NATIONAL INFORMATION CONSORTIUM
S-1/A, 1999-06-18
BUSINESS SERVICES, NEC
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<PAGE>

     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 18, 1999


                                                      REGISTRATION NO. 333-77939

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

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


                                AMENDMENT NO. 1
                                       TO
                                    FORM S-1


                             REGISTRATION STATEMENT

                                     UNDER

                           THE SECURITIES ACT OF 1933
                           --------------------------

                     NATIONAL INFORMATION CONSORTIUM, INC.

             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                              <C>                            <C>
           COLORADO                          7375                  52-2077581
 (State or Other Jurisdiction    (Primary Standard Industrial   (I.R.S. Employer
              of                   Classification Code No.)      Identification
Incorporation or Organization)                                        No.)
</TABLE>

                              12 CORPORATE WOODS,
                         10975 BENSON STREET, SUITE 390
                          OVERLAND PARK, KANSAS 66210
                                  877-234-EGOV

        (Address and telephone number of principal executive offices and
                          principal place of business)

                               JEFFERY S. FRASER
                      CHAIRMAN AND CHIEF EXECUTIVE OFFICER
                     NATIONAL INFORMATION CONSORTIUM, INC.
                              12 CORPORATE WOODS,
                         10975 BENSON STREET, SUITE 390
                          OVERLAND PARK, KANSAS 66210
                                  877-234-EGOV

           (Name, address, and telephone number of agent for service)
                           --------------------------

                                   COPIES TO:

     JOHN W. CAMPBELL, III, ESQ.                   NORA L. GIBSON, ESQ.
      KRISTIAN E. WIGGERT, ESQ.                  PETER S. BUCKLAND, ESQ.
     VALERIE A. VILLANUEVA, ESQ.                   ANGELA C. HILT, ESQ.
           JACLYN LIU, ESQ.                  Brobeck, Phleger & Harrison LLP
       Morrison & Foerster LLP                Spear Street Tower, One Market
          425 Market Street                  San Francisco, California 94105
 San Francisco, California 94105-2482

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

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

    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 check the following box. / /

    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement 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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration 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. / /
                           --------------------------


    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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.


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

                   SUBJECT TO COMPLETION, DATED JUNE 18, 1999

THE INFORMATION IN THIS PRELIMINARY 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 SUCH AN OFFER OR SALE IS NOT PERMITTED.
<PAGE>
PROSPECTUS


                               13,000,000 SHARES


                                     [LOGO]

                                  COMMON STOCK


    This is an initial public offering of common stock by National Information
Consortium, Inc. Of the 13,000,000 shares of common stock being sold in this
offering, 10,000,000 shares are being sold by us and 3,000,000 shares are being
sold by the selling shareholders. We will not receive any of the proceeds from
the sale of shares by the selling shareholders. The estimated initial public
offering price is between $9.00 and $11.00 per share.

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


    The shares of common stock have been proposed to be listed for quotation on
the Nasdaq National Market under the symbol EGOV.

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

<TABLE>
<CAPTION>
                                                                  PER SHARE        TOTAL
                                                              -----------------  ----------
<S>                                                           <C>                <C>
Initial public offering price...............................          $          $
Underwriting discounts and commissions......................          $          $
Proceeds to National Information Consortium, Inc., before
  expenses..................................................          $          $
Proceeds to the selling shareholders, before expenses.......          $          $
</TABLE>


    The selling shareholders have granted the underwriters an option for a
period of 30 days to purchase up to 1,950,000 additional shares of common stock.

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

         INVESTING IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
                    SEE "RISK FACTORS" BEGINNING ON PAGE 8.
                                 -------------

    Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.

HAMBRECHT & QUIST
           THOMAS WEISEL PARTNERS LLC
                      FAC/EQUITIES
                                 VOLPE BROWN WHELAN & COMPANY

           , 1999
<PAGE>
                               INSIDE FRONT COVER

                        National Information Consortium


                  Enabling online interaction with government.


        [Picture of people standing in line with arrow pointing at picture and
text accompanying arrow stating "You are here."]


                  [Text design reading "before e-government."]

<PAGE>

                                   GATEFOLD 1



<TABLE>
<S>                                            <C>
[Picture of person using computer at office
with arrow pointing at picture and text
accompanying arrow reading "You will be
here."]
</TABLE>



                  [Text design reading "after e-government."]



<TABLE>
<S>                                            <C>
                                               [Picture of person using computer at home
                                               with arrow pointing at picture and text
                                               accompanying arrow reading "and here."]
</TABLE>


<PAGE>
                                   GATEFOLD 2

                        National Information Consortium


    [Text design reading "Premium Services".]


    [Screen shot of one of National Information Consortium's government portals
on the Internet showing a selection of services, with explanatory information
for each service.]
<PAGE>
                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                  PAGE
                                                                  -----
<S>                                                            <C>
Prospectus Summary...........................................           4

Risk Factors.................................................           8

Forward-Looking Statements...................................          19

How We Intend to Use the Proceeds from the Offering..........          20

Dividend Policy..............................................          20

Capitalization...............................................          21

Dilution.....................................................          22

Selected Consolidated Actual and Pro Forma Financial Data....          23

Management's Discussion and Analysis of Financial Condition
  and Results of Operations..................................          24

Business.....................................................          35

Management...................................................          46

Certain Transactions.........................................          58

Principal and Selling Shareholders...........................          59

Description of Capital Stock.................................          62

Shares Eligible for Future Sale..............................          65

Underwriting.................................................          66

Legal Matters................................................          68

Experts......................................................          68

Where You Can Find Additional Information About Us...........          68

Index to Consolidated Financial Statements...................         F-1
</TABLE>


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

        All brand names and trademarks appearing in this prospectus are the
property of their respective holders.

                                       3
<PAGE>
                               PROSPECTUS SUMMARY

        THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION CONTAINED ELSEWHERE IN THIS
PROSPECTUS. THIS SUMMARY MAY NOT CONTAIN ALL OF THE INFORMATION THAT YOU SHOULD
CONSIDER BEFORE INVESTING IN THE COMMON STOCK. YOU SHOULD READ THE ENTIRE
PROSPECTUS CAREFULLY, INCLUDING "RISK FACTORS" AND OUR FINANCIAL STATEMENTS
BEFORE MAKING AN INVESTMENT DECISION.

                     NATIONAL INFORMATION CONSORTIUM, INC.


        National Information Consortium, Inc. is the leading provider of
Internet-based, electronic government services that help governments use the
Internet to reduce costs and provide a higher level of service to businesses and
citizens. We enter into contracts with governments and on their behalf design,
build and operate Internet-based portals, forming a partner relationship with
governments. These portals consist of Web sites and applications that we build,
which allow businesses and citizens to access government information online and
complete transactions, including applying for a permit, renewing a license or
filing a report. Our unique business model allows us to reduce our government
partners' financial and technology risks and obtain revenue by sharing in the
fees governments generate from electronic government services. Our partners
benefit because they gain a centralized, customer-focused presence on the
Internet. Businesses and citizens gain a faster, more convenient and more
cost-effective means to interact with governments.



        Government's regulation of commercial and consumer activities requires
billions of transactions and exchanges of large volumes of information between
government agencies, and businesses and citizens. These transactions and
exchanges include driver's license renewals, motor vehicle registrations, tax
returns, permit applications and requests for government-gathered information.
Traditionally, government agencies have transacted, and in many cases continue
to transact, with businesses and citizens using processes that are expensive,
inconvenient, labor-intensive and require extensive paperwork. Electronic
alternatives have often been unavailable, technically challenging and costly to
implement, or fragmented among different government agencies. The growing
acceptance of the Internet and electronic commerce presents a significant
opportunity for the development of electronic government, in which government
agencies can quickly and cost-effectively conduct transactions and distribute
information over the Internet.



        Despite the potential benefits of electronic government, government
entities encounter a unique set of challenges in implementing and maintaining
Internet-based electronic government services. In addition to the conventional
barriers the private sector confronts, including high costs, technological risk,
the need for customized and rapid deployment, and the scarcity of qualified
personnel, governments also face the intricacies of the political process, a
diverse constituent base, limited marketing capabilities and heightened security
requirements due to public trust concerns.



        We have pioneered the development of an Internet-based electronic
government solution that addresses these unique government challenges and meets
the needs of businesses and citizens. The key elements of our solution are:


        - a customer-focused, one-stop government portal that provides a single
          point of presence on the Web for all government agencies and permits
          businesses and citizens to conduct transactions and process
          information requests 24 hours a day, seven days a week;

        - a cost-efficient financial model that minimizes the use of government
          resources and up-front investment and is quickly and easily deployed;
          and


        - a contractual relationship with governments that aligns our interests
          with those of government and encourages the participation of
          interested government agencies, business and consumer groups and other
          important government entities, forming a partner relationship with
          governments. We work with each of our government partners to maximize


                                       4
<PAGE>
          their use of Internet technology, while addressing issues critical to
          them including the privacy and security of citizens.


        We plan to strengthen our position as the leading provider of electronic
government services. Key elements of our strategy are to:


        - continue to penetrate new markets, including other states, multi-state
          cooperative organizations, local governments and federal agencies, and
          to expand our services into international markets;


        - broaden product and service offerings with new Internet-based
          applications, including sales and use tax payments, enabling
          government agencies, businesses and citizens to interact more
          effectively online;



        - increase transaction volumes from existing and new customers by
          generating awareness and educating potential business and consumer
          users about the availability and benefits of electronic government
          services;



        - enhance the capability and efficiency of our business units by
          aggregating best practices across our organization and strengthening
          corporate operational and administrative functions, including product
          development, training and recruiting; and


        - attract, retain and train specialized and qualified personnel through
          performance incentives, targeted hiring and development programs.


        We currently provide Internet-based electronic government services for
the state governments of Arkansas, Georgia, Indiana, Iowa, Kansas, Maine,
Nebraska, and Virginia and the city-county government of the City of
Indianapolis and Marion County, Indiana. We have also been selected to provide
services to and have entered into a contract with the state of Utah. We
typically enter into three to five year contracts with our government partners
and manage operations through separate subsidiaries that operate as
decentralized business units with a high degree of autonomy. Under these
contracts, each local business unit helps its government partner implement,
develop, manage and enhance a single, comprehensive portal for conducting
transactions and delivering information to businesses and citizens online, and
we receive a share of the fee revenue governments obtain through use of the
portal for transactions. In our government partnerships with Georgia and Iowa,
we provide consulting, development and management services for these government
portals predominantly under a fixed-price model.



        We were incorporated in Delaware in December 1997 and reincorporated in
Colorado in April 1999. In 1998, we completed an exchange offer, through which
we consolidated our individual business units that deliver electronic government
services into our present company as subsidiaries. Our headquarters are located
at 12 Corporate Woods, 10975 Benson Street, Suite 390, Overland Park, Kansas
66210 and our telephone number is 877-234-EGOV. Our Web site is www.nicusa.com.
Any reference contained in this prospectus to our Web site, or to any other Web
site, shall not be deemed to incorporate information from those sites into this
prospectus.


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

                                       5
<PAGE>
                                  THE OFFERING


<TABLE>
<S>                                               <C>
Common stock offered by us......................  10,000,000 shares

Common stock offered by the selling               3,000,000 shares
  shareholders..................................

Common stock to be outstanding after this         52,481,996 shares
  offering......................................

Use of proceeds.................................  -  increased marketing efforts;
                                                  -  creation of new products and services;
                                                  -  further development of infrastructure;
                                                  -  working capital;
                                                  -  general corporate purposes; and
                                                  -  potential aquisitions.

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


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

        The number of shares of common stock to be outstanding after this
offering is based on the number of shares outstanding as of March 31, 1999 and
does not include the following:


        - 2,512,332 shares of common stock subject to options issued at a
          weighted average exercise price of $1.44 per share granted under our
          1998 stock option plan; or



        - 9,026,808 shares of common stock reserved for future issuance under
          our 1998 stock option plan and our 1999 employee stock purchase plan.


        Please see "Capitalization" for a more complete discussion regarding the
outstanding shares of our common stock and options to purchase our common stock
and other related matters.


        As of March 31, 1999, 31,896,145 shares of our outstanding common stock
have been placed in a voting trust, representing approximately 75.1% of our
outstanding common stock prior to this offering. The voting trust is selling
1,500,000 shares of common stock in this offering, which will reduce the number
of shares it holds to 30,396,145, or approximately 57.9% of our outstanding
common stock. The trustees of this voting trust are Messrs. Fraser and Hartley,
both of whom serve as directors of our company. As a result, Messrs. Fraser and
Hartley have, among other rights, the ability to control the election of
directors and approve corporate actions that must be submitted for a vote of
shareholders.


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

        UNLESS OTHERWISE NOTED, ALL INFORMATION IN THIS PROSPECTUS ASSUMES THAT:


        - THE UNDERWRITERS WILL NOT EXERCISE THEIR OPTION TO PURCHASE ADDITIONAL
          SHARES OF COMMON STOCK TO COVER OVER-ALLOTMENTS, IF ANY;



        - THE PUBLIC OFFERING PRICE WILL BE $10.00 PER SHARE;



        - WE WILL COMPLETE A 4.643377 FOR 1 SPLIT OF OUR COMMON STOCK BEFORE
          THIS OFFERING IS COMPLETED; AND


        - PRO FORMA INFORMATION GIVES EFFECT TO THE EXCHANGE OFFER WE COMPLETED
          IN MARCH 1998 AS IF THE EXCHANGE OFFER OCCURRED AT THE BEGINNING OF
          THE PERIOD PRESENTED.

        PLEASE SEE "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS--EXCHANGE OFFER" FOR MORE DETAILED INFORMATION ABOUT
THE EXCHANGE OFFER.

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


        The following summary consolidated actual and pro forma financial
information should be read in conjunction with our consolidated financial
statements and their related notes and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included in this prospectus. The
consolidated statement of operations data for the years ended December 31, 1997
and 1998 labeled "Actual" are derived from, and are qualified by reference to,
the audited financial statements included in this prospectus. The consolidated
statement of operations data for the years ended December 31, 1997 and 1998 and
the three months ended March 31, 1998 labeled "Pro Forma" are unaudited and
derived from and qualified by reference to the pro forma consolidated statements
of operations included in this prospectus. The consolidated statement of
operations data for the three month periods ended March 31, 1998 and 1999 and
the consolidated balance sheet data at March 31, 1999 labeled "Actual" are
derived from, and qualified by reference to, our unaudited interim financial
statements included in this prospectus. The as adjusted consolidated balance
sheet data summarized below gives effect to the receipt of the estimated net
proceeds from the sale of 10,000,000 shares of common stock offered by us in
this offering at an assumed initial public offering price of $10.00 per share,
after deducting underwriting discounts and commissions and estimated offering
expenses.


<TABLE>
<CAPTION>
                                                                                                              THREE MONTHS
                                                                  YEAR ENDED DECEMBER 31,                   ENDED MARCH 31,
                                                      ------------------------------------------------  ------------------------
                                                                1997                     1998                     1998
                                                      ------------------------  ----------------------  ------------------------
                                                        ACTUAL      PRO FORMA    ACTUAL     PRO FORMA     ACTUAL      PRO FORMA
                                                      -----------  -----------  ---------  -----------  -----------  -----------
                                                                        (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                   <C>          <C>          <C>        <C>          <C>          <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
    Revenues........................................   $     996    $  24,382   $  28,624   $  36,532    $     361    $   8,270
    Cost of revenues................................           5       18,410      21,211      27,394            1        6,184
    Gross profit....................................         991        5,972       7,413       9,138          360        2,086
    Operating loss..................................        (277)      (6,864)     (7,205)     (8,737)        (124)      (1,655)
    Net loss........................................   $    (277)   $  (6,932)  $  (7,896)  $  (9,430)   $    (124)   $  (1,658)

    Net loss per share--basic and diluted...........   $   (0.01)   $   (0.17)  $   (0.21)  $   (0.22)   $   (0.01)   $   (0.04)

    Weighted average shares outstanding.............      20,858       40,113      37,242      41,950       22,679       41,934

<CAPTION>

                                                        1999
                                                      ---------
                                                       ACTUAL
                                                      ---------

<S>                                                   <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
    Revenues........................................  $  11,455
    Cost of revenues................................      8,604
    Gross profit....................................      2,851
    Operating loss..................................     (3,302)
    Net loss........................................  $  (3,299)
    Net loss per share--basic and diluted...........  $   (0.08)
    Weighted average shares outstanding.............     42,243
</TABLE>



<TABLE>
<CAPTION>
                                                                                                  MARCH 31, 1999
                                                                                              ----------------------
                                                                                               ACTUAL    AS ADJUSTED
                                                                                              ---------  -----------
<S>                                                                                           <C>        <C>
CONSOLIDATED BALANCE SHEET DATA:
    Cash....................................................................................  $   1,115   $  91,015
    Total assets............................................................................     16,633     106,533
    Bank lines of credit....................................................................        839         839
    Long-term debt (includes current portion of notes payable/capital lease obligations)....      1,179       1,179
    Total shareholders' equity..............................................................      9,787      99,687
</TABLE>


                                       7
<PAGE>
                                  RISK FACTORS


        YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS AND ALL OTHER
INFORMATION CONTAINED IN THIS PROSPECTUS BEFORE PURCHASING OUR COMMON STOCK.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. ANY OF THE
FOLLOWING RISKS COULD MATERIALLY HARM OUR BUSINESS, OPERATING RESULTS AND
FINANCIAL CONDITION AND COULD RESULT IN A COMPLETE LOSS OF YOUR INVESTMENT.



              RISKS PARTICULAR TO NATIONAL INFORMATION CONSORTIUM



BECAUSE WE HAVE SERVICE CONTRACTS WITH A LIMITED NUMBER OF STATES AND CITY
GOVERNMENTS, THE TERMINATION OF ANY OF THESE CONTRACTS MAY HARM OUR BUSINESS



        Currently, we have contracts with eight states and one local government,
and have been selected to provide services to and have entered into a contract
with the state of Utah. These contracts typically have initial terms of three to
five years with option renewal periods of one to five years. However, any
renewal is optional and a government may terminate its contract prior to the
expiration date upon specific cause events that are not cured within a period of
20 to 180 days or, in some cases, upon passing legislation. Additionally, the
contracts under which we provide management and development services can be
terminated without cause on a specified period of notice. The decision by one or
more governments not to renew an existing contract or any termination of one or
more of these contracts will result in significant revenue shortfalls. If these
revenue shortfalls occur, our business and financial condition would be harmed.
We cannot be certain if, when or to what extent governments might fail to renew
or terminate any or all of their contracts with us.



OUR REVENUE GROWTH IS LIMITED BY THE NUMBER OF STATES THAT CHOOSE TO PROVIDE
ELECTRONIC GOVERNMENT SERVICES AND TO ADOPT OUR BUSINESS MODEL AND THE FINITE
NUMBER OF STATES WITH WHICH WE MAY CONTRACT FOR OUR ELECTRONIC GOVERNMENT
SERVICES



        We contract with state governments to provide electronic government
services on the state government's behalf to complete transactions and
distribute public information electronically. Our revenue growth depends on
government entities adopting such public/private partnerships. We cannot assure
you that government entities will choose to provide electronic government
services at all, or that they will not provide such services themselves without
private assistance or adopting our public/private model.


        In addition, as there is a finite number of states remaining with which
we can contract for our services, future increases in our revenues will depend
on our ability to expand our business model to include multi-state cooperative
organizations, local government, federal agencies and international entities. We
cannot assure you that we will succeed in our expansion into new markets or that
our services will be adaptable to those new markets.


WE MAY BE UNABLE TO OBTAIN FUTURE CONTRACTS THROUGH THE REQUEST FOR PROPOSAL
PROCESS



        Once a government decides to adopt a public/private model for electronic
government, it starts a selection process that operates under special rules that
apply to government purchasing. These rules typically require open bidding by
possible service providers like us against a list of requirements established by
governments under existing or specially-created procedures. To respond
successfully to these requests for proposals, commonly known as RFPs, we must
estimate accurately our cost structure for servicing a proposed contract, the
time required to establish operations for the proposed client and the likely
terms of any other proposals submitted. We also must assemble and submit a large
volume of information within the strict time schedule mandated by an RFP.
Whether or not we are able to respond successfully to RFPs in the future will
significantly impact our business. We cannot guarantee that we will win any bids
in the future through the RFP process, or that any winning bids will ultimately
result in contracts. Our business, financial condition and operating results
would be harmed if we fail to obtain profitable future contracts through the RFP
process.


                                       8
<PAGE>

THE FEES WE COLLECT FOR OUR PRODUCTS AND SERVICES ARE SUBJECT TO REGULATION THAT
COULD LIMIT OUR REVENUE GROWTH AND PROFITABILITY


        We collect user fees on behalf of government agencies and, under the
terms of our government contracts, we retain a portion of the fees. Generally,
our contracts provide that the amount of any fees we retain is set by the
government to provide us with a reasonable return or profit or, in one case, a
specified return on equity. We have limited control over the level of fees we
are permitted to retain. Our business, results of operations and financial
condition may be harmed if the level of fees we are permitted to retain is too
low or if our costs rise without a commensurate increase in fees.

THE POSSIBILITY OF GOVERNMENTS DEMANDING FIXED-PRICE CONTRACTS MAY SIGNIFICANTLY
REDUCE OUR REVENUES AND PROFITS


        Substantially all of our present contracts are on a transaction or
subscription fee basis, through which our fees vary depending on the number of
Internet users who access our products and services. However, we cannot assure
you that governments will not demand fixed-price contracts in the future.
Currently, we earn fees under our contracts with the states of Georgia and Iowa
predominantly on a fixed-price basis. We may, from time to time, enter into
other fixed-price contracts. Our failure to estimate accurately the resources
and time required for an engagement, to manage the government's expectations
effectively regarding the scope of services to be delivered for an estimated
price or to complete fixed-price engagements within budget, on time and to the
government's satisfaction could expose us to risks associated with cost overruns
and, potentially, to penalties, which may harm our business, operating results
and financial condition.



WE MAY BE UNABLE TO SUSTAIN THE USAGE LEVELS OF CURRENT PRODUCTS AND SERVICES
THAT PROVIDE A SIGNIFICANT PERCENTAGE OF OUR REVENUES


        We obtain a high proportion of our revenues from a limited number of
products and services. Subscription-based and transaction-based fees charged for
access to motor vehicle records, financing statements, corporation and court
information accounted for over 90% of our revenues for the year ended December
31, 1998 on a pro forma basis and are expected to continue to account for a
significant portion of our revenue in the near future. Regulatory changes or the
development of alternative information sources could materially reduce our
revenues from these products and services. A reduction in revenues from
currently popular products and services would harm our business, results of
operations and financial condition.

BECAUSE A MAJOR PORTION OF OUR CURRENT REVENUES ARE GENERATED FROM A SMALL
NUMBER OF USERS, THE LOSS OF ANY OF THESE USERS MAY HARM OUR BUSINESS AND
FINANCIAL CONDITION


        The primary source of our revenue is derived from data resellers' use of
our electronic government portals to access motor vehicle records for sale to
the auto insurance industry. For the year ended December 31, 1998, one of these
data resellers, Choicepoint, accounted for approximately 60% of our revenues.
Two other resellers accounted for an additional 11% of our revenue during the
year ended December 31, 1998. It is possible that these users will develop
alternative data sources or new business processes that would materially
diminish their use of our portals. The loss of all or a substantial portion of
business from any of these entities would harm our business and financial
condition.


OUR BUSINESS WITH VARIOUS GOVERNMENT ENTITIES OFTEN REQUIRES SPECIFIC GOVERNMENT
LEGISLATION TO BE PASSED FOR US TO INITIATE AND MAINTAIN OUR GOVERNMENT
CONTRACTS

        Because our business includes the execution of contracts with
governments under which we receive a portion of user fees charged to businesses
and citizens, it is often necessary for governments to draft and adopt specific
legislation before the government can circulate an RFP to which we can respond.

                                       9
<PAGE>

Furthermore, the maintenance of our government contracts requires the continued
acceptance of enabling legislation and any implementing regulations. In the
past, various entities that use the portals we operate to obtain government
products and services have challenged the authority of governments to
electronically provide these products and services exclusively through portals
like those we operate. A successful challenge in the future could result in a
proliferation of alternative ways to obtain these products and services, which
would harm our business, results of operations and financial condition. The
repeal or modification of any enabling legislation would also harm our business,
results of operations and financial condition.


BECAUSE WE RELY ON A CONTRACTUAL BIDDING PROCESS WHOSE PARAMETERS ARE
ESTABLISHED BY GOVERNMENTS, THE LENGTH OF OUR SALES CYCLES IS UNCERTAIN AND CAN
LEAD TO REVENUE SHORTFALLS

        Our dependence on a bidding process to initiate new projects, the
parameters of which are established by governments, results in uncertainty in
our sales cycles because the duration and the procedures for each bidding
process vary significantly according to each government entity's policies and
procedures. The time between the date of initial contact with a government for a
bid and the award of the bid may range from as little as 180 days to up to 36
months. The bidding process is subject to factors over which we have little or
no control, including:


        - political acceptance of the concept of government agencies contracting
          with third parties to distribute public information, which has been
          offered traditionally only by the government agencies often without
          charge;


        - the internal review process by the government agencies for bid
          acceptance;

        - the need to reach a political accommodation among various interest
          groups;

        - changes to the bidding procedure by the government agencies;

        - changes to state legislation authorizing government's contracting with
          third parties to distribute public information;

        - changes in government administrations;

        - the budgetary restrictions of government entities;

        - the competition generated by the bidding process; and

        - the possibility of cancellation or delay by the government entities.

        Any delay in the bidding process, changes to the bidding practices and
policies, the failure to receive the bid or the failure to execute a contract
may disrupt our financial results for a particular period and harm our business
and financial condition.

ENTRANCE OF POTENTIAL COMPETITORS INTO THE MARKETPLACE COULD HARM OUR ABILITY TO
MAINTAIN OR IMPROVE OUR POSITION IN THE MARKET


        Many companies exist that provide one or more parts of the solution we
offer. In most cases, the principal substitute for our services is a
government-designed and managed solution that integrates other vendors'
technologies, products and services. Companies that have expertise in marketing
and providing technical solutions to government entities may begin to compete
with us by further developing their services and increasing their focus on this
piece of their business and market shares. Examples of companies that may
compete with us are the following:


        - large systems integrators, including American Management Systems, Inc.
          and Sapient Corporation;

                                       10
<PAGE>
        - traditional consulting firms, including International Business
          Machines Corporation and Science Applications International
          Corporation; and

        - Web service companies, including USWeb/CKS, AppNet Systems, Inc. and
          Verio Inc.


        Many of our potential competitors are national or international in scope
and may have greater resources than we do. These resources could enable our
potential competitors to initiate severe price cuts or take other measures in an
effort to gain market share. Additionally, in some geographic areas, we may face
competition from smaller consulting firms with established reputations and
political relationships with potential government partners. If we do not compete
effectively or if we experience any pricing pressures, reduced margins or loss
of market share resulting from increased competition, our business and financial
condition may be harmed.



THE SEASONALITY OF USE FOR SOME OF OUR ELECTRONIC GOVERNMENT PRODUCTS AND
SERVICES MAY HARM OUR FOURTH QUARTER RESULTS OF EACH CALENDAR YEAR



        The use of some of our electronic government products and services is
seasonal, particularly the accessing of drivers' records, resulting in lower
revenues in the fourth quarter of each calendar year, due to the smaller number
of business days in this quarter and a lower volume of government-to-business
and government-to-citizen transactions during the holiday period. As a result,
seasonality is likely to cause our quarterly results to fluctuate, which could
harm our business and financial condition and could harm the trading price of
our common stock.


THE UNPREDICTABILITY OF OUR QUARTER-TO-QUARTER RESULTS MAY HARM THE TRADING
PRICE OF OUR COMMON STOCK


        Our future revenues and operating results may vary significantly from
quarter to quarter due to a number of factors, many of which are outside of our
control, and any of which may harm our business. These factors include:


        - the commencement, completion or termination of contracts during any
          particular quarter;


        - the introduction of new electronic government products and services by
          us or our competitors;


        - technical difficulties or system downtime affecting the Internet
          generally or the operation of our electronic government products and
          services; and

        - the amount and timing of operating costs and capital expenditures
          relating to the expansion of our business operations and
          infrastructure.


        Due to the factors noted above, our revenues in a particular quarter may
be lower than we anticipate and if we are unable to reduce spending in that
quarter, our operating results for that quarter may be harmed. You should not
rely on quarter-to-quarter comparisons of our results of operations as an
indication of future performance. It is possible that in some future periods our
results of operations may be below the expectations of public market analysts
and investors. If this occurs, the price of our common stock may decline.



WE MAY LOSE THE RIGHT TO THE CONTENT DISTRIBUTED THROUGH OUR GOVERNMENT PORTALS,
WHICH IS PROVIDED TO US ENTIRELY BY GOVERNMENT ENTITIES



        We do not own or create the content distributed through our government
portals. We depend on the governments with which we contract to supply
information and data feeds to us on a timely basis to allow businesses and
citizens to complete transactions and obtain government information. We cannot
assure you that these data sources will continue to be available in the future.
Government entities could terminate their contracts to provide data. Changes in
regulations could mean that governments no longer collect some types of data, or
that the data is protected by more stringent privacy rules preventing uses


                                       11
<PAGE>

now made of it. Moreover, our data sources are not always subject to exclusive
agreements, so that data included in our products and services also may be
included in those of our potential competitors. In addition, we are dependent
upon the accuracy and reliability of government computer systems and data
collection for the content of our portals. The loss or the unavailability of our
data sources in the future, or the loss of our exclusive right to distribute
some of the data sources, would harm our business, operating results and
financial condition.



IF WE FAIL TO COORDINATE OR EXPAND OUR OPERATIONAL PROCEDURES AND CONTROLS, WE
MAY NOT EFFECTIVELY MANAGE OUR GROWTH



        Our growth rate may increase rapidly in response to the acceptance of
our products and services under new or existing government contracts. If we
cannot manage our growth effectively, we may not be able to coordinate the
activities of our technical, accounting, and marketing staffs, and our business
could be harmed. We intend to plan for the acceptance of new bids by a number of
governmental entities so that we may be ready to begin operations as soon as
possible after acceptance of a bid. As part of this plan of growth, we must
implement new operational procedures and controls to expand, train and manage
our employees and to coordinate the operations of our various subsidiaries. If
we acquire new businesses, we also may have difficulties integrating new
operations, technologies and personnel. If we cannot manage the growth of our
government portals, staff, offices and operations, our business may be harmed.



WE MAY BE UNABLE TO HIRE, INTEGRATE OR RETAIN QUALIFIED PERSONNEL


        The recent growth in our business has resulted in an increase in the
responsibilities for both existing and new management personnel. Many of our
personnel are presently serving in both an executive capacity and as general
managers of our government portals. The loss of any of our executives,
particularly Jeffery S. Fraser, our Chief Executive Officer, and James B. Dodd,
our President and Chief Operating Officer, would likely harm our business.


        In addition, we expect that we will need to hire additional personnel in
all areas in 1999, including general managers for new operations in
jurisdictions in which we obtain contracts. Competition for personnel in the
Internet industry is intense. We may not be able to retain our current key
employees or attract, integrate or retain other qualified employees in the
future. If we do not succeed in attracting new personnel or integrating,
retaining and motivating our current personnel, our business could be harmed. In
addition, new employees generally require substantial training in the
presentation, policies and positioning of our government portals. This training
will require substantial resources and management attention.



TO BE SUCCESSFUL, WE MUST DEVELOP AND MARKET COMPREHENSIVE, EFFICIENT,
COST-EFFECTIVE AND SECURE ELECTRONIC ACCESS TO PUBLIC INFORMATION AND NEW
PRODUCTS AND SERVICES


        Our success depends in part upon our ability to attract a greater number
of Internet users to access public information electronically by delivering a
comprehensive composite of public information and an efficient, cost-effective
and secure method of electronic access and transactions. Moreover, in order to
increase revenues in the future, we must continue to develop products and
services that businesses and citizens will find valuable, and there is no
guarantee that we will be able to do so. If we are unable to develop products
and services that allow us to attract, retain and expand our current user base,
our revenues and future operating results may be harmed. We cannot assure you
that the products and services we offer will appeal to a sufficient number of
Internet users to generate continued revenue growth. Our ability to attract
Internet users to our government portals depends on several factors, including:

        - the comprehensiveness of public records available through our
          government portals;

        - the perceived efficiency and cost-effectiveness of accessing public
          records electronically;

                                       12
<PAGE>
        - the effectiveness of security measures; and

        - the increased usage and continued reliability of the Internet.


DEFICIENCIES IN OUR PERFORMANCE UNDER A GOVERNMENT CONTRACT COULD RESULT IN
CONTRACT TERMINATION, REPUTATIONAL DAMAGE OR FINANCIAL PENALTIES



        Each government entity with which we contract has the authority to
require an independent audit of our performance. The scope of audits could
include inspections of income statements, balance sheets, fee structures,
collections practices, service levels and our compliance with applicable laws,
regulations and standards. We cannot assure you that a future audit will not
find any material performance deficiencies that would result in an adjustment to
our revenues. Moreover, the consequent negative publicity could harm our
reputation among other governments with which we would like to contract. All of
these factors could harm our business, results of operations and financial
condition.


BECAUSE WE HAVE A LIMITED OPERATING HISTORY AS A CONSOLIDATED COMPANY, IT MAY BE
DIFFICULT TO EVALUATE OUR BUSINESS AND PROSPECTS


        In March 1998, we completed an exchange offer through which we
consolidated our individual business units that deliver our electronic
government services into our present company as subsidiaries. Accordingly, we
only have a limited operating history as a consolidated company on which to base
an evaluation of our business and prospects. You must consider our business in
the light of the risks, expenses and problems frequently encountered by
companies like us, particularly recently consolidated companies in new and
rapidly evolving markets like the Internet. These risks include whether we will
be able to take advantage of economies of scale for the following:


        - cost-effective use of our company-wide managerial and administrative
          resources;

        - efficient allocation of operating and financial resources among the
          individual business units;

        - efficient integration of new marketing and sales strategies and
          technological improvements among the individual business units; and

        - the addition of new business units without overburdening our current
          management and operational resources.


        We may not be able to successfully address these risks and as a result
our business, operating results and financial condition may be harmed.



WE MAY BE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS


        We rely on a combination of nondisclosure and other contractual
arrangements with governments, our employees and third parties, and privacy and
trade secret laws to protect and limit the distribution of the proprietary
applications, documentation and processes we have developed in connection with
the electronic government products and services we offer. If we fail to
adequately protect our intellectual property rights and proprietary information
or if we become involved in litigation relating to our intellectual property
rights and proprietary technology, our business could be harmed. Any actions we
take may not be adequate to protect our proprietary rights and other companies
may develop technologies that are similar or superior to our proprietary
technology.


        Additionally, it is possible that we could in the future become subject
to claims alleging infringement of third party intellectual property rights. Any
claims could subject us to costly litigation, and may require us to pay damages
and develop non-infringing intellectual property or acquire licenses to the
intellectual property that is the subject of the alleged infringement.
Additionally, licenses may not be available on acceptable terms or at all.


                                       13
<PAGE>

UPON THE COMPLETION OF THE INITIAL TERM OF OUR GOVERNMENT CONTRACTS, GOVERNMENTS
OBTAIN A PERPETUAL RIGHT OF USE LICENSE TO OUR SOFTWARE PROGRAMS AND OTHER
APPLICATIONS



        After termination of our contracts, it is possible that governments and
their successors and affiliates may use their right of use license rights to the
software programs and other applications we have developed for them in the
operation of their portals to launch competing services. Inadvertently, they
also may allow our intellectual property or other information to fall into the
hands of third parties, including our competitors.


WE MAY NEED MORE WORKING CAPITAL TO EXPAND OUR BUSINESS


        We anticipate that our current cash resources, combined with the net
proceeds from this offering, will be sufficient to meet our present working
capital and capital expenditure requirements for the next 18 months following
the date of this prospectus. However, we may need to raise additional capital
before this period ends to do the following:


        - support our expansion into other states, cities, municipalities,
          federal agencies and internationally;

        - respond to competitive pressures; and

        - acquire complementary businesses or technologies.


        Our future liquidity and capital requirements will depend upon numerous
factors, including the success of our existing and new product and service
offerings and potentially competing technological and market developments. We
may be required to raise additional funds through public or private financing,
strategic relationships or other arrangements. We cannot assure you that such
additional funding, if needed, will be available on terms acceptable to us, or
at all. If adequate funds are not available on acceptable terms, our ability to
develop or enhance our products and services, take advantage of future
opportunities or respond to competitive pressures would be significantly
limited. This limitation could harm our business, operating results and
financial condition.



WE MAY BE UNABLE TO INTEGRATE NEW TECHNOLOGIES AND INDUSTRY STANDARDS
EFFECTIVELY


        Our future success will depend on our ability to enhance and improve the
responsiveness, functionality and features of our products and services in
accordance with industry standards and to address the increasingly sophisticated
technological needs of our customers on a cost-effective and timely basis. Our
ability to remain competitive will depend, in part, on our ability to:

        - enhance and improve the responsiveness, functionality and other
          features of the government portals we offer;

        - continue to develop our technical expertise;

        - develop and introduce new services, applications and technology to
          meet changing customer needs and preferences; and

        - influence and respond to emerging industry standards and other
          technological changes in a timely and cost-effective manner.

        We cannot assure you that we will be successful in responding to the
above technological and industry challenges in a timely and cost-effective
manner. If we are unable to integrate new technologies and industry standards
effectively, our results of operations could be harmed.

                                       14
<PAGE>

                     RISKS TYPICAL OF THE INTERNET INDUSTRY



IF THE INTERNET INFRASTRUCTURE FAILS TO DEVELOP OR BE ADEQUATELY MAINTAINED, OUR
BUSINESS WOULD BE HARMED BECAUSE USERS MAY NOT BE ABLE TO ACCESS OUR GOVERNMENT
PORTALS



        Our success depends on the increase in Internet usage generally and in
particular as a means to access public information electronically. This in part
requires the development and maintenance of the Internet infrastructure. If this
infrastructure fails to develop or be adequately maintained, our business would
be harmed because users may not be able to access our government portals. Among
other things, this development and maintenance will require a reliable network
backbone with the necessary speed, data capacity, security and timely
development of complementary products for providing reliable Internet access and
services.


        The Internet has experienced, and is expected to continue to experience,
significant growth in the number of users and amount of traffic. If the Web
continues to experience increased numbers of users, frequency of use or
increased bandwidth requirements, the Internet infrastructure may not be able to
support these increased demands or perform reliably. The Internet has
experienced a variety of outages and other delays as a result of damage to
portions of its infrastructure, and could face such outages and delays in the
future. These outages and delays could reduce the level of Internet usage and
traffic on our government portals. In addition, the Internet could lose its
viability due to delays in the development or adoption of new standards and
protocols to handle increased levels of activity or due to increased
governmental regulation. If the Internet infrastructure is not adequately
developed or maintained, use of our government portals may be reduced.


WE MAY BE HELD LIABLE FOR CONTENT THAT WE OBTAIN FROM GOVERNMENT AGENCIES



        Because we aggregate and distribute sometimes private and sensitive
public information over the Internet, we may face potential liability for
defamation, negligence, invasion of privacy and other claims based on the nature
and content of the material that is published on our government portals. Most of
the agreements through which we obtain consent to disseminate this information
do not contain indemnity provisions in our favor. These types of claims have
been brought, sometimes successfully, against online services and Web sites in
the past. We cannot assure you that the general liability insurance will be
adequate to indemnify us for all liability that may be imposed. Any liability
that is not covered by our insurance or is in excess of our insurance coverage
could severely harm our business operations and financial conditions.


CONCERNS OVER TRANSACTIONAL SECURITY MAY HINDER THE GROWTH OF OUR BUSINESS

        A significant barrier to electronic commerce is the secure transmission
of confidential information over public networks. Any breach in our security
could expose us to a risk of loss or litigation and possible liability. We rely
on encryption and authentication technology licensed from third parties to
provide secure transmission of confidential information. As a result of advances
in computer capabilities, new discoveries in the field of cryptography or other
developments, a compromise or breach of the algorithms we use to protect
customer transaction data may occur. Because we provide information released
from various government entities, we may represent an attractive target for
security breaches.

        A compromise of our security or a perceived compromise of our security
could severely harm our business. A party who is able to circumvent our security
measures could misappropriate proprietary information, including customer credit
card information, or cause interruptions or incur direct damage to our
government portals. Also, should hackers obtain sensitive data and information,
or create bugs or viruses in an attempt to sabotage the functionality of our
products and services, we may receive negative publicity, incur liability to our
customers or lose the confidence of the governments with which we contract, any
of which may cause the termination or modification of our government contracts.

                                       15
<PAGE>
        We may be required to expend significant capital and other resources to
protect against the threat of security breaches or to alleviate problems caused
by these breaches. However, protection may not be available at a reasonable
price or at all.

GOVERNMENTAL REGULATION OF THE INTERNET MAY RESTRICT THE OPERATION AND GROWTH OF
OUR BUSINESS

        There are currently few laws or regulations that specifically regulate
communications or commerce on the Internet. Laws and regulations may be adopted
in the future, however, that address these issues including user privacy,
pricing, and the characteristics and quality of products and services. An
increase in regulation or the application of existing laws to the Internet could
significantly increase our cost of operations and harm our business. For
example, the Federal Communications Commission may, in the future, reconsider
its ruling that Internet access service is not "telecommunications" and may
decide that Internet service providers must pay a percentage of their gross
revenues as a "universal service contribution." If the Federal Communications
Commission were to require universal service contributions from providers of
Internet access or Internet backbone services, our costs of doing business may
increase, and we may not be able to recover these costs from our customers. As a
result, our business and financial condition could be harmed.

OUR BUSINESS MAY BE NEGATIVELY AFFECTED BY YEAR 2000 ISSUES


        We cannot assure you that the software systems that we use for portal
management, network monitoring, quality assurance, applications and information
and transaction processing do not contain undetected errors or defects
associated with Year 2000 data functions. Further, we cannot assure you that our
network systems acquired from third parties do not contain undetected errors or
defects. If any such errors or defects do exist, we may incur material costs to
resolve them.



        Because our products and services depend significantly on information
provided by and transactions conducted with our government partners, our ability
to deliver services and transactions properly to our customers depends on these
government partners being Year 2000 ready. We cannot assure you that our
government partners are Year 2000 ready. If they are not, their information
systems may be disrupted and our ability to provide services and transactions
curtailed. Our business, results of operations and financial condition would be
harmed as a result.



        In addition, the software and systems of financial institutions, utility
companies, Internet access companies, third-party service providers and others
outside of our control may not be Year 2000 ready. If these entities are not
Year 2000 ready, a systemic failure beyond our control could result, including a
prolonged Internet, telecommunications or general electrical failure. This type
of failure would make it difficult or impossible to use the Internet or access
our government portals. If a prolonged failure of this type occurs, our business
and financial condition would be harmed.



OUR SYSTEMS MAY FAIL OR LIMIT USER TRAFFIC



        Our communications hardware and computer hardware operations for
delivering our electronic government services are located individually in each
state or city where we provide those services. We cannot assure you that during
the occurrence of fire, floods, earthquakes, power loss, telecommunications
failures, break-ins and similar events that the modem banks and direct dial-up
connections we have to serve as back-up systems will not prevent damage to our
systems or cause interruptions to our services. Computer viruses, electronic
break-ins or other similar disruptive problems could cause users to stop
visiting our government portals and could cause our clients to terminate
agreements with us. If any of these circumstances occurred, our business could
be harmed. Our insurance policies may not adequately compensate us for any
losses that may occur due to any failures of or interruptions in our systems.



        Our government portals must accommodate a high volume of traffic and
deliver frequently updated information. These government portals may experience
interruptions due to any failure or delay by government agencies in the
transmission or receipt of this information. Due to holidays and technical
problems with state computer systems, our Web sites have experienced slower
response times or decreased


                                       16
<PAGE>

traffic in the past and may experience the same incidents in the future. In
addition, our users depend on Internet service providers, online service
providers and other Web site operators for access to our government portals.
Many of these providers and operators have experienced significant outages in
the past due to system failures unrelated to our systems, holidays and heavy
user traffic, and could experience the same outages, delays and other
difficulties in the future. Any of these system failures could harm our
business, results of operations and financial condition.



                       RISKS PARTICULAR TO THIS OFFERING



OUR EXECUTIVE OFFICERS, DIRECTORS AND MAJOR SHAREHOLDERS WILL RETAIN SIGNIFICANT
CONTROL OVER US AFTER THIS OFFERING, WHICH WILL ALLOW THEM TO INFLUENCE THE
OUTCOME OF MATTERS SUBMITTED TO SHAREHOLDERS FOR APPROVAL



        After this offering, executive officers, directors and holders of 5% or
more of our outstanding common stock will, in the aggregate, own approximately
75.2% of our outstanding common stock. In addition, as of March 31, 1999,
31,896,145 shares of our outstanding common stock have been placed in a voting
trust, representing approximately 75.1%% of our outstanding common stock prior
to this offering. The voting trust is selling 1,500,000 shares of common stock
in this offering, which will reduce the number of shares it holds to 30,396,145,
or approximately 57.9% of our outstanding common stock. The trustees of this
voting trust are Messrs. Fraser and Hartley, both of whom serve as directors of
our company. As a result, Messrs. Fraser and Hartley have, among other rights,
the ability to control the election of directors and approve corporate actions
that must be submitted for a vote of shareholders.


        The interests of these affiliates may conflict with the interests of
other shareholders, and the actions they take or approve may be contrary to
those desired by the other shareholders. This concentration of ownership may
also have the effect of delaying, preventing or deterring an acquisition of our
company by a third party.


OUR MANAGEMENT WILL RETAIN BROAD DISCRETION IN THE USE OF PROCEEDS FROM THIS
OFFERING AND MAY USE THE PROCEEDS IN WAYS THAT MAY NOT INCREASE OUR OPERATING
RESULTS OR MARKET VALUE



        We intend to use all of the net proceeds from the sale of the common
stock for increased marketing efforts, creation of new products and services,
further development of infrastructure, working capital, general corporate
purposes and potential acquisitions. However, our management will retain
significant flexibility in applying the net proceeds of this offering and may
use the proceeds in ways in which you do not agree. Until the proceeds are
needed, we plan to invest them in investment-grade, interest-bearing securities.
The failure of our management to apply such funds effectively could harm our
business.



THE SIGNIFICANT NUMBER OF SHARES OF COMMON STOCK THAT WILL BE ELIGIBLE FOR SALE
IN THE NEAR FUTURE MAY HARM THE MARKET PRICE OF OUR COMMON STOCK



        The market price of our common stock could drop as a result of sales of
a large number of shares of our common stock in the market after this offering,
or the perception that such sales could occur. These factors also could make it
more difficult for us to raise funds through future offerings of our common
stock.



        Based on the number of shares of common stock outstanding as of March
31, 1999, there will be 52,481,996 shares of common stock outstanding
immediately after this offering. All of the shares sold in this offering will be
freely transferable without restriction or further registration under the
Securities Act, except for shares purchased by our "affiliates" as defined in
Rule 144 of the Securities Act. Upon completion of this offering, 39,481,996
shares will be "restricted securities" as defined in Rule 144. These restricted
securities may be sold in the future without registration under the Securities
Act to the extent permitted under Rule 144, Rule 701 or an exemption under the
Securities Act. In connection with this offering, holders of all shares of
restricted securities have agreed not to sell their shares without the prior
written consent of Hambrecht & Quist LLC for a period of 180 days from the date
of this prospectus.


                                       17
<PAGE>

        As of March 31, 1999, 2,512,332 shares of common stock were issuable
upon exercise of outstanding options. Of those options, options to purchase
     shares will be vested and fully exercisable 180 days after commencement of
this offering. In connection with this offering, holders of outstanding options
have agreed not to sell any shares of common stock they acquire as a result of
option exercises without the prior written consent of Hambrecht & Quist LLC for
a period of 180 days from the date of this prospectus, subject to exceptions for
holders whose employment terminates during the 180 day period.



OUR STOCK PRICE, LIKE THAT OF OTHER INTERNET COMPANIES, MAY BE VOLATILE



        The market price of our common stock is likely to be highly volatile.
Our stock price could fluctuate in response to a variety of factors, including:



        - actual or anticipated variations in quarterly operating results;



        - announcements of new contracts or applications;



        - changes in financial estimates by securities analysts; and



        - other events or factors that may be beyond our control.



        The stock market has experienced significant price and volume
fluctuations and the market prices of securities of technology companies,
particularly Internet-related companies, have been highly volatile, often
unrelated to the operating performance of such companies. Investors may not be
able to resell their shares of our common stock at or above the initial public
offering price. In the past, securities class action litigation has often been
instituted against a company following periods of volatility in the company's
stock price. This type of litigation could result in substantial costs and could
divert our management's attention and resources.


INVESTORS IN THIS OFFERING WILL SUFFER IMMEDIATE DILUTION AND A DISPARITY IN
STOCK PURCHASE PRICE


        The initial public offering price is expected to be substantially higher
than the pro forma net tangible book value per share of the outstanding common
stock immediately after the offering. Accordingly, purchasers of common stock in
this offering will experience immediate and substantial dilution of
approximately $8.26 in net tangible book value per share, or approximately 82.6%
of the assumed offering price of $10.00 per share. In contrast, existing
shareholders paid an average price of $0.11 per share. Investors will incur
additional dilution upon the exercise of outstanding stock options and warrants.
Furthermore, any additional equity financing may be dilutive to shareholders and
debt financing, if available, may involve restrictive covenants, which may limit
our operating flexibility with respect to certain business matters. If
additional funds are raised through the issuance of equity securities, the
percentage ownership of our shareholders will be reduced. Shareholders may
experience additional dilution in net book value per share and such equity
securities may have rights, preferences and privileges senior to those of the
holders of our common stock.


ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS COULD PREVENT OR DELAY A
CHANGE OF CONTROL AND, AS A RESULT, NEGATIVELY IMPACT OUR SHAREHOLDERS


        Our articles of incorporation provide that our board of directors may
not for a period of three years engage in a business combination with an
interested shareholder unless the business combination is approved in a
prescribed manner. Furthermore, our bylaws limit the ability of shareholders to
raise matters at a meeting of shareholders without giving advance notice. The
anti-takeover provisions in our articles of incorporation and bylaws may have
the effect of delaying, deterring or preventing changes in control or management
of our company, even if such change in control or management would be beneficial
to shareholders. These provisions also could limit the price that some investors
might be willing to pay in the future for shares of our common stock.


                                       18
<PAGE>
                           FORWARD-LOOKING STATEMENTS


        This prospectus contains forward-looking statements that involve risks
and uncertainties, which may include statements about our:



        - business strategy;



        - plans for hiring additional personnel;



        - plans for entering into agreements with states to create, develop and
          manage government portals;



        - plans for the introduction of new electronic government products and
          services;



        - anticipated sources of funds, including the proceeds from this
          offering, to fund our operations for the 18 months following the date
          of this prospectus; and



        - plans, objectives, expectations and intentions contained in this
          prospectus that are not historical facts.


        When used in this prospectus, the words "expects," "anticipates,"
"intends," "plans," "believes," "seeks," "estimates" and similar expressions are
generally intended to identify forward-looking statements. In addition, this
prospectus includes statistical data about the Internet that comes from
information published by sources including International Data Corporation and
Forrester Research. Because these forward-looking statements involve risks and
uncertainties, actual results could differ materially from those expressed or
implied by these forward-looking statements for a number of reasons, including
those discussed under "Risk Factors" and elsewhere in this prospectus. We assume
no obligation to update any forward-looking statements.

                                       19
<PAGE>
              HOW WE INTEND TO USE THE PROCEEDS FROM THE OFFERING


        We estimate that we will receive net proceeds of $89,900,000 from the
sale of the 10,000,000 shares of common stock offered by us in this offering,
assuming an initial public offering price of $10.00 per share and after
deducting the estimated underwriting discounts and offering expenses. We will
not receive any of the proceeds from the sale of shares by the selling
shareholders.


        While we cannot predict with certainty how the proceeds of this offering
will be used, we currently intend to use them as follows:

        - to increase our new market development efforts;

        - to increase marketing efforts aimed at raising transaction volume;

        - to create new products and services; and


        - to further develop common infrastructure and operating platforms.


        We expect to use the remaining net proceeds from this offering for
working capital and other general corporate purposes. In addition, although we
are not currently participating in any active negotiations and have no
commitments or agreements with respect to any acquisition, we might in the
future use a portion of the remaining proceeds to pay for acquisitions.

        Pending these uses, the net proceeds of this offering will be invested
in short-term, investment-grade, interest-bearing investments or accounts.

        The amounts we actually spend for these purposes may vary significantly
and will depend on a number of factors, including our future revenue and cash
generated by operations and the other factors described under "Risk Factors."
Therefore, we will have broad discretion in the way we use the net proceeds. See
"Risk Factors--Our management will retain broad discretion in the use of
proceeds from this offering and may use the proceeds in ways in which you do not
agree" for more information.

                                DIVIDEND POLICY

        Other than dividends paid while we were a corporation formed under
Subchapter S of the Internal Revenue Code, we have never declared or paid any
cash dividends on shares of our common stock. We intend to retain any future
earnings for future growth and do not anticipate paying any cash dividends in
the foreseeable future.

                                       20
<PAGE>
                                 CAPITALIZATION

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

        - on an actual basis, giving effect to our reincorporation in Colorado
          in April 1999 and an increase in our authorized shares of common stock
          in May 1999; and


        - as adjusted to give effect to the receipt of the estimated net
          proceeds from the sale of 10,000,000 shares of common stock offered by
          us in this offering at an assumed initial public offering price of
          $10.00 per share, after deducting underwriting discounts and
          commissions and estimated offering expenses.


        The number of shares of common stock to be outstanding after this
offering is based on the number of shares outstanding as of March 31, 1999 and
does not include the following:


        - 2,512,332 shares of common stock subject to options issued at a
          weighted average exercise price of $1.44 per share granted under our
          1998 stock option plan; or



        - 9,026,808 shares of common stock reserved for future issuance under
          our 1998 stock option plan and our 1999 employee stock purchase plan.


        The information below is qualified by, and should be read in conjunction
with, our financial statements and the notes to those statements appearing at
the end of this prospectus.


<TABLE>
<CAPTION>
                                                                                                MARCH 31, 1999
                                                                                           ------------------------
                                                                                             ACTUAL     AS ADJUSTED
                                                                                           -----------  -----------
                                                                                                (IN THOUSANDS)
<S>                                                                                        <C>          <C>
Capital lease obligations-- long-term portion............................................   $     384    $     384
                                                                                           -----------  -----------
Shareholders' equity:
Common stock, no par value; 200,000,000 shares authorized; 42,481,996 shares issued and
  outstanding, actual; 52,481,996 shares issued and outstanding, as adjusted.............   $      --    $      --
Additional paid-in capital...............................................................      22,435      112,335
Accumulated deficit......................................................................      (9,125)      (9,125)
                                                                                           -----------  -----------
                                                                                               13,310      103,210
Less other...............................................................................      (3,523)      (3,523)
                                                                                           -----------  -----------
Total shareholders' equity...............................................................   $   9,787    $  99,687
                                                                                           -----------  -----------
Total capitalization.....................................................................   $  10,171    $ 100,071
                                                                                           -----------  -----------
                                                                                           -----------  -----------
</TABLE>


                                       21
<PAGE>
                                    DILUTION


        As of March 31, 1999, our actual net tangible book value was
approximately $1.33 million or $.03 per share. Actual net tangible book value
per share represents the amount of total actual tangible assets less total
actual liabilities, divided by the shares of common stock outstanding as of
March 31, 1999. After giving effect to the sale of the 10,000,000 shares of
common stock we are offering, after deducting the underwriting discount and
estimated offering expenses, our adjusted net tangible book value as of March
31, 1999 would have been $91.23 million, or $1.74 per share. This represents an
immediate increase in as adjusted net tangible book value of $1.71 per share to
existing shareholders and an immediate dilution of $8.26 per share to new
investors. The following table illustrates this per share dilution:



<TABLE>
<S>                                                                       <C>          <C>
Assumed public offering price per share.................................                $   10.00
    Net tangible book value per share as of March 31, 1999..............   $     .03
    Increase per share attributable to new investors....................        1.71
                                                                               -----
As adjusted net tangible book value per share after the offering........                     1.74
                                                                                       -----------
Dilution per share to new investors.....................................                     8.26
                                                                                       -----------
                                                                                       -----------
</TABLE>


        The following table sets forth, on a pro forma basis, as of March 31,
1999 the difference between the number of shares of common stock purchased, the
total consideration paid and the average price per share paid by the existing
shareholders and the new investors purchasing shares of common stock in this
offering:


<TABLE>
<CAPTION>
                  SHARES PURCHASED      TOTAL CONSIDERATION
                --------------------  ------------------------   AVERAGE PRICE
                 NUMBER     PERCENT     AMOUNT       PERCENT       PER SHARE
                ---------  ---------  -----------  -----------  ---------------
<S>             <C>        <C>        <C>          <C>          <C>
Existing
shareholders..  42,481,996      81.0% $ 4,645,071         4.4%     $    0.11
New
  investors...  10,000,000      19.0  100,000,000        95.6
                ---------  ---------  -----------       -----
    Total.....  52,481,996     100.0% $104,645,071      100.0%
                ---------  ---------  -----------       -----
                ---------  ---------  -----------       -----
</TABLE>



        The foregoing discussion and tables assume no exercise of any of the
2,512,332 stock options with a weighted average exercise price of $1.44
outstanding as of March 31, 1999.



        Sales by the selling shareholders to this offering will reduce the
number of shares of common stock held by existing shareholders to 39,481,996 or
approximately 75.2% (37,531,996 shares, or approximately 71.5%, if the
underwriters' over-allotment option is exercised in full) of the total number of
shares of common stock outstanding upon the closing of this offering and will
increase the number of shares held by new public investors to 13,000,000 or
approximately 24.8% (14,950,000 shares, or approximately 28.5%, if the
underwriters' over-allotment option is exercised in full) of the total number of
shares of common stock outstanding after this offering. See "Principal and
Selling Shareholders."


                                       22
<PAGE>
           SELECTED CONSOLIDATED ACTUAL AND PRO FORMA FINANCIAL DATA


        The following selected consolidated financial data should be read in
conjunction with our consolidated financial statements and their related notes,
our pro forma consolidated statements of operations and their related notes and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in this prospectus. No financial data is reported for 1994
as we had no meaningful operations during that year. The consolidated statement
of operations data for the year ended December 31, 1995 and the consolidated
balance sheet data as of December 31, 1995 and 1996 are unaudited and derived
from financial statements not included in this prospectus. The consolidated
statement of operations data for the years ended December 31, 1996, 1997 and
1998 and the consolidated balance sheet data as of December 31, 1997 and 1998
labeled "Actual" are derived from, and are qualified by reference to, our
audited financial statements included in this prospectus. The consolidated
statement of operations data for the years ended December 31, 1997 and 1998 and
the three month period ending March 31, 1998 labeled "Pro Forma" are unaudited
and derived from and qualified by reference to our pro forma consolidated
statements of operations and their related notes included in this prospectus.
The consolidated statement of operations data for the three month period ended
March 31, 1998 and 1999 and the consolidated balance sheet data as of March 31,
1999 labeled "Actual" are unaudited and derived from and qualified by reference
to our unaudited interim financial statements included in this prospectus.


<TABLE>
<CAPTION>
                                                                         YEAR ENDED DECEMBER 31,
                                               ----------------------------------------------------------------------------
                                                                                                            1998
                                                                                                 --------------------------
                                                 1995                           1997
                                               ---------             --------------------------
                                                            1996
                                                          ---------
                                                      ACTUAL           ACTUAL       PRO FORMA      ACTUAL       PRO FORMA
                                               --------------------  -----------  -------------  -----------  -------------
                                                                  (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                            <C>        <C>        <C>          <C>            <C>          <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
  Revenues...................................  $       3  $     236   $     996     $  24,382     $  28,624     $  36,532
  Cost of revenues...........................         --         21           5        18,410        21,211        27,394
                                               ---------  ---------  -----------  -------------  -----------  -------------
    Gross profit.............................          3        215         991         5,972         7,413         9,138
  Operating expenses:
    Service development and operations.......         --         38         224         1,309         3,885         4,327
    Selling, general and administrative......         12        168         660         3,122         4,242         5,087
    Stock compensation.......................         --         --         370           631           569           574
    Depreciation and amortization                     --          1          14         7,774         5,922         7,887
                                               ---------  ---------  -----------  -------------  -----------  -------------
      Total operating expenses...............         12        207       1,268        12,836        14,618        17,875
                                               ---------  ---------  -----------  -------------  -----------  -------------

  Operating income (loss)....................         (9)         8        (277)       (6,864)       (7,205)       (8,737)
                                               ---------  ---------  -----------  -------------  -----------  -------------
  Other income (expense):
    Interest expense.........................         --         --          --           (51)          (88)         (105)
    Other income (expense), net..............         --         --          --           (17)           56            71
                                               ---------  ---------  -----------  -------------  -----------  -------------
      Total other income (expense)...........         --         --          --           (68)          (32)          (34)
                                               ---------  ---------  -----------  -------------  -----------  -------------
  Income (loss) before income taxes..........         (9)         8        (277)       (6,932)       (7,237)       (8,771)
  Income tax expense (benefit)...............         --         --          --            --           659           659
                                               ---------  ---------  -----------  -------------  -----------  -------------
  Net income (loss)..........................  $      (9) $       8   $    (277)    $  (6,932)    $  (7,896)    $  (9,430)
                                               ---------  ---------  -----------  -------------  -----------  -------------
                                               ---------  ---------  -----------  -------------  -----------  -------------
  Net income (loss) per share:
    Basic and diluted........................  $   (0.47) $    0.00   $   (0.01)    $   (0.17)    $   (0.21)    $   (0.22)
                                               ---------  ---------  -----------  -------------  -----------  -------------
                                               ---------  ---------  -----------  -------------  -----------  -------------
  Weighted average shares outstanding........         19      6,005      20,858        40,113        37,242        41,950

<CAPTION>
                                                            THREE MONTHS
                                                           ENDED MARCH 31,
                                               ---------------------------------------

                                                          1998                1999
                                               --------------------------  -----------

                                                 ACTUAL       PRO FORMA      ACTUAL
                                               -----------  -------------  -----------

<S>                                            <C>          <C>            <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
  Revenues...................................   $     361     $   8,270     $  11,455
  Cost of revenues...........................           1         6,184         8,604
                                               -----------  -------------  -----------
    Gross profit.............................         360         2,086         2,851
  Operating expenses:
    Service development and operations.......         135           577           935
    Selling, general and administrative......         325         1,171         1,518
    Stock compensation.......................          --             5         1,699
    Depreciation and amortization                      24         1,988         2,001
                                               -----------  -------------  -----------
      Total operating expenses...............         484         3,741         6,153
                                               -----------  -------------  -----------
  Operating income (loss)....................        (124)       (1,655)       (3,302)
                                               -----------  -------------  -----------
  Other income (expense):
    Interest expense.........................          --           (17)          (37)
    Other income (expense), net..............          --            15            17
                                               -----------  -------------  -----------
      Total other income (expense)...........          --            (3)          (20)
                                               -----------  -------------  -----------
  Income (loss) before income taxes..........        (124)       (1,658)       (3,322)
  Income tax expense (benefit)...............          --            --           (23)
                                               -----------  -------------  -----------
  Net income (loss)..........................   $    (124)    $  (1,658)    $  (3,299)
                                               -----------  -------------  -----------
                                               -----------  -------------  -----------
  Net income (loss) per share:
    Basic and diluted........................   $   (0.01)    $   (0.04)    $   (0.08)
                                               -----------  -------------  -----------
                                               -----------  -------------  -----------
  Weighted average shares outstanding........      22,679        41,934        42,243
</TABLE>


<TABLE>
<CAPTION>
                                                                                                 DECEMBER 31,
                                                                                     -------------------------------------
                                                                                        1995         1996         1997
                                                                                     -----------  -----------  -----------
                                                                                       ACTUAL       ACTUAL       ACTUAL
                                                                                     -----------  -----------  -----------
                                                                                                (IN THOUSANDS)
<S>                                                                                  <C>          <C>          <C>
CONSOLIDATED BALANCE SHEET DATA:
  Cash.............................................................................   $            $            $     179

  Total assets.....................................................................          14          110          326
  Bank lines of credit.............................................................                                    --
  Long-term debt (includes current portion of notes payable/capital lease
    obligations)...................................................................          --           --           30
  Total shareholders' equity.......................................................         (15)          95          188

<CAPTION>
                                                                                                    MARCH 31,
                                                                                                  -------------

                                                                                        1998          1999
                                                                                     -----------  -------------
                                                                                       ACTUAL        ACTUAL
                                                                                     -----------  -------------

<S>                                                                                  <C>          <C>
CONSOLIDATED BALANCE SHEET DATA:
  Cash.............................................................................   $   1,311     $   1,115
  Total assets.....................................................................      17,249        16,633
  Bank lines of credit.............................................................       1,024           839
  Long-term debt (includes current portion of notes payable/capital lease
    obligations)...................................................................         745         1,179
  Total shareholders' equity.......................................................      10,912         9,787
</TABLE>


                                       23
<PAGE>
   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                                   OPERATIONS


        THE FOLLOWING MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH OUR
FINANCIAL STATEMENTS AND THE RELATED NOTES APPEARING AT THE END OF THIS
PROSPECTUS. OUR DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS BASED UPON
CURRENT EXPECTATIONS THAT INVOLVE RISKS AND UNCERTAINTIES, SUCH AS OUR PLANS,
OBJECTIVES, EXPECTATIONS AND INTENTIONS. ACTUAL RESULTS AND THE TIMING OF EVENTS
COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING
STATEMENTS AS A RESULT OF A NUMBER OF FACTORS, INCLUDING THOSE SET FORTH UNDER
"RISK FACTORS," "BUSINESS" AND ELSEWHERE IN THIS PROSPECTUS.


OVERVIEW


        We are the leading provider of Internet-based electronic government
services that help governments reduce costs and provide a higher level of
service to businesses and citizens. We form partnerships with governments and on
their behalf design, build and operate Internet-based portals that allow
businesses and citizens to complete transactions and obtain government
information online. We typically enter into three to five year contracts with
our government partners and manage operations for each partnership through
separate subsidiaries that operate as decentralized business units with a high
degree of autonomy. Under these contracts, each business unit focuses solely on
providing a comprehensive electronic government solution for that partner, and
receives a share of the revenue the partner generates through its portal while
the contract is in effect. In our government partnerships with Georgia and Iowa,
we provide consulting, development and management services for these government
portals predominantly under a fixed-price model. By establishing a local
business unit for each government partner, we have been able to develop a
management culture and incentive system that focuses on locally-based service
that distinguishes us from divisions of larger traditional technology providers.



        We were founded in 1991 when our first business unit was selected to
provide electronic government services in Kansas under a public/private
partnership model. Since then, we have formed partnerships and created business
units to serve the eight states of Arkansas, Georgia, Indiana, Iowa, Kansas,
Maine, Nebraska and Virginia, and one city-county government, the City of
Indianapolis and Marion County, Indiana. We have been selected by the state of
Utah to provide our electronic government services and have entered into a
contract with the state of Utah for our software.



        In 1997, we contracted with one of our government partners to develop,
for a fixed fee, back-office database management software which would enable
improved electronic filing, storage, management and distribution of Uniform
Commercial Code (UCC) and other corporate records. We formed a separate
application development division to develop, maintain and implement the core
technology for these applications, and subsequently entered into development
contracts with four additional states to implement similar back-office software.


EXCHANGE OFFER


        Starting with the partnership with the State of Kansas, our founders
established a separate S corporation for business conducted within each state
where they were awarded a public/private partnership contract. On March 31,
1998, we completed an exchange offer to combine our business units, which
previously operated as five separate affiliated companies, into one consolidated
company with each business unit as a subsidiary of our company. The exchange
offer was accounted for using the purchase accounting method. The $17.3 million
excess of the fair market value over the net book value of the acquired business
units has been partially allocated to intangible assets that relate to our
existing government contracts. The contracts were valued at the net present
value of projected future cash flows over the lives of the existing contracts.
The remainder of the excess was allocated to goodwill. See Note 3 of the notes
to our consolidated financial statements that appear at the end of this
prospectus for additional discussion of the accounting for the exchange offer.


                                       24
<PAGE>
BUSINESS MODEL

        We derive revenues from four sources:

        - the sale of electronic access to public records on behalf of
          government;

        - subscription and transaction-based fees;

        - fees for managing electronic government operations; and

        - fees and charges for government application development.


        In seven of our nine existing subsidiaries, our revenues are generated
from transactions, which generally include the sale of electronic access to
public records on behalf of the government and the collection of subscription
and transaction-based fees. Among the highest volume, most commercially valuable
products and services we offer are access to driver's license and motor vehicle
records, which accounted for over 90% of our pro forma revenues in 1998. We
believe that while these two applications will continue to be important sources
of transaction revenue early in our government partnerships, their contribution
as a percentage of our total revenues in existing government partnerships will
decline as other sources grow. Pro forma revenues from other government products
and services grew 107% in 1998 over 1997.


        We charge for access to records on a per-record basis and, depending
upon government policies, also on a fixed or sliding scale bulk basis. Our fees
are set by negotiation with the government agencies that control the records and
are typically approved by a government sanctioned oversight body. We recognize
revenues from transactions on an accrual basis and bill end-user customers
primarily on a monthly basis. We typically receive a majority of payments via
electronic funds transfer and credit card within 20 days of billing and remit
payment to governments within 60 days of the transaction. Government agency fees
and amounts payable to the primary contracting governmental entities are also
accrued as cost of revenues and accounts payable at the time revenues are
recognized.

        In our government partnerships with Georgia and Iowa, we provide
consulting, development and management services to state-operated government
portals predominantly under a fixed-price model. Revenues from these service
contracts are recognized when service is provided and billed at rates and
intervals provided for in the contract.


        Our application development division develops and implements back-office
government software applications for a fixed development fee, which is
recognized as revenue on a percentage of completion basis. In the fourth quarter
of 1998, we determined that the balance of revenues remaining to be recognized
in 1999 under our existing application development division contractual
obligations was not expected to cover anticipated costs of developing and
implementing the related applications. Estimated costs in excess of fixed
contract prices of $1.3 million for completing these applications were expensed
in the fourth quarter of 1998. Based on our most recent monthly review of our
current application development contracts, we expect to accrue an additional
$0.9 million of anticipated losses in the second quarter of 1999. We expect
substantially all of our existing application development contractual
commitments will be satisfied by the third quarter of 2000. The current
fixed-price contracts do not, and we believe in the future will not, represent a
significant percentage of our revenues.


        Revenues from individual business units are highly correlated to
population, but are also affected by pricing policies established by government
entities for public records, the number and growth of commercial enterprises and
the government entity's development of policy and information technology (IT)
infrastructure supporting electronic government.

        Approximately 83% of our pro forma revenue growth from 1997 to 1998 was
attributable to revenues from our business units that conducted operations for
substantially less than a full year in 1997. We believe that the formation of
partnerships with additional government entities will continue to be the primary
contributor to our revenue growth in the foreseeable future.

        Substantially all of our cost of revenues consist of payments we make to
our government partners for access to public records we distribute over the
Internet to businesses and citizens, and the remainder consist of

                                       25
<PAGE>
telecommunications costs. The pricing, costs and gross margin derived from these
records vary by the type of public record and by state.


        The majority of our operating expenses are personnel-related, and
directly associated with the development and marketing of electronic government
services in our business units. All nine business units have largely the same
operational design and a similar cost structure. Each of our business units has
a president, a marketing group and a service development and operations group
which together focus on the rapid development and deployment of Internet
applications to meet the needs of governments, businesses and citizens in that
particular venue. The amortization of goodwill and intangible assets related to
our exchange offer is the other major component of operating expenses.



        Since the inception of our first business unit in Kansas, we have used
stock purchase and stock option programs for key employees as compensation to
attract strong business and technical talent. We have recorded compensation
expense for some of our stock and options grants. The expense is equal to the
excess of the fair market price on the date of grant or sale over the option
exercise or stock sale price. As of March 31, 1999, we recorded deferred
compensation of approximately $3.4 million. For the stock options granted,
deferred compensation is being amortized over the vesting periods of the stock
options. We recognized a total of approximately $569,000 in stock compensation
expense in 1998 and approximately $1.7 million in stock compensation expense in
the three months ended March 31, 1999.



PRO FORMA RESULTS OF OPERATIONS



        Prior to the completion of our exchange offer in March 1998, we were a
holding company with no operations of our own. Our exchange offer consolidated
five business units as operating subsidiaries under our holding company.



        Prior to April 1, 1998, our historical consolidated results of
operations reflect only the results of our business unit formed to pursue new
business opportunities and not the results of our business units operating in
Indiana, Kansas, Arkansas and Nebraska. For example, for the three months ended
March 31, 1999, revenues were $11.5 million, which represents all of our
business units while the $361,000 reported for the three months ended March 31,
1998 represents primarily our operations in Georgia. Total operating expenses
are likewise not comparable. Accordingly, we believe that historical comparison
of our results of operations for the three months ended March 31, 1999 against
the three months ended March 31, 1998, the year ended December 31, 1998 against
the year ended December 31, 1997 and the year ended December 31, 1997 against
the year ended December 31, 1996 is not meaningful.



        We believe that comparisons of results of operations for the three
months ended March 31, 1999 against the pro forma results of operations for the
three months ended March 31, 1998 and the pro forma results of operations for
the year ended December 31, 1998 against the pro forma results of operations for
the year ended December 31, 1997 most accurately represents our combined
operations for these periods. See the pro forma consolidated financial
information that appears at the end of this prospectus for additional details
regarding the pro forma information.


                                       26
<PAGE>

        The following table presents certain consolidated statement of
operations data for the periods indicated as a percentage of total revenues on a
pro forma basis, except for the three months ended March 31, 1999.



