GAAP. At December 21, 1999, the gross deferred tax asset
amount relating to a non-capital loss carry forward was $517,500 which is
reduced by a valuation allowance of $517,500 as management does not consider
that it is more likely than not that such assets will be realized in the
carry forward period.

(d) Stock-based compensation:

For United States GAAP purposes, the Company has elected to follow the
disclosure-only provisions under Statement of Financial Accounting Standards
No. 123 ("FAS 123"), "Accounting for Stock-Based Compensation," and applies
Accounting Principles Board Opinion No. 25 "Accounting for Stock Issued
Employees" ("APB 25") and related interpretations in accounting for its
stock-based compensation to employees. As such, the Company's stock-based
compensation is measured based on the intrinsic value of the option on the
date of grant.

Under the intrinsic value method of APB 25, the stock option compensation is
the excess, if any, of the quoted market value of the stock at the
measurement date of the grant over the amount an optionee must pay to
acquire the stock. The Company grants stock options having exercise prices
based on the market price at the date of grants. Accordingly, under the
intrinsic value method, no stock-based compensation expense has resulted for
the period from January 1, 1999 to December 21, 1999, for the eight month
period ended December 31, 1998 and the years ended April 30, 1998 and 1997
for United States GAAP purposes.

(e) Redeemable preferred shares:

For United States GAAP purposes, preferred stock subject to mandatory
redemption requirements or whose redemption is outside the control of the
issuer is required to be presented outside of shareholders' equity. For the
periods presented, the Company's Class B, C, and F preferred shares would be
presented outside of shareholders' equity.

F-74
<PAGE>
SFG TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (CONTINUED)

PERIOD FROM JANUARY 1, 1999 TO DECEMBER 21, 1999
EIGHT MONTHS ENDED DECEMBER 31, 1998
YEARS ENDED APRIL 30, 1998 AND 1997

16. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES: (CONTINUED)

(f) Summary of United States GAAP adjustments:

The amounts in the balance sheets that differ from those reported under
Canadian GAAP are as follows.

<TABLE>
<CAPTION>
DECEMBER 21, 1999 DECEMBER 31, 1998
----------------------- -----------------------
CDN GAAP US GAAP CDN GAAP US GAAP
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Class B redeemable preferred
shares...................... $ -- $ 677,048 $ -- $ --
Class C redeemable preferred
shares...................... -- 1,219,966 -- --
Class F redeemable preferred
shares--current portion..... -- 207,398 -- 166,819
Class F redeemable preferred
shares--net of current
portion..................... -- -- -- 121,825

Shareholders' equity:
Share capital............... 5,063,248 -- 3,013,364 --
Class A common stock, issued
and outstanding 6,941,194
and 41,194................ -- 289,464 -- 55,347
Class B common stock, issued
and outstanding 2,738,410
and 1,979,373............. -- 2,669,372 -- 2,669,372
Class X common stock, issued
and outstanding nil and
20,000,000................ -- -- -- 1
</TABLE>

F-75
<PAGE>
SFG TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS) (CONTINUED)

PERIOD FROM JANUARY 1, 1999 TO DECEMBER 21, 1999
EIGHT MONTHS ENDED DECEMBER 31, 1998
YEARS ENDED APRIL 30, 1998 AND 1997

16. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES: (CONTINUED)

The following table sets forth the effect on the loss for the period and
loss per share:

<TABLE>
<CAPTION>
PERIOD FROM
JANUARY 1, EIGHT MONTHS
1999 TO ENDED YEARS ENDED APRIL 30,
DECEMBER 21, DECEMBER 31, -------------------------
1999 1998 1998 1997
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Net income (loss) under Canadian GAAP...... $ (415,270) $ (59,834) $(5,588,408) $ 94,985
Less deferred software development costs
capitalized.............................. -- -- -- (2,153,130)
Add deferred software development costs
amortized................................ -- -- -- 1,010,094
Add write-down of software development
costs.................................... -- -- 2,653,486 --
----------- ----------- ----------- -----------
Loss determined under United States GAAP... (415,270) (59,834) (2,934,922) (1,048,051)
Premium on redemption of shares............ -- (33,695) (30,312) (86,719)
----------- ----------- ----------- -----------
Loss available to common shareholders
determined under United States GAAP...... $ (415,270) $ (93,529) $(2,965,234) $(1,134,770)
=========== =========== =========== ===========
Weighted average number of shares
outstanding, United States GAAP.......... 22,070,547 16,084,028 2,002,344 1,509,658
=========== =========== =========== ===========
Net loss per share under United States
GAAP..................................... $ (0.02) $ -- $ (1.48) $ (0.75)
=========== =========== =========== ===========
</TABLE>

(g) Comprehensive loss:

For United States GAAP purposes, Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income," establishes standards for
reporting and disclosure of comprehensive income and its components. The
Company's comprehensive income consists of net income (loss), and changes in
its foreign currency translation account as follows:

F-76
<PAGE>

[BACK COVER]

[Our logo and address]

<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth all expenses payable by the Registrant in
connection with the sale of the common stock being registered. All of the
amounts shown are estimates, except for the SEC registration fee, the NASD
filing fee and the Nasdaq National Market application fee.

<TABLE>
<CAPTION>
AMOUNT TO
BE PAID
----------
<S> <C>
Registration fee............................................ $ 25,654
NASD filing fee............................................. 10,218
Nasdaq Stock Market Listing Application fee................. 87,000
Blue sky qualification fees and expenses.................... 5,000
Printing and engraving expenses............................. 500,000
Legal fees and expenses..................................... 500,000
Accounting fees and expenses................................ 500,000
Transfer agent and registrar fees........................... 3,000
Miscellaneous............................................... 19,128
Total................................................... 1,650,000
</TABLE>

ITEM 14. INDEMNIFICATION OF OFFICERS AND DIRECTORS

Under Section 145 of the Delaware General Corporation Law, the Registrant
has broad powers to indemnify its Directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act of 1933, as amended (the "Securities Act").

The Registrant's Certificate of Incorporation and Bylaws include provisions
to (i) eliminate the personal liability of its directors for monetary damages
resulting from breaches of their fiduciary duty to the extent permitted by
Section 102(b)(7) of the General Corporation Law of Delaware (the "Delaware
Law") and (ii) require the Registrant to indemnify its Directors and officers to
the fullest extent permitted by Section 145 of the Delaware Law, including
circumstances in which indemnification is otherwise discretionary. Pursuant to
Section 145 of the Delaware Law, a corporation generally has the power to
indemnify its present and former directors, officers, employees and agents
against expenses incurred by them in connection with any suit to which they are,
or are threatened to be made, a party by reason of their serving in such
positions so long as they acted in good faith and in a manner they reasonably
believed to be in or not opposed to, the best interests of the corporation and
with respect to any criminal action, they had no reasonable cause to believe
their conduct was unlawful. The Registrant believes that these provisions are
necessary to attract and retain qualified persons as Directors and officers.
These provisions do not eliminate the Directors' duty of care, and, in
appropriate circumstances, equitable remedies such as injunctive or other forms
of non-monetary relief will remain available under Delaware Law. In addition,
each Director will continue to be subject to liability for breach of the
Director's duty of loyalty to the Registrant, for acts or omissions not in good
faith or involving intentional misconduct, for knowing violations of law, for
acts or omissions that the Director believes to be contrary to the best
interests of the Registrant or its stockholders, for any transaction from which
the Director derived an improper personal benefit, for acts or omissions
involving a reckless disregard for the Director's duty to the Registrant or its
stockholders when the Director was aware or should have been aware of a risk of
serious injury to the Registrant or its stockholders, for acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication of
the Director's duty to the Registrant or its stockholders, for improper
transactions between the Director and the Registrant and for improper
distributions to stockholders and loans to

II-1
<PAGE>
Directors and officers. The provision also does not affect a Director's
responsibilities under any other law, such as the federal securities law or
state or federal environmental laws.

The Registrant has entered into indemnity agreements with each of its
Directors and executive officers that require the Registrant to indemnify such
persons against expenses, judgments, fines, settlements and other amounts
incurred (including expenses of a derivative action) in connection with any
proceeding, whether actual or threatened, to which any such person may be made a
party by reason of the fact that such person is or was a Director or an
executive officer of the Registrant or any of its affiliated enterprises,
provided that such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
Registrant and, with respect to any criminal proceeding, had no reasonable cause
to believe his conduct was unlawful. The indemnification agreements also set
forth certain procedures that will apply in the event of a claim for
indemnification thereunder.

The Registrant has entered into employment agreements with David P. Porreca
and Gregory R. Smith that provide for the indemnification of Mr. Porreca and
Mr. Smith to the maximum extent permitted by law for any acts made in good faith
while performing services in the ordinary and regular course of business for
Cayenta. To the same extent, Cayenta will pay and subject to any legal
limitations, advance all expenses, including reasonable attorneys' fees and
costs of court approved settlements, actually and necessarily incurred by
Mr. Porreca or Mr. Smith in connection with the defense of any action, suit or
proceeding and in connection with any appeal, which has been brought against
Mr. Porreca or Mr. Smith by reason of his service as an officer or agent of
Cayenta.

At present, there is no pending litigation or proceeding involving a
Director or officer of the Registrant as to which indemnification is being
sought nor is the Registrant aware of any threatened litigation that may result
in claims for indemnification by any officer or Director.

The Registrant has an insurance policy covering the officers and Directors
of the Registrant with respect to certain liabilities, including liabilities
arising under the Securities Act or otherwise.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Since its inception in September 1997, the Registrant has sold and issued
the following unregistered securities:

(a) In January 1999, the Registrant acquired substantially all of the assets
of Transnational Partners II, LLC, a company that focused on systems integration
and architecture. The Registrant acquired Transnational Partners II for
$7 million in cash and 4,842,425 shares of Series A preferred stock. The
Registrant also paid off an additional $2.8 million note that the Registrant
issued as part of the acquisition of Transnational Partners II, plus 7% interest
thereon, in February 2000. The Registrant issued such shares in reliance upon
the exemption from securities registration afforded by Rule 506 of Regulation D
under the Securities Act.

(b) In December 1999, the Registrant acquired Assist Cornerstone
Technologies, Inc., an e-commerce software company. The Registrant acquired
Assist Cornerstone for 1,066,485 shares of Class A common stock which were
issued to the former equity holders of Assist Cornerstone. Each share of Class A
common stock was valued at $3.19 per share. In addition, the Registrant paid
$12.9 million in cash, of which $9.9 million was paid at the closing, with the
balance withheld to satisfy possible working capital adjustments or
indemnification obligations. The Registrant issued such shares

II-2
<PAGE>

in reliance upon the exemption from securities registration afforded by
Rule 506 of Regulation D under the Securities Act.

(c) In connection with the Registrant's reorganization with Titan in
December 1999, the Registrant issued 20,650,000 shares of Class B common stock
to Titan. The Registrant issued such shares in reliance on the exemption
provided in Section 3(a)(9) of the Securities Act.

(d) In December 1999, the Registrant issued to Batchelder & Partners
warrants to purchase up to 1,023,827 shares of its Class A common stock at a
weighted average exercise price of $6.35 per share in consideration of strategic
advisory services provided to the Registrant by Batchelder & Partners. The
Registrant issued such warrants in reliance upon the exemption from securities
registration afforded by Rule 506 of Regulation D under the Securities Act.

(e) In October 1999, the Registrant issued 103,250 shares of Class A common
stock to Dr. Gene Ray upon the exercise of an option at an exercise price of
$0.18 per share. The Registrant issued such shares in reliance upon the
exemption from securities registration afforded by Rule 701 under the Securities
Act.

(f) In March 2000, the Registrant issued 516,250 shares of Class A common
stock to Penton Media, Inc. for $6,372,500, or $12.34 per share. The Registrant
issued such shares in reliance upon the exemption from securities regulation
afforded by Rule 506 of Regulation D under the Securities Act.

The recipients of the above-described securities represented their intention
to acquire the securities for investment only and not with a view to
distribution thereof. The recipients had adequate access through their
relationship with the Registrant, to information about the Registrant.

The stock amounts and per-share exercise prices in the descriptions above
reflect the 2.065 for 1 stock split of the Registrant's common stock which will
take place prior to the effectiveness of this offering. The recipients of the
above-described securities represented their intention to acquire the securities
for investment only and not with a view to distribution thereof. Appropriate
legends were affixed to the stock certificates issued in such transactions. All
recipients had adequate access, through employment or other relationships, to
information about the Registrant.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
--------------------- -----------------------
<C> <S>
1.1 Form of Underwriting Agreement.(1)

2.1 Asset Purchase Agreement among Transnational Partners II,
LLC, Cayenta and The Titan Corporation dated as of
January 1, 1999.*

2.2 Stock Purchase Agreement dated as of November 2, 1999 among
Cayenta, J.B. Systems, Inc., d.b.a. Mainsaver Corporation
and Mainsaver, JKS Separate Property Trust, The Gehl
Living Trust, JBS Acquisition Company, LLC, Epicor
Software Corporation, Mark Stevens and The Titan
Corporation.*

2.3 Stock Exchange and Stock Purchase Agreement dated as of
December 7, 1999 among Cayenta, Cayenta Operating Company,
The Titan Corporation, Assist Cornerstone Technologies,
Inc. and Selling Shareholders.*

2.4 Stock Purchase Agreement dated as of December 23, 1999 among
Cayenta, SFG Technologies, Inc., the Common Selling
Shareholders, the Preferred Selling Shareholders and the
Option Holders.*
</TABLE>

II-3
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
--------------------- -----------------------
<C> <S>
2.5 Contribution Agreement dated December 7, 1999 among The
Titan Corporation, Cayenta, Gene W. Ray and Transnational
Partners II, LLC.*

2.6 Limited Liability Company Agreement of Soliance, LLC dated
August 25, 1999 among Sempra Energy Information Solutions,
Modis, Inc. and Cayenta.*(2)

3.1 Certificate of Incorporation.*

3.2 Certificate of Amendment to Certificate of Incorporation.*

3.3 Bylaws.*

4.1 Reference is made to Exhibits 3.1, 3.2 and 3.3.

4.2 Specimen Stock Certificate.(1)

5.1 Opinion of Cooley Godward LLP.(1)

10.1 Cayenta Investor Rights Agreement.*

10.2 Cayenta 1997 Stock Option Plan.*

10.3 Titan 1995 Employee Stock Purchase Plan.*

10.4 Titan Supplemental Retirement Plan for Executives dated
December 17, 1993, as amended May 18, 1995.*

10.5 Form of Nonstatutory Stock Option Agreement under 1997 Stock
Option Plan.*

10.6 Form of Incentive Stock Option Agreement under 1997 Stock
Option Plan.*

10.7 Employment Agreement dated January 1, 1999 between David P.
Porreca and Cayenta.*

10.8 Employment Agreement dated January 1, 1999 between Gregory
R. Smith and Cayenta.*

10.9 Letter Agreement dated November 1, 1999 between Cayenta and
William G. Atkinson.*

10.10 Letter Agreement dated December 18, 1999 between Cayenta and
Edward M. Lake.*

10.11 Form of Indemnity Agreement.*

10.12 Contract between the Federal Aviation Administration and
Cayenta dated as of July 24, 1995.*(2)

10.13 Agreement for Consulting Services dated as of January 1,
1999 between Sempra Energy Information Solutions, LLC and
Transnational Partners II, LLC.*(2)

10.14 Management Services Agreement dated August 25, 1999 between
Cayenta and Soliance, LLC.*

10.15 Contract for Professional Services dated as of September 8,
1999 between Cayenta and Waste Management, Inc.*(2)

10.16 Software License Agreement dated September 23, 1998 between
Assist Cornerstone Technologies, Inc. and 800.com,
Inc.*(2)

10.17 Purchase Notification dated February 10, 1999 between Titan
and the Government of the District of Columbia.*(2)

10.18 Subcontract Agreement dated March 23, 1999 between Cap
Gemini America LLC and Cayenta.*(2)

10.19 Tax Allocation Agreement.

10.20 Corporate Services Agreement.

10.21 Facilities Agreement.

10.22 Office Space Lease dated March 9, 1999 between San Diego 225
RPF III, LLC and Titan.*
</TABLE>

II-4
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
--------------------- -----------------------
<C> <S>
10.23 Subordinated Promissory Note dated December 27, 1999 between
Cayenta Operating Company, Inc. and Titan.*

10.24 Technical Services Agreement dated January 1, 1997 between
Enova Corporation and Transnational Partners II, LLC, as
amended.*(2)

10.25 Total Service Provider Services and License Agreement dated
March 30, 2000 between Cayenta and Penton Media,
Inc.(1)(2)

10.26 Strategic Alliance Agreement dated March 30, 2000 between
Penton Media, Inc. and Cayenta.

10.27 Investor Rights Agreement dated March 30, 2000 among
Cayenta, Titan and Penton Media, Inc.

10.28 Cayenta Nonstatutory Stock Option Plan.

10.29 Pacific Corporate Center Lease dated January 14, 2000
between TIPAC-I, L.P and Cayenta.(1)

10.30 Agreement for Technical Services dated as of January 1, 2000
between Sempra Energy and Cayenta for Information
Technology Consulting Services, Contract
No. 5600001842.(1)(2)

10.31 Agreement for Technical Services dated as of January 1, 2000
between Sempra Energy and Cayenta for Information
Technology Consulting Services, Contract No.
5600001843.(1)(2)

11.1 Computation of Net Income per Share.*

21.1 Subsidiaries of the Registrant.*

23.1 Consent of Arthur Andersen LLP.

23.2 Consent of Arthur Andersen LLP.

23.3 Consent of Arthur Andersen LLP.

23.4 Consent of KPMG LLP.

23.5 Consent of Ernst & Young LLP, independent auditors.

23.6 Consent of Cooley Godward LLP. Reference is made to
Exhibit 5.1.(1)

24.1 Power of Attorney. Reference is made to page II-6.

27.1 Financial Data Schedule.*
</TABLE>

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

* Previously filed.

(1) To be filed by amendment.

(2) Confidential treatment requested.

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to provisions described in Item 14 or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other

II-5
<PAGE>
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes that:

(a) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed
to be part of this registration statement as of the time it was declared
effective.

(b) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

The undersigned Registrant hereby undertakes to supplement the prospectus,
after the expiration of the subscription period, to set forth the results of the
subscription offer, the transactions by the underwriters during the subscription
period, the amount of unsubscribed securities to be purchased by the
underwriters, and the terms of any subsequent reoffering thereof. If any public
offering by the underwriters is to be made on terms differing from those set
forth on the cover page of the prospectus, a post effective amendment will be
filed to set forth the terms of such offering.

II-6
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Amendment No. 2 to this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of San Diego, County of San Diego, State of California, on March 29, 2000.

<TABLE>
<S> <C> <C>
Registrant

By: /s/ EDWARD M. LAKE
-----------------------------------------
Edward M. Lake
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER
</TABLE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David P. Porreca and Edward M. Lake and each of
them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place, and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments, exhibits thereto and other documents in connection therewith) to
this Registration Statement and any subsequent registration statement filed by
the registrant pursuant to Rule 462(b) of the Securities Act of 1933, as
amended, which relates to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 2 to this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Chief Executive
* Officer and Director
------------------------------------------- (PRINCIPAL EXECUTIVE March 31, 2000
David P. Porreca OFFICER)

Senior Vice President and
/s/ EDWARD M. LAKE Chief Financial Officer
------------------------------------------- (PRINCIPAL FINANCIAL AND March 31, 2000
Edward M. Lake ACCOUNTING OFFICER)

* Senior Vice President,
------------------------------------------- General Counsel and March 31, 2000
Nicholas J. Costanza Secretary
</TABLE>

II-7
<PAGE>

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
*
------------------------------------------- Chairman of the Board and March 31, 2000
Gene W. Ray Director

*
------------------------------------------- Director March 31, 2000
Robert E. La Blanc

/s/ EDWARD M. LAKE
-------------------------------------------
Edward M. Lake
*ATTORNEY-IN-FACT
</TABLE>

II-8
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- --------------------- -----------------------
<C> <S>
1.1 Form of Underwriting Agreement.(1)

2.1 Asset Purchase Agreement among Transnational Partners II,
LLC, Cayenta and The Titan Corporation dated as of
January 1, 1999.*

2.4 Stock Purchase Agreement dated as of December 23, 1999 among
Cayenta, SFG Technologies, Inc., the Common Selling
Shareholders, the Preferred Selling Shareholders and the
Option Holders.*

2.5 Contribution Agreement dated December 7, 1999 among The
Titan Corporation, Cayenta, Gene W. Ray and Transnational
Partners II, LLC.*

2.6 Limited Liability Company Agreement of Soliance, LLC dated
August 25, 1999 among Sempra Energy Information Solutions,
Modis, Inc. and Cayenta.*(2)

3.1 Certificate of Incorporation.*

3.2 Certificate of Amendment to Certificate of Incorporation.*

3.3 Bylaws.*

4.1 Reference is made to Exhibits 3.1, 3.2 and 3.3.

4.2 Specimen Stock Certificate.(1)

5.1 Opinion of Cooley Godward LLP.(1)

10.1 Cayenta Investor Rights Agreement.*

10.2 Cayenta 1997 Stock Option Plan.*

10.3 Titan 1995 Employee Stock Purchase Plan.*

10.4 Titan Supplemental Retirement Plan for Executives dated
December 17, 1993, as amended May 18, 1995.*

10.5 Form of Nonstatutory Stock Option Agreement under 1997 Stock
Option Plan.*

10.6 Form of Incentive Stock Option Agreement under 1997 Stock
Option Plan.*

10.7 Employment Agreement dated January 1, 1999 between David P.
Porreca and Cayenta.*

10.8 Employment Agreement dated January 1, 1999 between Gregory
R. Smith and Cayenta.*

10.9 Letter Agreement dated November 1, 1999 between Cayenta and
William G. Atkinson.*

10.10 Letter Agreement dated December 18, 1999 between Cayenta and
Edward M. Lake.*

10.11 Form of Indemnity Agreement.*

10.12 Contract between the Federal Aviation Administration and
Cayenta dated as of July 24, 1995.*(2)

10.13 Agreement for Consulting Services dated as of January 1,
1999 between Sempra Energy Information Solutions, LLC and
Transnational Partners II, LLC.*(2)

10.14 Management Services Agreement dated August 25, 1999 between
Cayenta and Soliance, LLC.*
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- --------------------- -----------------------
<C> <S>
10.15 Contract for Professional Services dated as of September 8,
1999 between Cayenta and Waste Management, Inc.*(2)

10.16 Software License Agreement dated September 23, 1998 between
Assist Cornerstone Technologies, Inc. and 800.com,
Inc.*(2)

10.17 Purchase Notification dated February 10, 1999 between Titan
and the Government of the District of Columbia.*(2)

10.18 Subcontract Agreement dated March 23, 1999 between Cap
Gemini America LLC and Cayenta.*(2)

10.19 Tax Allocation Agreement.

10.20 Corporate Services Agreement.

10.21 Facilities Agreement.

10.22 Office Space Lease dated March 9, 1999 between San Diego 225
RPF III, LLC and Titan.*

10.23 Subordinated Promissory Note dated December 27, 1999 between
Cayenta Operating Company, Inc. and Titan.*

10.24 Technical Services Agreement dated January 1, 1997 between
Enova Corporation and Transnational Partners II, LLC, as
amended.*(2)

10.25 Total Service Provider Services and License Agreement dated
March 30, 2000 between Cayenta and Penton Media,
Inc.(1)(2)

10.26 Strategic Alliance Agreement dated March 30, 2000 between
Penton Media, Inc. and Cayenta.

10.27 Investor Rights Agreement dated March 30, 2000 among
Cayenta, Titan and Penton Media, Inc.

10.28 Cayenta Nonstatutory Stock Option Plan.

10.29 Pacific Corporate Center Lease dated January 14, 2000
between TIPAC-I, L.P. and Cayenta.(1)

10.30 Agreement for Technical Services dated as of January 1, 2000
between Sempra Energy and Cayenta for Information
Technology Consulting Services, Contract No.
5600001842.(1)(2)

10.31 Agreement for Technical Services dated as of January 1, 2000
between Sempra Energy and Cayenta for Information
Technology Consulting Services, Contract No.
5600001843.(1)(2)

11.1 Computation of Net Income per Share.*

21.1 Subsidiaries of the Registrant.*

23.1 Consent of Arthur Andersen LLP.

23.2 Consent of Arthur Andersen LLP.

23.3 Consent of Arthur Andersen LLP.

23.4 Consent of KPMG LLP.

23.5 Consent of Ernst & Young LLP, independent auditors.

23.6 Consent of Cooley Godward LLP. Reference is made to
Exhibit 5.1.(1)

24.1 Power of Attorney. Reference is made to page II-6.

27.1 Financial Data Schedule.*
</TABLE>

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

* Previously filed.

(1) To be filed by amendment.

(2) Confidential treatment requested.

<PAGE>

Exhibit 10.19

TAX ALLOCATION AGREEMENT

This TAX ALLOCATION AGREEMENT is entered into as of March 29, 2000
(the "EFFECTIVE DATE") between THE TITAN CORPORATION, a Delaware corporation
("TITAN"), its Affiliates, and CAYENTA, INC., a Delaware corporation
("CAYENTA").

WITNESSETH:

WHEREAS, Titan is the common parent of an affiliated group of
corporations which includes Cayenta and its subsidiaries (the "TITAN GROUP");

WHEREAS, the Titan Group currently files a consolidated federal income
tax return and desires to continue to file a consolidated federal income tax
return and consolidated or combined income tax returns where allowed by law; and

WHEREAS, the Titan Group desires to preserve the economic rights and
privileges which would accrue to each from the filing of separate federal and
state income tax returns and, further, desire to set forth their agreement
regarding those rights and privileges in writing.

NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, Titan, its Affiliates, and Cayenta hereby agree as follows:

1. DEFINITIONS

1.1 AFFILIATE OR AFFILIATES. "Affiliate" or "Affiliates" shall mean any
other corporation, whether presently existing or hereafter acquired, which is a
member of the Titan Consolidated Group within the meaning of Section 1504(a) of
the Internal Revenue Code. The term "Affiliate" or "Affiliates" shall not
include Cayenta or any of its subsidiaries, whether presently existing or
hereafter acquired.

1.2 CARRYFORWARDS. The term "Carryforwards" shall mean any net
operating loss, capital loss, tax credit or similar item carried forward from
prior consolidated return tax years.

1.3 CODE OR INTERNAL REVENUE CODE. "Internal Revenue Code" or "Code"
shall mean the Internal Revenue Code of 1986, as amended.

1.4 DEFICIT COMPANY. The term "Deficit Company" shall mean any of the
corporations within the Titan Consolidated Group that has an ordinary loss,
capital loss, special deduction or tax credit arising in a consolidated return
tax year, or in a prior separate return year, that is utilized to a greater
extent in the then current consolidated federal income tax return than would
have been the case if such corporation had filed a separate federal income tax
return for the year.

1.5 EFFECTIVE DATE. "Effective Date" is as defined immediately prior to
the Recitals at the beginning of this Agreement.

1.
<PAGE>

1.6 FINAL DETERMINATION. "Final Determination" shall mean the later to
occur of: (i) a decision of the United States Tax Court, or a judgment, decree,
or other order by another court of competent jurisdiction, which has become
final and unappealable; (ii) a closing agreement under Section 7121 of the Code;
or (iii) any other final disposition by reason of an agreement between the
affected party or parties and the appropriate tax authority, the expiration of
the applicable statute of limitations, or otherwise.

1.7 INTEREST RATE. "Interest Rate" shall mean the interest rate charged
by the Internal Revenue Service or other tax authority on underpayments of
federal or other tax.

1.8 TAX OR TAXES. "Tax" or "Taxes" shall mean all federal or state net
income and alternative or add on minimum taxes together with any interest,
penalties, additions to tax or additional amounts imposed thereon or imposed
with respect to any such interest, penalties, additions to tax or other
additional amounts.

1.9 TAX AUTHORITIES. "Tax Authorities" shall mean the Internal Revenue
Service and the tax authority in each jurisdiction where Cayenta would be
required to pay Taxes if it were a separate company and were not a member of the
Titan Group.

1.10 TAX BENEFIT ITEM. The term "Tax Benefit Item" shall mean any net
operating loss, capital loss, tax credit, carryforward or similar item generated
in a consolidated return tax year, or in a prior separate return tax year, that
is utilized in the current consolidated income tax return.

1.11 TAX YEAR. "Tax Year" shall mean any 12 month period ending on
December 31 or any portion of such period for which a return for Taxes is
required to be filed.

1.12 TITAN CONSOLIDATED GROUP OR TITAN GROUP. The term "Titan
Consolidated Group" or "Titan Group" shall mean the group of corporations,
including Cayenta and its subsidiaries, whether currently existing or hereafter
acquired, of which Titan is common parent and with which Titan files a
consolidated federal income tax return.

2. TAX RETURNS

2.1 FEDERAL TAX RETURNS. Titan as the common parent shall prepare and
file, or cause to be prepared and filed, federal income tax returns on a
consolidated basis for the Titan Consolidated Group for all tax years in which
this Agreement is in effect.

2.2 STATE TAX RETURNS. Titan as the common parent shall prepare and
file, or cause to be prepared and filed, state income tax returns on a combined,
consolidated, unitary, or other method that Titan believes will result in a
lower overall tax liability to the Parties.

2.3 ELECTIONS. Titan shall make all elections under the consolidated
return regulations or required to be made for the Titan Consolidated Group and
shall approve all elections made with respect to each member of the Titan Group.

2.
<PAGE>

2.4 TAX ALLOCATIONS. Cayenta shall pay to the applicable Tax
Authorities directly all amounts sufficient to pay for their respective
allocable share of federal and state tax income liabilities as calculated in
accordance with the provisions of Sections 3 and 4 of this Agreement, including
without limitation amounts satisfying quarterly estimated tax liabilities, as
well as annual liabilities.

3. CALCULATION OF INDIVIDUAL CORPORATE INCOME TAX LIABILITY

3.1 CALCULATION OF SEPARATE TAX LIABILITY. Except as otherwise provided
herein, beginning with the tax year ended December 31, 2000, and for each
subsequent tax year in which this Agreement is in effect, Cayenta shall
calculate its federal corporate income tax liability as if it were to file a
separate federal income tax return for such period. Any liability for
alternative minimum tax shall be treated as part of Cayenta's separate tax
liability.

3.2 METHOD OF CALCULATION. In so computing the separate federal income
tax liability of Cayenta:

(a) Except as otherwise provided herein, "separate company taxable
income" shall be determined as if Titan and each member of the Titan Group were
filing a separate tax return. Furthermore, the term shall not have the same
meaning as set forth in Regulation Section 1.1502-12;

(b) Any dividends received by Titan from Titan Group members, or by
one member from another, will be assumed to qualify for the 100% dividend
received deduction of Code Section 243, or shall be eliminated from such
calculation in accordance with Regulation Section 1.1502-14(a)(1);

(d) Limitation on the calculation of a deduction, the utilization
of credits, or the calculation of the liability shall be made on a consolidated
basis as determined by Titan. Accordingly, the limitations provided in Code
Sections 170(b)(2), 172(b)(2), 38(c), and 53(a) and similar limitations shall be
applied on the consolidated basis;

(e) The amounts in each taxable income bracket in Code Section
11(b) shall be allocated in any given year to members of the Titan Group as
Titan shall elect. Such election shall be made on an annual basis and shall be
binding upon all parties to this Agreement;

(f) The amount of any excess tax credits utilized by the Titan
Group on a consolidated basis shall be allocated in any given year to the
members of the Titan Group as determined by Titan. (Excess tax credits are the
total tax credits utilized on a consolidated basis that would not have been
utilized on a separate company basis.); and

(g) In calculating any carryback or carryover of net operating
losses, adjustments shall be made to such prior or subsequent tax year's
separate company tax liability

3.
<PAGE>

as determined under Code Section 172(b)(2). For purposes of this calculation the
election under Code Section 172(b)(3) (relating to the waiver of carrybacks)
shall be made on a separate company basis.

3.3 SEPARATE COMPANY TAXABLE INCOME. For purposes of Section 3.2(a)
above, separate company taxable income of each member of the Titan Group shall
take into account only those items of income, deduction, gain, loss and
Carryforwards recorded on the books and records of such member.

4. LIABILITY FOR TAX PAYMENTS.

4.1 FEDERAL TAX LIABILITIES. Titan shall file the federal corporate
income tax returns of the Titan Group for any tax year in which the Titan Group
files consolidated federal and state income tax returns.

4.2 PAYMENTS TO DEFICIT COMPANY. If in any tax year a member of the
Titan Group incurs a loss or generates tax credits or similar tax benefits (a
"tax benefit item"), Titan shall pay to the member ("Deficit Company") a sum
equal to the amount of benefit realized by Titan that is attributable to the tax
benefit item; payments due from Titan under this Section shall be made upon the
earlier of (1) the tax year in which the Deficit Company would have obtained a
tax benefit from the tax benefit item if it had in all tax years filed a
separate federal income tax return or (2) the year in which any applicable
carryforward period with respect to the tax benefit item expires.

4.3 INABILITY OF TITAN GROUP TO USE TAX BENEFIT ITEM. In the event that
the Titan Consolidated Group is unable to utilize the tax benefit item to reduce
its current tax liability, the Deficit Company shall first offset this loss
against its prior two tax years' taxable income. If the loss is greater than the
prior two tax years' taxable income, then the excess will be carried forward
against future tax years' taxable income. The tax repayment from Titan to the
Deficit Company under this paragraph will be calculated on the amount of the
loss carried back to prior years, and no further tax will be payable by the
Deficit Company until the losses carried forward are fully utilized against
future tax years' income.

4.4 STATE TAX LIABILITIES. If Cayenta is found liable to pay any state
corporate tax with respect to income earned by Cayenta, Cayenta shall pay to the
applicable Tax Authorities the amount of its respective state corporate tax
liability but only if Cayenta would be required to file a return in the state on
a separate return basis.

5. TIME AND METHOD OF PAYMENT.

Except as otherwise provided herein, the obligations of each member of the Titan
Group for federal income tax payments will be determined and paid as follows:

5.1 Not later than the 15th day after the end of the fourth, sixth,
ninth and twelfth months of each consolidated tax year of Titan, Titan will make
a reasonable determination (consistent with the provisions of Section 6655 of
the Code) of the separate federal income tax

4.
<PAGE>

liability that each member of the Titan Group would be required to pay as
estimated payments on a separate return basis for that period. Each member of
the applicable Titan Group shall pay to Titan the applicable Tax Authorities and
any interest and penalties associated with a late payment of any such taxes.

5.2 After the end of Titan's fourth accounting quarter and before the
15th day of the third month thereafter, each member of the Titan Group will
promptly pay to the applicable Tax Authorities the entire amounts estimated to
be due and payable under such member's federal income tax return as if filed on
a separate return basis, less all amounts previously paid with respect to that
tax year pursuant to Section 5.1 of this Section 5.

5.3 If upon the filing of the consolidated income tax return, a revised
calculation is made in the manner set forth in Section 5.1 of this Section 5,
and it is determined that any member has paid to the Tax Authorities with
respect to the consolidated taxable year an amount greater than that required by
Section 5.1, then that excess will be promptly paid by Titan to that member.

6. ADJUSTMENTS & FINANCIAL REPORTING

6.1 ADJUSTMENTS OF TAX LIABILITY. In the event of any adjustment of the
tax liability shown on the federal or state income tax returns of the Titan
Group, by reason of the filing of an amended return or claim for refund, or
relating to the Final Determination of a tax controversy involving a taxing
authority, the liability of Titan and any member of the Titan Group hereunder
shall be redetermined after fully giving effect to such adjustment as if such
adjustment had been made as part of the original computation. Titan and members
of the Titan Group shall be severally liable for the total amount of any and all
penalties and/or interest assessed to Titan by reason of the filing of the
consolidated return based on the pro rata share of each members' positive
separate return tax liability of the total tax liability of the Titan
Consolidated Group.

6.2 EARNINGS AND PROFITS ADJUSTMENTS. This agreement is not intended to
establish the method by which the earnings and profits of each member of the
Titan Group will be determined. Titan reserves the right to elect the method for
allocating tax liability for the purposes of determining earnings and profits as
set forth in Regulation Sections 1.1552-1 (a) and 1.1502-33(d).

7. NEW MEMBERS

7.1 ADDITION OF MEMBER. If, at any time, any other corporation becomes
a member of the Titan Group, the parties hereto agree that such member may
become a party to this Agreement by executing a duplicate copy of this
Agreement. Unless otherwise specified, such named member shall have all the
rights and obligations of a subsidiary under this Agreement.

7.2 FISCAL YEARS. Titan, as the common parent, shall cause any
corporation which hereinafter becomes a member of the Titan Consolidated Group
to maintain concurrent fiscal tax years.

5.
<PAGE>

8. DETERMINATION OF SUMS DUE FROM AND PAYABLE TO MEMBERS.

8.1 DETERMINATION. Titan will determine the sums due from and payable
to each member of the Titan Group under the provisions of this Agreement. Each
member of the Titan Group shall provide Titan with such information as may
reasonably be necessary to make these determinations. Issues arising in the
course of the determinations that are not expressly provided for in this
Agreement will be resolved in a manner provided for in Section 8.2 of this
Article 8.

8.2 ARBITRATION OF CONTESTED ISSUES. In the event that either Titan or
another member of the Titan Group disputes the calculation of any obligation
under this Agreement or the treatment for tax purposes of any item of income,
loss, deduction, credit or other tax attribute and cannot agree upon the proper
calculation or treatment, then such item of disagreement shall be referred
promptly to Arthur Andersen LLP or, in the event such firm is unacceptable to
either party, to some other public accounting firm reasonably acceptable to both
the disputing member and Titan. In the event the parties are unable to select an
accounting firm to act as arbitrator, the American Arbitration Association shall
select a national public accounting firm to act as arbitrator pursuant to this
Agreement. The arbitration shall proceed in accordance with the Rules of the
American Arbitration Association in effect on the date the demand for
arbitration is served except to the extent such rules relate to the selection of
arbitrators. The foregoing agreement to arbitrate shall be specifically
enforceable under applicable arbitration law. During the arbitration each party
shall bear its own attorneys' fees and pay one half of any fees due the
arbitrator except that as part of a final award the arbitrator may award
reasonable fees and costs. The award rendered by the arbitrator shall be final,
and judgment may be entered upon it in accordance with the applicable law in any
court having jurisdiction thereof. The parties may agree to defer unresolved
claims, disputes and other issues to arbitration at a later time to be mutually
agreed upon.

9. DEPARTING MEMBERS

9.1 DEFINITION. The term "Departing Members", as used herein, will mean
a member of the Titan Group that is no longer permitted under the Code to be
included in the consolidated federal income tax return.

9.2 TAX ALLOCATIONS. In applying this Agreement to a Departing Member
for the final taxable year in which its income, deductions, and tax credits are
required to be included in the consolidated federal income tax return: (i) the
amount required to be paid by a Departing Member under the provisions of Section
3 hereof and(ii) the amount that the Departing Member is entitled to receive
under the provisions of Section 5 hereof, will be determined by taking into
account the income, deductions and tax credits of the Departing Member only for
the fractional part of such tax year as the Departing Member was a member of the
Titan Group and included in the consolidated federal income tax return.