<TABLE>
<CAPTION>
                                                                              PERCENTAGE OF REVENUES
                                                                 ------------------------------------------------
                                                                 YEAR ENDED DECEMBER          THREE MONTHS
                                                                         31,                ENDED MARCH 31,
                                                                 --------------------  --------------------------
                                                                   1997       1998         1998          1999
                                                                 ---------  ---------  -------------  -----------
                                                                      PRO FORMA          PRO FORMA      ACTUAL
                                                                 --------------------  -------------  -----------
<S>                                                              <C>        <C>        <C>            <C>
Revenues.......................................................      100.0%     100.0%       100.0%        100.0%
Cost of revenues...............................................       75.5       75.0         74.8          75.1
                                                                 ---------  ---------        -----         -----
Gross profit...................................................       24.5       25.0         25.2          24.9
Operating expenses.............................................
  Service development and operations...........................        5.3       11.8          7.0           8.2
  Selling, general and administrative..........................       12.8       13.9         14.1          13.2
  Stock compensation...........................................        2.6        1.6          0.1          14.8
  Depreciation and amortization................................       31.9       21.6         24.0          17.5
                                                                 ---------  ---------        -----         -----
    Total operating expenses...................................       52.6       48.9         45.2          53.7
                                                                 ---------  ---------        -----         -----
Operating income (loss)........................................      (28.1)     (23.9)       (20.0)        (28.8)
Interest expense...............................................       (0.2)      (0.3)        (0.2)         (0.3)
Other income (expense), net....................................       (0.1)       0.2          0.2           0.1
                                                                 ---------  ---------        -----         -----
Income before income taxes.....................................      (28.4)     (24.0)       (20.0)        (29.0)
Income tax expense (benefit)...................................        0.0        1.8          0.0          (0.2)
                                                                 ---------  ---------        -----         -----
Net loss.......................................................      (28.4)%     (25.8)%       (20.0  )%      (28.8 )%
                                                                 ---------  ---------        -----         -----
                                                                 ---------  ---------        -----         -----
</TABLE>



PRO FORMA COMPARISON OF THREE MONTHS ENDED MARCH 31, 1999 AND 1998



        REVENUES.  Revenues increased 38.5% to $11.5 million for the three
months ended March 31, 1999 from $8.3 million on a pro forma basis for the three
months ended March 31, 1998. This increase was primarily attributable to two new
business units that were fully operational in the first quarter of 1999, but
were not operational in 1998.



        COST OF REVENUES.  Cost of revenues consists of payments we make to our
government partners for access to public records we distribute over the Internet
to businesses and citizens, and the remainder consist of telecommunications
costs. Cost of revenues increased 39.1% to $8.6 million for the three months
ended March 31, 1999 from $6.2 million on a pro forma basis for the three months
ended March 31, 1998. This increase primarily was attributable to the cost
related to the two new business units that were fully operational in the first
quarter of 1999, but were not operational in 1998.



        SERVICE DEVELOPMENT AND OPERATIONS.  Service development and operations
costs consist of costs to develop, implement, operate and maintain government
portals, as well as costs of personnel that design, develop and implement
back-office government applications. These costs increased 62.1% to $935,000 for
the three months ended March 31, 1999 from $577,000 on a pro forma basis for the
three months ended March 31, 1998. This increase primarily was attributable to
new business units and the increase in size of our application development
division.



        SELLING, GENERAL AND ADMINISTRATIVE.  Selling, general and
administrative costs consist of marketing and sales costs in our business units
and costs of corporate-level personnel. These costs increased 29.6% to $1.5
million for the three months ended March 31, 1999 from $1.2 million on a pro
forma basis for the three months ended March 31, 1998. This increase primarily
was attributable to new business units and the addition of corporate-level
personnel.



        STOCK COMPENSATION.  Stock compensation was $1.7 million for the three
months ended March 31, 1999 compared to $5,000 on a pro forma basis for the
three months ended March 31, 1998.


                                       27
<PAGE>

        DEPRECIATION AND AMORTIZATION.  Depreciation and amortization consisted
primarily of amortization of goodwill and intangible assets related to our
exchange offer. Depreciation and amortization was $2.0 million for the three
months ended March 31, 1999 and 1998.



        INCOME TAXES.  On March 31, 1998 we were an S corporation, as were all
of our business units, and therefore we did not record income tax expense. We
recognized an income tax benefit of $23,000 for the three months ended March 31,
1999. Goodwill amortization and a portion of stock compensation is not
non-deductible for tax purposes.



PRO FORMA COMPARISON OF YEARS ENDED DECEMBER 31, 1998 AND 1997



        REVENUES.  Pro forma revenues increased 49.8% to $36.5 million for the
year ended December 31, 1998 from $24.4 million for the year ended December 31,
1997. This increase was primarily attributable to the addition of four new
business units in 1997 that had a full year of operations in 1998.



        COST OF REVENUES.  Pro forma cost of revenues increased 48.8% to $27.4
million for the year ended December 31, 1998 from $18.4 million for the year
ended December 31, 1997. This increase was primarily attributable to the costs
related to the addition of four new business units in 1997 that had a full year
of operations in 1998.



        SERVICE DEVELOPMENT AND OPERATIONS.  Pro forma service development and
operations costs increased 237.4% to $4.3 million of the year ended December 31,
1998 from $1.3 million for the year ended December 31, 1997. This increase was
primarily attributable to the development of new business units and increased
development costs of our applications development division, including a charge
in the fourth quarter of 1998 of $1.3 million for anticipated losses on
application development contracts.



        SELLING, GENERAL AND ADMINISTRATIVE.  Pro forma selling, general and
administrative costs increased 62.9% to $5.1 million for the year ended December
31, 1998 from $3.1 million for the year ended December 31, 1997. This increase
primarily was attributable to marketing and sales activities within our new
business units.



        STOCK COMPENSATION.  Pro forma stock compensation was $574,000 for the
year ended December 31, 1998 and $631,000 for the year ended December 31, 1997.



        DEPRECIATION AND AMORTIZATION.  Pro forma depreciation and amortization
was $7.9 million for the year ended December 31, 1998 and $7.8 million for the
year ended December 31, 1997.



        INCOME TAXES.  We recognized an income tax provision of $659,000 for the
year ended December 31, 1998. This provision was attributable to a one-time $1.4
million provision for deferred taxes on our conversion to a C corporation, and
goodwill amortization and a portion of stock compensation being non-deductible
for tax purposes. For the year ended December 31, 1997, we were an S
corporation, as were all of our business units, and therefore we did not record
income tax expense.


                                       28
<PAGE>

SELECTED ACTUAL AND PRO FORMA QUARTERLY OPERATING RESULTS



        The following tables present certain consolidated statements of
operations data for our nine most recent quarters ended March 31, 1999 in
dollars and as a percentage of total revenues. Data for periods prior to the
three months ended June 30, 1998 are presented on a pro forma basis. In
management's opinion, this unaudited information has been prepared on the same
basis as the audited annual financial statements and includes all adjustments,
consisting only of normal recurring adjustments, necessary for fair presentation
of the unaudited information for the quarters presented. You should read this
information in conjunction with the consolidated financial statements, including
the notes thereto, included elsewhere in this prospectus. The results of
operations for any quarter are not necessarily indicative of results that we
might achieve for any subsequent periods.



<TABLE>
<CAPTION>
                                                                           QUARTER ENDED
                                 --------------------------------------------------------------------------------------------------
                                 MAR. 31,   JUNE 30,   SEPT. 30,   DEC. 31,   MAR. 31,   JUNE 30,   SEPT. 30,   DEC. 31,   MAR. 31,
                                   1997       1997       1997        1997       1998       1998       1998        1998       1999
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
                                                                           (IN THOUSANDS)
<S>                              <C>        <C>        <C>         <C>        <C>        <C>        <C>         <C>        <C>
Revenues.......................  $ 5,295    $ 5,410     $ 6,395    $ 7,282    $ 8,270    $ 8,493     $ 9,773    $ 9,996    $11,455
Cost of revenues...............    4,017      4,081       4,874      5,438      6,184      6,152       7,347      7,711      8,604
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
Gross profit...................    1,278      1,329       1,521      1,844      2,086      2,341       2,426      2,285      2,851
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
Operating expenses:
  Service development and
    operations.................      276        288         329        416        577        676         806      2,268        935
  Selling, general and
    administrative.............      612        694         764      1,052      1,171      1,380       1,219      1,317      1,518
  Stock compensation...........       10         --         150        471          5        259          --        310      1,699
  Depreciation and
    amortization...............    1,936      1,946       1,937      1,955      1,988      1,969       1,962      1,968      2,001
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
  Total operating expenses.....    2,834      2,928       3,180      3,894      3,741      4,284       3,987      5,863      6,153
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
Operating income (loss)........  $(1,556)   $(1,599)    $(1,659)   $(2,050)   $(1,655)   $(1,943)    $(1,561)   $(3,578)   $(3,302)
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------

                                                                 AS A PERCENTAGE OF TOTAL REVENUES
                                 --------------------------------------------------------------------------------------------------
Revenues.......................    100.0%     100.0%      100.0%     100.0%     100.0%     100.0%      100.0%     100.0%     100.0%
Cost of revenues...............     75.9       75.4        76.2       74.7       74.8       72.4        75.2       77.1       75.1
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
Gross profit...................     24.1       24.6        23.8       25.3       25.2       27.6        24.8       22.9       24.9
Operating expenses:
  Service development and
    operations.................      5.2        5.3         5.2        5.7        7.0        8.0         8.2       22.7        8.2
  Selling, general and
    administrative.............     11.6       12.8        11.9       14.5       14.1       16.2        12.5       13.2       13.2
  Stock compensation...........      0.2        0.0         2.3        6.5        0.1        3.0         0.0        3.1       14.8
  Depreciation and
    amortization...............     36.5       36.0        30.3       26.8       24.0       23.2        20.1       19.7       17.5
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
  Total operating expenses.....     53.5       54.1        49.7       53.5       45.2       50.4        40.8       58.7       53.7
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
Operating income (loss)........    (29.4)%    (29.5)%     (25.9)%    (28.2)%    (20.0)%    (22.8)%     (16.0)%    (35.8)%    (28.8)%
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
</TABLE>



        We expect operating results to fluctuate significantly in the future as
a result of a variety of factors, many of which are outside of our control. See
"Risk Factors--The unpredictability of our quarter to quarter results may
adversely affect the trading price of our common stock" and "--The seasonality
of use for some of our electronic government products and services may adversely
affect our fourth quarter results of each calendar year" for more information on
quarterly fluctuations and seasonality and how it affects our business.



        We believe that period to period comparisons of our operating results
will not necessarily be meaningful and you should not rely on them as an
indication of future performance. It is possible that in some future periods our
operating results may be below the expectations of public market analysts and
investors. In such event, the trading price of our common stock may decline.


                                       29
<PAGE>

HISTORICAL RESULTS OF OPERATIONS



HISTORICAL COMPARISON OF THREE MONTHS ENDED MARCH 31, 1999 AND 1998



        REVENUES.  Revenues increased to $11.5 million for the three months
ended March 31, 1999 from $361,000 for the three months ended March 31, 1998.
This increase was primarily attributable to the revenues of the four affiliated
business units included in reported revenues subsequent to the March 31, 1998
exchange offer and to new state business units becoming fully operational during
the latter part of 1998.



        COST OF REVENUES.  Cost of revenues increased to $8.6 million for the
three months ended March 31, 1999 from $1,000 for the three months ended March
31, 1998. This increase was primarily attributable to the cost of the revenues
of the business units acquired in the exchange offer and the additional state
business units that became fully operational during the latter part of 1998.



        SERVICE DEVELOPMENT AND OPERATIONS.  Service development and operations
costs increased to $935,000 for the three months ended March 31, 1999 from
$135,000 for the three months ended March 31, 1998. The increase was primarily
attributable to the business units acquired in the exchange offer and to
additional state business units.



        SELLING, GENERAL AND ADMINISTRATIVE.  Selling, general and
administrative costs increased to $1.5 million for the three months ended March
31, 1999 from $325,000 for the three months ended March 31, 1998. The increase
was due primarily to the business units acquired in the exchange offer and to
the addition of corporate-level personnel.



        STOCK COMPENSATION.  Stock compensation was $1.7 million for the three
months ended March 31, 1999. There was no stock compensation expense for the
three months ended March 31, 1998.



        DEPRECIATION AND AMORTIZATION.  Depreciation and amortization increased
to $2.0 million for the three months ended March 31, 1999 from $24,000 for the
three months ended March 31, 1998. This increase is primarily attributable to
amortization of goodwill and intangible assets resulting from the completion of
the exchange offer.



        INCOME TAXES.  On March 31, 1998 we were an S corporation and did not
record income tax expense. We recognized an income tax benefit of $23,000 for
the three months ended March 31, 1999. Goodwill amortization and a portion of
stock compensation is non-deductible for tax purposes.



HISTORICAL COMPARISON OF YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996



        Historical results of operations for the years ended December 31, 1997
and 1996 reflect the start-up of our business unit formed to pursue new business
opportunities in states other than Indiana, Kansas, Arkansas and Nebraska. These
states contained our initial business units that were accounted for as acquired
in the March 31, 1998 exchange offer.



        REVENUES.  Revenues increased to $28.6 million for the year ended
December 31, 1998 from $1.0 million for the year ended December 31, 1997 and
$236,000 for the year ended December 31, 1996. The increase in 1998 was
primarily attributable to the revenues of the business units aquired in the
exchange offer subsequent to March 31, 1998 and the addition of new state
business units.



        COST OF REVENUES.  Cost of revenues increased to $21.2 million for the
year ended December 31, 1998 from $5,000 for the year ended December 31, 1997
and $21,000 for the year ended December 31, 1996. The increase in 1998 was
primarily attributable to the cost of revenues of the business units acquired in
the exchange offer subsequent to March 31, 1998 and the addition of new state
business units.



        SERVICE DEVELOPMENT AND OPERATIONS.  Service development and operations
costs increased to $3.9 million for the year ended December 31, 1998 from
$224,000 for the year ended December 31, 1997 and $38,000 for the year ended
December 31, 1996. The increase in 1998 was primarily attributable to additional
state business units, the completion of the exchange offer and the increase in
size of our application development division, for which we recorded a $1.3
million charge in the fourth quarter for anticipated losses for satisfying
remaining obligations under our application development contracts.


                                       30
<PAGE>

        SELLING, GENERAL AND ADMINISTRATIVE.  Selling, general and
administrative costs increased to $4.2 million for the year ended December 31,
1998 from $660,000 for the year ended December 31, 1997 and $168,000 for the
year ended December 31, 1996. The increase in 1998 was primarily attributable to
the business units acquired in the exchange offer and to the addition of
corporate-level personnel.



        STOCK COMPENSATION.  Stock compensation increased to $569,000 for the
year ended December 31, 1998 from $370,000 for the year ended December 31, 1997.
There was no stock compensation expense for the year ended December 31, 1996.



        DEPRECIATION AND AMORTIZATION.  Depreciation and amortization increased
to $5.9 million for the year ended December 31, 1998 from $14,000 for the year
ended December 31, 1997. Depreciation and amortization expense for the year
ended December 31, 1996 was negligible. The 1998 expense consisted primarily of
amortization of goodwill and intangible assets resulting from the completion of
the exchange offer.



        INCOME TAXES.  We recognized an income tax provision of $659,000 for the
year ended December 31, 1998. This provision was attributable to a one-time $1.4
million provision for deferred taxes on our conversion to a C corporation and to
goodwill amortization and a portion of stock compensation being non-deductible
for tax purposes. For the years ended December 31, 1997 and 1996, we were an S
corporation and did not record income tax expense.



SELECTED HISTORICAL QUARTERLY OPERATING RESULTS



        The following table presents certain historical consolidated statement
of operations data for our nine most recent quarters ended March 31, 1999.
Actual results of operations data are presented for all periods. In management's
opinion, this unaudited information has been prepared on the same basis as the
audited annual financial statements and includes all adjustments, consisting
only of normal recurring adjustments, necessary for fair presentation of the
unaudited information for the quarters presented. You should read this
information in conjunction with the consolidated financial statements, including
the notes thereto, included elsewhere in this prospectus. The results of
operations for any quarter are not necessarily indicative of results that we
might achieve for any subsequent periods.



<TABLE>
<CAPTION>
                                                                           QUARTER ENDED
                                 --------------------------------------------------------------------------------------------------
                                 MAR. 31,   JUNE 30,   SEPT. 30,   DEC. 31,   MAR. 31,   JUNE 30,   SEPT. 30,   DEC. 31,   MAR. 31,
                                   1997       1997       1997        1997       1998       1998       1998        1998       1999
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
                                                                           (IN THOUSANDS)
<S>                              <C>        <C>        <C>         <C>        <C>        <C>        <C>         <C>        <C>
Revenues.......................   $  200     $  216     $  285      $  295     $  361     $8,494     $9,773      $9,996    $11,455
Cost of revenues...............       --         --          2           3          1      6,152      7,347       7,711      8,604
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
Gross profit...................      200        216        283         292        360      2,342      2,426       2,285      2,851
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
Operating Expenses:
  Service, development and
    operations.................       44         48         53          79        135        676        806       2,268        935
  Selling, general and
    administrative.............      111        162        145         242        325      1,381      1,219       1,317      1,518
  Stock compensation...........       --         --        146         224         --        259         --         310      1,699
  Depreciation and
    amortization...............        2          2          3           7         24      1,968      1,962       1,968      2,001
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
  Total operating expenses.....      157        212        347         552        484      4,284      3,987       5,863      6,153
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
Operating income (loss)........       43          4        (64)       (260)      (124)    (1,942)    (1,561)     (3,578)    (3,302)
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
Other income (expense):
  Interest expense.............       --         --         --          --         --        (19)       (31)        (38)       (37)
  Other income (expense),
    net........................       --         --         --          --         --         15         24          17         17
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
  Total other income...........       --         --         --          --         --         (4)        (7)        (21)       (20)
Income (loss) before income
  taxes........................       43          4        (64)       (260)      (124)    (1,946)    (1,568)     (3,599)    (3,322)
Income taxes...................       --         --         --          --         --         --        370         289        (23)
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
Net income (loss)..............   $   43     $    4     $  (64)     $ (260)    $ (124)    $(1,946)   $(1,938)    $(3,888)  $(3,299)
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
Net income (loss) per share:
  Basic and diluted............   $ 0.00     $ 0.00     $(0.00)     $(0.01)    $(0.01)    $(0.05)    $(0.05)     $(0.09)   $ (0.08)
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
  Weighted average shares
    outstanding................   20,532     20,536     20,826      21,527     22,679     41,946     42,066      42,066     42,243
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
                                 --------   --------   ---------   --------   --------   --------   ---------   --------   --------
</TABLE>


                                       31
<PAGE>

        We expect operating results to fluctuate significantly in the future as
a result of a variety of factors, many of which are outside of our control. See
"Risk Factors--The unpredictability of our quarter to quarter results may
adversely affect the trading price of our common stock" and "--The seasonality
of use for some of our electronic government products and services may adversely
affect our fourth quarter results of each calendar year" for more information on
quarterly fluctuations and seasonality and how it affects our business.


        We believe that period to period comparisons of our operating results
will not necessarily be meaningful and you should not rely on them as an
indication of future performance. It is possible that in some future periods our
operating results may be below the expectations of public market analysts and
investors. In such event, the trading price of our common stock may decline.

LIQUIDITY AND CAPITAL RESOURCES


        Prior to the exchange offer, each of our business units funded its
initial development and organizational costs from stock sales to employees and
private investors. Since March 31, 1998, initial development and organizational
costs related to new business units have been funded by net cash generated from
operations in existing business units. In most cases, our business units have
generated positive cash flow from operations within the first ninety days
following initial service implementation, and have thereafter begun to fund all
activities from operating cash flow. As of March 31, 1999, we had approximately
$1.1 million in cash and cash equivalents.



        Net cash used in operating activities was $366,000 for the three months
ended March 31, 1999. The difference between the net loss of $3.3 million and
net cash used was attributable to over $3.6 million in non-cash charges,
primarily amortization of intangibles and stock compensation. This difference
was offset by an increase in accounts receivable of $787,000, which was due to
increased volume in our largest business unit. The difference between the net
loss of $7.9 million and net cash provided by operating activities of $354,000
during the year ended December 31, 1998 was attributable to the non-cash charges
in amortization of intangibles and non-cash expense recognized for application
development contracts.


        Investing activities resulted in net cash used of $10,000 in the three
months ended March 31, 1999, and net cash provided of $607,000 in the year ended
December 31, 1998. The cash provided from investing activities in the year ended
December 31, 1998 was attributable to cash of $765,000 held by the business
units we consolidated in connection with our exchange offer, offset by cash
invested in property and equipment of $255,000.


        Cash flows provided from financing activities were $181,000 for the
three months ended March 31, 1999, and $170,000 for the year ended December 31,
1998. Cash flows provided from financing activities for the three months ended
March 31, 1999 were primarily attributable to issuances of our common stock to
executives and a board member during the period. Cash flows provided from
financing activities for the year ended December 31, 1998 were primarily
attributable to cash flows from borrowings of $1.2 million, offset by cash used
for payments on notes, leases, debentures and distributions to shareholders
totaling $588,000.


        Cash provided and/or used for operating, investing and financing
activities during the periods ended March 31, 1998, December 31, 1997, and
December 31, 1996 reflected the cash flow from our business unit formed to
pursue new business opportunities, and is not comparable to cash flow patterns
reflected in our consolidated operations.

        Each of our business units maintains operating lines of credit and
equipment lines of credit on identical or substantially similar terms and
conditions from the same bank. The total amount outstanding on our bank lines of
credit for our business units totaled $839,000 as of March 31, 1999.

        We believe that the net proceeds from this offering, together with the
existing cash balances and financing arrangements, will provide us with
sufficient funds to finance our operations through at least the

                                       32
<PAGE>
next 18 months. If the cash we generate from our operations is insufficient to
satisfy our liquidity requirements after this 18 month period, we may need to
sell additional equity or debt securities or obtain additional credit
facilities. The sale of additional equity or convertible debt securities may
result in additional dilution to our shareholders. We may not be able to raise
any additional capital or on acceptable terms or at all.

YEAR 2000 READINESS

        Many currently installed computer systems and software products are
coded to accept only two digit entries in the date code field. As a result,
software that records only the last two digits of the calendar year may not be
able to distinguish whether "00" means 1900 or 2000. This may result in software
failures or the creation of erroneous results.

        We have conducted an internal review of software systems that we use for
portal management, network monitoring, quality assurance, applications and
information and transaction processing. Because we developed most of these
software systems internally after the Year 2000 problem was already known, we
were largely able to anticipate four digit requirements. In connection with
ongoing reviews of our government portals, we also are reviewing our computer
infrastructure, including network equipment and servers. We do not anticipate
material problems with network equipment, as the majority of our current
configuration have been installed or upgraded with Year 2000 ready systems.
Similarly, we purchased most of our servers within the past four years. With
this relatively current equipment, we do not anticipate material Year 2000
readiness problems, and we will replace any servers that cannot be updated
either in the normal replacement cycle or on an accelerated basis.

        We also have internally standardized the majority of our systems on a
Solaris operating system, which we are advised by our vendor is Year 2000 ready
after implementation of the latest service upgrades. We use multiple software
systems for internal business purposes, including accounting, electronic mail,
service development, human resources, customer service and support and sales
tracking systems. The majority of these applications have either been purchased,
upgraded or internally developed within the last three years.


        We have made inquiries of vendors of systems we believe to be mission
critical to our business regarding their Year 2000 readiness. Although we have
received various assurances, we have not received affirmative documentation of
Year 2000 readiness from any of these vendors and we have not performed any
operational tests on our internal systems. We generally do not have contractual
rights with third party providers should their equipment or software fail due to
Year 2000 issues. If this third-party equipment or software does not operate
properly with regard to Year 2000, we may incur unexpected expenses to remedy
any problems. These expenses could potentially include purchasing replacement
hardware and software. We have not determined the state of readiness of some of
our third-party suppliers of information and services, phone companies, long
distance carriers, financial institutions and electric companies, the failure of
any one of which could severely disrupt our ability to conduct our business.



        Concurrently with our analysis of our internal systems, we have begun to
survey third-party entities with which we transact business, including
government partners, critical vendors and financial institutions, for Year 2000
readiness. We expect to complete this survey in the second quarter of 1999. Our
government partners typically have addressed Year 2000 issues on an
agency-by-agency basis under an overall Year 2000 program. We are monitoring
regularly the Year 2000 progress of those agencies which account for high
transaction and revenue volumes through our portals. We believe that many,
though not all, of these agencies have completed Year 2000 readiness
implementation. We cannot estimate the effect, if any, that non-ready systems of
these entities could have on our business, results of operations or financial
condition, and there can be no assurance that the impact, if any, would not be
material.


        We anticipate that our review of Year 2000 issues and any remediation
efforts will continue throughout calendar 1999. The costs incurred to date to
remediate our Year 2000 issues have not been

                                       33
<PAGE>
material. If any Year 2000 issues are uncovered with respect to these systems or
our other internal systems, we believe that we will be able to resolve these
problems without material difficulty, as replacement systems are available on
commercially reasonable terms. Presently, we have included the total remaining
cost of addressing Year 2000 issues within our existing information technology
budget. We do not anticipate any Year 2000 complications based on a number of
assumptions, including the assumption that we have already identified our most
significant Year 2000 issues. However, these assumptions may not be accurate,
which could cause our actual results to differ materially from those
anticipated. In view of our Year 2000 review and remediation efforts to date,
the recent development of a number of our products and services, the recent
installation of our networking equipment and servers, and the limited activities
that remain to be completed, we do not consider contingency planning to be
necessary at this time.

        Our applications operate in complex network environments and directly
and indirectly interact with a number of external hardware and software systems.
We are unable to predict to what extent our business may be affected if our
systems or the systems that operate in conjunction with our systems experience a
material Year 2000 failure. The most likely worst case scenarios are that the
Internet infrastructure fails or the internal systems of our government partners
fail, either of which would render us unable to provide products and services,
which would harm our business. Additionally, known or unknown errors or defects
that affect the operation of our software and systems could result in delay or
loss of revenue, interruption of services, cancellation of contracts and
memberships, diversion of development resources, damage to our reputation,
increased service and warranty costs, and litigation costs, any of which could
harm our business, financial condition and results of operations.

RECENT ACCOUNTING PRONOUNCEMENTS

        The Financial Accounting Standards Board issued Statement No. 131,
"Disclosure about Segments of an Enterprise and Related Information," which
establishes standards for the way public business enterprises report information
in annual statements and interim financial reports regarding operating segments,
products and services, geographic areas and major customers. This statement is
effective for financial statements for periods beginning after December 15,
1997. The adoption of this statement did not have a significant impact on the
way we report information in our annual statements and interim financial
reports.


        In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1 ("SOP 98-1"), "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use", which establishes
guidelines for the accounting for the costs of all computer software developed
or obtained for internal use. We are required to adopt SOP 98-1 effective
January 1, 1999. The adoption of SOP 98-1 did not have a material impact on our
consolidated financial statements.


INTEREST RATE RISK


        Our exposure to market risk for changes in interest rates relates
primarily to the increase or decrease in the amount of interest income we can
earn on our cash balances and on the increase or decrease in the amount of
interest expense we must pay with respect to our various outstanding debt
instruments. The risk associated with fluctuating interest expense is limited,
however, to the exposure related to those debt instruments and credit facilities
which are tied to market rates and we do not believe it is material. We do not
use derivative financial instruments. We ensure the safety and preservation of
our invested principal funds by limiting default risks, market risk and
investment risk.


                                       34
<PAGE>
                                    BUSINESS

OVERVIEW


        We are the leading provider of Internet-based, electronic government
services that help governments use the Internet to reduce costs and provide a
higher level of service to businesses and citizens. We enter into contracts with
governments and on their behalf design, build and operate Internet-based
portals, forming a partner relationship with governments. These portals consist
of Web sites and applications that we build, which allow businesses and citizens
to access government information online and complete transactions, including
applying for a permit, renewing a license or filing a report. Our unique
business model allows us to reduce our government partners' financial and
technology risks and obtain revenue by sharing in the fees governments generate
from electronic government services. Our partners benefit because they gain a
centralized, customer-focused presence on the Internet. Businesses and citizens
gain a faster, more convenient and more cost-effective means to interact with
governments.



        Currently, we provide Internet-based electronic government services for
eight states and one local government. The state of Utah has recently selected
us as an electronic government services provider, and we have entered into a
contract to implement our services in that state. We typically enter into three
to five year contracts with our government partners and manage operations for
each contractual relationship through separate subsidiaries that operate as
decentralized business units with a high degree of autonomy. We intend to
increase our revenues by replicating our model in other states, municipalities,
federal agencies and international entities, and by delivering new services and
expanding markets within our existing contractual relationship.


INDUSTRY BACKGROUND

THE MARKET FOR GOVERNMENT-TO-BUSINESS AND GOVERNMENT-TO-CITIZEN TRANSACTIONS


        Government's regulation of commercial and consumer activities requires
billions of transactions and exchanges of large volumes of information between
government agencies and businesses and citizens. These transactions and
exchanges include driver's license renewals, motor vehicle registrations, tax
returns, permit applications and requests for government-gathered information.
Government agencies typically defray the cost of processing these transactions
and of storing, retrieving and distributing information through a combination of
general tax revenue, service fees and charges for direct access to public
records. According to the official statistics of the U.S. Census Bureau,
federal, state and local governments collected a total of $451 billion in
charges and miscellaneous fees from businesses and citizens in 1995.
Additionally, states generated $26 billion in fees for motor vehicle,
corporation and other licenses in 1995.


THE LIMITS OF TRADITIONAL GOVERNMENT TRANSACTION METHODS


        Traditionally, government agencies have transacted, and in many cases
continue to transact, with businesses and citizens using processes that are
inconvenient and labor-intensive, require extensive paperwork and use large
amounts of scarce staff resources. Transactions and information requests are
often made in person or by mail and are processed manually, increasing the
potential for errors and the need for numerous revisions and follow-up. Even
newer methods, including telephone response systems, tape exchanges and dial-up
computer networks, rely on multiple systems and potentially incompatible data
formats, and require significant expertise and expenditures to introduce and
maintain. As a result, businesses and citizens often have no choice but to face
costly delays to complete essential tasks. These delays include waiting in line
at a government agency, waiting for answers by telephone or waiting for
responses by mail. Businesses and citizens encounter further inconvenience and
delay because they usually can work with government agencies only during normal
business hours. Even when electronic alternatives are available, they often
require a cumbersome process of multiple contacts with different government
agencies. Increases in the level of economic activity and in the population have
exacerbated these problems and increased the demand for new services.


                                       35
<PAGE>
GROWTH OF THE INTERNET AND ELECTRONIC COMMERCE

        The Internet has emerged as a global medium, enabling millions of people
worldwide to share information, communicate and conduct business electronically.
International Data Corporation, a market research firm, estimates that the
number of Web users will grow from approximately 97 million worldwide in 1998 to
approximately 320 million worldwide by the end of 2002. This growth is expected
to be driven by the large and growing number of PCs installed in homes and
offices, the decreasing cost of PCs, easier, faster and cheaper access to the
Internet, improvements in network infrastructure, the proliferation of Internet
content and the increasing familiarity with and acceptance of the Internet by
governments, businesses and consumers. In addition, the volume of electronic
commerce has grown in parallel with the Internet itself. According to
International Data Corporation, transactions on the Internet are expected to
increase from approximately $32 billion in 1998 to approximately $426 billion in
2002. Business-to-business usage is also growing rapidly. Forrester Research, a
market research firm, estimates that business-to-business electronic commerce
will grow from $17 billion in 1998 to $327 billion in 2002.

EMERGENCE OF THE INTERNET AS A MEDIUM FOR ELECTRONIC GOVERNMENT

        The growing acceptance of the Internet and electronic commerce presents
a significant opportunity for the development of electronic government, in which
government agencies conduct transactions and distribute information over the
Internet. By using the Internet, government agencies can increase the number and
efficiency of interactions with constituents without increasing expenditures or
demands on current personnel. In addition, regardless of physical distance,
businesses and citizens can obtain government information quickly and easily
over the Internet. For example, motor vehicle administrations can provide
instantaneous responses to auto insurers' requests for driving record data by
allowing controlled access to government databases through the Internet. This
Internet-based interaction reduces costs for both government and users and
decreases response times compared to providing the same data by mail or special
purpose dial-up computer connections.


CHALLENGES TO THE IMPLEMENTATION OF ELECTRONIC GOVERNMENT SERVICES



        Despite the potential benefits of electronic government, barriers to
creating successful Internet-based services often preclude governments from
implementing them. Some of these barriers are similar to those the private
sector encounters, including:


        - the high cost of implementing and maintaining Internet technology in a
          budget-constrained environment;

        - the financial, operational and technology risks of moving from older,
          established technologies to rapidly evolving Internet technologies;


        - the need to quickly assess the requirements of potential customers and
          cost-effectively design and implement electronic government services
          that are tailored to meet these requirements; and


        - the intense competition for qualified technical personnel.


        Governments also face some unique challenges that exacerbate the
difficulty of advancing to Internet-based services, including:



        - lengthy and political appropriations processes that make it difficult
          for governments to acquire resources and to develop Internet services
          quickly;


        - a diverse and substantially autonomous group of government agencies
          that have adopted varying and fragmented approaches to providing
          information and transactions over the Internet;

                                       36
<PAGE>

        - a lack of a marketing function that assures that services are designed
          to meet the needs of businesses and citizens and that they are aware
          of their availability; and


        - security and privacy concerns that are amplified by the confidential
          nature of the information and transactions available from and
          conducted with governments and the view that government information is
          part of the public trust.


        We believe traditional private sector Internet services generally do not
address the unique needs of electronic government. Most Internet solution
providers do not fully understand and are not well-equipped to deal with the
unique political and regulatory structures of governments. These providers,
including large systems integrators, typically take a time-and-materials,
project-based pricing approach that may not adequately balance the
responsiveness to change of a successful Internet business with the longer
time-horizons and extended commitment periods of government projects.


OUR SOLUTION

        We provide a unique, Internet-based electronic government solution that
meets the needs of businesses, citizens and governments. The key elements of our
solution are:

CUSTOMER-FOCUSED, ONE-STOP GOVERNMENT PORTAL


        Using our well-established marketing and technical expertise and our
government experience, we design, implement and manage portals for each of our
government partners that meet their needs as well as those of businesses and
citizens. Our portals are designed to create a single point of presence on the
Internet for our government partners that allows businesses and citizens to
reach the Web site of every government agency in a specific jurisdiction from
one online location. We employ a common look and feel in the Web sites of all
government agencies associated with our electronic government portals and make
them useful, appealing and easy to use. In addition to developing and managing
the government portal, we develop applications that, in one location on the
Internet, allow businesses and citizens to complete processes that have
traditionally required separate interaction with several different government
agencies, including establishing and obtaining required permits for a new
business enterprise. These applications also permit businesses and citizens to
conduct transactions with government agencies and to obtain information from
them 24 hours per day, seven days per week. We also help our government partners
to generate awareness and educate businesses and citizens about the availability
and potential benefits of electronic government services.


COMPELLING FINANCIAL MODEL


        We allow governments to implement comprehensive electronic government
services at minimal cost and risk. We take on the responsibility and cost of
designing, building and operating government portals and applications, with
minimal use of government resources. We employ our technological resources and
accumulated expertise to help governments avoid the risks of selecting and
investing in new technologies. We implement our electronic government services
rapidly, efficiently and accurately, using our well-tested and reliable
infrastructure and processes. Once we establish a government portal and
associated applications, we manage transaction flows and fund ongoing costs from
a share of fees received from information accessed and transactions conducted
through the portal.


PARTNERSHIP WITH GOVERNMENTS

        We form partnerships with governments by developing an in-depth
understanding of their interests and then aligning our interests with theirs. By
tying our revenues to the development of successful services and applications,
we assure government agencies and constituents that we are focused on their
needs. Moreover, we have pioneered, and encourage our partners to adopt, a model
for electronic government policymaking that involves the formation of oversight
boards that bring together interested

                                       37
<PAGE>

government agencies, business and consumer groups and other important government
constituencies in a single forum. We work within this forum to maintain constant
contact with government agencies and constituents and strive to ensure their
participation in the development of electronic government services. We attempt
to understand and facilitate the resolution of potential political disputes
among these participants to maximize the benefits of our services. We also
design our services to observe relevant privacy and security regulations, so
that they meet the same high standards of integrity, confidentiality and public
service as government agencies would observe in their own actions.


OUR STRATEGY


        Our objective is to strengthen our position as the leading provider of
Internet-based electronic government services. Key strategies to achieve this
objective include:


CONTINUE TO PENETRATE NEW MARKETS


        We intend to increase the number of our government partners by
leveraging our relationships with current government partners, our reputation
for providing proven electronic government services and our technology and
government process knowledge base. We have designed our services and
infrastructure so that we can deploy our services quickly, easily and
cost-effectively in new locations. We intend to market our one-stop approach to
other states, multi-state cooperative organizations, local governments and
federal agencies. In the future, we may expand our services into international
markets. Our expansion efforts will include developing relationships and
sponsors throughout an individual government entity, making presentations at
conferences of government executives with responsibility for information
technology policy, and developing contacts with organizations that act as forums
for discussions between these executives.


BROADEN PRODUCT AND SERVICE OFFERINGS

        We intend to develop new product and service offerings to enable
government agencies and businesses and citizens to interact more effectively
online. We will increase our development efforts by leveraging our experience
and deepening the knowledge base that we have developed from our operations. We
will continue to work with government agencies, professional associations and
other organizations to better understand the current and future needs of our
customers.

INCREASE TRANSACTION VOLUMES FROM EXISTING AND NEW CUSTOMERS


        We intend to increase traffic to our government portals through both
targeted and broad marketing initiatives. We will continue to work with our
government partners to create awareness of the online alternatives to
traditional government interaction, through initiatives including informational
brochures, government voicemail recordings and inclusion of Web site information
on government invoices. In addition, we will continue to update our portals to
highlight new government service information provided on the portals. We plan to
work with professional associations to directly and indirectly communicate to
their members the convenience, ease of use and other benefits of the electronic
government services our portals offer.


ENHANCE CAPABILITY AND EFFICIENCY OF CORE BUSINESS OPERATIONS

        We will continue to enhance our business model by increasing the overall
capability and efficiency of each government business unit. On a corporate
level, we will work with each business unit to share and coordinate the
implementation of best practices across our organization and to create new
products and services in response to the needs of businesses and citizens. We
intend to strengthen our operational and administrative functions to provide
standardized services in areas that benefit from economies of scale, including
new market development and human resources management. In addition, we

                                       38
<PAGE>
will continue to use performance incentives, including stock-based compensation
and local manager bonuses, to encourage each business unit to raise customer
satisfaction, continuously develop new products and services and lower overall
business unit costs.

ATTRACT, RETAIN AND TRAIN SPECIALIZED AND QUALIFIED PERSONNEL


        We believe that attracting, training and retaining specialized talent is
critical to executing our growth strategy. We intend to continue to improve
employee retention through challenging and entrepreneurial work assignments and
incentive programs, including equity interests in our company. We strive to
foster a creative, open atmosphere in which we encourage each employee to make
valuable contributions. We intend to hire employees with experience in
government processes who also have specific technical, marketing or contract
negotiation skills. In addition, we intend to improve the quality and retention
of our workforce through increased centralized training programs.


GOVERNMENT PARTNERSHIPS


        We provide electronic government services to eight states and one
city-county government through the following partnerships:



<TABLE>
<CAPTION>
                                                     YEAR
                                                   SERVICES    POPULATION
PARTNERSHIP NAME                                   COMMENCED     SERVED        WEB ADDRESS
- ------------------------------------------------  -----------  -----------  -----------------
<S>                                               <C>          <C>          <C>
Information Resource of Maine...................     1999       1,244,000   www.state.me.us

Information Network of Arkansas.................     1997       2,538,000   www.state.ar.us

CivicNet (Indianapolis and Marion County,
  Indiana)......................................     1997         813,000   www.civicnet.net

IOWAccess Network...............................     1997       2,862,000   www.iowaccess.org

Virginia Information Providers Network..........     1997       6,791,000   www.vipnet.org

GeorgiaNet Authority............................     1996       7,642,000   www.state.ga.us

Access Indian@ Information Network..............     1995       5,899,000   www.state.in.us

Nebrask@ Online.................................     1995       1,663,000   www.state.ne.us

Information Network of Kansas...................     1992       2,629,000   www.state.ks.us
</TABLE>


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

Source: 1998 estimated population information from the U.S. Census Bureau Web
        site at www.census.gov.

        Each of these partnerships operates under a separate contract, which
generally has an initial term of three to five years. Under a typical contract,
a government agrees that:


        - we have the right to develop a comprehensive Internet portal owned by
          the government to deliver electronic government services;


        - the portal we establish is the primary electronic and Internet
          interface between the government and its citizens;

        - the government supports the use of the portal for all commercially
          valuable applications in order to support the operation and expansion
          of the portal;

        - the government sponsors access to agencies for the purpose of entering
          into agreements with these agencies to develop applications for their
          data and transactions and to link their Web pages to the portal; and

                                       39
<PAGE>
        - the government establishes a policy making and fee approval board,
          which typically includes agency members, business customers and
          others, to establish prices for products and services and to set other
          policies.

        In return, we agree to:

        - develop, manage, market, maintain and expand the government's portal
          and information and electronic commerce applications;

        - assume the investment risk of building and operating the government's
          portal and applications without the direct use of tax dollars;

        - bear the risk of collecting transaction fees; and

        - have an independent audit conducted upon the government's request.


        We own all the software we develop under these contracts. After
completion of the initial contract term, our government partners receive a
perpetual, royalty-free license to use the software only in their own portals.


        We enter into separate agreements with various agencies and divisions of
our government partners to provide specific services and to conduct specific
transactions. These agreements preliminarily establish the pricing of the
electronic transactions and data access services we provide and the allocation
of revenues between us and the agency. These terms are then submitted to the
policy making and fee approval board for approval.


        In May 1999, we entered into a contract with the state of Utah to
provide electronic government services on terms similar to those of our services
in the table above. We are in the process of setting up operations under this
contract.


        In our government partnerships with Georgia and Iowa, we provide
consulting, development and management services for these government portals
predominantly under a fixed-price model.

OUR PRODUCTS AND SERVICES


        Each of our business units works with its government partner to
implement, develop, manage, and enhance a comprehensive, Internet-based portal
to deliver electronic government services to the government's constituents.
Citizens and businesses use these portals to gain access to Web-based
interactive applications in order to conduct transactions with the government
and gain access to public service information.



        We provide user-friendly and convenient access to useful government
information and services on each portal and develop numerous fee-based
transaction services and applications. These fee-based services and applications
allow businesses and citizens to access constantly changing government
information and to file necessary government documents, including driver's
license renewals, motor vehicle registrations, tax returns, and permit
applications. The types of products and services and the fees charged vary in
each jurisdiction according to the unique preferences of that jurisdiction. In
an effort to reduce the frustration businesses and citizens often encounter when
dealing with multiple government agencies, we handle cross-agency communications
whenever feasible and shield businesses and citizens from the complexity of
older, mainframe-based systems that agencies commonly use, creating an intuitive
and efficient way to deal with government.


                                       40
<PAGE>

        Some of the products and services we currently offer in different
jurisdictions include:

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

<TABLE>
<CAPTION>
PRODUCT OR SERVICE                    DESCRIPTION                       PRIMARY USERS
<S>                 <C>                                              <C>
Driver's License    Offers controlled instant look-up of driving     Insurance companies
Records Search      records by license number, name and birth date,
                    or social security number. Includes commercial
                    licenses.
Vehicle Title,      Provides controlled interactive title,           Insurance companies,
Lien &              registration and lien database access.           lenders
Registration
BillWatch-TM-       Allows the user to monitor state legislative     Attorneys, lobbyists
(Lobbyist in a      activity. Users can tag bills by key word or
Box-Registered Trademark-) bill number, and BillWatch-TM- will send an
                    e-mail when a change occurs in the status of
                    the bill.
Health              Allows users to search databases on several      Hospitals, clinics,
Professional        health professions.                              health insurers,
License Services                                                     citizens
Secretary of State  Allows users to access filings of corporations,  Attorneys, lenders
Searches            partnerships and other entities, including
                    charter documents.
UCC Searches        Permits searches of the UCC database.            Attorneys, lenders
Professional        Permits professionals to renew their licenses    Attorneys, doctors,
License Renewal     on line using a credit card.                     other licensed
                                                                     professionals
</TABLE>

        We also have a number of products and services in development,
including:
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PRODUCT OR SERVICE                    DESCRIPTION                       PRIMARY USERS
<S>                 <C>                                              <C>
Motor Fuel EDI      Allows motor fuel carriers to file their tax     Motor fuel carriers
Project             reports electronically.
Sales/Use Tax       Allows Sales and Use Tax filers to file the      Retailers
Filing              required forms online. The electronic forms
                    handle the computation in the form and write
                    the data out so that it can be entered into the
                    Department of Revenue's databases without the
                    need for the information to be re-keyed in the
                    Department's office.
Online Birth        Processes an online request for an official      Citizens
Certificate         birth certificate, charging the user's credit
                    card.
</TABLE>

        Our application development division develops and delivers applications
that improve the back-office administration of government records, and that
better enable electronic filing and distribution. These applications often are
highly customized for specific government or agency needs, and have been
developed under separate contracts outside of our core partnership arrangements
with governments.

        In addition to these products and services, we also provide customer
service and support. Our customer service representatives serve as a liaison
between our government partners and businesses and

                                       41
<PAGE>
citizens. Representatives are available 24 hours a day, seven days a week to
address any problems that might arise on the portals we operate.

SALES AND MARKETING

        We have two primary sales and marketing goals:

        - to develop new sources of revenue through new government partnerships;
          and

        - to retain and grow our revenue streams from existing government
          partnerships.

        We have well-established sales and marketing processes for achieving
these goals, which are managed by our national market development division and a
marketing department within each business unit.

DEVELOPING NEW SOURCES OF REVENUE

        We focus our new government sales and marketing efforts on increasing
the number of state, local, federal and international governments and government
agencies that are receptive to a public/private partnership for delivering
information and completing transactions over the Internet. We meet regularly
with interested government officials to educate them on the public/private
partnership model and its potential advantages for their jurisdictions. Members
of our management team are also regular speakers at conferences devoted to the
application of Internet technologies to facilitate the relationship between
governments and their citizens. In states where we believe interest is
significant, we seek to develop supportive, educational relationships with
professional and business organizations that may benefit from the government
service improvements our Internet delivery strategy can produce.


        Once a government decides to implement a public/private partnership
model for managing Internet access to resources and transactions, it typically
starts a selection process that operates under special rules that apply to
government purchasing. These rules typically require open bidding by possible
service providers against a list of requirements established by the government
under existing procedures or procedures especially created for the Internet
partner selection process. We respond to requests for bids with a proposal that
outlines in detail our philosophy and plans for implementing our business model.
Once our proposal is selected, we enter into negotiations for a contract. We
have responded to a number of requests for comprehensive electronic government
services proposals from governments and have been awarded and entered into
contracts in each case.


GROWING EXISTING MARKETS

        In our existing government partnerships, our marketing efforts focus on:

        - expanding the number of government agencies that provide services or
          information on the government portal;

        - identifying new information and transactions that can be usefully and
          cost-effectively delivered over the Internet; and

        - increasing the number of potential users who do business with the
          government over the Internet.

        Although each government's unique political and economic environment
drives different marketing and development priorities, we have found many of our
core applications to be relevant across multiple jurisdictions. Each of our
partnership operations has a director of marketing and additional marketing
staff that regularly meet with government, business and consumer representatives
to discuss potential new services. We also promote the use of existing services
to existing and new customers through speaking engagements and targeted
advertising to organizations for professionals, including lawyers, bankers and
insurance agents, that have a need for regular interaction with government.

        We have recently implemented a centralized marketing function, which
will identify products and services that have been developed and implemented
successfully for one government and replicate them in other jurisdictions.

                                       42
<PAGE>
TECHNOLOGY AND OPERATIONS

        Over the past eight years, we have made substantial investments in the
development of Internet-based applications and operations specifically designed
to allow businesses and citizens to transact with and receive information from
governments. The scope of our technological expertise includes network
engineering as it applies to the interconnection of government systems to the
Internet, Internet security, Web-to-legacy system integration, Web-to-mainframe
integration, database design, Web site administration and Web page development.
Within this scope, we have developed and implemented a comprehensive Internet
portal framework for governments, and a broad array of standalone service
solutions using a combination of our own proprietary technologies and
commercially available, licensed technologies. Our technological expertise,
coupled with our in-depth understanding of governmental processes and systems,
has made us adept at rapidly creating tailored solutions that keep our partners
on the forefront of electronic government.


        Each of our government partners has unique priorities and needs in the
development of its electronic government services. Over 60% of our employees
work in the Internet services and applications development, and operations area,
and nearly all are focused on a single government partner's application needs.
Our employees develop an understanding of a specific government's application
priorities, technical profiles and information technology personnel and
management. At the same time, all of our development directors are trained by
experienced technical staff from our other partnership operations on our
standard technical framework, and there is frequent and growing communication
and cooperation, which ensures that our government partners can make use of the
most advanced electronic government services we have developed throughout our
organization.


        Most of our portals and applications are physically hosted in each
jurisdiction in which we operate on servers that we own or lease. We also
provide links to sites that are maintained by government agencies or
organizations that we do not manage. Our business units provide uninterrupted 24
hour per day, 7 day a week online service, and all of our operations maintain
fault-tolerant, redundant systems, with thorough backup and security and
disaster recovery procedures.


        We believe our systems and applications are scalable and can easily be
replicated from one state to another. We focus on sustaining low-overhead
operations, with all major investments driven by the objective of deploying the
highest value-added technology and applications to each partnership operation.


        Finally, we have designed our government portals and applications to be
compatible with virtually any existing system and to be rapidly deployed. We
have implemented a government portal in as little as seven days from the award
of a contract, and have begun generating revenues from data access transactions
in as little as 30 days. To enable this level of speed and efficiency, we
license commercially available technology whenever possible and focus on the
integration and customization of these off-the-shelf solutions when necessary.
We expect that commercially licensed technology will continue to be available at
reasonable costs.

COMPETITION

        We believe that the principal factors upon which we compete are:

        - understanding of government needs;


        - the quality and fit of electronic government services;


        - the speed and responsiveness to the needs of businesses and citizens;
          and

        - cost-effectiveness.


        We believe we compete favorably with respect to the above-listed
factors. In most cases, the principal substitute for our services is a
government-designed and managed solution that integrates other


                                       43
<PAGE>

vendors' technologies, products and services. Companies that have expertise in
marketing and providing technical electronic services to government entities may
begin to compete with us by further developing their services and increasing
their focus on this piece of their business and market shares. Examples of
companies that may compete with us are the following:


        - large systems integrators, including American Management Systems, Inc.
          and Sapient Corporation;

        - traditional consulting firms, including International Business
          Machines Corporation and Science Applications International
          Corporation; and

        - Web service companies, including USWeb/CKS, AppNet Systems, Inc., and
          Verio Inc.


        Many of our potential competitors are national or international in scope
and may have greater resources than we do. These resources could enable our
potential competitors to initiate severe price cuts or take other measures in an
effort to gain market share. Additionally, in some geographic areas, we may face
competition from smaller consulting firms with established reputations and
political relationships with potential government partners. If we do not compete
effectively or if we experience any pricing pressures, reduced margins or loss
of market share resulting from increased competition, our business and financial
condition may be materially adversely affected.


INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS

        We rely on a combination of nondisclosure and other contractual
arrangements with governments, our employees and third parties, and privacy and
trade secret laws to protect and limit the distribution of the proprietary
software, documentation and processes we have developed in connection with the
electronic government products and services we offer. If we fail to adequately
protect our intellectual property rights and proprietary information or if we
become involved in litigation relating to our intellectual property rights and
proprietary technology, our business could be harmed. Any actions we take may
not be adequate to protect our proprietary rights and other companies may
develop technologies that are similar or superior to our proprietary technology.

        Although we believe that our products and services do not infringe on
the intellectual property rights of others and that we have all rights needed to
use the intellectual property employed in our business, it is possible that we
could in the future become subject to claims alleging infringement of third
party intellectual property rights. Any claims could subject us to costly
litigation, and may require us to pay damages and develop non-infringing
intellectual property or acquire licenses to the intellectual property that is
the subject of the alleged infringement.

        Additionally, upon the completion of the initial term of our government
contracts, governments and their successors and affiliates obtain a perpetual
right of use license to the software programs and other applications we have
developed for them in the operation of the networks. It is possible that
governments may use their limited license rights after termination of our
contracts to launch competing services, or inadvertently allow our intellectual
property or other information to fall into the hands of third parties, including
our competitors.

EMPLOYEES

        As of March 31, 1999, we had 102 full-time employees, of which 6 were
working in our corporate operations and 96 were located in our business units.
Of our employees, 18 were in sales and marketing, 63 were in service development
and operations and 21 were in finance, business development and administration.
Our future success will depend, in part, on our ability to continue to attract,
retain and motivate highly qualified technical and management personnel, for
whom competition is intense. From time to time, we also employ independent
contractors to support our research and development, marketing, sales and
support and administrative organizations. Our employees are not covered by any

                                       44
<PAGE>
collective bargaining agreement, and we have never experienced a work stoppage.
We believe that our relations with our employees are good.

FACILITIES

        Our principal administrative facility occupies a total of approximately
1,800 square feet at 12 Corporate Woods, 10975 Benson Street, Suite 390,
Overland Park, Kansas 66210. All of our subsidiaries also lease their
facilities. We believe our current facilities are adequate to meet our needs for
the foreseeable future. We do not anticipate acquiring property or buildings in
the foreseeable future.

LEGAL PROCEEDINGS

        We may from time to time become a party to various legal proceedings
arising in the ordinary course of our business. However, we are not currently
subject to any material legal proceedings.

                                       45
<PAGE>
                                   MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS


        The following table sets forth certain information regarding our
executive officers and directors as of June 15, 1999:



<TABLE>
<CAPTION>
NAME                                AGE     POSITION
- -------------------------------     ---     ------------------------------------------------------
<S>                              <C>        <C>
Jeffery S. Fraser..............     39      Chairman, Chief Executive Officer and Director
James B. Dodd..................     42      President, Chief Operating Officer and Director
Kevin C. Childress.............     41      Chief Financial Officer
William F. Bradley, Jr.........     44      Executive Vice President--Strategy, Policy & Legal,
                                            General Counsel and Secretary
Samuel R. Somerhalder..........     57      Executive Vice President--Operations and
                                            Administration
Harry H. Herington.............     39      Executive Vice President--Marketing and Technology
                                            Services, and Assistant Secretary
John L. Bunce, Jr..............     40      Director
Daniel J. Evans................     73      Director
Ross C. Hartley................     51      Director
Patrick J. Healy...............     32      Director
</TABLE>


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


        JEFFERY S. FRASER, one of our founders, has served as our Chairman and
Chief Executive Officer since January 1999 and as one of our directors since our
formation. Mr. Fraser served as our President and Chief Executive Officer from
April 1998 to December 1998 and President and Chief Executive Officer of our
subsidiary, National Information Consortium USA, Inc., from January 1993 to
April 1998. Additionally, from January 1992 to September 1998, he served as
President and Chief Executive Officer of our subsidiary, Kansas Information
Consortium, Inc. Mr. Fraser holds a B.S. in human resource management and an
M.S. in information systems from Friends University in Wichita, Kansas.


        JAMES B. DODD has served as our President, Chief Operating Officer and a
director since January 1999. Prior to joining us, Mr. Dodd spent 14 years with
the Sprint Corporation, a telecommunications company, where he served in various
senior management positions including, most recently, as Vice President and
General Manager of Sprint's Consumer Internet Access Group. Other positions he
held at Sprint included Vice President of Consumer International Marketing from
1992 to 1994, and Vice President of Consumer Product Management and Development
from 1995 to 1996. Mr. Dodd earned a CPA in 1982 and holds a B.A. in economics
from Stanford University and an M.B.A. from the Harvard Business School.


        KEVIN C. CHILDRESS has served as our Chief Financial Officer since May
1999. Prior to joining us, Mr. Childress served as a Managing Director and head
of the food and beverage industry group at BT Alex. Brown, Inc., an investment
banking firm, from 1992 to 1999. Prior to joining BT Alex. Brown, Mr. Childress
was with Salomon Brothers Inc. for 11 years, part of which time was spent as the
manager of the firm's Chicago-based midwest municipal finance group. Mr.
Childress holds a B.A. in economics and political science from Stanford
University.


        WILLIAM F. BRADLEY, JR. has served as our Secretary since May 1998,
General Counsel since July 1998 and Executive Vice President--Strategy, Policy &
Legal since January 1999. From May 1998 to February 1999, Mr. Bradley served as
one of our directors. He also serves as President, Chief Executive Officer and a
director of our subsidiary, Indian@ Interactive, Inc. Mr. Bradley is also the
General Manager for City-County Interactive, LLC, a subsidiary of Indian@
Interactive, Inc., which manages CivicNet for the city of Indianapolis and
Marion County, Indiana. From July 1989 to December 1994, Mr. Bradley was an
associate and later a law partner at Hinkle, Eberhart & Elkouri, LLC, a law firm
in Kansas. Mr. Bradley holds a B.A. in English from the University of Kansas,
Lawrence, and a J.D. degree from the University of Kansas School of Law.

                                       46
<PAGE>
        SAMUEL R. SOMERHALDER has served as our Executive Vice President of
Operations and Administration since January 1999. From May 1998 to November
1998, Mr. Somerhalder served as one of our directors. He also serves as
President, Chief Executive Officer and a director of our subsidiary, Nebrask@
Interactive, Inc., which manages Nebraska Online for which he has served as the
General Manager since January 1995. From November 1994 to April 1996, he also
served as Secretary of Nebrask@ Interactive, Inc. Prior to joining us, Mr.
Somerhalder was the Senior Vice President of Marketing for First Commerce
Technologies, Inc., an information technology company, from October 1991 to
January 1995. Mr. Somerhalder holds a B.S. in business administration from
Kansas State University.


        HARRY H. HERINGTON has served as our Executive Vice President of
Marketing and Technology Services since January 1999. He served as one of our
directors from May 1998 to February 1999. He also serves as President of
National Information Consortium USA, Inc., which has a government partnership
with Georgia to manage GeorgiaNet for which Mr. Herington is the General
Manager. From September 1995 to September 1996, Mr. Herington served as the
General Manager of Kansas Information Consortium, Inc. Prior to accepting his
present position with us, Mr. Herington was the Associate General Counsel for
the League of Kansas Municipalities from August 1992 to September 1995. Mr.
Herington holds a B.A. in photo journalism from Wichita State University in
Kansas and a J.D. degree from the University of Kansas School of Law.


        JOHN L. BUNCE, JR. has served as one of our directors since June 1998.
Mr. Bunce is a Managing Director and a member of the executive committee of
Hellman & Friedman LLC, a direct investment firm, which he joined as an
associate in 1988. Hellman & Friedman LLC is an affiliate of Hellman & Friedman
Capital Partners III, L.P., H&F Orchard Partners III, L.P. and H&F International
Partners III, L.P. Mr. Bunce also serves as a director of Western Wireless
Corporation, a cellular telecommunications company, Voicestream Wireless
Corporation, a telecommunications provider of personal communications services
(PCS), Bronner Slosberg Humphrey, Co., a direct marketing and interactive
agency, Falcon International Communications L.P., a cable company, and
MobileMedia Corporation, a paging and messaging services company. Mr. Bunce
holds a B.A. in international relations from Stanford University and an M.B.A.
from the Harvard Business School.

        DANIEL J. EVANS has served as one of our directors since November 1998.
He is the chairman of and serves as a consultant for Daniel J. Evans Associates
Consulting, a consulting company in Washington, since May 1989. Mr. Evans
currently serves as a director of Puget Sound Energy, an investor-owned electric
utility company, Flow International, a robotics company, Western Wireless
Corporation, a wireless communications company, and Tera Computer, a computer
manufacturing company. He also served as a U.S. Senator from September 1983 to
January 1989 and the Governor of the State of Washington from January 1965 to
January 1977. Mr. Evans holds a B.S. and an M.S. in civil engineering from the
University of Washington.


        ROSS C. HARTLEY, one of our founders, has served as one of our directors
since our formation. From its incorporation to March 1999, Mr. Hartley served as
Vice President of Marketing of Kansas Information Consortium, Inc. Mr. Hartley
also has served as President of The Hartley Insurance Group, an insurance
company in Kansas, since 1974. He also serves as a director of Empire District
Electric Company, an investor-owned electric utility company. Mr. Hartley holds
a B.S. in mathematics from Baker University in Baldwin City, Kansas and a J.D.
degree from the University of Kansas School of Law.


        PATRICK J. HEALY has served as one of our directors since June 1998. Mr.
Healy is a Managing Director of Hellman & Friedman LLC, a direct investment
firm, having joined Hellman & Friedman LLC as an associate in 1994. Hellman &
Friedman LLC is an affiliate of Hellman & Friedman Capital Partners III, L.P.,
H&F Orchard Partners III, L.P. and H&F International Partners III, L.P.
Currently, he also serves as a director of Bronner Slosberg Humphrey, Co., a
direct marketing and interactive agency. Mr. Healy holds an A.B. in economics
from Harvard College and an M.B.A. from the Harvard Business School.

        All directors hold office until the next annual meeting of the
shareholders and until their successors have been duly elected and qualified.
Executive officers are elected by and serve at the direction of the board of
directors.

                                       47
<PAGE>
KEY EMPLOYEES


<TABLE>
<CAPTION>
NAME                                AGE     POSITION
- -------------------------------     ---     ------------------------------------------------------
<S>                              <C>        <C>
Richard L. Brown...............     36      President, Chief Operating Officer and a director of
                                            Utah Interactive, Inc.
Robert P. Chandler.............     39      President, Chief Executive Officer and a director of
                                            Arkansas Information Consortium, Inc. and General
                                            Manager of the Information Network of Arkansas
Tamara Dukes...................     36      President, Chief Executive Officer and a director of
                                            New England Interactive, Inc. and General Manager of
                                            InforME Network
Steven Gill....................     38      Director of Finance of National Information Consortium
W. Kent Hiller.................     32      President, Chief Executive Officer and a director of
                                            Iowa Interactive, Inc. and General Manager of
                                            IOWAccess Network
Daniel Houlihan................     53      President, Chief Executive Officer and a director of
                                            Virginia Interactive, LLC and General Manager of
                                            Virginia Information Providers Network
Debra Luling...................     32      President, Chief Executive Officer and a director of
                                            Kansas Information Consortium, Inc. and General
                                            Manager of the Information Network of Kansas
Joseph Nemelka.................     30      President of Market Development Division of National
                                            Information Consortium and Chief Executive Officer and
                                            a director of Utah Interactive, Inc.
Keith Schraad..................     38      President of Georgia Division of National Information
                                            Consortium USA and General Manager of GeorgiaNet
                                            Authority
</TABLE>


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

        RICHARD L. BROWN has served since March 1999 as President, Chief
Operating Officer and a director of our subsidiary, Utah Interactive, Inc. Mr.
Brown served as the Director of Marketing and Operations of our subsidiary,
Indiana Interactive, Inc., from June 1998 to March 1999 and a marketing
executive from April 1998 to June 1998. Prior to joining us, Mr. Brown founded
and was Chief Executive Officer of Community Ventures in Living, Ltd., a
community-based non-profit organization in Indiana which assisted individuals
with disabilities. Mr. Brown holds a B.S. in economics from Purdue University.

        ROBERT P. CHANDLER has served since March 1999 as President and Chief
Executive Officer of our subsidiary, Arkansas Information Consortium, Inc.,
which manages the Information Network of Arkansas for which he serves as the
General Manager. He also has served as Secretary and a director of Arkansas
Information Consortium, Inc., since January 1997. Prior to joining us, Mr.
Chandler served as a Territory Director of ALLTEL Information Services Inc., an
information services provider in the telecommunications and financial services
industries, from January 1994 to September 1996 and as the Director of Sales and
Marketing at the same company from May 1997 to February 1999. From October 1996
to April 1997, he served as the Director of Sales and Marketing for eCommLink,
Inc., a software solutions provider in the financial services industry, a
company for which he was also a founding member. Mr. Chandler holds a B.S. in
marketing from Kansas State University and an M.B.A. from the University of
Kansas School of Business.


        TAMARA DUKES has served since March 1999 as President, Chief Executive
Officer and a director of our subsidiary, New England Interactive, Inc. which
manages Information Resource of Maine, our partnership with the State of Maine,
for which she serves as the General Manager. Ms. Dukes served as Director of
Marketing for Access Indiana Information Network from January 1998 through May
1998 and IOWAccess Network from June 1998 through February 1999. Prior to
joining us, Ms. Dukes founded Tamara Downham Dukes Marketing Consultants, a
marketing consulting company, in 1996, where she served as a principal from 1996
to January 1998. Additionally, Ms. Dukes created, produced and sold radio


                                       48
<PAGE>
advertising campaigns for WGLM Radio in Lafayette, Indiana from January 1995 to
January 1998. Ms. Dukes holds a B.A. in communication from Wheaton College.


        STEVEN GILL has served as our Director of Finance since February 1999.
Prior to joining us, Mr. Gill spent 11 years with Payless ShoeSource, Inc., a
retail shoe company, where he served in various positions including, most
recently, Assistant Controller, and other positions including Director of
Financial Planning and Analysis, Functional Controller, Manager of Real Estate
and Construction Planning and Analysis, and Manager of Corporate Financial
Planning and Analysis. Mr. Gill holds a B.S. in statistics from Brigham Young
University and an M.B.A. from the Brigham Young University's Marriott Graduate
School of Management.


        W. KENT HILLER has served since November 1997 as President, Chief
Executive Officer and a director of our subsidiary, Iowa Interactive, Inc.,
which manages the IOWAccess Network for which he serves as the General Manager.
From April 1996 to November 1997, he served as Director of Development for
Indiana Interactive, Inc. Prior to joining us, Mr. Hiller was a network
engineering manager for the state of Indiana from March 1995 to April 1996. From
January 1989 to March 1995, he held various positions in both engineering and
software development for the Space & Defense Group of The Boeing Company, an
aerospace company. Mr. Hiller holds a B.S. in mechanical engineering from Purdue
University and an M.B.A. from the Seattle University School of Business.


        DANIEL HOULIHAN has served since September 1997 as President, Chief
Executive Officer and a director of our subsidiary, Virginia Interactive, LLC,
which manages Virginia Information Providers Network for which he serves as the
General Manager. From October 1996 to August 1997, Mr. Houlihan served as Vice
President of Operations for Kansas Information Consortium, Inc. Prior to joining
us, he served as Chief Information Officer from December 1995 to October 1996
and the Director of Information Services Division from June 1993 to December
1995 for the State of Indiana. Mr. Houlihan holds a B.A. in political science
from Creighton University and an M.B.A. with a specialization in information
systems from the Florida Institute of Technology.



        DEBRA LULING has served since May 1998 as President, Chief Executive
Officer and a director of Kansas Information Consortium, Inc., which manages
Information Network of Kansas for which she serves as the General Manager. She
also served as the Director of Marketing from November 1996 to May 1998 and a
marketing representative from January 1996 November 1996 for Kansas Information
Consortium, Inc. Prior to joining us, Ms. Luling served from June 1993 to
December 1995 as the director of marketing activities for NewTek, Inc., a
computer hardware and software manufacturer in the desktop video industry, where
she oversaw the marketing and public relations efforts. Ms. Luling holds a B.S.
in journalism from the University of Kansas.



        JOSEPH NEMELKA has served since March 1999 as President of our Market
Development Division. Mr. Nemelka also serves as Chief Executive Officer and a
director of our subsidiary, Utah Interactive, Inc. From July 1997 to March 1999,
he served as President and Chief Executive Officer of Arkansas Information
Consortium, Inc. Prior to joining us, Mr. Nemelka served as a marketing
associate for Kansas Information Consortium, Inc. from October 1995 to August
1996 and for Indiana Interactive, Inc. from August 1996 to October 1996. From
October 1996 to July 1997, he served as a project manager for the Georgia
division of our subsidiary National Information Consortium USA. Mr. Nemelka
holds a B.A. in political science from Brigham Young University and a J.D.
degree from the University of Kansas School of Law.



        KEITH SCHRAAD has served since March 1999 as President of the Georgia
division of National Information Consortium/USA, which manages GeorgiaNet
Authority for which he serves as the General Manager. From October 1998 until
March 1999, he served as a project manager for National Information Consortium
USA. Additionally, from October 1997 to October 1998 he served as a marketing
associate for Kansas Information Consortium, Inc. Prior to joining us, Mr.
Schraad served as a Kansas State Senator and was an aide to U.S. Senator Robert
Dole. Mr. Schraad holds a B.A. in general studies from the University of Kansas
and a J.D. degree from the Washburn University School of Law.


                                       49
<PAGE>
COMPOSITION OF THE BOARD OF DIRECTORS

        Under our articles of incorporation and bylaws, the board of directors
has the power to set the number of directors at not less than three nor more
than 10. The number of members of the board of directors is currently set at
six. We intend to add one additional independent director prior to the closing
of this offering.

BOARD COMMITTEES

        The board of directors has established a compensation committee and an
audit committee. The compensation committee, consisting of Messrs. Hartley and
Bunce, reviews and approves the salaries, bonuses and other compensation payable
to our executive officers and administers and makes recommendations concerning
our employee benefit plans.


        The audit committee, consisting of Messrs. Hartley and Evans, and an
additional independent director to be elected prior to the closing of this
offering, recommends the selection of independent public accountants to the
board of directors, reviews the scope and results of the audit and other
services provided by our independent accountants, and reviews our accounting
practices and systems of internal accounting controls.



VOTING TRUST



        As of March 31, 1999, a portion of our outstanding common stock,
totaling 31,896,145 shares and representing approximately 75.1% of the
outstanding common stock prior to the offering is held in a voting trust, for
which Messrs. Fraser and Hartley serve as trustees. The voting trust is selling
1,500,000 shares of common stock in this offering, which will reduce the number
of shares it holds to 30,396,145, or approximately 57.9% of our outstanding
common stock. A total of 24,170,249 shares (23,033,549 shares after the
offering, assuming a pro rata allocation of shares sold by the voting trust) in
the voting trust are held for the benefit of affiliates of our company. The
address of each of the trustees is c/o Jeffery S. Fraser, 1811 Wakarusa Drive,
Suite 100, Lawrence, Kansas 66047. The trustees have dispositive and exclusive
voting power over all shares held by the voting trust, including without
limitation, the right to vote for the election of directors, authorize an
amendment to the articles of incorporation or bylaws, and authorize a merger or
consolidation of the company. Additionally, the trustees are empowered to
perform any and all acts necessary and appropriate for the organization and
operation of the voting trust.



        The voting trust certificates are transferable upon surrender of the
same according to the rules established by the trustees. The voting trust
expires on (a) June 30, 2018, (b) upon mutual assent of the trustees with
written notification to holders of the voting trust certificates, or (c) upon
deadlock between the trustees and failure to remedy the deadlock after 90 days.


DIRECTOR COMPENSATION


        Directors who are also our employees currently receive no additional
compensation for their services as directors of our company. Directors who are
not our employees do not receive a fee for attendance in person at meetings of
the board of directors or committees of the board of directors, but are
reimbursed for travel expenses and other out-of-pocket costs incurred in
connection with their attendance of meetings.


        In the past, Messrs. Fraser, Bradley, Somerhalder, Herington and Hartley
received consulting fees for their services, including serving as directors for
our subsidiaries.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

        No member of our compensation committee serves as a member of the board
of directors or compensation committee of any entity that has one or more
executive officers serving as a member of our board of directors or compensation
committee.

                                       50
<PAGE>
        There are no family relationships among any of our directors or
executive officers other than between Mr. Fraser and Mr. Somerhalder, who is Mr.
Fraser's brother-in-law.

EXECUTIVE COMPENSATION

        The following table contains information in summary form concerning the
compensation paid to our chief executive officer and each of our most highly
compensated executive officers whose total salary, bonus and other compensation
exceeded $100,000 during the year ended December 31, 1998. In accordance with
the rules of the SEC, the compensation described in this table does not include
perquisites and other personal benefits received by the executive officers named
in the table below which do not exceed the lesser of $50,000 or 10% of the total
salary and bonus reported for these officers.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                        ALL OTHER 1998
                                               1998 ANNUAL               COMPENSATION
                                               COMPENSATION       --------------------------
                                          ----------------------  TOTAL HEALTH   CONSULTING
                                           SALARY       BONUS       INSURANCE       FEES       401(K) MATCH
                                          ---------  -----------  -------------  -----------  ---------------
<S>                                       <C>        <C>          <C>            <C>          <C>
Jeffery S. Fraser ......................  $ 202,591          --     $  13,799     $  51,500      $   2,733
  Chairman and Chief Executive
  Officer

William F. Bradley, Jr. ................    110,509          --        11,912        18,000          2,733
  Secretary, General Counsel and
  Executive Vice President--Strategy,
  Policy & Legal

Samuel R. Somerhalder ..................    101,004          --        13,758        12,000          2,733
  Executive Vice President--
  Operations and Administration

Harry H. Herington .....................     83,999          --        14,263        32,000          2,733
  Executive Vice President--
  Marketing and Technology Services
</TABLE>

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


        Consulting fees consist of fees we paid to the executive officers in the
table above for their services as directors of our subsidiaries, as well as
various other services they performed for our subsidiaries.



        Mr. Fraser served as a director of each of our subsidiaries. Mr. Bradley
served as a director of our subsidiary, Indian@ Interactive, Inc., and, briefly,
as a director of our subsidiary, Nebrask@ Interactive, Inc. Mr. Somerhalder
served as a director of our subsidiary, Nebrask@ Interactive, Inc. Mr. Herington
served as a director of our subsidiaries, Nebrask@ Interactive, Inc, Kansas
Information Consortium, Inc., Indian@ Interactive, Inc. and Arkansas Information
Consortium, Inc.


OPTION GRANTS AND EXERCISES DURING FISCAL 1998

        No stock options were granted to or exercised by each of the executive
officers listed in the summary compensation table above during fiscal 1998.

AGGREGATED OPTION EXERCISES IN 1998 AND FISCAL YEAR END OPTION VALUES


        None of the executive officers listed in the summary compensation table
above exercised or held options in 1998.


                                       51
<PAGE>
EMPLOYMENT AGREEMENTS

    JEFFERY S. FRASER


        On July 24, 1998, Jeffery S. Fraser entered into an employment agreement
with us to serve as our President. Mr. Fraser currently serves as our Chairman
and Chief Executive Officer. The employment agreement provides Mr. Fraser with
an annual base salary of $249,000. Should we terminate Mr. Fraser's employment
without cause, before July 1, 2000, we must pay Mr. Fraser one year's base
salary in equal monthly payments on the first day of the month for each of the
twelve months following his termination. Should we terminate Mr. Fraser's
employment without cause after such time, but prior to July 1, 2001, we must pay
Mr. Fraser the equivalent of his base salary for the number of months remaining
until July 1, 2001. Should we terminate Mr. Fraser's employment without cause on
or after July 1, 2001, Mr. Fraser will not be entitled to severance pay, except
as provided in our severance benefit plan, if any, in effect on the termination
date. Cause is defined in the agreement as: (a) indictment or conviction for any
felony or crime involving dishonesty; (b) willful participation in any fraud
against us; (c) willful breach of Mr. Fraser's duties to us; (d) intentional
damage to any of our property; or (e) conduct by Mr. Fraser which our board of
directors determines to be inappropriate for his position.


        Should we terminate Mr. Fraser's employment for cause, we must pay Mr.
Fraser all compensation due on the date of termination.

        Under the terms of his agreement, Mr. Fraser may terminate his
employment with us in writing at any time for any reason. In connection with his
employment agreement, Mr. Fraser entered into a proprietary information and
inventions agreement and a non-competition agreement. Should Mr. Fraser's
employment with us terminate for any reason, the agreements provide collectively
that Mr. Fraser: (a) will not use any of our proprietary information without our
prior written consent; (b) will not use any confidential information to compete
against us or any of our employees; and (c) will not, for three years following
termination, solicit any of our employees or customers.

    JAMES B. DODD


        On January 1, 1999, James B. Dodd entered into an employment agreement
with us to serve as our President and Chief Operating Officer. This agreement
provides Mr. Dodd with an annual base salary of $200,000. Should we terminate
Mr. Dodd's employment without cause, as similarly defined in Mr. Fraser's
employment agreement, before January 1, 2002, we must pay Mr. Dodd his
then-current salary in equal monthly payments on the first day of the month for
each of the eighteen months following his termination. Should we terminate Mr.
Dodd's employment without cause on or after January 1, 2002, Mr. Dodd will not
be entitled to severance pay, except as provided in our severance benefit plan,
if any, in effect on the termination date.


        Should we terminate Mr. Dodd's employment for cause, we must pay Mr.
Dodd all compensation due on the date of termination.

        Under the terms of his agreement, Mr. Dodd may terminate his employment
with us in writing at any time for any reason. In connection with his employment
agreement, Mr. Dodd entered into a proprietary information and inventions
agreement and a non-competition agreement. Should Mr. Dodd's employment with us
terminate for any reason, the agreements provide collectively that Mr. Dodd: (a)
will not use any of our proprietary information without our prior written
consent; (b) will not use any confidential information to compete against us or
any of our employees; and (c) will not, for three years following termination,
solicit any of our employees or customers.


    KEVIN C. CHILDRESS



        On May 16, 1999, Kevin C. Childress entered into an employment agreement
with us to serve as our Chief Financial Officer. This agreement provides Mr.
Childress with an annual base salary of $175,000. Should we terminate Mr.
Childress' employment without cause, as similarly defined in Mr. Fraser's


                                       52
<PAGE>

employment agreement, before May 16, 2002, we must pay Mr. Childress his
then-current salary in equal monthly payments on the first day of the month for
each of the eighteen months following his termination. Should we terminate Mr.
Childress' employment without cause on or after May 16, 2002, Mr. Childress will
not be entitled to severance pay, except as provided in our severance benefit
plan, if any, in effect on the termination date.



        Should we terminate Mr. Childress' employment for cause, we must pay Mr.
Childress all compensation due on the date of termination.



        Under the terms of his agreement, Mr. Childress may terminate his
employment with us in writing at any time for any reason. In connection with his
employment agreement, Mr. Childress entered into a proprietary information and
inventions agreement and a non-competition agreement. Should Mr. Childress'
employment with us terminate for any reason, the agreements provide collectively
that Mr. Childress: (a) will not use any of our proprietary information without
our prior written consent; (b) will not use any confidential information to
compete against us or any of our employees; and (c) will not, for three years
following termination, solicit any of our employees or customers.


    WILLIAM F. BRADLEY, JR.


        On July 24, 1998, William F. Bradley Jr., entered into an employment
agreement with us to serve as our Subsidiary President. In addition Mr. Bradley
serves as our Secretary, General Counsel, and Executive Vice President of
Strategy, Policy & Legal. The employment agreement provides Mr. Bradley with an
annual base salary of $140,000. Should we terminate Mr. Bradley's employment
without cause, as similarly defined in Mr. Fraser's employment agreement, before
July 1, 2000, we must pay Mr. Bradley one year's base salary in equal monthly
payments on the first day of the month for each of the twelve months following
his termination. Should we terminate Mr. Bradley's employment without cause
after such time, but prior to July 1, 2001, we must pay Mr. Bradley the
equivalent of his base salary for the number of months remaining until July 1,
2001. Should we terminate Mr. Bradley's employment without cause on or after
July 1, 2001, Mr. Bradley will not be entitled to severance pay, except as
provided in our severance benefit plan, if any, in effect on the termination
date.


        Should we terminate Mr. Bradley's employment for cause, we must pay Mr.
Bradley all compensation due on the date of termination.

        Under the terms of his agreement, Mr. Bradley may terminate his
employment with us in writing at any time for any reason. In connection with his
employment agreement, Mr. Bradley entered into a proprietary information and
inventions agreement and a non-competition agreement. Should Mr. Bradley's
employment with us terminate for any reason, the agreements provide collectively
that Mr. Bradley: (a) will not use any of our proprietary information without
our prior written consent; (b) will not use any confidential information to
compete against us or any of our employees; and (c) will not, for three years
following termination, solicit any of our employees or customers.

    SAMUEL R. SOMERHALDER


        On July 24, 1998, Samuel R. Somerhalder entered into an employment
agreement with us to serve as our Subsidiary President. In addition, Mr.
Somerhalder serves as our Executive Vice President of Operations and
Administration. The employment agreement provides Mr. Somerhalder with an annual
base salary of $115,000. Should we terminate Mr. Somerhalder's employment
without cause, as similarly defined in Mr. Fraser's employment agreement, before
July 1, 2000, we must pay Mr. Somerhalder one year's base salary in equal
monthly payments on the first day of the month for each of the twelve months
following his termination. Should we terminate Mr. Somerhalder's employment
without cause after such time, but prior to July 1, 2001, we must pay Mr.
Somerhalder the equivalent of his base salary for the number of months remaining
until July 1, 2001. Should we terminate Mr. Somerhalder's employment without
cause on or after July 1, 2001, Mr. Somerhalder will not be entitled to
severance pay, except as provided in our severance benefit plan, if any, in
effect on the termination date.


                                       53
<PAGE>
        Should we terminate Mr. Somerhalder's employment for cause, we must pay
Mr. Somerhalder all compensation due on the date of termination.

        Under the terms of his agreement, Mr. Somerhalder may terminate his
employment with us in writing at any time for any reason. In connection with his
employment agreement, Mr. Somerhalder entered into a proprietary information and
inventions agreement and a non-competition agreement. Should Mr. Somerhalder's
employment with us terminate for any reason, the agreements provide collectively
that Mr. Somerhalder: (a) will not use any of our proprietary information
without our prior written consent; (b) will not use any confidential information
to compete against us or any of our employees; and (c) will not, for three years
following termination, solicit any of our employees or customers.

    HARRY H. HERINGTON


        On July 24, 1998, Harry H. Herington entered into an employment
agreement with us to serve as our Subsidiary President. In addition, Mr.
Herington serves as our Executive Vice President of Marketing and Technology
Services. The employment agreement provides Mr. Herington with an annual base
salary of $125,000. Should we terminate Mr. Herington's employment without
cause, as similarly defined in Mr. Fraser's employment agreement, before July 1,
2000, we must pay Mr. Herington one year's base salary in equal monthly payments
on the first day of the month for each of the twelve months following his
termination. Should we terminate Mr. Herington's employment without cause after
such time, but prior to July 1, 2001, we must pay Mr. Herington the equivalent
of his base salary for the number of months remaining until July 1, 2001. Should
we terminate Mr. Herington's employment without cause on or after July 1, 2001,
Mr. Herington will not be entitled to severance pay, except as provided in our
severance benefit plan, if any, in effect on the termination date.


        Should we terminate Mr. Herington's employment for cause, we must pay
Mr. Herington all compensation due on the date of termination.

        Under the terms of his agreement, Mr. Herington may terminate his
employment with us in writing at any time for any reason. In connection with his
employment agreement, Mr. Herington entered into a proprietary information and
inventions agreement and a non-competition agreement. Should Mr. Herington's
employment with us terminate for any reason, the agreements provide collectively
that Mr. Herington: (a) will not use any of our proprietary information without
our prior written consent; (b) will not use any confidential information to
compete against us or any of our employees; and (c) will not, for three years
following termination, solicit any of our employees or customers.

BENEFIT PLANS

    AMENDED AND RESTATED 1998 STOCK OPTION PLAN


        The 1998 plan was adopted and approved by our board of directors and by
our shareholders in May 1998, at which time a total of 4,643,377 shares of
common stock were reserved for issuance under this plan. In November 1998, the
1998 plan was amended to reserve a total of 7,893,741 shares of common stock for
issuance under this plan. In May 1999, the 1998 plan was amended to reserve a
total of 9,286,754 shares of common stock for issuance under this plan. At March
31, 1999, options to purchase 69,302 shares of common stock granted under the
1998 plan had been exercised, options to purchase 2,512,332 shares of common
stock were outstanding and options to purchase 6,705,120 shares of common stock
remained available for grant. The outstanding options were exercisable at a
weighted average exercise price of $1.44 per share. Outstanding options to
purchase an aggregate of 1,209,414 shares were held by employees who are not
officers or directors of our company.


        Our board of directors has delegated administration of the 1998 plan to
its compensation committee. The compensation committee is made up of not less
than two nor more than five non-employee directors within the meaning under Rule
16b-3 of the Exchange Act. Awards under the 1998 plan may consist of incentive
stock options, which are stock options that qualify under Section 422 of

                                       54
<PAGE>
the Internal Revenue Code, or non-qualified stock options, which are stock
options that do not qualify under that provision.

        The compensation committee may grant incentive stock options to
employees and officers of our company or any of our subsidiaries, and
non-qualified stock options to employees, officers or directors of our company
or any of our subsidiaries. The compensation committee may set the terms of such
grants, subject to the restrictions in the 1998 plan. Incentive stock option
grants are subject to the following limitations:

        - the term of any incentive stock option may not be longer than ten
          years;

        - the term of any incentive stock option granted to an individual
          possessing more than 10% of the combined voting power of our company
          or a subsidiary may not be longer than five years;

        - the aggregate fair market value of all shares underlying incentive
          stock options granted to an individual that first become exercisable
          in any calendar year may not exceed $100,000;

        - the exercise price of incentive stock options may not be less than the
          greater of the par value of the underlying shares or the fair market
          value of the underlying shares on the grant date; and

        - the exercise price of any incentive stock option granted to an
          individual possessing more than 10% of the combined voting power of
          our company or a subsidiary may not be less than 110% of the fair
          market value of the underlying shares on the grant date.

        During an optionee's lifetime, only an optionee can exercise an
incentive stock option or non-qualified stock option. He or she cannot transfer
such options other than by will or the laws of descent and distribution. If an
optionee's status as an employee or director of our company or any of our
subsidiaries terminates for any reason other than termination because of death,
disability, for cause or on account of voluntary termination, then the optionee
may exercise, in the 30 day period following the termination, that portion of
the options that is exercisable at the time of the termination unless such
options terminate or expire sooner by their terms. If an optionee's employment
by our company or any of our subsidiaries is terminated for cause, as defined in
the 1998 plan, or if an optionee voluntarily terminates his or her employment
with our company or with any of our subsidiaries, then any option held by the
optionee shall be terminated immediately and forfeited without any payment from
our company or our subsidiaries. In the event the optionee becomes disabled or
dies while the optionee is an employee or director of our company, then the
options vested as of the date of disability or death may be exercised prior to
the earlier of their expiration date or 12 months from the date of the
optionee's disability or death.


        In the event of (a) a merger, consolidation or reorganization in which
we are not the surviving company or (b) the acquisition by another company of
all or substantially all of our assets, then every option outstanding under the
1998 plan may be assumed or replaced with new options of comparable value by the
surviving, continuing, successor or acquiring company. In the event that the
outstanding options are neither assumed nor replaced, the compensation committee
may provide that an optionee can exercise his or her options within the period
of 30 days prior to the merger, consolidation, reorganization or acquisition.
Additionally, in connection with change of control situations in which a person,
other than one of our shareholders, directors or officers, acquires greater than
50% of the combined voting power of the company or less than a majority of the
directors are persons who were nominated or selected by our board of directors,
the compensation committee may accelerate the time at which options granted
under the 1998 plan may be exercised by an optionee.



        The 1998 plan will terminate automatically in 2008 unless sooner
terminated by the board of directors. The board of directors has the authority
to amend, suspend or terminate the 1998 plan, subject to shareholder approval of
some of the amendments. However, no action may be taken which will affect


                                       55
<PAGE>
any shares of common stock previously issued and sold or any option previously
granted under the 1998 plan without the optionee's consent.

    1999 EMPLOYEE STOCK PURCHASE PLAN


        Our stock purchase plan was approved by the board of directors and our
shareholders in May 1999. Our stock purchase plan is intended to qualify as an
employee stock purchase plan under Section 423 of the Internal Revenue Code in
order to provide our employees with an opportunity to purchase our stock through
payroll deductions. An aggregate of 2,321,688 shares of common stock has been
reserved for issuance and are available for purchase under the stock purchase
plan, subject to adjustment in the event of a stock split, stock dividend or
other similar change in our common stock or our capital structure. All employees
of our company and of our affiliates who have been employed for a continuous
period, as determined by the board or committee administering the stock purchase
plan but which will not exceed two years, preceding the offering are eligible to
participate in our stock purchase plan, provided that no employee of our company
or of our affiliates whose customary employment is for less than five months in
any calendar year and less than 20 hours per week are eligible to participate in
our stock purchase plan. Non-employee directors, consultants, and employees
subject to the rules or laws of a foreign jurisdiction that prohibit or make
impractical their participation in a stock purchase plan are not eligible to
participate in our stock purchase plan. Participation in our stock purchase plan
is also subject to the following limitations: (a) no employee will be eligible
for the grant of a stock purchase right if immediately after the right is
granted the employee would own more than five percent of the total combined
voting power of all of our or our affiliates' classes of stock, and (b) an
eligible employee may be granted a purchase right only to the extent that the
right does not permit the employee to purchase stock with a fair market value of
greater than $25,000 for each calendar year.


        Our stock purchase plan will be administered by the board of directors
or a committee appointed by the board consisting of three or more board members.
The committee will have complete authority to determine the employees who will
receive stock purchase rights and will designate offering periods not to exceed
27 months. The committee will establish one or more purchase dates during an
offering period during which stock purchase rights may be exercised and common
stock may be purchased.

        In the event we dissolve, liquidate, merge or consolidate through a
merger in which we are not the surviving corporation, effectuate a reverse
merger in which we are the surviving corporation but our shares of common stock
outstanding prior to the merger are converted into other property, whether in
the form of securities, cash or otherwise, or are acquired by any person, entity
or group, as defined by the Exchange Act or any successive provisions, holding
at least 50% of our combined voting power, then, the board or committee
administering the stock purchase plan may (a) allow the surviving or acquiring
corporation to assume the outstanding rights or substitute similar rights for
those participating under the stock purchase plan, (b) have the existing rights
under the stock purchase plan remain in full force and effect or (c) allow those
participating under the stock purchase plan to use their accumulated payroll
deductions to purchase our common stock immediately prior to the transactions
described above, provided that their rights under the ongoing offering period
will be terminated.

        On the first day of each offer period, a participating employee is
granted a purchase right. A purchase right is a form of option to be
automatically exercised on the forthcoming exercise dates within the offer
period during which authorized deductions are to be made from the pay of
participants and credited to their accounts under the stock purchase plan. When
the purchase right is exercised, the participant's withheld salary is used to
purchase our shares of common stock. The price per share at which our shares of
common stock are to be purchased under the stock purchase plan during any
offering period is the lesser of (a) 85% of the fair market value of our common
stock on the date of the commencement of the offer period or (b) 85% of the fair
market value of our common stock on the purchase date. The participant's
purchase right is exercised in this manner on each exercise date arising in the
offer period unless, on any purchase date, the fair market value of our common
stock is lower than the fair market value of our common stock on the first day
of the offering period. If so, the participant's participation in

                                       56
<PAGE>
the original offering period is terminated, and the participant is automatically
enrolled in the next offering period which will commence on the next day.

        Payroll deductions may range up to 15% of a participant's regular base
pay, exclusive of bonuses, overtime, shift-premiums, commissions, reimbursements
or other expense allowances. Participants may not make direct cash payments to
their accounts. The board or committee administering the stock purchase plan may
establish the maximum number of our shares of common stock that any employee may
purchase under the stock purchase plan during an offering period. The Internal
Revenue Code imposes additional limitations on the amount of common stock that
may be purchased during any calendar year.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS


        Our articles of incorporation and bylaws provide that we will indemnify
any person entitled to indemnity under the Colorado Business Corporation Act, as
it now exists or as amended, against all liability and expenses to the fullest
extent permitted by Colorado law. However, we will not indemnify any person in
connection with any proceeding initiated by this person, unless the proceeding
is authorized by a majority of our board of directors. In addition to
indemnification provided for in our charter documents, upon the closing of this
offering, we will have entered into agreements to indemnify our directors and
officers. To the fullest extent permitted by the Colorado Business Corporation
Act, these agreements, among other things, provide for the indemnification of
our directors and officers for some of the expenses, including attorneys' fees,
judgments, fines and settlement amounts incurred by any such person in any
action or proceeding, including any action by us or in the right of the company,
arising out of such person's services as one of our directors or officers, any
of our subsidiaries or any other company or enterprise to which such person
provides services at our request. Furthermore, we plan to purchase and maintain
insurance on behalf of our directors and officers to insure them against
liabilities that they may incur in their capacities as or arising out of their
status as directors and officers. We believe that these provisions and
agreements will assist us in attracting and retaining qualified persons to serve
as directors and officers.


        Section 7-109-102 of the Colorado Business Corporation Act provides that
a corporation may indemnify a director from liability incurred in connection
with a proceeding in which the director is made a party because of his or her
status as a director, except upon adjudication in connection with the particular
proceeding that (a) the director was liable to the corporation or (b) the
director was liable because he or she derived an improper personal benefit.

        Insofar as indemnification for liabilities arising under the Securities
Act may be permitted for our directors and officers under the provisions
contained in our charter documents, the Colorado Business Corporation Act or
otherwise, we have been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities, other than the payment by us of expenses incurred or
paid by one of our directors or officers, the successful defense of any action,
suit, or proceeding is asserted by such director or officer, we will submit to a
court of appropriate jurisdiction the question whether such indemnification by
us is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue, unless in the opinion of our
counsel the matter has been settled by controlling precedent.

        There is no pending litigation or proceeding involving one of our
directors or officers as to which indemnification is being sought, nor are we
aware of any pending or threatened litigation that may result in claims for
indemnification by any director or officer.

                                       57
<PAGE>
                              CERTAIN TRANSACTIONS


        Mr. Hartley, one of our founders, is the President of The Hartley
Insurance Agency, an insurance company, which acts as our insurance agent and
broker. In 1998, a payment of $8,345 was made directly to The Hartley Insurance
Agency. However, the aggregate insurance payment we made that was brokered by
The Hartley Insurance Agency totaled $478,392, including the $8,345 payment made
directly to The Hartley Insurance Agency.



        We have periodically leased aircraft from Sky King Leasing, a Kansas
corporation, of which Mr. Fraser, one of our founders, Mr. Hartley and
Christopher L. Shults, one of our five percent shareholders, each approximately
have a 25% interest. In 1998, we made payments totaling $24,223 to Sky King
Leasing.


        On January 8, 1998, we entered into an agreement with each of Messrs.
Fraser and Hartley to provide their respective estates with a right to require
us to repurchase some or all shares of our common stock owned by them upon their
death. These agreements were terminated on July 1, 1998.


        In March 1998, we completed an exchange offer in which shareholders in
our local operating networks exchanged their stock for shares of our common
stock. Messrs. Fraser, Hartley, Bradley, Somerhalder and Herington received an
aggregate of 21,614,414 shares of our common stock in the exchange offer.



        On June 30, 1998, Messrs. Fraser and Hartley entered into a voting trust
agreement under which they act as joint trustees for a voting trust which holds,
as of March 31, 1999, 31,896,145 shares of our common stock. See "Description of
Capital Stock--Voting Trust."



        On June 30, 1998, the voting trust described above sold to Hellman &
Friedman Capital Partners III, L.P. and its affiliates H&F International
Partners III, L.P. and H&F Orchard Partners III, L.P., collectively, 10,516,547
shares of our common stock at a price of $1.43 per share for an aggregate of
approximately $15,000,000. In connection with this sale, we entered into an
investor rights agreement with Hellman & Friedman and its affiliates in which we
granted them rights to register shares of our common stock in the future. See
"Description of Capital Stock" for a more detailed description.



        On December 3, 1998, we issued to Mr. James B. Dodd options to purchase
1,393,013 shares of our common stock at an exercise price of $1.44 per share. On
February 9, 1999, we sold to Mr. Dodd 173,258 shares of our common stock at
$1.44 per share for an aggregate of approximately $250,000.



        On May 16, 1999, we sold to Kevin C. Childress 23,727 shares of our
common stock at $5.27 per share for an aggregate of approximately $125,000.
Additionally, we issued to Mr. Childress options to purchase 696,511 shares of
our common stock at an exercise price of $5.27 per share.


        We intend to enter into indemnification agreements with each of our
directors and officers. These indemnification agreements will require us to
indemnify these individuals to the fullest extent permitted by Colorado law.

        We have also entered into various employment agreements with our
officers. See "Management-- Employment Agreements" for a more detailed
description.

        We believe that all of the transactions set forth above were made on
terms no less favorable to us than could have been obtained from unaffiliated
third parties. We intend that all future transactions, including loans, between
us and our officers, directors, principal shareholders and their affiliates will
be approved by a majority of the board of directors, including a majority of the
independent and disinterested outside directors on the board of directors, and
will be on terms no less favorable to us than could be obtained from
unaffiliated third parties.

                                       58
<PAGE>
                       PRINCIPAL AND SELLING SHAREHOLDERS

        The following table sets forth the beneficial ownership of our common
stock as of March 31, 1999 and as adjusted to reflect the sale of the shares of
common stock in this offering by:

        - each person or entity known by us to own beneficially more than five
          percent of our common stock;

        - our chief executive officer, each of the executive officers named in
          the summary compensation table and each of our directors;

        - all of our executive officers and directors as a group; and

        - all other selling shareholders.


        The Beneficial ownership is calculated based on 42,481,996 shares of our
common stock outstanding as of March 31, 1999 and 52,481,996 shares outstanding
immediately following the completion of this offering. Beneficial ownership is
determined in accordance with the rules of the SEC and generally includes voting
or investment power with respect to securities. Unless otherwise indicated, each
person or entity named in the table has sole voting power and investment power,
or shares voting and investment power with his or her spouse, with respect to
all shares of capital stock listed as owned by such person. Shares issuable upon
the exercise of options that are currently exercisable or become exercisable
within sixty days of March 31, 1999 are considered outstanding for the purpose
of calculating the percentage of outstanding shares of our common stock held by
the individual, but not for the purpose of calculating the percentage of
outstanding shares of our common stock held by any other individual.



        The number of shares being offered and shares beneficially owned after
the offering assume a pro rata allocation among beneficiaries of the voting
trust of the 1,500,000 shares being sold by the voting trust and a pro rata
allocation among the Hellman & Friedman entities of the aggregate of 1,500,000
shares those entities are selling in the offering.


        The address of each of the executive officers and directors is c/o
National Information Consortium, Inc., 12 Corporate Woods, 10975 Benson Street,
Suite 390, Overland Park, Kansas 66210.

<TABLE>
<CAPTION>
                                                                                                                 SHARES
                                                                                                               BENEFICIALLY
                                                               SHARES BENEFICIALLY OWNED                       OWNED AFTER
                                                                   PRIOR TO OFFERING                            OFFERING
                                                             -----------------------------  NUMBER OF SHARES   -----------
NAME AND ADDRESS                                                NUMBER        PERCENTAGE      BEING OFFERED      NUMBER
- -----------------------------------------------------------  -------------  --------------  -----------------  -----------
<S>                                                          <C>            <C>             <C>                <C>
5% SHAREHOLDERS
Jeffery S. Fraser and Ross C. Hartley, co-trustees of
  National Information Consortium Voting Trust, dated June
  30, 1998 c/o Jeffery S. Fraser
  1811 Wakarusa Drive, Suite 100
  Lawrence, KS 66047.......................................     31,896,145           75.1%       1,500,000      30,396,145
Hellman & Friedman Capital Partners III, L.P. c/o Hellman &
  Friedman LLC
  One Maritime Plaza
  San Francisco, CA 94111..................................      9,601,607           22.6        1,369,200       8,232,407
H&F Orchard Partners III, L.P.
  c/o Hellman & Friedman LLC
  One Maritime Plaza
  San Francisco, CA 94111..................................        704,609            1.7          100,800         603,809
H&F International Partners III, L.P
  c/o Hellman & Friedman LLC
  One Maritime Plaza
  San Francisco, CA 94111..................................        210,331              *           30,000         180,331
Christopher L. and Linda D. Shults
  633 North Wheatland Place
  Wichita, KS 67235........................................      2,229,851            5.2          104,850       2,125,001
NAMED EXECUTIVE OFFICERS AND DIRECTORS
Jeffery S. Fraser..........................................     31,896,145           75.1        1,500,000      30,396,145
James B. Dodd..............................................        303,272              *            8,100         295,172
William F. Bradley, Jr.....................................      2,132,679            5.0          100,350       2,032,329
Samuel R. Somerhalder......................................      2,345,123            5.5          110,250       2,234,873
Harry H. Herington.........................................      1,202,021              *           56,550       1,145,471
John L. Bunce, Jr..........................................     10,516,547           24.8        1,500,000       9,016,547
Daniel J. Evans............................................         69,302              *               --          69,302

<CAPTION>

NAME AND ADDRESS                                               PERCENTAGE
- -----------------------------------------------------------  ---------------
<S>                                                          <C>
5% SHAREHOLDERS
Jeffery S. Fraser and Ross C. Hartley, co-trustees of
  National Information Consortium Voting Trust, dated June
  30, 1998 c/o Jeffery S. Fraser
  1811 Wakarusa Drive, Suite 100
  Lawrence, KS 66047.......................................         57.9%
Hellman & Friedman Capital Partners III, L.P. c/o Hellman &
  Friedman LLC
  One Maritime Plaza
  San Francisco, CA 94111..................................          15.7
H&F Orchard Partners III, L.P.
  c/o Hellman & Friedman LLC
  One Maritime Plaza
  San Francisco, CA 94111..................................           1.2
H&F International Partners III, L.P
  c/o Hellman & Friedman LLC
  One Maritime Plaza
  San Francisco, CA 94111..................................             *
Christopher L. and Linda D. Shults
  633 North Wheatland Place
  Wichita, KS 67235........................................           4.1
NAMED EXECUTIVE OFFICERS AND DIRECTORS
Jeffery S. Fraser..........................................          57.9
James B. Dodd..............................................             *
William F. Bradley, Jr.....................................           3.9
Samuel R. Somerhalder......................................           4.3
Harry H. Herington.........................................           2.2
John L. Bunce, Jr..........................................          17.2
Daniel J. Evans............................................             *
</TABLE>


                                       59
<PAGE>

<TABLE>
<S>                                                          <C>            <C>             <C>                <C>
Ross C. Hartley............................................     31,896,145           75.1        1,500,000      30,396,145
Patrick J. Healy...........................................     10,516,547           24.8        1,500,000       9,016,547
All executive officers and directors as a group (10
  persons).................................................     42,612,010          100.0        3,000,000      39,612,010

<CAPTION>
Ross C. Hartley............................................          57.9
Patrick J. Healy...........................................          17.2
All executive officers and directors as a group (10
  persons).................................................          75.3
</TABLE>


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

*   Less than 1%.

        For a description of the voting trust and the rights and powers of the
trustees, see "Description of Capital Stock--Voting Trust."

        H&F Investors III, a California general partnership, is the sole general
partner of Hellman & Friedman Capital Partners III, L.P., a California limited
partnership, H&F Orchard Partners III, L.P., a California limited partnership,
and H&F International Partners III, L.P., a California limited partnership.
Messrs. Bunce and Healy are Managing Directors of Hellman & Friedman LLC, an
affiliate of H&F Investors III. The managing general partner of H&F Investors
III is Hellman & Friedman Associates III, L.P., a California limited
partnership, and the general partners of Hellman & Friedman Associates III are
H&F Management III, L.L.C., a California limited liability company, and H&F
Investors III, Inc., a California corporation. The sole shareholder of H&F
Investors III, Inc. is the Hellman Family Revocable Trust. The investment
decisions of H&F Investors III, Inc. and H&F Management III, L.L.C. are made by
an executive committee, of which Mr. Bunce is a member. The executive committee
indirectly exercises voting and investment power with respect to the shares of
our common stock held by Hellman & Friedman Capital Partners III, H&F Orchard
Partners III and H&F International Partners III, and could be deemed to
beneficially own such shares. The executive committee disclaims such beneficial
ownership except to the extent of its indirect pecuniary interest in such
shares.

        Mr. Bunce and Mr. Healy each disclaim beneficial ownership of all shares
of our common stock held by Hellman & Friedman Capital Partners III, H&F Orchard
Partners III and H&F International Partners III, except to the extent of their
individual indirect pecuniary interest in those shares.


        Shares held by Mr. and Mrs. Shults include 2,229,851 shares held for the
benefit of Mr. and Mrs. Shults in the voting trust for which Messrs. Fraser and
Hartley act as co-trustees.



        Shares held by Mr. Fraser include 24,445,425 shares held in the voting
trust for which Mr. Fraser acts as a co-trustee and 7,450,720 shares held in the
voting trust of which a family trust established for the benefit of Mr. Fraser
is the beneficial owner.



        Shares held by Mr. Dodd include 173,258 shares held for the benefit of
Mr. Dodd in the voting trust for which Messrs. Fraser and Hartley act as
co-trustees and 130,014 shares subject to options exercisable within 60 days of
March 31, 1999.



        Shares held by Mr. Bradley include 2,132,679 shares held for the benefit
of Mr. Bradley in the voting trust for which Messrs. Fraser and Hartley act as
co-trustees.



        Shares held by Mr. Somerhalder include 2,345,123 shares held for the
benefit of Mr. Somerhalder or his wife in the voting trust for which Messrs.
Fraser and Hartley act as co-trustees. These shares include 206,630 shares held
by Mr. Somerhalder's wife, Jean Somerhalder, as custodian to Chloe V. Fraser,
206,630 shares held by Mrs. Somerhalder as custodian to Jacob B. Fraser, 206,630
shares held by Mrs. Somerhalder as custodian to Joshua D. Fraser, 206,630 shares
held by Mrs. Somerhalder as custodian to Matthew S. Fraser and 206,630 shares
held by Mrs. Somerhalder as custodian to William N. Fraser.



        Shares held by Mr. Herington include 1,202,021 shares held for the
benefit of Mr. Herington in the voting trust for which Messrs. Fraser and
Hartley act as co-trustees.



        Shares held by Mr. Evans include 41,442 shares held in the Evans family
revocable trust.



        Shares held by Mr. Hartley include 23,412,278 shares held in the voting
trust for which Mr. Hartley acts as a co-trustee and 8,483,867 shares held for
the benefit of Mr. Hartley or his children in the voting trust. Shares held for
the benefit of Mr. Hartley or his children include 371,470 shares held in


                                       60
<PAGE>

an irrevocable trust established for the benefit of Hillary L. Hartley, 371,470
shares held in an irrevocable trust established for the benefit of Antonia C.
Hartley and 371,470 shares held in an irrevocable trust established for the
benefit of William R. Hartley.



        Shares held by all executive officers and directors as a group include
31,896,145 shares held in the voting trust for which Messrs. Fraser and Hartley
act as co-trustees and 130,014 shares subject to options exercisable within 60
days of March 31, 1999.


        Excluding the shares of common stock beneficially owned by Messrs.
Fraser and Hartley solely as a result of their status as trustees of the voting
trust, Messrs. Fraser and Hartley's beneficial ownership disclosure would appear
as follows:


<TABLE>
<CAPTION>
                                 SHARES BENEFICIALLY OWNED
                                                                             SHARES BENEFICIALLY
                                     PRIOR TO OFFERING        NUMBER OF      OWNED AFTER OFFERING
                                 -------------------------  SHARES BEING   ------------------------
NAME AND ADDRESS                   NUMBER     PERCENTAGE       OFFERED      NUMBER     PERCENTAGE
- -------------------------------  ----------  -------------  -------------  ---------  -------------
<S>                              <C>         <C>            <C>            <C>        <C>
Jeffery S. Fraser..............   7,450,720         17.5%       350,400    7,100,320        13.5%
Ross C. Hartley................   8,483,867         20.0        399,000    8,084,867         15.4
</TABLE>


                                       61
<PAGE>
                          DESCRIPTION OF CAPITAL STOCK

        We are authorized to issue up to 200,000,000 shares of common stock,
with no par value per share.

        The following summary of certain provisions of our common stock does not
purport to be complete and is subject to, and qualified in its entirety by, the
provisions of our articles of incorporation, which are included as an exhibit to
the registration statement of which this prospectus is a part, and by the
provisions of applicable law.

COMMON STOCK


        As of March 31, 1999, there were 42,481,996 shares of common stock
outstanding that were held of record or beneficially through a voting trust by
approximately 53 persons. There will be            shares of common stock
outstanding, assuming no exercise of the underwriters' over-allotment option and
no exercise of outstanding options, after giving effect to the sale of the
common stock we are offering.


        The holders of our common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the shareholders. We do not
have cumulative voting rights in the election of directors, and accordingly,
holders of a majority of the shares voting are able to elect all of the
directors. Subject to preferences that may be granted to any then outstanding
preferred stock, holders of common stock are entitled to receive ratably such
dividends as may be declared by the board of directors out of funds legally
available for such purpose as well as any distributions to the shareholders. In
the event of our liquidation, dissolution or winding up, holders of common stock
are entitled to share ratably in all of our assets remaining after payment of
liabilities and the liquidation preference of any then outstanding preferred
stock. Holders of common stock have no preemptive or other subscription of
conversion rights. There are no redemption or sinking fund provisions applicable
to the common stock.

VOTING TRUST


        As of March 31, 1999, a portion of our outstanding common stock,
totaling 31,896,145 shares and representing approximately 75.1% of the
outstanding common stock prior to the offering, is held in a voting trust, for
which Messrs. Fraser and Hartley serve as trustees. The voting trust is selling
1,500,000 shares of common stock in this offering, which will reduce the number
of shares it holds to 30,396,145, or approximately 57.9% of our outstanding
common stock. A total of 24,170,249 shares (23,033,549 shares after the
offering, assuming a pro rata allocation of shares sold by the voting trust) in
the voting trust are held for the benefit of affiliates of our company. The
address of each of the trustees is c/o Jeffery S. Fraser, 1811 Wakarusa Drive,
Suite 100, Lawrence, Kansas 66047. The trustees have dispositive and exclusive
voting power over all shares held by the voting trust, including without
limitation, the right to vote for the election of directors, authorize an
amendment to the articles of incorporation or bylaws, and authorize a merger or
consolidation of the company. Additionally, the trustees are empowered to
perform any and all acts necessary and appropriate for the organization and
operation of the voting trust.



        The voting trust certificates are transferable upon surrender of the
same according to the rules established by the trustees. The voting trust
expires on (a) June 30, 2018, (b) upon mutual assent of the trustees with
written notification to holders of the voting trust certificates or (c) upon
deadlock between the trustees and failure to remedy the deadlock after 90 days.



REGISTRATION RIGHTS



        According to an investor rights agreement between us and one of our
shareholders, Hellman & Friedman, and its affiliates, H&F International Partners
and H&F Orchard Partners, after the closing of the offering, Hellman & Friedman
and its affiliates will be entitled to demand that we file a registration


                                       62
<PAGE>

statement with respect to the registration of shares of our common stock under
the Securities Act. We are not required to effect:



        - more than two registrations;



        - a registration during the 180 day period following the effective date
          of this registration statement; or



        - a registration for a period not to exceed 90 days, if our board of
          directors has made a good faith determination that it would be
          seriously detrimental to us and our shareholders for a registration
          statement to be filed.



        Furthermore, according to the terms of this investor rights agreement,
after the closing of this offering, Hellman & Friedman and its affiliates will
be entitled to piggyback registration rights in connection with any registration
by us of our securities for our own account or the account of other
shareholders. In the event that we propose to register any shares of common
stock under the Securities Act, the holders of the piggyback registration rights
are entitled to receive notice and are entitled to include their shares of
common stock in the registration statement.



        At any time after we become eligible to file a registration statement on
Form S-3, Hellman & Friedman and its affiliates also may require us to file an
unlimited number of registration statements on Form S-3 under the Securities Act
with respect to their shares of common stock. We are not required to effect more
than two such registrations in any twelve-month period.



        The registration rights of Hellman & Friedman and its affiliates
terminate on the earlier of (a) the fifth anniversary of the date of this
offering or (b) the date when the shares held by them constitute less than 1% of
our outstanding common stock and may be sold under Rule 144 during any
three-month period. We are generally required to bear all of the expenses of all
registrations under the investor rights agreement, except underwriting discounts
and commissions. The registration rights agreement also contains a commitment by
us to indemnify the holders of registration rights.


ANTITAKEOVER EFFECTS OF PROVISIONS OF OUR ARTICLES OF INCORPORATION AND BYLAWS


        Provisions of our articles of incorporation and bylaws restrict
transactions and business combinations between our company and an interested
shareholder owning 15% or more of our outstanding voting stock, for a period of
three years from the date the shareholder becomes an interested shareholder.
Subject to some exceptions, unless the transaction is approved by our board of
directors and the holders of at least two-thirds of our outstanding voting
stock, excluding shares held by the interested shareholder, these provisions
prohibit significant business transactions. These prohibited business
transactions include a merger with, disposition of assets to, or receipt of
disproportionate financial benefits by the interested shareholder, or any other
transaction that would increase the interested shareholder's proportionate
ownership of our voting stock. The prohibition does not apply if, upon
consummation of the transaction in which any person becomes an interested
shareholder, the interested shareholder owns at least 85% of our outstanding
voting stock. This calculation does not include shares held by persons who are
both directors and officers or shares authorized under employee stock plans in
which the employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be tendered in a
tender or exchange offer.


        Our bylaws provide that all shareholder action may be effected at a duly
called meeting of shareholders or by a consent in writing. The bylaws also
provide that the president or secretary at the request in writing of a majority
of the board of directors or at the request in writing of shareholders owning a
majority of the issued and outstanding capital stock of the company entitled to
vote may call a special meeting of shareholders. Furthermore, our bylaws limit
the ability of shareholders to raise matters at a meeting of shareholders
without giving advance notice.

                                       63
<PAGE>
        These provisions in our articles of incorporation and bylaws will make
it more difficult for our existing shareholders to replace the board of
directors as well as for another party to obtain control by replacing the board
of directors. Since the board of directors has the power to retain and discharge
our officers, these provisions could also make it more difficult for existing
shareholders or another party to effect a change in management.


        These and other provisions also may have the effect of deterring,
preventing or delaying changes in control or management. These provisions are
intended to enhance the likelihood of continued stability in the composition of
the board of directors and in the policies furnished by the board of directors
and to discourage types of transactions that may involve an actual or threatened
change of control. These provisions are designed to reduce our vulnerability to
an unsolicited acquisition proposal. The provisions also are intended to
discourage tactics that may be used in proxy fights. However, such provisions
could have the effect of discouraging others from making tender offers for our
shares and, as a consequence, they also may inhibit fluctuations in the market
price of our shares that could result from actual or rumored takeover attempts.
These provisions also may have the effect of preventing changes in our
management.


TRANSFER AGENT AND REGISTRAR

        The transfer agent and registrar for our common stock is EquiServe. Its
address is 289 S. San Antonio Road, Suite 100, Los Altos, California 94022, and
its telephone number is (650) 917-3800.

                                       64
<PAGE>
                        SHARES ELIGIBLE FOR FUTURE SALE


        Upon completion of this offering, we will have outstanding 52,481,996
shares of common stock based upon shares outstanding at March 31, 1999, assuming
no exercise of the underwriters' over-allotment option. Excluding the 13,000,000
shares of common stock offered hereby and assuming no exercise of the
underwriters' over-allotment option, as of the effective date of the
registration statement, there will be 39,481,996 shares of common stock
outstanding, all of which are "restricted" shares under the Securities Act. All
restricted shares are subject to lock-up agreements with the underwriters
pursuant to which the holders of the restricted shares have agreed not to sell,
pledge or otherwise dispose of such shares for a period of 180 days after the
date of this prospectus. Hambrecht & Quist LLC may release the shares subject to
the lock-up agreements in whole or in part at any time with or without notice.
However, Hambrecht & Quist LLC has no current plans to do so.



        The following table indicates approximately when the 39,481,996 shares
of our common stock that are not being sold in the offering but which will be
outstanding at the time the offering is complete will be eligible for sale into
the public market:



<TABLE>
<CAPTION>
        ELIGIBILITY OF RESTRICTED SHARES FOR SALE IN PUBLIC MARKET
- ---------------------------------------------------------------------------
<S>                                                               <C>
At effective date...............................................          0
180 days after effective date...................................
After 180 days post-effective date..............................
</TABLE>



        Most of the restricted shares that will become available for sale in the
public market beginning 180 days after the effective date will be subject to
volume and other resale restrictions pursuant to Rule 144 because the holders
are our affiliates. The general provisions of Rule 144 are described below.



        In general, under Rule 144, any of our affiliates, or person, or persons
whose shares are aggregated, who has beneficially owned restricted shares for at
least one year, will be entitled to sell in any three-month period a number of
shares that does not exceed the GREATER of:



        - 1% of the then outstanding shares of the common stock, approximately
          524,819 shares immediately after this offering, OR


        - the average weekly trading volume during the four calendar weeks
          preceding the date on which notice of the sale is filed with the SEC.


        Sales pursuant to Rule 144 are subject to requirements relating to
manner of sale, notice and availability of current public information about us.
A person, or persons whose shares are aggregated, who is not deemed to have been
one of our affiliates at any time during the 90 days immediately preceding the
sale and who has beneficially owned his or her shares for at least two years is
entitled to sell such shares pursuant to Rule 144(k) without regard to the
limitations described above.



        As of March 31, 1999, 9,286,754 shares were reserved for issuance under
our amended and restated 1998 stock option plan, of which options to purchase
2,512,332 shares were then outstanding and 130,014 were then exercisable. We
intend to file, within 180 days after the date of this prospectus, a
registration statement under the Securities Act to register the 9,286,754 shares
under our 1998 stock option plan and the 2,321,688 shares of common stock
reserved for issuance under our employee stock purchase plan. Upon registration,
all of these shares will be freely tradable when issued, subject to Rule 144
volume limitations applicable to affiliates and lock-up agreements.


LOCK-UP AGREEMENTS


        All officers and directors and some of the holders of common stock and
options to purchase common stock have agreed pursuant to "lock-up" agreements
that they will not offer, sell, contract to sell, pledge, grant any option to
sell, or otherwise dispose of, directly or indirectly, any shares of common
stock or securities convertible or exchangeable for common stock, or warrants or
other rights to purchase common stock for a period of 180 days after the date of
this prospectus without the prior written consent of Hambrecht & Quist LLC.


                                       65
<PAGE>
                                  UNDERWRITING

        Subject to the terms and conditions of the underwriting agreement and
the underwriters named below, through their representatives, Hambrecht & Quist
LLC, Thomas Weisel Partners LLC, FAC/ Equities, a division of First Albany
Corporation, and Volpe Brown Whelan & Company, LLC have severally agreed to
purchase from us the following respective numbers of shares of common stock:


<TABLE>
<CAPTION>
                                                                                  NUMBER OF
NAME                                                                               SHARES
- --------------------------------------------------------------------------------  ---------
<S>                                                                               <C>
Hambrecht & Quist LLC...........................................................
Thomas Weisel Partners LLC......................................................
First Albany Corporation........................................................
Volpe Brown Whelan & Company, LLC...............................................

                                                                                  ---------
  Total.........................................................................  13,000,000
                                                                                  ---------
                                                                                  ---------
</TABLE>


        The underwriting agreement provides that the obligations of the
underwriters are subject to certain conditions precedent, including the absence
of any material adverse change in our business and the receipt of certain
certificates, opinions and letters from us, our counsel and the independent
accountants. The nature of the underwriters' obligation is such that they are
committed to purchase all shares of common stock offered if any shares are
purchased.

        The following tables show the per share and total underwriting discounts
and commissions we will pay to the underwriters. These amounts are shown
assuming both no exercise and full exercise of the underwriters' over-allotment
option to purchase additional shares.

              UNDERWRITING DISCOUNTS AND COMMISSIONS PAYABLE BY US
                          AND THE SELLING SHAREHOLDERS

<TABLE>
<CAPTION>
                                                          WITH                          WITHOUT
                                                 OVER-ALLOTMENT EXERCISE        OVER-ALLOTMENT EXERCISE
                                              -----------------------------  -----------------------------
<S>                                           <C>                            <C>
Per Share...................................            $                              $
Total.......................................            $                              $
</TABLE>

        We estimate that the total expenses of this offering, excluding
underwriting discounts and commissions, will be approximately $           .


        The underwriters propose to offer the shares of common stock directly to
the public at the initial public offering price set forth on the cover page of
this prospectus and to selected dealers at such price less a concession not in
excess of $     per share. The underwriters may allow and the dealers may
reallow a concession not in excess of $     per share to other dealers. After
the initial public offering of the shares, the offering price and other selling
terms may be changed by the underwriters. The representatives have informed us
that the underwriters do not intend to confirm discretionary sales of more than
5% of the shares of common stock offered in this offering.



        The selling shareholders have granted to the underwriters an option,
exercisable no later than 30 days after the date of this prospectus, to purchase
up to 1,950,000 additional shares of common stock at the initial public offering
price, less the underwriting discount set forth on the cover page of this
prospectus. To the extent that the underwriters exercise this option, each of
the underwriters will have a firm commitment to purchase approximately the same
percentage thereof which the number of shares of common stock to be purchased by
it shown in the above table bears to the total number of shares of


                                       66
<PAGE>
common stock offered hereby. The selling shareholders will be obligated,
pursuant to the option, to sell shares to the underwriters to the extent the
option is exercised. The underwriters may exercise this option only to cover
over-allotments made in connection with the sale of shares of common stock
offered hereby.

        The offering of shares is made for delivery when, as and if accepted by
the underwriters and subject to prior sale and withdrawal, cancellation or
modification of the offering without notice. The underwriters reserve the right
to reject an order for the purchase of shares in whole or in part.


        The underwriters have advised us that they do not intend to confirm
discretionary sales in excess of 5% of the shares of common stock offered under
this prospectus.


        The selling shareholders and us have each agreed to indemnify the
underwriters against certain liabilities, including liabilities under the
Securities Act, and to contribute to payments the underwriters may be required
to make in respect thereof.

        Our shareholders, including executive officers, directors and the
selling shareholders, have agreed not to, without the prior written consent of
Hambrecht & Quist LLC, offer, sell or otherwise dispose of any shares of common
stock or options to acquire shares of common stock or securities exchangeable
for or convertible into shares of common stock owned by them during the 180-day
period following the date of this prospectus. We have agreed that we will not,
without the prior written consent of Hambrecht & Quist LLC, offer, sell or
otherwise dispose of any shares of common stock or options to acquire shares of
common stock or securities exchangeable for or convertible into shares of common
stock during the 180-day period following the date of this prospectus, except
that we may issue shares upon the exercise of options granted prior to the date
hereof, and may grant additional options under our stock option plans, provided
that, without the prior written consent of Hambrecht & Quist LLC, the additional
options shall not be exercisable during that period.

        Prior to this offering, there has been no public market for the common
stock. The initial public offering price for the common stock will be determined
by negotiation among us and the representatives of the underwriters. Among the
factors to be considered in determining the initial public offering price are
prevailing market and economic conditions, our revenues and earnings, market
valuations of other companies engaged in activities similar to ours, estimates
of our business potential and our prospects, the present state of our business
operations, our management and other factors deemed relevant.


        Persons participating in this offering may over-allot or effect
transactions which stabilize, maintain or otherwise affect the market price of
the common stock at levels above those which might otherwise prevail in the open
market, including by entering stabilizing bids, effecting syndicate covering
transactions or imposing penalty bids. A stabilizing bid means the placing of
any bid or effecting of any purchase, for the purpose of pegging, fixing or
maintaining the price of the common stock. A syndicate covering transaction
means the placing of any bid on behalf of the underwriting syndicate or the
effecting of any purchase to reduce a short position created in connection with
the offering. A penalty bid means an arrangement that permits the underwriters
to reclaim a selling concession from a syndicate member in connection with the
offering when shares of common stock sold by the syndicate member are purchased
in syndicate covering transactions. Such transactions may be effected on the
Nasdaq National Market, in the over-the-counter market, or otherwise. This
stabilizing, if commenced, may be discontinued at any time.



        A prospectus in electronic format is being made available on a Web site
maintained by Hambrecht & Quist LLC. In addition, some broker-dealers may choose
to make a prospectus in electronic format available on Web sites maintained by
them.



        Thomas Weisel Partners LLC, one of the representatives of the
underwriters, was organized and registered as a broker-dealer in December 1998.
Since December 1998, Thomas Weisel Partners has been named as a lead or
co-manager on 39 filed public offerings of equity securities, of which 17 have
been completed, and has acted as a syndicate member in an additional 17 public
offerings of equity securities. Thomas Weisel Partners does not have any
material relationship with us or any of our officers, directors or other
controlling persons, except with respect to its contractual relationship with us
pursuant to the underwriting agreement entered into in connection with this
offering.


                                       67
<PAGE>
                                 LEGAL MATTERS

        The validity of the common stock offered hereby will be passed upon for
us by Morrison & Foerster LLP, San Francisco, California. Certain legal matters
in connection with the offering will be passed upon for the underwriters by
Brobeck, Phleger & Harrison LLP, San Francisco, California.

                                    EXPERTS

        The audited financial statements included in this prospectus have been
so included in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

               WHERE YOU CAN FIND ADDITIONAL INFORMATION ABOUT US


        We have filed with Securities and Exchange Commission in Washington,
D.C. a Registration Statement on Form S-1 under the Securities Act with respect
to the common stock offered in this prospectus. This prospectus, filed as part
of the registration statement, does not contain all of the information set forth
in the registration statement and its exhibits and schedules, portions of which
have been omitted as permitted by the rules and regulations of the SEC. For
further information about us and the common stock, we refer you to the
registration statement and to its exhibits and schedules. Statements in this
prospectus about the contents of any contract, agreement or other document are
not necessarily complete and, in each instance, we refer you to the copy of such
contract, agreement or document filed as an exhibit to the registration
statement, and each such statement being qualified in all respects by reference
to the document to which it refers. Anyone may inspect the registration
statement and its exhibits and schedules without charge at the public reference
facilities the SEC maintains 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 500 West Madison Street, Suite 1400, Chicago,
Illinois, 60661. You may obtain copies of all or any part of these materials
from the SEC upon payment to the SEC of prescribed fees. You may also inspect
these reports and other information without charge at a Web site maintained by
the SEC. The address of this site is http://www.sec.gov.



        Upon completion of this offering, we will become subject to the
informational requirements of the Exchange Act and, in accordance therewith,
file reports, proxy statements and other information with the SEC. You will be
able to inspect and copy these reports, proxy statements and other information
at the public reference facilities maintained by the SEC and at the SEC's
regional offices at the addresses noted above. You also will be able to obtain
copies of this material from the Public Reference Section of the SEC as
described above, or inspect them without charge at the SEC's Web site. We have
applied for quotation of our common stock on the Nasdaq National Market. If we
receive approval for quotation on the Nasdaq National Market, then you will be
able to inspect reports, proxy and information statements and other information
concerning us at the National Association of Securities Dealers, Inc. at 1735 K
Street, N.W., Washington, D.C. 20006.


                                       68
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S>                                                                                     <C>
NATIONAL INFORMATION CONSORTIUM, INC.

  Report of PricewaterhouseCoopers LLP, Independent Accountants.......................        F-3

  Consolidated Balance Sheets.........................................................        F-4

  Consolidated Statements of Operations...............................................        F-5

  Consolidated Statements of Changes in Shareholders' Equity..........................        F-6

  Consolidated Statements of Cash Flows...............................................        F-7

  Notes to Consolidated Financial Statements..........................................        F-8

INDIAN@ INTERACTIVE, INC. AND SUBSIDIARY

  Report of PricewaterhouseCoopers LLP, Independent Accountants.......................       F-25

  Consolidated Balance Sheets.........................................................       F-26

  Consolidated Statements of Income...................................................       F-27

  Consolidated Statements of Changes in Shareholders' Equity..........................       F-28

  Consolidated Statements of Cash Flows...............................................       F-29

  Notes to Consolidated Financial Statements..........................................       F-30

KANSAS INFORMATION CONSORTIUM, INC.

  Report of PricewaterhouseCoopers LLP, Independent Accountants.......................       F-36

  Balance Sheets......................................................................       F-37

  Statements of Income................................................................       F-38

  Statements of Changes in Shareholders' Equity.......................................       F-39

  Statements of Cash Flows............................................................       F-40

  Notes to Financial Statements.......................................................       F-41

ARKANSAS INFORMATION CONSORTIUM, INC.

  Report of PricewaterhouseCoopers LLP, Independent Accountants.......................       F-45

  Balance Sheets......................................................................       F-46

  Statements of Operations............................................................       F-47

  Statements of Changes in Shareholders' Equity.......................................       F-48

  Statements of Cash Flows............................................................       F-49

  Notes to Financial Statements.......................................................       F-50

NEBRASK@ INTERACTIVE, INC.

  Report of PricewaterhouseCoopers LLP, Independent Accountants.......................       F-54
</TABLE>

                                      F-1
<PAGE>
<TABLE>
<S>                                                                                     <C>
  Balance Sheets......................................................................       F-55

  Statements of Income................................................................       F-56

  Statements of Changes in Shareholders' Equity.......................................       F-57

  Statements of Cash Flows............................................................       F-58

  Notes to Financial Statements.......................................................       F-59

PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

  Overview............................................................................       F-63

  Pro Forma Consolidated Statements of Operations.....................................       F-64

  Notes to Pro Forma Consolidated Financial Information...............................       F-67
</TABLE>

                                      F-2
<PAGE>
         REPORT OF PRICEWATERHOUSECOOPERS LLP, INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of
National Information Consortium, Inc.


The common stock split described in Note 8 to the consolidated financial
statements has not been consummated at June 16, 1999. When it has been
consummated, we will be in a position to furnish the following report:



   "In our opinion, the accompanying consolidated balance sheets and the
   related consolidated statements of operations, of changes in
   shareholders' equity and of cash flows present fairly, in all material
   respects, the financial position of National Information Consortium, Inc.
   and its subsidiaries (the "Company") at December 31, 1998 and 1997, and
   the results of their operations and their cash flows for each of the
   three years in the period ended December 31, 1998, in conformity with
   generally accepted accounting principles. These financial statements are
   the responsibility of the Company's management; our responsibility is to
   express an opinion on the financial statements based on our audits. We
   conducted our audits of these statements in accordance with generally
   accepted auditing standards which 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, assessing the accounting
   principles used and significant estimates made by management, and
   evaluating the overall financial statement presentation. We believe that
   our audits provide a reasonable basis for the opinion expressed above."



/s/ PRICEWATERHOUSECOOPERS LLP
Kansas City, Missouri
June 16, 1999


                                      F-3
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.
                          CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                                    DECEMBER 31,
                                                                                                ---------------------
                                                                                                  1997       1998
                                                                                                --------  -----------
                                                                                                                        MARCH 31,
                                                                                                                           1999
                                                                                                                       ------------
                                                                                                                       (UNAUDITED)
<S>                                                                                             <C>       <C>          <C>
                                                              ASSETS
  Current assets:
    Cash......................................................................................  $178,695  $ 1,310,751  $ 1,115,136
    Trade accounts receivable.................................................................     6,932    2,908,043    3,694,625
    Prepaid expenses..........................................................................    21,849       47,133      103,420
    Other current assets......................................................................     6,247       67,311      255,410
                                                                                                --------  -----------  ------------
      Total current assets....................................................................   213,723    4,333,238    5,168,591
  Property and equipment, net.................................................................   112,203    1,229,415    1,684,850
  Other assets................................................................................       120       17,183        4,790
  Intangible assets, net......................................................................        --   11,669,059    9,775,258
                                                                                                --------  -----------  ------------
      Total assets............................................................................  $326,046  $17,248,895  $16,633,489
                                                                                                --------  -----------  ------------
                                                                                                --------  -----------  ------------

                                               LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
    Accounts payable..........................................................................  $ 56,681  $ 2,376,505  $ 2,755,641
    Accrued expenses..........................................................................    34,551      227,106      261,122
    Income taxes payable......................................................................        --       68,700       22,700
    Deferred income taxes.....................................................................        --      164,234      254,068
    Bank lines of credit......................................................................        --    1,023,592      839,452
    Capital lease obligations--current portion................................................        --      235,323      201,233
    Notes payable--current portion............................................................     5,019       50,000      594,000
    Application development contracts.........................................................        --    1,256,000    1,174,471
    Other current liabilities.................................................................    17,119       49,465       47,865
                                                                                                --------  -----------  ------------
      Total current liabilities...............................................................   113,370    5,450,925    6,150,552
  Capital lease obligations--long term portion................................................        --      409,989      384,019
  Note payable--long term portion.............................................................    24,923       50,000           --
  Deferred income taxes.......................................................................        --      425,878      312,098
                                                                                                --------  -----------  ------------
      Total liabilities.......................................................................   138,293    6,336,792    6,846,669
                                                                                                --------  -----------  ------------
  Commitments and contingencies (Notes 10 and 11)

  Shareholders' equity:
    Common stock, no par, 200,000,000 shares authorized, 22,288,209, 42,066,181 and 42,481,996
      shares issued and outstanding...........................................................        --           --           --
    Additional paid-in capital................................................................   627,435   19,551,646   22,435,331
    Accumulated deficit.......................................................................  (414,682)  (5,825,966)  (9,125,019)
                                                                                                --------  -----------  ------------
                                                                                                 212,753   13,725,680   13,310,312
    Less notes and stock subscriptions receivable.............................................   (25,000)          --     (125,000)
    Less deferred compensation expense........................................................        --   (2,813,577)  (3,398,492)
                                                                                                --------  -----------  ------------
      Total shareholders' equity..............................................................   187,753   10,912,103    9,786,820
                                                                                                --------  -----------  ------------
      Total liabilities and shareholders' equity..............................................  $326,046  $17,248,895  $16,633,489
                                                                                                --------  -----------  ------------
                                                                                                --------  -----------  ------------
</TABLE>


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

                                      F-4
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED
                                      YEAR ENDED DECEMBER 31,             MARCH 31,
                                  --------------------------------  ---------------------
                                    1996       1997        1998       1998        1999
                                  ---------  ---------  ----------  ---------  ----------
                                                                         (UNAUDITED)
<S>                               <C>        <C>        <C>         <C>        <C>
Revenues........................  $ 235,971  $ 996,550  $28,623,656 $ 361,358  $11,455,065
Cost of revenues................     21,248      5,168  21,210,632        690   8,603,698
                                  ---------  ---------  ----------  ---------  ----------
  Gross profit..................    214,723    991,382   7,413,024    360,668   2,851,367
                                  ---------  ---------  ----------  ---------  ----------
Operating expenses:
  Service development and
    operations..................     38,248    224,128   3,884,810    134,932     934,871
  Selling, general and
    administrative..............    168,399    660,254   4,241,780    325,290   1,517,568
  Stock compensation............         --    370,235     568,869         --   1,698,770
  Depreciation and
    amortization................        297     13,679   5,922,396     24,031   2,001,559
                                  ---------  ---------  ----------  ---------  ----------
  Total operating expenses......    206,944  1,268,296  14,617,855    484,253   6,152,768
                                  ---------  ---------  ----------  ---------  ----------
Operating income (loss).........      7,779   (276,914) (7,204,831)  (123,585) (3,301,401)
                                  ---------  ---------  ----------  ---------  ----------
Other income (expense):
  Interest expense..............         --         --     (88,161)      (628)    (36,995)
  Other income, net.............         --        111      55,839         --      16,565
                                  ---------  ---------  ----------  ---------  ----------
  Total other income
    (expense)...................         --        111     (32,322)      (628)    (20,430)
                                  ---------  ---------  ----------  ---------  ----------
Income (loss) before income
  taxes.........................      7,779   (276,803) (7,237,153)  (124,213) (3,321,831)
Income tax expense (benefit)....         --         --     658,813         --     (22,778)
                                  ---------  ---------  ----------  ---------  ----------
Net income (loss)...............  $   7,779  $(276,803) $(7,895,966) $(124,213) $(3,299,053)
                                  ---------  ---------  ----------  ---------  ----------
                                  ---------  ---------  ----------  ---------  ----------
Net income (loss) per share:
  Basic and diluted.............  $    0.00  $   (0.01) $    (0.21) $   (0.01) $    (0.08)
                                  ---------  ---------  ----------  ---------  ----------
                                  ---------  ---------  ----------  ---------  ----------
  Weighted average shares
    outstanding (Note 8)........  6,004,625  20,857,785 37,242,423  22,679,122 42,242,941
                                  ---------  ---------  ----------  ---------  ----------
                                  ---------  ---------  ----------  ---------  ----------
Pro forma tax provision
  (unaudited)--Note 9:
  Net income (loss).............  $   7,779  $(276,803) $(7,895,966) $(124,213)
  Pro forma provision for income
    taxes.......................      3,034     36,438  (1,516,894)   (48,443)
                                  ---------  ---------  ----------  ---------
  Pro forma net income (loss)...  $   4,745  $(313,241) $(6,379,072) $ (75,770)
                                  ---------  ---------  ----------  ---------
                                  ---------  ---------  ----------  ---------
  Pro forma basic and diluted
    income (loss) per share.....  $    0.00  $   (0.02) $    (0.17) $    0.00
                                  ---------  ---------  ----------  ---------
                                  ---------  ---------  ----------  ---------
</TABLE>


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

                                      F-5
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                         NOTES
       COMMON STOCK       ADDITIONAL                   AND STOCK       DEFERRED
   ---------------------    PAID-IN    ACCUMULATED   SUBSCRIPTIONS   COMPENSATION
     SHARES     AMOUNT      CAPITAL      DEFICIT      RECEIVABLE       EXPENSE         TOTAL
   ----------  ---------  -----------  ------------  -------------   ------------   -----------
  <C>          <C>        <C>          <C>           <C>             <C>            <C>
BALANCE,
 JANUARY
  1,
 1996...     19,841 $      -- $       100 $    (15,331)   $      --  $        --    $   (15,231)
Net
income...                                     7,779                                       7,779
Issuance
  of
  common
stock... 20,337,768        --     102,500           --          --            --        102,500
   ----------  ---------  -----------  ------------  -------------   ------------   -----------
BALANCE,
DECEMBER
  31,
 1996... 20,357,609        --     102,600       (7,552)          --           --         95,048
Net
loss...         --        --          --     (276,803)          --            --       (276,803)
Distributions
  to
  shareholders...         --        --          --     (130,327)          --          --    (130,327)
Issuance
  of
  common
stock...  1,930,600        --     524,835           --     (25,000)           --        499,835
   ----------  ---------  -----------  ------------  -------------   ------------   -----------
BALANCE,
DECEMBER
  31,
 1997... 22,288,209        --     627,435     (414,682)     (25,000)          --        187,753
Common
 stock
issued
  in
  exchange... 19,255,155        --  18,539,814           --          --          --  18,539,814
Net
loss...         --        --          --   (7,895,966)          --            --     (7,895,966)
Distributions
  to
  shareholders...         --        --          --     (838,367)          --          --    (838,367)
Termination
  of
  Subchapter
  S
 election...         --        --  (3,323,049)    3,323,049          --          --          --
Issuance
  of
  common
stock...    522,817        --     583,333           --          --            --        583,333
Stock
options
granted
  with
  exercise
  price
  less
  than
  fair
  market
  value
  at
  date
  of
 grant..         --        --   3,124,113           --          --    (2,855,390)       268,723
Deferred
compensation
  expense
  recognized...         --        --          --           --          --      41,813      41,813
Stock
subscription
 received...         --        --          --           --      25,000          --       25,000
   ----------  ---------  -----------  ------------  -------------   ------------   -----------
BALANCE,
DECEMBER
  31,
 1998... 42,066,181        --  19,551,646   (5,825,966)          --   (2,813,577)    10,912,103
Net
loss
(unaudited)...         --        --          --   (3,299,053)          --          --  (3,299,053)
Stock
options
granted
  with
  exercise
  price
  less
  than
  fair
  market
  value
  at
  date
  of
  grant
  (unaudited)...         --        --     794,561           --          --    (794,561)          --
Stock
options
exercised
  (unaudited)...     69,303        --     100,000           --          --          --     100,000
Deferred
compensation
  expense
  recognized
  (unaudited)...         --        --          --           --          --     209,646     209,646
Issuance
  of
  common
  stock
  (unaudited)...    346,512        --   1,989,124           --    (125,000)          --   1,864,124
   ----------  ---------  -----------  ------------  -------------   ------------   -----------
BALANCE,
  MARCH
  31,
  1999
  (unaudited)... 42,481,996 $      -- $22,435,331 $ (9,125,019)   $(125,000) $(3,398,492) $ 9,786,820
   ----------  ---------  -----------  ------------  -------------   ------------   -----------
   ----------  ---------  -----------  ------------  -------------   ------------   -----------
</TABLE>


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

                                      F-6
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                          THREE MONTHS ENDED
                                                          YEAR ENDED DECEMBER 31,              MARCH 31,
                                                     ---------------------------------  -----------------------
                                                       1996       1997        1998        1998         1999
                                                     ---------  ---------  -----------  ---------  ------------
                                                                                              (UNAUDITED)
<S>                                                  <C>        <C>        <C>          <C>        <C>
Cash flows from operating activities:
  Net income (loss)................................  $   7,779  $(276,803) $(7,895,966) $(124,213) $ (3,299,053)
  Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating
    activities:
    Depreciation and amortization..................        297     13,679    5,922,396     24,031     2,001,559
    Compensation expense recognized upon issuance
      of common stock..............................         --    370,235      258,333         --     1,489,124
    Compensation expense recognized upon granting
      of stock options.............................         --         --      268,723         --            --
    Recognition of deferred compensation expense...         --         --       41,813         --       209,646
    (Gain) loss on disposals of property and
      equipment....................................         --      1,200      (12,639)        --            --
    Application development contracts..............         --         --    1,256,000         --       (81,529)
    Deferred income taxes..........................         --         --      590,113         --       (23,946)
  Changes in operating assets and liabilities:
    (Increase) in trade accounts receivable........    (11,708)    (1,471)     (21,980)  (110,991)     (786,582)
    (Increase) decrease in prepaid expenses........         --    (21,849)       3,335         --       (56,287)
    (Increase) in other current assets.............         --         --      (54,956)   (10,805)     (188,099)
    (Increase) decrease in other assets............         --         --       (8,103)    (3,505)        3,574
    Increase (decrease) in accounts payable........         --     56,681     (184,889)    15,265       379,136
    Increase in accrued expenses...................         --     19,199       80,472      4,092        34,016
    Increase (decrease) in income taxes payable....         --         --       68,700         --       (46,000)
    Increase (decrease) in other current
      liabilities..................................     15,351     17,119       43,034    (17,119)       (1,600)
                                                     ---------  ---------  -----------  ---------  ------------
    Net cash provided by (used in) operating
      activities...................................     11,719    177,990      354,386   (223,245)     (366,041)
                                                     ---------  ---------  -----------  ---------  ------------
Cash flows from investing activities:
  Purchase of property and equipment...............    (19,676)  (112,521)    (255,203)   (46,881)      (10,374)
  Proceeds from disposals of property and
    equipment......................................         --      5,026       42,736         --            --
  Proceeds from notes receivable from
    shareholders...................................         --         --       55,000         --            --
  Cash of acquired companies.......................         --         --      764,908         --            --
                                                     ---------  ---------  -----------  ---------  ------------
  Net cash provided by (used in) investing
    activities.....................................    (19,676)  (107,495)     607,441    (46,881)      (10,374)
                                                     ---------  ---------  -----------  ---------  ------------
Cash flows from financing activities:
  Proceeds from bank lines of credit...............         --         --    1,190,285    150,000        70,000
  Payments on bank lines of credit.................         --         --     (270,084)        --      (254,140)
  Proceeds from notes payable......................         --     29,942           --         --            --
  Payments on notes payable........................    (29,251)        --      (29,942)    (1,617)      (50,000)
  Payments on capital lease obligations............         --         --     (101,533)        --       (60,060)
  Payments on debentures payable...................         --         --     (130,130)        --            --
  Distributions to shareholders....................         --   (130,327)    (588,367)        --            --
  Proceeds from issuance of common stock...........    102,500    129,600       75,000         --       475,000
  Proceeds from subscriptions receivable...........         --         --       25,000         --            --
                                                     ---------  ---------  -----------  ---------  ------------
  Net cash provided by financing activities........     73,249     29,215      170,229    148,383       180,800
                                                     ---------  ---------  -----------  ---------  ------------
Net increase (decrease) in cash....................     65,292     99,710    1,132,056   (121,743)     (195,615)
Cash, beginning of year............................     13,693     78,985      178,695    178,695     1,310,751
                                                     ---------  ---------  -----------  ---------  ------------
Cash, end of period................................  $  78,985  $ 178,695  $ 1,310,751  $  56,952  $  1,115,136
                                                     ---------  ---------  -----------  ---------  ------------
                                                     ---------  ---------  -----------  ---------  ------------
Other cash flow information:
  Interest paid....................................  $      --  $      --  $    54,707  $      --  $     36,995
                                                     ---------  ---------  -----------  ---------  ------------
                                                     ---------  ---------  -----------  ---------  ------------
</TABLE>


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

                                      F-7
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. THE COMPANY AND BASIS OF PRESENTATION


        National Information Consortium, Inc. (the "Company" or "NIC") is a
provider of Internet-based electronic government services, which are integrated
packages of hardware and software, that help governments use the Internet to
reduce costs and provide a higher level of service to businesses and citizens.
The Company was formed as a Delaware corporation on December 18, 1997, for the
sole purpose of effecting a common stock exchange offer (the "Exchange Offer")
to combine under common ownership five separate affiliated entities under which
the Company conducted its business operations. The five companies were National
Information Consortium USA, Inc. ("NIC/USA"), Kansas Information Consortium,
Inc. ("KIC"), Indian@ Interactive, Inc. ("III"), Nebrask@ Interactive, Inc.
("NII") and Arkansas Information Consortium, Inc. ("AIC"). The Exchange Offer
was consummated on March 31, 1998, and has been accounted for as a business
combination. NIC/USA is the entity whose shareholders received the largest
portion of the Company's common stock shares and is treated as the accounting
acquirer with the purchase method of accounting being applied to the four other
companies (see Note 3). The accompanying consolidated financial statements
reflect the acquisitions on March 31, 1998, with the results of operations and
cash flows subsequent to that date reflecting the results of all the companies,
and prior to that date only the operations of NIC/USA.



        As of December 31, 1998, the Company provides electronic government
services for seven states and one local government. The Company's primary
business activity is to design, build and operate Internet-based portals for
governments under multi-year contracts, forming a relationship in which
governments view the Company as their partner (referred to as government
partnerships--see Note 4). In addition, the Company enters into contracts to
provide consulting, development and management services to government portals in
exchange for a negotiated fee. The Company also has a development division that
develops applications to automate certain government back-office processes to
facilitate electronic access.


        The Company negotiates contracts with government agencies desiring to
include their information on the government portal. The Company markets the
services and solicits users to enter into subscriber contracts permitting the
user to access the portal and the government information contained therein in
exchange for a transactional or subscription user fee. The Company is
responsible for funding up front investment and ongoing operational costs.
Through separate wholly-owned subsidiaries, NIC/USA operates in Virginia and
Iowa, and has a service contract with the state of Georgia. Following the
Exchange Offer, the Company has wholly-owned subsidiaries operating in the
states of Arkansas, Indiana, Kansas and Nebraska in addition to the operations
of NIC/USA.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    BASIS OF CONSOLIDATION

        The accompanying consolidated financial statements consolidate NIC/USA
with its wholly-owned subsidiaries for periods prior to the Exchange Offer and
the Company together with all of its direct and indirect wholly-owned
subsidiaries, including NIC/USA, for periods subsequent to the Exchange Offer.
All significant intercompany balances and transactions have been eliminated. The
Company and NIC/USA have no partially owned subsidiaries.