9.3 EXCHANGE OF INFORMATION. After the filing of the consolidated
federal income tax return for the last tax year that the Departing Member was
included therein, the Departing Member will be informed of the amount of
consolidated carryovers as of the end of the tax year

6.
<PAGE>

or period which are attributable to the Departing Member, as provided by
Treasury Regulations Section 1.1502-79 or otherwise, including the agreement of
the parties.

10. TAX CONTROVERSIES

10.1 RESPONSIBILITY. If a consolidated federal income tax return for
any taxable year during which this Agreement is in effect is examined by the
Internal Revenue Service, the examination, as well as any other matters relating
to that tax return, including any tax litigation, will be handled solely by
Titan. Members of the Titan Group shall cooperate with Titan and to this end
will execute protests, petitions, and any other documents as Titan determines to
be necessary or appropriate.

10.2 ALLOCATION OF LIABILITY AND EXPENSE. The cost and expense of
Titan's handling of a tax controversy, including legal and accounting fees, will
be allocated to and paid by the member to whom the tax controversy relates. If
the tax controversy relates to more than one member in the Titan Group, the cost
and expense will be allocated between the Companies in the proportion that each
Company's potential additional tax liability bears to the total potential
additional tax liability of the Titan Group (assuming that the final
determination of the tax controversy is in favor of the Internal Revenue
Service) for the tax year on issue. If the tax controversy encompasses more than
one tax year, Titan will first allocate the cost and expense to each tax year in
the proportion that the potential additional tax liability for each tax year
bears to the total potential additional tax liability for the tax years in
issue.

11. DURATION

11.1 AGREEMENT IN EFFECT. Unless earlier terminated by mutual agreement
of the parties, this Agreement shall remain in effect for federal income tax
purposes with respect to any tax year for which consolidated federal income tax
returns are filed by the Titan Group and for state income tax purposes with
respect to any tax year for which combined, consolidated or unitary income tax
returns are filed by the Titan Group.

11.2 TERMINATION OF AGREEMENT. Notwithstanding the termination of this
Agreement, its provisions will remain in effect with respect to any period of
time during the tax year in which termination occurs, for which the income of
the terminating party must be included in the consolidated return. The preceding
sentence shall not be construed, however, to require a party to contribute to
consolidated tax liability for any period for which it files a separate return.
Allocations of consolidated tax liability shall be made hereunder only for
periods covered by a consolidated federal income tax return.

12. MISCELLANEOUS

12.1 PARENT DESIGNATE. At the election of the Titan, Titan can
designate a member of the Titan Group to act on behalf of Titan in performing
the duties identified in this Agreement.

12.2 BINDING EFFECT, ASSIGNMENT, ETC. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their permitted
assigns and successors in

7.
<PAGE>

interest. No party may assign any right, or delegate any obligation hereunder
without the express prior written consent of Titan.

12.3 REMEDIES CUMULATIVE. The remedies of the parties under this
Agreement are cumulative and shall not exclude any other remedies to which the
party may be lawfully entitled.

12.4 AMENDMENT. No change, modification, or amendment of this Agreement
shall be valid or binding on the parties unless such change or modification
shall be in writing signed by the party or parties against whom the same is
sought to be enforced.

12.5 COOPERATION. Each party hereby covenants and agrees that it shall
execute and deliver all materials including, but not limited to, returns,
supporting schedules, workpapers, correspondence and other documents relating to
the consolidated return to any party to this Agreement during regular business
hours.

12.6 NO WAIVER. The failure of any party to insist on strict
performance of a covenant hereunder or of any obligation hereunder shall not be
a waiver of such party's right to demand strict compliance therewith in the
future, nor shall the same be construed as a novation of this Agreement.

12.7 CAPTIONS. Titles or captions of Sections and paragraphs contained
in this Agreement are inserted only as a matter of convenience and for
reference, and in no way define, limit, extend, or describe the scope of this
Agreement or the intent of any provision hereto.

12.8 NUMBER AND GENDER. Whenever required by the context, the singular
number shall include the plural, the plural number shall include the singular,
and the gender of any pronoun shall include all genders.

12.9 INTEGRATION. This Agreement comprises the entire agreement among
the parties hereto as to the subject matter hereof and supersedes in all
respects all prior agreements and understandings between them related thereto.

12.10 COUNTERPARTS. This Agreement may be executed in multiple copies,
each of which shall for all purposes constitute an Agreement, binding on the
parties, and each partner hereby covenants and agrees to execute all duplicates
or replacement counterparts of this Agreement as may be required.

12.11 COMPUTATION OF TIME. Whenever the last day for the exercise of
any privilege or the discharge of any duty hereunder shall fall on a Saturday,
Sunday or any public or legal holiday, whether local or national, the person
having such privilege or duty shall have until 5:00 p.m. Pacific Standard Time
on the next succeeding business day to exercise such privilege, or to discharge
such duty.

12.12 COSTS AND EXPENSES. Unless otherwise provided in this Agreement,
each party shall bear all fees and expenses incurred in performing its
obligations under this Agreement.

8.
<PAGE>

12.13 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of California.

12.14 INDEMNIFICATION. Titan shall indemnify and hold harmless the
other parties against any and all Taxes for which Titan is liable pursuant to
the terms of this Agreement and any interest and penalties and reasonable
attorney's fees and expenses arising out of or incident to the failure of Titan
to pay its share of Taxes under this Agreement or otherwise carry out its
obligations in accordance with this Agreement.

9.
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.

THE TITAN CORPORATION
a Delaware corporation

By: /s/ Deanna H. Petersen
-----------------------------
Print Name: Deanna H. Petersen
---------------------
Title: Vice President,
Corporate Controller
--------------------------

CAYENTA, INC.
a Delaware corporation

By: /s/ Edward M. Lake
-----------------------------
Print Name: Edward M. Lake
---------------------
Title: Chief Financial Officer
--------------------------

10.

<PAGE>

Exhibit 10.20

CORPORATE SERVICES AGREEMENT

This CORPORATE SERVICES AGREEMENT (the "Agreement"), is effective as of
March 29, 2000 (the "Effective Date"), by and between THE TITAN CORPORATION, a
Delaware corporation ("Titan") and CAYENTA, INC., a Delaware corporation (the
"Company").

RECITALS

WHEREAS, Titan is the common parent of an affiliated group of
corporations which includes the Company (the "Titan Group");

WHEREAS, Titan is the principal stockholder of the Company and the
Company has become a member of the Titan Group;

WHEREAS, the Company and its majority-owned subsidiaries require
certain administrative support in the conduct of its business; and

WHEREAS, Titan wishes to offer and provide such support to the Company,
and the Company wishes to accept such support, upon the terms and conditions set
forth herein.

NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and obligations contained herein, the parties agree as follows:

1. SCOPE OF AGREEMENT.

Titan hereby agrees to provide or make available certain administrative
support and related services to the Company and/or its majority-owned
subsidiaries ("Services") in accordance with the terms and conditions of this
Agreement. Titan shall also provide such additional support or services to the
Company and/or its majority-owned subsidiaries pursuant to this Agreement as
Titan and the Company may mutually agree. The Services shall be performed in the
manner, to the extent and at a time substantially consistent with the manner in
which Titan performs administrative or other services for its own benefit.

2. SERVICES.

2.1 TYPES OF SUPPORT SERVICES. Services under this Agreement shall be
for support of the type described below:

(a) ACCOUNTING SERVICES. Titan shall provide bookkeeping and
accounting services, including the maintenance of books and records of the
Company's financial operations, stock option accounting services, internal audit
support services, and review of compliance with financial and accounting
procedures. Titan shall assist the Company in the preparation of Securities and
Exchange Commission and NASDAQ Stock Market filings, including without
limitation, Forms 8-K, 10-Q and 10-K, annual and quarterly reports to
stockholders and proxy statements and proxies and assist in the solicitation of
proxies.

1.
<PAGE>

(b) PAYROLL AND PERSONNEL SERVICES. Titan shall provide the
following payroll and personnel services to the Company: administration of
reasonable employee payroll matters and maintenance of general employee
insurance obligations, establishment and management of an employee benefits
program, management of a corporate human resources program relating to executive
and employee recruiting, hiring and training of employees and their
administration, and advice on employee relations and related issues, management
of the Company's employee equity incentive plans and programs and establishment
and management of retirement plans (including the establishment of a 401(k)
Retirement Plan).

(c) MIS SERVICES. Titan shall provide reasonable management
information services to the Company, including coordination of intercompany
network services and database management services between Titan and the Company,
information technology planning services and centralized procurement of hardware
and software and custom software development. Titan may provide additional
management information services as are mutually agreed between Titan and the
Company. In addition, Titan shall allow the Company and its wholly owned
subsidiaries to access, display and use software systems and programs owned by
or licensed to Titan, except to the extent that Titan is precluded by its
licenses from providing such access, display or use.

(d) LEGAL SERVICES. Titan shall consult with and advise the
Company in determining the Company's need for legal services, including legal
services from the Company's General Counsel and other legal counsel with respect
to labor and personnel matters, compliance with applicable securities laws and
regulations, government contracting laws and other applicable laws and
regulations, litigation management, contract negotiation and preparation, merger
and acquisitions, intellectual property protections, tax issues, preventive
counseling and all matters relating to corporate governance of the Company. The
Company shall be responsible for paying and shall bear the cost of all legal
services provided to the Company.

(e) CONTRACTING SERVICES. Titan shall provide the Company
reasonable contracting services as requested by the Company, including
assistance with contract negotiations and administration of contracts.

(f) RISK MANAGEMENT. Titan shall provide the Company
centralized insurance purchasing for liability, property, casualty and other
normal business insurance and the handling of claims. Titan also shall provide
the Company support for product, worker safety and environmental programs of the
Company. Company acknowledges its primary responsibility for compliance with
applicable laws and the establishment and implementation of such programs.

(g) TAX RELATED SERVICES. Titan shall assist the Company in
the preparation of federal, state and local income tax returns, tax research and
planning and assistance on tax audits or other tax-related controversies.

(h) CORPORATE RECORD KEEPING SERVICES. Titan shall maintain,
on behalf of the Company, corporate records, including minutes of meetings of
the board of directors and stockholders of Company, supervision of transfer
agent and registration functions, maintenance of stock records, including the
tracking of stock issuances and stock reservations, and maintenance of records
relating to Section 16 and insider trading compliance.

2.
<PAGE>

(i) FINANCIAL SERVICES. Titan shall provide to the Company the
following financial services: (a) banking services administration, including
bank account administration, loan administration, covenant compliance
administration, maintenance of cash collection and disbursement systems and
arrangement of letters of credit, foreign currency exchanges or conversion
calculations and cash transfers; (b) financial management and information
services, including centralized cash management, pension fund management,
leasing, customer financing, financial analysis and providing information on
foreign currency issues, risk assessment and hedging strategies and (c)
investment banking services, including advice and support for equity and debt
financings, managing Titan and the Company's relationships with debt rating
agencies, analysis, advice, negotiation and other support for mergers and
acquisitions, investor relations services and management of relationships with
equity financial analysts. In connection with such services, Titan is authorized
to (y) invest the funds deposited by the Company with Titan in taxable,
tax-exempt or tax-preferred instruments of short or longer term duration based
upon Titan's assessment of the Company's tax considerations and the Company's
cash needs or (z) loan all or any portion of funds to Titan or any other
subsidiary or affiliate of Titan at interest rates not less than would be
received from comparable term taxable interest-bearing securities and on payment
terms consistent with the Company's cash needs. Titan will advise the Company on
a quarterly basis as to the earnings that the Company may expect on its cash
deposits during the following quarter.

(j) CREDIT SERVICES. Titan shall assist the Company in
identifying and obtaining cost-effective sources of financing consistent with
the needs of Titan and its affiliated companies. Subject to entering into a
reimbursement agreement, Titan may provide the Company with corporate guaranties
or other credit support in connection with the Company's direct external
financing transactions.

2.2 PERFORMANCE OF SERVICES.

(a) PERFORMANCE. The Services shall be performed by Titan on
an ongoing basis during the Term (as defined in Section 5.1 below), as
reasonably required or requested by the Company.

(b) THIRD PARTY PROVISION OF SERVICES. At its option, Titan
may provide any of the Services by contracting with a third party to provide
such services. In such event, the Company shall continue to pay Titan directly
for the services in accordance with Section 2.3 of this Agreement.

2.3 CHARGE FOR SERVICES.

(a) DIRECT SERVICES. The Company shall reimburse Titan monthly
for all Services directly attributable to the Company and/or its majority-owned
subsidiaries at Titan's fully allocated cost, or in the case of Services
provided by a third party at the invoiced amount to Titan.

(b) HUMAN RESOURCES FEE. For human resources related Services,
the Company shall pay Titan an annual fee equal to the Company's percentage of
Titan's annual cost

3.
<PAGE>

of its human resource function, with the percentage being the percentage of the
Company's average headcount to the total Titan Group average headcount as of the
last day of the last fiscal year and as of the end date of each of the four
quarters of the current fiscal year ("Human Resources Fee"). Prior to the
beginning of each fiscal year, Titan will estimate the Human Resources Fee for
such fiscal year and Company shall pay Titan the estimated annual Human
Resources Fee in twelve equal monthly installments. At the end of each fiscal
year, Titan will calculate the actual Human Resources Fee and shall credit the
Company for any overpayments against the first payments due on the Human
Resources Fee for the new fiscal year and invoice the Company for any
underpayments of the Human Resources Fee.

(c) CORPORATE SERVICES. For all other Services, the Company
shall pay Titan an annual fee determined by the Company's percentage of Titan's
annual cost of its central corporate services ("Corporate Services Fee"). The
Company's percentage shall be the average of the following three percentages as
of the final day of the last fiscal year and as of the end date of each of the
four quarters of the current fiscal year: (i) the percentage of the Company's
total payroll dollars of the total payroll of the Titan Group, (ii) the
percentage of the Company's operating revenue to the total operating revenue of
the Titan Group and (iii) the percentage of the average net book value of the
sum of the Company's tangible capital assets plus inventories to the total
average net book value of the Titan Group's tangible capital assets plus
inventories; provided that Titan reserves the right to adjust the allocations
for such Services based upon its assessment of the actual relative use of the
central corporate services by the members of the Titan Group. Prior to the
beginning of each fiscal year, Titan will estimate the Corporate Services Fee
for such fiscal year and Company shall pay Titan the estimated annual Corporate
Services Fee in twelve equal monthly installments. At the end of each fiscal
year, Titan will calculate the actual Corporate Services Fee and shall credit
the Company for any overpayments against the first payments due on the Corporate
Services Fee for the new fiscal year and invoice the Company for any
underpayments of the Corporate Services Fee of the Titan Group.

(d) INVOICES. The Company shall pay to Titan the aggregate
amount specified in any invoice for services within ten (10) days of receipt by
the Company.

3. DUTIES OF THE COMPANY

3.1 COOPERATION. The Company shall fully cooperate with Titan to permit
Titan to perform its duties and obligations under this Agreement in a timely
manner. The Company shall direct its officers, directors, employees, and agents
("Representatives") to (i) properly respond to requests by Titan for
information, and (ii) if requested by Titan, meet with or consult with Titan
regarding any manner related to the Services. The Company shall also promptly
provide Titan with copies of any agreements, instruments or documents in
possession of the Company as are reasonably requested by Titan, and promptly
provide Titan with any notices or other communications that the Company may
receive that may have any affect on Titan performance of the Services.

3.2 ACCURACY OF INFORMATION. The Company shall be responsible for the
completeness and accuracy of all information furnished to Titan by the Company
and Representatives of the Company in connection with Titan's performance of the
Services.

4.
<PAGE>

4. LIMITATION OF LIABILITY.

The Company acknowledges that Titan is not in the business of providing
Services and that Services are being provided pursuant to this Agreement as an
accommodation to the Company. The Company's sole and exclusive remedy and
Titan's sole and exclusive liability for any breach of by Titan of Section 2,
and for any damages of the Company suffered or incurred directly or indirectly
in connection with the provision of Services by Titan (whether any claim related
to such damages arises in contract, in tort, by statute or otherwise), shall be
the performance by Titan of Services at Titan's expense. Titan makes no
warranty, express or implied, including any implied warranty of merchantability
for a particular purpose or as to the performance of the Services furnished
thereunder, nor any implied warranty arising from course of performance, course
of dealing or usage of trade, all of which are hereby expressly disclaimed.
Under no circumstances, including the failure of the essential purpose of any
remedy, shall Titan be liable for any consequential, exemplary, punitive or
incidental damages, including lost profits, regardless of whether Titan has been
advised of the possibility of such damages.

5. TERM AND TERMINATION.

5.1 TERM. This Agreement shall begin as of the Effective Date and shall
continue through March 29, 2001 ("Term"). This Agreement shall automatically
renew at the end of the initial Term and each subsequent Term for successive
one-year terms unless the Company notifies Titan at least 45 days prior to the
end of the current fiscal year that it intends to terminate this Agreement or
the Agreement otherwise terminates in accordance with Section 5.2.

5.2 TERMINATION. This Agreement shall automatically terminate without
any further action by either party on the date that the Company ceases to be a
member of the Titan Group.

5.3 EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
this Section 5, all further obligation of the parties under this Agreement shall
terminate; provided, however, that: (a) no party shall be relieved of any
obligation or liability arising from any prior breach by such party of the
provisions of this Agreement; (b) the parties shall, in all events, remain bound
by and continue to be subject to the terms set forth in Sections 4, 5 and 6; and
(c) the Company shall remain liable for payment under Section 2.3 for any
Services performed on or prior to the date of termination. Following
termination, if Titan performs any Services for the Company on an as-requested
basis or as required in the event that the Company is unable to arrange for
another source for such services or as otherwise required by Titan in acting in
its capacity as the majority stockholder of the Company, then Titan shall charge
the Company, and the Company shall pay Titan, on a monthly basis, a fee equal to
the market rate for comparable services. The obligations in this Section 5.3
shall survive termination of this Agreement.

5.4 TERMINATION FEE. If the Agreement terminates pursuant to Section
5.2, then the Company shall pay Titan a termination fee equal to the estimated
Corporate Services Fee and Human Resources Fees for the remaining months in the
current fiscal year following the date of termination of this Agreement.

5.
<PAGE>

6. CONFIDENTIALITY, RECORDS.

6.1 PROPRIETARY INFORMATION. All information furnished or disclosed by
one party (a "Disclosing Party") to the other party (a "Receiving Party") in
connection with the negotiation or performance of this Agreement, including but
not limited to trade secrets, cost and pricing information, proprietary computer
programs and algorithms, techniques, designs, drawings, prototypes, formulae or
test data, relating to any research project, work in process, future
development, engineering, manufacturing, marketing, servicing, financing or
personnel matter shall be deemed "Proprietary Information." of the Disclosing
Party. Provided, however, that the term "Proprietary Information" shall not be
deemed to include information which the Receiving Party can demonstrate by
competent written proof: (a) is now, or hereafter becomes, through no act or
failure to act on the part of the Receiving Party, available in the public
domain; (b) is known by the Receiving Party at the time of receiving such
information; (c) is hereafter furnished to the Receiving Party by a third party
without such third party violating an agreement with the Disclosing Party; (d)
is independently developed by the Receiving Party without reference to the
Proprietary Information or (e) is the subject of a written permission to
disclose by the Disclosing Party.

6.2 USE AND HANDLING OF PROPRIETARY INFORMATION. The Receiving Party
shall maintain all Proprietary Information in trust and confidence and shall use
at least the same degree of care regarding this information as it uses with
respect to its own Proprietary Information to prevent it's unauthorized
disclosure, use or publication. The Receiving Party may use such Proprietary
Information only to the extent required to accomplish the intent of this
Agreement. The Receiving Party shall not use the Proprietary Information for any
purpose or in any manner which would constitute a violation of any laws or
regulations, including, without limitation, the export control laws of the
United States.