    PROPERTY AND EQUIPMENT

        Property and equipment are carried at cost less accumulated
depreciation. Depreciation is computed using the straight-line method over
estimated useful lives of 8 years for furniture and fixtures, 3-8 years for
equipment, 3-5 years for purchased software and 5 years for leasehold
improvements. When assets are retired or otherwise disposed of, the cost and
related accumulated depreciation are removed

                                      F-8
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
from the accounts and any resulting gain or loss is included in operations for
the period. The cost of maintenance and repairs is charged to expense as
incurred; significant renewals and betterments are capitalized.


        The Company periodically evaluates the carrying value of property and
equipment to be held and used when events and circumstances warrant such a
review. The carrying value of property and equipment is considered impaired when
the anticipated undiscounted cash flows from the asset is separately
identifiable and is less than its carrying value. In that event, a loss is
recognized based on the amount by which the carrying value exceeds the fair
value of the asset. Fair value is determined primarily using the anticipated
cash flows discounted at a rate commensurate with the risk involved. Losses on
assets to be disposed of are determined in a similar manner, except that fair
values are reduced for the cost to dispose.


    INTANGIBLE ASSETS


        At each balance sheet date, the Company assesses the value of recorded
goodwill and other intangible assets for possible impairment based primarily on
the ability to recover the balances from expected future cash flows on an
undiscounted basis. If the sum of the expected future cash flows on an
undiscounted basis is less than the carrying amount of the intangible asset, an
impairment loss would be recognized for the amount by which the carrying value
of the intangible asset exceeds its estimated fair value. The Company has not
recorded any provisions for possible impairment of goodwill or intangible
assets.


    REVENUE RECOGNITION

        The Company recognizes revenues from providing electronic government
services (primarily transaction and information access fees) when the service is
provided. The Company must remit a certain percentage of these fees to
government agencies regardless of whether the Company ultimately collects the
fees. Government agency fees and amounts payable to the primary contracting
governmental entities (see Note 4) are accrued as cost of revenues and accounts
payable at the time the revenue is recognized.

        Revenue from service contracts is recognized as the services are
provided at rates provided for in the contract.


        The Company recognizes revenues from application development contracts
on the percentage of completion method, utilizing labor hours incurred to date
as compared to the estimated total labor hours for each contract. Included in
the measurement of percentage of completion are the internal costs of developing
the core technology which is a deliverable under the Company's current
contracts. Any anticipated losses on contracts are charged to operations as soon
as they are determinable. In the fourth quarter of 1998, the Company determined
that its most recent cost estimates exceeded the remaining revenues to be
recognized. The Company accrued $1.3 million of estimated costs in excess of
revenues for satisfying remaining obligations under the contracts. The provision
for anticipated losses was determined on an individual contract basis. Because
of the inherent uncertainties in estimating the costs of completion, it is at
least reasonably possible that the estimates will change within the near term.


    INCOME TAXES

        The Company changed its income tax status from an S corporation to a C
corporation on July 1, 1998. The Company, along with its subsidiaries, files a
consolidated federal income tax return.

                                      F-9
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
        Deferred income taxes are recognized for the tax consequences in future
years of differences between the tax bases of assets and liabilities and their
financial reporting amounts at each year end based on enacted laws and statutory
tax rates applicable to the periods in which the differences are expected to
affect taxable income. Valuation allowances are established when necessary to
reduce deferred tax assets to the amount expected to be realized.

    SERVICE DEVELOPMENT COSTS

        The Company expenses as incurred the employee costs to develop,
implement, operate and maintain the government portals. These costs are included
in service development and operations expense in the consolidated statements of
operations.

    APPLICATION DEVELOPMENT COSTS

        As discussed above, the Company, through a development division, is
developing an application under customer contracts that automates certain
government back-office processes to facilitate electronic access. Costs of
developing this application are considered costs of performance under the
contracts and have been expensed as incurred. These costs are included in
service development and operations expense in the consolidated statements of
operations.

    STOCK-BASED COMPENSATION

        The Company has elected to account for its stock-based compensation plan
using the intrinsic value method prescribed in Accounting Principles Board
Opinion ("APB") No. 25, "Accounting for Stock Issued to Employees." Statement of
Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation," establishes accounting and disclosure requirements using a
fair-value-based method of accounting for stock-based compensation plans. The
Company has elected the method of accounting prescribed by APB No. 25 as
described above, and has adopted the disclosure requirements of SFAS No. 123.

        Accordingly, the Company records as compensation expense the amount by
which the fair value of common stock sold to employees and consultants exceeds
the amount paid. Any excess of fair value of the price of common stock over the
exercise price for options granted to employees is recorded as deferred
compensation expense within shareholders' equity and amortized as expense
ratably over the vesting period.

    CONCENTRATION OF CREDIT RISK

        Financial instruments that potentially subject the Company to
significant concentrations of credit risk consist primarily of cash and accounts
receivable. The Company limits its exposure to credit loss by depositing its
cash with high credit quality financial institutions. The Company considers
accounts receivable to be fully collectible; accordingly, no allowance for
doubtful accounts is required. The Company has not experienced any significant
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.

                                      F-10
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    RECENT ACCOUNTING PRONOUNCEMENTS

        The Financial Accounting Standards Board issued Statement No. 131,
"Disclosures about Segments of an Enterprise and Related Information," which
establishes standards for reporting financial information regarding operating
segments, products and services, geographic areas and major customers. The
statement is effective for financial statements for periods beginning after
December 15, 1997. As the Company operates in one business segment, the adoption
of this statement did not have a significant impact on the Company's financial
statements.


        In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1 ("SOP 98-1"), "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use," which establishes
guidelines for the accounting for the costs of all computer software developed
or obtained for internal use. SOP 98-1 is effective January 1, 1999. The
adoption of SOP 98-1 did not have a material impact on the Company's
consolidated financial statements.


    UNAUDITED INTERIM FINANCIAL INFORMATION


        The accompanying consolidated balance sheet as of March 31, 1999, the
consolidated statements of operations and cash flows for the three months ended
March 31, 1999 and 1998 and the consolidated statement of changes in
shareholders' equity for the three months ended March 31, 1999 are unaudited.



        In the opinion of management, these statements have been prepared on the
same basis as the audited financial statements and include all adjustments,
consisting only of normal recurring adjustments, necessary for the fair
statement of the results of these periods. The data disclosed in the notes to
financial statements for these periods are unaudited.


3. ACCOUNTING FOR THE EXCHANGE OFFER

        On March 31, 1998, the Company exchanged its common shares for the
common shares of five affiliated business units--NIC/USA, KIC, III, NII and AIC.
Starting in 1991 with the state of Kansas, the Company's founders established an
S corporation for business conducted within each state in which it was awarded a
contract. By 1996, the Company had expanded into four states and decided to
pursue future business opportunities through NIC/USA, leaving the four other
business units to pursue opportunities solely within those states.

        Ownership of the five affiliated business units was similar, but not
identical, leading to the conclusion to account for the Exchange Offer as a
business combination. Prior to consummating the Exchange Offer, the Company was
a holding company with no operations of its own. Exchange ratios were determined
proportionately based on estimated 1998 pretax earnings for each company. No
appraisal of fair market value of the separate companies was obtained.

        Management determined the fair value of the consolidated company on
March 31, 1998 was $40 million. The fair value was allocated to each of the
business units based upon proportional values agreed to by the shareholders in
consummating the Exchange Offer.


        Shareholders of NIC/USA, III, KIC, AIC and NII received 22,288,209,
10,099,461, 4,179,039, 3,032,009 and 1,944,646 shares of the Company's common
shares which were valued for purchase accounting at $21,460,187, $9,724,259,
$4,023,785, $2,919,368 and $1,872,401, respectively. As the shareholders of
NIC/USA received 54% of the Company's common shares, NIC/USA was treated as the
acquirer in applying purchase accounting.


                                      F-11
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. ACCOUNTING FOR THE EXCHANGE OFFER (CONTINUED)
        The cost of the acquired business units of $18,539,813 was allocated to
the tangible and identifiable intangible assets acquired and liabilities assumed
on the basis of their fair values on the Exchange Offer date. The fair value of
net tangible assets, consisting primarily of cash, accounts receivable, property
and equipment, accounts payable and debt, approximated historical carrying
amounts. The sole identifiable intangible asset relates to the government
contracts and was valued at the net present value of projected future cash flows
over the lives of the existing contracts discounted by 15%. Developed
applications were not assigned a value because each state has a perpetual right
of use license to applications developed if the Company's relationship is
terminated. The remainder of the cost was allocated to goodwill. The purchase
price and allocation by acquired business unit and in total is summarized as
follows:

<TABLE>
<CAPTION>
                                       III        KIC        AIC        NII       TOTAL
                                    ---------  ---------  ---------  ---------  ----------
<S>                                 <C>        <C>        <C>        <C>        <C>
Fair market value at March 31,
  1998............................  $9,724,259 $4,023,785 $2,919,368 $1,872,401 $18,539,813
                                    ---------  ---------  ---------  ---------  ----------
                                    ---------  ---------  ---------  ---------  ----------
Allocated to:
  Tangible net assets.............    464,766    311,159    304,529    108,897   1,189,351
  Contract intangibles............  1,911,321    433,611    447,994    672,387   3,465,313
  Goodwill........................  7,348,172  3,279,015  2,166,845  1,091,117  13,885,149
                                    ---------  ---------  ---------  ---------  ----------
                                    $9,724,259 $4,023,785 $2,919,368 $1,872,401 $18,539,813
                                    ---------  ---------  ---------  ---------  ----------
                                    ---------  ---------  ---------  ---------  ----------
Government contract expiration
  date............................    8/31/00   12/31/99    6/30/00    1/31/02
</TABLE>

        As a result of rapid technological changes occurring in the Internet
industry and the intense competition for qualified Internet professionals,
recorded contract intangibles and goodwill are amortized on a straight-line
basis over the life of the existing contracts. There can be no assurance the
contracts will be renewed when they expire at terms that will be beneficial to
the Company. At the time of the Exchange Offer, the Company and each of the
business units were S corporations. The Exchange Offer was tax free to the
shareholders. The historical tax basis in the assets and liabilities carries
over to the Company and the amortization of the goodwill and contract
intangibles is not deductible for income tax purposes.

        The following unaudited pro forma consolidated amounts give effect to
the acquisitions of the business units as if they had occurred on January 1,
1997, using the amortization of goodwill and contract intangible the Company has
and will record for periods subsequent to the Exchange Offer:


<TABLE>
<CAPTION>
                                      YEAR ENDED
                                     DECEMBER 31,
                                ----------------------  THREE MONTHS ENDED
                                   1997        1998       MARCH 31, 1998
                                ----------  ----------  -------------------
<S>                             <C>         <C>         <C>
Revenues......................  $24,382,184 $36,532,345     $ 8,270,047
Operating loss................  (6,863,442) (8,736,631)      (1,655,386)
Net loss......................  (6,931,996) (9,429,917)      (1,658,166)
Basic and diluted loss per
  share.......................  $    (0.17) $    (0.22)     $     (0.04)
Weighted average shares
  outstanding.................  40,112,940  41,950,418       41,934,277
</TABLE>


4. GOVERNMENT PARTNERSHIPS

        Each of the Company's government partnerships operates under a separate
contract, which generally has an initial term of three to five years. The
Company enters into separate agreements with various agencies and divisions of
the government partners to provide specific services and to conduct

                                      F-12
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. GOVERNMENT PARTNERSHIPS (CONTINUED)
specific transactions. These agreements preliminarily establish the pricing of
the electronic transactions and data access services the Company provides and
the division of revenues between the Company and the government agency. Prices
and revenue sharing agreements must be approved by the government. The Company
owns all the applications developed under these contracts. After completion of a
defined contract term, the Company's government partners receive a perpetual,
royalty-free license to the applications for use only. If the Company's contract
is not renewed after a defined term the government partners would be entitled to
take over the portal in place with no future obligation of the Company. In some
cases, the Company provides management services to government-owned portals in
exchange for an agreed-upon fee.

        The following is a summary of the Company's larger business units that
have entered into agreements with government partners and the significant terms
of those operating agreements.

    VIRGINIA INTERACTIVE, LLC (VI)


        On July 30, 1997, VI, a wholly-owned subsidiary of NIC/USA, entered into
a contract to provide electronic government services to the Virginia Information
Providers Network Authority (the "Virginia Authority"). VI is responsible for
managing and marketing the government portal as well as funding up front
investment and ongoing operational costs. The contract is for a period of five
years, commencing September 1, 1997, with the Virginia Authority having a
five-year renewal option. If the Virginia Authority extends the contract through
2007, it is entitled to a perpetual license for applications developed at no
additional compensation to VI.


        User fees received by the VI business unit are disbursed (1) first for
the payment of operating expenses (primarily telecommunication costs), (2) then
to the Virginia Authority in accordance with interagency agreements negotiated
by VI on behalf of the Virginia Authority and for the reasonable and necessary
expenses of the Virginia Authority, and (3) then all remaining funds to VI.

    INDIANA INTERACTIVE, INC. (III)


        The III business unit develops, operates, maintains and expands
electronic government services for electronic access to public information for
the Access Indiana Information Network ("AIIN"). AIIN is a State of Indiana
government instrumentality created by the Indiana legislature for the purpose of
providing electronic access to state, county and local information required by
Indiana businesses and citizens. III is responsible for managing and marketing
the government portal as well as funding up-front investment and ongoing
operational costs. The contract with AIIN and the interagency agreements with
various government agencies include limitations and provisions for the rates III
can charge and the amount of remuneration to AIIN and each government agency.
The initial contract expires September 2000 but may be renewed, or amended and
renewed, for up to an additional five years. AIIN is entitled to a perpetual for
use only license to the applications developed for no additional compensation to
III.


        III's wholly-owned subsidiary, City-County Interactive, L.L.C. (the
"Subsidiary"), was formed in 1997 to provide electronic government solutions for
CivicNet, formerly CivicLink, the electronic gateway service for the city of
Indianapolis and Marion County, Indiana. In addition, the Subsidiary is to
further operate, manage and expand CivicNet.

        In connection with the revenues generated under the contract with AIIN,
AIIN receives 2% of gross revenues per annum, before all other payments. The
data-providing entities are then paid in accordance with interagency agreements.
The remaining balance is retained by III.

                                      F-13
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. GOVERNMENT PARTNERSHIPS (CONTINUED)
    ARKANSAS INFORMATION CONSORTIUM, INC. (AIC)


        AIC serves as a provider of electronic government services, by a
contract signed in July 1997 between AIC and the Information Network of Arkansas
("INA"), a public instrumentality created by legislation in the State of
Arkansas (the "State"). AIC is responsible for managing and marketing the
government portal as well as funding up-front investment and ongoing operational
costs. The contract is for one three-year term through June 30, 2000, with four
one-year renewals at the option of INA. If the State decides to extend the
contract through June 30, 2003, or at anytime thereafter, the INA shall be
entitled to a perpetual for use only license to the applications developed for
no additional compensation to AIC. Prior to June 30, 2003, the INA reserves the
right to negotiate terms to license the applications.


        Network transaction fees received pursuant to the agreement with INA are
disbursed first for payment of certain operating expenses for the government
portal (primarily telecommunication costs). Five percent of the amount by which
gross revenues for the portal exceed the amount payable to government agencies
is then distributed to the INA. The balance is disbursed to AIC.

    KANSAS INFORMATION CONSORTIUM, INC. (KIC)


        KIC was incorporated August 15, 1991 to serve as a provider of
electronic government services to develop, operate, maintain and expand a
government portal for electronic access to public information for the
Information Network of Kansas ("INK"). INK is a State of Kansas government
instrumentality created by the Kansas legislature for the purpose of providing
electronic access to state, county and local information required by Kansas
businesses and citizens. KIC is responsible for managing and marketing the
government portal as well as funding up-front investment and ongoing operational
costs. The contract with INK includes limitations and provisions for the rates
KIC can charge and the amount of remuneration to INK and each government agency.
The initial contract was to expire on December 31, 1996, but was renewed until
December 31, 1999 unless earlier terminated by INK for cause. INK shall have the
option, upon termination or expiration of the contract, to require KIC to
provide electronic government services in accordance with the terms of the
contract for a period of up to twelve months from the time of the expiration or
notification of termination. INK is entitled to a perpetual for use only license
to the applications developed for no additional compensation to KIC.


        In connection with the revenues generated under the contract with INK,
INK receives 2.0% of gross revenue, per annum, payable monthly, before all other
payments. KIC may then receive a 25.0% rate of return per annum on its risk
capital from net income before taxes. The remaining net income before taxes is
shared 66.7% with KIC and 33.3% with INK. Risk capital is defined in the
contract as the sum of paid-in capital, corporate loans with a payback period
exceeding one year, and noncancellable obligations under corporate leases.

    NEBRASK@ INTERACTIVE, INC. (NII)

        NII was incorporated November 22, 1994 for the purpose of operating as a
provider of electronic government solutions for the public information portal of
the State of Nebraska ("Nebrask@ Online"). NII developed and operates the public
information portal to provide businesses and citizens with electronic access to
state, county and local information via the Internet. NII is responsible for
managing and marketing the portal as well as funding up-front investment and
ongoing operational costs.


        On December 3, 1997, NII entered into a contract with the Nebraska State
Records Board ("NSRB") to provide electronic government services to enhance,
operate, maintain and expand the existing portal that was developed by NII under
its 1995 contract with the Nebraska Library Commission ("NLC")


                                      F-14
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. GOVERNMENT PARTNERSHIPS (CONTINUED)

and various government agencies. The contract includes limitations and
provisions for the rates NII can charge and the amount of remuneration to each
government agency. The contract will expire on January 31, 2002 unless earlier
terminated by the NSRB for cause. The NSRB shall have the option, upon
termination or expiration of the contract, to require NII to provide electronic
government services in accordance with the terms of the contract for a period of
up to twelve months from the time of the expiration or notice of termination,
whichever is earlier. On January 1, 2002, the NSRB will be entitled to a
perpetual for use only license to the applications developed for no additional
compensation to NII.


        In connection with the revenues generated under the contract with the
NSRB, the NSRB receives 4.5% of the first $89,000 in gross profit and 2% of
gross profit thereafter. Gross profit is defined in the contract as the
difference between NII's gross revenues and amounts paid to government agencies
and for certain telecommunication expenses.

    NATIONAL INFORMATION CONSORTIUM U.S.A., INC. (NIC/USA)

        A service contract was entered into between NIC/USA and the GeorgiaNet
Authority ("GANET"), an agency of the State of Georgia, on September 15, 1996.
Pursuant to the contract, NIC/USA must dedicate a minimum number of full time
employees to assist GANET in creating and providing an information access
program. Pursuant to the contract, GANET is entitled to a perpetual use license
to the applications developed at no additional compensation to NIC/USA. However,
if GANET terminates the contract prior to September 2001, GANET must pay NIC/USA
a fee ranging from $500,000 to $1,000,000 (based on the date of termination) in
order to receive a license for the applications. The contract must be renewed by
GANET on a yearly basis. In the event fees received by GANET from its customers
are insufficient to cover its obligations to NIC/USA, the contract shall
terminate without further obligation of GANET.

        In connection with the revenues generated under the contract with GANET,
GANET pays NIC/ USA $800,000 per year, in equal amounts of $200,000 on a
quarterly basis. In addition, GANET pays NIC/ USA 5% of gross GANET revenues
from non-bulk fees per quarter.

5. PROPERTY AND EQUIPMENT

        Property and equipment consists of the following:

<TABLE>
<CAPTION>
                                                           DECEMBER 31,
                                                       --------------------
                                                         1997       1998
                                                       ---------  ---------
<S>                                                    <C>        <C>
Furniture and fixtures...............................  $      --  $ 210,209
Equipment............................................    125,048  1,530,636
Purchased software...................................         --    101,484
Leasehold improvements...............................         --     39,285
                                                       ---------  ---------
                                                         125,048  1,881,614
Less accumulated depreciation........................     12,845    652,199
                                                       ---------  ---------
                                                       $ 112,203  $1,229,415
                                                       ---------  ---------
                                                       ---------  ---------
</TABLE>

        Depreciation expense for the years ended December 31, 1996, 1997 and
1998, was $177, $13,559 and $236,699, respectively.

                                      F-15
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. INTANGIBLE ASSETS

        Intangible assets consist of the following:

<TABLE>
<CAPTION>
                                      DECEMBER 31,
                                 ----------------------    MARCH 31, 1999
                                    1997        1998         (UNAUDITED)
                                 ----------  ----------  -------------------
<S>                              <C>         <C>         <C>
Goodwill.......................  $       --  $13,885,149     $13,885,149
Contract intangibles...........          --   3,465,313        3,465,313
                                 ----------  ----------  -------------------
                                         --  17,350,462       17,350,462
Less accumulated
  amortization.................          --   5,681,403        7,575,204
                                 ----------  ----------  -------------------
                                 $       --  $11,669,059     $ 9,775,258
                                 ----------  ----------  -------------------
                                 ----------  ----------  -------------------
</TABLE>

7. BANK LINES OF CREDIT AND OTHER DEBT OBLIGATIONS

        NIC/USA has a $1,000,000 operating line of credit from a bank that bears
interest at the bank's index rate (7.75% at December 31, 1998). The expiration
date on the line is April 30, 1999. At December 31, 1997 and 1998, $0 and
$370,000 was outstanding on the line. The line is collateralized by NIC/USA's
assets and guaranteed by various affiliated companies. The line was renewed on
April 30, 1999 with a maturity date of April 30, 2000.

        NIC/USA entered into a $225,000 equipment line of credit with a bank in
January 1998. The line bears interest at the bank's reference rate plus 1.75%
(9.50% at December 31, 1998). There is no given expiration date on the line. At
December 31, 1998, no amounts were outstanding on the line. The line is
collateralized by the related equipment and guaranteed by the parent company.

        In December 1997, NIC/USA borrowed $29,942 from a bank in the form of a
note payable collateralized by an automobile. The note was repaid in full in
1998.

        In October 1998, NIC/USA issued to GANET, an irrevocable letter of
credit in the amount of $200,000 that expires October 31, 1999.

        On January 19, 1999, NIC/USA purchased an airplane and financed the
purchase by borrowing $544,000 from a bank in the form of a note payable. The
note bears interest at 7.75% and matures January 19, 2000. The loan is to be
repaid in eleven monthly installments of $6,529 commencing February 19, 1999
with a final lump-sum payment of $513,707 on January 19, 2000. The note is
collateralized by the airplane.

        VI entered into a $250,000 operating line of credit with a bank in May
1998. The line bears interest at the bank's index rate (7.75% at December 31,
1998). The expiration date on the line is April 30, 2000. At December 31, 1998,
$218,750 was outstanding on the line. The line is collateralized by VI's assets
and guaranteed by various affiliated companies.

        VI entered into a $225,000 equipment line of credit with a bank in April
1998. The line bears interest at the bank's reference rate plus 1.75% (9.50% at
December 31, 1998). There is no given expiration date on the line. At December
31, 1998, there were no amounts outstanding on the line. The line is
collateralized by the related equipment and guaranteed by the parent company.

        Iowa Interactive, Inc. entered into a $225,000 equipment line of credit
with a bank in April 1998. The line bears interest at the bank's reference rate
plus 1.75% (9.50% at December 31, 1998). There is no given expiration date on
the line. At December 31, 1998, no amounts were outstanding on the line. The
line is collateralized by the related equipment and guaranteed by the parent
company.

                                      F-16
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. BANK LINES OF CREDIT AND OTHER DEBT OBLIGATIONS (CONTINUED)
        III has a $400,000 operating line of credit from a bank that bears
interest at the bank's index rate (7.75% at December 31, 1998). The expiration
date on the line is April 30, 2000. At December 31, 1998, $192,136 was
outstanding on the line. The line is collateralized by the III's assets and
guaranteed by various affiliated companies.

        III has a $150,000 operating line of credit with a bank that bears
interest at the bank's prime rate plus 0.50% (8.25% at December 31, 1998). The
expiration date on the line is November 1, 1999. At December 31, 1998, $18,209
was outstanding on the line. The line is collateralized by III's assets.

        III has a $225,000 equipment line of credit with a bank which bears
interest at the bank's reference rate plus 1.75% (9.50% at December 31, 1998).
There is no given expiration date on the line. At December 31, 1998, there were
no amounts outstanding on the line. The line is collateralized by the related
equipment and guaranteed by the parent company.

        KIC has a $250,000 operating line of credit from a bank that bears
interest at the bank's index rate (7.75% at December 31, 1998). The expiration
date on the line is April 30, 2000. At December 31, 1998, $179,497 was
outstanding on the line. The line is collateralized by KIC's assets and
guaranteed by various affiliated companies.

        KIC has a $225,000 equipment line of credit with a bank which bears
interest at the bank's reference rate plus 1.75% (9.50% at December 31, 1998).
There is no given expiration date on the line. At December 31, 1998, no amounts
were outstanding on the line. The line is collateralized by the related
equipment and guaranteed by the parent company.

        AIC has a $150,000 operating line of credit from a bank that bears
interest at the bank's index rate (7.75% at December 31, 1998). The expiration
date on the line is April 30, 2000. At December 31, 1998, no amounts were
outstanding on the line. The line is collateralized by AIC's assets and
guaranteed by the parent company.

        AIC has a $225,000 equipment line of credit with a bank which bears
interest at the bank's reference rate plus 1.75% (9.50% at December 31, 1998).
There is no given expiration date on the line. At December 31, 1998, no amounts
were outstanding on the line. The line is collateralized by the related
equipment and guaranteed by the parent company.

        In March 1998, AIC agreed to pay a shareholder $19,500 for past services
and reacquired the shareholder's 5,005 shares of NII. An initial payment of
$6,500 was made with the remaining balance of $13,000 due in two annual
installments of $6,500 in 1999 and 2000.

        AIC has issued to the State of Arkansas an irrevocable letter of credit
in the amount of $50,000.

        NII has a $100,000 line of credit with a bank that bears interest at the
bank's index rate (7.75% at December 31, 1998). The expiration date on the line
is April 30, 2000. At December 31, 1998, $45,000 was outstanding on the line.
The line is collateralized by NII's assets and guaranteed by the parent company.

        NII has a $225,000 equipment line of credit with a bank which bears
interest at the bank's reference rate plus 1.75% (9.50% at December 31, 1998).
There is no given expiration date on the line. At December 31, 1998, no amounts
were outstanding on the line. The line is collateralized by the related
equipment and guaranteed by the parent company.

        In March 1998, NII agreed to pay a shareholder $130,500 for past
services and reacquired the shareholder's 5,250 shares of NII. An initial
payment of $43,500 was made with the remaining balance of $87,000 due in two
annual installments of $43,500 in 1999 and 2000.

                                      F-17
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. BANK LINES OF CREDIT AND OTHER DEBT OBLIGATIONS (CONTINUED)
        The operating line of credit agreements contain various covenants
relating to reporting requirements and financial ratios. At December 31, 1998,
the Company was either in compliance with these covenants or had received
waivers on any violations of these covenants.


8. SHAREHOLDERS' EQUITY AND EARNINGS PER SHARE


    COMMON STOCK

        The Company's Board of Directors has authorized 13,500,000 shares of
common stock for issuance by the Company at December 31, 1998. In April 1999,
the Company was reincorporated in the state of Colorado and changed the par
value of its common stock from $.01 per share to no par. On May 6, 1999, the
Company increased its authorized shares to 200,000,000.


        On June 14, 1999, the Board of Directors declared a 4.643377 for 1 stock
split on the Company's common stock whereby 3.643377 additional shares will be
issued for each share of common stock held by shareholders of record on a date
prior to the effective date of the registration statement filed by the Company
for an initial public offering of its common stock. The effect of the stock
split has been retroactively reflected in the accompanying consolidated
financial statements for all periods presented. All references to the number of
Company common shares and per share amounts elsewhere in the related footnotes
have also been restated as appropriate to reflect the effect of the common stock
split for all periods presented.


        In the first six months of 1998, the Company made $588,367 of S
corporation cash distributions to common shareholders. NIC/USA made $130,327 of
distributions to its shareholders in 1997.


        On June 30, 1998, the Company and a voting trust entered into by the
Company's shareholders entered into a stock purchase agreement for the Company's
shareholders to sell a 25% interest in the Company to an investment management
firm. The Company did not receive any of the proceeds from the sale. Under the
voting trust agreement, two principal shareholders have the right to vote all of
the Company's common shares, except those held by the investment management firm
and to sell all or any part of such shares. The investment management investors
also have certain registration rights, a right of first refusal to purchase any
common shares proposed to be sold by the voting trust, a right to participate in
any sale by the voting trust and certain other rights. The Company's bylaws give
the Company the right of first refusal to purchase any common shares desired to
be sold by a shareholder at the lesser of a third party offered price or a
formula price. One common shareholder has the right, only upon termination
within the first three years of employment, to cause the Company to repurchase
173,258 shares of common stock purchased by the shareholder on February 9, 1999,
at the $1.44 price per share paid by the shareholder.


                                      F-18
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


8. SHAREHOLDERS' EQUITY AND EARNINGS PER SHARE (CONTINUED)



        At December 31, 1997 and as of March 31, 1998, the date of the Exchange
Offer, NIC/USA had 1,000,000 common shares authorized and 112,330 common shares
issued and outstanding. However, as NIC/USA is considered the accounting
acquirer, its historical outstanding share information has been adjusted for the
Exchange Offer exchange ratio. Shareholders of NIC/USA received 198.42 Company
common shares for each share held of NIC/USA on March 31, 1998. Retroactive
adjustments are also made for purposes of calculating and reporting earnings per
share.


    COMMON STOCK TRANSACTIONS

        From August 1997 through December 1997, NIC/USA sold 5,130 and 4,500
shares of its common stock to employees at prices of $29.24 and $1.00 per share,
respectively. The Company recorded $370,235 in compensation expense related to
these transactions.


        From April 1998 through June 1998, the Company sold 348,254 shares of
common stock to two employees at $0.22 per share. The Company recorded $258,333
in compensation expense related to this transaction. From September 1998 through
December 1998, the Company granted 2,534,796 common stock options. Compensation
expense of $310,536 was recorded in 1998 and deferred compensation expense of
$2,813,577 was recorded at December 31, 1998 which is being expensed ratably
over the vesting period.



        On June 30, 1998, the Company issued 174,563 shares of its common stock
and made an S corporation distribution of those shares, which were valued at
$1.43 per share, to its shareholders. These shares were given to a consultant as
compensation for services rendered to the Company's shareholders with the
investment management firm sale. In connection with the transaction, the Company
also paid $57,077 in professional fees on behalf of the shareholders which were
also distributed as an S corporation distribution.



    ADDITIONAL PAID-IN CAPITAL



        The Company offset its accumulated deficit on the date of Subchapter S
election termination against its additional paid-in capital as reflected in the
Consolidated Statements of Changes in Shareholders' Equity.


    1999 EMPLOYEE STOCK PURCHASE PLAN

        In May 1999, the Company's Board of Directors approved an employee stock
purchase plan intended to qualify as an "employee stock purchase plan" under
Section 423 of the Internal Revenue Code.

    EARNINGS PER SHARE


        The Company computes net income (loss) per share in accordance with the
provisions of SFAS No. 128, "Earnings Per Share" and SEC Staff Accounting
Bulletin No. 98. Under SFAS No. 128 and SAB No. 98, basic net income (loss) per
share is computed by dividing the net income (loss) for the period by the
weighted average number of common shares outstanding for the period. Treated as
outstanding for all periods prior to the Exchange Offer is an issuance of
174,563 of common shares to all common shareholders on July 1, 1998 for no
consideration to the Company as described above. Diluted net income (loss) per
share is the same as basic net income (loss) per share because common stock
issuable upon exercise of employee stock options is antidilutive.


                                      F-19
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


8. SHAREHOLDERS' EQUITY AND EARNINGS PER SHARE (CONTINUED)

        The following sets forth the calculation of earnings per share for the
actual and pro forma periods indicated:


<TABLE>
<CAPTION>
                                 YEAR ENDED DECEMBER 31,           PRO FORMA
                          -------------------------------------      THREE           THREE           THREE
                                          1998                    MONTHS ENDED    MONTHS ENDED    MONTHS ENDED
                             1997      PRO FORMA       1998      MARCH 31, 1998  MARCH 31, 1998  MARCH 31, 1999
                            ACTUAL    (UNAUDITED)     ACTUAL      (UNAUDITED)     (UNAUDITED)     (UNAUDITED)
                          ----------  ------------  -----------  --------------  --------------  --------------
<S>                       <C>         <C>           <C>          <C>             <C>             <C>
Net loss................  $ (276,803)  $(9,429,917) $(7,895,966)  $ (1,658,166)   $   (124,213)   $ (3,299,053)
Basic and diluted loss
  per share.............  $    (0.01)  $    (0.22)  $     (0.21)  $      (0.04)   $      (0.01)   $      (0.08)
Weighted-average common
  shares outstanding....  20,857,785   41,950,418    37,242,423     41,934,277      22,679,122      42,242,941
</TABLE>


9. INCOME TAXES

        On July 1, 1998, the Company changed its income tax status from an S
corporation to a C corporation. The Company recognized a net deferred tax
liability of approximately $1,374,000 representing the temporary differences
between the book and tax bases of assets and liabilities on that date. No
deferred tax liability was recorded for goodwill. The effect of recognizing the
deferred tax liability has been included in the consolidated statement of
operations for the year ended December 31, 1998.

        Income tax expense for the year ended December 31, 1998 consisted of the
following:


<TABLE>
<S>                                                                <C>
Current income taxes:
  Federal........................................................  $  56,045
  State..........................................................     12,655
                                                                   ---------
    Total........................................................     68,700
                                                                   ---------
Deferred income taxes, net:
  Federal........................................................    540,345
  State..........................................................     49,768
                                                                   ---------
    Total........................................................    590,113
                                                                   ---------
    Total income taxes...........................................  $ 658,813
                                                                   ---------
                                                                   ---------
</TABLE>



        The unaudited pro forma provision for income taxes for the years ended
December 31, 1996, 1997 and 1998 and the three-months ended March 31, 1998
presented on the Consolidated Statements of Operations present the Company's
results of operations as if it were a C corporation for the entire period. The
pro forma provision for income taxes for the year ended December 31, 1998
represents the incremental provision for the six month period the Company was an
S corporation together with removing the $1,374,000 cumulative effect recorded
in 1998 as discussed above. The pro forma provision for income taxes was
calculated based on enacted tax laws and statutory tax rates applicable to the
periods presented taking into account permanent differences.


                                      F-20
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. INCOME TAXES (CONTINUED)
        Significant components of the Company's deferred tax assets and
liabilities at December 31, 1998, are as follows:


<TABLE>
<S>                                                               <C>
Deferred tax assets:
  Accrued accounts payable......................................  $ 721,757
  Application development contracts.............................    479,922
  Compensation related to non-qualified stock options...........     59,842
  Other.........................................................     28,130
                                                                  ---------
    Total.......................................................  1,289,651
                                                                  ---------
Deferred tax liabilities:
  Accrued revenue...............................................    897,097
  Contract intangibles..........................................    881,346
  Depreciation..................................................     62,324
  Other.........................................................     38,996
                                                                  ---------
    Total.......................................................  $1,879,763
                                                                  ---------
Net deferred tax liability......................................  $ 590,112
                                                                  ---------
                                                                  ---------
</TABLE>


        The following table is a reconciliation between the effective income tax
rate indicated by the consolidated statements of operations and the statutory
federal income tax rate for the year ended December 31, 1998:


<TABLE>
<S>                                                                    <C>
Effective federal and state income tax rate (provision)..............       (9.1)%
Goodwill amortization (six months)...................................       15.5
S to C corporation adjustment........................................       19.7
Pretax loss as an S corporation (six months).........................       10.4
State income taxes...................................................       (1.3)
Other................................................................       (0.2)
                                                                       ---------
Statutory federal income tax rate....................................       35.0%
                                                                       ---------
                                                                       ---------
</TABLE>


10. CAPITAL LEASE OBLIGATIONS

        The Company and its subsidiaries lease various property and equipment
under capital leases. The agreements require the company and its subsidiaries to
pay all taxes, fees, assessments or other charges.

        Capitalized leased property and equipment consists of the following at
December 31, 1998:

<TABLE>
<S>                                                                 <C>
Furniture and fixtures............................................  $ 117,911
Equipment.........................................................    766,153
Purchased software................................................     81,795
                                                                    ---------
                                                                      965,859
Less accumulated depreciation.....................................    314,026
                                                                    ---------
                                                                    $ 651,833
                                                                    ---------
                                                                    ---------
</TABLE>

                                      F-21
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. CAPITAL LEASE OBLIGATIONS (CONTINUED)
        Future minimum noncancellable lease payments under these capital leases
at December 31, 1998 are as follows:

<TABLE>
<CAPTION>
FISCAL YEAR
- ------------------------------------------------------------------
<S>                                                                 <C>
1999..............................................................  $ 280,884
2000..............................................................    217,180
2001..............................................................    213,918
2002..............................................................     17,787
                                                                    ---------
                                                                      729,769
Less interest.....................................................     84,457
                                                                    ---------
Present value of net minimum lease payments.......................    645,312
Less current portion..............................................    235,323
                                                                    ---------
Long-term portion.................................................  $ 409,989
                                                                    ---------
                                                                    ---------
</TABLE>

11. OPERATING LEASES

        The Company and its subsidiaries lease office space and certain
equipment under operating leases. The future minimum lease payments under
noncancellable operating leases are as follows:

<TABLE>
<CAPTION>
FISCAL YEAR
- --------------------------------------------------------------------------------
<S>                                                                               <C>
1999............................................................................  $    408,412
2000............................................................................       320,125
2001............................................................................       248,143
2002............................................................................       209,932
2003............................................................................        24,989
                                                                                  ------------
                                                                                  $  1,211,601
                                                                                  ------------
                                                                                  ------------
</TABLE>

        Total rent expense for the years ended December 31, 1996, 1997 and 1998
was $0, $2,099 and $354,192 respectively.

12. EMPLOYEE BENEFIT PLAN

        The Company and its subsidiaries sponsor a defined contribution 401(k)
profit sharing plan. In accordance with the plan, all full-time employees are
eligible immediately upon employment. A discretionary match and a discretionary
contribution may be made to the plan as determined by the Board of Directors.
Company contributions totaled $1,731, $14,031, and $94,571 for the years ended
December 31, 1996, 1997 and 1998, respectively.

13. STOCK OPTION PLAN

        The Company has adopted a formal stock option plan (the "Plan") to
provide for the granting of either incentive stock options or non-qualified
stock options to encourage certain employees of the Company and its
subsidiaries, and certain directors of the Company, to participate in the
ownership of the Company, and to provide additional incentive for such employees
and directors to promote the success of its business through sharing the future
growth of such business. The Company is authorized to grant

                                      F-22
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. STOCK OPTION PLAN (CONTINUED)

options for up to 9,286,754, common shares under the Plan, of which 2,534,796
have been granted in 1998. The exercise price of all options granted under the
plan was $1.44, which was less than the fair market value of the stock on the
various grant dates. The weighted-average grant-date fair value of options
granted during the year was $1.60. Employee options are generally exercisable
one year from date of grant in cumulative annual installments of 33% and expire
four years after the grant date.



        On December 31, 1998, the Company granted 1,393,013 options (1,046,501
non-qualified options and 346,512 incentive options) to an executive of the
Company under two separate stock option agreements covered by the Plan.
Non-qualified stock options totaling 60,712 vested immediately with the
remainder of the options exercisable one year from date of grant in cumulative
annual installments of 25%. The non-qualified stock options expire ten years
after the grant date. Incentive stock options totaling 69,302 vested immediately
with the remainder of the options exercisable one year from date of grant in
cumulative annual installments of 25%. The incentive stock options expire five
years from the date of grant.


        Stock option activity for the year ended December 31, 1998, was as
follows:


<TABLE>
<CAPTION>
                                             SHARES     WEIGHTED AVERAGE PRICE
                                            ---------  -------------------------
<S>                                         <C>        <C>
Outstanding at January 1..................         --                 --
  Granted.................................  2,534,796          $    1.44
  Exercised...............................         --                 --
  Forfeited...............................     20,793          $    1.44
                                            ---------
Outstanding at December 31................  2,514,003          $    1.44
Exercisable at December 31................    199,317          $    1.44
</TABLE>



        For all options outstanding at December 31, 1998, the exercise price was
$1.44 per share and the weighted-average remaining contractual life was 6.7
years.


        The Company accounts for the Plan using the intrinsic value method
prescribed in Accounting Principles Board Opinion ("APB") No. 25, "Accounting
for Stock Issued to Employees." Statement of Financial Accounting Standards
("SFAS") No. 123, "Accounting for Stock-Based Compensation," requires certain
disclosures regarding expense and value of options granted using the
fair-value-based method even though the Company follows APB No. 25. Had
compensation cost for the Company's Plan been determined consistent with SFAS
No. 123, the Company's net loss and loss per share would have been as follows
for the year ended December 31, 1998:


<TABLE>
<S>                                                                <C>
Net loss
  As reported....................................................  $(7,895,966)
  Pro forma......................................................  $(7,906,551)
Basic and diluted loss per share:
  As reported....................................................  $    (0.21)
  Pro forma......................................................  $    (0.21)
</TABLE>


        The Company used the minimum value option pricing model, as permitted by
the Financial Accounting Standards Board for nonpublic companies, to determine
the fair value of grants made in 1998.

                                      F-23
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. STOCK OPTION PLAN (CONTINUED)
The minimum value model does not consider expected volatility in stock price.
The following assumptions were applied in determining pro forma compensation
cost for the year ended December 31, 1998:


<TABLE>
<S>                                                                <C>
Risk-free interest rate..........................................  5.00%
Expected dividend yield..........................................  0.00%
Expected option life.............................................  6.6 years
Expected stock price volatility..................................  0.001%
Fair value of options granted....................................  $1.60
</TABLE>


14. CONCENTRATION OF CREDIT

        For the year ended December 31, 1998, the Company derived 71% of its
revenues from two data resellers.

15. RELATED PARTY TRANSACTIONS

        The Company and its subsidiaries pay their Board members director fees
for services rendered. Total expense incurred for the year ended December 31,
1998 was $130,500. No director fees were paid in either 1997 or 1996.

        The Company and its subsidiaries purchase business and health insurance
through an insurance agency that is controlled by a shareholder and director of
the Company. Insurance expense for the years ended December 31, 1996, 1997 and
1998 was approximately $3,000, $50,000 and $444,600, respectively.

16. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

        NIC/USA financed the purchase of $335,646 of property and equipment in
1998 under capital leases.

        KIC sold certain assets during 1998 which were then leased back from the
purchaser over a period of three years. The resulting lease is being accounted
for as a capital lease. The purchaser paid down KIC's bank line of credit in
1998 by $28,666 as part of this sale-leaseback transaction.

        III sold certain assets during 1998 which were then leased back from the
purchaser over a period of three years. The resulting lease is being accounted
for as a capital lease. The purchaser paid down III's bank line of credit in
1998 by $169,287 as part of this sale-leaseback transaction.

        AIC financed the purchase of $13,083 of property and equipment in 1998
under capital leases.

        NII financed the purchase of $7,114 of property and equipment in 1998
under capital leases.

                                      F-24
<PAGE>
         REPORT OF PRICEWATERHOUSECOOPERS LLP, INDEPENDENT ACCOUNTANTS

To the Board of Directors of
Indian@ Interactive, Inc. and subsidiary

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, of changes in shareholders' equity and of
cash flows present fairly, in all material respects, the financial position of
Indian@ Interactive, Inc. and subsidiary (the "Company") at December 31, 1997
and 1996, and the results of their operations and their cash flows for the years
then ended in conformity with generally accepted accounting principles. 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 of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

/s/ PRICEWATERHOUSECOOPERS LLP
Kansas City, Missouri
May 6, 1999

                                      F-25
<PAGE>
                    INDIAN@ INTERACTIVE, INC. AND SUBSIDIARY

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                           --------------------
                                                             1996       1997
                                                           ---------  ---------   MARCH 31,
                                                                                    1998
                                                                                 -----------
                                                                                 (UNAUDITED)
<S>                                                        <C>        <C>        <C>
                                           ASSETS
Current assets:
  Cash...................................................  $ 280,918  $     964   $ 380,209
  Trade accounts receivable..............................    860,777  1,505,464   1,203,141
  Receivable from employees..............................         --         --       1,000
  Due from related companies.............................         --         --         662
  Prepaid expenses.......................................     10,042     16,531      14,359
                                                           ---------  ---------  -----------
        Total current assets.............................  1,151,737  1,522,959   1,599,371
                                                           ---------  ---------  -----------
Property and equipment, net..............................    372,222    375,426     363,196
                                                           ---------  ---------  -----------
Other assets:
  Note receivable from shareholder.......................     25,000     15,000      15,000
  Deposits and other.....................................     10,464     13,988         250
  Organization costs, net of accumulated amortization of
    $5,815, $10,627, and $11,830.........................     18,244     13,432      12,229
                                                           ---------  ---------  -----------
        Total other assets...............................     53,708     42,420      27,479
                                                           ---------  ---------  -----------
        Total assets.....................................  $1,577,667 $1,940,805  $1,990,046
                                                           ---------  ---------  -----------
                                                           ---------  ---------  -----------

                            LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Checks issued in excess of bank balance................  $      --  $ 117,405   $      --
  Accounts payable.......................................    724,411    876,710   1,089,165
  Accrued expenses.......................................     44,756     25,671      55,617
  Due to related companies...............................         --        528       4,527
  Bank lines of credit...................................    119,196     92,923      92,923
  Current portion of capital lease obligations...........     99,603    141,632     144,499
                                                           ---------  ---------  -----------
        Total current liabilities........................    987,966  1,254,869   1,386,731
                                                           ---------  ---------  -----------
Long-term liabilities:
  Debentures payable to related parties..................     90,000     90,000      90,000
  Capital lease obligations, net of current portion......    167,536     97,370      48,549
                                                           ---------  ---------  -----------
        Total long-term liabilities......................    257,536    187,370     138,549
                                                           ---------  ---------  -----------
        Total liabilities................................  1,245,502  1,442,239   1,525,280
                                                           ---------  ---------  -----------
Commitments and contingencies (Notes 6 and 7)............
Shareholders' equity:
  Common stock, no par value; 100,000 shares authorized,
    87,250, 88,122 and 88,122 shares issued and
    outstanding..........................................     18,825     18,825      18,825
  Additional paid-in capital.............................    156,174    183,557     183,557
  Retained earnings......................................    157,166    296,184     262,384
                                                           ---------  ---------  -----------
        Total shareholders' equity.......................    332,165    498,566     464,766
                                                           ---------  ---------  -----------
        Total liabilities and shareholders' equity.......  $1,577,667 $1,940,805  $1,990,046
                                                           ---------  ---------  -----------
                                                           ---------  ---------  -----------
</TABLE>

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

                                      F-26
<PAGE>
                    INDIAN@ INTERACTIVE, INC. AND SUBSIDIARY

                       CONSOLIDATED STATEMENTS OF INCOME


<TABLE>
<CAPTION>
                                                           YEAR ENDED         THREE MONTHS
                                                          DECEMBER 31,           ENDED
                                                     ----------------------  MARCH 31, 1998
                                                        1996        1997      (UNAUDITED)
                                                     ----------  ----------  --------------
<S>                                                  <C>         <C>         <C>
Revenues...........................................  $11,658,194 $12,524,065   $3,541,101
Cost of revenues...................................   9,623,884  10,040,041     2,727,257
                                                     ----------  ----------  --------------
      Gross profit.................................   2,034,310   2,484,024       813,844
                                                     ----------  ----------  --------------
Operating expenses:
  Service development and operations...............     359,689     480,492       225,425
  Selling, general and administrative..............     814,997   1,070,667       424,581
  Stock compensation...............................          --      13,431            --
  Depreciation and amortization....................      83,448     107,332        31,841
                                                     ----------  ----------  --------------
      Total operating expenses.....................   1,258,134   1,671,922       681,847
                                                     ----------  ----------  --------------
      Operating income.............................     776,176     812,102       131,997
                                                     ----------  ----------  --------------
Other income (expense):
  Interest income..................................      21,514      20,192         6,804
  Interest expense.................................     (34,867)    (32,330)       (9,634)
  Miscellaneous income.............................          --       3,412         1,820
  Gain on disposals of property and equipment......          --         401            --
                                                     ----------  ----------  --------------
      Total other expense, net.....................     (13,353)     (8,325)       (1,010)
                                                     ----------  ----------  --------------
      Net income...................................  $  762,823  $  803,777    $  130,987
                                                     ----------  ----------  --------------
                                                     ----------  ----------  --------------
</TABLE>


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

                                      F-27
<PAGE>
                    INDIAN@ INTERACTIVE, INC. AND SUBSIDIARY

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                    NOTES DUE
                                        COMMON STOCK       ADDITIONAL               ON COMMON
                                   ----------------------    PAID-IN    RETAINED      STOCK
                                     SHARES      AMOUNT      CAPITAL    EARNINGS    PURCHASES       TOTAL
                                   -----------  ---------  -----------  ---------  -----------  --------------
<S>                                <C>          <C>        <C>          <C>        <C>          <C>
BALANCE, JANUARY 1, 1996.........      87,250   $  87,250   $ 156,174   $ (24,911)  $ (68,425)    $  150,088
Net income.......................          --          --          --     762,823          --        762,823
Change in par value of common
  stock..........................          --     (68,425)         --          --      68,425             --
Distributions to shareholders....          --          --          --    (580,746)         --       (580,746)
                                   -----------  ---------  -----------  ---------  -----------  --------------
BALANCE, DECEMBER 31, 1996.......      87,250      18,825     156,174     157,166          --        332,165
Net income.......................          --          --          --     803,777          --        803,777
Issuance of common stock.........         872          --      27,383          --          --         27,383
Distributions to shareholders....          --          --          --    (664,759)         --       (664,759)
                                   -----------  ---------  -----------  ---------  -----------  --------------
BALANCE, DECEMBER 31, 1997.......      88,122      18,825     183,557     296,184          --        498,566
Net income (unaudited)...........          --          --          --     130,987          --        130,987
Distributions to shareholders
  (unaudited)....................          --          --          --    (164,787)                  (164,787)
                                   -----------  ---------  -----------  ---------  -----------  --------------
BALANCE, MARCH 31, 1998
  (UNAUDITED)....................      88,122   $  18,825   $ 183,557   $ 262,384   $      --     $  464,766
                                   -----------  ---------  -----------  ---------  -----------  --------------
                                   -----------  ---------  -----------  ---------  -----------  --------------
</TABLE>

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

                                      F-28
<PAGE>
                    INDIAN@ INTERACTIVE, INC. AND SUBSIDIARY

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER
                                                                      31,
                                                              --------------------
                                                                1996       1997
                                                              ---------  ---------   THREE MONTHS
                                                                                         ENDED
                                                                                    MARCH 31, 1998
                                                                                    ---------------
                                                                                      (UNAUDITED)
<S>                                                           <C>        <C>        <C>
Cash flows from operating activities:
  Net income................................................  $ 762,823  $ 803,777     $ 130,987
  Adjustments to reconcile net income to net cash provided
    by operating activities:
    Depreciation and amortization...........................     83,448    107,332        31,841
    Gain on disposals of property and equipment.............         --       (401)           --
    Compensation expense recognized upon issuance of common
      stock.................................................         --     13,431            --
    Changes in operating assets and liabilities:
      Decrease (increase) in trade accounts receivable......    (86,475)  (644,687)      302,323
      Decrease (increase) in receivable from employees......      3,400         --        (1,000)
      (Increase) in due from related companies..............         --         --          (662)
      Decrease (increase) in prepaid expenses...............     (6,799)    (6,489)        2,172
      Decrease (increase) in deposits and other.............    (10,214)    (3,524)       13,738
      Increase (decrease) in accounts payable...............    (17,435)   152,299       212,455
      Increase (decrease) in accrued expenses...............     26,261    (19,085)       29,946
      Increase in due to related companies..................         --        528         3,999
                                                              ---------  ---------  ---------------
      Net cash provided by operating activities.............    755,009    403,181       725,799
                                                              ---------  ---------  ---------------
Cash flows from investing activities:
  Purchases of property and equipment.......................   (237,287)  (110,607)      (18,408)
  Proceeds from disposals of property and equipment.........         --      5,284            --
  Proceeds from repayments of note receivable from
    shareholder.............................................         --     10,000            --
                                                              ---------  ---------  ---------------
      Net cash used in investing activities.................   (237,287)   (95,323)      (18,408)
                                                              ---------  ---------  ---------------
Cash flows from financing activities:
  Checks issued in excess of bank balance...................         --    117,405      (117,405)
  Proceeds from bank lines of credit........................    362,405     97,202            --
  Payment on bank lines of credit...........................         --    (19,834)           --
  Payments on capital lease obligations.....................    (46,187)  (131,778)      (45,954)
  Distributions to shareholders.............................   (580,746)  (664,759)     (164,787)
  Proceeds from issuance of common stock....................         --     13,952            --
                                                              ---------  ---------  ---------------
    Net cash used in financing activities...................   (264,528)  (587,812)     (328,146)
                                                              ---------  ---------  ---------------
Net increase (decrease) in cash.............................    253,194   (279,954)      379,245
Cash, beginning of year.....................................     27,724    280,918           964
                                                              ---------  ---------  ---------------
Cash, end of period.........................................  $ 280,918  $     964     $ 380,209
                                                              ---------  ---------  ---------------
                                                              ---------  ---------  ---------------
Other cash flow information:
  Interest paid.............................................  $  34,867  $  32,330     $   8,135
                                                              ---------  ---------  ---------------
                                                              ---------  ---------  ---------------
</TABLE>

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

                                      F-29
<PAGE>
                    INDIAN@ INTERACTIVE, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    ORGANIZATION

       INDIAN@ INTERACTIVE, INC.

        Indian@ Interactive, Inc. (the "Company") was incorporated March 6, 1995
to design, build and operate Internet-based portals that allow businesses and
citizens to complete transactions and obtain government information online for
the Intelenet Commission ("Intelenet"). Intelenet is a State of Indiana
government instrumentality created by the Indiana legislature for the purpose of
providing electronic access to state, county and local information required by
Indiana businesses and citizens. The Company is responsible for managing and
marketing the government portal as well as funding up front investment and
ongoing operational costs. The contract with Intelenet and the interagency
agreements with various state agencies include limitations and provisions for
the rates the Company can charge and the amount of remuneration to Intelenet and
each state agency. The initial contract expires September 2000 but may be
renewed, or amended and renewed, for up to an additional five years. Intelenet
is entitled to a perpetual for use only license to the applications development
for no additional compensation to the Company.

        In October 1997, the Company entered into a computer system agreement
with the Indiana Secretary of State ("SOS"). The system is intended to automate
many of SOS's internal operations and provide the public electronic access to
certain SOS data.

        On March 31, 1998, the shareholders of the Company exchanged all of the
issued and outstanding common stock shares for shares of common stock in
International Information Consortium, Inc. whose name was later changed to
National Information Consortium, Inc. ("NIC"). As a result, NIC became the sole
shareholder of the Company.

       CITY-COUNTY INTERACTIVE, L.L.C.


        The Company's wholly-owned subsidiary, City-County Interactive, L.L.C.
(the "Subsidiary"), was formed in 1997 to assume the role of electronic
government services provider for CivicNet, formerly CivicLink, the government
portal for the city of Indianapolis and Marion County, Indiana. In addition, the
Subsidiary is to further operate, manage and expand CivicNet.


    BASIS OF CONSOLIDATION

        The accompanying consolidated financial statements include the Company
and its subsidiary. All significant intercompany accounts and transactions have
been eliminated in consolidation.

    ACCOUNTS RECEIVABLE

        The Company considers accounts receivable to be fully collectible;
accordingly, no allowance for doubtful accounts is required.

    PROPERTY AND EQUIPMENT


        Property and equipment are carried at cost less accumulated
depreciation. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets. When assets are retired or otherwise
disposed of, the cost and related accumulated depreciation are removed from the
accounts and any resulting gain or loss is included in income for the period.
The cost of maintenance and repairs is charged to expense as incurred;
significant renewals and betterments are capitalized.


                                      F-30
<PAGE>
                    INDIAN@ INTERACTIVE, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

        The Company periodically evaluates the carrying value of property and
equipment to be held and used when events and circumstances warrant such a
review. The carrying value of property and equipment is considered impaired when
the anticipated undiscounted cash flows from the asset is separately
identifiable and is less than its carrying value. In that event, a loss is
recognized based on the amount by which the carrying value exceeds the fair
value of the asset. Fair value is determined primarily using the anticipated
cash flows discounted at a rate commensurate with the risk involved. Losses on
assets to be disposed of are determined in a similar manner, except that fair
values are reduced for the cost to dispose.


    REVENUE RECOGNITION

        The Company recognizes revenues from providing electronic government
services (primarily transaction fees) when the service is provided. The Company
must remit a certain percentage of fees to state agencies regardless of whether
the Company ultimately collects the fees. In connection with the revenues
generated under the contract with Intelenet, Intelenet receives 2% of gross
revenues per annum, before all other payments. The data providing entities are
then paid in accordance with interagency agreements. The remaining balance is
retained by the Company.

    ORGANIZATION COSTS

        During the period ended December 31, 1995, the Company incurred
organization costs totaling $24,059. The organization costs are being amortized
on a straight-line basis over a period of five years.

    SERVICE DEVELOPMENT COSTS

        The Company expenses as incurred the employee costs to develop,
implement, operate and maintain the government portal.

    STOCK BASED COMPENSATION

        The Company records as compensation expense the amount by which the fair
value of common stock sold to employees exceeds the amount paid.

    INCOME TAXES

        The Company has elected to be taxed as a small business corporation
under provisions of Subchapter S of the Internal Revenue Code. Under such
provisions, the shareholders are taxed individually on their respective shares
of the Company's taxable income. Therefore, no provision for income tax expense
has been made. The Company changed its income tax status from an S corporation
to a C corporation effective July 1, 1998.

    USE OF ESTIMATES

        The preparation of consolidated 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 consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

                                      F-31
<PAGE>
                    INDIAN@ INTERACTIVE, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    UNAUDITED INTERIM FINANCIAL INFORMATION


        The accompanying balance sheet as of March 31, 1998, and the related
statements of income, changes in shareholders' equity and cash flows for the
three months ended March 31, 1998 are unaudited.



        In the opinion of management, these statements have been prepared on the
same basis as the audited financial statements and include all adjustments,
consisting only of normal recurring adjustments, necessary for the fair
statement of the results of this period. The data disclosed in the notes to the
financial statements for this period is unaudited.


2.  CONCENTRATION OF CREDIT

        For the years ended December 31, 1997 and 1996, the Company derived 77%
and 80%, respectively, of its transaction fees from two data resellers. At
December 31, 1997 and 1996, 79% and 81%, respectively, of its accounts
receivable were from the same two data resellers.

3.  PROPERTY AND EQUIPMENT

        Property and equipment consist of the following:

<TABLE>
<CAPTION>
                                      DECEMBER 31,
                                  --------------------   USEFUL
                                    1996       1997       LIVES
                                  ---------  ---------  ---------
<S>                               <C>        <C>        <C>
Furniture.......................  $  75,996  $  77,641    8 years
Equipment.......................    320,920    420,423    5 years
Software........................     60,464     64,739    3 years
                                  ---------  ---------
                                    457,380    562,803
Less accumulated depreciation...     85,158    187,377
                                  ---------  ---------
                                  $ 372,222  $ 375,426
                                  ---------  ---------
                                  ---------  ---------
</TABLE>

        Depreciation expense for the years ended December 31, 1997 and 1996 was
$102,520 and $78,637, respectively.

4.  BANK LINES OF CREDIT

    INDIAN@ INTERACTIVE, INC.

        The Company has a $100,000 operating line of credit from a bank which
was increased to $150,000 in October 1997. The interest rate on the line equals
the bank's prime rate plus 0.50% (9.00% at December 31, 1997). The line expired
on November 1, 1998. There were no amounts outstanding on the line of credit at
December 31, 1997 and 1996. The line is collateralized by the Company's assets
as well as personal guarantees of three of the Company's shareholders.

        The Company obtained an additional $200,000 operating line of credit
with a bank in December 1997 which was subsequently increased to $400,000 in
1998. The interest rate on the line equals the bank's index rate (8.50% at
December 31, 1997). The line matures April 30, 2000. There were no amounts
outstanding on the line of credit at December 31, 1997. The line of credit is
collateralized by the Company assets and guaranteed by various affiliated
companies.

                                      F-32
<PAGE>
                    INDIAN@ INTERACTIVE, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4.  BANK LINES OF CREDIT (CONTINUED)
        The Company has a $600,000 equipment line of credit from a bank which
bears interest at the bank's prime rate plus 0.50% (9.00% at December 31, 1997).
The line expired on November 1, 1998. At December 31, 1997 and 1996, $79,508 and
$119,196, respectively, of equipment purchases were outstanding on the line.
During January 1997, $100,300 of the existing balance on the line of $119,196
was refinanced through a sale-leaseback with the bank. The line is
collateralized by the Company's assets as well as personal guarantees of three
of the Company's shareholders.

        The Company obtained an additional $225,000 equipment line of credit
from a bank in April 1998. The interest rate on the line equals the bank's
reference rate plus 1.75%. There is no given expiration date on the line. The
line is collateralized by the related equipment and guaranteed by an affiliated
company.

        The line of credit agreements contain various covenants relating to
reporting requirements and financial ratios. At December 31, 1997 and 1996, the
Company was either in compliance with these covenants or had received waivers on
any violations of these covenants.

    CITY-COUNTY INTERACTIVE, L.L.C.

        The Subsidiary has a $100,000 operating line of credit with a bank which
bears interest at the bank's prime rate plus 0.50%. (9.00% at December 31,
1997). The line expired November 1, 1998. There were no amounts outstanding on
the line of credit at December 31, 1997 and 1996. The line is collateralized by
the Subsidiary's assets as well as the guarantee of the Company and personal
guarantees of three of the Company's shareholders.

        The Subsidiary has a $75,000 equipment line of credit from a bank which
bears interest at the bank's prime rate plus 0.50% (9.00% at December 31, 1997).
The line expired on November 1, 1998. At December 31, 1997 and 1996, $13,415 and
$0, respectively, of equipment purchases were outstanding on the line. The line
is collateralized by the Subsidiary's assets as well as the guarantee of the
Company and personal guarantees of three of the Company's shareholders.

5.  DEBENTURES PAYABLE TO RELATED PARTIES

        Debentures payable at December 31, 1997 and 1996 consist of $90,000 of
10% debentures issued to two shareholders. These debentures are due in one
installment in October 2000. The Company called the debentures in May 1998. Due
to the early call, the Company was required to pay a 5.0% premium.

6.  CAPITAL LEASE OBLIGATIONS

        The Company leases various equipment under agreements with original
terms of three years. The agreements require the Company to pay all taxes, fees,
assessments or other charges.

                                      F-33
<PAGE>
                    INDIAN@ INTERACTIVE, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6.  CAPITAL LEASE OBLIGATIONS (CONTINUED)
        Capitalized leased property at December 31, 1997 and 1996, consists of:

<TABLE>
<CAPTION>
                                            1996       1997
                                          ---------  ---------
<S>                                       <C>        <C>
Furniture and fixtures..................  $  72,507  $  72,507
Equipment...............................    281,460    281,460
Software................................     59,656     59,656
                                          ---------  ---------
                                            413,623    413,623
Less accumulated depreciation...........     78,113    163,090
                                          ---------  ---------
                                          $ 335,510  $ 250,533
                                          ---------  ---------
                                          ---------  ---------
</TABLE>

        Future minimum lease payments under these capital leases at December 31,
1997 are as follows:

<TABLE>
<S>                                                 <C>
FISCAL YEAR
  1998............................................  $ 155,874
  1999............................................     97,510
  2000............................................      3,262
                                                    ---------
                                                      256,646
  Less interest...................................    (17,644)
                                                    ---------
  Present value of net minimum lease payments.....    239,002
  Less current portion............................   (141,632)
                                                    ---------
  Long-term portion...............................  $  97,370
                                                    ---------
                                                    ---------
</TABLE>

7.  OPERATING LEASES

        The Company leases its office space, an apartment and certain equipment
under operating leases. Future minimum lease payments under noncancellable
leases at December 31, 1997 are as follows:

<TABLE>
<S>                                                 <C>
FISCAL YEAR
  1998............................................  $  69,972
  1999............................................     58,120
  2000............................................     50,503
                                                    ---------
                                                    $ 178,595
                                                    ---------
                                                    ---------
</TABLE>

        Total rent expense for the years ended December 31, 1997 and 1996 was
$71,554 and $64,518, respectively.

        On June 1, 1998, the Company leased additional office space which
increased the future minimum lease payments to $77,502, $73,310 and $63,700 for
the years ending December 31, 1998, 1999 and 2000, respectively.

8.  RELATED PARTY TRANSACTIONS

        The Company pays its Board members director fees for services rendered.
Total expense incurred was $54,000 and $36,000 for the years ended December 31,
1997 and 1996, respectively.

                                      F-34
<PAGE>
                    INDIAN@ INTERACTIVE, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8.  RELATED PARTY TRANSACTIONS (CONTINUED)
        Interest expense on debentures payable to related parties totaled $9,000
for the years ended December 31, 1997 and 1996.

        The note receivable from shareholder of $15,000 was paid in full in July
1998.

        The Company purchases business and health insurance through an insurance
agency that is controlled by a shareholder of the Company. Insurance expense
totaled approximately $65,000 and $43,000 for the years ended December 31, 1997
and 1996, respectively.

        The Company rents an aircraft on an hourly basis from Sky King Leasing,
a company with common shareholders. The amount paid to Sky King Leasing was
approximately $10,500 and $19,500 in 1997 and 1996, respectively.


        The Company is affiliated, through common ownership, with several
companies that also serve as electronic government services providers for
various states. The Company is a partial guarantor of certain line of credit
agreements entered into by these affiliated companies. The total amounts
available and outstanding under such agreements at December 31, 1997 was
$1,075,000 and $192,089.


9.  EMPLOYEE BENEFIT PLAN

        The Company, in conjunction with affiliated companies, maintains a
401(k) profit sharing plan. In accordance with the plan, all employees are
eligible immediately upon employment. A discretionary match and a discretionary
contribution may be made to the plan as determined by the Board of Directors.
Company contributions totaled $18,432 and $16,319 for the years ended December
31, 1997 and 1996, respectively.

10.  COMMON STOCK

    CHANGE IN PAR VALUE OF COMMON STOCK

        During 1996, the Company amended the corporate bylaws to change the par
value of common stock from $1.00 par to no par with a total stated value of
$18,825. In conjunction with the amendment, notes due on common stock purchases
were forgiven.

    RESTRICTIONS ON TRANSFERABILITY OF COMMON STOCK

        The Articles of Incorporation of the Company stipulate that should any
shareholder desire to sell or transfer their respective shares of common stock,
such stock must first be offered to the Company. Any stock not purchased by the
Company within a specified time frame must then be offered to the remaining
shareholders. The purchase price must be equivalent to the price that would be
paid by a non-shareholder.

11.  SUPPLEMENTARY CASH FLOW DISCLOSURES

        The Company sold certain assets during 1996 which were leased back from
the purchaser over a period of three years. The resulting leases are being
accounted for as capital leases. The purchaser paid down $103,641 of the
Company's bank line of credit during 1997 and $313,323 during 1996.

                                      F-35
<PAGE>
         REPORT OF PRICEWATERHOUSECOOPERS LLP, INDEPENDENT ACCOUNTANTS

To the Board of Directors of

Kansas Information Consortium, Inc.

In our opinion, the accompanying balance sheets and the related statements of
income, of changes in shareholders' equity and of cash flows present fairly, in
all material respects, the financial position of Kansas Information Consortium,
Inc. (the "Company") at December 31, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles. 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 of these statements in accordance with generally accepted auditing
standards which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

/s/ PRICEWATERHOUSECOOPERS LLP
Kansas City, Missouri
May 6, 1999

                                      F-36
<PAGE>
                      KANSAS INFORMATION CONSORTIUM, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                             --------------------
                                                               1996       1997
                                                             ---------  ---------   MARCH 31,
                                                                                      1998
                                                                                   -----------
                                                                                   (UNAUDITED)
<S>                                                          <C>        <C>        <C>
                                            ASSETS
Current assets:
  Cash.....................................................  $  36,571  $ 136,379   $ 179,413
  Trade accounts receivable................................    483,092    542,979     626,303
  Receivable from employees................................      3,246        968       9,432
  Due from related companies...............................         --     22,348         982
  Prepaid expenses.........................................     23,353     16,870      10,930
                                                             ---------  ---------  -----------
    Total current assets...................................    546,262    719,544     827,060
Property and equipment, net................................    131,770    151,522     155,165
Deposits and other.........................................      2,145        625          25
                                                             ---------  ---------  -----------
    Total assets...........................................  $ 680,177  $ 871,691   $ 982,250
                                                             ---------  ---------  -----------
                                                             ---------  ---------  -----------
                             LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable.........................................  $ 405,715  $ 445,054   $ 481,516
  Accrued expenses.........................................      5,127     23,784      40,893
                                                             ---------  ---------  -----------
    Total current liabilities..............................    410,842    468,838     522,409
Bank lines of credit.......................................        100    178,674     148,682
Debentures payable to related parties......................     75,000         --          --
                                                             ---------  ---------  -----------
    Total liabilities......................................    485,942    647,512     671,091
                                                             ---------  ---------  -----------
Commitments and contingencies (Note 6).....................
Shareholders' equity:
  Common stock, $1 par value; 500,000 shares authorized,
    250,000 issued and 224,750, 229,250 and 229,250
    outstanding............................................    250,000    250,000     250,000
  Additional paid-in capital...............................      8,870     22,146      22,146
  Retained earnings........................................     (6,385)   (19,717)     67,263
                                                             ---------  ---------  -----------
                                                               252,485    252,429     339,409
Less common stock subscriptions receivable.................    (25,500)        --          --
Less treasury stock, at cost...............................    (32,750)   (28,250)    (28,250)
                                                             ---------  ---------  -----------
    Total shareholders' equity.............................    194,235    224,179     311,159
                                                             ---------  ---------  -----------
    Total liabilities and shareholders' equity.............  $ 680,177  $ 871,691   $ 982,250
                                                             ---------  ---------  -----------
                                                             ---------  ---------  -----------
</TABLE>

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

                                      F-37
<PAGE>
                      KANSAS INFORMATION CONSORTIUM, INC.
                              STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                            YEAR ENDED
                                                           DECEMBER 31,
                                                       --------------------
                                                         1996       1997
                                                       ---------  ---------   THREE MONTHS
                                                                                 ENDED
                                                                             MARCH 31, 1998
                                                                             --------------
                                                                              (UNAUDITED)
<S>                                                    <C>        <C>        <C>
Revenues.............................................  $5,009,204 $6,067,362   $1,625,488
Cost of revenues.....................................  3,681,547  4,576,795     1,174,015
                                                       ---------  ---------  --------------
    Gross profit.....................................  1,327,657  1,490,567       451,473
                                                       ---------  ---------  --------------
Operating expenses:
  Service development and operations.................    300,044    387,083        99,685
  Selling, general and administrative................    783,971    812,306       190,994
  Stock compensation.................................      3,870     13,276            --
  Depreciation.......................................     44,983     32,496         9,971
                                                       ---------  ---------  --------------
    Total operating expenses.........................  1,132,868  1,245,161       300,650
                                                       ---------  ---------  --------------
    Operating income.................................    194,789    245,406       150,823
                                                       ---------  ---------  --------------
Other income (expense):
  Interest income....................................      1,909        822           401
  Interest expense...................................    (18,072)   (13,056)       (4,639)
  Loss on disposals of property and equipment........    (11,214)   (43,144)           --
                                                       ---------  ---------  --------------
    Total other expense, net.........................    (27,377)   (55,378)       (4,238)
                                                       ---------  ---------  --------------
    Net income.......................................  $ 167,412  $ 190,028    $  146,585
                                                       ---------  ---------  --------------
                                                       ---------  ---------  --------------
</TABLE>

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

                                      F-38
<PAGE>
                      KANSAS INFORMATION CONSORTIUM, INC.
                 STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                              COMMON STOCK      ADDITIONAL                   TREASURY STOCK     COMMON STOCK
                                          --------------------    PAID-IN     RETAINED    --------------------  SUBSCRIPTIONS
                                           SHARES     AMOUNT      CAPITAL     EARNINGS     SHARES     AMOUNT     RECEIVABLE
                                          ---------  ---------  -----------  -----------  ---------  ---------  -------------
<S>                                       <C>        <C>        <C>          <C>          <C>        <C>        <C>
BALANCE, JANUARY 1, 1996................    250,000  $ 250,000   $   1,400    $ (35,795)    (28,250) $ (35,750)   $ (25,500)
Net income..............................         --         --          --      167,412          --         --           --
Distributions to shareholders...........         --         --          --     (138,002)         --         --           --
Sales of treasury stock.................         --         --       7,470           --       3,000      3,000           --
                                          ---------  ---------  -----------  -----------  ---------  ---------  -------------
BALANCE, DECEMBER 31, 1996..............    250,000    250,000       8,870       (6,385)    (25,250)   (32,750)     (25,500)
Net income..............................         --         --          --      190,028          --         --           --
Distributions to shareholders...........         --         --          --     (203,360)         --         --           --
Sales of treasury stock.................         --         --      13,276           --       4,500      4,500           --
Payment received for subscribed stock...         --         --          --           --          --         --       25,500
                                          ---------  ---------  -----------  -----------  ---------  ---------  -------------
BALANCE, DECEMBER 31, 1997..............    250,000    250,000      22,146      (19,717)    (20,750)   (28,250)          --
Net income (unaudited)..................         --         --          --      146,585          --         --           --
Distributions to shareholders
  (unaudited)...........................         --         --          --      (59,605)         --         --           --
                                          ---------  ---------  -----------  -----------  ---------  ---------  -------------
BALANCE, MARCH 31, 1998 (UNAUDITED).....    250,000  $ 250,000   $  22,146    $  67,263     (20,750) $ (28,250)   $      --
                                          ---------  ---------  -----------  -----------  ---------  ---------  -------------
                                          ---------  ---------  -----------  -----------  ---------  ---------  -------------

<CAPTION>

                                            TOTAL
                                          ---------
<S>                                       <C>
BALANCE, JANUARY 1, 1996................  $ 154,355
Net income..............................    167,412
Distributions to shareholders...........   (138,002)
Sales of treasury stock.................     10,470
                                          ---------
BALANCE, DECEMBER 31, 1996..............    194,235
Net income..............................    190,028
Distributions to shareholders...........   (203,360)
Sales of treasury stock.................     17,776
Payment received for subscribed stock...     25,500
                                          ---------
BALANCE, DECEMBER 31, 1997..............    224,179
Net income (unaudited)..................    146,585
Distributions to shareholders
  (unaudited)...........................    (59,605)
                                          ---------
BALANCE, MARCH 31, 1998 (UNAUDITED).....  $ 311,159
                                          ---------
                                          ---------
</TABLE>

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

                                      F-39
<PAGE>
                      KANSAS INFORMATION CONSORTIUM, INC.
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                          YEAR ENDED DECEMBER
                                                                  31,
                                                          --------------------
                                                            1996       1997
                                                          ---------  ---------   THREE MONTHS
                                                                                     ENDED
                                                                                MARCH 31, 1998
                                                                                ---------------
                                                                                  (UNAUDITED)
<S>                                                       <C>        <C>        <C>
Cash flows from operating activities:
  Net income............................................  $ 167,412  $ 190,028     $ 146,585
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation........................................     44,983     32,496         9,971
    Loss on disposals of property and equipment.........     11,214     43,144            --
    Compensation expense recognized upon sales of
      treasury stock....................................      3,870     13,276            --
    Changes in operating assets and liabilities:
    (Increase) in trade accounts receivable.............   (159,828)   (59,887)      (83,324)
    Decrease (increase) in receivable from employees....     (3,246)     2,278        (8,464)
    Decreases (increase) in due from related
      companies.........................................         --    (22,348)       21,366
    Decrease (increase) in prepaid expenses.............     (5,984)     6,483         5,940
    Decrease (increase) in deposits and other...........       (699)     1,520           600
    Increase in accounts payable........................    118,081     39,339        36,462
    Increase (decrease) in accrued expenses.............     (4,547)    18,657        17,109
                                                          ---------  ---------  ---------------
      Net cash provided by operating activities.........    171,256    264,986       146,245
                                                          ---------  ---------  ---------------
Cash flows from investing activities:
  Purchases of property and equipment...................    (62,960)   (96,151)      (13,613)
  Proceeds from disposals of property and equipment.....     56,775        759            --
                                                          ---------  ---------  ---------------
      Net cash used in investing activities.............     (6,185)   (95,392)      (13,613)
                                                          ---------  ---------  ---------------
Cash flows from financing activities:
  Proceeds from bank lines of credit....................     90,321    215,941            --
  Payments on bank lines of credit......................   (164,981)   (37,367)      (29,993)
  Payments on debentures payable to related parties.....    (25,000)   (75,000)           --
  Distributions to shareholders.........................   (138,002)  (203,360)      (59,605)
  Proceeds from sale of treasury stock..................      6,600      4,500            --
  Proceeds from common stock subscriptions receivable...         --     25,500            --
                                                          ---------  ---------  ---------------
      Net cash used in financing activities.............   (231,062)   (69,786)      (89,598)
                                                          ---------  ---------  ---------------
Net increase (decrease) in cash.........................    (65,991)    99,808        43,034
Cash, beginning of year.................................    102,562     36,571       136,379
                                                          ---------  ---------  ---------------
Cash, end of period.....................................  $  36,571  $ 136,379     $ 179,413
                                                          ---------  ---------  ---------------
                                                          ---------  ---------  ---------------
Other cash flow information:
  Interest paid.........................................  $  20,168  $  14,310     $   4,639
                                                          ---------  ---------  ---------------
                                                          ---------  ---------  ---------------
</TABLE>

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

                                      F-40
<PAGE>
                      KANSAS INFORMATION CONSORTIUM, INC.

                         NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        ORGANIZATION.  Kansas Information Consortium, Inc. (the "Company") was
incorporated August 15, 1991 to design, build and operate Internet-based portals
that allow businesses and citizens to complete transactions and obtain
government information online for the Information Network of Kansas ("INK"). INK
is a State of Kansas government instrumentality created by the Kansas
legislature for the purpose of providing electronic access to state, county and
local information required by Kansas businesses and citizens. The Company is
responsible for managing and marketing the government portal as well as funding
up front investment and ongoing operational costs. The contract with INK
includes limitations and provisions for the rates the Company can charge and the
amount of remuneration to INK and each state agency. The initial contract was to
expire on December 31, 1996, but was renewed until December 31, 1999 unless
earlier terminated by INK for cause. INK shall have the option, upon termination
or expiration of the contract, to require the Company to act in accordance with
the terms of the contract for a period of up to twelve months from the time of
the expiration or notification of termination. INK is entitled to a perpetual
for use only license to applications developed for no additional compensation to
the Company.

        On March 31, 1998, the shareholders of the Company exchanged all of
their issued and outstanding common stock shares for shares of common stock in
International Information Consortium, Inc. whose name was later changed to
National Information Consortium, Inc. ("NIC"). As a result, NIC became the sole
shareholder of the Company.

    ACCOUNTS RECEIVABLE.

        The Company considers accounts receivable to be fully collectible;
accordingly, no allowance for doubtful accounts is required.

    PROPERTY AND EQUIPMENT.


        Property and equipment are carried at cost less accumulated
depreciation. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets. When assets are retired or otherwise
disposed of, the cost and related accumulated depreciation are removed from the
accounts and any resulting gain or loss is included in income for the period.
The cost of maintenance and repairs is charged to expense as incurred;
significant renewals and betterments are capitalized.



        The Company periodically evaluates the carrying value of property and
equipment to be held and used when events and circumstances warrant such a
review. The carrying value of property and equipment is considered impaired when
the anticipated undiscounted cash flows from the asset is separately
identifiable and is less than its carrying value. In that event, a loss is
recognized based on the amount by which the carrying value exceeds the fair
value of the asset. Fair value is determined primarily using the anticipated
cash flows discounted at a rate commensurate with the risk involved. Losses on
assets to be disposed of are determined in a similar manner, except that fair
values are reduced for the cost to dispose.


    REVENUE RECOGNITION

        The Company recognizes revenues from providing electronic government
services (primarily transaction fees) when the service is provided. The Company
must remit a certain percentage of transaction fees to state agencies regardless
of whether the Company ultimately collects the fees. In connection with the
revenues generated under the contract with INK, INK receives 2.0% of gross
revenue per annum, payable monthly, before all other payments. The Company may
then receive a 25.0% rate of return per annum on its risk capital from net
income before taxes. The remaining net income before taxes

                                      F-41
<PAGE>
                      KANSAS INFORMATION CONSORTIUM, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
is shared 66.7% with the Company and 33.3% with INK. Risk capital is defined in
the contract as the sum of paid-in capital, corporate loans with a payback
period exceeding one year, and noncancellable obligations under corporate
leases.

    SERVICE DEVELOPMENT COSTS.

        The Company expenses as incurred the employee costs to develop,
implement, operate and maintain the government portal.

    STOCK-BASED COMPENSATION.

        The Company records as compensation expense the amount by which the fair
value of common stock sold to employees exceeds the amount paid.

    INCOME TAXES.

        The Company has elected to be taxed as a small business corporation
under provisions of Subchapter S of the Internal Revenue Code. Under such
provisions, the shareholders are taxed individually on their respective shares
of the Company's taxable income. Therefore, no provision for income tax expense
has been made. The Company changed its income tax status from an S corporation
to a C corporation effective July 1, 1998.

    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.

    UNAUDITED INTERIM FINANCIAL INFORMATION.


        The accompanying balance sheet as of March 31, 1998, and the related
statements of income, changes in shareholders' equity and cash flows for the
three months ended March 31, 1998 are unaudited.



        In the opinion of management, these statements have been prepared on the
same basis as the audited financial statements and include all adjustments,
consisting only of normal recurring adjustments, necessary for the fair
statement of the results of this period. The data disclosed in the notes to the
financial statements for this period is unaudited.


2. CONCENTRATION OF CREDIT

        For the years ended December 31, 1997 and 1996, the Company derived 84%
and 72%, respectively, of its transaction fees from six data resellers. At
December 31, 1997 and 1996, 84% and 80%, respectively, of its accounts
receivable were from the same six data resellers.

                                      F-42
<PAGE>
                      KANSAS INFORMATION CONSORTIUM, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3. PROPERTY AND EQUIPMENT

        Property and equipment consists of the following:

<TABLE>
<CAPTION>
                                                 DECEMBER 31,
                                             --------------------    USEFUL
                                               1996       1997        LIVES
                                             ---------  ---------  -----------
<S>                                          <C>        <C>        <C>
Furniture and fixtures.....................  $  77,519  $  84,419     8 years
Equipment..................................    170,578    116,195   5-8 years
Software...................................     25,103         --     5 years
Leasehold improvements.....................     15,457     15,457     5 years
                                             ---------  ---------
                                               288,657    216,071
Less accumulated depreciation..............    156,887     64,549
                                             ---------  ---------
                                             $ 131,770  $ 151,522
                                             ---------  ---------
                                             ---------  ---------
</TABLE>

        Depreciation expense for the years ended December 31, 1997 and 1996 was
$32,496 and $44,983, respectively.

4. BANK LINES OF CREDIT

        The Company obtained a $250,000 line of credit from a bank in May 1997.
The interest rate on the line equals the prime rate as per the Wall Street
Journal (8.50% at December 31, 1997). The line matures May 1, 1999. At December
31, 1997, $178,674 was outstanding on the line of credit. The line of credit is
collateralized by the Company's assets.

        The Company obtained an additional $250,000 line of credit from a bank
in December 1997. The interest rate on the line equals the bank's index rate
(8.50% at December 31, 1997). The line matures April 30, 2000. There were no
amounts outstanding on the line of credit at December 31, 1997. The line of
credit is collateralized by the Company's assets and guaranteed by various
affiliated companies.

        The Company obtained a $225,000 equipment line of credit from a bank in
April 1998. The interest rate on the line equals the bank's reference rate plus
1.75%. There is no given expiration date on the line. The line is collateralized
by the related equipment and guaranteed by an affiliated company.

        The Company had a $50,000 line of credit from a bank with a maturity
date of March 30, 1998, which was repaid during 1997. At December 31, 1997 and
1996, $0 and $100, respectively, was outstanding on the line of credit.

5. DEBENTURES PAYABLE TO RELATED PARTIES

        The Company had $75,000 of 10% debentures with a maturity date of
October 31, 2001 which were repaid during 1997.

                                      F-43
<PAGE>
                      KANSAS INFORMATION CONSORTIUM, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. OPERATING LEASES

        The Company leases its office space and certain equipment under
operating leases. The future minimum lease payments under noncancellable
operating leases are as follows:

<TABLE>
<CAPTION>
FISCAL YEAR
- -----------------------------------------------------------------
<S>                                                                <C>
1998.............................................................   $ 118,374
1999.............................................................     105,041
2000.............................................................      38,374
2001.............................................................      38,374
2002.............................................................      31,980
                                                                   -----------
                                                                    $ 332,143
                                                                   -----------
                                                                   -----------
</TABLE>

        Total rent expense for the years ended December 31, 1997 and 1996 was
$137,161 and $66,143, respectively.

7. RELATED PARTY TRANSACTIONS

        The Company pays its Board members director fees for services rendered.
Total expense incurred was $41,000 and $45,000 for the years ended December 31,
1997 and 1996, respectively.

        The Company purchases business and health insurance through an insurance
agency that is controlled by a shareholder of the Company. Insurance expense
totaled approximately $58,000 and $86,000 in 1997 and 1996, respectively.

        The Company rents an aircraft on an hourly basis from Sky King Leasing,
a company with common shareholders. The amount paid to Sky King Leasing was
approximately $18,000 and $8,500 in 1997 and 1996, respectively.

        During 1997, a shareholder of the Company sold a vehicle to the Company
for $30,000.

8. EMPLOYEE BENEFIT PLAN

        The Company, in conjunction with affiliated companies, maintains a
401(k) profit sharing plan. In accordance with the plan, all employees are
eligible immediately upon employment. A discretionary match and a discretionary
contribution may be made to the plan as determined by the Board of Directors.
Company contributions totaled $37,178 and $10,611 for the years ended December
31, 1997 and 1996, respectively.

9. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

        The Company sold certain assets during 1996 which were leased back from
the purchaser over a period of three years. The resulting lease is being
accounted for as an operating lease. The purchaser paid down on the Company's
bank line of credit in 1996 by $51,929 as part of this sale-leaseback
transaction.

                                      F-44
<PAGE>
         REPORT OF PRICEWATERHOUSECOOPERS LLP, INDEPENDENT ACCOUNTANTS

To the Board of Directors of
Arkansas Information Consortium, Inc.

In our opinion, the accompanying balance sheet and the related statement of
operations, of changes in shareholders' equity, and of cash flows present
fairly, in all material respects, the financial position of Arkansas Information
Consortium, Inc. (the "Company") at December 31, 1997, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles. 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 audit. We conducted our audit
of these statements in accordance with generally accepted auditing standards
which 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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.

/s/ PRICEWATERHOUSECOOPERS LLP
Kansas City, Missouri
May 6, 1999

                                      F-45
<PAGE>
                     ARKANSAS INFORMATION CONSORTIUM, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                                   1997
                                                               -------------  MARCH 31, 1998
                                                                              --------------
                                                                               (UNAUDITED)
<S>                                                            <C>            <C>
                                           ASSETS
Current assets:
  Cash.......................................................    $  72,916      $  104,345
  Trade accounts receivable..................................      585,989         734,639
  Interest receivable from shareholders......................        1,786           2,773
  Prepaid expenses...........................................          778             924
                                                               -------------  --------------
      Total current assets...................................      661,469         842,681
                                                               -------------  --------------
Property and equipment, net..................................      123,492         141,410
                                                               -------------  --------------
Other assets:
  Deposits...................................................        3,000           3,000
  Organization costs, net of accumulated amortization of $315
    and $504.................................................        3,466           3,277
  Notes receivable from shareholders.........................       40,000          40,000
                                                               -------------  --------------
      Total other assets.....................................       46,466          46,277
                                                               -------------  --------------
      Total assets...........................................    $ 831,427      $1,030,368
                                                               -------------  --------------
                                                               -------------  --------------

                            LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable...........................................    $ 534,760      $  656,689
  Accrued expenses...........................................        5,620          15,766
  Due to related party.......................................        4,510             254
  Note payable to former shareholder--current portion........           --           6,500
                                                               -------------  --------------
      Total current liabilities..............................      544,890         679,209
Debentures payable...........................................       40,130          40,130
Note payable to former shareholder--long-term portion........           --           6,500
                                                               -------------  --------------
      Total liabilities......................................      585,020         725,839
                                                               -------------  --------------
Commitments and contingencies (Note 6)
Shareholders' equity:
  Common stock:
    Series A $1 par, 500,000 voting shares authorized,
      272,059 shares issued and outstanding..................      272,059         272,059
    Series B $1 par, 500,000 non-voting shares authorized,
      220,881 shares issued, 220,881 and 215,876 shares
      outstanding............................................      220,881         220,881
    Retained earnings........................................     (246,533)       (174,026)
                                                               -------------  --------------
                                                                   246,407         318,914
  Less treasury stock, at cost...............................           --         (14,385)
                                                               -------------  --------------
      Total shareholders' equity.............................      246,407         304,529
                                                               -------------  --------------
      Total liabilities and shareholders' equity.............    $ 831,427      $1,030,368
                                                               -------------  --------------
                                                               -------------  --------------
</TABLE>

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

                                      F-46
<PAGE>
                     ARKANSAS INFORMATION CONSORTIUM, INC.
                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                YEAR ENDED
                                                               DECEMBER 31,
                                                                   1997
                                                               -------------   THREE MONTHS
                                                                                  ENDED
                                                                              MARCH 31, 1998
                                                                              --------------
                                                                               (UNAUDITED)
<S>                                                            <C>            <C>
Revenues.....................................................   $ 2,346,889     $2,041,142
Cost of revenues.............................................     2,077,144      1,802,776
                                                               -------------  --------------
      Gross profit...........................................       269,745        238,366
                                                               -------------  --------------
Operating expenses:
  Service development and operations.........................        90,447         56,808
  Selling, general and administrative........................       187,567        100,425
  Stock compensation.........................................       232,384          5,115
  Depreciation and amortization..............................         8,232          6,236
                                                               -------------  --------------
      Total operating expenses...............................       518,630        168,584
                                                               -------------  --------------
      Operating income (loss)................................      (248,885)        69,782
                                                               -------------  --------------
Other income (expense):
  Interest income............................................         4,083          3,628
  Interest expense...........................................        (1,731)          (903)
                                                               -------------  --------------
      Total other income.....................................         2,352          2,725
                                                               -------------  --------------
      Net income (loss)......................................   $  (246,533)    $   72,507
                                                               -------------  --------------
                                                               -------------  --------------
</TABLE>


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

                                      F-47
<PAGE>
                     ARKANSAS INFORMATION CONSORTIUM, INC.
                 STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                               SERIES A AND B
                                                COMMON STOCK                     TREASURY STOCK
                                            --------------------  RETAINED   ----------------------
                                             SHARES     AMOUNT    EARNINGS     SHARES      AMOUNT      TOTAL
                                            ---------  ---------  ---------  -----------  ---------  ---------
<S>                                         <C>        <C>        <C>        <C>          <C>        <C>
Balance, January 1, 1997..................         --  $      --  $      --          --   $      --  $      --
Issuance of common stock..................    492,940    492,940         --          --          --    492,940
Net loss..................................         --         --   (246,533)         --          --   (246,533)
                                            ---------  ---------  ---------  -----------  ---------  ---------
Balance, December 31, 1997................    492,940    492,940   (246,533)         --          --    246,407
Net income (unaudited)....................         --         --     72,507          --          --     72,507
Purchase of treasury stock (unaudited)....         --         --         --      (5,005)    (14,385)   (14,385)
                                            ---------  ---------  ---------  -----------  ---------  ---------
Balance, March 31, 1998 (unaudited).......    492,940  $ 492,940  $(174,026)     (5,005)  $ (14,385) $ 304,529
                                            ---------  ---------  ---------  -----------  ---------  ---------
                                            ---------  ---------  ---------  -----------  ---------  ---------
</TABLE>

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

                                      F-48
<PAGE>
                     ARKANSAS INFORMATION CONSORTIUM, INC.
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                YEAR ENDED
                                                               DECEMBER 31,
                                                                   1997
                                                               -------------   THREE MONTHS
                                                                                  ENDED
                                                                              MARCH 31, 1998
                                                                              --------------
                                                                               (UNAUDITED)
<S>                                                            <C>            <C>
Cash flows from operating activities:
  Net income (loss)..........................................    $(246,533)     $   72,507
  Adjustments to reconcile net income (loss) to net cash
    provided by (used in) operating activities:
  Depreciation and amortization..............................        8,232           6,236
  Issuance of common stock for services......................      232,384              --
  Expense recognized upon repurchase of treasury stock.......           --           5,115
  Changes in operating assets and liabilities:
    (Increase) in trade accounts receivable..................     (585,989)       (148,650)
    (Increase) in interest receivable from shareholders......       (1,786)           (987)
    (Increase) in prepaid expenses...........................         (778)           (145)
    (Increase) in deposits...................................       (3,000)             --
    Increase in accounts payable.............................      534,760         121,929
    Increase in accrued expenses.............................        5,620          10,146
    Increase (decrease) in due to related party..............        4,510          (4,256)
                                                               -------------  --------------
        Net cash provided by (used in) operating
          activities.........................................      (52,580)         61,895
                                                               -------------  --------------
Cash flows from investing activities:
  Purchases of property and equipment........................     (131,409)        (23,966)
  Organization costs.........................................       (3,781)             --
                                                               -------------  --------------
        Net cash used in investing activities................     (135,190)        (23,966)
                                                               -------------  --------------
Cash flows from financing activities:
  Proceeds from issuance of debentures.......................       40,130              --
  Proceeds from issuance of common stock.....................      220,556              --
  Purchase of treasury stock.................................           --          (6,500)
                                                               -------------  --------------
        Net cash provided by (used in) financing
          activities.........................................      260,686          (6,500)
                                                               -------------  --------------
Net increase in cash.........................................       72,916          31,429
Cash, beginning of year......................................           --          72,916
                                                               -------------  --------------
Cash, end of period..........................................    $  72,916      $  104,345
                                                               -------------  --------------
                                                               -------------  --------------
Other cash flow information:
  Interest paid..............................................    $     128      $      903
                                                               -------------  --------------
                                                               -------------  --------------
</TABLE>

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

                                      F-49
<PAGE>
                     ARKANSAS INFORMATION CONSORTIUM, INC.

                         NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    ORGANIZATION

        Arkansas Information Consortium, Inc. (the "Company") was incorporated
in October 1996 to design, build and operate Internet-based portals that allow
businesses and citizens to complete transactions and obtain government
information online, as defined by a contract signed in July 1997 between the
Company and the Information Network of Arkansas ("INA"), a public
instrumentality created by legislation in the State of Arkansas (the "State"),
to provide electronic access via the Internet to public information. The Company
is responsible for managing and marketing the government portal as well as
funding up front investment and ongoing operational costs. The contract is for
one three year term through June 30, 2000, with four one-year renewals at the
option of INA. If the State decides to extend the contract through June 30,
2003, or at anytime thereafter, INA shall be entitled to a perpetual for use
only license to the applications developed for no additional compensation to the
Company. Prior to June 30, 2003, INA reserves the right to negotiate terms for
licensure of applications.

        On March 31, 1998, substantially all of the shareholders of the Company
exchanged their shares for common stock shares in International Information
Consortium, Inc., whose name was later changed to National Information
Consortium, Inc. ("NIC"). As a result, NIC became the sole shareholder of the
Company. Only one shareholder did not participate in the exchange. In March
1998, the Company agreed to pay this shareholder $19,500 for past services and
reacquired the shareholder's 5,005 shares in the Company. The reacquired shares
were recorded as treasury stock at fair market value, which totaled $14,385. An
initial payment of $6,500 was made with the remaining balance recorded as a note
payable due in two annual installments of $6,500 in 1999 and 2000. The
difference between $19,500 and the fair value of the reacquired stock was
recorded as expense in the amount of $5,115.

    ACCOUNTS RECEIVABLE

        The Company considers accounts receivable to be fully collectible;
accordingly, no allowance for doubtful accounts has been recorded.

    PROPERTY AND EQUIPMENT


        Property and equipment are carried at cost less accumulated
depreciation. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets. When assets are retired or otherwise
disposed of, the cost and related accumulated depreciation are removed from the
accounts and any resulting gain or loss is included in operations for the
period. The cost of maintenance and repairs is charged to expense as incurred;
significant renewals and betterments are capitalized.



        The Company periodically evaluates the carrying value of property and
equipment to be held and used when events and circumstances warrant such a
review. The carrying value of property and equipment is considered impaired when
the anticipated undiscounted cash flows from the asset is separately
identifiable and is less than its carrying value. In that event, a loss is
recognized based on the amount by which the carrying value exceeds the fair
value of the asset. Fair value is determined primarily using the anticipated
cash flows discounted at a rate commensurate with the risk involved. Losses on
assets to be disposed of are determined in a similar manner, except that fair
values are reduced for the cost to dispose.


    ORGANIZATION COSTS

        Organization costs represent legal costs incurred by the Company
relating to its incorporation and formation and are being amortized using the
straight-line method over five years.

                                      F-50
<PAGE>
                     ARKANSAS INFORMATION CONSORTIUM, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    INCOME TAXES

        The Company has elected to be treated as a small business corporation
under provisions of Subchapter S of the Internal Revenue Code. Under such
provisions, the shareholders are taxed individually on their respective shares
of the Company's taxable income. Therefore, no provision for income tax has been
made. The Company changed its income tax status from an S corporation to a C
corporation effective July 1, 1998.

    REVENUE RECOGNITION

        The Company recognizes revenues from providing electronic government
services (primarily transaction fees) when the service is provided. The Company
must remit a certain percentage of transaction fees to state agencies regardless
of whether the Company ultimately collects the fees. In addition, transaction
fees received pursuant to the agreement with INA are disbursed first for payment
of network operating expenses, then to INA 5% of the amount by which gross
revenues exceed the amount payable to state agencies, and the balance to the
Company.

    SERVICE DEVELOPMENT COSTS

        The Company expenses as incurred the employee costs to develop,
implement, operate and maintain the government portal.

    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.

    UNAUDITED INTERIM FINANCIAL INFORMATION


        The accompanying balance sheet as of March 31, 1998, and the related
statements of operations, cash flows and changes in shareholders' equity for the
three months ended March 31, 1998 are unaudited.



        In the opinion of management, these statements have been prepared on the
same basis as the audited financial statements and include all adjustments,
consisting only of normal recurring adjustments, necessary for the fair
statement of the results of this period. The data disclosed in the notes to the
financial statements for this period is unaudited.


2. CONCENTRATION OF CREDIT

        For the year ended December 31, 1997, the Company derived 99% of its
transaction fees from three data resellers. The same three data resellers
represent 99% of accounts receivable at December 31, 1997.

                                      F-51
<PAGE>
                     ARKANSAS INFORMATION CONSORTIUM, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3. PROPERTY AND EQUIPMENT

        Property and equipment consists of the following at December 31, 1997:

<TABLE>
<CAPTION>
                                                                    USEFUL
                                                                     LIVES
                                                                  -----------
<S>                                                    <C>        <C>
Equipment............................................  $ 125,706   3-8 years
Leasehold improvements...............................      5,703    5 years
                                                       ---------
                                                         131,409
Less accumulated depreciation........................      7,917
                                                       ---------
                                                       $ 123,492
                                                       ---------
                                                       ---------
</TABLE>

        Depreciation expense for the year ended December 31, 1997 was $7,917.

4. DEBENTURES PAYABLE

        Debentures payable at December 31, 1997 consists of $40,130 of 9%
debentures issued to seven individuals as part of the initial capitalization of
the Company. In May 1998, the Company entered into a $150,000 bank line of
credit agreement, which is guaranteed by NIC. Proceeds from the line of credit
totaling $40,000 were used to repay the debentures. The line of credit was
repaid in August 1998.

5. BANK LINES OF CREDIT AND LETTER OF CREDIT

        The Company obtained a $150,000 operating line of credit from a bank in
May 1998. The interest rate on the line equals the bank's index rate (8.50% at
the inception of the line). The expiration date on the line is April 30, 2000.
The line is collateralized by the Company's assets and guaranteed by an
affiliated company.

        The Company obtained a $225,000 equipment line of credit from a bank in
April 1998. There is no given expiration date on the line. The line is
collateralized by the related equipment and guaranteed by an affiliated company.

        The Company has issued to the State an irrevocable letter of credit in
the amount of $50,000.

6. OPERATING LEASES

        The Company leases its office space and certain equipment under
operating leases. Future minimum lease payments under noncancellable operating
leases are as follows at December 31, 1997:

<TABLE>
<CAPTION>
FISCAL YEAR
- ------------------------------------------------------------------
<S>                                                                 <C>
1998..............................................................  $  42,322
1999..............................................................     43,024
2000..............................................................     22,328
2001..............................................................        936
2002..............................................................        936
                                                                    ---------
                                                                    $ 109,546
                                                                    ---------
                                                                    ---------
</TABLE>

        The lease for office space is a six year lease that runs through 2003
with annual rent of $42,000 per year for years four through six, which is not
included above. In the event that the Company's contract with INA was not
renewed, the Company may terminate the lease at the end of the third, fourth or
fifth

                                      F-52
<PAGE>
                     ARKANSAS INFORMATION CONSORTIUM, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. OPERATING LEASES (CONTINUED)
years, upon written notice given 90 days before the end of that year. Under no
other circumstances can the Company terminate the lease.

        Total rent expense for the year ended December 31, 1997 was $18,364.

7. RELATED PARTY TRANSACTIONS

        The Company pays its Board members director fees for services rendered.
Total expense incurred was $6,000 for the three month period ended March 31,
1998. No director fees were paid in 1997.


        The Company is affiliated, through common ownership, with several
companies that also serve as electronic government services providers for
various states. The Company is a partial guarantor of certain line of credit
agreements entered into by these affiliated companies. The total amounts
available and outstanding under such agreements at December 31, 1997 were
$1,050,000 and $178,674.


        Notes receivable from shareholders at December 31, 1997 represents two
notes paying interest at 10% per annum which were originally issued in exchange
for shares of the Company's stock and payable in three years. The notes were
paid in full in July 1998.

        During the start-up phase of the organization, an affiliated company
paid expenses on behalf of the Company totaling approximately $96,000, all of
which has been reimbursed by the Company. Of this amount, approximately, $3,800
was recorded as organization costs with the remaining $92,200 expensed as
incurred.

        The Company rents an aircraft on an hourly basis from Sky King Leasing,
which has common shareholders with the Company. The amount paid to Sky King
Leasing for the year ended December 31, 1997 was approximately $8,300.

        The Company purchases business and health insurance through an insurance
agency that is controlled by a shareholder of the Company. Insurance expense for
the year ended December 31, 1997 was approximately $13,900.

8. EMPLOYEE BENEFIT PLAN

        The Company, in conjunction with affiliated companies, maintains a
401(k) profit sharing plan. In accordance with the plan, all employees are
eligible immediately upon employment. A discretionary match and a discretionary
contribution may be made to the plan as determined by the Board of Directors.
Company contributions totaled $4,301 for the year ended December 31, 1997.

9. COMMON STOCK

        The initial capitalization of the Company in June 1997 consisted of
492,940 shares of $1 par common stock issued to approximately 35 individual
investors. Cash was received for 220,556 of the shares and a note receivable was
issued for 40,000 of the shares. The remaining 232,384 shares were issued in
exchange for previous services rendered and were expensed at the $1 par amount
which was the same price per share paid by the other investors.

        The Articles of Incorporation of the Company stipulate that should any
shareholder desire to sell or transfer their respective shares of common stock,
such stock must first be offered to the Company. Any stock not purchased by the
Company within a specified time period must then be offered to the remaining
shareholders. The purchase price must be equivalent to the price that would be
paid by a non-shareholder.

                                      F-53
<PAGE>
         REPORT OF PRICEWATERHOUSECOOPERS LLP, INDEPENDENT ACCOUNTANTS

To the Board of Directors of
Nebrask@ Interactive, Inc.

In our opinion, the accompanying balance sheets and the related statements of
income, of changes in shareholders' equity and of cash flows present fairly, in
all material respects, the financial position of Nebrask@ Interactive, Inc. (the
"Company") at December 31, 1997 and 1996 and the results of its operations and
its cash flows for the years then ended, in conformity with generally accepted
accounting principles. 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 of these
statements in accordance with generally accepted auditing standards which
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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

/s/ PRICEWATERHOUSECOOPERS LLP
Kansas City, Missouri
May 6, 1999

                                      F-54
<PAGE>
                           NEBRASK@ INTERACTIVE, INC.
                                 BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                  DECEMBER 31,
                                                              --------------------
                                                                1996       1997
                                                              ---------  ---------
                                                                                     MARCH 31,
                                                                                       1998
                                                                                    -----------
                                                                                    (UNAUDITED)
<S>                                                           <C>        <C>        <C>
                                            ASSETS
Current assets:
  Cash......................................................  $  83,955  $ 129,676   $ 100,941
  Trade accounts receivable.................................    179,730    316,162     320,499
  Prepaid expenses..........................................         --         --       2,407
                                                              ---------  ---------  -----------
      Total current assets..................................    263,685    445,838     423,847
Property and equipment, net.................................    129,917    110,158     104,259
Other.......................................................      2,743      2,336       2,235
                                                              ---------  ---------  -----------
      Total assets..........................................  $ 396,345  $ 558,332   $ 530,341
                                                              ---------  ---------  -----------
                                                              ---------  ---------  -----------

                             LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable..........................................  $ 119,836  $ 227,340   $ 263,914
  Accrued expenses..........................................        257      5,167      10,790
  Bank line of credit--current portion......................     24,789         --          --
  Capital lease obligation..................................     60,148         --          --
  Note payable to former shareholder--current portion.......         --         --      43,500
  Dividends payable.........................................         --     47,848          --
                                                              ---------  ---------  -----------
      Total current liabilities.............................    205,030    280,355     318,204
Bank line of credit--long-term portion......................     23,563     89,412      59,740
Note payable to former shareholder--long-term portion.......         --         --      43,500
                                                              ---------  ---------  -----------
      Total liabilities.....................................    228,593    369,767     421,444
                                                              ---------  ---------  -----------
Commitments and contingencies (Notes 5 and 6)

Shareholders' equity:
  Common stock--$1 par value, 100,000 shares authorized,
    50,167, 50,367 and 50,367 issued and 50,167, 50,367 and
    45,117 outstanding......................................     50,167     50,367      50,367
  Additional paid-in capital................................     72,535     75,585      75,585
  Retained earnings.........................................     45,050     62,613      72,384
                                                              ---------  ---------  -----------
                                                                167,752    188,565     198,336
  Less treasury stock, at cost..............................         --         --     (89,439)
                                                              ---------  ---------  -----------
      Total shareholders' equity............................    167,752    188,565     108,897
                                                              ---------  ---------  -----------
      Total liabilities and shareholders' equity............  $ 396,345  $ 558,332   $ 530,341
                                                              ---------  ---------  -----------
                                                              ---------  ---------  -----------
</TABLE>


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

                                      F-55
<PAGE>
                           NEBRASK@ INTERACTIVE, INC.
                              STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                           YEAR ENDED
                                                          DECEMBER 31,
                                                      --------------------
                                                        1996       1997
                                                      ---------  ---------   THREE MONTHS
                                                                                 ENDED
                                                                            MARCH 31, 1998
                                                                            ---------------
                                                                              (UNAUDITED)
<S>                                                   <C>        <C>        <C>
Revenues............................................  $2,324,176 $2,447,318    $ 706,059
Cost of revenues....................................  1,613,978  1,710,699       479,090
                                                      ---------  ---------  ---------------
    Gross profit....................................    710,198    736,619       226,969
                                                      ---------  ---------  ---------------
Operating expenses:
  Service development and operations................    129,575    126,510        59,912
  Selling, general and administrative...............    358,902    393,355       134,994
  Stock compensation................................      1,232      1,978            --
  Depreciation and amortization.....................     37,852     36,701        22,664
                                                      ---------  ---------  ---------------
      Total operating expenses......................    527,561    558,544       217,570
                                                      ---------  ---------  ---------------
      Operating income..............................    182,637    178,075         9,399
                                                      ---------  ---------  ---------------
Other income (expense):
  Interest income...................................      7,877      5,951         1,974
  Interest expense..................................    (16,949)    (4,552)       (1,602)
  Loss on disposal of property and equipment........       (174)    (8,713)           --
                                                      ---------  ---------  ---------------
      Total other income (expense)..................     (9,246)    (7,314)          372
                                                      ---------  ---------  ---------------
      Net income....................................  $ 173,391  $ 170,761     $   9,771
                                                      ---------  ---------  ---------------
                                                      ---------  ---------  ---------------
</TABLE>

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

                                      F-56
<PAGE>
                           NEBRASK@ INTERACTIVE, INC.
                 STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                         COMMON STOCK        ADDITIONAL                   TREASURY STOCK
                                   ------------------------    PAID-IN     RETAINED    --------------------
                                     SHARES       AMOUNT       CAPITAL     EARNINGS     SHARES     AMOUNT      TOTAL
                                   -----------  -----------  -----------  -----------  ---------  ---------  ---------
<S>                                <C>          <C>          <C>          <C>          <C>        <C>        <C>
Balance, January 1, 1996.........      50,000    $  50,000    $  70,225    $  20,435          --  $      --  $ 140,660
Net income.......................          --           --           --      173,391          --         --    173,391
Distributions to shareholders....          --           --           --     (148,776)         --         --   (148,776)
Issuance of common stock.........         167          167        2,310           --          --         --      2,477
                                   -----------  -----------  -----------  -----------  ---------  ---------  ---------
Balance, December 31, 1996.......      50,167       50,167       72,535       45,050          --         --    167,752
Net income.......................          --           --           --      170,761          --         --    170,761
Distributions to shareholders....          --           --           --     (153,198)         --         --   (153,198)
Issuance of common stock.........         200          200        3,050           --          --         --      3,250
                                   -----------  -----------  -----------  -----------  ---------  ---------  ---------
Balance, December 31, 1997.......      50,367       50,367       75,585       62,613          --         --    188,565
Net income (unaudited)...........          --           --           --        9,771          --         --      9,771
Distributions to shareholders
  (unaudited)....................          --           --           --           --          --         --         --
Purchase of treasury stock
  (unaudited)....................          --           --           --           --      (5,250)   (89,439)   (89,439)
                                   -----------  -----------  -----------  -----------  ---------  ---------  ---------
Balance, March 31, 1998
  (unaudited)....................      50,367    $  50,367    $  75,585    $  72,384      (5,250) $ (89,439) $ 108,897
                                   -----------  -----------  -----------  -----------  ---------  ---------  ---------
                                   -----------  -----------  -----------  -----------  ---------  ---------  ---------
</TABLE>


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

                                      F-57
<PAGE>
                           NEBRASK@ INTERACTIVE, INC.
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER
                                                                 31,
                                                         --------------------
                                                           1996       1997
                                                         ---------  ---------
                                                                                THREE MONTHS
                                                                                   ENDED
                                                                               MARCH 31, 1998
                                                                               --------------
                                                                                (UNAUDITED)
<S>                                                      <C>        <C>        <C>
Cash flows from operating activities:
  Net income...........................................  $ 173,391  $ 170,761    $    9,771
  Adjustments to reconcile net income to net cash
    provided by operating activities:
  Depreciation and amortization........................     37,852     36,701        22,664
  Loss on disposals of property and equipment..........        174      8,713            --
  Expense recognized upon purchase of treasury stock...         --         --        41,061
  Compensation expense recognized upon issuance of
    common stock.......................................      1,232      1,978            --
  Changes in operating assets and liabilities:
    (Increase) in trade accounts receivable............    (20,665)  (136,432)       (4,337)
    (Increase) in prepaid expenses.....................         --         --        (2,407)
    Increase in accounts payable.......................     15,060    107,504        36,574
    Increase in accrued expenses.......................          4      4,910         5,623
                                                         ---------  ---------  --------------
      Net cash provided by operating activities........    207,048    194,135       108,949
                                                         ---------  ---------  --------------
Cash flows from investing activities:
  Purchases of property and equipment..................     (1,734)   (25,248)      (16,664)
  Proceeds from disposals of property and equipment....      1,200         --            --
  Proceeds from repayments of note receivable from
    related party......................................     10,220         --            --
                                                         ---------  ---------  --------------
      Net cash provided by (used in) investing
        activities.....................................      9,686    (25,248)      (16,664)
                                                         ---------  ---------  --------------
Cash flows from financing activities:
  Proceeds from bank line of credit....................         --     85,000            --
  Payments on bank line of credit......................    (32,176)   (43,940)      (29,672)
  Payments on capital lease obligation.................    (83,227)   (60,148)           --
  Distributions to shareholders........................   (148,776)  (105,350)      (47,848)
  Proceeds from issuance of common stock...............      1,245      1,272            --
  Purchase of treasury stock...........................         --         --       (43,500)
                                                         ---------  ---------  --------------
      Net cash used in financing activities............   (262,934)  (123,166)     (121,020)
                                                         ---------  ---------  --------------
Net increase (decrease) in cash........................    (46,200)    45,721       (28,735)
Cash, beginning of year................................    130,155     83,955       129,676
                                                         ---------  ---------  --------------
Cash, end of period....................................  $  83,955  $ 129,676    $  100,941
                                                         ---------  ---------  --------------
                                                         ---------  ---------  --------------
Other cash flow information:
  Interest paid........................................  $  16,949  $   4,552    $    1,602
                                                         ---------  ---------  --------------
                                                         ---------  ---------  --------------
</TABLE>

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

                                      F-58
<PAGE>
                           NEBRASK@ INTERACTIVE, INC.

                         NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    ORGANIZATION

        Nebrask@ Interactive, Inc., (the "Company") was incorporated on November
22, 1994 to design, build and operate Internet-based portals for the State of
Nebraska ("Nebrask@ Online") that allow businesses and citizens to complete
transactions and obtain government information online. The Company is
responsible for managing and marketing the portal as well as funding up front
investment and ongoing operational costs.


        On December 3, 1997, the Company entered into a contract to provide
electronic government services for the Nebraska State Records Board ("NSRB") to
enhance, operate, maintain and expand the existing portal that was developed by
the Company under its 1995 contract with the Nebraska Library Commission ("NLC")
and various state agencies. The contract includes limitations and provisions for
the rates the Company can charge and the amount of remuneration to each state
agency. The contract will expire on January 31, 2002 unless earlier terminated
by the NSRB for cause. The NSRB shall have the option, upon termination or
expiration of the contract, to require the Company to act in accordance with the
terms of the contract for a period of up to twelve months from the time of
expiration or notice of termination, whichever is earlier. On January 1, 2002,
the NSRB will be entitled to a perpetual for use only license to the
applications developed for no additional compensation to the Company.


        On March 31, 1998, substantially all of the shareholders of the Company
exchanged their shares for common stock shares in International Information
Consortium, Inc., whose name was later changed to National Information
Consortium, Inc. ("NIC"). As a result, NIC became the sole shareholder of the
Company. Only one shareholder did not participate in the exchange. In March
1998, the Company agreed to pay this shareholder $130,500 for past services and
reacquired the shareholder's 5,250 shares in the Company. The reacquired shares
were recorded as treasury stock at fair market value, which totaled $89,439. An
initial payment of $43,500 was made with the remaining balance recorded as a
note payable due in two annual installments of $43,500 in 1999 and 2000. The
difference between $130,500 and the fair value of the reacquired stock was
recorded as expense in the amount of $41,061.

    ACCOUNTS RECEIVABLE

        The Company considers accounts receivable to be fully collectible;
accordingly, no allowance for doubtful accounts is required.

    PROPERTY AND EQUIPMENT


        Property and equipment are carried at cost less accumulated
depreciation. Depreciation is computed using the straight-line method over
estimated useful lives of the assets. When assets are retired or otherwise
disposed of, the cost and related accumulated depreciation are removed from the
accounts and any resulting gain or loss is included in income for the period.
The cost of maintenance and repairs is charged to expense as incurred;
significant renewals and betterments are capitalized.



        The Company periodically evaluates the carrying value of property and
equipment to be held and used when events and circumstances warrant such a
review. The carrying value of property and equipment is considered impaired when
the anticipated undiscounted cash flows from the asset is separately
identifiable and is less than its carrying value. In that event, a loss is
recognized based on the amount by which the carrying value exceeds the fair
value of the asset. Fair value is determined primarily using the


                                      F-59
<PAGE>
                           NEBRASK@ INTERACTIVE, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

anticipated cash flows discounted at a rate commensurate with the risk involved.
Losses on assets to be disposed of are determined in a similar manner, except
that fair values are reduced for the cost to dispose.


    INCOME TAXES

        The Company has elected to be treated as a small business corporation
under provisions of Subchapter S of the Internal Revenue Code. Under such
provisions, the shareholders are taxed individually on their respective shares
of the Company's taxable income. Therefore, no provision for income tax has been
made. The Company changed its income tax status from an S corporation to a C
corporation effective July 1, 1998.

    REVENUE RECOGNITION

        The Company recognizes revenues from providing electronic government
services (primarily transaction fees) when the service is provided. The Company
must remit a certain percentage of transaction fees to state agencies regardless
of whether the Company ultimately collects the fees. In addition, the NSRB
receives 4.5% of the first $89,000 in gross profit and 2% of gross profit
thereafter. Gross profit is defined in the contract as the difference between
the Company's gross revenues and amounts paid to state agencies and for certain
telecommunication expenses.

    SERVICE DEVELOPMENT COSTS

        The Company expenses as incurred the employee costs to develop,
implement, operate and maintain the government portal.

    STOCK-BASED COMPENSATION

        The Company records as compensation expense the amount by which the fair
value of common stock sold to employees exceeds the amount paid.

    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.

    UNAUDITED INTERIM FINANCIAL INFORMATION


        The accompanying balance sheet as of March 31, 1998, and the related
statements of income, cash flows and changes in shareholders' equity for the
three months ended March 31, 1998 are unaudited.



        In the opinion of management, these statements have been prepared on the
same basis as the audited financial statements and include all adjustments,
consisting only of normal recurring adjustments, necessary for the fair
statement of the results of this period. The data disclosed in the notes to the
financial statements for this period is unaudited.


                                      F-60
<PAGE>
                           NEBRASK@ INTERACTIVE, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. CONCENTRATION OF CREDIT

        For the year ended December 31, 1997, the Company derived 86% of its
transaction fees from four data resellers. At December 31, 1997, 89% of its
accounts receivable were from five data resellers. For the year ended December
31, 1996, the Company derived 83% of its transaction fees from three data
resellers. At December 31, 1996, 89% of its accounts receivable were from the
same three data resellers.

3. PROPERTY AND EQUIPMENT

        Property and equipment consists of the following:

<TABLE>
<CAPTION>
                                                 DECEMBER 31,
                                             --------------------    USEFUL
                                               1996       1997        LIVES
                                             ---------  ---------  -----------
<S>                                          <C>        <C>        <C>
Furniture and fixtures.....................  $     718  $     718    8 years
Purchased software.........................     14,020     18,320    3 years
Equipment..................................    163,592    170,398   5-8 years
                                             ---------  ---------
                                               178,330    189,436
Less accumulated depreciation..............     48,413     79,278
                                             ---------  ---------
                                             $ 129,917  $ 110,158
                                             ---------  ---------
                                             ---------  ---------
</TABLE>

        Depreciation expense for the years ended December 31, 1997 and 1996 was
$36,294 and $37,446, respectively.

4. BANK LINE OF CREDIT

        The Company has a $100,000 line of credit with a bank which bears
interest at a rate equal to an index (8.50% at December 31, 1997). The maturity
date of the line is April 30, 2000. At December 31, 1997 and 1996, the amount
outstanding under the line was $89,412 and $48,352, respectively. The line is
collateralized by the Company's assets and guaranteed by affiliated companies.

        The Company obtained a $225,000 equipment line of credit from a bank in
April 1998. The interest rate on the line equals the bank's reference rate plus
1.75%. There is no given expiration date on the line. The line is collateralized
by the related equipment and guaranteed by an affiliated company.

5. CAPITAL LEASE OBLIGATION

        At December 31, 1996, the Company had a noncancellable capital lease
obligation with a bank for computer equipment totaling $60,148, which was repaid
in August 1997.

                                      F-61
<PAGE>
                           NEBRASK@ INTERACTIVE, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. OPERATING LEASES

        The Company leases its office space and certain equipment under
operating leases. The future minimum lease payments under noncancellable
operating leases are as follows:

<TABLE>
<CAPTION>
FISCAL YEAR
- ---------------------------------------------------
<S>                                                  <C>
1998...............................................  $  28,626
1999...............................................     28,626
2000...............................................     11,296
2001...............................................      7,830
                                                     ---------
                                                     $  76,378
                                                     ---------
                                                     ---------
</TABLE>

        Total rent expense for the years ended December 31, 1997 and 1996 was
$22,992 and $21,475, respectively.

7. RELATED PARTY TRANSACTIONS

        The Company purchases business and health insurance through an insurance
agency that is controlled by a shareholder of the Company. Insurance expense
totaled approximately $34,400 and $37,800 for the years ended December 31, 1997
and 1996, respectively.

        The Company rents an aircraft on an hourly basis from Sky King Leasing,
which has common shareholders with the Company. The amount paid to Sky King
Leasing was approximately $4,700 and $6,600 for the years ended December 31,
1997 and 1996, respectively.


        The Company is affiliated, through common ownership, with several
companies that also serve as electronic government services providers for
various states. The Company is a partial guarantor of certain line of credit
agreements entered into by these affiliated companies. The total amounts
available and outstanding under such agreements at December 31, 1997 were
$950,000 and $178,674.


8. EMPLOYEE BENEFIT PLAN

        The Company, in conjunction with affiliated companies, maintains a
401(k) profit sharing plan. In accordance with the plan, all employees are
eligible immediately upon employment. A discretionary match and a discretionary
contribution may be made to the plan as determined by the Board of Directors.
Company contributions totaled $8,163 and $9,319 for the years ended December 31,
1997 and 1996, respectively.

9. RESTRICTIONS ON TRANSFERABILITY OF COMMON STOCK

        The Articles of Incorporation of the Company stipulate that should any
shareholders desire to sell or transfer their respective shares of common stock,
such stock must first be offered to the Company. Any stock not purchased by the
Company within a specified time frame must then be offered to the remaining
shareholders. The purchase price must be equivalent to the price that would be
paid by a non-shareholder.

                                      F-62
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.
                  PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
                                    OVERVIEW

        On March 31, 1998, National Information Consortium, Inc. (the "Company"
or "NIC") exchanged its common shares for the common shares of five affiliated
companies (the "Exchange Offer") in a transaction accounted for using the
purchase method of accounting. Prior to consummating the Exchange Offer, the
Company was a holding company with no operations of its own. Shareholders of one
of the affiliated companies, National Information Consortium USA, Inc.
("NIC/USA") received 54% of the Company's common shares and NIC/USA has been
treated as the acquirer in applying purchase accounting.

        The following unaudited pro forma consolidated statements of operations
give effect to the acquisition by NIC/USA of Kansas Information Consortium, Inc.
("KIC"), Indian@ Interactive, Inc. ("III"), Nebrask@ Interactive, Inc. ("NII")
and Arkansas Information Consortium, Inc. ("AIC") (the "Acquired Companies").
The unaudited pro forma consolidated statements of operations are based on the
individual statements of operations of the Company and the Acquired Companies
appearing elsewhere in this Prospectus, and combine the results of operations of
the Company and the Acquired Companies for the year ended December 31, 1997, the
three month period ended March 31, 1998 and the year ended December 31, 1998 as
if the transaction occurred on January 1, 1997. The pro forma adjustments
include the elimination of all intercompany transactions. These unaudited pro
forma consolidated statements of operations should be read in conjunction with
the historical financial statements and notes thereto of the Company and the
Acquired Companies included elsewhere in this Prospectus.

        The unaudited pro forma consolidated statements of operations are not
necessarily indicative of the operating results that would have been achieved
had the transactions been in effect as of the beginning of the periods presented
and should not be construed as being representative of future operating results.

                                      F-63
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.
                 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                                  (UNAUDITED)
                          YEAR ENDED DECEMBER 31, 1997


<TABLE>
<CAPTION>
                               NIC        III         KIC        AIC        NII     ELIMINATIONS ADJUSTMENTS  PRO FORMA
                            ---------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
<S>                         <C>        <C>         <C>        <C>        <C>        <C>          <C>          <C>
Revenues..................  $ 996,550  $12,524,065 $6,067,362 $2,346,889 $2,447,318  $      --    $      --   $24,382,184
Cost of revenues..........      5,168  10,040,041  4,576,795  2,077,144  1,710,699          --           --   18,409,847
                            ---------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
  Gross profit............    991,382   2,484,024  1,490,567    269,745    736,619          --           --    5,972,337
Operating expenses:
  Service development and
    operations............    224,128     480,492    387,083     90,447    126,510          --           --    1,308,660
  Selling, general and
    administrative........    660,254   1,070,667    812,306    187,567    391,377          --           --    3,122,171
  Stock compensation......    370,235      13,431     13,276    232,384      1,978          --           --      631,304
  Depreciation and
    amortization..........     13,679     107,332     32,496      8,232     36,701          --    7,575,204(A)  7,773,644
                            ---------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
  Total operating
    expenses..............  1,268,296   1,671,922  1,245,161    518,630    556,566          --    7,575,204   12,835,779
                            ---------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
Operating income (loss)...   (276,914)    812,102    245,406   (248,885)   180,053          --   (7,575,204)  (6,863,442)
                            ---------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
Other income (expense):
  Interest expense........         --     (32,330)   (13,056)    (1,731)    (4,552)         --           --      (51,669)
  Other income (expense),
    net...................        111      24,005    (42,322)     4,083     (2,762)         --           --      (16,885)
                            ---------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
  Total other income
    (expense).............        111      (8,325)   (55,378)     2,352     (7,314)         --           --      (68,554)
                            ---------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
Income (loss) before
  income taxes............   (276,803)    803,777    190,028   (246,533)   172,739          --   (7,575,204)  (6,931,996)
Income taxes (C)..........         --          --         --         --         --          --           --           --
                            ---------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
Net income (loss).........  $(276,803) $  803,777  $ 190,028  $(246,533) $ 172,739   $      --   ($7,575,204) $(6,931,996)
                            ---------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
                            ---------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
Net loss per share:
  Basic and diluted.......  $   (0.01)                                                                        $    (0.17)
                            ---------                                                                         ----------
                            ---------                                                                         ----------
  Weighted average shares
    outstanding...........  20,857,785                                                           19,255,155(B) 40,112,940
                            ---------                                                            -----------  ----------
                            ---------                                                            -----------  ----------
</TABLE>


    SEE ACCOMPANYING NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION.

                                      F-64
<PAGE>

                     NATIONAL INFORMATION CONSORTIUM, INC.
                 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                                  (UNAUDITED)
                       THREE MONTHS ENDED MARCH 31, 1998



<TABLE>
<CAPTION>
                                NIC         III        KIC        AIC        NII     ELIMINATIONS ADJUSTMENTS  PRO FORMA
                             ----------  ---------  ---------  ---------  ---------  -----------  -----------  ----------
<S>                          <C>         <C>        <C>        <C>        <C>        <C>          <C>          <C>
Revenues...................  $  370,288  $3,541,101 $1,625,487 $2,041,142 $ 706,059   $ (14,030)(D)  $      -- $8,270,047
Cost of revenues...........         690  2,727,257  $1,174,015 1,802,776    479,090          --           --    6,183,828
                             ----------  ---------  ---------  ---------  ---------  -----------  -----------  ----------
  Gross profit.............     369,598    813,844    451,472    238,366    226,969     (14,030)          --    2,086,219
                             ----------  ---------  ---------  ---------  ---------  -----------  -----------  ----------
Operating expenses:
  Service development and
    operations.............     148,962    225,425     99,685     56,808     59,912     (14,030)(D)         --    576,762
  Selling, general and
    administrative.........     320,190    424,581    190,994    100,425    134,994          --           --    1,171,184
  Stock compensation.......          --         --         --      5,115         --          --           --        5,115
  Depreciation and
    amortization...........      24,031     31,841      9,971      6,236     22,664          --    1,893,801(A)  1,988,544
                             ----------  ---------  ---------  ---------  ---------  -----------  -----------  ----------
  Total operating
    expenses...............     493,183    681,847    300,650    168,584    217,570     (14,030)   1,893,801    3,741,605
                             ----------  ---------  ---------  ---------  ---------  -----------  -----------  ----------
Operating income (loss)....    (123,585)   131,997    150,822     69,782      9,399          --   (1,893,801)  (1,655,386)
                             ----------  ---------  ---------  ---------  ---------  -----------  -----------  ----------
Other income (expense):
  Interest expense.........        (628)    (9,633)    (4,639)      (903)    (1,602)         --           --      (17,405)
  Other income, net........          --      8,623        400      3,628      1,974          --           --       14,625
                             ----------  ---------  ---------  ---------  ---------  -----------  -----------  ----------
  Total other income
    (expense)..............        (628)    (1,010)    (4,239)     2,725        372          --           --       (2,780)
                             ----------  ---------  ---------  ---------  ---------  -----------  -----------  ----------
Income (loss) before income
  taxes....................    (124,213)   130,987    146,583     72,507      9,771          --   (1,893,801)  (1,658,166)
Income taxes (C)...........          --         --         --         --         --          --           --           --
                             ----------  ---------  ---------  ---------  ---------  -----------  -----------  ----------
Net income (loss)..........  $ (124,213) $ 130,987  $ 146,583  $  72,507  $   9,771   $      --   ($1,893,801) $(1,658,166)
                             ----------  ---------  ---------  ---------  ---------  -----------  -----------  ----------
                             ----------  ---------  ---------  ---------  ---------  -----------  -----------  ----------
Net loss per share:
  Basic and diluted........  $    (0.01)                                                                       $    (0.04)
                             ----------                                                                        ----------
                             ----------                                                                        ----------
  Weighted average shares
    outstanding............  22,679,122                                                           19,255,155(B) 41,934,277
                             ----------                                                           -----------  ----------
                             ----------                                                           -----------  ----------
</TABLE>


    SEE ACCOMPANYING NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION.

                                      F-65
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.
                 PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                                  (UNAUDITED)
                          YEAR ENDED DECEMBER 31, 1998


<TABLE>
<CAPTION>
                              NIC        III(E)     KIC(E)     AIC(E)     NII(E)    ELIMINATIONS ADJUSTMENTS  PRO FORMA
                           ----------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
<S>                        <C>         <C>         <C>        <C>        <C>        <C>          <C>          <C>
Revenues.................  $28,623,656 $3,541,101  $1,625,488 $2,041,142 $ 706,059   $  (5,101)(D)  $      -- $36,532,345
Cost of revenues.........  21,210,632   2,727,257  1,174,015  1,802,776    479,090          --           --   27,393,770
                           ----------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
  Gross profit...........   7,413,024     813,844    451,473    238,366    226,969      (5,101)          --    9,138,575
                           ----------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
Operating expenses:
  Service development and
    operations...........   3,884,810     225,425     99,685     56,808     59,912          --           --    4,326,640
  Selling, general and
    administrative.......   4,241,780     424,581    190,994    100,425    134,994      (5,101)(D)         --  5,087,673
  Stock compensation.....     568,869          --         --      5,115         --          --           --      573,984
  Depreciation and
    amortization.........   5,922,396      31,841      9,971      6,236     22,664          --    1,893,801(A)  7,886,909
                           ----------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
  Total operating
    expenses.............  14,617,855     681,847    300,650    168,584    217,570      (5,101)   1,893,801   17,875,206
                           ----------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
Operating income
  (loss).................  (7,204,831)    131,997    150,823     69,782      9,399          --   (1,893,801)  (8,736,631)
                           ----------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
Other income (expense):
  Interest expense.......     (88,161)     (9,634)    (4,639)      (903)    (1,602)         --           --     (104,939)
  Other income, net......      55,839       8,624        401      3,628      1,974          --           --       70,466
                           ----------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
  Total other income
    (expense)............     (32,322)     (1,010)    (4,238)     2,725        372          --           --      (34,473)
                           ----------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
Income (loss) before
  income
  taxes..................  (7,237,153)    130,987    146,585     72,507      9,771          --   (1,893,801)  (8,771,104)
Income taxes (C).........     658,813          --         --         --         --          --           --      658,813
                           ----------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
Net income (loss)........  $(7,895,966) $  130,987 $ 146,585  $  72,507  $   9,771   $      --   ($1,893,801) $(9,429,917)
                           ----------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
                           ----------  ----------  ---------  ---------  ---------  -----------  -----------  ----------
Net income (loss) per
  share:
  Basic and diluted......  $    (0.21)                                                                        $    (0.22)
                           ----------                                                                         ----------
                           ----------                                                                         ----------
  Weighted average shares
    outstanding..........  37,242,423                                                             4,707,995(B) 41,950,418
                           ----------                                                            -----------  ----------
                           ----------                                                            -----------  ----------
</TABLE>


    SEE ACCOMPANYING NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION.

                                      F-66
<PAGE>
                     NATIONAL INFORMATION CONSORTIUM, INC.
             NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

        The following adjustments were applied to the Company's historical
consolidated statements of operations for the periods indicated to arrive at the
pro forma consolidated financial information.

(A) Represents amortization expense related to the contract intangibles and
    goodwill resulting from the application of purchase accounting for the
    Acquired Companies. For the year ended December 31, 1997, the amount
    represents the annual amortization for the twelve month period following the
    March 31, 1998 Exchange Offer. For the three months ended March 31, 1998,
    the adjustment represents the amortization for the first three months
    following the Exchange Offer. The Company's consolidated results for the
    year ended December 31, 1998 already reflect amortization for the nine
    months following the Exchange Offer. The adjustment represents an additional
    three months amortization to arrive at a full year.

(B) For the year ended December 31, 1997 and the three months ended March 31,
    1998, represents the Company's common shares issued to the shareholders of
    the Acquired Companies in the Exchange Offer. For the year ended December
    31, 1998, represents incremental shares needed to reflect the common shares
    outstanding for a full year.

(C) For the year ended December 31, 1997 and the three months ended March 31,
    1998, all of the companies were S corporations. No provision for income
    taxes has been included.

(D) To eliminate intercompany revenues and expenses.

(E) Represents the Acquired Companies results of operations for the three months
    ended March 31, 1998. The Company's results of operations already include
    the Acquired Companies results of operations for the nine months subsequent
    to the March 31, 1998 Exchange Offer.

                                      F-67
<PAGE>
                               INSIDE BACK COVER


                        National Information Consortium



        [Text design reading "e-government portals" and "www.nicusa.com."]



        [Map of the United States with maps of individual states in which
National Information Consortium has contracted to operate government portals
rising from map into foreground. Each individual state map contains the logo of
that state government's portal.]



        [Listing of the Web addresses of National Information Consortium's
portals.]

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


                               13,000,000 SHARES


                                     [LOGO]

                                  COMMON STOCK
                                ---------------

                                   PROSPECTUS

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

                               HAMBRECHT & QUIST

                           THOMAS WEISEL PARTNERS LLC

                                  FAC/EQUITIES

                          VOLPE BROWN WHELAN & COMPANY

                                   ---------

                                         , 1999

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

        YOU SHOULD RELY ONLY ON INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT
CONTAINED IN THIS PROSPECTUS. WE ARE OFFERING TO SELL, AND SEEKING OFFERS TO
BUY, SHARES OF COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE
PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF
THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS
PROSPECTUS OR OF ANY SALE OF OUR COMMON STOCK.

        NO ACTION IS BEING TAKEN IN ANY JURISDICTION OUTSIDE THE UNITED STATES
TO PERMIT A PUBLIC OFFERING OF THE COMMON STOCK OR POSSESSION OR DISTRIBUTION OF
THIS PROSPECTUS IN ANY SUCH JURISDICTION. PERSONS WHO COME INTO POSSESSION OF
THIS PROSPECTUS IN JURISDICTIONS OUTSIDE THE UNITED STATES ARE REQUIRED TO
INFORM THEMSELVES ABOUT AND TO OBSERVE ANY RESTRICTIONS AS TO THIS OFFERING AND
THE DISTRIBUTION OF THIS PROSPECTUS APPLICABLE TO THAT JURISDICTION.

        UNTIL            , 1999, ALL DEALERS THAT BUY, SELL OR TRADE IN OUR
COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
                                    PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

        The expenses to be paid by the Registrant in connection with the
distribution of the securities being registered, other than underwriting
discounts and commissions, are included in the following table. All amounts are
estimates except the SEC filing fee, the NASD filing fee and the Nasdaq National
Market listing fee.


<TABLE>
<CAPTION>
                                                                   AMOUNT
                                                                  ---------
<S>                                                               <C>
Securities and Exchange Commission Filing Fee...................  $  41,561
NASD Filing Fee.................................................     15,450
Nasdaq National Market Listing Fee..............................     17,500
Accounting Fees and Expenses....................................    300,000
Blue Sky Fees and Expenses......................................      3,000
Legal Fees and Expenses.........................................    400,000
Transfer Agent and Registrar Fees and Expenses..................     10,000
Printing Expenses...............................................    150,000
Miscellaneous Expenses..........................................     62,489
                                                                  ---------
    Total.......................................................  $1,000,000
                                                                  ---------
                                                                  ---------
</TABLE>



ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS


        Sections 7-109-102 and 7-109-107 of the Colorado Business Corporation
Act provide that we may indemnify our directors and officers against all
liabilities and expenses actually and reasonably incurred in connect with the
defense or settlement of any judicial or administrative proceedings in which the
director or officer has have become involved by reason of his or her status as a
director or officer, if it is determined by our disinterested directors, a
committee appointed by our directors, our shareholders or an independent counsel
appointed by our directors that the director or officer acted in good faith and
in the reasonable belief that his or her conduct was not opposed to our best
interests or, in the case of criminal proceedings, unlawful. No indemnification
shall be made with respect to any claim, issue or matter in connection with a
proceeding in which the director or officer being indemnified is adjudged to be
liable to us or in connection with any proceeding in which the director or
officer being indemnified is adjudicated to have derived an improper personal
benefit. Further, indemnification in connection with a proceeding is limited to
reasonable expenses, including attorneys' fees, incurred in connection with the
proceeding.

        Article V of our articles of incorporation, which is Exhibit 3.1 to this
Registration Statement, and Article VIII of our bylaws, which is Exhibit 3.2 to
this Registration Statement, provide that we will indemnify any person entitled
to indemnity under the Colorado Business Corporation Act, as it now exists or as
amended, against all liability and expenses to the fullest extent permitted by
the same Act. Further, Article VI of our articles of incorporation provides that
our directors will not incur any personal liability from us or our shareholders
for monetary damages for breach of fiduciary duty as a director, except when the
personal liability arises from any breach of the director's duty of loyalty to
us or our shareholders, acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of the law, acts specified in
Section 7-108-403 of the Colorado Business Corporation Act, or any transaction
from which a director derived an improper personal benefit.

        Insofar as indemnification for liabilities arising under the Securities
Act may be permitted for our directors or officers under the provisions
contained in our charter documents, the Colorado Business Corporation Act or
otherwise, we have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is,

                                      II-1
<PAGE>
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities, other than the payment by us of expenses incurred or paid by
one of our directors or officers in the successful defense of any action, suit,
or proceeding, is asserted by such director or officer, we will, unless in the
opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by us is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

        In addition to indemnification provided for in our charter documents, we
intend to enter into agreements, a form of which is Exhibit 10.1 to this
Registration Statement, to indemnify our directors and officers. These
agreements provide for the indemnification of our directors and officers for
certain expenses, including attorneys' fees, judgments, fines and settlement
amounts incurred by any such person in any action or proceeding, including any
action by us, arising out of such person's services as one of our directors or
officers, any of our subsidiaries or any other company or enterprise to which
such person provides services at our request, to the fullest extent permitted by
the Colorado Business Corporation Act. Furthermore, we will purchase and
maintain insurance on behalf of our directors and officers insuring them against
liabilities that they may incur in their capacities as or arising out of their
status as directors or officers.

        The underwriting agreement, which is Exhibit 1.1 to this Registration
Statement, provides for indemnification by our underwriters and their officers
and directors for certain liabilities arising under the Securities Act or
otherwise.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES


        From our incorporation to June 15, 1999, we have granted or issued and
sold the following unregistered securities:



        1. Stock options to employees, officers, directors and consultants under
our 1998 stock option plan exercisable for up to an aggregate of 2,512,332
shares of our common stock, at a weighted average exercise price of $1.44 per
share.



        2. On April 21, 1998, we sold to Ms. Debra Luling 232,170 shares of our
common stock at $0.22 per share for approximately $50,000.



        3. On June 29, 1998, we sold to Mr. Everett Wohlers 116,084 shares of
our common stock at $0.22 per share for approximately $25,000.



        4. On June 29, 1998, we as a distribution to our shareholders, issued to
Mr. Randall Eccker 174,563 shares of our common stock for his services to our
shareholders in the sale of 10,516,547 shares of our common stock by the voting
trust, for which Messrs. Fraser and Hartley are co-trustees, to Hellman &
Friedman Capital Partners III, L.P., and affiliates.



        5. On February 8, 1999, we sold to Mr. Joseph Nemelka 69,304 shares of
our common stock at $1.44 per share for approximately $100,000.



        6. On February 9, 1999, we sold to Mr. James B. Dodd 173,258 shares of
our common stock at $1.44 per share for approximately $250,000.



        7. On March 1, 1999, we sold to Mr. Robert P. Chandler 69,302 shares of
our common stock at $1.44 per share for approximately $100,000.



        8. On March 1, 1999, we sold to Ms. Tamara Dukes 17,324 shares of our
common stock at $1.44 per share for approximately $25,000.



        9. On March 1, 1999, we sold to Mr. Richard L. Brown 17,324 shares of
our common stock at $1.44 per share for approximately $25,000.



        10. On May 16, 1999, we sold to Mr. Kevin C. Childress 23,727 shares of
our common stock at $5.27 per share for approximately $125,000.



        The issuances of the securities in all of the transactions above were
deemed to be exempt from registration under the Securities Act in reliance on
Section 4(2) of the Securities Act by an issuer not involving a public offering,
where the purchasers represented their intention to acquire the securities for


                                      II-2
<PAGE>

investment only and not with a view to distribution and received or had access
to adequate information about the Registrant, except for the transactions under
Number 1, which were deemed to be exempted in reliance on Rule 701 promulgated
under the Securities Act as transactions pursuant to a compensatory benefit
plan.



        On March 31, 1998, we exchanged shares of our common stock for the
common stock of five affiliated companies--National Information Consortium USA,
Inc., Kansas Information Consortium, Inc., Indian@ Interactive, Inc., Nebrask@
Interactive, Inc. and Arkansas Information Consortium, Inc. The issuance of such
securities was exempt from the registration requirements of the Securities Act
of 1933, as amended, due to the exemptions from registration provided by
Sections 3(a)(9) and 4(2) thereof.


        Appropriate legends were affixed to the stock certificates issued in the
above transactions. Similar legends were imposed in connection with any
subsequent sales of any such securities. No underwriters were employed in any of
the above transactions.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

        (a) Exhibits

           The exhibits are as set forth in the Exhibit Index.

        (b) Financial Statement Schedules

           All schedules have been omitted since they are not required or are
not applicable or the required information is shown in the financial statements
or related notes.

ITEM 17. UNDERTAKINGS

        The Registrant hereby undertakes to provide to the underwriters at the
closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

        Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, 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 Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other 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 Securities Act and will be governed by the final
adjudication of such issue.

        The Registrant hereby undertakes that:

(1) For purposes of any liability under the Securities Act, 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.

(2) For the purpose of determining any liability under the Securities Act, 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.

                                      II-3
<PAGE>
                                   SIGNATURES


        Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Overland
Park, State of Kansas on the 18th day of June, 1999.


<TABLE>
<S>                             <C>  <C>
                                NATIONAL INFORMATION CONSORTIUM, INC.

                                By:            /s/ JEFFERY S. FRASER*
                                     -----------------------------------------
                                                 Jeffery S. Fraser
                                        CHAIRMAN AND CHIEF EXECUTIVE OFFICER
</TABLE>


        Pursuant to the requirements of the Securities Act of 1933, 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>
                                Chairman and Chief
    /s/ JEFFERY S. FRASER*      Executive Officer
- ------------------------------  (Principal Executive           June 18, 1999
      Jeffery S. Fraser         Officer)

      /s/ JAMES B. DODD
- ------------------------------  President, Chief Operating     June 18, 1999
        James B. Dodd           Officer and Director

    /s/ KEVIN C. CHILDRESS      Chief Financial Officer
- ------------------------------  (Principal Financial and       June 18, 1999
      Kevin C. Childress        Accounting Officer)

   /s/ JOHN L. BUNCE, JR.*
- ------------------------------  Director                       June 18, 1999
      John L. Bunce, Jr.