6.3 OWNERSHIP OF PROPRIETARY INFORMATION. All Proprietary Information
(including all copies thereof) of a party hereto shall at all times remain the
property of such Disclosing Party. No rights or licenses to trademarks,
inventions, copyrights or patents are implied or granted under this Agreement.

6.4 PERMITTED DISCLOSURE. A party may disclose Proprietary Information
to its professional advisors, and may disclose such information if such
disclosure is in response to a valid order of a court or other governmental body
of the United States or any political subdivision thereof or is mandated by
applicable law, provided, however, that the Receiving Party shall first have
given notice to the Disclosing Party and shall provide reasonable assistance to
the Disclosing Party to a protective order, confidentiality order or other
appropriate relief. Any compelled disclosure shall be limited to the maximum
disclosure required by such order or applicable law.

6.5 INJUNCTIVE RELIEF. Each party hereby acknowledges and agrees that
in the event of any breach of this Agreement by a Receiving Party, including,
without limitation, the actual or threatened disclosure of Proprietary
Information without the prior express written consent of the Disclosing Party,
the Disclosing Party will suffer an irreparable injury, such that no remedy at
law will afford it adequate protection against, or appropriate compensation for,
such injury.

6.
<PAGE>

Accordingly, in the event of any breach or threatened breach by a Receiving
Party of any provisions of this Section 6, the Disclosing Party shall, in
addition to all other remedies available to it, be entitled to specific
performance of the Receiving Party's obligations under this Agreement.

7. MISCELLANEOUS.

7.1 TAXES. The Company shall pay any and all direct or indirect taxes
arising out of payments made or due pursuant to this Agreement other than any
income taxes payable by Titan.

7.2 GOVERNING LAW. This Agreement shall be governed by and construed
under the internal laws of the State of California.

7.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement, including any and all
attachments or exhibits hereto, constitutes the entire, final and exclusive
understanding and agreement between the parties with respect to the subject
matter hereof. This Agreement may be amended, waived, discharged or terminated
only by written agreement of the parties.

7.4 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or invalid, this Agreement shall continue in full force and effect
without said provision.

7.5 FORCE MAJEURE. In the event that a party's performance under this
Agreement, other than the Company's obligation to make payments, shall be
interrupted or delayed by the occurrence of any event beyond the reasonable
control of such party, then such party shall be excused from performance during
the period of time when the interruption occurred.

7.6 CAPTIONS. The captions and heading to Sections of this Agreement
have been inserted for identification and reference purposes only and shall not
be used to construe the meaning or the interpretation of this Agreement.

7.7 PARTIES IN INTEREST. This Agreement shall inure to the benefit of
and be binding upon Titan, the Company and their successors and assigns. The
provisions of this Agreement are for the sole benefit of Titan and the Company
and the creditors and stockholders of Titan and the Company are not intended
beneficiaries of this Agreement.

7.8 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or at such other address
as such party may designate by ten (10) days' advance written notice to the
other parties.

7.9 STATUS. Titan shall be deemed to be an independent contractor and,
except as expressly provided or authorized in this Agreement, shall have no
authority to act for or represent the Company or bind or commit the Company to
any agreement or obligation.

7.
<PAGE>

7.10 OTHER ACTIVITIES OF TITAN. The Company recognizes that Titan now
renders and may continue to render administrative, management and other services
to other companies in the Titan Group and other companies that may or may not
have policies and conduct activities similar to those of the Company. Titan
shall be free to render such services and the Company hereby consents thereto.
Titan shall only devote so much of its time and attention to the performance of
its duties under this Agreement as Titan deems reasonable or necessary to
perform the Services required thereunder.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

8.
<PAGE>

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the respective parties as of the respective dates set forth above.

THE TITAN CORPORATION
a Delaware corporation

By: /s/ Deanna H. Petersen
------------------------------
Print Name: Deanna H. Petersen
----------------------
Title: Vice President,
Corporate Controller
---------------------------

CAYENTA, INC.,
a Delaware corporation

By: /s/ Edward M. Lake
-----------------------------
Print Name: Edward M. Lake
----------------------
Title: Chief Financial Officer
---------------------------

<PAGE>

Exhibit 10.21

FACILITIES AGREEMENT

This Facilities Agreement (the "Agreement") is entered into as of
March 29, 2000, between The Titan Corporation, a Delaware corporation ("Titan"),
and Cayenta, Inc., a Delaware corporation, and majority-owned subsidiary of
Titan (the "Company").

RECITALS

WHEREAS, Titan has entered into that certain deed of lease
(hereinafter collectively called the "Master Lease"), dated January 19, 1993,
between USAA Real Estate Limited Partnership, as Landlord (hereinafter called
"Landlord") and Titan, covering premises including portions of the building
located at 1900 Campus Commons Drive, Reston, Virginia, as set forth in the
Master Lease (the "Master Premises"). A copy of the Master Lease and its
amendments, which Titan represents to the Company to be true and complete,
are attached hereto as Exhibit A and made a part hereof;

WHEREAS, the Company requires certain portions of the Master Premises
and the use of certain furniture, equipment, systems and services in the conduct
of its business; and

WHEREAS, Titan wishes to sublease to the Company certain portions of
the Master Premises (the "Subleased Premises") and to provide the use of certain
furniture, equipment, systems and services in accordance with the terms of this
Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and obligations contained herein, the parties agree as follows:

1. TERM.

The term of this Agreement shall commence on March 29, 2000 (the
"Commencement Date") and shall expire on June 30, 2003, the termination of the
Master Lease, unless sooner terminated pursuant to any of the provisions hereof.

2. REGIONAL OCCUPANCY SERVICES.

(a) GENERAL. During the term of this Agreement, Titan shall sublease to
the Company a base of 26,248 square feet of the Master Premises ("Subleased
Premises"), subject to the parties' agreement to increase or decrease the size
of the Subleased Premises on a monthly basis. In addition, Titan shall provide
rent, maintenance, property taxes, utilities, landlord pass-through expenses,
property insurance, reception desk services, telephone services (including use
of the telephone system) and centralized mail and postage and other services and
operating expenses currently provided as part of Titan's regional occupancy
services allocated to its subsidiaries ("Regional Occupancy Services"). Titan
will allow the Company to continue to use furniture and equipment owned by Titan
but used by the Company in its business as of the date of this Agreement,
subject to the parties' agreement to eliminate or add furniture and equipment.

(b) REGIONAL OCCUPANCY FEE. The Company shall pay Titan an annual fee
determined by the Company's percentage of Titan's annual costs of its Regional
Occupancy Services ("Regional Occupancy Fee"). The Company's percentage shall be
the percentage of the

1.
<PAGE>

Company's square footage occupied to the total square footage occupied by Titan
and its subsidiaries occupying the Master Premises. Titan will estimate the
Regional Occupancy Fee for each fiscal year and the Company shall pay Titan the
estimated annual Regional Occupancy Fee in twelve equal monthly installments,
subject to adjustment quarterly for any material changes (as determined by
Titan) in the amount of square feet subleased or the amount of other Regional
Occupancy Services used. At the end of each fiscal year, Titan will calculate
the actual Regional Occupancy Fee and shall credit the Company for any
overpayments against the first payments due on the Regional Occupancy Fee for
the new fiscal year and invoice the Company for any underpayments of the
Regional Occupancy Fee.

(c) PAYMENTS. The Company shall pay Titan on the first day of each
month except the first payment of a new fiscal year shall be made within ten
(10) days of the receipt of the estimated allocation for the current fiscal year
the monthly installment of the estimated annual Regional Occupancy Fee. All
invoices not paid when due will accrue interest at a rate of 1 1/2 per month for
each day past due until paid full, subject to the maximum rate allowable by law.

3. OTHER FACILITIES OBLIGATIONS.

(a) This Agreement is subject and subordinate to all of the terms and
conditions of the Master Leases. Except for the direct payment of rent, landlord
pass-through expenses or other payment under the Master Lease below, the Company
shall perform the obligations of Titan as Tenant under the Master Lease to the
extent such obligations are applicable to the Subleased Premises pursuant to the
Agreement. Subject to Paragraph 4 of this Agreement, in the event of the
termination of the Titan's interest as Tenant under the Master Lease for any
reason, then this Agreement shall terminate coincidentally therewith without any
liability of Titan to the Company.

(b) All applicable terms and conditions contained in the Master Lease
are incorporated in this Agreement by reference, and made a part hereof as if
set forth herein at length; with Titan being substituted for the "Landlord"
under the Master Lease, and Subleased Premises being substituted for "Premises"
under the Master Lease. Notwithstanding the foregoing, it is understood and
agreed that Titan shall not be obligated to perform any of the obligations of
Landlord under the Master Lease with respect to the provisions of the Master
Lease incorporated into this Agreement and the Company agrees to look solely to
Landlord for the performance of such obligations. Subject to Paragraph 3(d) of
this Agreement, Titan will not be liable to the Company for any failure by
Landlord to perform its obligations under the Master Lease, nor will such
failure by Landlord excuse performance by the Company of its obligations
hereunder.

(c) The Company hereby agrees to indemnify and hold Titan harmless from
and against any and all claims, liabilities, losses, damages and expenses
(including reasonable attorneys' fees) incurred by Titan arising out of, from or
in connection with (i) the use or occupancy of the Subleased Premises by the
Company, (ii) any breach or default by the Company under this Agreement, or
(iii) the failure of the Company to perform any obligation under the terms and
provisions of the Master Lease assumed by the Company hereunder or required to
be performed by the Company as provided herein from and after the Commencement
Date of this Agreement.

2.
<PAGE>

(d) Titan hereby agrees to indemnify and hold the Company harmless from
and against any and all claims, liabilities, losses, damages and expenses
(including reasonable attorneys' fees) incurred by the Company arising out of,
from or in connection with (i) Titan's breach of any provision of this
Agreement, or (ii) acts or omissions of Titan under the Master Lease in
connection with the Master Premises prior to the Commencement Date of this
Agreement.

(e) By execution of this Agreement, the Company accepts the Subleased
Premises as being in good and sanitary order, condition, and repair, and accepts
the Premises and appurtenances "as is" in their present condition without any
representation or warranty by Titan as to the condition of said Subleased
Premises and appurtenances or as to the use or occupancy which may be made
thereof.

4. DEFAULT. In addition to all other rights and remedies of Titan hereunder,
should the Company be in default under any of the covenants and obligations of
the Master Lease, then Titan shall have the rights set forth in the Master Lease
in the event of such default.

5. QUIET ENJOYMENT. Titan covenants that so long as the Company keeps and
substantially performs each and every term, provision and condition herein
contained on the part of the Company to be kept and performed, the Company shall
peacefully and quietly enjoy the Subleased Premises without hindrance or
molestation by Titan or any other person claiming by, through or under Titan.

6. AMENDMENTS OF MASTER LEASE. Titan may cause or permit any reasonable
amendment of the Master Lease during the term of this Agreement. The Company
shall be bound by such amendment to the extent applicable, unless otherwise
agreed by Titan and the Company.

7. CONDITION TO EFFECTIVENESS. This Agreement is subject to the Landlord giving
its consent to this Agreement in writing, if required under the terms of the
Master Lease.

8. NOTICES. All communications, notices and demands of any kind which either
party may be required or desires to give to or serve upon the other party shall
be sent by prepaid, first class mail, registered or certified, with return
receipt requested. Any such notice shall be addressed to the parties as follows:

If to Titan: The Titan Corporation
3033 Science Park Road
San Diego, California 92121
Attention: Legal Department

If to the Company: Cayenta, Inc.
225 Broadway, Suite 1500
San Diego, California 92101
Attention: Chief Executive Officer

3.
<PAGE>

Any notice sent by U.S. mail as described above shall be deemed
effective within two (2) days after the posted date of mailing. Either party may
change its address by notifying the other party of a changed address in
accordance with the provisions of this paragraph.

9. BROKERS. Each party represents to the other that no brokerage commission or
finder's fee has been incurred in connection with this transaction, and each
party shall indemnify the other against any such commission or fee that may be
alleged to have been incurred by it in connection with this Agreement.

10. SIGNAGE. The Company shall have the right to place its name on the existing
lobby directory, unless otherwise agreed by the parties hereto.

11. ATTORNEYS' FEES. If there is any legal action or proceeding between Titan
and the Company to enforce any provision of this Agreement or to protect or
establish any right or remedy of either Titan or the Company hereunder, the
unsuccessful party to such action or proceeding shall pay to the prevailing
party all costs and expenses, including reasonable attorneys' fees, incurred by
such prevailing party in such action or proceeding and in any appeal in
connection therewith, and if such prevailing party recovers a judgment in any
such action, proceeding or appeal, such costs, expenses and attorneys' fees
shall be included as part of such judgment.

12. ENTIRE AGREEMENT. This Agreement, together with the Master Lease,
constitutes the entire agreement between the parties with respect to the subject
matter thereof, and shall supersede all other agreements, oral or in writing,
between the parties respecting said subject matter. Neither this Agreement nor
the Master Lease shall be amended or modified in any way except in a written
instrument signed by both parties hereto.

13. ASSIGNMENT AND SUBLETTING. The Company shall not assign, sell, transfer
(whether by operation of law or otherwise), or otherwise encumber this Agreement
or any portion of its interest in the Subleased Premises, or sublet all or any
portion of the Subleased Premises or permit any other person to occupy or use
the Subleased Premises, without the prior written consent of Titan and Landlord.

14. GOVERNING LAW. This Agreement shall be construed in accordance with and
governed by the internal laws of the State of California.

15. SUCCESSORS. This Agreement shall be binding on and shall inure to the
benefit of the parties and their successors.

16. HEADINGS. The paragraph headings appearing in this Agreement are for the
purpose of convenience only and are not deemed to be a part of this Agreement.

17. COOPERATIVE USE OF SUBLEASED PREMISES. The parties understand that they may
or will be sharing space on the Master Premises and that such sharing may expose
each other's confidential information. The parties shall cooperate with each
other and shall make reasonable efforts to respect each other's privacy and
confidential information. The Company shall comply with all reasonable rules and
regulations established by Titan for the use of the Subleased Premises and any
relevant adjoining space.

4.
<PAGE>

IN WITNESS WHEREOF, Titan and the Company have duly executed this
Agreement as of the day and year first above written.

THE TITAN CORPORATION,
a Delaware corporation

By: /s/ L.L. Fowler
------------------------------------
Print Name: L.L. Fowler
-----------------------------
Title:
----------------------------------

CAYENTA, INC.,
a Delaware corporation

By: /s/ Edward M. Lake
------------------------------------
Print Name: Edward M. Lake
-----------------------------
Title: Chief Financial Officer
----------------------------------

5.
<PAGE>

EXHIBIT A

MASTER LEASE

A-1

<PAGE>

Exhibit 10.26

STRATEGIC ALLIANCE AGREEMENT

BETWEEN

PENTON MEDIA, INC.

AND

CAYENTA, INC.

DATED AS OF MARCH 30, 2000

<PAGE>

TABLE OF CONTENTS

Page
----
1. Marketing Opportunities.......................................2

2. Future E-Commerce Projects....................................2

3. Strategic Framework...........................................2

4. Promotion of Penton Products..................................2

5. Confidentiality...............................................2

6. Intellectual Property Rights..................................3

7. Publicity.....................................................4

8. Term; Termination; Survival...................................4

9. Limitation of Liability.......................................4

10. Independent Contractors; Costs................................4

11. Amendments and Waivers........................................5

12. Expenses......................................................5

13. Successors and Assigns........................................5

14. No Third-Party Beneficiaries..................................5

15. Governing Law.................................................5

16. Counterparts..................................................5

17. Headings......................................................5

18. Entire Agreement..............................................5

<PAGE>

STRATEGIC ALLIANCE AGREEMENT

This Strategic Alliance Agreement (this "AGREEMENT") is made as of
March 30, 2000 (the "EFFECTIVE DATE"), between Penton Media, Inc., a Delaware
corporation with its principal place of business at 1100 Superior Avenue,
Cleveland, Ohio 44114 ("PENTON"), and Cayenta, Inc., a Delaware corporation
with its principal place of business at 225 Broadway, Suite 1500, San Diego,
CA 92101 ("CAYENTA").

RECITALS

A. Penton currently services over 50 vertical markets with a broad
range of print, in-person/tradeshow, and online web site products. Penton is
currently strengthening its Internet presence and has plans to significantly
enhance its web site activities. In the near future, Penton will be devoting
significant resources to develop certain web sites, one of which is the
Healthwell.com site.

B. Cayenta, a total service provider ("TSP") of end-to-end, e-commerce
systems, is currently in final contract negotiations with Penton to be Penton's
sole vendor for the development, support and hosting of the Healthwell.com site
and has offered to provide up to $1.25 million of equity in Healthwell.com at
such time as the opportunity for such investment becomes available.

C. The parties desire to enter into this Agreement to establish certain
fundamental concepts of their strategic relationship so as to (i) enhance
Penton's online presence, (ii) facilitate end-to-end e-commerce solutions for
current and future Penton website products, (iii) promote the development of
Cayenta's e-commerce TSP business, and (iv) establish Cayenta as a Penton
preferred e-commerce provider.

D. Each of the parties expects and intends to devote significant
resources to the development, promotion and effectuation of their respective
businesses which are the subject of this strategic alliance, all as more
particularly set forth in one or more definitive agreements to be entered into
from time to time pursuant to this Agreement (the "DEFINITIVE AGREEMENTS").

E. The parties hereto are concurrently herewith entering into a Stock
Purchase Agreement, whereby Penton will purchase 250,000 shares of Cayenta
common stock (the "CAYENTA SPA") and a Total Service Provider Services and
License Agreement for Cayenta services with respect to the Healthwell.com
project (the "HEALTHWELL TSPSLA").

NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency which are hereby
acknowledged, the parties hereto (the "PARTIES") agree as follows:

<PAGE>

1. MARKETING OPPORTUNITIES. In further consideration for entering into the
Cayenta SPA and the Healthwell TSPSLA, Penton will contribute to Cayenta $1.0
million per year of free marketing opportunities calculated at earned/published
rates for two years. This will include advertising in any of Penton's
publications including INTERNET WORLD, BOARDWATCH, and INDUSTRY WEEK magazines,
as well as raw exhibit space (to be developed at Cayenta's expense) in any of
Penton Exhibitions including INTERNET WORLD and ISPCON shows. Penton will also
provide Cayenta with sponsorship and co-marketing opportunities, including, for
example, web site linkage.

2. FUTURE E-COMMERCE PROJECTS. Penton and Cayenta are currently engaged in
discussions on various projects which, if successfully concluded, will make
Cayenta the TSP for Penton projects regarding the Electronics OEM, internet, and
ISP markets both domestic and abroad. In addition, over the next
six months, Penton and Cayenta will enter into discussions with respect to
additional projects, so that a total of ten projects will have been discussed by
the end of such six month period. To the extent that Penton uses Cayenta as the
provider of services for any future e-commerce projects, the Parties will
negotiate in good faith to enter into Definitive Agreements with respect to each
project. The obligations, relationships and arrangements of the Parties with
respect to such future projects will arise and be governed only under and
pursuant to the terms and conditions of the Definitive Agreement that
specifically addresses each project. The Parties hereby agree that upon entering
into any Definitive Agreement with respect to a specific future e-commerce
project, Cayenta will provide a dedicated support team to develop and coordinate
Penton e-commerce initiatives and projects.

3. STRATEGIC FRAMEWORK. Cayenta will develop and deliver to Penton an overall
strategic framework for selecting, building and delivering standardized
technologies for Penton-wide implementation.

4. PROMOTION OF PENTON PRODUCTS. Cayenta will offer Penton products and services
to the Cayenta customer base through bundled value added business services
offered in conjunction with Cayenta's TSP family of products and services.
Cayenta will also offer market exposure for Penton products and service via
promotion on Cayenta web sites, case studies and customer testimonial related
marketing collateral.