     /s/ DANIEL J. EVANS*
- ------------------------------  Director                       June 18, 1999
       Daniel J. Evans

     /s/ ROSS C. HARTLEY*
- ------------------------------  Director                       June 18, 1999
       Ross C. Hartley

    /s/ PATRICK J. HEALY*
- ------------------------------  Director                       June 18, 1999
       Patrick J. Healy
</TABLE>



<TABLE>
<S>   <C>                        <C>                         <C>
*By:      /s/ JAMES B. DODD
      -------------------------
            James B. Dodd
          ATTORNEY-IN-FACT
</TABLE>


                                      II-4
<PAGE>
                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
  EXHIBIT
  NUMBER                                          DOCUMENT
- -----------  ----------------------------------------------------------------------------------
<S>          <C>
       1.1   Form of Underwriting Agreement*

       3.1   Articles of Incorporation of the Registrant

       3.2   Bylaws of the Registrant

       4.1   Reference is made to Exhibits 3.1 and 3.2

       4.2   Investor Rights Agreement dated June 30, 1998+

       4.3   Specimen Stock Certificate of the Registrant

       5.1   Opinion of Morrison & Foerster LLP as to the legality of the common stock

       9.1   Voting Trust Agreement between Jeffery S. Fraser and Ross C. Hartley and certain
             Holders of Shares of National Information Consortium, Inc. dated June 30, 1998 and
             form of the voting trust certificate+

      10.1   Form of Indemnification Agreement between the Registrant and each of its executive
             officers and directors+

      10.2   Registrant's 1998 Stock Option Plan, as amended and restated+

      10.3   Registrant's 1999 Employee Stock Purchase Plan+

      10.4   Employment Agreement between the Registrant and Jeffery S. Fraser dated July 1,
             1998+

      10.5   Employment Agreement between the Registrant and William F. Bradley, Jr. dated July
             24, 1998+

      10.6   Employment Agreement between the Registrant and Samuel R. Somerhalder dated July
             24, 1998+

      10.7   Employment Agreement between the Registrant and Harry H. Herington dated July 24,
             1998+

      10.8   Employment Agreement between the Registrant and James B. Dodd dated January 1,
             1999+

      10.9   Contract for Network Manager Services between the Information Network of Kansas
             and Kansas Information Consortium, Inc. dated December 18, 1991 with addenda dated
             October 15, 1992, August 19, 1993, May 26, 1995 and June 13, 1996 and amendment on
             March 2, 1998+

     10.10   Contract for Network Manager Services between the State of Indiana by and through
             the Intelenet Commission and Indian@ Interactive, Inc., dated July 18, 1995+

     10.11   Services Contract by and between National Information Consortium, U.S.A. and the
             GeorgiaNet Authority, an agency of the State of Georgia, dated September 15, 1996+

     10.12   Contract for Network Manager between Information Network of Arkansas by and
             through the Information Network of Arkansas Board and Arkansas Information
             Consortium, Inc. dated July 2, 1997+

     10.13   Contract for Network Manager Services between the Nebraska State Records Board on
             behalf of the State of Nebraska and Nebrask@ Interactive, Inc. dated December 3,
             1997 with addendum No. 1 dated as of the same date+

     10.14   Contract for Network Manager Services between the Commonwealth of Virginia by and
             through the Virginia Information Providers Network Authority and Virginia
             Interactive, LLC dated January 15, 1998+

     10.15   Contract for Network Manager Services between Iowa Interactive, Inc. and the State
             of Iowa by and through Information Technology Services dated April 23, 1998+
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
  EXHIBIT
  NUMBER                                          DOCUMENT
- -----------  ----------------------------------------------------------------------------------
<S>          <C>
     10.16   Contract for Network Manager Services between the Consolidated City of
             Indianapolis and Marion County by and through the Enhanced Access Board of Marion
             County and City-County Interactive, LLC dated August 31, 1998 with addendum dated
             as of the same date+

     10.17   State of Maine Contract for Special Services with New England Interactive, Inc.
             dated April 14, 1999+

     10.18   Employment Agreement between the Registrant and Kevin C. Childress dated May 16,
             1999

     10.19   Sublease for the Registrant's offices at 12 Corporate Woods, Overlank Park dated
             May 14, 1999 and Lease for the same address dated January 15, 1995 with First
             Lease Modification dated October 30, 1996

     10.20   Agreement between Equifax Services and Nebrask@ Online dated March 25, 1996.

     10.21   Agreement between ChoicePoint and the Information Network of Kansas dated
             September 1, 1997

     10.22   Agreement between Equifax/ChoicePoint and the Information Network of Arkansas
             dated September 2, 1997

     10.23   Agreement between Equifax Systems, Inc. and Access Indian@ Information Network
             dated November 14, 1995

     10.24   Contract for Network Manager Services between the State of Utah and Utah
             Interactive, Inc. dated as of May 7, 1999

      21.1   Subsidiaries of the Registrant+

      23.1   Consent of Morrison & Foerster LLP. Reference is made to Exhibit 5.1

      23.2   Consent of PricewaterhouseCoopers LLP, Independent Accountants

      24.1   Power of Attorney of Kevin C. Childress

      27.1   Financial Data Schedule
</TABLE>


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

    *   To be filed by amendment


    +   Previously filed


<PAGE>

                                       AMENDED
                              ARTICLES OF INCORPORATION
                                          OF
                        NATIONAL INFORMATION CONSORTIUM, INC.


     The Articles of Incorporation of National Information Consortium, Inc. is
hereby restated, integrated and amended to read as follows:

ARTICLE 1

     The name of the Corporation is National Information Consortium, Inc.

ARTICLE 2

     The Corporation's registered office in the state of Colorado is The
Corporation Company, 1675 Broadway, Suite 1200, Denver, CO 80202.  The name of
its registered agent at such address is The Corporation Company .

     The Corporation's initial principal office in the state of Colorado is The
Corporation Company, 1675 Broadway, Suite 1200, Denver, CO 80202.

ARTICLE 3

     The nature of the business or purposes to be conducted or promoted by the
Corporation is to engage in any lawful business, act or activity for which
corporations may be organized under the Colorado Business Corporation Act.

ARTICLE 4

     The total number of shares of stock which the Corporation shall have
authority to issue is two hundred million (200,000,000) shares of common stock,
no par value ("Common Stock").


                                       -1-
<PAGE>

ARTICLE 5

     The Corporation shall indemnify, to the fullest extent permitted by
applicable law in effect from time to time, any person, and the estate and
personal representative of any such person, against all liability and expense
(including attorneys' fees) incurred by reason of the fact that he or she is or
was a director or officer of the Corporation or, while serving as a director or
officer of the Corporation, he or she is or was serving at the request of the
Corporation as a director, officer, partner, trustee, employee, fiduciary, or
agent of, or in any similar managerial or fiduciary position of, another
domestic or foreign Corporation or other individual or entity or of an employee
benefit plan.  The Corporation shall also indemnify any person who is serving or
has served the Corporation as director, officer, employee, fiduciary, or agent,
and that person's estate and personal representative, to the extent and in the
manner provided in any bylaw, resolution of the shareholders or directors,
contract, or otherwise, so long as such provision is legally permissible.

ARTICLE 6

     There shall be no personal liability of a director to the Corporation or to
its shareholders for monetary damages for breach of fiduciary duty as a
director, except that said personal liability shall not be eliminated to the
Corporation or to the shareholders for monetary damages arising due to any
breach of the director's duty of loyalty to the Corporation or to the
shareholders, acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, acts specified in section 7-108-403,
C.R.S., or any transaction from which a director derived an improper personal
benefit.  Notwithstanding any other provisions herein, personal liability of a
director shall be eliminated to the greatest extent possible as is now, or in
the future, provided for by law.  Any repeal or modification of the foregoing
sentence shall not adversely affect any right or protection of a director of the
Corporation existing hereunder with respect to any act or omission occurring
prior to such repeal or modification.

ARTICLE 7

     The number of directors which shall constitute the whole board of directors
shall be fixed from time to time by the bylaws of the Corporation, subject to
Article IV(b) of these Articles.

ARTICLE 8

     The name and mailing address of the persons who are to serve as the initial
directors of the Corporation until the first annual meeting of shareholders of
the Corporation, or until their successors are elected and qualified, are set
forth below:


                                       -2-
<PAGE>

<TABLE>
<CAPTION>
     NAME                     ADDRESS
     <S>                      <C>
     John L. Bunce            One Maritime Plaza, #1200, San Francisco, CA 94111

     James Dodd               534 South Kansas Avenue, #1210, Topeka, KS 66603

     Daniel J. Evans          1111 Third Avenue, Suite 3400, Seattle, WA 98101

     Jeffrey S. Fraser        172 North Center Street, Suite 201, Jackson, WY
                              83001

     Ross C. Hartley          P.O. Box 500, Baxter Springs, KS 66713

     Patrick Healy            One Maritime Plaza, #1200, San Francisco, CA 94111
</TABLE>

ARTICLE 9

     The name and mailing address of the incorporator is as follows:

<TABLE>
<CAPTION>
     NAME                     ADDRESS
     <S>                      <C>
     William F. Bradley, Jr.  150 W. Market St., #530, Indianapolis, IN 46204
</TABLE>

ARTICLE 10

     1.    Elections of directors need not be by written ballot unless the
bylaws of the Corporation shall so provide.

     2.    There shall be no cumulative voting by shareholders of any class or
series in the election of directors of the Corporation.

     3.    Meetings of shareholders may be held at such place, either within or
without the State of Colorado, as may be designated by or in the manner provided
in the bylaws. The books of the Corporation may be kept (subject to any
provision contained in the statutes of the State of Colorado) outside the State
of Colorado at such place or places as may be designated from time to time by
the board of directors or in the bylaws of the Corporation.

ARTICLE 11

     1.    As used in this Article XI, the term:

           (1)   "Affiliate" means a person that directly, or indirectly
     through one or more intermediaries, controls, or is controlled by, or is
     under common control with, another person.


                                       -3-
<PAGE>

           (2)   "Associate," when used to indicate a relationship with any
     person, means: (i) any corporation, partnership, unincorporated association
     or other entity of which such person is a director, officer or partner or
     is, directly or indirectly, the owner of 20% or more of any class of voting
     stock; (ii) any trust or other estate in which such person has at least a
     20% beneficial interest or as to which such person serves as trustee or in
     a similar fiduciary capacity; and (iii) any relative or spouse of such
     person, or any relative of such spouse, who has the same residence as such
     person.

           (3)   "Business Combination," means:

           (i)   any merger, consolidation or plan of share exchange involving
     the Corporation or any direct or indirect majority-owned subsidiary of the
     Corporation with (A) an Interested Shareholder (as hereinafter defined), or
     (B) with any other corporation, partnership, unincorporated association or
     other entity if the merger, consolidation or plan of share exchange is
     caused by the Interested Shareholder and as a result of such merger,
     consolidation or plan of share exchange subsection (b) of this Article is
     not applicable to the surviving entity;

           (ii)  any sale, lease, exchange, mortgage, pledge, transfer or other
     disposition (in one transaction or a series of transactions), except
     proportionately with all other shareholders of the Corporation, to or with
     the Interested Shareholder, whether as part of a dissolution or otherwise,
     of assets of the Corporation or of any direct or indirect majority-owned
     subsidiary of the Corporation which assets have an aggregate market value
     equal to 10% or more of either the aggregate market value of all the assets
     of the Corporation determined on a consolidated basis or the aggregate
     market value of all the outstanding stock of the Corporation;

           (iii) any transaction which results in the issuance or transfer by
     the Corporation or by any direct or indirect majority-owned subsidiary of
     the Corporation of any stock of the Corporation or of such subsidiary to an
     Interested Shareholder, except: (A) pursuant to the exercise, exchange or
     conversion of securities exercisable for, exchangeable for or convertible
     into stock of the Corporation or any such subsidiary which securities were
     outstanding prior to the time that the Interested Shareholder became such;
     (B) pursuant to a dividend or distribution paid or made, or the exercise,
     exchange or conversion of securities exercisable for, exchangeable for or
     convertible into stock of the Corporation or any such subsidiary which
     security is distributed, pro rata to all holders of a class or series of
     stock of the Corporation subsequent to the time the Interested Shareholder
     became such; (C) pursuant to an exchange offer by the Corporation to
     purchase stock made on the same terms to all holders of said stock; or (D)
     any issuance or transfer of stock by the Corporation; provided however,
     that in no case under items (B)-(D) of this subparagraph shall there be an
     increase in the Interested Shareholder's proportionate share of the stock
     of any class or series of the Corporation or of the voting stock of the
     Corporation;


                                       -4-
<PAGE>

           (iv)  any transaction involving the Corporation or any direct or
     indirect majority-owned subsidiary of the Corporation which has the effect,
     directly or indirectly, of increasing the proportionate share of the stock
     of any class or series, or securities convertible into the stock of any
     class or series, of the Corporation or of any such subsidiary which is
     owned by the Interested Shareholder, except as a result of immaterial
     changes due to fractional share adjustments or as a result of any purchase
     or redemption of any shares of stock not caused, directly or indirectly, by
     the Interested Shareholder; or

           (v)   any receipt by the Interested Shareholder of the benefit,
     directly or indirectly (except proportionately as a shareholder of the
     Corporation), of any loans, advances, guarantees, pledges or other
     financial benefits (other than those expressly permitted in subparagraphs
     (i)-(iv) of this paragraph) provided by or through the Corporation or any
     direct or indirect majority-owned subsidiary.

           (4)   "control," including the terms "controlling," "controlled by"
     and "under common control with," means the possession, directly or
     indirectly, of the power to direct or cause the direction of the management
     and policies of a person, whether through the ownership of voting stock, by
     contract or otherwise. A person who is the owner of 20% or more of the
     outstanding voting stock of any corporation, partnership, unincorporated
     association or other entity shall be presumed to have control of such
     entity, in the absence of proof by a preponderance of the evidence to the
     contrary; notwithstanding the foregoing, a presumption of control shall not
     apply where such person holds voting stock, in good faith and not for the
     purpose of circumventing this section, as an agent, bank, broker, nominee,
     custodian or trustee for one or more owners who do not individually or as a
     group have control of such entity.

           (5)   "Interested Shareholder" means any person (other than the
     Corporation and any direct or indirect majority-owned subsidiary of the
     Corporation) that (i) is the owner of 15% or more of the outstanding voting
     stock of the Corporation, or (ii) is an Affiliate or Associate of the
     Corporation and was the owner of 15% or more of the outstanding voting
     stock of the Corporation at any time within the 3-year period immediately
     prior to the date on which it is sought to be determined whether such
     person is an Interested Shareholder, and the Affiliates and Associates of
     such person; provided, however, that the term "Interested Shareholder"
     shall not include any person whose ownership of shares in excess of the 15%
     limitation set forth herein is the result of action taken solely by the
     Corporation; provided that such person shall be an Interested Shareholder
     if thereafter such person acquires additional shares of voting stock of the
     Corporation, except as a result of further corporate action not caused,
     directly or indirectly, by such person. For the purpose of determining
     whether a person is an Interested Shareholder, the voting stock of the
     Corporation deemed to be outstanding shall include stock deemed to be owned
     by the person through application of paragraph (8) of this subsection but
     shall not include any other unissued stock of the Corporation which may be
     issuable pursuant to any agreement, arrangement or understanding, or upon
     exercise of conversion rights, warrants or options, or otherwise.


                                       -5-
<PAGE>

           (6)   "person" means any individual, corporation, partnership,
     unincorporated association or other entity.

           (7)   "stock" means, with respect to any corporation, capital stock
     and, with respect to any other entity, any equity interest.

           (8)   "voting stock" means, with respect to any corporation, stock
     of any class or series entitled to vote generally in the election of
     directors and, with respect to any entity that is not a corporation, any
     equity interest entitled to vote generally in the election of the governing
     body of such entity.

           (9)   "owner," including the terms "own" and "owned," when used with
     respect to any stock, means a person that individually or with or through
     any of its Affiliates or Associates:

           (i)   beneficially owns such stock, directly or indirectly; or

           (ii)  has (A) the right to acquire such stock (whether such right is
     exercisable immediately or only after the passage of time) pursuant to any
     agreement, arrangement or understanding, or upon the exercise of conversion
     rights, exchange rights, warrants or options, or otherwise; provided,
     however, that a person shall not be deemed the owner of stock tendered
     pursuant to a tender or exchange offer made by such person or any of such
     person's Affiliates or Associates until such tendered stock is accepted for
     purchase or exchange; or (B) the right to vote such stock pursuant to any
     agreement, arrangement or understanding; provided, however, that a person
     shall not be deemed the owner of any stock because of such person's right
     to vote such stock if the agreement, arrangement or understanding to vote
     such stock arises solely from a revocable proxy or consent given in
     response to a proxy or consent solicitation made to 10 or more persons; or

           (iii) has any agreement, arrangement or understanding for the
     purpose of acquiring, holding, voting (except voting pursuant to a
     revocable proxy or consent as described in item (B) of subparagraph (ii) of
     this paragraph), or disposing of such stock with any other person that
     beneficially owns, or whose Affiliates or Associates beneficially own,
     directly or indirectly, such stock.

     2.    Notwithstanding any other provisions contained in these Articles,
the Corporation shall not engage in any Business Combination with any Interested
Shareholder for a period of three (3) years following the time that such
shareholder became an Interested Shareholder, unless:

           (1)   Prior to such time the Board of Directors of the Corporation
     approved either the Business Combination or the transaction which resulted
     in the shareholder becoming an Interested Shareholder;


                                       -6-
<PAGE>

           (2)   Upon consummation of the transaction which resulted in the
     shareholder becoming an Interested Shareholder, the Interested Shareholder
     owned at least 85% of the voting stock of the Corporation outstanding at
     the time the transaction commenced, excluding for purposes of determining
     the number of shares outstanding those shares owned (i) by persons who are
     directors and also officers and (ii) employee stock plans in which employee
     participants do not have the right to determine confidentially whether
     shares held subject to the plan will be tendered in a tender or exchange
     offer; or

           (3)   At or subsequent to such time the Business Combination is
     approved by the board of directors and authorized at an annual or special
     meeting of shareholders, and not by written consent, by the affirmative
     vote of at least 66 2/3% of the outstanding voting stock which is not owned
     by the Interested Shareholder.

     3.    The restrictions contained in this Article shall not apply if:

           (1)   The Corporation, by action of the shareholders, adopts an
     amendment to these Articles of Incorporation expressly repealing this
     Article;  provided that, in addition to any other vote required by law,
     such amendment to the Articles of Incorporation or bylaws must be approved
     by the affirmative vote of a majority of the shares entitled to vote.  An
     amendment adopted pursuant to this paragraph shall not be effective until
     12 months after the adoption of such amendment and shall not apply to any
     Business Combination between the Corporation and any person who became an
     Interested Shareholder of the Corporation on or prior to the date of such
     adoption;

           (2)

           (3)   A shareholder becomes an Interested Shareholder inadvertently
     and (i) as soon as practicable divests itself of ownership of sufficient
     shares so that the shareholder ceases to be an Interested Shareholder; and
     (ii) would not, at any time within the 3-year period immediately prior to a
     Business Combination between the Corporation and such shareholder, have
     been an Interested Shareholder but for the inadvertent acquisition of
     ownership; or

           (4)   The Business Combination is proposed prior to the consummation
     or abandonment of and subsequent to the earlier of the public announcement
     or the notice required under the Colorado Business Corporation Act of a
     proposed transaction which (i) constitutes one of the transactions
     described in the 2nd sentence of this paragraph; (ii) is with or by a
     person who either was not an Interested Shareholder during the previous 3
     years or who became an Interested Shareholder with the approval of the
     Corporation's Board of Directors; and (iii) is approved or not opposed by a
     majority of the members of the Board of Directors then in office (but not
     less than 1) who were directors prior to any person becoming an Interested
     Shareholder during the previous 3 years or were recommended for election or
     elected to succeed such directors by a majority of such directors. The
     proposed transactions referred to in the preceding sentence are limited to
     (x) a merger, consolidation or plan of share exchange involving the
     Corporation (except for a merger in respect of which, pursuant to Section
     7-111-104 of the Colorado Business Corporation Act or any successor


                                       -7-
<PAGE>

     provision thereto, no vote of the shareholders of the Corporation is
     required); (y) a sale, lease, exchange, mortgage, pledge, transfer or other
     disposition (in one transaction or a series of transactions), whether as
     part of a dissolution or otherwise, of assets of the Corporation or of any
     direct or indirect majority-owned subsidiary of the Corporation (other than
     to any direct or indirect wholly-owned subsidiary or to the Corporation)
     having an aggregate market value equal to 50% or more of either that
     aggregate market value of all of the assets of the Corporation determined
     on a consolidated basis or the aggregate market value of all the
     outstanding stock of the Corporation; or (z) a proposed tender or exchange
     offer for 50% or more of the outstanding voting stock of the Corporation.
     The Corporation shall give not less than 20 days' notice to all Interested
     Shareholders prior to the consummation of any of the transactions described
     in clause (x) or (y) of the 2nd sentence of this paragraph.

     4.    No provision of the Articles of Incorporation or bylaw shall
require, for any vote of shareholders required by this section, a greater vote
of shareholders than that specified in this section.

ARTICLE 12

     Except as specifically provided otherwise herein, the Corporation may
amend, alter, change or repeal any provision contained in these Articles of
Incorporation, in the manner now or hereafter prescribed by the laws of the
State of Colorado,  and may add additional provisions authorized by such laws as
are then in force. All rights conferred upon the directors or shareholders of
the Corporation herein or in any amendment hereof are granted subject to this
reservation.


                                       -8-

<PAGE>

                                     BYLAWS

                                       OF

                      NATIONAL INFORMATION CONSORTIUM, INC.

                                    * * * * *

                                    ARTICLE I
                                     OFFICES

     Section 1.1.   REGISTERED OFFICE AND AGENT.  The initial registered office
shall be CT Corporation System, 1675 Broadway, Suite 1200, Denver, CO 80202, and
the name of the initial registered agent of the corporation at such address
shall be CT Corporation System.

     Section 1.2.   OFFICES.  The corporation may also have offices at such
other places both within and without the State of Colorado as the Board of
Directors may from time to time determine or the business of the corporation may
require.

                                   ARTICLE II
                            MEETINGS OF SHAREHOLDERS

     Section 2.1.   ANNUAL MEETINGS.  Annual meetings of shareholders shall be
held the first Tuesday in May, either within or without the State of Colorado,
or at such other time and place as may be designated from time to time by the
Board of Directors and stated in the notice of the meeting, for the purpose of
electing a Board of Directors, and transacting such other business as may
properly be brought before the meeting.

     Section 2.2.   SPECIAL MEETINGS.  Special meetings of the shareholders, for
any purpose or purposes, unless otherwise provided by statute or by the Articles
of Incorporation, may be called at any time by the President and shall be called
by the President or Secretary at the request in writing of a majority of the
Board of Directors, or at the request in writing of shareholders owning a
majority in amount of the entire capital stock of the corporation issued and
outstanding and entitled to vote. Such request shall state the purpose or
purposes of the proposed meeting. Business transacted at any special meeting of
shareholders shall be limited to the purposes stated in the notice.

     Section 2.3.   NOTICE OF MEETINGS.  Whenever shareholders are required or
permitted to take action at a meeting, a written notice of the meeting shall be
given which shall state the place, date and hour of the meeting, and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called. Unless otherwise provided by law, the written notice of any meeting
shall be given not less than ten nor more than sixty days before the date of the
meeting, to each shareholder entitled to vote at such meeting.

     Section 2.4.   QUORUM.  Except as otherwise provided by law or by the
Articles of Incorporation or these Bylaws, the presence in person or by proxy of
the holders of a majority of the


                                        1
<PAGE>

outstanding shares of stock of the corporation entitled to vote thereat shall
constitute a quorum at each meeting of the shareholders and all questions shall
be decided by a majority of the shares so represented in person or by proxy at
the meeting and entitled to vote thereat. The shareholders present at any duly
organized meeting may continue to do business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum.

     Section 2.5.   ADJOURNMENTS.  Notwithstanding any other provisions of the
Articles of Incorporation or these Bylaws, the holders of a majority of the
shares of stock of the corporation entitled to vote at any meeting, present in
person or represented by proxy, whether or not a quorum is present, shall have
the power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
any such adjourned meeting at which a quorum shall be present or represented,
any business may be transacted which might have been transacted at the meeting
originally called; provided, however, that if the adjournment is for more than
thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
shareholder of record entitled to vote at the adjourned meeting.

     Section 2.6.   VOTING; PROXIES. Unless otherwise provided in the Articles
of Incorporation, each shareholder shall at every meeting of the shareholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such shareholder, but no proxy shall be voted on
after three years from its date, unless the proxy provides for a longer period.
Each proxy shall be revocable unless expressly provided therein to be
irrevocable or unless otherwise made irrevocable by law. The notice of every
meeting of the shareholders may be accompanied by a form of proxy approved by
the Board of Directors in favor of such person or persons as the Board of
Directors may select.

     Section 2.7.   ACTION BY CONSENT OF SHAREHOLDERS.  Unless otherwise
provided in the Articles of Incorporation, any action required to be taken at
any annual or special meeting of shareholders of the corporation, or any action
which may be taken at any annual or special meeting of such shareholders, may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, shall be signed by all of the
holders of outstanding stock entitled to vote thereon.

     Section 2.8.   LIST OF SHAREHOLDERS ENTITLED TO VOTE.  The officer who has
charge of the stock ledger of the corporation shall prepare and make, at least
ten days before every meeting of shareholders, a complete list of the
shareholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each shareholder and the number of shares registered
in the name of each shareholder. Such list shall be open to the examination of
any shareholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at the
time and place of the meeting during the whole time thereof, and may be
inspected by any shareholder who is present.


                                        2
<PAGE>

     Section 2.9.   FIXING RECORD DATE.  In order that the corporation may
determine the shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty nor less than ten
days before the date of such meeting, nor more than sixty days prior to any
other action. The Board of Directors shall not close the books of the
corporation against transfer of shares during the whole or any part of such
period. A determination of shareholders of record entitled to notice of or to
vote at a meeting of shareholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.

     Section 2.10.  BUSINESS TO BE BROUGHT BEFORE THE ANNUAL MEETING. To be
properly brought before the annual meeting of shareholders, business must be
either (a) specified in the notice of meeting (or any supplement thereto) given
by or at the direction of the Board of Directors, (b) otherwise brought before
the meeting by or at the direction of the Board of Directors, or (c) otherwise
properly brought before the meeting by a shareholder of the corporation who is a
shareholder of record at the time of giving of notice provided for in this
Section 2.10 of Article II, who shall be entitled to vote at such meeting and
who complies with the notice procedures set forth in this Section 2.10 of
Article II. In addition to any other applicable requirements, for business to be
brought before an annual meeting by a shareholder of the corporation, the
shareholder must have given timely notice thereof in writing to the Secretary of
the corporation. To be timely, a shareholder's notice must be delivered to or
mailed and received at the principal executive offices of the corporation not
less than 90 days prior to the anniversary date of the immediately preceding
annual meeting of shareholders of the corporation in the case of each subsequent
annual meeting of shareholders. A shareholder's notice to the Secretary shall
set forth as to each matter the shareholder proposes to bring before the annual
meeting (i) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and address, as they appear on the corporation's books,
of the shareholder proposing such business, (iii) the acquisition date, the
class and the number of shares of voting stock of the corporation which are
owned beneficially by the shareholder, (iv) any material interest of the
shareholder in such business, and (v) a representation that the shareholder
intends to appear in person or by proxy at the meeting to bring the proposed
business before the meeting.

     Notwithstanding anything in these Bylaws to the contrary, no business shall
be conducted at the annual meeting except in accordance with the procedures set
forth in this Section 2.10.

     The chairman of the annual meeting shall, if the facts warrant, determine
and declare to the meeting that business was not properly brought before the
meeting in accordance with the provisions of this Section 2.10 of Article II,
and if the chairman should so determine, the chairman shall so declare to the
meeting and any such business not properly brought before the meeting shall not
be transacted.


                                        3
<PAGE>

     Notwithstanding the foregoing provisions of this Section 2.10 of Article
II, a shareholder shall also comply with all applicable requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder with respect to the matters set forth in this Section 2.10.

                                   ARTICLE III
                               BOARD OF DIRECTORS

     Section 3.1.   NUMBER; QUALIFICATIONS.  The number of directors shall be at
least three and not more than ten, subject to the provisions contained in the
Articles of Incorporation.  Within that range, the number of directors shall be
as stated by resolution adopted by the Board of Directors from time to time, but
no decrease in the number of directors shall have the effect of shortening the
term of any incumbent director. The directors shall be elected at the annual
meeting of the shareholders, except as provided in Section 3.2, and each
director elected shall hold office until his successor is elected and qualified
or until his earlier death, resignation or removal. A director need not be a
shareholder of the corporation. A majority of the directors may elect from its
members a chairman, who shall also serve as chairman of any annual or special
meeting of the shareholders. The chairman, if any, shall hold this office until
his successor shall have been elected and qualified.

     Section 3.2.   VACANCIES.  Any vacancy in the Board of Directors, including
vacancies resulting from any increase in the authorized number of directors may
be filled by a majority of the remaining directors then in office, though less
than a quorum, or by a sole remaining director, and the directors so chosen
shall hold office until the next annual meeting of shareholders and their
successors are duly elected and qualified, or until their earlier death,
resignation or removal.

     Section 3.3.   POWERS.  The business affairs and property of the
corporation shall be managed by or under the direction of the Board of Directors
which may exercise all such powers of the corporation and do all such lawful
acts and things as are not by statute or by the Articles of Incorporation or by
these Bylaws directed or required to be exercised or done by the shareholders.

     Section 3.4.   RESIGNATIONS.  Any director may resign at any time by
written notice to the corporation. Any such resignation shall take effect at the
date of receipt of such notice or at any later time specified therein, and,
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.

     Section 3.5.   REGULAR MEETINGS.  Regular meetings of the Board of
Directors shall be held at such place or places within or without the State of
Colorado, at such hour and on such day as may be fixed by resolution of the
Board of Directors, without further notice of such meetings.

     Section 3.6.   SPECIAL MEETINGS.  Special meetings of the Board of
Directors may be held whenever called by (i) the Chairman of the Board; (ii) the
President; (iii) the President or Secretary on the written request of a majority
of the Board of Directors; or (iv) resolution adopted by the Board of Directors.
Special meetings may be held within or without the State of Colorado as may be
stated in the notice of the meeting.


                                        4
<PAGE>

     Section 3.7.   NOTICE OF MEETINGS.  Written notice of the time, place and
general nature of the business to be transacted at all special meetings of the
Board of Directors must be given to each director at least three days prior to
the day of the meeting; provided, however, that notice of any meeting need not
be given to any director if waived by him in writing, or if he shall be present
at such meeting, except when the director attends the meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business on the grounds that the meeting is not lawfully called or convened.

     Section 3.8.   QUORUM; VOTE REQUIRED FOR ACTION.  At all meetings of the
Board of Directors, a majority of directors then in office shall constitute a
quorum for the transaction of business and, except as otherwise provided by law
or these Bylaws, the act of a majority of the directors present at any meeting
at which there is a quorum shall be the act of the Board of Directors; but a
lesser number may adjourn the meeting from day to day, without notice other than
announcement at the meeting, until a quorum shall be present. Directors may
participate in any meeting of the directors, and members of any committee of
directors may participate in any meeting of such committee, by means of
conference telephone or similar communications equipment by means of which all
persons participating in such meeting can hear each other, and such
participation shall constitute presence in person at such meeting.

     Section 3.9.   ACTION BY CONSENT OF DIRECTORS.  Any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee of the Board of Directors may be taken without a meeting, if all
members of the board or the committee of the board, as the case may be, consent
thereto in writing, which may be in counterparts, and the writing or writings
are filed with the minutes of proceedings of the Board of Directors or the
committee thereof. Such writing(s) shall be manually executed if practicable,
but if circumstances so require, effect shall be given to written consent
transmitted by telegraph, telex, telecopy or similar means of visual data
transmission.

     Section 3.10.  TELEPHONIC MEETINGS PERMITTED.  Members of the Board of
Directors, or any committee designated by the board, may participate in a
meeting of such board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Bylaw shall constitute presence in person at such meeting.

     Section 3.11.  COMPENSATION.  Directors shall be entitled to such
compensation for their services as may be approved by the Board of Directors,
including, if so approved by resolution of the Board of Directors, a fixed sum
and expenses of attendance at each regular or special meeting or any committee
thereof. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.

     Section 3.12.  REMOVAL.  Except as provided in the Articles of
Incorporation or by law, any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of shares entitled
to vote at an election of directors. The notice calling such meeting shall state
the intention to act upon such matter, and, if the notice so provides, the
vacancy or vacancies caused by such removal may be filled at such meeting by a
vote of the majority of the shares entitled to vote at an election of directors.


                                        5
<PAGE>

     Section 3.13.  COMMITTEES.  The Board of Directors may, by resolution
passed by a majority of the whole Board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation. The
Board may designate one or more directors as alternate members of any committee.
The alternate members of any committee may replace any absent or disqualified
member at any meeting of the committee. Any such committee, to the extent
provided in a resolution of the Board of Directors, shall have and may exercise
all the powers and authority of the Board of Directors in the management of the
business and affairs of the corporation, and may authorize the seal of the
corporation to be affixed to all papers which may require it; but no such
committee shall have such power or authority in reference to amending the
Articles of Incorporation, adopting an agreement of merger or consolidation,
recommending to the shareholders the sale, lease or exchange of all or
substantially all of the corporation's property and assets, recommending to the
shareholders a dissolution of the corporation or a revocation of a dissolution,
or amending the Bylaws of the corporation; and, unless the resolution or the
Articles of Incorporation expressly so provide, no committee shall have the
power or authority to declare a dividend or to authorize the issuance of stock
or to adopt a Certificate of Ownership and Merger. Such committee or committees
shall have such name or names as may be determined from time to time by
resolution adopted by the Board of Directors. Each committee shall keep regular
minutes of its meetings and report the same to the Board of Directors when
required. Members of special or standing committees shall be entitled to receive
such compensation for serving on such committees as the Board of Directors shall
determine.

     Section 3.14. NOMINATION OF DIRECTORS. Only persons who are nominated in
accordance with-the following procedures shall be eligible for election as
directors. Nominations of persons for election to the Board of Directors of the
corporation may be made at a meeting of shareholders (a) by or at the direction
of the Board of Directors or (b) by any shareholder of the corporation who is a
shareholder of record at the time of giving of notice provided for in this
Section 3.14 of Article III, who shall be entitled to vote for the election of
directors at the meeting and who complies with the notice procedures set forth
in this Section 3.14 of Article III. Such nominations, other than those made by
or at the direction of the Board of Directors, shall be made pursuant to timely
notice in writing to the Secretary of the corporation. To be timely, a
shareholder's notice shall be delivered to or mailed and received at the
principal executive offices of the corporation (i) with respect to an election
to be held at the annual meeting of the shareholders of the corporation, not
later than 90 days prior to the anniversary date of the immediately preceding
annual meeting of shareholders of the corporation, and (ii) with respect to an
election to be held at a special meeting of shareholders of the corporation for
the election of directors, not later than the closing of business on the 10th
day following the day on which such notice of the date of the meeting was mailed
or public disclosure of the date of the meeting was made, whichever first
occurs. Such shareholder's notice to the Secretary shall set forth (a) as to
each person whom the shareholder proposes to nominate for election or
re-election as a director, all information relating to the person that is
required to be disclosed in solicitations for proxies for election of directors,
or is otherwise required, pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (including the written consent of such person
to be named in the proxy statement as a nominee and to serve as a director if
elected); and (b) as to the shareholder giving the notice (i) the name and
address, as they appear on the corporation's books, of such shareholder, and
(ii) the class and number of shares of capital stock of the corporation which
are beneficially owned by the shareholder. At the request of the Board


                                        6
<PAGE>

of Directors, any person nominated by the Board of Directors for election as a
director shall furnish to the Secretary of the corporation that information
required to be set forth in a shareholder's notice of nomination which pertains
to the nominee.

     In the event that a person is validly designated as nominee to the Board
and shall thereafter become unable or unwilling to stand for election to the
Board of Directors, the Board of Directors or the shareholder who proposed such
nominee, as the case may be, may designate a substitute nominee.

     No person shall be eligible to serve as a director of the corporation
unless nominated in accordance with the procedures set forth in this Section
3.14 of Article III. The chairman of the meeting of shareholders shall, if the
facts warrant, determine and declare to the meeting that a nomination was not
made in accordance with the procedures prescribed by the Bylaws, and if the
chairman should so determine, the chairman shall so declare to the meeting and
the defective nomination shall be disregarded.

     Notwithstanding the foregoing provisions of this Section 3.14 of Article
III, a shareholder shall also comply with all applicable requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder with respect to the matters set forth in this Section 3.14 of Article
III.

                                   ARTICLE IV
                                     NOTICES

     Section 4.1.   NOTICES.  Whenever any notice is required to be given under
the provisions of these Bylaws or of the Articles of Incorporation to any
director or shareholder, such notice must be in writing and may be given in
person, in writing or by mail, telegram, telecopy or other similar means of
visual communication, addressed to such director or shareholder, at his address
as it appears on the records of the corporation, with postage or other
transmittal charges thereon prepaid. Such notice shall be deemed to be given (i)
if by mail, at the time when the same shall be deposited in the United States
mail and (ii) otherwise, when such notice is transmitted.

     Section 4.2.   WAIVER OF NOTICE.  Whenever any notice is required to be
given under the provisions of the Bylaws or of the Articles of Incorporation to
any director or shareholder, a waiver thereof in writing, signed by the person
or persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.

                                    ARTICLE V
                                    OFFICERS

     Section 5.1.   ELECTION; QUALIFICATIONS; TERM OF OFFICE; RESIGNATION;
REMOVAL; VACANCIES.  The officers of the corporation shall be elected or
appointed by the Board of Directors and may include, at the discretion of the
Board, a Chairman of the Board, a President, a Secretary, a Treasurer and such
Executive, Senior or other Vice Presidents and other officers as may be
determined by the Board of Directors. Any number of offices may be held by the
same person. The officers of the corporation shall hold office until their
successors are chosen and qualified, except that any officer


                                        7
<PAGE>

may resign at any time by written notice to the corporation and the Board of
Directors may remove any officer at any time at its discretion with or without
cause. Any vacancies occurring in any office of the corporation by death,
resignation, removal or otherwise may be filled for the unexpired portion of the
term by the Board of Directors at any regular or special meeting.

     Section 5.2.   POWERS AND DUTIES.  The officers of the corporation shall
have such powers and duties as generally pertain to their offices, except as
modified herein or by the Board of Directors, as well as such powers and duties
as shall be determined from time to time by the Board of Directors. The Chairman
of the Board, if one is elected, and otherwise the President, shall preside at
all meetings of the Board. The President shall preside at all meetings of the
shareholders.

                                   ARTICLE VI
                                      STOCK

     Section 6.1.   CERTIFICATES.  Every holder of stock in the corporation
shall be entitled to have a certificate, signed by, or in the name of the
corporation by, (i) the Chairman or Vice-Chairman of the Board of Directors, or
the President or a Vice President and (ii) the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the corporation,
certifying the number of shares owned by him in the corporation. If the
corporation shall be authorized to issue more than one class of stock or more
than one series of any class, the powers, designations, preferences and
relative, participating, optional or other special rights of each class of stock
or series thereof and the qualification, limitations or restrictions of such
preferences and/or rights shall be set forth in full or summarized on the face
or back of the certificate which the corporation shall issue to represent such
class or series of stock, provided that, in lieu of the foregoing requirements,
there may be set forth on the face or back of the certificate which the
corporation shall issue to represent such class or series of stock, a statement
that the corporation will furnish without charge to each shareholder who so
requests the powers, designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and/or
rights.

     Section 6.2.   CERTIFICATES ISSUED FOR PARTLY PAID SHARES.  Certificates
may be issued for partly paid shares and in such case upon the face or back of
the certificates issued to represent any such partly paid shares the total
amount of the consideration to be paid therefor, and the amount paid thereon
shall be specified.

     Section 6.3.   FACSIMILE SIGNATURES.  Any of or all the signatures on the
certificate may be facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.

     Section 6.4.   LOST, STOLEN OR DESTROYED STOCK CERTIFICATES; ISSUANCE OF
NEW CERTIFICATES. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the


                                        8
<PAGE>

Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require and/or to give the corporation a bond in such
sum as it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost, stolen or
destroyed.

     Section 6.5.   TRANSFER OF STOCK.  Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation or authority to
transfer, and subject to applicable federal and state securities laws and
contractual obligations, it shall be the duty of the corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.

                                   ARTICLE VII
                               GENERAL PROVISIONS

     Section 7.1.   DIVIDENDS.  Dividends upon the capital stock of the
corporation, subject to the provisions of the Articles of Incorporation, if any,
may be declared by the Board of Directors at any regular or special meeting,
pursuant to law. Dividends may be paid in cash, in property, or in shares of the
capital stock, subject to the provisions of the Articles of Incorporation.
Before payment of any dividend, there may be set aside out of any funds of the
corporation available for dividends such sum or sums as the directors from time
to time, in their absolute discretion, think proper as a reserve or reserves to
meet contingencies, or for equalizing dividends, or for repairing or maintaining
any property of the corporation, or for such other purpose as the directors
shall think conducive to the interest of the corporation, and the directors may
modify or abolish any such reserve in the manner in which it was created.

     A member of the Board of Directors, or a member of any committee designated
by the Board of Directors, shall be fully protected in relying in good faith
upon the records of the Corporation and upon such information, opinions, reports
or statements presented to the Corporation by any of its officers or employees,
or committees of the Board of Directors, or by any other person as to matters
the director reasonably believes are within such other person's professional or
expert competence and who has been selected with reasonable care by or on behalf
of the Corporation, as to the value and amount of the assets, liabilities and/or
net profits of the Corporation, or any other facts pertinent to the existence
and amount of surplus or other funds from which dividends might properly be
declared and paid, or with which the Corporation's stock might properly be
purchased or redeemed.

     Section 7.2.   FISCAL YEAR.  The fiscal year of the corporation shall be
the calendar year.

     Section 7.3.   SEAL.  The seal of the corporation shall be in such form as
the Board of Directors shall prescribe.

     Section 7.4.   AMENDMENTS.  These Bylaws may be altered, amended or
repealed or new Bylaws may be adopted by the shareholders or, unless expressly
prohibited by a particular Bylaw, by the Board of Directors (i) at any regular
meeting of the shareholders or of the Board of Directors (ii) or at any special
meeting of the shareholders or of the Board of Directors if notice of such
alteration, amendment, repeal or adoption of new Bylaws shall be contained in
the notice of such


                                        9
<PAGE>

special meeting. The power to adopt, amend or repeal Bylaws conferred upon the
Board of Directors shall not divest or limit the power of the shareholders to
adopt, amend or repeal Bylaws.

                                  ARTICLE VIII
                                 INDEMNIFICATION

     The corporation shall be authorized to indemnify any person entitled to
indemnity under the Colorado Business Corporation Act, as the same exists or may
hereafter be amended (the "Act"), to the fullest extent permitted by the Act;
provided, however, that the corporation shall not be permitted to indemnify any
person in connection with any proceeding initiated by such person, unless such
proceeding is authorized by a majority of the directors of the corporation.


As amended effective May 4, 1999.



                                          10
<PAGE>

                                  TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           PAGE
<S>                                                                        <C>
ARTICLE I OFFICES    . . . . . . . . . . . . . . . . . . . . . . . . .       1
      Section 1.1.   REGISTERED OFFICE AND AGENT.. . . . . . . . . . .       1
      Section 1.2.   OFFICES.. . . . . . . . . . . . . . . . . . . . .       1

ARTICLE II MEETINGS OF SHAREHOLDERS. . . . . . . . . . . . . . . . . .       1
      Section 2.1.   ANNUAL MEETINGS.. . . . . . . . . . . . . . . . .       1
      Section 2.2.   SPECIAL MEETINGS. . . . . . . . . . . . . . . . .       1
      Section 2.3.   NOTICE OF MEETINGS. . . . . . . . . . . . . . . .       1
      Section 2.4.   QUORUM. . . . . . . . . . . . . . . . . . . . . .       1
      Section 2.5.   ADJOURNMENTS. . . . . . . . . . . . . . . . . . .       2
      Section 2.6.   VOTING; PROXIES.. . . . . . . . . . . . . . . . .       2
      Section 2.7.   ACTION BY CONSENT OF SHAREHOLDERS.. . . . . . . .       2
      Section 2.8.   LIST OF SHAREHOLDERS ENTITLED TO VOTE.. . . . . .       2
      Section 2.9.   FIXING RECORD DATE. . . . . . . . . . . . . . . .       3
      Section 2.10.  BUSINESS TO BE BROUGHT BEFORE THE ANNUAL
                     MEETING.. . . . . . . . . . . . . . . . . . . . .       3

ARTICLE III BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . .       4
      Section 3.1.   NUMBER; QUALIFICATIONS. . . . . . . . . . . . . .       4
      Section 3.2.   VACANCIES.. . . . . . . . . . . . . . . . . . . .       4
      Section 3.3.   POWERS. . . . . . . . . . . . . . . . . . . . . .       4
      Section 3.4.   RESIGNATIONS. . . . . . . . . . . . . . . . . . .       4
      Section 3.5.   REGULAR MEETINGS. . . . . . . . . . . . . . . . .       4
      Section 3.6.   SPECIAL MEETINGS. . . . . . . . . . . . . . . . .       4
      Section 3.7.   NOTICE OF MEETINGS. . . . . . . . . . . . . . . .       5
      Section 3.8.   QUORUM; VOTE REQUIRED FOR ACTION. . . . . . . . .       5
      Section 3.9.   ACTION BY CONSENT OF DIRECTORS. . . . . . . . . .       5
      Section 3.10.  TELEPHONIC MEETINGS PERMITTED.. . . . . . . . . .       5
      Section 3.11.  COMPENSATION. . . . . . . . . . . . . . . . . . .       5
      Section 3.12.  REMOVAL.. . . . . . . . . . . . . . . . . . . . .       5
      Section 3.13.  COMMITTEES. . . . . . . . . . . . . . . . . . . .       6
      Section 3.14.  NOMINATION OF DIRECTORS.. . . . . . . . . . . . .       6

ARTICLE IV NOTICES   . . . . . . . . . . . . . . . . . . . . . . . . .       7
      Section 4.1.   NOTICES.. . . . . . . . . . . . . . . . . . . . .       7
      Section 4.2.   WAIVER OF NOTICE. . . . . . . . . . . . . . . . .       7

ARTICLE V OFFICERS   . . . . . . . . . . . . . . . . . . . . . . . . .       7
      Section 5.1.   ELECTION; QUALIFICATIONS; TERM OF OFFICE;
                     RESIGNATION; REMOVAL; VACANCIES.. . . . . . . . .       7
      Section 5.2.   POWERS AND DUTIES.. . . . . . . . . . . . . . . .       8
</TABLE>

                                        i
<PAGE>

<TABLE>
<S>                                                                        <C>
ARTICLE VI STOCK     . . . . . . . . . . . . . . . . . . . . . . . . .       8
      Section 6.1.   CERTIFICATES. . . . . . . . . . . . . . . . . . .       8
      Section 6.2.   CERTIFICATES ISSUED FOR PARTLY PAID SHARES. . . .       8
      Section 6.3.   FACSIMILE SIGNATURES. . . . . . . . . . . . . . .       8
      Section 6.4.   LOST, STOLEN OR DESTROYED STOCK CERTIFICATES;
                     ISSUANCE OF NEW CERTIFICATES. . . . . . . . . . .       8
      Section 6.5.   TRANSFER OF STOCK.. . . . . . . . . . . . . . . .       9

ARTICLE VII GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . .       9
      Section 7.1.   DIVIDENDS.. . . . . . . . . . . . . . . . . . . .       9
      Section 7.2.   FISCAL YEAR.. . . . . . . . . . . . . . . . . . .       9
      Section 7.3.   SEAL. . . . . . . . . . . . . . . . . . . . . . .       9
      Section 7.4.   AMENDMENTS. . . . . . . . . . . . . . . . . . . .       9

ARTICLE VIII INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . .       10
</TABLE>

                                    * * * * *


                                       ii
<PAGE>

                                     BYLAWS


                                       OF

                      NATIONAL INFORMATION CONSORTIUM, INC.
                            (A COLORADO CORPORATION)






As amended effective May 4, 1999


<PAGE>

FRONT

COMMON STOCK      COMMON STOCK

EGOV

THIS CERTIFICATE IS TRANSFERABLE IN BOSTON, MA OR NEW YORK, NY

INCORPORATED UNDER THE LAWS
OF THE STATE OF COLORADO

CUSIP 636491 10 2

SEE REVERSE FOR
CERTAIN DEFINITIONS

THIS CERTIFIES THAT    is the owner of

FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, NO PAR VALUE, OF

NATIONAL INFORMATION CONSORTIUM, INC.
transferable only on the books of the Corporation by the holder hereof in
person or by duly authorized attorney upon surrender of this Certificate
properly endorsed. This Certificate is not valid until countersigned by the
Transfer Agent and registered by the Registrar.

     IN WITNESS WHEREOF, the Corporation has caused the facsimile signatures of
its duly authorized officers to be hereunto affixed.

Dated:

SECRETARY    CHAIRMAN

COUNTERSIGNED AND REGISTERED:

BankBoston, N.A.

TRANSFER AGENT AND REGISTRAR

BY

AUTHORIZED SIGNATURE


BACK

NATIONAL INFORMATION CONSORTIUM, INC.

The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

         TEN COM  N        as tenants in common
         TEN ENT  N        as tenants by the entireties
         JT TEN   N        as joint tenants with right of
                           survivorship and not as tenants
                           in common

<PAGE>

         UNIF GIFT MIN ACT  N       ............. Custodian .............
                         (Cust)                    (Minor)
                     under Uniform Gifts to Minors

                      Act ................................
                                    (State)

Additional abbreviations may also be used though not in the above list.

    FOR VALUE RECEIVED,                    hereby sell, assign and transfer
unto

         PLEASE INSERT SOCIAL SECURITY OR OTHER
         IDENTIFYING NUMBER OF ASSIGNEE

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint


Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises. Dated

X
X

NOTICE:

THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.

Signature(s) Guaranteed

By

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.

KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, OR DESTROYED THE
CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A
REPLACEMENT CERTIFICATE.



<PAGE>

                            EXHIBIT 5.1

                           June 15, 1999


National Information Consortium, Inc.
2 Corporate Woods,
10975 Benson Street, Suite 390
Overland Park, KS 66210

Ladies and Gentlemen:

     At your request, we have examined the Registration Statement on Form S-1
of National Information Consortium, Inc., a Colorado corporation (the
"Company"), filed with the Securities and Exchange Commission (the
"Registration Statement") on May 6, 1999, relating to the registration under
the Securities Act of 1933, as amended, of up to 14,950,000 shares of the
Company's common stock, no par value per share (the "Stock"), which are
authorized but unissued stock to be offered and sold by the Company
(including up to 1,950,000 shares subject to the underwriters' over-allotment
option) and 3,000,000 of which are presently issued and outstanding and
will be sold by certain selling shareholders (the ""Selling Shareholders").
The Stock is to be sold to the underwriters named in the Registration
Statement for resale to the public.

     As counsel to the Company, we have examined the proceedings taken by the
Company in connection with the issuance and sale of the Stock.

     We are of the opinion that the up to 3,000,000 shares of Stock to be
sold by the Selling Shareholders pursuant to the Registration Statement are
validly issued, fully paid and non-assessable, and that the up to 11,950,000
shares of Stock to be offered and sold by the Company have been duly
authorized and, when issued and sold by the Company in the manner described
in the Registration Statement and in accordance with the resolutions adopted
by the Board of Directors of the Company, will be validly issued, fully paid
and nonassessable.

     We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us in the Registration
Statement, the prospectus constituting a part thereof and any amendments
thereto.


                                  Very truly yours,


                                  /s/ Morrison & Foerster LLP
                                  Morrison & Foerster LLP


<PAGE>

                       NATIONAL INFORMATION CONSORTIUM, INC.


                               KEY EMPLOYEE AGREEMENT
                                        FOR
                                  KEVIN CHILDRESS


       THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of the 16th
day of May, 1999, by and between Kevin Childress ("Executive") and NATIONAL
INFORMATION CONSORTIUM, INC. a Colorado corporation (the "Company").

       WHEREAS, the Company desires to employ Executive to provide personal
services to the Company and to the Company's subsidiaries, and desires to
provide Executive with certain compensation and benefits in return for his
services; and

       WHEREAS, Executive desires to be employed by the Company and provide
personal services to the Company in return for certain compensation and
benefits;

       NOW, THEREFORE, the parties hereto agree as follows:

       1.     EMPLOYMENT BY THE COMPANY.

              1.1    EMPLOYMENT.  Subject to terms set forth herein, the Company
or a subsidiary of the Company agrees to employ Executive in the position of
Chief Financial Officer and Executive hereby accepts such employment effective
as of the date first written above.  During the term of his employment with the
Company, Executive will devote his best efforts and substantially all of his
business time and attention (except for vacation periods and reasonable periods
of illness or other incapacity permitted by the Company's general employment
policies) to the business of the Company.

              1.2    DUTIES.  Executive will serve in an executive capacity and
shall perform such duties as are customarily associated with his then current
title, consistent with the Bylaws of the Company and as required by the
Company's Board of Directors (the "Board").  Executive shall perform his duties
at the Company's corporate headquarters, currently in Overland Park, Kansas.

              1.3    POLICIES.  The employment relationship between the parties
shall also be governed by the general employment policies and practices of the
Company, including those relating to protection of confidential information and
assignment of inventions, except that when the terms of this Agreement differ
from or are in conflict with the Company's general employment policies or
practices, this Agreement shall control.

              1.4    INVESTMENT.  As a condition to your employment you will
purchase 5,110 shares of the Company's common stock at a purchase price per
share of $24.46 or

                                       1
<PAGE>

$125,000 in the aggregate.

              2.     COMPENSATION.

              2.1    SALARY.  Executive shall receive for services to be
rendered hereunder an annualized base salary of $175,000, payable in equal
installments (prorated for portions of a pay period) on the Company's regular
pay days and the Company will withhold from such compensation all applicable
federal and state income, social security and disability and other taxes as
required by applicable laws.  In addition, Executive shall be entitled to
bonuses earned by Executive pursuant to bonus plans established from time to
time by the Company's Board of Directors.

              2.2    STANDARD COMPANY BENEFITS.  Executive shall be entitled to
all rights and benefits for which he is eligible under the terms and conditions
of the standard Company benefits and compensation practices which may be in
effect from time to time and provided by the Company to its employees generally.

              2.3    MOVING EXPENSES.   Executive shall be reimbursed by the
Company for all reasonable expenses incurred by Executive for moving his family
and his household and other belongings to the vicinity of the Company's
corporate offices, including transitional living expenses incurred by Executive
for a period and in an amount consistent with the policies of the Company which
policies shall be established in consultation with Executive.

        3.    PROPRIETARY INFORMATION OBLIGATIONS.

              3.1    AGREEMENT. Executive agrees to execute and abide by the
Proprietary Information and Inventions Agreement attached hereto as EXHIBIT A
(the "Proprietary Information Agreement").

       4.     OUTSIDE ACTIVITIES.

              4.1    Except with the prior written consent of the Company's
Board of Directors, Executive will not during the term of this Agreement
undertake or engage in any other employment, occupation or business enterprise,
other than ones in which Executive is a passive investor.  Executive may engage
in civic and not-for-profit activities so long as such activities do not
materially interfere with the performance of his duties hereunder.

              4.2    Except as permitted by Section 4.3, Executive agrees not to
acquire, assume or participate in, directly or indirectly, any position,
investment or interest known by him to be adverse or antagonistic to the
Company, its business or prospects, financial or otherwise.

              4.3    During the term of his employment by the Company, except on
behalf of the Company, Executive will not directly or indirectly, whether as an
officer, director,

                                       2
<PAGE>

stockholder, partner, proprietor, associate, representative, consultant, or
in any capacity whatsoever engage in, become financially interested in, be
employed by or have any business connection with any other person,
corporation, firm, partnership or other entity whatsoever which were known by
him to compete directly with the Company, throughout the world, in any line
of business engaged in (or planned to be engaged in) by the Company;
provided, however, that anything above to the contrary notwithstanding, he
may own, as a passive investor, shares of a publicly-held corporation that is
competitive with the Company, if such shares are actively traded on an
established national securities market, so long as the number of shares of
such corporation's capital stock that are owned beneficially (directly or
indirectly) by Executive shall not in the aggregate constitute more than 5%
of the outstanding voting stock of such corporation.

       5.     TERMINATION OF EMPLOYMENT.

              5.1    TERMINATION WITHOUT CAUSE.

                     (a)    The Company shall have the right to terminate
Executive's employment with the Company at any time without cause.

                     (b)    In the event Executive's employment is terminated
without cause before May 16, 2002, the Company shall pay Executive severance
equal to eighteen months at Executive's then-current salary. This severance
will be paid in equal monthly payments on the first day of the month for each
of the eighteen months following such termination.

                     (c)    In the event Executive's employment is terminated
without cause on or after May 16, 2002, Executive will not be entitled to
severance pay, pay in lieu of notice or any other such compensation, except as
provided in the Company's Severance Benefit Plan, if any, in effect on the
termination date.

              5.2    TERMINATION FOR CAUSE.

                     (a)    The Company shall have the right to terminate
Executive's employment with the Company at any time for cause.  Written
notification of termination and specific cause of termination shall be provided
to Executive at the time of termination.

                     (b)    "Cause" for termination shall mean:  (i) indictment
or conviction of any felony or of any crime involving dishonesty; (ii) willful
participation in any fraud against the Company; (iii) breach of Executive's
duties to the Company, including persistent unsatisfactory performance of job
duties; (iv) intentional damage to any property of the Company; or (v) conduct
by Executive which in the good faith and reasonable determination of the Board
demonstrates gross unfitness to serve.  With respect to clause (iii) above,
Executive shall be given written notice of such unsatisfactory performance and
30 days from the date of such notice to cure the causes set forth therein.

                                       3
<PAGE>

                     (c)    In the event Executive's employment is terminated at
any time with cause, Executive will not be entitled to severance pay, pay in
lieu of notice or any other such compensation; PROVIDED, HOWEVER, that Executive
shall receive all compensation earned prior to and including the date of
termination.

              5.3    VOLUNTARY OR MUTUAL TERMINATION.

                     (a)    Executive may voluntarily terminate his employment
with the Company in writing at any time, after which no further compensation
will be paid to Executive.

                     (b)    In the event Executive voluntarily terminates his
employment, he will not be entitled to severance pay, pay in lieu of notice or
any other such compensation; PROVIDED, HOWEVER, that Executive shall receive all
compensation earned prior to and including the date of termination.

       6.     NON-INTERFERENCE; NON-COMPETITION.

              (a)    While employed by the Company, and for three (3) years
immediately following the Termination Date, Executive agrees not to interfere
with the business of the Company by:

                     (i)    soliciting, attempting to solicit, inducing, or
otherwise causing any employee of the Company to terminate his or her employment
in order to become an employee, consultant or independent contractor to or for
any competitor of the Company; or

                     (ii)   directly or indirectly soliciting the business of
any customer of the Company which at the time of termination or one year
immediately prior thereto was listed on the Company's customer list.

              (b)    Executive agrees to execute and abide by the
Non-Competition Agreement attached hereto as EXHIBIT B.

       7.     GENERAL PROVISIONS.

              7.1    NOTICES.  Any notices provided hereunder must be in writing
and shall be deemed effective upon the earlier of personal delivery (including
personal delivery by telex) or the third day after mailing by first class mail,
to the Company at its primary office location and to Executive at his address as
listed on the Company payroll.

              7.2    SEVERABILITY.  Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or

                                       4
<PAGE>

unenforceable provisions had never been contained herein.

              7.3    WAIVER.  If either party should waive any breach of any
provisions of this Agreement, he or it shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of
this Agreement.

              7.4    COMPLETE AGREEMENT.  This Agreement and its Exhibits,
constitute the entire agreement between Executive and the Company and it is the
complete, final, and exclusive embodiment of their agreement with regard to this
subject matter.  It is entered into without reliance on any promise or
representation other than those expressly contained herein, and it cannot be
modified or amended except in a writing signed by Executive and an officer of
the Company.

              7.5    COUNTERPARTS.  This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
Agreement.

              7.6    HEADINGS.  The headings of the sections hereof are inserted
for convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.

              7.7    SUCCESSORS AND ASSIGNS.  This Agreement is intended to bind
and inure to the benefit of and be enforceable by Executive and the Company, and
their respective successors, assigns, heirs, executors and administrators,
except that Executive may not assign any of his duties hereunder and he may not
assign any of his rights hereunder without the written consent of the Company,
which shall not be withheld unreasonably.

              7.8    ATTORNEY FEES.  If either party hereto brings any action to
enforce his or its rights hereunder, the prevailing party in any such action
shall be entitled to recover his or its reasonable attorneys' fees and costs
incurred in connection with such action.

              7.9    CHOICE OF LAW.  All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the law of the
State of Kansas.

     IN WITNESS WHEREOF, the parties have executed this Key Employee
Agreement on the day and year first above written.

                                          NATIONAL INFORMATION
                                          CONSORTIUM, INC.:


                                          By: /s/ James B. Dodd
                                             -------------------------------
                                             James B. Dodd, President


                                       5
<PAGE>


                                              /s/ Kevin C. Childress
                                             -------------------------------
                                             Kevin C. Childress















                                       6

<PAGE>
                                                               Exhibit 10.19

                                    SUBLEASE

      THIS SUBLEASE, made this 16th day of May, 1999 by and between ACCEPTANCE
INSURANCE COMPANIES, INC., a Delaware corporation or its successor
("Sublandlord"), and NATIONAL INFORMATION CONSORTIUM, a Colorado corporation
("Subtenant").

                                    RECITALS:

      A.    Pursuant to the terms of that certain lease (the "Lease") dated
January 10, 1995, and amended by a First Lease Modification Agreement dated
October 30, 1996, by and between Sublandlord and Knickerbocker Properties, Inc.
XXI as successor in interest to Metropolitan Life Insurance Company, a New York
corporation as ("Landlord"), Sublandlord leases the Leased Premises (as defined
in the Lease) in that Building designated as 12 Corporate Woods, the street
address of which is 10975 Benson, Overland Park, Johnson County, Kansas 66210,
(the "Building"), situated in CORPORATE WOODS, a subdivision in said City,
County and State.

      B.    Subtenant desires to sublease from Sublandlord a portion of the
Leased Premises pursuant to the terms and conditions set forth herein.

      For and in consideration of the rents, covenants and agreements
hereinafter set forth, Sublandlord and Subtenant agree with each other as
follows:

            1.    PREMISES:  Sublandlord hereby rents, leases and lets to
Subtenant, and Subtenant hereby rents, leases and takes from Sublandlord, the
following described premises, consisting of an area of 1,536 usable square feet
together with a pro rata share of common floor area allocable thereto,
184 square feet, a total of approximately 1,720 net rentable square feet of
office space (the "Premises"), located on the third floor of the Building and is
that area identified as Suite 390 on Exhibit A attached hereto.

            2.    TERM:  The sublease term shall be for thirty-two (32) months
commencing on the 1st day of May, 1999 (the "Commencement Date"), and ending on
the 31st day of December, 2001.

            3.    RENT:  Subtenant agrees to pay Sublandlord as follows:

                  (a)    The monthly rent payable by Subtenant to Sublandlord
shall be Two Thousand Seven Hundred Ninety-Five AND NO/100 DOLLARS ($2,795.00)
per month.  The first month's rent is due upon signature of this document.  All
subsequent payments of any and all rent shall be due on the first day of each
succeeding month thereafter.

                  (b)    Additional Rent:  Subtenant's Rent includes annual
Operating Costs (as defined in the Lease) to the extent they do not exceed $7.91
per net rentable square foot ("Operating Stop").  Subtenant shall pay as
Additional Rent, Subtenant's pro rata share of all Operating Costs (as defined
in the Lease) assessed to


                                       1
<PAGE>

Sublandlord under the Lease, within ten (10) business days of the written notice
from Sublandlord.

                  (c)    Subtenant shall pay rent to Sublandlord and shall send
rent to:  ACCEPTANCE INSURANCE CO's., INC.; OMNI CENTRE BUSINESS PARK; 300 W.
BROADWAY, SUITE 100; COUNCIL BLUFFS, IA 51503-9094, or at such address or to
such person's attention as Sublandlord shall direct.

            4.    SECURITY DEPOSIT:  Subtenant has deposited the sum of
$2,795.00 with Sublandlord as security for its prompt and proper performance of
all the terms, covenants and agreements contained in this Sublease.  Subtenant
understands and agrees (a) that such deposit is not a prepayment of rent and
that Sublandlord shall not be obligated to apply said deposit to any unpaid rent
or portion thereof, although it may do so at its option; (b) that such deposit
does not constitute a trust fund, and that it may be deposited in any bank or
depository selected by Sublandlord and commingled with Sublandlord's other
funds; and (c) that Sublandlord shall have no obligation to account to Subtenant
and Subtenant shall have no right to recover from Sublandlord any interest,
earnings or other increments which may accrue during the time such deposit is
held by Sublandlord.

            5.    SUBLETTING:  This subletting shall be upon and subject to all
the rules and regulations of Landlord and the terms and conditions of the Lease,
except if there is a provision of this Sublease inconsistent with the Lease or
rules and regulations, then the Lease or rules or regulations, respectively,
will control.  Subtenant further agrees to comply with all terms and conditions
imposed on Sublandlord in the Lease, except as specifically otherwise addressed
in this Sublease.  Subtenant shall pay to Sublandlord any amounts due by
Sublandlord to Landlord under the Lease as a result of Subtenant's actions or
inactions with respect to the Premises, including but not limited to repairs,
damages and alterations to the Premises.

            6.    INSURANCE:  Subtenant shall deliver to Landlord an insurance
certificate (in the same amounts and coverages) per Section 17 of the Lease,
First Lease Modification Agreement, naming Landlord and Sublandlord as
additional insureds.  Subtenant shall deliver to Sublandlord a certificate of
insurance evidencing coverage per Section 17 of the Lease and First Lease
Modification Agreement.

            7.    LIABILITY:  Subtenant further agrees that Sublandlord shall
not be liable to Subtenant or its agents, servants, employees, customers or
invitees, for any damage to person or property caused by any act, omission or
neglect of Subtenant, its agents, servants, employees, clients or invitees, and
Subtenant agrees to hold Sublandlord and Landlord and their agents, servants,
employees, clients or invitees harmless from all claims for any such damage.
Subtenant shall not be liable to Sublandlord or to Sublandlord's agents,
servants, employees, clients or invitees for any damage to person or property
caused by an act, omission or neglect of Sublandlord, or Landlord, their agents,
servants, employees, clients and invitees.  Sublandlord agrees to hold Subtenant
and Landlord or their agents, servants, employees, clients and invitees harmless
from all


                                       2
<PAGE>

claims for any damage caused by an act, omission or neglect of Sublandlord, its
agents, servants, employees clients and invitees.

            8.    LEASEHOLD IMPROVEMENTS:  Subtenant agrees to sublease the
Premises in an "as is" condition.  However, Sublandlord agrees to pay all costs
to install a wall (sheetrocked, taped, sanded and painted) with cove base to
separate Suite 380 from Suite 390.  Sublandlord will provide directory signage,
door signage, and have the locks re-keyed for Subtenant.

            9.    BINDING EFFECT:  This Sublease shall be binding upon, and
shall inure to the benefit of the parties and their respective heirs, successors
and assigns.

            10.   GOVERNING LAW:  This Sublease shall be construed according to
the laws of the State of Kansas.

            11.   SUBLANDLORD'S LIABILITY:  Sublandlord shall remain liable for
the performance and observation of the covenants and conditions in the Lease
contained on its part to be performed and observed.

            12.   SUBLANDLORD'S COMPLIANCE:  The Sublandlord has, to date,
complied with all terms of the Lease and will duly observe and perform those
obligations imposed upon it under the Lease.

            13.   RIGHTS AND OBLIGATIONS OF THE PARTIES; FURTHER SUBLETTING OR
ASSIGNMENT:  All of the terms, provisions, covenants and conditions contained in
the Lease are incorporated herein by reference and are hereby made a part of
this Sublease with the same force and effect as if Sublandlord were the Landlord
under the Lease and Subtenant were the Tenant thereunder, from and after May 1,
1999.  In the event of any breach of this Sublease by Subtenant, Sublandlord
will have the same rights against Subtenant under this Sublease as would be
available to Landlord against the Sublandlord under the Lease if such breach
were by the Sublandlord.  Subtenant will have no right to assign the Sublease or
sublet the Premises nor any part thereof, or encumber or otherwise transfer in
any way, this Sublease or the Premises, nor part with or share possession of the
Premises.  Subtenant will have no right or option to hold over or extend this
Sublease beyond December 31, 2001, nor to act on behalf of Sublandlord as Tenant
under the Lease to hold over or extend occupancy of the Premises beyond the term
of the Lease.

            14.   USE AND SURRENDER OF PREMISES:  Subtenant will use the
Premises for general office business purposes and for no other purpose.  Upon
termination of this Sublease, Subtenant will quit and surrender to Sublandlord
the Premises (along with all keys, locks and the fixtures connected with the
Premises), free of all of Subtenant's office furniture and personal property, in
"broom-clean" condition.


                                       3
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Sublease as of
the day and year first above written.


SUBLANDLORD:                                 SUBTENANT:


ACCEPTANCE INSURANCE COMPANIES, INC.         NATIONAL INFORMATION CONSORTIUM
a Delaware corporation                       a Colorado corporation


By:  /s/ Bess Groben                         By:       James B. Dodd
   -----------------------------------            -----------------------------

Name:    Bess Groben                         Name:     James B. Dodd
     ---------------------------------            ------------------------------

Title:   Facilities Manager                  Title:    President
      --------------------------------             -----------------------------


                                       4
<PAGE>

                          SUBLEASE ADDENDUM NUMBER ONE

This Sublease Addendum made this 14th day of May, 1999 by and between Acceptance
Insurance Companies Inc. (Sublandlord) and National Information Consortium
(Subtenant) to supplement the terms and conditions of the Sublease between the
parties and hereby is attached thereto and incorporated by reference therein. In
consideration of the mutual covenants contained herein, Sublandlord and
Subtenant agree as follows:

1.       DISCRETIONARY OPTION Provided Subtenant is not in default with any of
         the terms and conditions of the Sublease and subject to Sublandlord's
         sole discretion to do so, Sublandlord hereby grants Subtenant an option
         to sublease the additional space at the Overland Park premises now
         occupied by the Sublandlord.

2.       PREMISES Subject to the terms of the discretionary option, Sublandlord
         hereby rents, leases and lets to Subtenant, and Subtenant hereby rents,
         leases and takes from Sublandlord, the following described premises,
         consisting of an area of 1,187 rentable square feet of office space
         located on the third floor of the Building designated at 12 Corporate
         Woods, the street address of which is 10975 Benson, Overland Park,
         Kansas 66210 identified as Suite 380.

3.       TERM The sublease term shall be for nineteen (19) months, seventeen
         (17) days, commencing on the 15th day of May, 2000 and ending on the
         31st day of December, 2001.

4.       RENT Subtenant agrees to pay Sublandlord for the additional option
         space as follows:

         A.       The monthly rent payable by Subtenant to Sublandlord shall be
                  Nineteen Hundred Twenty Eight AND 88/100 DOLLARS ($1,928.88)
                  per month. The first month's rent is due May 15, 2000. All
                  subsequent payments of any and all rent shall be due on the
                  first day of each succeeding month thereafter.

         B.       Additional Rent: Subtenant's Rent includes annual Operating
                  Costs (as defined in the Lease) to the extent they do not
                  exceed $7.91 per net rentable square foot ("Operating Stop").
                  Subtenant shall pay as Additional Rent, Subtenant's pro rata
                  share of all Operating Costs (as defined in the Lease)
                  assessed to Sublandlord under the Lease, within ten (10)
                  business days of the written notice from Sublandlord.

         C.       Subtenant shall pay rent to Sublandlord and shall send rent
                  to: ACCEPTANCE INSURANCE COMPANIES INC.; OMNI CENTRE BUSINESS
                  PARK; 300 W. BROADWAY, SUITE 100; COUNCIL BLUFFS, IA
                  51503-9094, or at such address or to such person's attention
                  as Sublandlord shall direct.

5.       SECURITY DEPOSIT Subtenant will deposit prior to May 15, 2001, the sum
         of $1,928.88 with Sublandlord as security for its prompt and proper
         performance of


                                       1

<PAGE>

         all the terms, covenants and agreements contained in this Sublease
         Addendum. Subtenant understands and agrees (a) that such deposit
         is not a prepayment of rent and that Sublandlord shall not be
         obligated to apply said deposit to any unpaid rent or portion thereof,
         although it may do so at its option; (b) that such deposit does not
         constitute a trust fund, and that it may be deposited in any bank or
         depository selected by Sublandlord and commingled with Sublandlord's
         other funds; and (c) that Sublandlord shall have no obligation to
         account to Subtenant and Subtenant shall have no right to recover from
         Sublandlord any interest, earnings or other increments which may accrue
         during the time such deposit is held by Sublandlord.

6.       SUBLET If Sublandlord, in its sole discretion, refuses to grant
         Subtenant the option for additional space, Subtenant, pursuant to the
         following, shall be allowed to sublet Subtenant's original subleased
         premises. This subletting shall be upon and subject to all the rules
         and regulations of Sublandlord and the terms and conditions of the
         Sublease, except if there is a provision of this Sublease inconsistent
         with the Lease or rules and regulations, then the Lease or rules or
         regulations, respectively, will control. Subtenant further agrees to
         comply with all terms and conditions imposed on Sublandlord in the
         Lease, except as specifically otherwise addressed in this Sublease.
         Subtenant shall remain liable for said rent to Sublandlord if Subtenant
         is unable to sublet original premises and shall pay to Sublandlord any
         amounts due under the Sublease as a result of Subtenant's actions or
         inactions with respect to the Premises, including but not limited to
         repair, damages and alterations to the Premises.

7.       OTHER TERMS Sublandlord and Subtenant agree all other terms of the
         Sublease and Lease shall be applicable to this Sublease Addendum.

8.       LEASEHOLD IMPROVEMENTS If Sublandlord does grant Subtenant the option
         for additional space, there shall be no subleasehold improvements paid
         for by the Sublandlord and Subtenant agrees to sublease the additional
         space in an "as is" condition.

         IN WITNESS WHEREOF, the parties hereto have executed this Sublease
Addendum as of the day and year first above written.

SUBLANDLORD:                                  SUBTENANT:

ACCEPTANCE INSURANCE COMPANIES, INC.          NATIONAL INFORMATION CONSORTIUM
a Delaware Corporation                        a Colorado Corporation

By: /s/ Bess Goben                            By: /s/ James B. Dodd
   ------------------------------                -----------------------------
Name:   Bess Goben                            Name:   James B. Dodd
     ----------------------------                   --------------------------
Title:  Facilities Mgr.                       Title:  President
      ---------------------------                   --------------------------


                                       2



<PAGE>


                                     LEASE

       THIS LEASE ("Lease"), is made as of the 15th day of January, 1995,
between METROPOLITAN LIFE INSURANCE COMPANY, a New York Corporation, as
"Landlord", and Acceptance Insurance Companies, Inc, a Delaware Corporation,
as "Tenant".

       W I T N E S S E T H:

       For and in consideration of the rents, covenants and agreements
hereinafter set forth, Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord, the Leased Premises (hereinafter defined) upon the following
terms and conditions:

1.     TERM.

       A.     The term of this Lease ("Term" or "Lease Term") shall be three
(3) years, 0 (zero) months, and 0 (zero) days commencing on the first
(1st) day of March, 1995 ("Commencement Date"), unless adjusted as
hereinafter provided, and ending on the last day of February, 1998,
unless sooner terminated as hereinafter provided.

       B.     If Landlord shall permit Tenant to enter into possession of the
Leased Premises prior to the Commencement Date, Tenant covenants and agrees that
its occupancy shall be deemed to be under all of the covenants and agreements of
this Lease and that it shall pay Landlord Rent, on a daily basis, in the amount
or amounts herein otherwise provided for, as though the date Tenant did enter
into possession was the designated Commencement Date.  In the event Tenant's
entry into possession shall occur on a day other than the first day of the month
in which possession is permitted, all Rent provided for herein shall be prorated
for such month on a daily basis, at the rate payable during the first month for
which Rent is payable hereunder.

       C.     If Tenant enters into possession of the Leased Premises on a date
other than the Commencement Date, the expiration date of the Lease Term shall
not be adjusted unless otherwise hereafter agreed to in writing by Landlord.

       D.     If by the Commencement Date specified in Section 1, paragraph A
hereof, the Leased Premises have not been substantially completed pursuant to
the plans and specifications set forth on Exhibit B, due to omission, delay or
default by Tenant or anyone acting under or for Tenant ("Tenant Delay") or due
to any cause other than Landlord's default, Landlord shall have no liability,
and the obligations of this Lease (including, without limitation, the obligation
to pay Rent) shall nonetheless commence as of the specific date set forth in
Section 1, paragraph A hereof.

       E.     If, however, the Leased Premises are not substantially completed
due to default on the part of Landlord, then as Tenant's sole remedy for the
delay in Tenant's occupancy of the Leased Premises, the Commencement Date shall
be delayed and the Rent herein provided shall not commence until the earlier of
actual occupancy by Tenant or substantial completion of the work which Landlord
has agreed to perform.


                                      1

<PAGE>

2.     LEASED PREMISES.

Landlord hereby rents, leases and lets to Tenant, and Tenant hereby rents,
leases and takes from Landlord, the following described premises, consisting
of an area of approximately 520 square feet of space ("Leased Premises")
together with the pro rata share of common floor area allocable thereto,
which is approximately 62 square feet, for a total of approximately 582 net
rentable square feet, which is designated as Suite 380 located on the third
(3rd) floor in that building designated as 12 Corporate Woods ("Building"),
which Building contains approximately 101,331 total net rentable square feet,
the street address of which is 10975 Benson, and which is located within the
Corporate Woods Subdivision ("Corporate Woods"), in Overland Park, Johnson
County, Kansas 66210. The location of the Leased Premises within the Building
is further shown on Exhibit A attached hereto and is that area crosshatched.

3.     SECURITY DEPOSIT.

Upon execution of this Lease, Tenant shall deposit with Landlord, the sum of
Eight Hundred Sixty Eight and 15/100 Dollars ($868.15) ("Security Deposit") as
security for its prompt and proper performance of all the terms, covenants and
agreements contained in this Lease.  Tenant understands, acknowledges and agrees
(i) that the Security Deposit is not a prepayment of rent; (ii) that Landlord
shall not be obligated to apply the Security Deposit to any unpaid Rent or
portion thereof, although it may do so at its option; (iii) that the Security
Deposit does not constitute a trust fund; (iv) that the Security Deposit may be
deposited in any account including an interest bearing account maintained by
Landlord, in any bank or depository selected by Landlord, and commingled with
Landlord's other funds; and (v) that Landlord shall have no obligation to pay
interest on the Security Deposit and Tenant shall have no right to recover from
Landlord and Landlord shall have no obligation to account to Tenant for any
interest, earnings or other increments which may accrue during the time the
Security Deposit is held by Landlord, except as otherwise specifically provided
in this Lease.  The Security Deposit shall be held by Landlord as security for
the performance by Tenant of all of Tenant's covenants and obligations under
this Lease.  Landlord may, from time to time, without prejudice to any other
remedy, use the Security Deposit to the extent necessary to make good any
arrearage of Rent or to satisfy any other covenant or obligation of the Tenant
hereunder.  Following any such application of the Security Deposit, Tenant shall
pay to Landlord on demand the amount so applied in order to restore the Security
Deposit to its original amount.  If Tenant is not in default at the termination
of this Lease and has paid in full all Rent and prorations and assuming Landlord
is not required to make repairs to the Leased Premises caused by Tenant's
vacating or by extraordinary wear and tear, or remove any then existing
leasehold improvements, then the balance of the Security Deposit remaining after
any such application shall be returned by Landlord to Tenant.  If Landlord
transfers its interest in the Leased Premises during the term of this Lease,
Landlord may assign the Security Deposit to the transferee and thereafter shall
have no further liability for the return of such Security Deposit.

4.     LANDLORD'S LIEN.

       As security for the performance of the obligations of Tenant under this
Lease, Tenant hereby grants Landlord a security interest in all equipment,
inventory, fixtures, furniture, and all


                                      2

<PAGE>

other property now owned or hereafter acquired by Tenant which is located in
the Leased Premises, and all additions thereto, and all proceeds and products
thereof.  Tenant shall not remove any of such personal property from the
Leased Premises until all of Tenant's obligations under this Lease have been
satisfied in full.  Without excluding any other manner of notice, any
requirement of reasonable notice to Tenant of Landlord's intention to dispose
of any property pursuant to the enforcement of such security interest will be
met if such notice is given at least ten (10) days before the time of such
disposition.  Any sale made pursuant to the enforcement of such security
interest shall be deemed to have been a public sale conducted in a
commercially reasonable manner if held at the Leased Premises or at any
warehouse in Johnson County, Kansas to where such property has been relocated
by Landlord after advertisement of the time, place, method of sale and a
general description of the property to be sold, in a daily newspaper
published in Johnson County, Kansas, or Kansas City, Missouri for five (5)
consecutive business days before the date of sale.  The Tenant agrees to
execute upon demand and deliver to the Landlord within ten (10) days after
written request therefor by or on behalf of Landlord, such financing
statements, continuation statements and other instruments which might
reasonably be required to perfect, protect or continue the foregoing security
interest.

5.     RENT.

       Tenant agrees to pay Landlord rent as follows:

       A.     BASE RENT.  The monthly base rent ("Base Rent") shall be:
Eight Hundred Sixty-Eight and 15/100 DOLLARS ($868.15), from March 1, 1995 to
February 28, 1998; -- ($ -- ) from -- to --; and -- ($ -- ) from -- to --.
All base Rent shall be payable in advance.  The Base Rent for the first
calendar month or partial calendar month of the Term shall be due upon the
Commencement Date subject to Section 7 hereof, and the remaining payments of
Base Rent shall be due on the first day of each calendar month thereafter
during the Term.  The Base Rent includes annual Operating Costs (hereinafter
defined) to the extent they do not exceed $__________ per net rentable square
foot ("Operating Stop").

       B.     ADDITIONAL RENT.  In addition to the Base Rent, Tenant shall pay
during the Lease Term as additional rent ("Additional Rent"), the following:

              (i)    Tenant's pro rata share of all Operating Costs (hereinafter
       defined) reasonably attributable to the Leased Premises during the Term,
       to the extent such Operating Costs attributable TO the Leased Premises
       exceed the Operating Stop included in the Base Rent; and

              (ii)   All other sums or amounts herein otherwise provided for,
       which are to be paid for by Tenant.

       C.     All Base Rent and Additional Rent (both Base Rent and
Additional Rent are herein included in the term "Rent") due hereunder shall
be due and payable in U.S. dollars without notice or demand, both of which
are hereby expressly waived, and without offset or counterclaim, except as
herein specifically provided otherwise.  Tenant's pro rata share of any item
under this Lease shall be that percentage which the net rentable square feet
of space in the Lease bears to the total net rentable square feet of space in
the Building.  All Rent

                                      3

<PAGE>

shall be payable to Landlord, c/o Jones & Company, 9401 Indian Creek Parkway
- - Suite 1000, Overland Park, Kansas 66210, or at such other address as
Landlord may from time to time direct in the manner required hereunder for
giving notice.  If any Rent is not paid within ten (10) days after the same
is due, Tenant shall pay to Landlord a late payment fee to compensate
Landlord for its extra expenses, inclusive of legal fees, involved in
handling such delinquency.  The late payment fee shall be the greater of five
percent (5%) of the amount delinquent, or $100.00, plus interest at the rate
of eighteen percent (18%) per annum or the maximum rate which can be legally
charged, whichever is less, on the entire delinquent sum from its due date
until paid, which amounts shall be payable as Additional Rent.

6.     RENT ADJUSTMENT.

       A.     OPERATING COSTS.  Operating Costs for the Building shall be
determined on an accrual basis for calendar year by taking into account on a
consistent accounting basis all costs of management, maintenance, and operation
of the Building, including, but not limited to, the costs of cleaning,
utilities, water, air conditioning, heating, plumbing, elevator service,
insurance and general maintenance contracts, costs of maintaining lawns, drives
and parking areas, costs amortized over at least a five-year period for capital
improvements designed to conserve energy or expected to reduce Operating Costs
property taxes and special assessments against the Building, plus this
Building's allocate share of all costs of maintaining and insuring common area
within Corporate Woods, and all taxes and special assessments against such
common areas, plus all other costs which can properly be considered operating
expenses for the Building, but excluding costs of capital improvements (other
than those amortized over at least a five.-year period for capital improvements
designed to conserve energy or expected to reduce Operating Costs), alterations
for Tenants, leasing commissions, advertising, depreciation, interest, income
taxes and administrative costs not specifically incurred in the management and
operation of the Building.

       B.     PROJECTED OPERATING COSTS.  Whenever Landlord determines that
projected Operating Costs ("Projected Operating Costs") attributable to the
Leased Premises pursuant to the terms and provisions of this Lease during any
calendar year will exceed the Operating Stop, Tenant shall pay to Landlord as
Additional Rent, monthly, that portion of the Projected Operating Costs for the
current calendar year, retroactive to January 1 of such calendar year, equal to
one-twelfth (1/12) of the amount by which the Projected Operating Costs for the
Leased Premises during the current calendar year exceed the Operating Stop.  Any
adjustment in Projected Operating Costs shall not cause an adjustment in the
monthly Base Rent or the Operating Stop for the Leased Premises.  Notice of any
adjustment in Projected Operating Costs for the Leased Premises shall be given
Tenant on or before April 1st of the year for which such adjustment is
effective, or as soon thereafter as Landlord has determined the amount of such
adjustment, if any, and any increase in the monthly payment toward the Projected
Operating Costs in excess of the Operating Stop for the Leased Premises prior to
the giving of such notice, after deducting all prepayments thereon made by
Tenant, if any, shall be due in a lump sum as Additional Rent within ten (10)
days after receipt of Landlord's statement therefor.

       C.     INTERIM ADJUSTMENT.  If at any time during the Lease Term,
Landlord determines that the Projected Operating Costs attributable to the
Leased Premises during any calendar year are anticipated to be in excess of the
last Projected Operating Costs submitted to Tenant,


                                      4

<PAGE>

Landlord may provide Tenant with a revised summary of Projected Operating
Costs for such calendar year and advise Tenant of the sum by which Projected
Operating Costs exceed the last Projected Operating Costs submitted to
Tenant.  In such event, Tenant shall pay to Landlord monthly during such
calendar year as Additional Rent, a sum equal to one-twelfth (1/12) of the
sum by which the Projected Operating Costs, as reflected in the revised
summary, exceed the last Projected Operating Costs submitted to Tenant.
Tenant shall also pay to Landlord as Additional Rent, one-twelfth (1/12) of
such sum for each month or fractional month of the calendar year which has
elapsed as of the date of such notice.

       D.     YEAR END ADJUSTMENT.  Upon completion of each calendar year,
Landlord shall determine the Operating Costs for such calendar year and shall
advise Tenant of such actual figures by April 1 of the following calendar year
exceed the total of Operating Stop and all additional payments of Projected
Operating Costs for such calendar year, such excess shall be due in a lump sum
as Additional Rent within ten (10) days after receipt of Landlord's statement
therefor.  If the Operating Costs for the Leased Premises for any calendar year
exceed the Operating Stop, but are less than the total of the Operating Stop and
all additional payments of Projected Operating Costs for such calendar year,
Landlord shall credit such excess against any unpaid Rent then due hereunder,
but if none, at Tenant's option, Landlord shall either refund to Tenant the
amount of any excess payment of Rent, or credit such excess against the next
maturing installment of Rent due hereunder.  If the Term of this Lease shall end
during any calendar year in which Additional Rent is due hereunder, Tenant's
obligation to pay Additional Rent shall be applicable to only those calendar
months prior to the end of the Lease Term hereunder.  The provisions of this
paragraph shall survive termination of the Lease.

7.     PRORATION OF FIRST AND LAST MONTH'S RENT.

       A.     Tenant shall not be obligated to pay Rent hereunder until delivery
of possession of the Leased Premises is tendered by landlord unless otherwise
herein provided.  Delivery of possession of the Leased Premises to Tenant shall
be deemed to have been made when the Leased Premises have been substantially
completed in compliance with and subject to the provisions of Section 13 hereof
and the Leased Premises are tendered to or made available to Tenant for the
installation of its fixtures and equipment.  In the event delivery of possession
is made on a day other than the first day of a calendar month, all Rent provided
for herein shall be prorated for said month on a daily basis by taking the
annualized rent, dividing it by 365 to establish the daily Rent, and then
multiplying the daily Rent times the actual days following the delivery of
possession included within such month.

       B.     If the Lease Term ends on any date other than the last day of a
month, whether by expiration of the state Lease Term or otherwise, all Rent
provided for herein shall be prorated for such month on a daily basis by taking
the annualized rent, dividing it by 365 to establish the daily Rent, and then
multiplying the daily Rent times the actual days included within such month.

8.     USE.

       Tenant agrees that it shall use the Leased Premises solely for general
office use and for no other purpose.  Tenant agrees that it will not do or
permit anything to be done in or about the


                                      5

<PAGE>

Leased premises or in the Building or in Corporate Woods which will in any
way obstruct or interfere with the rights of any other tenant or occupant of
the Building or Corporate Woods, or injure or annoy them or disturb their
quiet enjoyment, or interfere with any services to be provided to any common
areas or to any other tenant within the building or Corporate Woods, or use
or allow the Leased Premises to be used for any improper, immoral, unlawful
or objectionable purpose, or in any manner which might injure or tend to
injure, impair or tend to impair, the character, reputation or appearance of
the Building, Corporate Woods, or any part thereof or which may invalidate or
increase the premium cost of any insurance carried on the building.  Tenant
shall not commit waste in, on or about the Leased Premises, the Building or
Corporate Woods.

9.     SERVICES.

       A.     So long as Tenant is not in default under this Lease within the
limitations hereinafter set forth, Landlord shall furnish Tenant during the
Lease Term with the following services:

              (i)    Normal Business Hours: Landlord shall operate the Building
       during normal business hours ("Normal Business Hours") which shall be
       Monday through Friday, from 8:00 a.m. to 6:00 p.m., and on Saturday from
       8:00 am. to 1:00 p.m., exclusive of holidays.

              (ii)   Water:  Landlord shall supply to the common areas of the
       Building warm and cold water as reasonably necessary for normal drinking,
       lavatory, toilet and cleaning purposes.

              (iii)  Elevator:  Landlord shall supply appropriate elevator
       services for the Building during Normal Business Hours and at all other
       times shall provide what Landlord deems to be sufficient elevator
       service, subject always to reasonable security requirements, to permit
       Tenant reasonable access to the Leased Premises.

              (iv)   HVAC: Landlord shall supply to the common areas and to the
       Leased Premises, on a year-round basis during Normal Business Hours,
       heat, ventilation and air conditioning, on a reasonable basis, through
       the heating, ventilating and air conditioning systems of the Building, at
       such temperatures and in such amounts as are considered by Landlord to be
       standard or as required by governmental authority.  Landlord further
       agrees to provide upon prior written request from Tenant to Landlord,
       prior to 3:00 p.m. of the preceding business day, heating or air
       conditioning services for the Leased Premises at times other than as
       above specified, but Tenant shall pay as Additional Rent, the entire cost
       of such additional services, based upon an hourly rate determined by
       Landlord.

              (v)    Electricity:  Landlord shall supply electrical power to
       meet normal electrical power needs for normal office uses during Normal
       Business Hours including power for standard lighting or other lighting
       approved by Landlord, typewriters, dictating equipment, calculating
       machines, personal computers and other machines of similar low electrical
       consumption, but not including electricity required for any item of
       electrical


                                      6

<PAGE>

       equipment which singularly consumes more than .25 kilowatts per hour
       at rated capacity or requires voltage other than 120 volts single
       phase.  Landlord may cause the Leased Premises to be separately
       metered or submetered, and from time to time, Landlord may at its
       option, cause a qualified electrical engineer or consultant to make an
       electrical usage analysis of the Leased Premises, all at Tenant's
       cost, which costs shall be due and payable upon demand as Additional
       Rent.  If Tenant's electrical usage as determined either by metering,
       submetering or an electrical usage survey exceeds the normal
       electrical usage to be provided by Landlord hereunder, Tenant shall
       pay monthly as Additional Rent the entire cost of providing such
       excess electricity.

              (vi)   Maintenance:  Landlord shall provide routine maintenance
       and electric lighting service (including lamp replacement), for all
       common area and service area of the Building and Corporate Woods in the
       manner and to the extent deemed by Landlord to be standard; and lamp
       replacement for all standard fluorescent light fixtures in the Leased
       Premises necessary to maintain the lighting provided by Landlord as a
       part of the improvements.  In addition, solely at Tenant's cost, Landlord
       agrees to replace lamps in any non-standard light fixtures installed in
       the Leased Premises with Landlord's consent, using lamps supplied by and
       at the cost of Tenant.

              (vii)  Security:  Landlord shall provide security in the form of
       limited access to the Building during other than Normal Business Hours,
       in such form as Landlord deems appropriate.  Landlord shall have no
       liability to Tenant, its employees, agents, invitees or licensees for any
       losses resulting from theft or burglary, or for damages done by persons
       on the Leased Premises and Landlord shall not be required to insure
       against any such losses.  Tenant shall fully cooperate with Landlord's
       efforts to maintain security in the Building and within Corporate Woods
       and Tenant shall follow and shall cause its agents and employees to
       follow all regulations promulgated from time to time by Landlord with
       respect thereto.

              (viii) Janitorial:  Landlord shall furnish to the common areas and
       to the Leased Premises, reasonable janitorial services and normal trash
       removal five (5) times weekly, exclusive of Saturdays, Sundays and
       holidays, compatible with other office buildings within Corporate Woods.

       B.     If at any time or from time to time Tenant requires, requests or
obtains any additional work or services of any type in excess of those required
to be supplied by Landlord, or if Tenant installs or causes Landlord to install
any floor covering, lighting or other improvements which require any special
care or treatment, Landlord may furnish such additional work or service to
Tenant upon reasonable notice, and Tenant shall pay to Landlord all additional
costs associated therewith, including a reasonable administrative or overhead
charge by Landlord, as Additional Rent, upon being billed therefore, and the
costs of such additional work or services billed directly to Tenant shall be
excluded from Operating Expenses.

       C.     Landlord does not warrant that any of the services referred to
above, or any other services which Landlord may supply to the Building or the
Leased Premises, will be free from interruption.  Landlord shall not be
responsible or liable for any damage, loss or inconvenience resulting from
failure to furnish any of the above services or any other services which
Landlord


                                      7

<PAGE>

agrees to provide to the extent such failure is caused by acts of God,
strikes, lockouts, embargoes, material shortages, war, accidents or other
conditions reasonably beyond Landlord's control, or to the extent caused by
maintenance, inspections, repairs, alterations, changes or improvements in
any part of the Building, or in Corporate Woods, or to the extent caused by
the failure of outside agencies to furnish such services.  No failure to
provide any such service or services shall constitute an eviction nor entitle
Tenant to any reduction, offset, discontinuance or delay in the payment of
any Rent or Additional Rent.

       D.     Tenant shall pay for the installation, use and maintenance of all
of its telephone and other communication services, subject to Landlord's right
to direct and approve the location and method of installation of all wires and
other equipment which are to be installed in the Building.  Tenant shall have no
right to install any portion of any such installation, other than normal wiring,
outside of the Leased Premises.

10.    REPAIRS, MAINTENANCE AND ALTERATIONS.

       A.     Landlord agrees to maintain the structure, roof, exterior walls,
exterior doors, exterior windows, public restrooms, elevators, all plumbing,
heating, air conditioning and similar equipment and the corridors of the
Building of which the Leased Premises is a part, and the grounds and parking
areas serving the Building, and the common areas within Corporate Woods in good
repair, provided, however, that if any repairs to any part of the Building or
any such equipment installed in or used in connection with the Building or any
of the grounds or parking areas serving the Building or any common areas of
Corporate Woods is necessitated by the negligent act or omission of Tenant, its
employees, agents, contractors, customers, guests, licensees or invitees, Tenant
shall immediately reimburse Landlord for the cost thereof upon demand, as
Additional Rent, and such reimbursed costs shall be excluded form the Operating
Costs.

       B.     Tenant shall make no alterations, improvements or changes to the
Leased Premises, the Building or Corporate Woods or install any vending machines
on the Leased Premises without Landlord's prior written consent.  Unless
Landlord shall otherwise agree in writing, all maintenance, alterations,
replacements, repairs, improvements or changes to which Landlord may consent
shall be done either by or under the direction of Landlord, but at the sole cost
of Tenant and only pursuant to such plans, specifications and agreements as are
approved by Landlord.  By consenting to or approving any plans, specifications
and agreements for any alterations, improvements or changes which Tenant desires
to make to the Leased Premises, Landlord does not warrant and shall assume no
responsibility or liability for the completeness, design sufficiency, or
compliance of such plans with all applicable laws, rules and regulations of
governmental agencies or authorities.

       C.     Tenant shall be responsible for the Leased Premises and at
Tenant's cost, shall keep it in a safe, neat and attractive condition.  Tenant
shall pay for all redecoration, remodeling, alteration and painting of the
Leased Premises desired by Tenant which are approved by Landlord.  Tenant shall
also pay for the repair and maintenance during the Lease Term of all special
equipment or improvements installed in the Leased Premises, including, but not
limited to, supplemental air handling units, dishwashers, icemakers, disposals,
showers, sinks,


                                      8

<PAGE>

commodes, parquet floors, glass walls or sidelights and other similar
equipment or improvements.

       D.     Tenant covenants and agrees to reimburse Landlord for all costs
and expenses incurred by Landlord to repair or replace any damage done to
Corporate Woods, the Building, the Leased Premises, or any part of any of such
property, caused by Tenant or Tenant's agents, employees, invitees, of visitors
and such repairs shall restore the damaged property to as good a condition as it
was in prior to such damage, and shall be effected in compliance with all
applicable laws, ordinances, rules and regulations, and Tenant shall pay the
cost thereof to Landlord on demand as Additional Rent.  The Tenant shall not
contract for any work or service which might interfere with Landlord's
employees, agents or contractors doing work or performing services for the
benefit of the Building or the Leased Premises.  Any and all alterations to the
Leased Premises shall become the property of Landlord upon termination of this
Lease (except for movable equipment or furniture; owned by Tenant), provided,
however, that Landlord may solely at its option, require Tenant to remove at the
end of the Lease Term, any and all leasehold improvements designated by Landlord
and all fixtures, equipment and other property installed on or in the Leased
Premises by Tenant and to thereafter restore the Leased Premises to the
condition required by Section 36 hereof.  In the event that Landlord so elects,
and Tenant fails to remove any such leasehold improvements, fixtures, equipment
or property, Landlord may remove such at Tenant's cost, with no obligation on
the part of Landlord to preserve or store any such removed improvements,
fixtures, equipment or property, and Tenant shall pay Landlord on demand as
Additional Rent, all costs incurred by Landlord in removing such and restoring
the Leased Premises as hereinabove provided.

11.    LIENS.

Tenant shall not under any circumstances permit any mechanics', materialmen's,
laborers' or other liens to be placed upon the Leased Premises, the Building, or
Corporate Woods and nothing in this Lease shall be deemed or construed in any
way as constituting the consent or request of Landlord, express or implied, by
inference or otherwise, to any person for the performance of any labor or the
furnishing of any materials to the Leased Premises, the Building or Corporate
Woods, or any part thereof, nor as giving Tenant any right, power, or authority
to contract for or permit the rendering of any services or the furnishing of any
materials that would give rise to any mechanics', materialmen's, laborers' or
other liens against the Leased Premises, the Building or Corporate Woods.  In
addition to any and all other rights or remedies then available to Landlord,
Landlord may, but shall not be obligated to, discharge any such lien, without
obligation to determine the propriety of the lien amount.  In the event any such
lien is attached to the Leased Premises, the Building or Corporate Woods, or in
the event anyone attempts to attach any such lien on any part of the Leased
Premises, the Building or Corporate Woods, then forthwith upon notice from
Landlord, Tenant shall cause such lien to be released.  Tenant hereby
indemnifies and agrees to hold Landlord harmless from all costs and expense,
including payment to Landlord of all costs and expenses, including but not
limited to legal fees incurred by Landlord and all costs incurred by Landlord to
discharge such lien and any amount paid by Landlord for any of the aforesaid
purposes shall be paid by Tenant to Landlord on demand as Additional Rent.


                                      9

<PAGE>

12.    ASSIGNMENT AND SUBLETTING.

       A.     Tenant shall not sell, assign, transfer or encumber this Lease, or
any interest herein, voluntarily or involuntarily, by operation of law or
otherwise, or sublet the Leased Premises or any part thereof, or allow any other
occupant to coma in,.  with or under Tenant, or use or occupy any portion of the
Leased Premises, or permit this Lease or the leasehold estate created hereby to
become vested in or owned by any person, firm or corporation by operation of law
or otherwise, without in every instance, first obtaining the prior written
consent of Landlord.  If Tenant is a corporation, the sale or transfer of fifty
percent (50 %) or more of the stock of Tenant, (exclusive only of those shares
of Tenant which are traded on any regulated securities exchange after such
transfers) shall constitute an assignment of this Lease for the purposes of this
paragraph.  If Tenant is a partnership, any change in control of the general
partnership interest of Tenant shall constitute an assignment of this Lease for
the purposes of this paragraph.  Any breach of the foregoing provisions shall
constitute a breach hereof, and Landlord may, at its option, at any time
thereafter, declare Tenant to be in default hereunder.

       B.     If Tenant shall request Landlord's consent to an assignment of
this Lease or to a subletting of the whole or any part of the Leased Premises,
Tenant shall submit to Landlord with such request, the name of the Proposed
assignee or subtenant, such information concerning its business, financial
responsibility and standing as Landlord may reasonably require, and a complete
disclosure of all consideration to be paid for and the effective date of the
proposed assignment or subletting.  Upon receipt of such request and all such
information by Landlord, it shall have the right, exercisable by notice in
writing to Tenant within fourteen (14) days thereafter, (i) if the request is
for an assignment or a subletting of all the Leased Premises, to cancel and
terminate this Lease; or (ii) if such request is to sublet a portion of the
Leased Premises only, to cancel and terminate this Lease with respect to such
portion.  If Landlord exercises its rights hereunder, the effective date of such
cancellation shall be set forth in Landlord's notice to Tenant, but such date
shall not be earlier than the effective date of the proposed assignment or
subletting nor later than ninety (90) days thereafter.  Further, Tenant shall
continue to pay to Landlord all Rent as herein otherwise provided, until the
effective date of such cancellation, on which date Tenant shall surrender to
Landlord, possession of the Leased Premises or the portion thereof subject to
such cancellation.  If this Lease shall be canceled as to a portion of the
Leased Premises only, then Tenant's obligations to pay Rent as herein otherwise
provided, shall be abated proportionately from and after the effective date of
such cancellation, and Tenant shall pay to Landlord all costs incurred to
construct an appropriate demising wall separating the canceled portion of the
Leased Premises from the remainder of the Leased Premises.

       C.     If Tenant requests Landlord's consent to an assignment or
subletting of this Lease, and if Landlord elects to consent thereto, an
amount equal to any consideration other than rent paid Tenant by the assignee
or subtenant for or in connection with such assignment or subletting shall be
payable forthwith by Tenant to Landlord as Additional Rent.  If Tenant
requests and obtains Landlord's consent to an assignment or subletting of all
of the Leased Premises, the Rent attributable to the Leased Premises so
assigned or sublet during each month of the term of such assignment or
subletting, shall be the greater of the Rent attributable thereto then
payable under this Lease, or the Rent to be paid Tenant by its subtenant or
assignee for the Leased Premises. If Tenant requests and obtains Landlord's
consent to an assignment or


                                      10

<PAGE>

subletting of less than all of the Leased Premises, the Rent attributable to
that portion of the Leased Premises so assigned or sublet during each month
of the term of such assignment or subletting, shall be the greater of the
Rent attributable thereto then payable under this Lease (calculated on a pro
rata basis based upon the net rentable square fee to so subleased or assigned
as it relates to the total net rentable square feet in the Leased Premises),
or the Rent to be paid Tenant by its subtenant or assignee for such subleased
or assigned portion of the Leased Premises.

       D.     If Tenant wishes to assign or sublet all or any portion of the
Leased Premises, and wishes to use a real estate broker to secure such assignee
or subtenant, Tenant agrees to use the real estate broker then representing
Landlord in Corporate Woods as Tenant's exclusive agent or such purposes, and to
continue to use such broker so long as it is diligently seeking as assignee or
subtenant for such space.  Tenant shall not directly or indirectly advertise or
permit anyone else to advertise the Leased Premises, or any portion of it, as
being available for sublease or assignment, unless otherwise agreed to in
writing by Landlord.

       E.     Any permitted assignment or subletting shall be only for the uses
herein permitted and otherwise upon and subject to all the terms, provisions,
covenants and conditions contained in this Lease and, notwithstanding Landlord's
consent thereto, Tenant and all guarantors, hereunder, if any, shall continue to
be and remain liable hereunder.

       F.     Any person, firm or corporation which enters into possession of
all or any portion of the Leased Premises, either with or without Landlord's
prior written consent, by such act, shall be deemed to have assumed as a joint
obligor with Tenant and unconditionally guaranteed the timely performance of all
of Tenant's obligations under this Lease, including but not limited to the
payment of all Rent and other payments which become due and payable to Landlord
hereunder, whether then due or thereafter accruing, and all damages due
hereunder because of any default by Tenant hereunder or breach of this Lease.
Acceptance of Rent or any other payment by Landlord from anyone other than
Tenant who is in possession of all or any portion of the Leased Premises, or any
notice or demand made by Landlord to anyone other than Tenant who has entered
into possession of all or any portion of the Leased Premises in violation of the
terms of this Lease shall not be deemed to be a waiver, consent or approval by
Landlord of such breach or a consent to or approval of such person, firm or
entity entering into such possession.

13.    CONSTRUCTION OF IMPROVEMENTS.

Prior to the commencement of the Lease Term, Landlord agrees to cause the Leased
Premises to be improved in accordance with the plans, specifications, and
agreements approved by Landlord and Tenant and which are attached hereto as
"Exhibit B" and made a part of this Lease.  Landlord shall not be obligated to
construct or install any improvements or facilities of any kind other than those
called for by Exhibit B.  The total cost of constructing the improvements as
outlined in Exhibit B hereof shall be borne by Landlord up to but not exceeding
$6,866.00.  Tenant shall be advised of any projected costs in excess of such
amount and Tenant agrees to pay Landlord at least fifty percent (50%) of any
projected costs exceeding such amount prior to commencement of the construction
of improvements and within ten (10) business days after Tenant is advised in
writing of such sum, unless otherwise agreed to in writing by Landlord.  The
balance of any costs exceeding such amount shall be paid to Landlord upon
substantial


                                      11

<PAGE>

completion of the Leased Premises within ten (10) business days after Tenant
is advised in writing of the balance due.  Landlord agrees to commence and
complete the construction of the improvements called for by Exhibit B in a
timely manner.

14.    ACCEPTANCE OF LEASED PREMISES.

Tenant's taking possession of the Leased Premises shall be evidence that the
Leased Premises were in good order and satisfactory condition when the Tenant
took possession, provided however that within thirty (30) days after substantial
completion pursuant to Section 7 hereof, Tenant may prepare a punchlist which
sets forth any incomplete item required by Exhibit B, and Landlord agrees to
thereafter in a timely manner commence to complete all such items set forth on
the punchlist as soon as reasonably possible.  Tenant has agreed to accept the
Leased Premises in an "as is" condition except as herein otherwise provided, and
Landlord shall have no obligation to alter, remodel, repair or improve the
Leased Premises or the Building and no representations respecting the condition
of the, Leased Premises or the Building have been made by Landlord to Tenant,
other than as may be contained herein.

15.    COMPLIANCE WITH APPLICABLE LAWS AND INSURANCE REQUIREMENTS.

       A.     During the Lease Term, Tenant shall not use or occupy, or permit
any portion of the Leased Premises, the Building or Corporate Woods to be used
or occupied, (a) in violation of any law, ordinance, order, rule, regulation,
certificate of occupancy, or other governmental requirement, or (b) for any
disreputable business or purpose, or (c) in any manner or for any business or
purpose which creates risks of fire or other hazards, or which in any way
violates, suspends, voids, or increases the cost of any fire or liability or any
other insurance coverage of any kind carried by Landlord upon all or any part of
the Building, its contents or Corporate Woods.  Tenant, at Tenant's expense,
shall comply with all present and future laws, ordinances, orders, rules,
regulations, and other governmental requirements of all federal, state, county
and municipal authorities relating to the use, condition or occupancy of the
Leased Premises, and all rules, orders, regulations and requirements of any
board of fire underwriters or insurance service office or any other similar
body, having jurisdiction over the Building.

       B.     Tenant shall not do or commit, or permit to be done or committed,
any act or thing which might cause any policy or policies of insurance written
in connection with the Building or the property therein, or Corporate Woods, to
become void or suspended or which might cause the insurance risk an the
Building, or the property therein, or Corporate Woods, to be rendered more
hazardous or otherwise increase the rate of premium for any such insurance over
the rate in effect on the Commencement Date.  Tenant shall pay to Landlord on
demand as Additional Rent, the amount of any increase in premiums for the
Building and Corporate Woods caused by any breach of this covenant.

16.    INDEMNITY.

Landlord shall not be liable to Tenant, or to Tenant's agents, servants,
employees, customers, or invitees for any injury to person or damage to property
caused by any act, omission, or negligence of Tenant, its agents, servants,
employees, invitees, licensees or any other person


                                      12

<PAGE>

entering the Leased Premises, the Building or Corporate Woods under the
invitation of Tenant ("Invitees") or arising out of the use of the Leased
Premises, the Building or Corporate Woods by Tenant or its Invitees or
arising out of the conduct of Tenant's business or out of a default by Tenant
in the performance of any of its obligations hereunder.  Tenant hereby
indemnifies and agrees to save Landlord harmless from and against all claims,
liability or expense, including reasonable attorney's fees, arising from the
use or occupation of the Leased Premises by Tenant or anyone on the Leased
Premises with Tenant's permission, or form any breach of this Lease.

17.    INSURANCE, LOSS, DAMAGE, REIMBURSEMENT.

       A.     TENANT'S INSURANCE REQUIREMENTS.  Tenant shall maintain at its own
cost and expense:

              (i)    Comprehensive general liability insurance on an occurrence
       basis naming both Landlord and Tenant as insureds covering claims and
       liabilities for injury or damage to persons or property or for the loss
       of life or property occurring upon, in or about the Leased Premises,
       caused by or resulting from any act or omission of Tenant, its employees,
       agents, contractors, customers, guests, licensees or invitees, such
       insurance to afford minimum protection during the Lease Term in such
       amounts as Landlord shall from time to time designate by written notice
       to Tenants, but in no event less than $1,000,000 combined single limit
       coverage for bodily injury, death, property damages or a combination
       thereof;

              (ii)   Workmen's Compensation and Employer's Liability Insurance
       in accordance with the laws of the State of Kansas;

              (iii)  Fire insurance in an amount adequate to cover the cost of
       replacement of all equipment, installations, fixtures and contents in the
       Leased Premises, including leasehold improvements paid for by Tenants, in
       the event of loss or damage by fire and against loss or damage by other
       risks now or hereafter embraced by so-called "Extended Coverage", with
       protection against vandalism, malicious mischief and sprinkler leakage;
       and

              (iv)   When required by Landlord, such other insurance against
       other insurable hazards and in such amounts as may from time to time be
       commonly and customarily insured against and are generally available for
       tenants in first class office buildings in the City of Overland Park,
       Kansas.

All of the above insurance may be affected by one or more policies (which may
cover the Leased Premises and other locations), but shall be issued by insurers
of recognized responsibility reasonably acceptable to Landlord, and each such
policy shall contain a provision whereby the insurer agrees not to cancel or
terminate such coverage without at least ten (10) days prior written notice to
Landlord, and that no act or omission to act of any of the named insureds will
invalidate such insurance as to the other named insureds.

       B.     WAIVER OF LIABILITY FOR DAMAGES.  Landlord, its agents, servants
and employees shall not be liable for any injury or damage to persons or
property resulting from fire, explosion,


                                      13

<PAGE>

falling plaster, steam, gas, electricity, water, rain, snow, earthquakes, or
leaks from any part of the Building, or from the pipes, appliances or
plumbing works or from the roof, street or subsurface or from any other place
or by dampness or by any other cause of whatsoever nature, unless caused by
or due to the gross negligence or willful misconduct of Landlord, and Tenant
does hereby expressly waive any consequential damages, compensation or claims
for inconvenience or loss of business, rents or any profits as a result of
any such injury or damage.

       C.     WAIVE OF SUBROGATION.  Landlord and Tenant each hereby waives on
behalf of itself and its insurers (none of which shall ever be assigned any such
claim or be entitled thereto due to subrogation or otherwise) any and all rights
of recovery, claim, action, or cause of action, against the other, its agents,
officers, servants, partners, shareholders, or employees, and against every
other tenant in the Building who shall have executed a similar waiver as set
forth in this Section, and the agents, officers, servants, partners,
shareholders and employees of each such other tenant, for any loss or damage
that may occur to the Leased Premises, or any improvements thereto, or the
Building or any improvements thereto, or any personal property of such party
therein, by reason of fire, the elements, or any other cause or origin, which is
insured against under any insurance policy actually being maintained from time
to time, even if not required hereunder, or which would be insured against under
the terms of any insurance policy required to be carried or maintained
hereunder, whether or not such insurance coverage is actually being maintained
by Tenant and regardless of the cause or origin, including in every instance
negligence of the other party hereto, its agents, officers, or employees, or the
negligence of any other tenant in the Building who shall have executed a similar
waiver, or its agents, servants or employees.  Landlord and Tenant each agree to
cause appropriate clauses to be included in all of their insurance policies
necessary to implement the foregoing provisions.

       D.     REIMBURSEMENT OBLIGATION OF TENANT.  Tenant shall reimburse
Landlord for all expense, damages and fines incurred or suffered by Landlord by
reason of any breach, violation or nonperformance by Tenant, or its agents,
servants or employees, of any covenant or provision of this Lease, or by reason
of damage to persons or property caused by moving property of or for Tenant in
or out of the Building, or by the installation or removal of furniture or other
property of or for Tenant, or by reason of or arising out of the carelessness,
negligence or improper conduct of Tenant, or its agents, servants or employees,
in the use or occupancy of the Leased Premises or the Building or Corporate
Woods.

       E.     TENANT NOTICE OBLIGATIONS.  Tenant shall give Landlord immediate
notice in case of fire or accidents in the Leased Premises or in the Building.
Tenant shall give Landlord prompt notice if any of the insurance coverage and
the clauses required to be included in each of Tenant's insurance policies
pursuant to the provisions of this Section cannot be obtained.  Tenant shall
give Landlord immediate notice of any cancellation or change of the terms of any
such policy which would affect any such clause or naming.

       F.     EVIDENCE OF INSURANCE.  On or before the Commencement Date Tenant
shall furnish Landlord with a certificate or certificates evidencing the
aforesaid insurance coverage, or a copy of the actual insurance policy providing
such insurance coverage.  Renewal policies or certificates therefor shall be
furnished to Landlord at least thirty (30) days prior to the expiration date of
each policy theretofore furnished to Landlord.


                                      14

<PAGE>

18.    LANDLORD'S USE OF BUILDING.

Landlord reserves the exclusive right to use the Building of which the Leased
Premises is a part, and every Pad thereof, except the interior of the Leased
Premises, for promotional purposes.  Landlord reserves the right at all
reasonable times to enter and be upon the Leased Premises for the purpose of
examining same, to show the same to prospective purchasers and mortgagees, for
cleaning, and to evaluate the need for repairs, alterations, additions,
installations and removals as Landlord may deem proper or useful for serving the
Leased Premises or the Building, and to enter and be upon the Leased Premises,
through its agents, employees and contractors, at all reasonable times to
repair, maintain, alter, improve and remodel the Leased Premises or the
Building, or carry out any provision of this Lease, but Landlord shall to the
extent reasonably possible, exercise such rights in a manner which will not
unreasonably interrupt or interfere with Tenant's use and occupancy of the
Leased Premises.  Tenant shall not be entitled to any compensation, damages, or
abatement or reduction in rent on account of any such repairs, maintenance,
alterations, improvements, remodeling or entry upon the Leased Premises as
herein permitted.  For a period of one hundred eighty (180) days prior to the
expiration of this Lease, Landlord shall have the right to enter upon the Leased
Premises at all reasonable times and exhibit the same to prospective tenants.

19.    DAMAGE OR DESTRUCTION.

       A.     If the Leased Premises or the Building is substantially and
materially damaged by fire or other casualty, so that all or any portion of the
Leased Premises is untenantable, even if the Leased Premises are not actually
damaged, Landlord may, at its option, exercisable within ninety (90) days after
the date of such damage, elect by written notice to Tenant either to repair and
restore the same or to terminate this Lease.

       B.     If Landlord shall elect under Paragraph A above to repair or
restore the Leased Premises, or the Building, Landlord shall do so as promptly
as reasonably possible, and this I as shall remain in full force and effect
during the making of such repairs, except that if such loss or damage was not
caused in whole or in part by the negligent act of Tenant, its agents,
employees, contractors or licensees, Rent shall abate as follows:

              (i)    If as a result of such damage or destruction the Leased
       Premises is rendered totally untenantable, Rent shall abate from the date
       of such damage or destruction until the Leased Premises, or any portion
       thereof accepted by Tenant, is ready for occupancy; or

              (ii)   If as a result of such damage or destruction the Leased
       Premises is rendered partially untenantable, and from and after the date
       Landlord restores a portion, but less than all of the Leased Premises to
       tenantable condition, and Tenant with Landlord's written consent elects
       to reoccupy such portion prior to the entire Leased Premises being
       restored to tenantable condition, Rent shall be reduced in the proportion
       that the untenantable square foot area of the Leased Premises bears to
       the total square foot area of the Leased Premises, and such reduction
       shall continue until the damaged or destroyed portion of the Leased
       Premises is ready for occupancy.


                                      15

<PAGE>

The foregoing provisions to the contrary notwithstanding, Landlord's obligation
to repair, replace and restore the Leased Premises shall never exceed the scope
of the work required to be done by Landlord at its cost in originally
constructing the Leased Premises pursuant to Exhibit B, and Landlord shall not
be obligated or required to repair, replace or restore any damage or injury, or
make any repairs to or replacement or restoration of any tenant finish items or
additions or improvements made in or to the Leased Premises by Tenant, or by
Landlord for or on behalf of Tenant, (hereinafter "Tenant Paid Improvements")
which are in excess of the original tenant finish which Landlord was obligated
to provide at its cost pursuant to Section 13 hereof, except to the extent that
the loss or damage of such Tenant Paid Improvements is insured under one or more
insurance policies maintained or paid for by Tenant, and which are payable to
Landlord, but then only to the extent that Landlord does in fact receive such
insurance proceeds and can use such proceeds to repair or replace such damaged
or destroyed Tenant Paid Improvements.

       C.     If Landlord shall elect under Paragraph A above to terminate this
Lease, this Lease shall terminate as of the date of such damage or destruction.

       D.     Anything contained in this Section 19 to the contrary
notwithstanding, if the Building of which the Leased Premises is a part, is
substantially damaged or destroyed by fire or other casualty and Landlord elects
not to repair or rebuild the same, Landlord may, at its option, elect to
terminate this Lease, even though the Leased Premises may not be damaged or
destroyed by such fire or other casualty; and provided further, that if the
Leased Premises are substantially damaged or destroyed by fire or other casualty
at any time when the then remaining Lease Term is less than twelve (12) months
(exclusive of any unexercised renewal options), Landlord may, at its option,
exercised within thirty (30) days after the date of such damage or destruction,
elect to cancel this Lease rather than restore the Leased Premises as herein
provided, in which event Landlord may retain all insurance proceeds payable to
Landlord because of such loss or damage.

       E.     Any notice given hereunder shall be given in the manner
hereinafter provided.

20.    CONDEMNATION.

       A.     If the whole of the Leased Premises shall be taken for any public
or quasi public use under any statute or by right of eminent domain, or by
private purchase in lieu thereof, this Lease shall automatically terminate as of
the date that possession shall be taken by or given to the condemning authority.

       B.     If only a portion of the Leased Premises or the Building of which
it is a part or the site upon which it is located shall be so taken, or if any
or all of the common areas comprising Corporate Woods which directly, materially
and adversely affect the Building are so taken, Landlord, at its option, may
terminate this Lease as of the date that possession shall be taken by or given
to the condemning or acquiring authority, upon giving written notice of
termination to Tenant.  If Landlord elects not to terminate this Lease, it shall
restore the Leased Premises to an architectural unit as nearly like its
condition prior to such taking as shall be practicable; but such work shall not
exceed the scope of the work required to be done by Landlord in originally
constructing the Leased Premises.  Landlord shall notify Tenant of its election
either to terminate or to restore not later than ninety (90) days after the
effective date of the after any such taking.  If this Lease is not terminated,
in connection with any condemnation or sale in lieu of


                                      16

<PAGE>

condemnation as hereinbefore provided, all of the terms of this Lease shall
continue in effect, provided however, that if any portion of the Leased
Premises has been taken, then the Rent, or a fair and just proportion
thereof, according to the nature and extent of the taking of the Leased
Premises, shall be suspended or abated.

       C.     All compensation awarded or paid upon a total or partial taking of
the Leased Premises, the Building or any common area of Corporate Woods shall
belong to and be the property of Landlord without any participation by Tenant;
provided, however, that nothing contained herein shall be construed to preclude
Tenant from prosecuting any claim directly against the condemning authority in
such condemnation proceedings for low of business, depreciation to, damage to,
cost of removal of, or for the value of, stock and trade fixtures, furniture and
other personal property belonging to Tenant, and for any relocation allowance or
award, so long as such claim, allowance or award shall not diminish or otherwise
adversely affect Landlord's award.

21.    ABANDONMENT.

If Tenant shall vacate or abandon the Leased Premises or if Tenant should refuse
or fail to take possession of the Leased Premises at the Commencement Date,
Tenant shall be deemed to be in default hereunder, and Landlord shall have the
right to enter upon the Leased Premises and exhibit it to prospective lessees
without notice, and to exercise all of Landlord's rights provided hereunder in
event of a default hereunder.

22.    PARKING.

Tenant shall be entitled to use and to permit its employees, agents,
contractors, customers, guests and invitees to use Tenant's pro rata share of
all parking spaces provided by Landlord for the Building, in the parking lots
provided for the Building or as otherwise designated by Landlord, subject always
to all applicable rules and regulations.  In order to keep all required
firelanes open, to protect persons and property from injury or damage due to
fire or other casualty, to avoid unreasonably interfering with the rights of
Landlord and other tenants within Corporate Woods, and their respective
employees, agents, contractors, customers, guests and invitees, to keep all
driveways, aisles, entry ramps, roadways, sidewalks and parking areas available
for their intended uses, to provide suitable parking for visitors and the
disabled, and to not unreasonably interfere with anyone's ingress and egress to
any building within Corporate Woods, Tenant agrees to restrict the parking of
its motor vehicles and the motor vehicles of all of its employees, agents,
contractors, customers, guests and invitees to only those striped, designated
parking areas provided for the Building, so that all roadways, driveways,
aisles, entry ramps, sidewalks and pedestrian passageways shall remain open and
unobstructed at all times for their intended use, and that those parking spaces
designated as reserved for visitors and the disabled will be available to and
used only by those for whom they are intended.  Tenant shall not park any
vehicles in any parking lot overnight, unless the owner of such car is then
within the Building, without Landlord's prior consent.  Should a motor vehicle
be parked by Tenant or by any of its employees, agents, contractors, customers,
guests and invitees other than in such designated parking areas, or overnight
without Landlord's consent, or otherwise fail to be in compliance with all
applicable rules and regulations, Landlord may remove or cause the removal of
such vehicle from Corporate Woods or to other locations within Corporate Woods
at the cost of the


                                      17

<PAGE>

owner thereof, and Landlord shall not be liable to such owner or any other
person for any loss or damage which may result therefrom.

23.    DEFAULT.

Any failure by Tenant to pay any installment of Base Rent within five (5) days
after its due date, or any failure by Tenant to pay any other Rent or any other
sum of money due hereunder within ten (10) days after notice to Tenant of the
sum due, shall constitute a monetary default ("Monetary Default") under this
Lease.  If apparent Monetary Default exists at any time and if Tenant has not
previously been in actual Monetary Default under this Lease, Landlord will
attempt to advise Tenant, either by telephone or in writing, that such apparent
Monetary Default exists, before Landlord actually gives Tenant notice of default
hereunder.  However, Landlord's right to give actual notice of default under
this Lease shall not be conditional in any manner upon Landlord first advising
Tenant of any such apparent Monetary Default.  Any failure by Tenant to perform
or comply with any other covenant or agreement herein contained (all of which
shall be deemed to be material hereunder) which failure shall continue for a
period of thirty (30) days after written notice thereof is given Tenant shall
constitute a non-monetary default ("Non-Monetary Default") under this Lease.  In
the event of any Monetary Default or Non-Monetary Default hereunder (jointly and
severally "Default"), this Lease shall be in Default.  At any time thereafter
while such Default continues to exist, Landlord may, at its option:

       A.     Terminate this Lease; or

       B.     Effect or pay or perform that obligation as to which the Tenant is
in Default, and the Tenant shall thereupon be indebted to the Landlord for all
amounts so paid or advanced and all costs and expenses incurred in connection
therewith, such indebtedness to be payable on demand as Additional Rent; or

       C.     Re-enter, take possession of the Leased Premises and remove all
persons and property therefrom (any property so removed may be stored in a
public warehouse or elsewhere at the cost of, at the sole risk of loss of and
for the account of Tenant), all without notice or legal process and without
being deemed guilty of trespass, or liable for any loss or damage occasioned
thereby.  If Tenant shall, either before or after Default, voluntarily give up
possession of the Leased Premises to Landlord, or deliver the keys to said
Leased Premises to Landlord, or both, such actions shall be deemed to be in
compliance with Landlord's rights and the acceptance thereof by Landlord or its
agent shall not be deemed to be a termination of this Lease or constitute a
surrender of the Leased Premises, unless Landlord specifically so elects in
writing at such time.  Should Landlord elect to re-enter into possession, or
should it take possession pursuant to legal proceedings or pursuant to any
notice provided by law, it may either terminate this Lease or, without
terminating this Lease, may relet said Leased Premises (or any part thereof)
separately or with any other portion or portions of the Building, for such term
or terms (including a term extending beyond the Term of this Lease), at such
rental or rentals and upon such other terms and conditions as Landlord in it s
sole discretion may deem advisable.  Upon each such reletting all rentals shall
be applied first to the payment of any costs and expenses of such reletting,
including brokerage fees, attorney's fees and costs of any alterations and
repairs which Landlord, in its sole judgment, deemed necessary in connection
with such reletting (if


                                      18

<PAGE>

leased in whole or in part with other space in the building, all such costs
and expenses shall be allocated on a square foot basis); second to the
payment of any indebtedness other than Rent due hereunder from Tenant to
Landlord; third to the payment of rent due and unpaid hereunder; and the
residue, if any, shall be held by Landlord and applied in payment of future
Rent or damage as the same may be come due and payable hereunder.  If such
rentals received from such reletting during any month shall be less than the
Rent to be paid during said month by Tenant hereunder, Tenant shall pay any
such deficiency to Landlord monthly.  No such re-entry or retaking of
possession by Landlord shall be construed as an election by Landlord to
terminate this Lease unless a written notice of such election is given to
Tenant or unless the termination thereof is decreed by a court of competent
jurisdiction. Notwithstanding any such reletting without termination,
Landlord may at any time thereafter elect to terminate this Lease for such
previous breach.

Should this Lease be terminated at any time due to Tenant's Default, Tenant
shall forthwith surrender possession of the Leased Premises to Landlord without
further demand, and Landlord, in addition to any other remedies it may have, may
recover from Tenant all damages it may incur by reason of such breach, including
the costs of recovering the Leased Premises, reasonable attorneys' fees, and the
worth at the time of such termination of the amount of Rent and charges
equivalent to Rent reserved in this Lease for the remainder of the stated term,
all of which amounts shall be immediately due and payable from Tenant to
Landlord as Additional Rent.  In determining the Rent which would be payable by
Tenant hereunder subsequent to Default, the Rent for each year o the unexpired
term shall be equal to the Base Rent provided for the balance of the Lease Term,
plus the average of the total annual Additional Rent and other charges due from
Tenant form the Commencement Date of the then current Term hereof to the time of
default, or for the proceeding three (3) full calendar years, whichever is the
shorter period.

After any such Default, Landlord shall not be obligated to notify Tenant of
the due date of Rent nor demand payment thereof on its due date, the same
being expressly waived by Tenant.  The acceptance of any sums of money from
Tenant after the expiration of any ten (10) day or thirty (30) day notice is
above-provided shall be taken to be a payment on account by Tenant and shall
not constitute a waiver by Landlord of any of its rights hereunder or at law,
nor shall it reinstate this Lease or cure a default on the part of Tenant,
unless Landlord then so agrees in writing.

24.    BROKERAGE COMMISSIONS.

Tenant represents and warrants that it has dealt with no broker, agent or
other person in connection with this transaction other than Jones & Company
Real Estate an Mortgages ("Listing Broker") and that no broker, agent or
other person brought about this transaction, other than the Listing Broker.
Tenant hereby indemnifies and does hereby agree to hold Landlord harmless
from and against any claim by any other broker, agent or other person
claiming a commission or other form of compensation by virtue of having dealt
with Tenant with regard to this leasing transaction.  The provisions of this
paragraph shall survive the termination of this Lease.

                                      19

<PAGE>

25.    WAIVER OF BENEFITS.

Tenant waives the benefits of all existing and future rent control legislation
and statutes and any similar governmental rules and regulations, whether in time
of war or not, to the extent permitted by law.

26.    MISCELLANEOUS TAXES.

Tenant shall pay prior to delinquency all taxes assessed against or levied upon
its occupancy of the Leased Premises, or upon the fixtures, furnishings,
equipment and all other personal property of Tenant located in the Leased
Premises, if nonpayment thereof shall give rise to a lien on any part of the
Building, and when possible Tenant shall cause said fixtures, furnishings,
equipment and other personal property to be assessed and billed separately from
the property of Landlord.  In the event any or all of Tenant's occupancy of the
Leased Premises, shall be assessed and taxed with the property of Landlord,
Tenant shall pay to Landlord its share of such taxes, as determined by Landlord,
within ten (10) days after delivery to Tenant by Landlord of a statement in
writing setting forth the amount of such taxes applicable to Tenant's fixtures,
furnishings, equipment or personal property.

27.    SPRINKLERS.

If there now is or shall be installed in the Building a "sprinkler system" and
such a system or any of its appliances shall be damaged or injured or not in
proper working order by reason of any act or omission of the Tenant, Tenant's
agents, servants, employees, licensees or visitors, the Tenant shall immediately
notify Landlord in writing, and, within a reasonable period after Landlord's
receipt of such notice, Landlord shall have the sprinkler system restored at
Tenant's expense, which costs Tenant shall forthwith pay as Additional Rent upon
receipt of a billing therefor; and if any bureau, department or official of the
state or city government, requires or recommends that any changes,
modifications, alterations, or additional sprinkler heads or other equipment be
made or supplied by reason of the Tenant's business, or the location of
partitions, trade fixtures, or other contents of the Leased Premises, or for any
other reason, or if any such changes, modifications, alterations, additional
sprinkler heads or other equipment, become necessary to prevent the imposition
of a penalty or charge against the full allowance in the fire insurance rate for
a sprinkler system, Landlord shall at the Tenant's expense, promptly make and
supply such changes, modifications, alterations, additional sprinkler head or
other equipment, all of which Tenant shall forthwith pay as Additional Rent upon
receipt of a billing therefor.

28.    RIGHTS AND REMEDIES.

The rights and remedies of Landlord hereunder and any others provided by law
shall be construed as cumulative and no one of them is exclusive of any other
right or remedy.  Such rights and remedies shall further be continuing rights
and remedies, none of which shall be exhausted by being exercised on one or more
occasions.  Landlord shall be entitled to an injunction in proper cases, from
time to time, if sought by Landlord to enforce any part or parts of this Lease
or to prevent or stop any violation or default hereunder on the part of Tenant,
its agents, servants or employees.  A waiver by Landlord of any default, breach
or failure of Tenant to comply with this Lease shall not be construed as a
continuing waiver thereof or as a waiver by


                                      20

<PAGE>

Landlord of its right to enforce the terms of this Lease in the event of any
subsequent default, breach or failure of Tenant to comply with this Lease.
Any failure or waiver of Landlord to terminate this Lease upon the happening
of any event giving Landlord the right or option to terminate this Lease,
shall not be construed as a waiver of the tight of Landlord to terminate this
Lease thereafter, upon the happening of any event giving Landlord the right
or option to terminate this Lease.  Whenever in this Lease Landlord reserves
or is given the right and power to give or withhold its consent to any action
on the part of Tenant, such right and power shall not be exhausted by its
exercise on one or more occasions, but shall be a continuing right and power
for the full term of this Lease.

29.    ATTORNEY'S FEES AND COSTS.

In case suit shall be brought for recovery of possession of the Leased Premises,
or because of the breach of any other covenant or agreement herein contained or
for an interpretation of any provision of this Lease, or for any other reason
involving this Lease, all expenses incurred therefor by the prevailing party,
including a reasonable attorney's fee, shall be paid by the other party.

30.    MEMORANDUM OF LEASE.

Landlord may record this Lease, or a memorandum hereof, at any time, at
Landlord's option.  Tenant shall execute and record a memorandum of this Lease
at any time Landlord so requests.  Tenant shall not record a memorandum of this
Lease at any time, without Landlord's prior written request or consent to do so,
which request or consent can be withheld or granted at Landlord's absolute
discretion.

31.    SUBORDINATION.

This Lease shall be subject and subordinate to all existing or future mortgages
or deeds of trust placed by Landlord on the Building of which the Leased
Premises is a part, or on Corporate Woods; provided, however, that Landlord may,
at its option at any time, by written document duly recorded in the Office of
the Register of Deeds in and for Johnson County, Kansas, cause this Lease to
become superior to any mortgage or deed of trust on the Building, or Corporate
Woods, or any portion thereof.  Further, at Landlord's option, this Lease may be
assigned by Landlord to any mortgages or cestui que trust as additional security
for any loan to Landlord, and Tenant shall acknowledge within ten (10) days
after written request, receipt of notice of each such assignment.  Any such
assignment may be recorded.  Tenant shall, upon notice of any such assignment,
comply with the terms thereof.

32.    ESTOPPEL CERTIFICATE.

Within ten (10) days after Landlord's written request therefor, Tenant shall
without charge, execute a written instrument addressed to Landlord or to any
other person, firm or corporation specified by Landlord, certifying:

       A.     That Tenant has accepted the Lease Premises, is in occupancy, and
is paying rent on a current basis with no off-sets or claims, or if it is not
paying rent on a current basis or does


                                      21

<PAGE>

have off-sets or claims, Tenant shall specify the status of its rental
payments and the basis and amount claimed due as off-sets or claims;

       B.     That this Lease is unmodified and in full force and effect, or if
there has been any modification, that the same is in full force and effect as so
modified, and identifying any such modification;

       C.     Whether or not there are any off-sets or defenses then existing in
favor of Tenant against the enforcement of any of the terms, covenants and
conditions of this Lease, and if so, specifying the same, and also stating that
Landlord has observed and performed all of the terms, covenants and conditions
to be observed and performed by Landlord hereunder, and if not, specifying to
what extent Landlord has not observed or performed all of the terms, covenants
and conditions to be observed and performed by Landlord hereunder; and

       D.     The dates to which monthly Base Rent, Additional Rent and all
other charges equivalent to rent hereunder have been paid.

Such request may be made by Landlord at any time and from time to time during
the term of this Lease.

33.    ASSIGNMENT OF LEASE BY LANDLORD.

Landlord and each party succeeding to Landlord's interest in the Building may
transfer, assign, convey or otherwise dispose of this Lease and in each such
event, from and after the date of such transfer, assignment, conveyance or other
disposition of this Lease, Landlord and each successor shall be free from and
relieved of all covenants and obligations of the Landlord herein and from any
and all liability resulting from any act or omission or event occurring
thereafter.  Each party succeeding to landlord's interest in the Building shall
be deemed to have agreed to assume and carry out any and all of the covenants of
Landlord under this Lease accruing from and after the date such successor
acquires its interest herein, and continuing only for so long thereafter as it
shall hold such interest, all without further agreement between the parties
hereto or their successors in interest.  Tenant shall acknowledge within ten
(10) days after written request, receipt of notice of any such transfer,
assignment, conveyance or other disposition of Landlord's interest herein or in
the Building.

34.    LIMITED LIABILITY OF LANDLORD.

The liability of Landlord and each of its successors for any default by Landlord
(or its successors) under the terms of this Lease shall be limited to such
claims and causes of action which accrue during Landlord's and each of its
successor's respective ownership of the Building, and then shall be limited only
to the interest of Landlord from time to time in the Building, or if the
Building has been sold after such liability accrued but before it is fully
satisfied, then the sale proceeds from the Building, and Tenant agrees to look
solely to Landlord's interest in the Building or the sale proceeds therefrom for
recovery of any judgment against the Landlord, it being intended that neither
Landlord nor its survivors shall have any personal liability for any judgment or
deficiency hereunder.


                                      22
<PAGE>

Any claim which Tenant may have against Landlord hereunder as of the date
Landlord terminates its ownership of the Building, shall be deemed to have
been waived or terminated by Tenant unless Landlord is given notice of such
claim within six (6) months after the date Landlord gives notice to Tenant
that Landlord has terminated its ownership of the Building, provided further
however, that Tenant shall be deemed to have waived or terminated any claim
it may have against Landlord unless Tenant files suit in a court of competent
jurisdiction and timely obtains service of process upon Landlord all within
twelve (12) months after the date Landlord gives notice to Tenant that
Landlord has terminated its ownership of the Building.

35.    TRANSFER OF TENANT.

Landlord shall have the right to transfer the Tenant to other premises within
Corporate Woods so long as the premises to which Tenant is transferred shall
contain net rentable square footage not less than the net rentable square
footage in the Leased Premises, and have tenant improvements similar to or
better than the existing tenant improvements in the vacated space, as
determined by Landlord.  Tenant's occupancy of any premises to which Tenant
may be transferred shall be under all the covenants and agreements of this
Lease and at the same Rent as herein otherwise provided.  Landlord may
exercise its rights hereunder at any time and from time to time during the
Term of this Lease by giving written notice of the exercise thereof to Tenant
at least sixty (60) days prior to that date upon which Tenant is to be
transferred.  If Landlord exercises its rights hereunder, Tenant shall be
reimbursed for reasonable costs and expenses incurred by Tenant in connection
with such transfer.

36.    PEACEABLE SURRENDER.

Upon termination of this Lease, whether by expiration of the Lease Term or
otherwise, Tenant shall peaceably quit and surrender to Landlord the Leased
Premises, broom clean, in good condition and repair, ordinary wear and tear
and damage by fire or other insured casualty excepted, together with all
improvements constructed by Tenant thereon; provided, however, Landlord may
require Tenant to remove all such alterations, improvements or changes to the
Leased Premises and restore the Leased Premises to as good of condition as
existed prior to the commencement of the Lease Term, ordinary wear and tear
and loss by fire or other insured casualty excepted, provided however that if
Landlord does not so elect to cause Tenant to remove all or any portion of
such alterations or improvements or changes, all such designated alterations,
improvements and changes shall become the property of Landlord, and shall
remain upon and be surrendered with the Leased Premises.  If upon termination
of the Lease Term, the Leased Premises are surrendered to Landlord with
damage suffered by fire or any other insured casualty, if Tenant has not
previously assigned to Landlord all of Tenant's rights in and to any
insurance proceeds payable because of such fire or other insured casualty
damage to the Leased Premises, Tenant shall forthwith assign and set over to
Landlord, all of Tenant's right, title and interest in and to all such
insurance proceeds payable because of such fire or other insured casualty,
and Tenant shall cooperate with Landlord as requested by Landlord, in
pursuing any such claim on Landlord's behalf.  If Tenant is not then in
default hereunder, Tenant shall have the right and privilege, and at
Landlord's option, even if Tenant is in default hereunder, the obligation at
the termination of this Lease to forthwith remove any movable office
equipment installed and maintained by Tenant in the Leased Premises and
Tenant shall pay to Landlord to Additional Rent, all costs which would be
incurred by Landlord if Landlord were to repair all


                                      23

<PAGE>

such damage, if any, to the Leased Premises or the Building resulting from
the removal of such property.  Tenant's obligation hereunder shall survive
the expiration or other termination of the Lease Term.

37.    HOLDING OVER.

In the event Tenant or any of its successors in interest hold over the Leased
Promises, or any part thereof, upon expiration or other termination of this
Lease or in the event Tenant continues to occupy the Leased Premises after
the termination of Tenant's right of possession pursuant to Section 23
hereof, unless otherwise agreed in writing by Landlord, such holding aver
shall constitute and be construed as a tenancy at will, and in such event
Tenant shall pay double rent for all the time Tenant retains possession of
the Leased Premises, of any part thereof, after the termination of this
Lease, whether by expiration of the Lease Term or otherwise, and in addition
Tenant shall pay all consequential damages, including legal fees, suffered by
Landlord because of such holding over.  Should Tenant holdover in any manner
after expiration of this Lease, such holding over by Tenant shall be subject
to all terms, covenants and conditions of this Lease which so not
inconsistent with such holding over, and no such holding over by Tenant shall
ever be construed as an extension of this Lease Term without Landlord's
written consent.

38.    QUIET ENJOYMENT.

Upon Tenant paying the Rent and observing and performing all the terms,
covenants and conditions on Tenant's part to be observed and performed
hereunder, Tenant may peaceably and quietly enjoy the Leased Premises without
hindrance or molestation by anyone claiming by, through or under the
Landlord, subject, nevertheless, to the terms and conditions of this Lease,
and to any ground leases, underlying leases, mortgages, laws, regulations,
covenants, restrictions and easements affecting title to the Building, the
land upon which the Building is situated and Corporate Woods.

39.    NOTICE.

Any notice permitted, provided for or required under this Lease must, unless
otherwise expressly provided in this Lease, be in writing, and shall be given
or served by depositing the same in the United States mail, postage prepaid,
registered or certified and addressed to the party to be notified, with
return receipt requested, or by delivering the same in person to an officer
of such party with written acknowledged receipt, or by overnight delivery,
when appropriate, addressed to die party to be notified at the address se
forth below or such other address, notice of which has been given to the
other party.  Any such notice shall be effective as of the date it is so
delivered, mailed or sent by overnight delivery.  If directed to Landlord, it
shall be addressed to:

              Metropolitan Life Insurance Company
              c/o Jones & Company, Managing Agent
              9401 Indian Crock Parkway
              40 Corporate Woods - Suite 1000
              Overland Park, Kansas 66210

and to:


                                      24

<PAGE>

              Metropolitan Life Insurance Company
              One Lincoln center - Suite 800
              Oak Brook Terrace, Illinois 60181
              Attn:  Regional Manager
                     Real Estate Investments

with a copy directed to:

              Metropolitan Life Insurance Company
              2001 Spring Road - Suite 400
              Oakbrook, Illinois 60521
              Attn.: Vice President
                     Real Estate Investments

If directed to Tenant, it shall be addressed to Tenant at the Leased
Premises, with a copy directed to:

              Acceptance Insurance Companies
              One Central Park Plaza
              222 South 15th Street, Suite 600 North
              Omaha, Nebraska 68102
              Attn: Bert Houle

40.    TENANT.

The term "Tenant" as used in this Lease means and applies to whomever
executes this Lease as a Tenant regardless of number, gender or nature or
entity, and shall also include each person, corporation, partnership or other
entity, if any, which has guaranteed Tenant's performance hereunder, and so
far as affirmative covenants, hereunder, shall also include each person,
corporation, partnership or other entity, if any, which goes into possession
of any portion of the Leased Premises at any time during the Lease Term, with
or without Landlord's consent, but no person, corporation, partnership or
other entity, if any, which goes into possession of any part of the Leased
Premises without Landlord's consent and in violation of the provisions of
Section 12 hereof shall acquire any rights, legal or equitable, in the Leased
Premises or under this Lease.  If more than one person, corporation,
partnership or other entity has executed this Lease, or any guarantee hereof,
all such persons, corporations, partnerships and other entities shall be
jointly and severally liable hereunder. Notice to Tenant in compliance with
Section 39 hereof, shall be deemed to be notice to each such person,
corporation, partnership or other entity.

41.    RULES AND REGULATIONS.

Tenant agrees to abide by all rules and regulations for Tenants in the
Building and occupants of space within Corporate Woods, as the same now
exists and as they are established and modified by Landlord from time to
time.  The current rules and regulations are set forth in Exhibit C attached
hereto and incorporated herein by reference.  Landlord reserves the right to
establish, modify and enforce additional reasonable and nondiscriminatory
rules and regulations for the Building, the parking areas and common areas
serving the Building and Corporate Woods, and to


                                      25

<PAGE>

modify existing rules and regulations from time to time, all for the safety,
maintenance, repair and cleanliness of the Building and the parking area and
common area serving the Building and Corporate Woods, and for the
preservation of good order therein, and Tenant agrees to comply with and
abide by all such rules and regulations as they exist from time to time.

42.    HEIRS, SUCCESSORS AND ASSIGNS.

Subject to the provisions of Sections 33 and 34 hereof, all covenants,
conditions and agreements herein contained shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.

43.    MISCELLANEOUS PROVISIONS

       A.     SEVERABILITY.  If any term or provision of this Lease, or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Lease, or the application of
such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall, not be affected thereby,
and each term and provision of this Lease shall be valid and enforced to the
fullest extent permitted by law notwithstanding the invalidity of any other
term or provision hereof.

       B.     AUTHORITY.  Each person executing this Lease for or on behalf
of any party, in so doing, individually represents and warrants to the other
party hereto, that such person has the actual and legal authority to bind
such party for whom such person purports to be executing this Lease.

       C.     GOVERNING LAW.  This Lease and the sights and obligations of
the parties hereto shall be interpreted, construed, and enforced in
accordance with the laws of the State of Kansas.

       D.     FORCE MAJEURE.  Whenever a period of time is herein prescribed
for the taking of any action by Landlord or Tenant, Landlord or Tenant as the
case may be, shall not be liable or responsible for, and there shall be
excluded from the computation of such period of time, any delays due to
strikes, riots, acts of God, shortages of labor or materials, war,
governmental laws, regulations or restrictions, or any other cause whatsoever
beyond the control of Landlord or Tenant, as the case may be.  The provisions
of this Section shall not operate to excuse Tenant from the prompt payment of
Rent or the prompt payment of any other sum required by the terms of this
Lease.

       E.     TIME OF PERFORMANCE.  Except as expressly otherwise herein
provided, with respect to all required acts of Tenant, time is of the essence
of this Lease.

       F.     EFFECT OF DELIVERY OF THIS LEASE.  Landlord has delivered a
copy of this Lease to Tenant for Tenant's review only, and the delivery
hereof does not constitute an offer to Tenant or an option.  This Lease shall
not be binding and effective until a copy executed by Tenant is delivered to,
 and executed by Landlord.

       G.     INDEX AND HEADINGS; COPIES.  The Index and Section headings of
this Lease are for convenience only and shall not limit or define the meaning
or content of this Lease or any


                                      26

<PAGE>

Section hereof.  This Lease is being executed in several copies, each of
which shall be deemed an original.

44.    ADDENDUM AND EXHIBITS.

The following exhibits ("Exhibits") are attached hereto and incorporated
herein by reference and made a part of this Lease for all purposes:

              Exhibit "A" - Floor Plate of Leased Promises
              Exhibit "B" - Plans and Specifications for Leasehold Improvements
              Exhibit "C" - Current Rules and Regulations for Corporate Woods
                            Office Park

45.    INTEGRATED AGREEMENT.

This Lease, including the Addendum and all attached Exhibits, contains and
constitutes the entire agreement between Landlord and Tenant and supersedes
all prior agreements and understandings between the parties to this Lease
relating to the subject matter of this Lease.  There are no agreements,
understandings, restrictions, warranties, representations or inducements
between the parties to this Lease relating to the subject matter hereof,
other than those set forth in this Lease.

IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and
year first above written.