5. CONFIDENTIALITY

5.1 It is anticipated that each of the Parties and their affiliates may
disclose to the other proprietary and confidential information that (a) is
identified as proprietary and confidential at the time of disclosure, (b) is not
otherwise publicly available, or (c) can reasonably be regarded as confidential
(collectively, "INFORMATION"). Information may include Intellectual Property,
software programs, technical data, customer information and business information
of the Parties.

5.2 Each Party or their affiliates will be a "DISCLOSING PARTY" with
respect to Information which that Party or its affiliates discloses to the other
and will be a "RECEIVING PARTY" with respect to Information which that Party or
their affiliates receives from the other. A

2
<PAGE>

Disclosing Party will not identify as Information any information which the
Disclosing Party does not, in good faith, consider to be proprietary and/or
confidential.

5.3 The Receiving Party will maintain the secrecy and confidentiality
of Information of the Disclosing Party by way of efforts at least equivalent to
the efforts that the Receiving Party normally applies to its own property that
it maintains secret and confidential, and in any event using no less than a
reasonable degree of care.

5.4 The Information may be disclosed by the Receiving Party only in
furtherance of the objectives of this Agreement and only to the Receiving
Party's employees with a need to know, provided that each such employee has
previously been advised of the proprietary and confidential nature of the
Information. The Information will not be used by the Receiving Party or such
employees other than in furtherance of the objectives of this Agreement. The
Receiving Party will be responsible for maintaining the confidentiality and
non-use of Information received by the Receiving Party from the Disclosing Party
which has been disclosed to the Receiving Party's employees in accordance with
this Section 5.4

5.5 The disclosure of Information will not be construed to grant to the
Receiving Party any ownership or other proprietary interest in the Information.
The Receiving Party agrees that it does not acquire any title, ownership, or
other Intellectual Property right or license by virtue of such disclosure.

5.6 A Receiving Party has no obligation with respect to any Information
disclosed hereunder which: (a) was in Receiving Party's possession before
receipt from Disclosing Party other than through prior disclosure by or on
behalf of Disclosing Party and Receiving Party is not otherwise under an
obligation of confidentiality with respect to such Information; or (b) is or
becomes a matter of general public knowledge through no breach of this
Agreement; or (c) is rightfully received by Receiving Party from a third party
without an obligation of confidentiality; or (d) is independently developed by
Receiving Party without any obligation of confidentiality with respect to such
Information; or (e) is required to be disclosed by the Receiving Party by order
of a court or as a matter of law, including, without limitation, any voluntary
filing under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, provided that the receiving party uses reasonable
efforts to provide the Disclosing Party with prior notice of such obligation to
disclose and either reasonably assists in obtaining a protective order therefor
or reasonably considers any requests for confidential treatment of such
Information by the Disclosing Party.

5.7 Upon termination or earlier expiration of this Agreement, the
Receiving Party will (a) immediately cease using the Information, (b) promptly
return to the Disclosing Party all tangible embodiments of the Information
received from the Disclosing Party together with all written or electronically
stored documentation that is based on or reflects, in whole or in part, such
Information, and (c) promptly destroy or, at the Disclosing Party's election,
return all other copies. The obligations of confidentiality and non-use of a
Receiving Party under this Agreement will continue in effect for a period of two
years after such return and destruction of Information, which will be evidenced
by written records of the Receiving Party.

3
<PAGE>

6. INTELLECTUAL PROPERTY RIGHTS

6.1 Nothing in this Agreement will be construed to grant to either
party any ownership or other interest in the Intellectual Property of the other.
To the extent that any Intellectual Property is developed pursuant hereto or any
Definitive Agreement, the Parties' respective rights and responsibilities with
respect to such Intellectual Property, including the use thereof, will be
addressed in each such instrument.

6.2 "INTELLECTUAL PROPERTY" means with respect to any party, any
patent, trade mark, service mark, trade name, invention, product designation,
logo, slogan, trade secret, know how, work of authorship, computer software,
database, Internet address, including uniform resource locators and domain
names, and research in progress and any improvement and derivative works
thereof, or any other similar type of intellectual property right therein,
together with any registration or application with respect thereto, in each
case, which is used or held for use or otherwise necessary in connection with
the conduct of business of such Party [as currently conducted.]

7. PUBLICITY. Neither Party nor their affiliates will issue a press release or
make any other public announcement or statement of the terms of this Agreement
or the activities or performance hereunder without the prior written consent of
all of the other Party.

8. TERM; TERMINATION; SURVIVAL

8.1 Subject to Section 8.4 hereof, this Agreement will terminate on the
second anniversary of the Effective Date, unless earlier terminated pursuant to
Section 8.2 or 8.3 hereof.

8.2 A Party may, by giving written notice thereof to another Party,
terminate this Agreement as of a date specified in such notice in the event that
such other party (a) terminates or suspends its business; (b) becomes a debtor
in a bankruptcy or insolvency proceeding under federal or state statute; (c)
becomes insolvent or becomes subject to direct control by a trustee, receiver or
similar authority; (d) is acquired by a third party, or acquires a controlling
interest in a third party, reasonably deemed to be a competitor of the party
giving notice of termination.

8.3 A Party may terminate this Agreement at any time if the other Party
breaches either the Cayenta SPA or the Healthwell TSPSLA.

8.4 Termination of this Agreement will not affect the provisions hereof
relating to Intellectual Property or confidentiality, nor will a termination of
this Agreement release any Party from its obligations or liabilities, or deprive
any party of its rights or benefits, under any Definitive Agreements entered
hereunder, unless and only to the extent such relevant agreement provides
otherwise.

9. LIMITATION OF LIABILITY.

In no event will one Party assert against the other Party any claim for
indirect, incidental, punitive, special or consequential damages, including, but
not limited to, lost business or lost profits, whether foreseeable or not, even
if such Parties have been advised of the possibility of such damages.

4
<PAGE>

10. INDEPENDENT CONTRACTORS; COSTS. The Parties will at all times be independent
Parties. Neither Party is an employee, joint venturer, agent or partner of the
other; neither Party is authorized to assume or create any obligations or
liabilities, express or implied, on behalf of or in the name of the other. The
employees, methods, facilities and equipment of each Party will at all times be
under the exclusive direction and control of that Party. Except as otherwise
expressly agreed in writing, each of the Parties will bear its own costs and
expenses incurred in connection with its performance hereunder.

11. AMENDMENTS AND WAIVERS. Any provision of this Agreement may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed, in
the case of an amendment, by each Party to this Agreement, or in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or
delay by any Party in exercising any right, power or privilege hereunder will
operate as a waiver thereof nor will any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided will be
cumulative and not exclusive of any rights or remedies provided by law.

12. EXPENSES. Whether or not the transactions contemplated by this Agreement are
consummated, except as otherwise expressly provided for herein, each Party will
pay or cause to be paid all of its own fees and expenses incident to the
preparation and performance of the Agreement, including the fees and expenses of
any broker, finder, financial advisor, legal advisor or similar person engaged
by such party.

13. SUCCESSORS AND ASSIGNS. The provisions of this Agreement will be binding
upon and inure to the benefit of the Parties hereto and their respective
successors and assigns; provided that, no Party may assign any of its rights or
obligations under this Agreement without the consent of each other Party hereto.

14. NO THIRD-PARTY BENEFICIARIES. Except as otherwise expressly provided in this
Agreement, this Agreement is for the sole benefit of the Parties hereto and
their permitted successors and assigns and nothing herein expressed or implied
will give or be construed to give to any Person, other than the Parties hereto
and such permitted successors and assigns, any legal or equitable rights
hereunder.

15. GOVERNING LAW. This Agreement will be governed by, and construed in
accordance with, the laws of the State of Ohio, without regard to the conflict
of laws rules of such state.

16. COUNTERPARTS. This Agreement may be signed in any number of counterparts,
each of which will be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

17. HEADINGS. The headings in this Agreement are for convenience of reference
only and will not control or affect the meaning or construction of any
provisions hereof.

18. ENTIRE AGREEMENT. This Agreement (including any Schedules and the Exhibits
referred to herein and/or attached hereto) constitutes the entire agreement
among the parties with respect to the subject matter of this Agreement. This
Agreement (including any Schedules and

5
<PAGE>

the Exhibits referred to herein and/or attached hereto) supersedes all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter hereof of this Agreement.

IN WITNESS WHEREOF the parties have caused this Strategic Alliance
Agreement to be executed in counterparts by their authorized representatives, to
be effective as of the Effective Date.

PENTON MEDIA, INC.

By: /s/ Joseph G. NeCastro
-------------------------------
Name: Joseph G. NeCastro
Title: Chief Financial Officer

CAYENTA, INC.

By: /s/ Edward M. Lake
-------------------------------
Name: Edward M. Lake
Title: Chief Financial Officer

<PAGE>

Exhibit 10.27

CAYENTA, INC.

INVESTOR RIGHTS AGREEMENT

MARCH 30, 2000

<PAGE>

CAYENTA, INC.

INVESTOR RIGHTS AGREEMENT

THIS INVESTOR RIGHTS AGREEMENT (the "Agreement") is entered into as of
the 30th day of March 2000, by and among CAYENTA, INC., a Delaware corporation
(the "Company"), THE TITAN CORPORATION, a Delaware corporation ("Titan"), and
PENTON MEDIA, INC., an Ohio corporation ("Stockholder").

RECITALS

WHEREAS, the Company proposes to issue up to two hundred and fifty
thousand (250,000) shares of its Class A Common Stock to the Stockholder
pursuant to a Class A Common Stock Purchase Agreement by and among the Company
and the Stockholder (the "Stock Purchase Agreement"); and

WHEREAS, as a condition of entering into the Stock Purchase Agreement,
the Stockholder has requested that the Company and Titan extend to them certain
registration rights, co-sale rights and rights of first refusal on certain
issuances of equity securities of the Company, and certain other rights as set
forth below; and

WHEREAS, as a condition of entering into the Stock Purchase Agreement,
the Company and Titan have requested rights of first refusal on certain
transfers of the Cayenta Shares by the Stockholder and certain other rights as
set forth below.

NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, the parties mutually agree as follows:

SECTION 1. GENERAL

1.1 DEFINITIONS. As used in this Agreement the following terms shall
have the following respective meanings:

"AFFILIATE" of any person or entity means an person or entity
directly or indirectly controlling, controlled by, or under common control with
any such person or entity.

"CAYENTA SHARES" shall mean the Company's Class A Common Stock
issued pursuant to the Stock Purchase Agreement and held by the Stockholder and
its permitted assigns.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

"FORM S-3" means such form under the Securities Act as in effect on
the date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.

1.
<PAGE>

"HOLDER" means any person owning of record Registrable Securities
that have not been sold to the public or any assignee of record of such
Registrable Securities in accordance with Section 2.9 hereof.

"INITIAL OFFERING" means the Company's first firm commitment
underwritten public offering of its Class A Common Stock registered under the
Securities Act.

"REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement or document.

"REGISTRABLE SECURITIES" means (a) the Cayenta Shares; and (b) any
Class A Common Stock of the Company issued as (or issuable upon the conversion
or exercise of any warrant, right or other security which is issued as) a
dividend or other distribution with respect to, or in exchange for or in
replacement of, the Cayenta Shares. Notwithstanding the foregoing, Registrable
Securities shall not include any securities sold by a person to the public
either pursuant to a registration statement or Rule 144 or sold in a private
transaction in which the transferor's rights under Section 2 of this Agreement
are not assigned.

"REGISTRABLE SECURITIES THEN OUTSTANDING" shall be a number of
shares determined by calculating the total number of Cayenta Shares that are
then Registrable Securities and are then issued and outstanding.

"REGISTRATION EXPENSES" shall mean all expenses incurred by the
Company in complying with Sections 2.2 and 2.3 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company which shall
be paid in any event by the Company).

"SEC" or "COMMISSION" means the Securities and Exchange Commission.

"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

"SELLING EXPENSES" shall mean all underwriting discounts and
selling commissions applicable to the sale.

"TITAN SHARES" shall mean any shares of Class B Common Stock of the
Company held by Titan.

SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER

2.1 RESTRICTIONS ON TRANSFER.

(a) Each Holder agrees not to make any disposition of all or any
portion of the Cayenta Shares or Registrable Securities unless and until:

(i) It has complied with the requirements of Section 5 hereof;

2.
<PAGE>

(ii) There is then in effect a registration statement under
the Securities Act covering such proposed disposition and such disposition is
made in accordance with such registration statement;

(iii) (A) The transferee has agreed in writing to be bound by
the terms of this Agreement, (B) such Holder shall have notified the Company of
the proposed disposition and shall have furnished the Company with a reasonably
detailed statement of the circumstances surrounding the proposed disposition,
and (C) if reasonably requested by the Company, such Holder shall have furnished
the Company with an opinion of counsel, reasonably satisfactory to the Company,
that such disposition will not require registration of such Cayenta Shares under
the Securities Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144; or

(iv) Notwithstanding the provisions of paragraphs (i), (ii)
and (iii) above, Section 5 hereof shall not apply and no such registration
statement or opinion of counsel shall be necessary for a transfer by a Holder to
the Holder's immediate family member or trust, limited liability company,
partnership or other entity established for the benefit of an individual Holder
or the Holder's immediate family members, any Affiliate of a Holder or to a
Holder's employees provided that each such transferee is an accredited investor
as defined in Regulation D under the Securities Act; PROVIDED that in each case
the transferee will be subject to the terms of this Agreement to the same extent
as if he were an original Holder hereunder.

(b) Each certificate representing Cayenta Shares or Registrable
Securities shall (unless otherwise permitted by the provisions of the Agreement)
be stamped or otherwise imprinted with a legend substantially similar to the
following (in addition to any legend required under applicable state securities
laws):

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS
AND UNTIL REGISTERED UNDER THE ACT OR UNLESS THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.

(c) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any holder thereof if the holder shall have
obtained an opinion of counsel, if required, (which counsel may be counsel to
the Company) reasonably acceptable to the Company to the effect that the
securities proposed to be disposed of may lawfully be so disposed of without
registration, qualification or legend.

(d) Any legend endorsed on an instrument pursuant to applicable
state securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.

3.
<PAGE>

(e) Notwithstanding anything to the contrary set forth herein, each
Holder agrees not to make any transfer or disposition of Cayenta Shares or
Registrable Securities to any third party, government or administrative agency
that in the reasonable judgment of Titan's board of directors could cause Titan
to be debarred or otherwise precluded from engaging in its government contracts
business. Any such attempted transfer or disposition shall be void and the
Company agrees that it will not effect such a transfer nor will it treat such a
transferee as the holder of such Cayenta Shares or Registrable Securities.

2.2 FORM S-3 REGISTRATION.

(a) Subject to the conditions of this Section 2.2, if the Company
shall receive a written request from the Holders of a majority of the
Registrable Securities then outstanding (the "Initiating Holders") that the
Company file a registration statement under the Securities Act on Form S-3, then
the Company shall, within fifteen (15) days of the receipt thereof, give written
notice of such request to all Holders, and subject to the limitations of this
Section 2.2, use its best efforts to effect, as soon as practicable, such
registration and all such qualifications and compliances as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of such Holders' Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities of any
other holders of the Company's registrable securities entitled to inclusion in
such registration joining in such request as are specified in a written request
given within fifteen (15) days after receipt of such written notice from the
Company.

(b) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 2.2
and the Company shall include such information in the written notice referred to
in Section 2.2(a). In such event, the right of any Holder to include its
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by a majority in interest of the
Initiating Holders (which underwriter or underwriters shall be reasonably
acceptable to the Company). Notwithstanding any other provision of this Section
2.2, if the underwriter advises the Company that marketing factors require a
limitation of the number of securities to be underwritten (including Registrable
Securities) then the Company shall so advise all Holders of Registrable
Securities which would otherwise be underwritten pursuant hereto, and the number
of Registrable Securities that may be included in the underwriting shall be
allocated first, to the Holders and any other holders of the Company's
registrable securities entitled to inclusion in such registration on a PRO RATA
basis based on the number of registrable securities held by all such holders
(including the Initiating Holders); and second, to any shareholder of the
Company (other than to such holders) on a PRO RATA basis. Any Registrable
Securities excluded or withdrawn from such underwriting shall be withdrawn from
the registration. If the Holders are unable to register and sell at least
seventy-five percent (75%) of the Registrable Securities requested by them to be
registered because of such underwriter's cutback, such registration statement
shall be withdrawn and the expenses of such withdrawn

4.
<PAGE>

registration statement shall be borne by the Company in accordance with Section
2.4 hereof, and such registration shall not constitute a registration requested
under this Section 2.2.

(i) prior to the first anniversary of the registration
statement pertaining to the Initial Offering;

(ii) if Form S-3 (or any successor or similar form) is not
available for such offering by the Holders; provided however, that the Company
shall use all commercially reasonable efforts to become and remain eligible to
use Form S-3 (or any successor or similar form);

(iii) if the Holders, together with the holders of any other
securities of the Company entitled to inclusion in such registration, propose to
sell Registrable Securities and such other securities (if any) at an aggregate
price to the public of less than four million dollars ($4,000,000); provided,
however, that the foregoing shall not apply if the Stockholder proposes to sell
all of its Registrable Securities pursuant to such registration at the market
price as quoted on any national securities exchange or pursuant to any
inter-dealer quotation system; provided further, that in the event the aggregate
price to the public is less than four million dollars ($4,000,000) due to the
underwriter's cutback provided for in Section 2.2(b) and the Company elects not
to effect such registration, then such registration shall not be counted as a
registration requested under this Section 2.2;

(iv) in any particular jurisdiction in which the Company would
be required to qualify to do business or to execute a general consent to service
of process in effecting such registration, qualification or compliance;

(v) after the Company has effected one (1) registration
pursuant to this Section 2.2, and such registration has been declared or ordered
effective; provided, however, that if such registration is underwritten and
Registrable Securities are not sold pursuant to such registration, such
registration shall not be counted as a registration requested under this Section
2.2

(vi) if within fifteen (15) days of receipt of a written
request from Initiating Holders pursuant to Section 2.2(a), the Company gives
notice to the Holders of the Company's intention to make a public offering
within ninety (90) days; or

(vii) if the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 2.2, a certificate signed by the
Chairman of the Board stating that in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company and
its shareholders for such registration statement to be effected at such time, in
which event the Company shall have the right to defer such filing for a period
of not more than ninety (90) days after receipt of the request of the Initiating
Holders; PROVIDED that such right to delay a request shall be exercised by the
Company not more than once in any twelve (12) month period.

5.
<PAGE>

2.3 PIGGYBACK REGISTRATIONS. The Company shall notify all Holders of
Registrable Securities in writing at least twenty (20) days prior to the filing
of any registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding the registration statement related to the Initial
Offering and registration statements relating to employee benefit plans or with
respect to corporate reorganizations or other transactions under Rule 145 of the
Securities Act) and will afford each such Holder an opportunity to include in
such registration statement all or part of such Registrable Securities held by
such Holder. Each Holder desiring to include in any such registration statement
all or any part of the Registrable Securities held by it shall, within fifteen
(15) days after the above-described notice from the Company, so notify the
Company in writing. Such notice shall state the intended method of disposition
of the Registrable Securities by such Holder. If a Holder decides not to include
all of its Registrable Securities in any registration statement thereafter filed
by the Company, such Holder shall nevertheless continue to have the right to
include any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to offerings
of its securities, all upon the terms and conditions set forth herein.
Notwithstanding anything set forth above, the registration rights set forth in
this Section 2.3 do not apply to the Company's Initial Offering.

(a) UNDERWRITING. If the registration statement under which the
Company gives notice under this Section 2.3 is for an underwritten offering, the
Company shall so advise the Holders of Registrable Securities. In such event,
the right of any such Holder to be included in a registration pursuant to this
Section 2.3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. Notwithstanding any other
provision of the Agreement, if the underwriter determines in good faith that
marketing factors require a limitation of the number of Registrable Securities
to be underwritten, the number of Registrable Securities that may be included in
the underwriting shall be allocated, first, to the Company; second, to the
Holders and any other holders of the Company's registrable securities entitled
to inclusion in such registration on a PRO RATA basis based on the total number
of Registrable Securities held by all such holders; and third, to any
shareholder of the Company (other than a Holder) on a PRO RATA basis. No such
reduction shall reduce the securities being offered by the Company for its own
account to be included in the registration and underwriting. If any Holder
disapproves of the terms of any such underwriting, such Holder may elect to
withdraw therefrom by written notice to the Company and the underwriter,
delivered at least ten (10) business days prior to the effective date of the
registration statement. Any Registrable Securities excluded or withdrawn from
such underwriting shall be excluded and withdrawn from the registration. For any
Holder which is a partnership, limited liability company or corporation, the
partners, retired partners, members and shareholders of such Holder, or the
estates and family members of any such partners and retired partners and any
trusts for the benefit of any of the foregoing person shall be deemed to be a
single "Holder", and any PRO RATA reduction with respect to such "Holder" shall
be based upon the aggregate amount of Cayenta Shares carrying registration
rights owned by all entities and individuals included in such "Holder," as
defined in this sentence.

6.
<PAGE>

(b) RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.3 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 2.4 hereof.

2.4 EXPENSES OF REGISTRATION. Except as specifically provided herein,
all Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 2.2 or any registration under
Section 2.3 herein shall be borne by the Company. All Selling Expenses incurred
in connection with any registrations hereunder, shall be borne by the holders of
the securities so registered PRO RATA on the basis of the number of Registrable
Securities so registered. The Company shall not, however, be required to pay for
expenses of any registration proceeding begun pursuant to Section 2.2, the
request of which has been subsequently withdrawn by the Initiating Holders
unless (a) the withdrawal is based upon material adverse information concerning
the Company of which the Initiating Holders were not aware at the time of such
request, (b) the Holders of a majority of Registrable Securities agree to
forfeit their right to the one requested registration pursuant to Section 2.2,
in which event such right shall be forfeited by all Holders), or (c) the
registration is withdrawn in accordance with the last sentence of Section
2.2(b). If the Holders are required to pay the Registration Expenses, such
expenses shall be borne by the holders of securities (including Registrable
Securities) requesting such registration in proportion to the number of
securities for which registration was requested. If the Company is required to
pay the Registration Expenses of a withdrawn offering pursuant to clause (a)
above, then the Holders shall not forfeit their rights under Section 2.2.

2.5 OBLIGATIONS OF THE COMPANY. Whenever required to effect the
registration of any Registrable Securities pursuant to Section 2.2, the Company
shall, as expeditiously as reasonably possible:

(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use all reasonable efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to ninety (90) days or, if earlier,
until the Holder or Holders have completed the distribution related thereto. The
Company shall not be required to file, cause to become effective or maintain the
effectiveness of any registration statement that contemplates a distribution of
securities on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act.

(b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement for the period set forth in paragraph (a) above.

(c) Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.

7.
<PAGE>

(d) Use its reasonable best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders; PROVIDED that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.

(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.

(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.

(g) Use its best efforts to furnish, on the date that such
Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, (i) an opinion, dated as of such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and (ii)
a letter dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering addressed to the underwriters.

2.6 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Section 2 shall terminate and be of no further force and effect five
(5) years after the date of the consummation of the Initial Offering. In
addition, a Holder's registration rights shall expire if all Registrable
Securities held by and issuable to such Holder (and its affiliates, partners,
former partners, members and former members) may be immediately sold under Rule
144 during any ninety (90) day period.

2.7 DELAY OF REGISTRATION; FURNISHING INFORMATION.

(a) No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 2.

(b) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 2.2 or 2.3 that the selling
Holders shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them and the intended method of disposition of
such securities as shall be required to effect the registration of their
Registrable Securities.

(c) The Company shall have no obligation with respect to any
registration requested pursuant to Section 2.2 if, due to the operation of
subsection 2.2(b), the number of

8.
<PAGE>

Registrable Securities or the anticipated aggregate offering price of the
Registrable Securities to be included in the registration does not equal or
exceed the number of Registrable Securities or the anticipated aggregate
offering price required to originally trigger the Company's obligation to
initiate such registration as specified in Section 2.2, and in such event, such
registration shall not be counted as a registration requested under Section 2.2.

2.8 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Sections 2.2 or 2.3:

(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the partners, officers, employees and directors of
each Holder, any underwriter (as defined in the Securities Act) for such Holder
and each person, if any, who controls such Holder or underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation") by the Company: (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the indemnifying party of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities law in connection with the offering covered by such registration
statement; and the Company will pay as incurred to each such Holder, partner,
officer, employee, director, underwriter or controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED HOWEVER,
that the indemnity agreement contained in this Section 2.8(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company, which consent
shall not be unreasonably withheld, nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, director, underwriter
or controlling person of such Holder.

(b) To the extent permitted by law, each Holder will, if
Registrable Securities held by such Holder are included in the securities as to
which such registration qualifications or compliance is being effected,
indemnify and hold harmless the Company, each of its directors, its officers and
each person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter and any other Holder selling securities under
such registration statement or any of such other Holder's partners, employees,
directors or officers or any person who controls such Holder, against any
losses, claims, damages or liabilities (joint or several) to which the Company
or any such director, officer, controlling person, underwriter or other such
Holder, or partner, director, officer or controlling person of such other Holder
may become subject under the Securities Act, the Exchange Act or other federal
or state law, insofar as such losses, claims, damages or liabilities (or actions
in respect thereto) arise out of or are based upon

9.
<PAGE>

any Violation by a Holder, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with written
information furnished by such Holder under an instrument duly executed by such
Holder and stated to be specifically for use in connection with such
registration; and each such Holder will pay as incurred any legal or other
expenses reasonably incurred by the Company or any such director, officer,
controlling person, underwriter or other Holder, or partner, officer, director
or controlling person of such other Holder in connection with investigating or
defending any such loss, claim, damage, liability or action if it is judicially
determined that there was such a Violation; PROVIDED, HOWEVER, that the
indemnity agreement contained in this Section 2.8(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; PROVIDED FURTHER, that in no event shall any
indemnity under this Section 2.8 exceed the net proceeds from the offering
received by such Holder.

(c) Promptly after receipt by an indemnified party under this
Section 2.8 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.8, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 2.8, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 2.8.

(d) If the indemnification provided for in this Section 2.8 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any losses, claims, damages or liabilities referred to herein,
the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; PROVIDED, that in no event shall any contribution by a
Holder hereunder exceed the net proceeds from the offering received by such
Holder.

10.
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(e) The obligations of the Company and Holders under this Section
2.8 shall survive completion of any offering of Registrable Securities in a
registration statement and the termination of this agreement. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.

2.9 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Registrable Securities pursuant to this Section 2 may be assigned by
a Holder to a transferee or assignee of Registrable Securities which is a
Holder's family member or trust, limited liability company, partnership or other
entity established for the benefit of an individual Holder, any Affiliate of a
Holder or to a Holder's employees provided that each such transferee is an
accredited investor as defined in Regulation D under the Securities Act;
PROVIDED, HOWEVER, (i) the transferor shall, within ten (10) days after such
transfer, furnish to the Company written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned and (ii) such transferee shall agree to
be subject to all restrictions set forth in this Agreement.

2.10 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Section 2
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of at least a majority of the
Registrable Securities then outstanding. Any amendment or waiver effected in
accordance with this Section 2.10 shall be binding upon each Holder and the
Company. By acceptance of any benefits under this Section 2, Holders of
Registrable Securities hereby agree to be bound by the provisions hereunder.

2.11 "MARKET STAND-OFF" AGREEMENT; AGREEMENT TO FURNISH INFORMATION.
Each Holder hereby agrees that such Holder shall not sell or otherwise transfer
or dispose of any Common Stock (or other securities) of the Company held by such
Holder (other than those included in the registration) for a period specified by
the representative of the underwriters of Common Stock (or other securities) of
the Company not to exceed one hundred eighty (180) days following the effective
date of the Initial Offering of the Company filed under the Securities Act;
provided, however, that each Holder shall agree to any market stand-off
agreement (not in excess of 90 days) proposed by any underwriter in connection
with a registration statement whereby Registrable Securities are offered for
sale pursuant to Section 2.3 hereof. Each Holder agrees to execute and deliver
such other agreements as may be reasonably requested by the Company or the
underwriter which are consistent with the foregoing or which are necessary to
give further effect thereto. In addition, if requested by the Company or the
representative of the underwriters of Common Stock (or other securities) of the
Company, each Holder shall provide, within ten (10) days of such request, such
information as may be required by the Company or such representative in
connection with the completion of any public offering of the Company's
securities pursuant to a registration statement filed under the Securities Act.
The obligations described in this Section 2.11 shall not apply to a registration
relating solely to employee benefit plans on Form S-1 or Form S-8 or similar
forms that may be promulgated in the future, or a registration relating solely
to a Commission Rule 145 transaction on Form S-4 or similar forms that may be
promulgated in the future. The Company may impose stop-transfer instructions
with

11.
<PAGE>

respect to the Common Stock (or other securities) subject to the foregoing
restriction until the end of said one hundred eighty (180) day period with
respect to the Initial Offering, or said ninety (90) day period with respect to
any other underwritten offering in connection with a registration statement
whereby Registrable Securities are offered for sale pursuant to Section 2.3
hereof.

2.12 RULE 144 REPORTING. With a view to making available to the Holders
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to use its best efforts to:

(a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the effective date of
the first registration filed by the Company for an offering of its securities to
the general public;

(b) File with the SEC, in a timely manner, all reports and other
documents required of the Company under the Exchange Act; and

(c) So long as a Holder owns any Registrable Securities, furnish to
such Holder forthwith upon request: a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 of the Securities
Act, and of the Exchange Act (at any time after it has become subject to such
reporting requirements); a copy of the most recent annual or quarterly report of
the Company; and such other reports and documents as a Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing it to
sell any such securities without registration.

SECTION 3. STOCKHOLDER CO-SALE RIGHTS

3.1

(a) If Titan proposes to sell or transfer any Titan Shares, then
Titan shall promptly give written notice (the "Notice") to the Company and to
the Stockholder at least 20 days prior to the closing of such sale or transfer.
The Notice shall describe in reasonable detail the proposed sale or transfer
including, without limitation, the number of Titan Shares to be sold or
transferred, the nature of such sale or transfer, the consideration to be paid,
and the name and address of each prospective purchaser or transferee. In the
event that the sale or transfer is being made pursuant to the provisions of
Section 3.2 hereof, the Notice shall state under which paragraph and
subparagraph the sale or transfer is being made.

(b) Stockholder shall have the right, exercisable upon written
notice to Titan within 15 days after receipt of the Notice, to participate in
such sale on the same terms and conditions specified in the Notice (each such
Stockholder a "Participant"). To the extent that the Stockholder exercises such
right of participation in accordance with the terms and conditions set forth
below, the number of Titan Shares that Titan may sell in the transaction shall
be correspondingly reduced.

(c) Stockholder may sell all or any part of that number of Cayenta
Shares equal to the product obtained by multiplying (i) the aggregate number of
Titan Shares covered by

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<PAGE>

the Notice by (ii) a fraction, the numerator of which is the number of Cayenta
Shares owned by the Stockholder at the time of the sale or transfer and the
denominator of which is the total number of Titan shares and Cayenta Shares
owned by Titan and the Stockholder, respectively, at the time of the sale or
transfer.

(d) Each Participant shall effect its participation in the sale by
promptly delivering to Titan for transfer to the prospective purchaser one or
more certificates, properly endorsed for transfer, which represent the type and
number of Cayenta Shares which such Participant elects to sell.

(e) The stock certificate or certificates that the Participant
delivers to Titan pursuant to paragraph 3.1(d) shall be transferred to the
prospective purchaser in consummation of the sale of the Common Stock pursuant
to the terms and conditions specified in the Notice, and Titan shall
concurrently therewith remit to such Participant that portion of the sale
proceeds to which such Participant is entitled by reason of its participation in
such sale. To the extent that any prospective purchaser, or purchasers,
prohibits such assignment or otherwise refuses to purchase Cayenta Shares or
other securities from a Participant exercising its rights of co-sale hereunder,
Titan shall not sell to such prospective purchaser or purchasers any Titan
Shares unless and until, simultaneously with such sale, Titan shall purchase
such Cayenta Shares or other securities from such Participant.

(f) The exercise or non-exercise of the rights of the Participants
hereunder to participate in one or more sales of Titan Shares made by Titan
shall not adversely affect their rights to participate in subsequent sales of
Titan Shares subject to paragraph 3.1(a).

(g) If the Stockholder elects not to participate in the sale of
Titan Shares subject to the Notice, Titan may, not later than sixty (60) days
following delivery to the Company and the Stockholder of the Notice, enter into
an agreement providing for the closing of the transfer of the Titan Shares
covered by the Notice within thirty (30) days of such agreement on terms and
conditions not more favorable to the transferor than those described in the
Notice. Any proposed transfer on terms and conditions more favorable than those
described in the Notice, as well as any subsequent proposed transfer of any of
the Titan Shares by Titan, shall again be subject to the co-sale rights of the
Stockholder and shall require compliance by Titan with the procedures described
in this Section 3.1.

3.2 EXEMPT TRANSFERS

(a) Notwithstanding the foregoing, the provisions of Sections
3.1(b) through 3.1(g) shall not apply to (i) any pledge of Titan Shares made
pursuant to a bona fide loan transaction that creates a mere security interest,
including any security interest in existence on the date of this Agreement; or
(ii) any transfer of Titan Shares to an Affiliate of Titan; provided that (A)
Titan shall inform the Stockholder of such pledge or transfer prior to effecting
it and (B) the pledgee or transferee shall furnish the Stockholder with a
written agreement to be bound by and comply with all provisions of Section 3.
Such transferred Titan Shares shall remain "Titan Shares" hereunder, and such
pledgee or transferee shall be treated as "Titan" for purposes of this
Agreement.

13.
<PAGE>

(b) Notwithstanding the foregoing, the provisions of Section 3
shall not apply to the sale of any Titan Shares (i) to the public pursuant to a
registration statement filed with, and declared effective by, the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the
"Securities Act"); (ii) to the Company, or (iii) if prior to such sale, Titan
held less than 5% of the Company's outstanding capital stock.

3.3 PROHIBITED TRANSFERS

(a) In the event Titan should sell any Titan Shares in
contravention of the co-sale rights of the Stockholder under this Agreement (a
"Prohibited Transfer"), Stockholder, in addition to such other remedies as may
be available at law, in equity or hereunder, shall have the put option provided
below, and Titan shall be bound by the applicable provisions of such option.

(b) In the event of a Prohibited Transfer, Stockholder shall have
the right to sell to Titan and require Titan to purchase the type and number of
Cayenta Shares equal to the number of Cayenta Shares the Stockholder would have
been entitled to transfer to the purchaser had the Prohibited Transfer under
Section 3(c) hereof been effected pursuant to and in compliance with the terms
hereof. Such sale shall be made on the following terms and conditions:

(i) The price per share at which the Cayenta Shares are to be
sold to Titan shall be equal to the price per share paid by the purchaser to
Titan in the Prohibited Transfer. Titan shall also reimburse the Stockholder for
any and all fees and expenses, including legal fees and expenses, incurred
pursuant to the exercise or the attempted exercise of the Stockholder's rights
under Section 3.

(ii) Within 90 days after the later of the dates on which the
Stockholder (A) received notice of the Prohibited Transfer or (B) otherwise
became aware of the Prohibited Transfer, the Stockholder shall, if exercising
the option created hereby, deliver to Titan the certificate or certificates
representing Cayenta Shares to be sold, each certificate to be properly endorsed
for transfer.

(iii) Titan shall, upon receipt of the certificate or
certificates for the Cayenta Shares to be sold by the Stockholder, pursuant to
this Section 3.3, pay the aggregate purchase price therefor and the amount of
reimbursable fees and expenses, as specified in subparagraph 3.3(b)(i), in cash
or by other means acceptable to the Stockholder.

(iv) Notwithstanding the foregoing, any attempt by Titan to
transfer Titan Shares in violation of Section 3 hereof shall be void and the
Company agrees it will not effect such a transfer nor will it treat any alleged
transferee as the holder of such Titan Shares without the written consent of the
Stockholder.

3.4 LEGEND

(a) Each certificate representing Titan Shares now or hereafter
owned by Titan or issued to any person in connection with a transfer pursuant to
this Section 3 hereof shall be endorsed with the following legend:

14.
<PAGE>

"THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND
CONDITIONS OF A CERTAIN INVESTOR RIGHTS AGREEMENT BY AND
BETWEEN THE STOCKHOLDER, THE CORPORATION AND CERTAIN HOLDERS
OF STOCK OF THE CORPORATION. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
CORPORATION."

(b) Titan agrees that the Company may instruct its transfer agent
to impose transfer restrictions on the Titan Shares represented by certificates
bearing the legend referred to in Section 3.4(a) above to enforce the provisions
of this Agreement and the Company agrees to promptly do so. The legend shall be
removed when the rights under this Section 3 expire pursuant to the terms of
this Agreement.

SECTION 4. STOCKHOLDER RIGHTS OF FIRST REFUSAL

4.1 SUBSEQUENT OFFERINGS. Stockholder shall have a right of first
refusal to purchase its PRO RATA share of all Equity Securities, as defined
below, that the Company may, from time to time, propose to sell and issue after
the date of this Agreement, other than the Equity Securities excluded by Section
4.6 hereof. Stockholder's PRO RATA share is equal to the ratio of (a) the number
of Cayenta Shares which Stockholder is deemed to be a holder immediately prior
to the issuance of such Equity Securities to (b) the total number of shares of
the Company's outstanding Common Stock (including all shares of Common Stock
issued or issuable upon exercise of any outstanding warrants or options)
immediately prior to the issuance of the Equity Securities. The term "Equity
Securities" shall mean (i) any Common Stock, Preferred Stock or other security
of the Company, (ii) any security convertible, with or without consideration,
into any Common Stock, Preferred Stock or other security (including any option
to purchase such a convertible security), (iii) any security carrying any
warrant or right to subscribe to or purchase any Common Stock, Preferred Stock
or other security or (iv) any such warrant or right.

4.2 EXERCISE OF RIGHTS. If the Company proposes to issue any Equity
Securities, it shall give Stockholder written notice of its intention,
describing the Equity Securities, the price and the terms and conditions upon
which the Company proposes to issue the same. Stockholder shall have fifteen
(15) days from the giving of such notice to agree to purchase its PRO RATA share
of the Equity Securities for the price and upon the terms and conditions
specified in the notice by giving written notice to the Company and stating
therein the quantity of Equity Securities to be purchased. Notwithstanding the
foregoing, the Company shall not be required to offer or sell such Equity
Securities to the Stockholder who would cause the Company to be in violation of
applicable federal securities laws by virtue of such offer or sale.

4.3 ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS. If the Stockholder
fails to exercise in full the rights of first refusal, the Company shall have
ninety (90) days thereafter to sell the Equity Securities in respect of which
the Stockholder's rights were not exercised, at a price and upon general terms
and conditions materially no more favorable to the purchasers thereof than
specified in the Company's notice to the Stockholder pursuant to Section 4.2
hereof. If the Company has not sold such Equity Securities within ninety (90)
days of the notice

15.
<PAGE>

provided pursuant to Section 4.2, the Company shall not thereafter issue or sell
any Equity Securities, without first offering such securities to the Stockholder
in the manner provided above.

4.4 SALE WITHOUT NOTICE. In lieu of giving notice to the Stockholder
prior to the issuance of Equity Securities as provided in Section 4.2, the
Company may elect to give notice to the Stockholder within thirty (30) days
after the issuance of Equity Securities. Such notice shall describe the type,
price and terms of the Equity Securities. Stockholder shall have twenty (20)
days from the date of receipt of such notice to elect to purchase its PRO RATA
share of Equity Securities (as defined in Section 4.1, and calculated before
giving effect to the sale of the Equity Securities to the purchasers thereof).
The closing of such sale shall occur within sixty (60) days of the date of
notice to the Stockholder.

4.5 TRANSFER OF RIGHTS OF FIRST REFUSAL; AMENDMENT. The rights of first
refusal of Stockholder under this Section 4 may be transferred to the same
parties, subject to the same restrictions as any transfer of registration rights
pursuant to Section 2.9. The rights of first refusal established by this Section
4 may be amended, or any provision waived with the written consent of the
Stockholder.

4.6 EXCLUDED SECURITIES. The rights of first refusal established by
this Section 4 shall have no application to any of the following Equity
Securities:

(a) shares of Class A Common Stock (and/or options, warrants or
other Class A Common Stock purchase rights issued pursuant to such options,
warrants or other rights) issued or to be issued to employees, officers or
directors of, or consultants or advisors to the Company or any subsidiary,
pursuant to stock purchase or stock option plans or other arrangements that are
approved by the Board of Directors;

(b) stock issued pursuant to any rights or agreements outstanding
as of the date of this Agreement, options and warrants outstanding as of the
date of this Agreement; and stock issued pursuant to any such rights or
agreements granted after the date of this Agreement; PROVIDED that the rights of
first refusal established by this Section 4 applied with respect to the initial
sale or grant by the Company of such rights or agreements;

(c) any Equity Securities issued for consideration other than cash
pursuant to a merger, consolidation, acquisition or similar business
combination;

(d) shares of Class A Common Stock issued in connection with any
stock split, stock dividend or recapitalization by the Company;

(e) any Equity Securities issued pursuant to any equipment leasing
arrangement, or debt financing from a bank or similar financial institution;

(f) any Equity Securities that are issued by the Company pursuant
to a registration statement filed under the Securities Act; and

(g) shares of the Company's Common Stock or Preferred Stock issued
in connection with strategic transactions involving the Company and other
entities, such as (i) joint ventures, manufacturing, marketing or distribution
arrangements or (ii) technology transfer,

16.
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licensing or development arrangements; PROVIDED that such strategic transactions
and the issuance of shares therein, shall have been determined by the Company's
Board of Directors to be a strategic transaction for purposes of this
subsection.

SECTION 5. RIGHTS OF FIRST AND SECOND REFUSAL ON SALE OF CAYENTA SHARES

5.1 SALE OF CAYENTA SHARES. The Company shall have a right of first
refusal to purchase any Cayenta Shares that Stockholder (or a permitted
assignee) proposes to sell or transfer to any third party after the date of this
Agreement. Titan shall have a right of second refusal to purchase any Cayenta
Shares that Stockholder (or a permitted assignee) proposes to sell to any third
party after the date of this Agreement.

5.2 EXERCISE OF RIGHT OF FIRST REFUSAL. If Stockholder proposes to sell
or transfer any Cayenta Shares, Stockholder shall give the Company written
notice of its intention, describing the price and the terms and conditions upon
which Stockholder proposes to sell or transfer the same. The Company shall have
fifteen (15) days from the giving of such notice to agree to purchase any or all
of such Cayenta Shares for the price and upon the terms and conditions specified
in the notice by giving written notice to Stockholder and stating therein the
quantity of such Cayenta Shares to be purchased.

5.3 EXERCISE OF RIGHT OF SECOND REFUSAL. If the Company does not
exercise its right of first refusal to purchase all such Cayenta Shares, the
Stockholder shall give Titan written notice of its intention to sell all
remaining Cayenta Shares it desires to sell for the price and on the terms and
conditions upon which such Stockholder set forth in the notice to the Company
delivered pursuant to Section 5.2. Titan shall have fifteen (15) days from the
giving of such notice to agree to purchase such remaining Cayenta Shares for the
price and upon the terms and conditions specified in the notice by giving
written notice to such Stockholder and stating therein the quantity of such
Cayenta Shares to be purchased.

5.4 SALE OF CAYENTA SHARES TO OTHER PERSONS. If the Company fails to
exercise its right of first refusal in full and if Titan fails to exercise its
right of second refusal in full, the Stockholder shall have ninety (90) days
from the notice delivered to Titan pursuant to Section 5.3 to sell or transfer
such Cayenta Shares in respect of which the Company's or Titan's rights were not
exercised, at a price and upon general terms and conditions materially no more
favorable to the purchasers thereof than specified in the Stockholder's notices
delivered pursuant to Section 5.2 hereof and Section 5.3 hereof. If the
Stockholder has not sold such Cayenta Shares within ninety (90) days of the
notice provided pursuant to Section 5.3, the Stockholder shall not thereafter
sell or transfer any Cayenta Shares, without first offering such securities to
the Company and Titan in the manner provided above.

5.5 TRANSFER OF RIGHTS OF FIRST REFUSAL; AMENDMENT. The right of first
refusal of the Company and the right of second refusal of Titan under this
Section 5 may be transferred to affiliates of the Company by the Company and
affiliates of Titan by Titan. The rights of first refusal established by this
Section 5 may be amended, or any provision waived with the written consent of
the Company and Titan.

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5.6 EXEMPT TRANSFER. Notwithstanding anything to the contrary herein,
Stockholder may transfer any part or all of its Cayenta Shares to a member of
such Stockholder's immediate family or a trust, limited liability company,
partnership or other entity established for the benefit of such Stockholder or
any Affiliate of Stockholder or an immediate family member of such Stockholder
or to an employee of Stockholder provided that each such transferee is an
accredited investor as defined in Regulation D under the Securities Act;
PROVIDED, HOWEVER, (i) the transferor shall, within ten (10) days after such
transfer, furnish to the Company written notice of the name and address of such
transferee or assignee and (ii) such transferee shall agree to be subject to all
restrictions set forth in this Agreement.

5.7 LEGEND

(a) Each certificate representing Cayenta Shares now or hereafter
owned by any Stockholder or issued to any person in connection with a transfer
pursuant to this Section 5 hereof shall be endorsed with the following legend:

(b) Stockholder agrees that the Company may instruct its transfer
agent to impose transfer restrictions on the Cayenta Shares represented by
certificates bearing the legend referred to in Section 5.7(a) above to enforce
the provisions of this Agreement and the Company agrees to promptly do so. The
legend shall be removed when the rights under this Section 5 expire pursuant to
the terms of this Agreement.

SECTION 6. TERMINATION OF RIGHTS

The rights set forth in Sections 3, 4 and 5 of this Agreement shall not
apply to, and shall terminate upon the earlier of (i) the effective date of the
registration statement pertaining to the Initial Offering or (ii) (A) a sale,
lease or other disposition of all or substantially all of the assets of the
Company, (B) a merger or consolidation in which the Company is not the surviving
corporation or (C) a reverse merger in which the Company is the surviving
corporation but the shares of Common Stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise. The registration rights set forth in
Section 2 of this Agreement shall terminate in accordance with Section 2.6
hereof, and the Company agrees to promptly remove any legends related to the
rights set forth in Sections 3, 4 and 5 hereof from all applicable stock
certificates.

SECTION 7. MISCELLANEOUS

18.
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7.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.

7.2 SURVIVAL. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by any Holder and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by or
on behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.

7.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of Registrable Securities or Titan Shares from time
to time; PROVIDED, HOWEVER, that prior to the receipt by the Company of adequate
written notice of the transfer of any Registrable Securities specifying the full
name and address of the transferee, the Company may deem and treat the person
listed as the holder of such Registrable Securities in its records as the
absolute owner and holder of such Registrable Securities for all purposes,
including the payment of dividends or any redemption price.

7.4 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto, the Stock
Purchase Agreement and the other documents delivered pursuant thereto constitute
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and no party shall be liable or bound to any other in any
manner by any representations, warranties, covenants and agreements except as
specifically set forth herein and therein.

7.5 SEVERABILITY. In case any provision of the Agreement shall be
invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.

7.6 AMENDMENT AND WAIVER.

(a) Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company, Titan and the
Stockholder.

(b) Except as otherwise expressly provided, the obligations of the
Company and Titan and the rights of the Holders under this Agreement may be
waived only with the written consent of the Stockholder.

7.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any party hereto upon any
breach, default or noncompliance of the any other party under this Agreement
shall impair any such right, power, or remedy, nor shall it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of any similar breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent, or approval of
any kind or character on any party's part of any breach, default or
noncompliance under the Agreement or any waiver on such party's part of any
provisions or conditions of this Agreement must be in writing and shall be
effective only

19.
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to the extent specifically set forth in such writing. All remedies, either under
this Agreement, by law, or otherwise afforded to any party hereto, shall be
cumulative and not alternative.

7.8 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one (1) day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the party
to be notified at the address as set forth on the signature pages hereof or
Exhibit A hereto or at such other address as such party may designate by ten
(10) days advance written notice to the other parties hereto.

7.9 ATTORNEYS' FEES. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.

7.10 TITLES AND SUBTITLES. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.

7.11 COUNTERPARTS. This Agreement may be executed by facsimile and in
any number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.

[THIS SPACE INTENTIONALLY LEFT BLANK]

20.
<PAGE>

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

IN WITNESS WHEREOF, the parties hereto have executed this INVESTOR
RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

COMPANY:

CAYENTA, INC.

By:/s/ Edward M. Lake
---------------------------------------
Edward M. Lake, Chief Financial Officer

THE TITAN CORPORATION

By:/s/ Nicholas J. Costanza
--------------------------------------
Nicholas J. Costanza

STOCKHOLDER:

PENTON MEDIA, INC.

By:/s/ Joseph G. NeCastro
--------------------------------------
Joseph G. NeCastro
--------------------------------------

Its: Chief Financial Officer
--------------------------------------

INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

<PAGE>

TABLE OF CONTENTS

PAGE
<S> <C>
SECTION 1. GENERAL...............................................................................................1

1.1 Definitions.....................................................................................1

SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER................................................................2

2.1 Restrictions on Transfer........................................................................2

2.2 Form S-3 Registration...........................................................................4

2.3 Piggyback Registrations.........................................................................6

2.4 Expenses of Registration........................................................................7

2.5 Obligations of the Company......................................................................7

2.6 Termination of Registration Rights..............................................................8

2.7 Delay of Registration; Furnishing Information...................................................8

2.8 Indemnification.................................................................................9

2.9 Assignment of Registration Rights..............................................................11

2.10 Amendment of Registration Rights...............................................................11

2.11 "Market Stand-Off" Agreement; Agreement to Furnish Information.................................11

2.12 Rule 144 Reporting.............................................................................12

SECTION 3. STOCKHOLDER CO-SALE RIGHTS...........................................................................12

3.2 Exempt Transfers...............................................................................13

3.3 Prohibited Transfers...........................................................................14

3.4 Legend.........................................................................................14

SECTION 4. STOCKHOLDER RIGHTS OF FIRST REFUSAL..................................................................15

4.1 Subsequent Offerings...........................................................................15

4.2 Exercise of Rights.............................................................................15

4.3 Issuance of Equity Securities to Other Persons.................................................15

4.4 Sale Without Notice............................................................................16

4.5 Transfer of Rights of First Refusal; Amendment.................................................16

4.6 Excluded Securities............................................................................16

SECTION 5. RIGHTS OF FIRST AND SECOND REFUSAL ON SALE OF CAYENTA SHARES.........................................17

5.1 Sale of Cayenta Shares.........................................................................17

5.2 Exercise of Right of First Refusal.............................................................17

</TABLE>

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TABLE OF CONTENTS
(CONTINUED)

<TABLE>

<S> <C>
5.3 Exercise of Right of Second Refusal............................................................17

5.4 Sale of Cayenta Shares to Other Persons........................................................17

5.5 Transfer of Rights of First Refusal; Amendment.................................................17

5.6 Exempt Transfer................................................................................17

5.7 Legend.........................................................................................18

SECTION 6. TERMINATION OF RIGHTS................................................................................18

SECTION 7. MISCELLANEOUS........................................................................................18

7.1 Governing Law..................................................................................18

7.2 Survival.......................................................................................18

7.3 Successors and Assigns.........................................................................19

7.4 Entire Agreement...............................................................................19

7.5 Severability...................................................................................19

7.6 Amendment and Waiver...........................................................................19

7.7 Delays or Omissions............................................................................19

7.8 Notices........................................................................................19

7.9 Attorneys' Fees................................................................................20

7.10 Titles and Subtitles...........................................................................20

7.11 Counterparts...................................................................................20

</TABLE>

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<PAGE>

INVESTOR RIGHTS AGREEMENT

A-1

<PAGE>

Exhibit 10.28

CAYENTA, INC. NONSTATUTORY STOCK OPTION PLAN

ADOPTED DECEMBER 27, 1999
APPROVED BY STOCKHOLDERS DECEMBER 27, 1999
TERMINATION DATE: SEPTEMBER 16, 2007

1. PURPOSES.

(a) ELIGIBLE STOCK OPTIONS. The persons eligible to receive Options are
the Officers and Directors of the Company and its Affiliates.

(b) AVAILABLE OPTIONS. The purpose of the Plan is to provide a means by
which eligible recipients of Options may be given an opportunity to benefit from
increases in value of the Class A Common Stock through the granting of the
Options.

(c) GENERAL PURPOSE. The Company, by means of the Plan, seeks to retain
the services of the group of persons eligible to receive Options, to secure and
retain the services of new members of this group and to provide incentives for
such persons to exert maximum efforts for the success of the Company and its
Affiliates.

2. DEFINITIONS.

(a) "AFFILIATE" means any parent corporation or subsidiary corporation
of the Company, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code

(b) "BOOK VALUE" means the book value of one share of Common Stock as
determined from the consolidated balance sheet of the Company as of the last day
of the last month preceding the date on which Book Value is determined under
this Plan. The consolidated balance sheet shall be prepared in accordance with
U.S. generally accepted accounting principles, consistently applied.

(d) "CODE" means the Internal Revenue Code of 1986, as amended.

(e) "COMMITTEE" means a committee of one or more members of the Board
appointed by the Board in accordance with subsection 3(c).

(f) "COMMON STOCK" means the Class A common stock of the Company.

(g) "COMPANY" means Cayenta, Inc. a Delaware corporation.

(h) "CONTINUOUS SERVICE" means that the Participant's service with the
Company or an Affiliate, whether as an Officer or Director is not interrupted or
terminated. The Participant's

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<PAGE>

Continuous Service shall not be deemed to have terminated merely because of a
change in the capacity in which the Participant renders service to the Company
or an Affiliate as an Officer or Director or a change in the entity for which
the Participant renders such service, provided that there is no interruption or
termination of the Participant's Continuous Service. The Board or the chief
executive officer of the Company, in that party's sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military leave or
any other personal leave.

(i) "COVERED EMPLOYEE" means the chief executive officer and the four
(4) other highest compensated officers of the Company for whom total
compensation is required to be reported to stockholders under the Exchange Act,
as determined for purposes of Section 162(m) of the Code.

(j) "DIRECTOR" means a member of the Board of Directors of the Company.

(k) "DISABILITY" means (i) before the Listing Date, the inability of a
person, in the opinion of a qualified physician acceptable to the Company, to
perform the major duties of that person's position with the Company or an
Affiliate of the Company because of the sickness or injury of the person and
(ii) after the Listing Date, the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code.

(l) "EMPLOYEE" means any person employed by the Company or an
Affiliate. Mere service as a Director or payment of a director's fee by the
Company or an Affiliate shall not be sufficient to constitute "employment" by
the Company or an Affiliate.

(m) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

(n) "FAIR MARKET VALUE" means, as of any date, the value of the Common
Stock determined as follows:

(i) If the Common Stock is listed on any established stock exchange
or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair
Market Value of a share of Common Stock shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or market (or the exchange or market with the greatest volume of
trading in the Common Stock) on the last market trading day prior to the day of
determination, as reported in THE WALL STREET JOURNAL or such other source as
the Board deems reliable.

(ii) In the absence of such markets for the Common Stock, the Fair
Market Value shall be determined in good faith by the Board.

(o) "LISTING DATE" means the first date upon which any security of the
Company is listed (or approved for listing) upon notice of issuance on any
securities exchange or designated (or approved for designation) upon notice of
issuance as a national market security on an interdealer quotation system if
such securities exchange or interdealer quotation system has been

2
<PAGE>

certified in accordance with the provisions of Section 25100(o) of the
California Corporate Securities Law of 1968.

(p) "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not a
current Employee or Officer of the Company or its parent or a subsidiary, does
not receive compensation (directly or indirectly) from the Company or its parent
or a subsidiary for services rendered as a consultant or in any capacity other
than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act ("Regulation S-K")), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3.

(q) "OPTION" means an Option not intended to qualify as an Incentive
Stock Option granted under this Plan.

(r) "OFFICER" means (i) before the Listing Date, any person designated
by the Company as an executive officer of the Company or an executive officer of
an Affiliate and (ii) on and after the Listing Date, a person who is an officer
of the Company within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder and any person who is an officer of
an Affiliate within the meaning of Section 16 of the Exchange Act and the rules
and regulations promulgated thereunder.

(s) "OPTION AGREEMENT" means a written agreement between the Company
and an Optionholder evidencing the terms and conditions of an individual Option
grant. Each Option Agreement shall be subject to the terms and conditions of the
Plan.

(t) "OPTIONHOLDER" means a person to whom an Option is granted pursuant
to the Plan or, if applicable, such other person who holds an outstanding
Option.

(u) "OUTSIDE DIRECTOR" means a Director who either (i) is not a current
Employee of the Company or an "affiliated corporation" (within the meaning of
Treasury Regulations promulgated under Section 162(m) of the Code), is not a
former Employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an "affiliated corporation"
at any time and is not currently receiving direct or indirect remuneration from
the Company or an "affiliated corporation" for services in any capacity other
than as a Director or (ii) is otherwise considered an "outside director" for
purposes of Section 162(m) of the Code.

(v) "PARTICIPANT" means a person to whom a Option is granted pursuant
to the Plan or, if applicable, such other person who holds an outstanding
Option.

(w) "PLAN" means this Cayenta, Inc. Nonstatutory Stock Option Plan.

(x) "RULE 16b-3" means Rule 16b-3 promulgated under the Exchange Act or
any successor to Rule 16b-3, as in effect from time to time.

3
<PAGE>

(y) "SECURITIES ACT" means the Securities Act of 1933, as amended.

3. ADMINISTRATION.

(a) ADMINISTRATION BY BOARD. The Board shall administer the Plan unless
and until the Board delegates administration to a Committee, as provided in
subsection 3(c).

(b) POWERS OF BOARD. The Board shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:

(i) To determine from time to time which of the persons eligible
under the Plan shall be granted Options; when and how each Option shall be
granted; the provisions of each Option granted (which need not be identical),
including the time or times when a person shall be permitted to receive Common
Stock pursuant to an Option; and the number of shares of Common Stock with
respect to which an Option shall be granted to each such person.

(ii) To construe and interpret the Plan and Options granted under
it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Option Agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.

(iii) To amend the Plan or a Option as provided in Section 11.

(iv) Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best interests of the
Company which are not in conflict with the provisions of the Plan.

(i) GENERAL. The Board may delegate administration of the Plan to a
Committee or Committees of one (1) or more members of the Board, and the term
"Committee" shall apply to any person or persons to whom such authority has been
delegated. If administration is delegated to a Committee, the Committee shall
have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of
the administrative powers the Committee is authorized to exercise (and
references in this Plan to the Board shall thereafter be to the Committee or
subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.

(ii) COMMITTEE COMPOSITION WHEN COMMON STOCK IS PUBLICLY TRADED. At
such time as the Common Stock is publicly traded, in the discretion of the
Board, a Committee may consist solely of two or more Outside Directors, in
accordance with Section 162(m) of the Code, and/or solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3. Within the scope of such
authority, the Board or the Committee may (1) delegate to a committee

4
<PAGE>

of one or more members of the Board who are not Outside Directors the authority
to grant Options to eligible persons who are either (a) not then Covered
Employees and are not expected to be Covered Employees at the time of
recognition of income resulting from such Option or (b) not persons with respect
to whom the Company wishes to comply with Section 162(m) of the Code and/or (2)
delegate to a committee of one or more members of the Board who are not
Non-Employee Directors the authority to grant Options to eligible persons who
are not then subject to Section 16 of the Exchange Act.

(d) EFFECT OF BOARD'S DECISION. All determinations, interpretations and
constructions made by the Board in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all persons.

4. SHARES SUBJECT TO THE PLAN.

(a) SHARE RESERVE. Subject to the provisions of Section 10 relating to
adjustments upon changes in Common Stock, the Common Stock that may be issued
pursuant to Options shall not exceed in the aggregate Six Hundred Twenty-Eight
Thousand (628,000) shares of Common Stock.

(b) REVERSION OF SHARES TO THE SHARE RESERVE. If any Option shall for
any reason expire or otherwise terminate, in whole or in part, without having
been exercised in full, the shares of Common Stock not acquired under such
Option shall revert to and again become available for issuance under the Plan.

(c) SOURCE OF SHARES. The shares of Common Stock subject to the Plan
may be unissued shares or reacquired shares, bought on the market or otherwise.

5. ELIGIBILITY. Subject to the provisions of Section 10 relating to
adjustments upon changes in the shares of Common Stock, no Employee shall be
eligible to be granted Options covering more than five hundred thousand
(500,000) shares of Common Stock during any calendar year. This Section 5
shall not apply prior to the Listing Date and, following the Listing Date,
this Section 5 shall not apply until (i) the earliest of: (1) the first
material modification of the Plan (including any increase in the number of
shares of Common Stock reserved for issuance under the Plan in accordance
with Section 4); (2) the issuance of all of the shares of Common Stock
reserved for issuance under the Plan; (3) the expiration of the Plan; or (4)
the first meeting of stockholders at which Directors are to be elected that
occurs after the close of the third calendar year following the calendar year
in which occurred the first registration of an equity security under Section
12 of the Exchange Act; or (ii) such other date required by Section 162(m) of
the Code and the rules and regulations promulgated thereunder.

6. OPTION PROVISIONS.

Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. All Options shall be designated
Nonstatutory Stock Options at the time of grant, and, if certificates are
issued, a separate certificate or certificates will be issued for shares of
Common Stock purchased on exercise of each type of Option. The provisions of

5
<PAGE>

separate Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

(a) TERM. No Option granted prior to the Listing Date shall be
exercisable after the expiration of ten (10) years from September 16, 1997.

(b) EXERCISE PRICE OF A NONSTATUTORY STOCK OPTION. The exercise price
of each Nonstatutory Stock Option granted prior to the Listing Date shall be not
less than the Book Value per share on the date the Option is granted. The
exercise price of each Nonstatutory Stock Option granted on or after the Listing
Date shall be not less than eighty-five percent (85%) of the Fair Market Value
of the Common Stock subject to the Option on the date the Option is granted.
Notwithstanding the foregoing, a Nonstatutory Stock Option may be granted with
an exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option
in a manner satisfying the provisions of Section 424(a) of the Code.

(c) CONSIDERATION. The purchase price of Common Stock acquired pursuant
to an Option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Option is exercised or (ii) at
the discretion of the Board at the time of the grant of the Option (or
subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the
Company of other Common Stock, (2) according to a deferred payment or other
similar arrangement with the Optionholder or (3) in any other form of legal
consideration that may be acceptable to the Board. Unless otherwise specifically
provided in the Option, the purchase price of Common Stock acquired pursuant to
an Option that is paid by delivery to the Company of other Common Stock
acquired, directly or indirectly from the Company, shall be paid only by shares
of the Common Stock of the Company that have been held for more than six (6)
months (or such longer or shorter period of time required to avoid a charge to
earnings for financial accounting purposes). At any time that the Company is
incorporated in Delaware, payment of the Common Stock's "par value," as defined
in the Delaware General Corporation Law, shall not be made by deferred payment.

(d) In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.

(e) TRANSFERABILITY OF A NONSTATUTORY STOCK OPTION. A Nonstatutory
Stock Option granted prior to the Listing Date shall not be transferable except
by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Optionholder only by the Optionholder. A Nonstatutory
Stock Option granted on or after the Listing Date shall be transferable to the
extent provided in the Option Agreement. If the Nonstatutory Stock Option does
not provide for transferability, then the Nonstatutory Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall
be exercisable during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering written
notice to the Company, in a form satisfactory to the

6
<PAGE>

Company, designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the Option.

(f) VESTING GENERALLY. The total number of shares of Common Stock
subject to an Option may, but need not, vest and therefore become exercisable in
periodic installments that may, but need not, be equal. The Option may be
subject to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The
provisions of this subsection 6(f) are subject to any Option provisions
governing the minimum number of shares of Common Stock as to which an Option may
be exercised. Options granted prior to the Listing Date to Officers or Directors
may be made fully exercisable, subject to reasonable conditions such as
continued employment, at any time or during any period established by the
Company.

(g) TERMINATION OF CONTINUOUS SERVICE. In the event an Optionholder's
Continuous Service terminates (other than upon the Optionholder's death or
Disability), the Optionholder may exercise his or her Option (to the extent that
the Optionholder was entitled to exercise such Option as of the date of
termination) but only within such period of time ending on the earlier of (i)
the date three (3) months following the termination of the Optionholder's
Continuous Service (or such longer or shorter period specified in the Option
Agreement, which period shall not be less than thirty (30) days for Options
granted prior to the Listing Date unless such termination is for cause), or (ii)
the expiration of the term of the Option as set forth in the Option Agreement.
If, after termination, the Optionholder does not exercise his or her Option
within the time specified in the Option Agreement, the Option shall terminate.

(h) EXTENSION OF TERMINATION DATE. An Optionholder's Option Agreement
may also provide that if the exercise of the Option following the termination of
the Optionholder's Continuous Service (other than upon the Optionholder's death
or Disability) would be prohibited at any time solely because the issuance of
shares of Common Stock would violate the registration requirements under the
Securities Act, then the Option shall terminate on the earlier of (i) the
expiration of the term of the Option set forth in subsection 6(a) or (ii) the
expiration of a period of three (3) months after the termination of the
Optionholder's Continuous Service during which the exercise of the Option would
not be in violation of such registration requirements.

(i) DISABILITY OF OPTIONHOLDER. In the event that an Optionholder's
Continuous Service terminates as a result of the Optionholder's Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination), but only
within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in
the Option Agreement, which period shall not be less than six (6) months for
Options granted prior to the Listing Date) or (ii) the expiration of the term of
the Option as set forth in the Option Agreement. If, after termination, the
Optionholder does not exercise his or her Option within the time specified
herein, the Option shall terminate.

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<PAGE>

(j) DEATH OF OPTIONHOLDER. In the event (i) an Optionholder's
Continuous Service terminates as a result of the Optionholder's death or (ii)
the Optionholder dies within the period (if any) specified in the Option
Agreement after the termination of the Optionholder's Continuous Service for a
reason other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by
the Optionholder's estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
option upon the Optionholder's death pursuant to subsection 6(e), but only
within the period ending on the earlier of (1) the date eighteen (18) months
following the date of death (or such longer or shorter period specified in the
Option Agreement, which period shall not be less than six (6) months for Options
granted prior to the Listing Date) or (2) the expiration of the term of such
Option as set forth in the Option Agreement. If, after death, the Option is not
exercised within the time specified herein, the Option shall terminate.

(k) EARLY EXERCISE. The Option may, but need not, include a provision
whereby the Optionholder may elect at any time before the Optionholder's
Continuous Service terminates to exercise the Option as to any part or all of
the shares of Common Stock subject to the Option prior to the full vesting of
the Option. Any unvested shares of Common Stock so purchased may be subject to a
repurchase option in favor of the Company or to any other restriction the Board
determines to be appropriate. The Company will not exercise its repurchase
option until at least six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes) have
elapsed following exercise of the Option unless the Board otherwise specifically
provides in the Option.

(l) RIGHT OF REPURCHASE. The Option may, but need not, include a
provision whereby the Company may elect, prior to the Listing Date, to
repurchase all or any part of the vested shares of Common Stock acquired by the
Optionholder pursuant to the exercise of the Option at a price per share equal
to the Book Value per share on the date of repurchase.

(m) RIGHT OF FIRST REFUSAL. The Option may, but need not, include a
provision whereby the Company may elect, prior to the Listing Date, to exercise
a right of first refusal following receipt of notice from the Optionholder of
the intent to transfer all or any part of the shares of Common Stock received
upon the exercise of the Option. Except as expressly provided in this subsection
6(m), such right of first refusal shall otherwise comply with any applicable
provisions of the Bylaws of the Company.

7. COVENANTS OF THE COMPANY.

(a) AVAILABILITY OF SHARES. During the terms of the Options, the
Company shall keep available at all times the number of shares of Common Stock
required to satisfy such Options.

(b) SECURITIES LAW COMPLIANCE. The Company shall seek to obtain from
each regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to grant Options and to issue and sell shares of
Common Stock upon exercise of the Options; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Option or any Common Stock issued or issuable pursuant

8
<PAGE>

to any such Option. If, after reasonable efforts, the Company is unable to
obtain from any such regulatory commission or agency the authority which counsel
for the Company deems necessary for the lawful issuance and sale of Common Stock
under the Plan, the Company shall be relieved from any liability for failure to
issue and sell Common Stock upon exercise of such Options unless and until such
authority is obtained.

8. USE OF PROCEEDS FROM STOCK.

Proceeds from the sale of Common Stock pursuant to Options shall
constitute general funds of the Company.

9. MISCELLANEOUS.

(a) ACCELERATION OF EXERCISABILITY AND VESTING. The Board shall have
the power to accelerate the time at which a Option may first be exercised or the
time during which a Option or any part thereof will vest in accordance with the
Plan, notwithstanding the provisions in the Option stating the time at which it
may first be exercised or the time during which it will vest.

(b) STOCKHOLDER RIGHTS. No Participant shall be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any shares of
Common Stock subject to such Option unless and until such Participant has
satisfied all requirements for exercise of the Option pursuant to its terms.

(c) NO EMPLOYMENT OR OTHER SERVICE RIGHTS. Nothing in the Plan or any
instrument executed or Option granted pursuant thereto shall confer upon any
Participant any right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Option was granted or shall affect the right
of the Company or an Affiliate to terminate (i) the employment of an Employee
with or without notice and with or without cause, or (ii) the service of a
Director pursuant to the Bylaws of the Company or an Affiliate, and any
applicable provisions of the corporate law of the state in which the Company or
the Affiliate is incorporated, as the case may be.

(d) INVESTMENT ASSURANCES. The Company may require a Participant, as a
condition of exercising or acquiring Common Stock under any Option, (i) to give
written assurances satisfactory to the Company as to the Participant's knowledge
and experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Option; and (ii) to give written assurances satisfactory
to the Company stating that the Participant is acquiring Common Stock subject to
the Option for the Participant's own account and not with any present intention
of selling or otherwise distributing the Common Stock. The foregoing
requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (1) the issuance of the shares of Common Stock upon the exercise
or acquisition of Common Stock under the Option has been registered under a then
currently effective registration statement under the Securities Act or (2) as to
any particular requirement, a determination is made by counsel for the Company
that such requirement need not be met in the

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<PAGE>

circumstances under the then applicable securities laws. The Company may, upon
advice of counsel to the Company, place legends on stock certificates issued
under the Plan as such counsel deems necessary or appropriate in order to comply
with applicable securities laws, including, but not limited to, legends
restricting the transfer of the Common Stock.

(e) WITHHOLDING OBLIGATIONS. To the extent provided by the terms of a
Option Agreement, the Participant may satisfy any federal, state or local tax
withholding obligation relating to the exercise or acquisition of Common Stock
under a Option by any of the following means (in addition to the Company's right
to withhold from any compensation paid to the Participant by the Company) or by
a combination of such means: (i) tendering a cash payment; (ii) authorizing the
Company to withhold shares of Common Stock from the shares of Common Stock
otherwise issuable to the Participant as a result of the exercise or acquisition
of Common Stock under the Option, provided, however, that no shares of Common
Stock are withheld with a value exceeding the minimum amount of tax required to
be withheld by law; or (iii) delivering to the Company owned and unencumbered
shares of Common Stock.

10. ADJUSTMENTS UPON CHANGES IN STOCK.

(a) CAPITALIZATION ADJUSTMENTS. If any change is made in the Common
Stock subject to the Plan, or subject to any Option, without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities subject to the Plan
pursuant to subsection 4(a) and the maximum number of securities subject to
award to any person pursuant to Section 5, and the outstanding Options will be
appropriately adjusted in the class(es) and number of securities and price per
share of Common Stock subject to such outstanding Options. The Board shall make
such adjustments, and its determination shall be final, binding and conclusive.
(The conversion of any convertible securities of the Company shall not be
treated as a transaction "without receipt of consideration" by the Company.)

(b) CHANGE IN CONTROL--DISSOLUTION OR LIQUIDATION. In the event of a
dissolution or liquidation of the Company, then all outstanding Options shall
terminate immediately prior to such event.

(c) CHANGE IN CONTROL--ASSET SALE, MERGER, CONSOLIDATION OR REVERSE
MERGER. In the event of (i) a sale, lease or other disposition of all or
substantially all of the assets of the Company, (ii) a merger or consolidation
in which the Company is not the surviving corporation or (iii) a reverse merger
in which the Company is the surviving corporation but the shares of Common Stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise, then any surviving corporation or acquiring corporation shall assume
any Options outstanding under the Plan or shall substitute similar Options
(including an award to acquire the same consideration paid to the stockholders
in the transaction described in this subsection 10(c) for those outstanding
under the Plan). In the event any surviving corporation or acquiring corporation
refuses to

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assume such Options or to substitute similar Options for those outstanding under
the Plan, then with respect to Options held by Participants whose Continuous
Service has not terminated, the vesting of such Options (and, if applicable, the
time during which such Options may be exercised) shall be accelerated in full,
and the Options shall terminate if not exercised (if applicable) at or prior to
such event. With respect to any other Options outstanding under the Plan, such
Options shall terminate if not exercised (if applicable) prior to such event.

(d) CHANGE IN CONTROL--SECURITIES ACQUISITION. After the Listing Date,
in the event of an acquisition by any person, entity or group within the meaning
of Section 13(d) or 14(d) of the Exchange Act, or any comparable successor
provisions (excluding any employee benefit plan, or related trust, sponsored or
maintained by the Company or an Affiliate) of the beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable
successor rule) of securities of the Company representing at least fifty percent
(50%) of the combined voting power entitled to vote in the election of
Directors, then with respect to Options held by Participants whose Continuous
Service has not terminated, the vesting of such Options (and, if applicable, the
time during which such Options may be exercised) shall be accelerated in full.

11. AMENDMENT OF THE PLAN AND OPTIONS.

(a) AMENDMENT OF PLAN. The Board at any time, and from time to time,
may amend the Plan. However, except as provided in Section 10 relating to
adjustments upon changes in Common Stock, no amendment shall be effective unless
approved by the stockholders of the Company to the extent stockholder approval
is necessary to satisfy the requirements of Section 422 of the Code, Rule 16b-3
or any Nasdaq or securities exchange listing requirements.

(b) STOCKHOLDER APPROVAL. The Board may, in its sole discretion, submit
any other amendment to the Plan for stockholder approval, including, but not
limited to, amendments to the Plan intended to satisfy the requirements of
Section 162(m) of the Code and the regulations thereunder regarding the
exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to certain executive officers.

(c) CONTEMPLATED AMENDMENTS. It is expressly contemplated that the
Board may amend the Plan in any respect the Board deems necessary or advisable
to provide eligible Employees with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated
thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.

(d) NO IMPAIRMENT OF RIGHTS. Rights under any Option granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the Participant and (ii) the Participant
consents in writing.

(e) AMENDMENT OF OPTIONS. The Board at any time, and from time to time,
may amend the terms of any one or more Options; provided, however, that the
rights under any Option shall not be impaired by any such amendment unless (i)
the Company requests the consent of the Participant and (ii) the Participant
consents in writing.

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12. TERMINATION OR SUSPENSION OF THE PLAN.

(a) PLAN TERM. The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on the day before the tenth
(10th) anniversary of the date the Plan is adopted by the Board or approved by
the stockholders of the Company, whichever is earlier. No Options may be granted
under the Plan while the Plan is suspended or after it is terminated.

(b) NO IMPAIRMENT OF RIGHTS. Suspension or termination of the Plan
shall not impair rights and obligations under any Option granted while the Plan
is in effect except with the written consent of the Participant.

13. EFFECTIVE DATE OF PLAN.

The Plan shall become effective as determined by the Board, but no
Option shall be exercised (or, in the case of a stock bonus, shall be granted)
unless and until the Plan has been approved by the stockholders of the Company,
which approval shall be within twelve (12) months before or after the date the
Plan is adopted by the Board.

14. CHOICE OF LAW.

The law of the State of California shall govern all questions
concerning the construction, validity and interpretation of this Plan, without
regard to such state's conflict of laws rules.

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EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
on the consolidated financial statements of Cayenta, Inc. as of December 31,
1998 and 1999 and for each of the three years in the period ended December
31, 1999 dated January 31, 2000 (except with respect to the matters discussed
in Note 12, as to which the date is March 30, 2000) and to all references to
our Firm included in or made a part of this registration statement.

ARTHUR ANDERSEN LLP

San Diego, California
March 30, 2000

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
on the financial statements of Transnational Partners II, LLC for the period
from February 9, 1997 (commencement of operations) to December 31, 1997, and
for the year ended December 31, 1998 dated December 28, 1999 and to all
references to our Firm included in or made a part of this registration
statement.

ARTHUR ANDERSEN LLP

San Diego, California
March 30, 2000

<PAGE>

EXHIBIT 23.3

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
on the financial statements of JB Systems, Inc. (d.b.a. Mainsaver) for each
of the two years in the period ended December 31, 1998 and for the ten
months ended October 31, 1999, dated December 28, 1999, and to all references
to our Firm included in or made a part of this registration statement.

ARTHUR ANDERSEN LLP

San Diego, California
March 30, 2000

<PAGE>

Exhibit 23.4

CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS

The Board of Directors
SFG Technologies Inc.

We consent to the use of our report dated January 31, 2000, relating to the
consolidated balance sheets of SFG Technologies Inc. as at December 21, 1999
and December 31, 1998 and the consolidated statements of operations, deficit,
and cash flows for the period from January 1, 1999 to December 21, 1999, the
eight months ended December 31, 1998 and the years ended April 30, 1998 and
1997, included in this registration statement on Form S-1 of Cayenta, Inc.
and to the reference to our firm under the heading "Experts" in the related
prospectus.

/s/ KPMG LLP

Chartered Accountants

Vancouver, Canada
March 30, 2000

<PAGE>

Exhibit 23.5

Consent of Independent Auditors

We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated February 11, 2000 with respect to the financial
statements of Assist Cornerstone Technologies, Inc., included in Amendment No. 2
to the Registration Statement (Form S-1 No. 333-93789) and related Prospectus of
Cayenta, Inc for the registration of 7,475,000 shares of its Class A common
stock.

/s/ Ernst & Young LLP

Salt Lake City, Utah
March 29, 2000