LANDLORD:                           TENANT:

METROPOLITAN LIFE INSURANCE         ACCEPTANCE INSURANCE
COMPANY,                            COMPANIES, INC.,
a New York Corporation              a Nebraska Corporation


By: /s/ Jeffrey S. Moce             By: /s/ Peter A. Kholla
   -----------------------------       ------------------------------
   Name: Jeffrey S. Moce               Name: Peter A. Kholla
        ------------------------            -------------------------
   Its: Assistant Vice President       Its: Asst. Corporate Secretary
       -------------------------           --------------------------


                                      27

<PAGE>

                              TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                     PAGE NO.
<S>                                                                  <C>
1.   TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2.   LEASED PREMISES.. . . . . . . . . . . . . . . . . . . . . . . . . . . .2
3.   SECURITY DEPOSIT. . . . . . . . . . . . . . . . . . . . . . . . . . . .2
4.   LANDLORD'S LIEN.. . . . . . . . . . . . . . . . . . . . . . . . . . . .2
5.   RENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
6.   RENT ADJUSTMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . .4
7.   PRORATION OF FIRST AND LAST MONTH'S RENT. . . . . . . . . . . . . . . .5
8.   USE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
9.   SERVICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
10.  REPAIRS, MAINTENANCE AND ALTERATIONS. . . . . . . . . . . . . . . . . .8
11.  LIENS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
12.  ASSIGNMENT AND SUBLETTING.. . . . . . . . . . . . . . . . . . . . . . 10
13.  CONSTRUCTION OF IMPROVEMENTS. . . . . . . . . . . . . . . . . . . . . 11
14.  ACCEPTANCE OF LEASED PREMISES.. . . . . . . . . . . . . . . . . . . . 12
15.  COMPLIANCE WITH APPLICABLE LAWS AND INSURANCE
     REQUIREMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
16.  INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
17.  INSURANCE, LOSS, DAMAGE, REIMBURSEMENT. . . . . . . . . . . . . . . . 13
18.  LANDLORD'S USE OF BUILDING. . . . . . . . . . . . . . . . . . . . . . 15
19.  DAMAGE OR DESTRUCTION.. . . . . . . . . . . . . . . . . . . . . . . . 15
20.  CONDEMNATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
21.  ABANDONMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
22.  PARKING.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
23.  DEFAULT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
24.  BROKERAGE COMMISSIONS.. . . . . . . . . . . . . . . . . . . . . . . . 19
25.  WAIVER OF BENEFITS. . . . . . . . . . . . . . . . . . . . . . . . . . 20
26.  MISCELLANEOUS TAXES.. . . . . . . . . . . . . . . . . . . . . . . . . 20
27.  SPRINKLERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
28.  RIGHTS AND REMEDIES.. . . . . . . . . . . . . . . . . . . . . . . . . 20
29.  ATTORNEY'S FEES AND COSTS.. . . . . . . . . . . . . . . . . . . . . . 21
30.  MEMORANDUM OF LEASE.. . . . . . . . . . . . . . . . . . . . . . . . . 21
31.  SUBORDINATION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
32.  ESTOPPEL CERTIFICATE. . . . . . . . . . . . . . . . . . . . . . . . . 21
33.  ASSIGNMENT OF LEASE BY LANDLORD.. . . . . . . . . . . . . . . . . . . 22
34.  LIMITED LIABILITY OF LANDLORD.. . . . . . . . . . . . . . . . . . . . 22
35.  TRANSFER OF TENANT. . . . . . . . . . . . . . . . . . . . . . . . . . 23
36.  PEACEABLE SURRENDER.. . . . . . . . . . . . . . . . . . . . . . . . . 23
37.  HOLDING OVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
38.  QUIET ENJOYMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
39.  NOTICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>


<PAGE>

<TABLE>
<S>                                                                  <C>
40.  TENANT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
41.  RULES AND REGULATIONS.. . . . . . . . . . . . . . . . . . . . . . . . 25
42.  HEIRS, SUCCESSORS AND ASSIGNS.. . . . . . . . . . . . . . . . . . . . 26
43.  MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . 26
44.  ADDENDUM AND EXHIBITS.. . . . . . . . . . . . . . . . . . . . . . . . 27
45.  INTEGRATED AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>

<PAGE>

                                     LEASE


                      ACCEPTANCE INSURANCE COMPANIES, INC.


                                      AND


                      METROPOLITAN LIFE INSURANCE COMPANY








                               12 CORPORATE WOODS
                            10975 BENSON - SUITE 380
                           OVERLAND PARK, KANSAS 66210



<PAGE>

                       FIRST LEASE MODIFICATION AGREEMENT

                              Dated as of 10/30/96

WITNESSETH:

     WHEREAS, KNICKERBOCKER PROPERTIES, INC., XXI, as successor in interest to
METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation, as ("Landlord"),
and ACCEPTANCE INSURANCE COMPANIES, INC., a Delaware corporation as ("Tenant"),
respectively, under the terms of a lease dated January 10, 1995 ("Lease"),
covering approximately 582 net rentable square feet of office space in Suite 380
in 12 Corporate Woods in the Corporate Woods Office Park located in the city of
Overland Park, Johnson County, Kansas desire to modify and amend said Lease; and

     WHEREAS, Tenant now desires to expand the Leased Premises to include
approximately 2,076 square feet plus 249 square feet of common area allocated
thereto, for a total of approximately 2,325 additional net rentable square feet
known as Suite 390 in 12 Corporate Woods requiring the following lease
modifications to become effective January 1, 1997 or upon substantial completion
of the improvements described on Exhibit B-1;

     NOW, THEREFORE, for and in consideration of the rents, covenants and
agreements as set forth in the Lease, and of the premises and undertakings
hereinafter set forth, the receipt and sufficiency of which is hereby
acknowledged, the parties agree that said Lease shall be and is hereby amended
and modified as hereinafter provided.

1.    The existing provisions of Section 1. TERM shall continue to be
applicable through December  31, 1996.  Section 1. TERM is hereby amended to
provide that from and after January 1, 1997, the Term shall be as follows:

      1.    TERM

      A.    Term of this Lease ("Lease Term") shall be five (5) years, zero (0)
months commencing on the first day of January, 1997 ("Commencement Date") unless
adjusted as hereinafter provided and ending on the last day of December, 2001.

      B.    If Landlord shall permit Tenant to enter into possession of the
Leased Premises prior to the Commencement Date, Tenant covenants and agrees that
its occupancy shall be deemed to be under all of the covenants and agreements of
this Lease except that it shall not owe or pay Rent to Landlord prior to the
Commencement Date.

      C.    If Tenant enters into possession of the Leased Premises on a date
other than the Commencement Date, the expiration date of the Lease Term shall
not be adjusted unless otherwise hereafter agreed to in writing by Landlord.

      D.    If by the Commencement Date specified in Section 1, paragraph A
hereof, the Leased Premises have not been substantially completed pursuant to
the plans and


<PAGE>

specifications set forth on Exhibit B-1, due to omission, delay or default by
Tenant or anyone acting under or for Tenant ("Tenant Delay") or due to any cause
other than Landlord's default, Landlord shall have no liability, and the
obligations of this Lease (including, without limitation, the obligation to pay
Rent) shall nonetheless commence as of the specific date set forth in Section 1,
paragraph A hereof.

      E.    If, however, the Leased Premises are not substantially completed
due to default on the part of the Landlord, then as Tenant's sole remedy for the
delay in Tenant's occupancy of the Leased Premises, the Commencement Date shall
be delayed and the Rent herein provided shall not commence until the earlier of
actual occupancy by Tenant or substantial completion of the work which Landlord
has agreed to perform.

2.    Commencing as of January 1, 1997, Section 2. LEASED PREMISES is hereby
revoked and replaced with the following provisions thereto:

      2.    LEASED PREMISES

      Landlord hereby rents, leases and lets to Tenant, and Tenant hereby
      rents, leases and takes from Landlord the following described premises
      consisting of an area of approximately 2,596 square feet of space
      ("Leased Premises") together with the pro rata share of common floor area
      allocable thereto which is approximately 311 square feet for a total of
      approximately 2,907 net rentable square feet which is designated as
      Suites 380 and 390 located on the third floor in that building designated
      as 12 Corporate Woods ("Building"), which Building contains approximately
      101,331 total net rentable square feet, the street address of which is
      10975 Benson, and which is located within the Corporate Woods subdivision
      ("Corporate Woods"), in Overland Park, Johnson County, Kansas 66210.  The
      location of the Leased Premises within the Building is further shown on
      Exhibit A-1 attached hereto and is that area cross-hatched.

3.    The existing provisions of Section 5. RENT shall continue to be
applicable through December 31, 1996.  Rent is hereby amended to provide that
from and after January 1, 1997, Rent shall be due and payable as follows:

      5.    RENT.

      Tenant agrees to pay Landlord rent as follows:

            A.      BASE RENT.  The monthly base rent ("Base Rent") shall be
      Four Thousand Seven Hundred Twenty-Three and 88/100 Dollars ($4,723.88)
      from January 1, 1997 to December 31, 2001.  All Base Rent shall be
      payable in advance.  The Base Rent for the first calendar month or
      partial calendar month of the Term shall be due upon the Commencement
      Date, subject to Section 7 of the Lease, and the remaining payments of
      Base Rent shall be due on the first day of each calendar month thereafter
      during the Term.  The Base Rent includes annual Operating Costs
      (hereinafter defined) to the extent they do not exceed $7.91 per net
      rentable square foot ("Operating Stop").


<PAGE>

            B.      ADDITIONAL RENT.  In addition to the Base Rent, Tenant shall
      pay during the Lease Term as additional rent ("Additional Rent"), the
      following:

            (i)     Tenant's pro rata share of all Operating Costs (hereinafter
      defined) reasonably attributable to the Leased Premises during the Term,
      to the extent such Operating costs attributable to the Leased Premises
      exceed the Operating Stop included in the Base Rent; and

            (ii)    All other sums or amounts herein otherwise provided for,
      which are to be paid for by Tenant.

            C.      All Base Rent and Additional Rent (both Base Rent and
      Additional Rent are herein included in the term "Rent") due hereunder
      shall be due and payable in U.S. dollars without notice or demand, both
      of which are hereby expressly waived, and without offset or counterclaim,
      except as herein specifically provided otherwise.  Tenant's pro rata
      share of any item under this Lease shall be that percentage which the net
      rentable square feet of space in the Leased Premises bears to the total
      net rentable square feet of space in the Building.  All Rent shall be
      payable to Knickerbocker Properties, Inc. XXI, P.O. Box 29634 G.P.O.,
      New York, New York 10087-9634, or at such other address as Landlord may
      from time to time direct in the manner required hereunder for giving
      notice.  If any Rent is not paid within ten (10) days after the same is
      due, Tenant shall pay to Landlord a late payment fee to compensate
      Landlord for its extra expenses, inclusive of legal fees, involved in
      handling such delinquency.  The late payment fee shall be the greater of
      five percent (5%) of the amount delinquent, or $100.00, plus interest at
      the rate of eighteen percent (18%) per annum or the maximum rate which
      can be legally charged, whichever is less, on the entire delinquent sum
      from its due date until paid, which amounts shall be payable as
      Additional Rent.

4.    Effective immediately, Section 13. CONSTRUCTION OF IMPROVEMENTS is hereby
revoked and replaced with the following provisions thereto:

      13.   CONSTRUCTION OF IMPROVEMENTS.

      Landlord agrees to cause the Leased Premises to be improved in accordance
      with the plans, specifications, and agreements approved by Landlord and
      Tenant.  Landlord agrees to assume the total cost of constructing the
      improvements as outlined in Exhibit B-1 hereof which shall not exceed
      $32,180.00.  In the event the total cost of constructing such
      improvements exceeds such sum due to any Tenant-caused additions,
      changes, or delays, then Tenant shall be responsible for such excess
      costs, which sum shall be paid by Tenant to Landlord as additional rent,
      within twenty (20) days after Landlord's billing for such excess costs.
      Landlord agrees to commence and complete the construction of the
      improvements with reasonable diligence.


<PAGE>

5.    Effective immediately, Section 17 INSURANCE, LOSS, DAMAGE, REIMBURSEMENT
is hereby revoked and replaced with the following provisions thereto:

      17.   INSURANCE, LOSS, DAMAGE, REIMBURSEMENT

      A.    TENANT'S INSURANCE REQUIREMENTS.  Tenant shall maintain at its own
cost and expense:

              (i)   Commercial general liability insurance on an occurrence
basis naming Landlord, its asset manager and property manager and Tenant as
insureds covering claims and liabilities for injury or damage to persons or
property or for the loss of life or property occurring upon, in or about the
Leased Premises, caused by or resulting from any act or omissions of Tenant, its
employees, agents, contractors, customers, guests, licensees or invitees, such
insurance to afford minimum protection during the Lease Term in such amounts as
Landlord shall from time to time designate by written notice to Tenant, but in
no event less than $5,000,000 combined single limit coverage for bodily injury,
death, property damages or a combination thereof;

             (ii)   Workmen's Compensation and Employer's Liability Insurance in
accordance with the laws of the State of Kansas;

            (iii)   Fire insurance in an amount adequate to cover the cost of
replacement of all equipment, installations, fixtures and contents in the Leased
Premises with a maximum deductible of $1,000.00, including leasehold
improvements paid for by Tenant, in the event of loss or damage by fire and
against loss or damage by other risks now or hereafter embraced by so-called
"All Risk property coverage," including protection against vandalism, malicious
mischief, theft and sprinkler leakage; and

             (iv)   When required by Landlord, such other insurance against
other insurable hazards and in such amounts as may from time to time be commonly
and customarily insured against and are generally available for tenants in
first-class office buildings in the City of Overland Park, Kansas.

      All of the above insurance may be affected by one or more policies
(which may cover the Leased Premises and other locations), but shall be
issued by insurers of recognized responsibility reasonably acceptable to
Landlord, with a minimum Best's rating of A-V1, and each such policy shall
contain a provision whereby the insurer agrees not to cancel or terminate
such coverage without at least ten (10) days prior written notice to
Landlord, and that no act or omission to act of any of the named insureds
will invalidate such insurance as to the other named insureds.  Tenant's
insurance shall be primary and non-contributory.

      B.    WAIVER OF LIABILITY FOR DAMAGES.  Landlord, its agents, servants
and employees shall not be liable for any injury or damage to persons or
property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water, rain, snow, earthquakes or leaks from any part of the
Building, or from the pipes, appliances or plumbing works or from the roof,
street or subsurface or from any other place or by dampness or by any


<PAGE>

other cause of whatsoever nature, unless caused by or due to the gross
negligence or willful misconduct of Landlord, and Tenant does hereby expressly
waive any consequential damages, compensation or claims for inconvenience or
loss of business, rents or any profits as a result of any such injury or damage.

      C.    WAVIER OF SUBROGATION.  Landlord and Tenant each hereby waives on
behalf of itself and its property insurers (none of which shall ever be assigned
any such claim or be entitled thereto due to subrogation or otherwise) any and
all rights of recovery, claim, action, or cause of action, against the other,
its agents, officers, servants, partners, shareholders, or employees, and
against every other tenant in the building who shall have executed a similar
waiver as set forth in this Section, and the agents, officers, servants,
partners, shareholders and employees of each such other tenant, for any loss or
damage that may occur to the Leased Premises, or any improvements thereto, or
the Building or any improvements thereto, or any personal property of such party
therein, by reason of fire, the elements, or any other cause or origin, which is
insured against under any property insurance policy actually being maintained
from time to time, even if not required hereunder, or which would be insured
against under the terms of any insurance policy required to be carried or
maintained hereunder, whether or not such insurance coverage is actually being
maintained by Tenant and regardless of the cause or origin, including in every
instance negligence of the other party hereto, its agents, officers, or
employees, or the negligence of any other tenant in the Building who shall have
executed a similar waiver, or its agents, servants or employees.  Landlord and
Tenant each agree to cause appropriate clauses to be included in their property
insurance policies necessary to implement the foregoing provisions.

      D.    REIMBURSEMENT OBLIGATION OF TENANT.  Tenant shall reimburse
Landlord for all expense, damages and fines incurred or suffered by Landlord by
reason of any breach, violation or nonperformance by Tenant, or its agents,
servants or employees, of any covenant or provision of this Lease, or by reason
of damage to persons or property caused by moving property of or for Tenant in
or out of the Building, or by the installation or removal of furniture or other
property of or for Tenant, or by reason of or arising out of the carelessness,
negligence or improper conduct of Tenant, or its agents, servants or employees,
in the use or occupancy of the Leased Premises or the Building or Corporate
Woods.

      E.    TENANT NOTICE OBLIGATIONS.  Tenant shall give Landlord immediate
notice in case of fire or accidents in the Leased Premises or in the Building.
Tenant shall give Landlord prompt notice if any of the insurance coverage and
the clauses required to be included in each of Tenant's insurance policies
pursuant to the provisions of this Section cannot be obtained.  Tenant shall
give Landlord immediate notice of any cancellation or change of the terms of any
such policy which would affect any such clause or naming.

      F.    EVIDENCE OF INSURANCE.  On or before the Commencement Date Tenant
shall furnish Landlord with a certificate or certificates evidencing the
aforesaid insurance coverage, or a copy of the actual insurance policy providing
such insurance to coverage.  Renewal policies or certificates therefor shall be
furnished to Landlord at least thirty (30)


<PAGE>

days prior to the expiration date of each policy for which either a certificate
or a copy of the policy was theretofore furnished to Landlord.

6.    Effective immediately, Section 39. NOTICE is hereby revoked in its
entirety and replaced with the following provision:

      39.   NOTICE.

      Any notice permitted, provided for or required under this Lease must,
      unless otherwise expressly provided in this Lease, be in writing, and
      shall be given or served by depositing the same in the United States
      mail, postage prepaid, registered or certified and addressed to the party
      to be notified, with return receipt requested, or by delivering the same
      in person to an officer of such party with written acknowledged receipt,
      or by overnight delivery, when appropriate, addressed to the party to be
      notified at the address set forth below or such other address, notice of
      which has been given to the other party.  Any such notice shall be
      effective as of the date it is so delivered, mailed or sent by overnight
      delivery.  If directed to Landlord, it shall be addressed to:

            Knickerbocker Properties, Inc. XXI
            c/o Jones Lang Wootten Realty Advisors
            335 Madison Avenue, Seventh Floor
            New York, New York 10017
            ATTN:  Bruce Morrison

      with a copy directed to:

            MC Real Estate Services
            9401 Indian Creek Parkway, Suite 1000
            Overland Park, Kansas 66210
            ATTN:  General Manager

      If directed to Tenant, it shall be addressed to Tenant at the Leased
Premises, with a copy directed to:

            Acceptance Insurance Companies, Inc.
            One Central Park Plaza
            222 South 15th Street, Suite 600 North
            Omaha, Nebraska 68102
            ATTN:  Bert Houle

      All other terms and conditions of said Lease and of any previous
modification thereof shall remain unchanged.

      The provisions of this First Lease Modification Agreement shall bind and
inure to the benefit of the parties hereto, and to their respective successors
and assigns.


<PAGE>

      IN WITNESS WHEREOF, said parties have executed this First Lease
Modification Agreement in quadruplicate on the day and year first above written.

                                   TENANT:


                                   ACCEPTANCE INSURANCE COMPANIES, INC.,
                                   A DELAWARE CORPORATION


                                   By:  /s/ Raymond N. Siebert
                                   Name:    Raymond N. Siebert
                                   Its:    V.P. Administration


                                   LANDLORD:

                                   KNICKERBOCKER PROPERTIES, INC. XXI,


                                   By:  /s/ Bruce G. Morrison
                                   Name:    Bruce G. Morrison
                                   Its:    Vice President



<PAGE>

                                                                 Exhibit 10.20


                   AGREEMENT FOR INTERACTIVE POINT-TO-POINT
                ELECTRONIC ACCESS TO NEBRASKA DRIVERS LICENSE
                       RECORDS THROUGH NEBRASK@ ONLINE

     THIS AGREEMENT, effective as of the last date written below, is between
Equifax Services, a corporation with its principal office in Atlanta, Georgia
and Nebrask@ Online, a State of Nebraska entity operated under the authority of
the Nebraska Library Commission, by and through its agent for this purpose,
Nebrask@ Interactive, Inc., a Nebraska corporation (hereinafter "Network
Manager").

     WHEREAS, Equifax desires to receive interactive electronic access to
Nebraska Driver License Records (and at some future date, Motor Vehicle Title
and Lien Records, if the same become available electronically) under the custody
of the Division of Motor Vehicles of the State of Nebraska (hereinafter "DMV"),
pursuant to that 1995 interagency agreement between DMV and the Nebraska Library
Commission, and as it may be amended or superseded from time to time; and

     WHEREAS, driver license records and motor vehicle title and lien records
are currently public records under Nebraska statutes; and

     WHEREAS,  Equifax desires to receive such access via the Internet, a
dedicated digital data circuit between Network Manager and Equifax or any other
means of access mutually agreed upon (which type of access shall hereinafter be
referred to as "interactive point-to-point");

     NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and in consideration of the amounts to be paid by Equifax  to
Nebrask@ Online for interactive point-to-point access to such records, the
parties agree as follows:

     1. Network Manager shall furnish to Equifax upon query by Equifax, within
     limitations of the electronic delivery system, such data fields contained
     in Nebraska driver license records as is permitted by DMV to be furnished
     by Network Manager to all other interactive and batch customers.

     2. Equifax may request records directly from Network Manager via the
     Internet or Telnet or "rlogin"  through a remote TCP/IP router and digital
     data circuit provided by Equifax. All expenses associated with requesting
     or receiving records using the remote TCP/IP network shall be the
     responsibility of Equifax.

<PAGE>

Agreement for Interactive Point-to-Point
Electronic Access to Nebraska Drivers License
Records through Nebrask@ Online    PAGE 2



     3. Equifax shall pay to Network Manager a fee for each record requested
     electronically, which fee has been set, and may be revised from time to
     time, by the Nebraska Library Commission, or some other state agency with
     supervisory and oversight authority over Nebrask@ Online, and which fee is
     currently $3.00 per record requested.

     4. Payment shall be remitted to Network Manager within twenty (20) days
     from the date of the invoice. Invoices will be mailed monthly to the
     address shown below:
                    Equifax Services
                    Attn: Registry Management
                    Box 74006: Mail Drop 42J
                    Atlanta,  GA 30374-0006

     5. This agreement may be terminated at any time after sixty (60) days
     notice by the terminating party giving notice in writing, signed by a duly
     authorized representative of the terminating party. This agreement shall be
     terminable immediately at the option of any party upon any material breach
     of the agreement by the other party. This agreement shall be terminated
     immediately without advance notification upon cessation of the interagency
     agreement between DMV and the Nebraska Library Commission, unless there is
     in place a substitute agreement or authority for access to continue. Notice
     of termination shall be in writing signed by a duly authorized
     representative of the aggrieved party and deposited with the United States
     Postal Service, correctly addressed and postage prepaid.

     6. Equifax agrees to use any information or records obtained from Network
     Manager, and to require others who obtain the information through Equifax
     to use any information or records so obtained, only in a manner consistent
     with federal or state laws, rules, regulations, and information policies,
     including policies of Network Manager.


                                       2

<PAGE>

Agreement for Interactive Point-to-Point
Electronic Access to Nebraska Drivers License
Records through Nebrask@ Online    PAGE 3



     7. This agreement constitutes the entire agreement of the parties and
     supersedes all other prior written or oral agreements between the parties
     with respect to the subject matter hereof. The agreement may be changed,
     modified or amended at any time by an instrument in writing, signed by duly
     authorized representatives of both parties hereto or by changes in Nebraska
     law.

IN WITNESS TO their agreement to all the above and foregoing, the parties hereto
have caused this document to be signed by their duly authorized agents.

Equifax Services                        Nebrask@ Online
"Equifax"                               ANetwork Manager@


/s/ G.S. Iken                            /s/ Sam Somerhalder
- ----------------------------------      -----------------------------------
Authorized Agent                        Sam Somerhalder
    G.S. Iken                           General Manager
- ----------------------------------

    AVP
- ----------------------------------
(Typed Title)

Dated        3/15/96                    Dated       3/25/96
      -----------------------------           -----------------------------


                                       3



<PAGE>

                                                                Exhibit 10.21


                                  AGREEMENT

This agreement, effective September 1, 1997, is between ChoicePoint, a
corporation with its principal office in Atlanta, Georgia, and the
Information Network of Kansas, hereinafter referred to as INK, a State of
Kansas instrumentality, by and through its agent, the Kansas Information
Consortium, Inc. hereinafter referred to as Network Manager.

WHEREAS, ChoicePoint is desirous of entering into an Agreement with INK
for the purpose of receiving computer access to driver license records under
the custody of the Kansas Department of Revenue, hereinafter referred to as
KDOR, as provided in K.S.A. 54-9301, ET SEQ..

WHEREAS, the driver license records maintained by KDOR are subject to K.S.A.
74-2012 as amended, and information therefrom may be provided to a requesting
party for the purpose of assisting an insurer authorized to business in
Kansas, or the insurer's authorized agent, in processing an application for,
or renewal, or cancellation of, a motor vehicle liability insurance policy;
and (uses as stated in "Certificate of Acceptance" attached hereto)

WHEREAS, the driver license records maintained by KDOR and accessed via INK
are subject to the provisions of K.S.A. 45-201 ET SEQ. which relates to the
Kansas Open Records Act.

WHEREAS, ChoicePoint desires to purchase electronic access to said records now
and in subsequent years; and

WHEREAS, the parties hereto desire to follow the spirit as well as the letter
of the legislative mandate as aforesaid and as contained in the Kansas Open
Records Act, and that ChoicePoint as a requester of said records does not
intend to, and will not: (A) use any list of names or addresses contained in
or derived from the records of information for the purpose of selling or
offering for sale any property or service to any person listed or to any
person who resides at any address listed; or (B) sell, give or otherwise make
available to any person any list of names addresses contained in or derived
from the records or information for the purpose of allowing that person to
sell or offer for sale any property or service to any person listed or to any
person who resides at any address listed; (C) use any information or records
obtained from INK in any manner contrary to Federal or State laws, rules and
regulations or policies, or INK policy; and


<PAGE>

FURTHERMORE, ChoicePoint, agrees to comply with the CONFIDENTIALITY
requirements of driver license data in that; All records of the Kansas
Division of Vehicles relating to the physical or mental condition of any
person or to expungement shall be confidential. Records of the Division
relation to diversion agreement for the purposes of K.S.A. 8-1567, 12-4415,
and 22-2908, and amendments thereto, shall be confidential and shall be
disclosed by direct computer access only to: (1) A city, county or district
attorney, for the purpose of determining a person's eligibility for
diversion; (2) a municipal or district court, for the purpose of using the
record in connect with any matter before the court; (3) a law enforcement
agency, for the purpose of supplying the record to a person authorized to
obtain it under (1) or (2) or (4) an employer when a person is required to
retain a commercial driver's license due to the nature of such person's
employment. INDIVIDUALS AND/OR ORGANIZATIONS VIOLATING THIS CONFIDENTIALITY
PROVISION ARE SUBJECT TO PROSECUTION.

NOW, THEREFORE, in consideration of the mutual covenants and agreements, for
the amounts hereinafter provided to be paid by ChoicePoint, the parties
hereto hereby agree as follows:

1.   The Network Manager shall furnish to ChoicePoint agreed data, contained
     on Kansas driver license records requested by ChoicePoint.

2.   ChoicePoint may request records directly from The Network Manager via
     dial-up 9.6Kps V.32 3780 to 3780 direct telecommunications line, dial up
     2400bps to 28.8Kbps asynchronous Kermit direct telecommunication line.

3.   All correspondence should be delivered to the following address:

                        Information Network of Kansas
                        534 South Kansas Avenue
                        Suite 1210
                        Topeka, KS 66603-3406

4.   Remittances to INK under this contract will be delivered to the
     following address:

                        Information Network of Kansas
                        P.O. Box 1576
                        Topeka, KS 66603

5.   Shipment and billing by the Network Manager shall be made to the
     following address:

                        ChoicePoint
                        Attention: Registry Management - 71D
                        P.O. Box 105179
                        Atlanta, Georgia 30348-5179


<PAGE>

6.   ChoicePoint shall pay to INK a fee of $4.00 per record request. Payment
     shall be remitted to INK within twenty (20) days from the date of the
     invoice. Invoices will be mailed monthly to the address shown in
     Section 5. The account is in default if payment in full is not received
     by the 25th of each month for the previous month's transactions. INK may
     assess a late charge equal to 5% of the balance in default. In addition
     INK may suspend or terminate Choicepoint ability to retrieve motor
     vehicle records from the State of Kansas.

7.   This agreement may be terminated at any time after sixty (60) days
     notice by an instrument in writing, signed by duly authorized
     representative of either party hereto. This agreement shall immediately
     be terminated upon any breach of any covenant by either party without
     advance notification or upon cessation of the agreement with KDOR. Notice
     of termination shall be in writing signed by a duly authorized
     representative of the aggrieved party and deposited with the United
     States Postal Service correctly addressed and postage prepaid.

8.   This agreement constitutes the entire AGREEMENT of the parties and
     supersedes all other prior written or oral agreements between the parties
     with respect to subject matter hereof. This agreement may be changed,
     modified or amended at any time by an instrument in writing, signed by
     duly representatives of both parties hereto.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized official or officers.


ChoicePoint                            Information Network of Kansas
                                       Network Manager



/s/ George S. Iken     6/15/98         /s/ Debra Luling              6/22/98
- -------------------    -------         --------------------          -------
Signature              Date            Debra Luling                  Date
                                       General Manager



George S. Iken
- --------------------
(Typed name)



VP- Marketing
- --------------------
(Typed Title)


<PAGE>

                         CERTIFICATE OF ACCEPTABLE USE


DRIVER PRIVACY PROTECTION ACT: Prohibition on release and use of certain
personal information by States, organizations and persons.

If this document is being signed by a representative of the company or
organization, THE FORM MUST BE SIGNED BY AN INDIVIDUAL LEGALLY AUTHORIZED TO
OBLIGATE YOUR COMPANY TO AN AGREEMENT.

I certify that CHOICEPOINT SERVICES INC. (FORMERLY EQUIFAX SERVICES INC) (User)
is eligible under the DRIVER PRIVACY PROTECTION ACT OF 1994 (18 USC APP. 2721
ET SEQ.) and relevant Kansas statutes and regulations to receive the records
of individuals who have chosen the "opt out" alternative through the Kansas
Department of Motor Vehicles.

User certifies legal fulfillment in at least one of the federally regulated
categories of permissible use and understands that by signing this form, User
agrees to adhere to all regulations and stipulations associated with this law.

User further understands that it is a violation of Federal law to give false
information to obtain such records and that by violating this Federal
mandate User is subject to prosecution.

Should User or User's customers upon subsequent examination be found to have
submitted a request and thereby obtained personal information, which request
does NOT fall within one of the federally regulated categories of permissible
use, then User, User's customer, or both could be SUBJECT TO THE PENALTIES
PROVIDED FOR SUCH A VIOLATION IN THE DRIVER PRIVACY PROTECTION ACT OF 1994.

If you are not certain you or your company qualify to obtain opt out records,
please refer to the actual text of the law (18 USC App. 272) to insure
compliance.

PLEASE PLACE YOUR INITIAL TO THE LEFT OF THE FEDERALLY MANDATED CATEGORY(S)
OF ACCEPTABLE USE FOR WHICH YOU ARE OBTAINING OPT OUT RECORDS.

1)  ___________ For use by any government agency, including any court or law
    enforcement agency, in carrying out its functions, or any private person
    or entity acting on behalf of a Federal, State, or local agency in carrying
    out its functions.
2)  ___________ For use in connection with matters of motor vehicle or driver
    safety and theft; motor vehicle emissions; motor vehicle product
    alterations, recalls, or advisories; performance monitoring of motor
    vehicles, motor vehicle parts and dealers; motor vehicle market
    research activities, including survey research; and removal of
    non-owner records from the original owner records of motor vehicle
    manufacturers.
3)    /s/ GI    For use in the normal course of business by a legitimate
    ----------- business or its agents, employees, or contractors, but only -


                                       Certificate of Acceptable Use Page 1 of 2

<PAGE>

                A)    /s/ GI    to verify the accuracy of personal information
                    ----------- submitted by the individual to the business
                    or its agents, employees, or contractors; and
                B)    /s/ GI    if such information as so submitted is not
                    ----------- correct or is no longer correct, to obtain the
                    correct information, but only for the purposes of preventing
                    fraud by, pursuing legal remedies against, or recovering
                    on a debt or security interest against, the individual.
4)  ___________ For use in connection with any civil, criminal, administrative,
    or arbitral proceeding in any Federal, State, or local court or agency or
    before any self-regulatory body, including the service of process,
    investigation in anticipation of litigation, and the execution or
    enforcement of judgments and orders, or pursuant to an order of a Federal,
    State, or local court.
5)  ___________ For use in research activities, and for use in producing
    statistical reports, so long as the personal information is not published,
    redisclosed, or used to contact individuals.
6)    /s/ GI    For use by any insurer or insurance support organization, or
    ----------- by a self-insured entity, or its agents, employees, or
    contractors, in connection with claims investigation activities, antifraud
    activities, rating or underwriting.
7)    /s/ GI    For use in providing notice to the owners of towed or
    ----------- impounded vehicles.
8)    /s/ GI    For use by any licensed private investigative agency or
    ----------- licensed security service for any purpose permitted under this
    subsection.
9)    /s/ GI    For use by an employer or its agent or insurer to obtain or
    ----------- verify information relating to a holder of a commercial
    driver's license that is required under the Commercial Motor Vehicle Safety
    Act of 1986 (49 USC App. 2710 et seq).
10) NOT ADOPTED
11)   /s/ GI    For any other use in response to requests for individual motor
    ----------- vehicle records if the motor vehicle department has provided in
    a clear and conspicuous manner on forms for issuance or renewal of
    operator's permits, titles, registrations, or identification cards, notice
    that personal information collected by the department may be disclosed to
    any business or person, and has provided in a clear and conspicuous manner
    on such forms an opportunity to prohibit such disclosures.
12) NOT ADOPTED
13)   /s/ GI    For use by any requester, if the requester demonstrates it
    ----------- has obtained the written consent of the individual to whom the
    information pertains.
14) ___________ For any other use specifically authorized under the law of the
    State that holds the record, if such use is related to the operation of a
    motor vehicle or public safety.


INK account number(s): 290, 4310, 1931, 4528
                      -----------------------
**ALL USER IDS ASSOCIATED WITH THIS ACCOUNT WILL BE MODIFIED TO ACCESS "OPT
OUT" RECORDS UNLESS SPECIFIED OTHERWISE**


/s/ George S. Iken  AVP                    9/2/97
- -----------------------------             --------
Name / Title (please print)                 Date


User is in compliance with THE DRIVER PRIVACY PROTECTION ACT OF 1994 (18USC
App. 2721 et seq) in the acquisitions of Kansas "opted out" records.


/s/ George S. Iken
- ---------------------------------------
Signature



                                       Certificate of Acceptable Use Page 2 of 2



<PAGE>
                                                                Exhibit 10.22
                                  AGREEMENT FOR
                                BATCH PROCESSING

         This agreement is made between Equifax/Choice Point, a corporation with
its principal offices in Atlanta, Georgia ("SUBSCRIBER"), and the Information
Network of Arkansas (INA), a State of Arkansas public instrumentality operating
under the authority of A.C.A. ss. 25-25-101 ET SEQ.

         WHEREAS, SUBSCRIBER is desirous of entering into an Agreement with INA
for the purpose of receiving computer access to official driver license records
("Agreed Data") under the custody of the Office of Driver's Services of the
Revenue Division of the Department of Finance and Administration ("ODS"); and

         WHEREAS, SUBSCRIBER desires to purchase electronic access to said
records now and in subsequent years, and to do so by electronic batch
processing;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein, including the amounts hereinafter provided to be paid by SUBSCRIBER for
such access, the parties hereto agree as follows:

         1.   INA shall furnish to SUBSCRIBER Agreed Data requested by
SUBSCRIBER, subject to any limitations to access to the ODS database imposed by
ODS.

         2.   SUBSCRIBER may request records directly from INA via a dial-up
28.8 Kops V.34 37$0 to 3780 direct telecommunication line.

         3.   SUBSCRIBER shall pay INA a fee of $8.00 per record request for
Traffic Violation Reports and $11.00 per record request for Commercial Traffic
Violation Reports. Payment shall be remitted to INA within twenty (20) days from
the date of the invoice. Invoices will be mailed monthly to the SUBSCRIBER's
address, which is:

                               Equifax/Choice Point
                               P. O. Box 740006
                               Atlanta, GA  30374-0008

Accounts not paid when due may be fined, or may have their access terminated
without notice.

         4.   This agreement may be terminated at any time upon sixty (60) days
notice by an instrument in writing, signed by a duly authorized representative
or the party wishing to terminate, and mailed to the other party. This agreement
may be immediately terminated upon any material breach of any covenant herein at
the option of the non-breaching party, or upon cessation of the INA's Agreement
with Department of Finance and Administration. Any notice of termination shall
be deposited with the United States Postal Service, restricted delivery, return
receipt requested, correctly addressed to the

                                      1

<PAGE>

party to receive notice, and postage prepaid. SUBSCRIBER's address for notice
shall be the address in paragraph 3 above. INA's address for notice is:

                               Information Network of Arkansas
                               ATTN:  Network Manager
                               425 West Capitol Avenue
                               TC3Y Tower, Suite 3565
                               Little Rock, AR  72201

         5.   SUBSCRIBER agrees and represents that each Arkansas traffic
violation report and commercial traffic violation report request submitted by
and through SUBSCRIBER to INA will either be individually _____________ by
SUBSCRIBER for compliance with the circumstances permitted for personal
information as set forth in the applicable Arkansas Code, as the applicable code
sections may be amended from time to time, or else SUBSCRIBER will require those
who request records through them to represent in writing ONLY requests which
meet the criteria for furnishing personal information on Arkansas traffic
violation reports and commercial traffic violation reports under those same code
sections will be submitted through SUBSCRIBER to INA. SUBSCRIBER acknowledges
that obtaining or requesting personal information without complying with the
Arkansas Code Annotated, as they may be amended from time to time, may subject
SUBSCRIBER or their customers to the penalties of Arkansas and Federal law.
SUBSCRIBER further acknowledges that INA is relying upon SUBSCRIBER's agreement
herewith in allowing access to electronic batch record access.

         6.   This agreement constitutes the entire AGREEMENT of the parties and
supersedes all other prior written or oral agreements between the parties with
respect to the subject matter herein. This agreement may be changed, modified or
amended at any time, but only by an instrument in writing, signed by duly
authorized representatives of both parties hereto.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized representatives.

<TABLE>
<CAPTION>

SUBSCRIBER                                              Information Network of Arkansas
<S>                                     <C>             <C>                                   <C>

/s/ G.S. Iken                             9/2/97        /s/ Joseph Nemelka                      9/2/97
- ---------------------------------      -------------   ---------------------------------     -------------
 Authorized Agent                        Date            Joseph Nemelka                         Date
                                                         Network General Manager

    G.S. Iken
- ---------------------------------
 (Typed Name)

                                      2

<PAGE>

- ---------------------------------
 (Typed Title)

</TABLE>

                                      3

<PAGE>
                                                              Exhibit 10.23

                         AGREEMENT FOR BATCH PROCESSING

This agreement is made between Equifax Systems, Inc., a corporation with its
principal office in Atlanta, GA ("SUBSCRIBER"), and Access Indiana Information
Network (AIIN), a State of Indiana instrumentality operated under the authority
of the Indiana Intelenet Commission.

WHEREAS, SUBSCRIBER is desirous of entering into an Agreement with AIIN for the
purpose of receiving computer access to official driver license records ("Agreed
Data") under the custody of the Indiana Bureau of Motor Vehicles, ("IBMV"); and

WHEREAS, SUBSCRIBER desires to purchase electronic access to said records now
and in subsequent years, and to do so by electronic batch processing;

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein,
including the amounts hereinafter provided to be paid by SUBSCRIBER for such
access, the parties hereto agree as follows:

     1.   AIIN shall furnish to SUBSCRIBER Agreed Data requested by
SUBSCRIBER, subject to any limitations to access to the IBMV database imposed
by IBMV.

     2.   SUBSCRIBER may request records directly from AIIN via Tape or, via
a dial-up 19.2Kbps V.34 3780 to 3780 direct telecommunication line.

     3.   SUBSCRIBER shall pay to AIIN a fee of $5.00 (five dollars) per
record request. Payment shall be remitted to AINN within twenty (20) days
from the date of the invoice. Invoices will be mailed monthly to the
SUBSCRIBER'S address, which is:

          Ms. Linda Campbell
          Equifax Systems, Inc.
          P.O. Box 740006
          Registry Management, Drop 425
          Atlanta, GA  30374-0006

Accounts not paid when due may be fined, or may have their access terminated
without notice.

     4.   This agreement may be terminated at any time upon sixty (60) days
advance notice by an instrument in writing, signed by a duly authorized
representative of the party wishing to terminate, and mailed to the other
party. This agreement may be immediately terminated upon any material breach
of any covenant herein at the option of the non-breaching party, or upon
cessation of the Indiana Intelenet Commission's Interagency Agreement with
IBMV. Any notice of termination shall be deposited with the United States
Postal Service, restricted delivery, return receipt requested, correctly



<PAGE>

addressed to the party to receive notice, and postage prepaid. SUBSCRIBER's
address for notice shall be the address in paragraph 3 above.  AIIN's address
for notice is:

          Access Indiana Information Network
          ISTA Building, Suite 530
          150 West Market Street
          Indianapolis, IN  46204-2806

     5.   This agreement constitutes the entire AGREEMENT of the parties and
supersedes all other prior written or oral agreements between the parties
with respect to the subject matter herein. This agreement may be changed,
modified or amended at any time, but only by an instrument in writing, signed
by duly authorized representatives of both parties hereto.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized representatives.

"SUBSCRIBER"                           Access Indiana Information Network

by /s/ G.S. Iken         11/6/95       by /s/ William F. Bradley, Jr.  11/14/95
  -------------------    --------         ---------------------------  --------
  Authorized agent       Date             William F. Bradley, Jr.      Date
                                          Network General Manager
   G.S. Iken
- ---------------------
(Typed Name)

   Asst. V.P.
- ---------------------
(Typed Title)



                                      2

<PAGE>

                                                                Exhibit 10.24


                       STATE OF UTAH - STATEWIDE CONTRACT
                           Contract # PD-1068*

<TABLE>
<S>                                             <C>

1. CONTRACTING PARTIES:  This contract is between the State of Utah and the
                         following CONTRACTOR:


   UTAH INTERACTIVE, INC.                        LEGAL STATUS OF CONTRACTOR
   -----------------------------------           [ ] Sole Proprietor
                 Name                            [ ] Non-Profit Corporation
                                                 [X] For-Profit Corporation
   150 West Market St. Ste. 530                  [ ] Partnership
   -----------------------------------           [ ] Government Agency
               Address

   INDIANAPOLIS   IN      46204-2806
   -----------------------------------
   City           State         Zip


   Federal Tax ID# 880417510    Vendor #94598A   Commodity Code #20827000000

   Vendor Contact Person: Richard L. Brown       Vendor Phone #: 801-652-1188

   Vendor Fax #: 317-233-2382                    Vendor E-mail address: inet:[email protected]


2. GENERAL PURPOSE OF CONTRACT: The general purpose of this contract is to provide: COORDINATED NETWORK
   DEVELOPMENT AND MANAGEMENT FOR ON-LINE GOVERNMENT SERVICES TO THE PUBLIC.

3. CONTRACT PERIOD:  Effective date MAY 7, 1999  Termination date: MAY 6, 2003 unless terminated early or
   extended in accordance with the terms and conditions of this contract.
   Renewal options (if any) THREE TWO-YEAR RENEWAL PERIODS AS DESCRIBED IN CONTRACT ATTACHMENT B.

4. PRICING AS PER ATTACHED PRICE LIST (see Attachment B)

   CASH DISCOUNT TERMS: ________________________________

   DAYS REQUIRED FOR DELIVERY: _________________________

   MINIMUM ORDER: ______________________________________

5. ATTACHMENT A:  Standard Terms and conditions for Statewide Contracts
   ATTACHMENT B:  Scope of Work and Special Terms and Conditions
   ATTACHMENT C:  ______________________________________________

6. OTHER DOCUMENTS INCORPORATED BY REFERENCE, BUT NOT ATTACHED:
   A. Request for Proposal Number RA9000 and Contractor's Response.
   B. All other governmental laws and rules.

   ANY CONFLICTS BETWEEN ATTACHMENT A AND OTHER ATTACHMENTS, AND INCORPORATED DOCUMENTS WILL BE RESOLVED
   IN FAVOR OF ATTACHMENT A.

   IN WITNESS WHEREOF, the parties sign and cause this contract to be executed.


   CONTRACTOR                             STATE



   /s/ Richard L. Brown                   /s/ David Moon
   ----------------------------------     --------------------------------------
   Richard L. Brown, General Manager      David Moon, Chief Information Officer
   Utah Interactive, Inc.


                                          /s/ Douglas Richins
                                          ---------------------------------------
                                          Douglas Richins, Director of Purchasing
</TABLE>

<PAGE>

                                 ATTACHMENT A:
                     STANDARD CONTRACT TERMS AND CONDITIONS
                        STATE OF UTAH, STATEWIDE CONTRACT


PARTICIPANTS: This is a contract for furnishing the State of Utah government
departments, institutions, agencies and political subdivisions (i.e.,
colleges, school districts, counties, cities, etc.).

POLITICAL SUBDIVISION PARTICIPATION: Participation under this contract by
political subdivisions (i.e., colleges, school districts, counties, cities,
etc.) will be voluntarily determined by the political subdivision. The
contractor agrees to supply the political subdivisions based upon the same
terms, conditions and prices.

QUANTITY ESTIMATES:  The State does not guarantee to purchase any amount
under the contract to be awarded. Estimated quantities are for bidding
purposes only and are not to be construed as a guarantee to purchase any
amount.

DELIVERY:  The prices bid will be the delivered price to any state agency or
political subdivision. All deliveries will be F.O.B. destination with all
transportation and handling charges paid by the contractor. Responsibility
and liability for loss or damage will remain with Contractor until final
inspection and acceptance when responsibility will pass to the Buyer except
as to latent defects, fraud and Contractor's warranty obligations. The minimum
shipment amount will be found in the special terms and conditions. Any order
for less than the specified amount is to be shipped with the freight prepaid
and added as a separate item on the invoice. Any portion of an order to be
shipped without transportation charges that is back ordered will be shipped
without charge.

LOCAL WAREHOUSE AND DISTRIBUTION:  The contractor will maintain a reasonable
amount of stock warehoused in the state of Utah for immediate or emergency
shipments. Shipments are to be made in the quantities as required by the
various ordering agencies. Orders for less than the minimum specified amount
will have transportation charges prepaid by the contractor and added as a
separate item on the invoice. Any portion of an order to be shipped without
transportation charges that is backordered will be shipped without charge.

REPORTS:  The contractor will submit quarterly reports to the State
Purchasing Agent showing the quantities and dollar volume of purchases by
each agency and political subdivision.

CASH DISCOUNT TERMS:  Bidder may quote a cash discount based upon early
payment; however, discounts offered for less than 30 days will not be
considered in making the award. The date from which discount time is
calculated will be the date a correct invoice is received or receipt of
shipment, whichever is later, except that if testing is performed, the date
will be the date of acceptance of the merchandise.

PRICE GUARANTEE, ADJUSTMENTS:  The contract pricing is guaranteed for the
period specified. Following the guarantee period, any request for price
adjustment must be for an equal guarantee period, and must be made at least
30 days prior to the effective date. Requests for price adjustment must
include sufficient documentation supporting the request. Any adjustment or
amendment to the contract will not be effective unless approved by the State
Director of Purchasing. The State will be given the immediate benefit of any
decrease in the market or allowable discount.

ORDERING AND INVOICING:  Orders will be placed by the using agencies directly
with the contractor. All orders will be shipped promptly in accordance with
the delivery guarantee. The contractor will then promptly submit invoices to
the ordering agency. The state contract number and the agency ordering number
will appear on the invoices, freight tickets, and correspondence relating to
the contract order. The prices paid by the State will by those prices on file
with the Division of Purchasing. The State has the right to adjust any
invoice reflecting incorrect pricing.

PAYMENT:  Payments are normally made within 30 days following the date the
order is delivered or the date a correct invoice is received, whichever is
later. After 45 days the Contractor may assess overdue account charges up to
a maximum rate of one percent per month on the outstanding balance. All
payments to the contractor will be remitted by mail. Payments may be made via
a State of Utah (or political subdivision) "Purchasing Card."

TAXES:  Contract prices will be exclusive of state sales, use and federal
excise taxes. The State of Utah's sales and use tax exemption number is
E33399. The tangible personal property or services being purchased are being
paid from State funds and used in the exercise of that entity's essential
functions. If the items being purchased are construction materials, they will
be converted into real property by employees of this government entity,
unless otherwise stated in the contract, or contract orders. The State of
Utah's Federal excise exemption number is 87-780010K.

INSPECTIONS:  Goods furnished under this contract will be subject to
inspection and test by the Buyer at times and places determined by the Buyer.
If the Buyer finds goods furnished to be incomplete or not in compliance with
bid specifications, the Buyer may reject the goods and require Contractor to
either correct them without charge or deliver them at a reduced price which
is equitable under the circumstances. If Contractor is unable or refuses to
correct such goods within a time deemed reasonable by the Buyer, the Buyer may
cancel the order in whole or in part. Nothing in this paragraph will
adversely affect the Buyer's rights including the rights and remedies
associated with revocation of acceptance under the Uniform Commercial Code.

PATENTS, COPYRIGHTS, ETC.:  The Contractor will release, indemnify and hold
the Buyer, its officers, agents and employees harmless from liability of any
kind or nature, including the Contractor's use of any copyrighted or
uncopyrighted composition, secret process, patented or unpatented invention,
article or appliance furnished or used in the performance of this contract.

HOLD HARMLESS:  The contractor will release, protect, indemnify and hold the
State and the respective political subdivisions and their officers, agencies,
employees, harmless from and against any damage, cost or liability, including
reasonable attorney's fees for any or all injuries to persons, property or
claims for money damages arising from acts or omissions of the contractor,
his employees or subcontractors or volunteers.

AMENDMENTS:  The terms of this contract will not be waived, altered,
modified, supplemented or amended in any manner whatsoever without prior
written approval of the State Director of Purchasing.

ASSIGNMENT/SUBCONTRACT:  Contractor will not assign, sell, transfer,
subcontract or sublet rights, or delegate responsibilities under this
contract, in whole or in part, without the prior written approval of the
State Director of Purchasing.

CANCELLATION:  Unless otherwise stated in the special terms and conditions,
this price agreement may be canceled without cause by the State upon


                               Page 1 of 2


<PAGE>

60 days notice, in writing, prior to the effective date of the cancellation.
Cancellation may be in whole or in part. Cancellation of the  [illegible]
contractor default may be immediate.

DEFAULT AND REMEDIES:  Any of the following events will constitute cause for
the State to declare Contractor in default of the contract 1. Nonperformance
of contractual requirements; 2. A material breach of any term or condition of
this contract. The State will issue a written notice of default providing a
period in which Contractor will have an opportunity to cure. Time allowed for
cure will not diminish or eliminate Contractor's liability for liquidated or
other damages. If the default remains, after Contractor has been provided the
opportunity to cure, the State may do one or more of the following:  1.
Exercise any remedy provided by law; 2. Terminate this contract and any
related contracts or portions thereof; 3. Impose liquidated damages; 4.
Suspend contractor from receiving future bid solicitations.

GOVERNING LAW:  This price agreement is governed by and construed in
accordance with the laws of the state of Utah. Provisions of this contract
are pursuant to the authority set forth in Section 63-66 UTAH CODE
ANNOTATED, 1953, as amended, Utah State Procurement Rules (UTAH
ADMINISTRATIVE CODE Section R33) and related statutes.

LAWS AND REGULATIONS:  Any and all supplies, services and equipment furnished
will comply fully with all applicable Federal and State laws and regulations.

FORCE MAJEURE:  Neither party to this contract will be held responsible for
delay or default caused by fire, riot, acts of God and/or war which is
beyond that party's reasonable control. The State may terminate this contact
after determining such delay or default will reasonably prevent successful
performance of the contract.

HAZARDOUS CHEMICAL INFORMATION: The Contractor will provide one set of the
appropriate material safety data sheet(s) and container label(s) upon
delivery of a hazardous material to the user agency. All safety data sheets
and labels will be in accordance with each participating state's requirements.

CONFLICT OF INTEREST:  Contractor certifies that it has not offered or given
any gift or compensation prohibited by the laws of the state of Utah to any
officer or employee of the state or participating political subdivisions to
secure favorable treatment with respect to being awarded this contract.

INDEPENDENT CONTRACTOR:  Contractor will be an independent contractor, and as
such will have no authorization, express or implied to bind the State to any
agreements, settlements, liability or understanding whatsoever, and agrees
not to perform any acts as agent for the State, except as expressly set forth
herein. Compensation stated herein will be the total amount payable to the
contractor by the State. The contractor will be responsible for the payment
of all income tax and social security tax due as a result of payments
received from the State for these contract services. Persons employed by the
State and acting under the direction of the State will not be deemed to be
employees or agents of the Contractor.

NON-COLLUSION:  By signing the price agreement the Contractor certifies that
the offer submitted has been arrived at independently and has been submitted
without collusion with, and without any agreement, understanding or planned
common course of action with any other vendor of materials, supplies,
equipment or services described in the price agreement, designed to limit
independent bidding or competition.

SEVERABILITY:  If any provision of this contract is declared by a court to be
illegal or in conflict with any law, the validity of the remaining terms and
provisions will not be affected; and the rights and obligations of the
parties will be construed and enforced as if the contract did not contain the
particular provision held to be invalid.

RECORDS ADMINISTRATION:  The contractor will maintain, or supervise the
maintenance of all records necessary to properly account for the payments
made to the contractor for costs authorized by this contract. These records
will be retained by the contractor for at least four years after the contract
terminates, or until all audits initiated within the four years have been
completed, whichever is later.

AUDIT OF RECORDS:  The contractor agrees to allow the State and Federal
auditors, and State agency staff, access to all the records to this contract,
for audit and inspection, and monitoring of services. Such access will be
during normal business hours, or by appointment.

WARRANTY (INCLUDING YEAR 2000): The contractor agrees to warrant and assume
responsibility for each hardware, firmware, and/or software product
(hereafter called the product) that it licenses, or sells, to the State of
Utah under this contract. The contractor acknowledges that the Uniform
Commercial Code applies to this contract. In general, the contractor warrants
that: (1) the product will do what the salesperson said it would do, (2) the
product will live up to all specific claims that the manufacturer makes in
their advertisements, (3) the product will be suitable for the ordinary
purposes for which such product is used, (4) the product will be suitable for
any SPECIAL PURPOSES that the State has relied on the contractor's skill or
judgement to consider when it advised the State about the product, especially
to ensure year 2000 compatibility and fitness, (5) the product has been
properly designed and manufactured, and (6) the product is free of
significant defects or unusual problems about which the State has not been
warned. In general, "year 2000 compatibility and fitness" means: (1) the
product warranted by the contractor will not cease to perform before, during,
or after the calendar year 2000, (2) the product will not produce abnormal,
invalid, and/or incorrect results before, during, or after the calendar year
2000, (3) will include, but not be limited to, date data century recognition,
calculations that accommodate same century and multi-century formats, date
data values that reflect century, and (4) accurately process date data
(including, but not limited to, calculating, comparing, and sequencing)
from, into, and between the twentieth and twenty-first centuries, including
leap year calculations. If problems arise, the contractor will repair or
replace (at no charge to the State) the product whose noncompliance is
discovered and made known to the contractor in writing. If there is a Year
2000 problem, the contractor agrees to immediately assign senior engineering
staff to work continuously until the product problem is corrected, time
being of the essence. Nothing in this warranty will be construed to limit any
rights or remedies the State of Utah may otherwise have under this contract
with respect to defects other than Year 2000 performance.

DEBARMENT.  The CONTRACTOR certifies that neither it nor its principals are
presently debarred, suspended, proposed for debarment, declared ineligible,
or voluntarily excluded from participation in this transaction (contract) by
any governmental department or agency. If the CONTRACTOR cannot certify this
statement, attach a written explanation for review by the STATE.


                                                 (revision date: April 8, 1999)


                                  Page 2 of 2


<PAGE>

                                 ATTACHMENT B
                 SCOPE OF WORK AND SPECIAL TERMS AND CONDITIONS
                     CONTRACT FOR NETWORK MANAGER SERVICES

     THIS CONTRACT is between the State of Utah, hereinafter referred to as "the
State", and Utah Interactive , Inc., a for-profit corporation, hereinafter
referred to a "UII".

     WHEREAS, the State has worked diligently to create an opportunity for
providing enhanced electronic access to public services and information for Utah
citizens in the most cost-effective, progressive, and cooperative means
possible; and

     WHEREAS, E-Utah, hereinafter referred to as the "Network", is poised to
become a significant public access, economic development and educational tool
for the State of Utah and its residents; and

     WHEREAS, the Network will significantly benefit the State through:

     1.  Increased public services with minimal use of tax dollars;

     2.  Enhanced public access to State government;

     3.  Equality of access to State government regardless of geographic
     locations;

     4.  Increased efficiency of State government agencies and offices without
     budget increases through electronic commerce transactions;

     5.  Providing additional resources to State agencies and offices and to
     assist them in information management, access, and electronic commerce
     functions as the project grows;

     6.  Providing both Network services at no cost and Premium Services, for
     which an access charge will be assessed as recommended by the Utah
     Electronic Commerce Council, hereinafter referred to as the UECC;

     7.  Enhancing access to services and information of political subdivisions;
     and

<PAGE>

     WHEREAS, in order to effectuate electronic access and commerce for citizens
with government throughout the State, the Governor's Office, Chief Information
Officers' Section issued  a Request for Proposal for a Government Services and
Information Network (Electronic Gateway Service) RFP # RA9000 on January 8, 1999
and amendments on February 3, 1999 and February 16, 1999, referred to
hereinafter collectively as the "RFP", seeking proposals for a private network
manager; and

     WHEREAS, UII submitted a proposal in response to the RFP, and such proposal
was determined by the proposal review committee and the Division of Purchasing
to be the one best suited to the goals of the State, which proposal is
hereinafter referred to as the "UII Proposal"; and

     WHEREAS, the State desires to contract with UII to serve as the Network
Manager and to establish, develop, operate, maintain and expand the Network as
mutually agreed to by UII and the State; and

     WHEREAS the Network will provide increased electronic access and commerce
among Utah residents, businesses, and other government entities;

     NOW THEREFORE, the parties agree as follows:

1.   PURPOSE OF THE NETWORK.

     The purpose of the Network and this contract is to realize the vision of
the Governor and the Utah Legislature in meeting the goals set forth in the Utah
Information Technology Act and may be summarized as follows:

<PAGE>

     A.   To create and provide a significant and diligently promoted public
     service to Utah citizens and businesses by:

          (1)  Expanded business and citizen access to government services and
          information;

          (2)  Offering an easy and convenient process for these groups to
          conduct transactions with State government online;

          (3)  Accelerating the development and delivery of an increased volume
          of quality, online government services;

          (4)  Improving the level of customer service from State government;
          and

     B.   To provide such public service without increasing the tax burden on
     the citizens of Utah, through utilization of private capital and management
     and appropriate payment for the same.


2.   TERM OF CONTRACT AND RENEWALS


     This Contract shall be for a term of four (4) years, commencing May 7,
1999, and expiring at 12:00 a.m., May 6, 2003, unless earlier terminated by the
State.

     At the option of the State, the Contract may be renewed for a period of two
(2) additional years by written notice from the State on or before October 31,
2002, of its decision to extend the Contract period through May 6, 2005.

     At the option of the State, the Contract may be renewed for an additional
period of two (2) additional years by written notice from the State on or before
October 31, 2004, of its decision to extend the Contract period through May 6,
2007.

     At the option of the State, the Contract may be renewed for a period of two
(2) additional years by written notice from the State on or before October 31,
2006, of its decision to extend the Contract period through May 6, 2009.


                                       3

<PAGE>

3.   RELATIONSHIP OF PARTIES


E-Utah will be overseen by the Utah Electronic Commerce Council (UECC), an
advisory boeard to the State Chief Information Officer (CIO).  Routine contract
administrative activities will be implemented through the contract
administrator, who is the state electronic commerce coordinator, working in
concert with UII. Final statutory and decision-making authority for this
contract resides with the CIO.  The duties and responsibilities of the UECC and
UII are as follows:

     A.   Notwithstanding any other provisions contained herein, it is expressly
     agreed that UII is an independent contractor in the performance of each and
     every part of this Contract.  As such UII is solely liable for all labor
     and expenses in furtherance of such performance hereunder.  It is expressly
     agreed that UII and any of its subcontractors and agents, officers and
     employees in the performance of this Contract shall act in an independent
     capacity and not as officers or employees of the State.  It is further
     expressly agreed that this Contract shall not be construed as a partnership
     or joint venture between UII or any subcontractor and the State of Utah.

     B.   UII may become an agent of the State only by the expressed written
     consent of the State.

     C.   UII will not pledge any assets of the State in its care, custody or
     control, or cause any type of lien to attach to such.

     D.   UII will provide network manager services in exchange for the
     opportunity to earn a reasonable profit from the Network's premium
     services.  Premium Services are those


                                       4

<PAGE>

     services or information that are made available in such a way that they
     have commercial value or add convenience to the user.  UII will develop
     and operate the Network which will serve in a manner which is
     self-supporting and cost effective.  Much of the information access will
     be provided free to Network users. Free services will be funded from the
     proceeds of the premium services.  The development of premium or free
     services will include adequate integration with state agency systems to
     ensure that necessary records are created and populated appropriately.
     The Network will be self-supporting with UII receiving its compensation
     from the net proceeds of premium services.

     E.   The UECC will establish priorities and policies and approve or
     disapprove Service Level Agreements (agreements between the Network and a
     State Agencies or political subdivisions that define circumstances and
     responsibilities relating to providing on-line electronic access and/or
     transactions, which are at the agencies' or political subdivisions'
     discretion.) The UECC will review and approve or disapprove a service
     management plan for activities, schedules and deliverables.  UII will
     submit the plan to the UECC within 60 days of the commencement of this
     contract.  The plan shall also include but not be limited to a detailed
     description of the proposed network security architecture (define) and
     other core or shared services.  The plan will also describe how
     maintenance, back-up disaster recovery and the design and updating of the
     State Home Page will be implemented.  UII will also submit a revised budget
     plan for the operation of the Network within 60 days of the commencement of
     this contract.

     F.   As a contractor for the State, UII will deliver and disburse funds as
     agreed between UII, UECC and any state entity as negotiated in separate
     Service Level Agreement.  All funds handling procedures shall be approved
     by the UECC and the Utah State Treasurer.  UII will keep, maintain and be a
     custodian of all Network financial and operation records.


                                       5

<PAGE>

     G.   UII will disclose information in accordance with the Government
     Records Management Act (GRAMA) and will follow other relevant state and
     federal statutes, rules and regulations applicable to assuring privacy and
     confidentiality.  Service level agreements will specify the process for
     disclosure.  Any disclosure that is not specified in the service level
     agreement shall only be disclosed through the express written authorization
     of the data custodian.


4.   HARDWARE AND SOFTWARE AGREEMENTS


     A.   UII will provide hardware, and provide or develop software as outlined
     in the UII Proposal, and such other hardware and software as may be
     necessary to make the Network operational.

     B.   Upon completion of the initial four year term of the contract, UII
     will provide to the State at no cost, and without additional terms or
     conditions, a complete copy, together with any software updates or
     upgrades made by UII, of all application and network software
     (hereinafter collectively "The Software") developed either by UII or by
     any or all of its Affiliate Network Companies and implemented on the
     network (Corporations who are wholly owned subsidiaries of the National
     Information Consortium, Inc. that serve as the Network Managers for
     state gateway service initiatives.)   UII will also include with The
     Software complete documentation and source code. The State shall be
     granted a perpetual for-use-only  license to The Software including
     rights to modify the code and application as the State deems
     appropriate. An exclusion to this provision applies to software or
     documentation created by third parties and purchased by UII, or one of
     its Affiliate Network Companies.  The Software shall be delivered to the
     State no later than the end of the term of


                                       6

<PAGE>

     the contract unless otherwise agreed to mutually by the parties to this
     contract.  This provision also remains in effect for any additional
     software created by UII or an Affiliate Network Company implemented on
     the Network during any subsequent contract extension, amendment or
     renewal period.

     C.   If this Agreement is terminated by the State "for cause" or by UII for
     reasons other than those identified in section 15 and 16 prior to the end
     of the initial contract term, the State shall be entitled to the license at
     the time termination is effective.  If this Agreement is terminated by the
     State without cause the State reserves the right to negotiate terms for
     licensure of software. The State reserves the right to acquire equipment at
     fair market value at the termination of this contract in coordination with
     UII's leasing agent.

     D.   License shall be limited to State use and may not be sublicensed to
     political subdivisions; however, if the State has a joint program through
     the Network with a political subdivision at the time the license is granted
     or before the termination of the contract, the license may continue to be
     used for such a program only.

     E.   UII shall deposit on a quarterly basis, the most recent version of all
     network application source code in escrow with a neutral third party to be
     mutually chosen by UII and the State.  Over the term of the contract UII
     will have the authority to remove superseded source code.  The source code
     shall be delivered to the State by the Escrow Agent in the event UII: (i)
     is declared insolvent through bankruptcy proceedings, (ii) is unable to
     perform its obligations to the State under the Contract, or (iii) as
     otherwise provided in its agreement with the Escrow Agent.

     UII acknowledges that the State will review, approve and subsequently
     receive from UII, an


                                       7

<PAGE>

     executed copy of the software escrow agreement between UII and the
     Escrow Agent to the State.  UII will notify the State in writing of any
     amendments to such agreements, any change in Escrow Agent, or of any
     replacement or successor escrow arrangements.  The Escrow Agent will
     provide written notification to the State's Contract Administrator, at
     least semiannually, detailing all account activity during the previous
     period.

     F.   All Network trademarks, trade names, logos and other identifiers,
     Internet uniform resource locators, Internet addresses and e-mail addresses
     obtained or developed pursuant to this Contract shall be the property of
     the State.


5.   CONNECTIONS BETWEEN INFORMATION NETWORK AND STATE AGENCIES


     Costs associated with and maintenance of communication links from State
facilities to UII facilities for Network purposes, including but not limited to
leased circuits from telephone or cable companies, shall be paid as expenses by
UII.


6.   NETWORK SERVICE


     A.   UII shall negotiate with and obtain written Service Level Agreements
     from each separate data-providing entity (hereinafter, "DPE") from which
     electronic access or transactions are desired.

     B.   Subscribers (customers who apply for and receive from the network, a
     user name and password in order to access the services they desire) will be
     required to execute a contract


                                       8


<PAGE>

     for services.  All contracts with subscribers and all SLAs shall be subject
     to approval and continuing monitoring by the UECC.

     C.   UII will enter into an SLA with each agency or political subdivision
     who provides information to UII for the Network or which has a transaction
     which furnishes information to the agency or political subdivision.  These
     agreements will be signed by the agencies' authorized representative(s) and
     will be approved by the UECC.  Only information that is legally and
     ethically distributable, as determined by the state agency, in its capacity
     as the legal custodian of the respective data, will be included on the
     Network.  The SLA will detail what information will be accessed or
     transactions performed, how it will be accessed and provided to the public
     or how the transaction will generally operate with the agency, any
     statutory fees or enhanced access charges, and what, if any special
     requirements must be satisfied by the individual customers to qualify for
     access to the information or to perform the transaction.  The agency and
     UII will agree on a schedule for collection and payment of any statutory
     fee required.  Once an agreement has been reached and approved by the UECC,
     the public information application will be developed according to the
     agency's SLA.

     D.   Since UII's software developer creating the application may see some
     confidential information while working with the agency representative in
     determining which data fields are required, UII's employees must satisfy
     any privacy and confidentiality requirements that the agency may require
     prior to beginning work.

     E.   All SLA's or other requests regarding the Network from non-state level
     political subdivisions must be approved by the UECC through the service
     request process.  The UECC shall establish the priority of such requests.


                                       9

<PAGE>

7.   DISTRIBUTION OF NETWORK REVENUES


     A.   The establishment of all charges to Network users shall be reviewed by
     the UECC. The UECC will review and approve any and all Network use or data
     access charges for fairness, reasonableness, and appropriateness.  UII may
     at any time recommend changes in charges to the UECC.

     B.   In establishing Network use or data access charges the UECC shall
     consider the following factors:

          (1)  A commitment to the public policy requirement to provide
          electronic access to public records at the most reasonable rate
          possible and to improve government service to its citizens and
          businesses by allowing transactions online.

          (2)  That the charges may be adjusted to permit funding of special
          projects and enhancement of public service.

          (3)  The entrepreneurial and start-up nature of the business and
          attendant risk of capital for UII and the need to earn a reasonable
          profit on Network operations.

          (4)  The need to invest in the reasonable expansion, maintenance and
          improvement to online network transactions and information services.

          (5)  Any other reasonable factors which in the opinion of UECC should
          be considered.

     C.   In the event that costs which UII pays State agencies for data or
     data access are reduced or increased as a result of legislation or State
     regulatory administrative changes, such reductions or increases shall be
     passed on directly to subscribers and users of the information network
     unless otherwise approved in writing by the UECC.


                                      10

<PAGE>

8.   NETWORK MANAGER REMUNERATION AND REVENUE DISTRIBUTION


     Flow of funds will be determined through Service Level Agreements with Data
Custodians as approved by the UECC and the State Treasurer.  Within the
framework of the revenue distribution procedure addressed in Section 7 above,
the distribution of all  funds attributable to Network transactions and
subscriptions will be in the following order unless otherwise mutually agreed to
between UII and the State in writing.

     -    Payment of statutory fees.

     -    Payment of all Network operating expenses and costs of sale.  These
          expenses include but are not limited to the core and ongoing costs of
          the operating the Network as well as applications development costs
          associated with the deployment of free and premium services.

     -    Payment of reasonable and necessary expenses of the UECC as mutually
          agreed by the Board and UII as stated in the UECC budget plan.

     -    All remaining funds will be retained by UII.


9.   FINANCES, RECORDS AND REPORTING


     A.   UII shall handle all revenue from Network operations as determined in
     accordance with Section 8.  UII shall establish one or more accounts in
     financial institutions which are federally insured for deposit of revenue
     from Network operations and shall furnish the State with the names of the
     institutions, the account numbers, and the names of those persons having
     signatory authority.


                                      11

<PAGE>

     B.   All UII documents and records pertaining to operation of the Network
     will be available for inspection, auditing, and copying by the State, or
     other authorized representatives designated by the State, at any reasonable
     time.  UII corporate records remain property of the corporation and are not
     subject to public inspections.  Monthly income statements and balance
     sheets for the Network will be provided to the State by UII.

     C.   To the extent an audit report discloses any discrepancies in the UII
     charges, billings, or financial records, and following a period for review
     and verification of the amount by UII, UII will adjust the payment as soon
     as reasonable possible, but not to exceed 90 days.  UII shall cooperate to
     assure that verification is completed in a timely manner.

     D.   UII also agrees to make other changes requested by the State, which
     are agreed to by UII and the UECC, to comply with recommendations resulting
     from any audit.  Any such audit will be performed by a competent and
     reputable Certified Public Accountant licensed in Utah or a member of a
     'big six' accounting firm.

     E.   The accounting system is to include a numbered chart of accounts,
     books of original entry of all transactions, appropriate subsidiary
     ledgers, a general ledger which includes to-date postings and an audit
     trail through financial statements.  Such books may either be maintained on
     paper or on computer with appropriate backup.  UII shall from the beginning
     of this Contract adopt the calendar year ending December 31st for reporting
     purposes.

     F.   UII will report activities to the State as follows:

          (1)  Within 120 days after the close of UII's fiscal year, UII will
          submit to the State an annual financial report and audit.  These
          reports must be certified by an independent certified public
          accountant (selected by UII) who may be the accountant


                                      12

<PAGE>

          or a member of the firm of accountants who regularly audit the
          books and accounts of UII.  The submitted audit information must
          include, but is not limited to, the audited financial statements,
          auditor opinions, reports on internal control, findings and
          recommendations and management letters. In addition, UII is subject
          to any further audit and review determined necessary by the State
          after furnishing reasonable notice to UII.

          (2)  Develop and regularly update, in cooperation with the data
          custodians, a draft Network strategic plan for presentation to the
          UECC on at least an annual basis.

          (3)  Report to the UECC on a periodic basis concerning potential new
          applications, services and related issues.  UII will strive to improve
          access to, and the utility of the public information and transactions
          available through the Network by exploring and recommending ways to:

               a.   Expand the amount and kind of public services and
               information available free of charge;

               b.   Increase the utility of the public information presented,
               the transactions available, and the form in which both are
               provided;

               c.   Expand the base of users who access the public services and
               information;

               d.   Improve individual and business access to public services
               and information through implementing improvements in technology;
               and,

               e.   Make recommendations designed to increase the effectiveness
               and resources of the Network.

               f.   Redesign and maintain the State of Utah website and the
               agreed upon Network pages


                                      13

<PAGE>

          (4)  UII will measure Customer satisfaction including Web surveys and
          report results to the UECC on a schedule to be agreed to by the UECC
          and UII but no less than on an annual basis, and

          (5)  UII will measure and report to the UECC on growth trends and
          usage of the Network, as well as hits, access, transactions and other
          performance measures or metrics as mutually agreed upon by the UECC
          and UII.  Working in cooperation with the UECC, UII will submit the
          details of the proposed service measures either as part of the service
          management plan for Network wide indicators and as part of the Service
          Level Agreements for application specific indicators.

          (6)  UII will utilize the state's payment card processor for payment
          card transactions, with the provision that UII will receive state
          rates negotiated as part of the state of Utah contract with First
          Security Bank, during the life of that contract unless otherwise
          determined by the State.

          (7)  UII shall provide annually to the Utah State Auditor, 211 State
          Capitol Building, Salt Lake City, UT 84114, a Statement on Auditing
          Standards 70 Report (SAS-70).


10.  PERSONNEL PRACTICES


                                      14

<PAGE>

     A.   The hiring, recruitment, management, training, and firing of UII
     employees will be the responsibility of UII.  The State's only involvement
     in the personnel affairs of UII shall be limited to disclosure of the names
     and positions of officers and employees of UII, except within its role as
     auditor.

     B.   No officer, employee, or director of UII shall receive a salary,
     except as and for services performed by such officer, employee, or
     director, or member for UII on behalf of he Network.

     C.   UII shall be responsible for all required costs attributable to its
     officers and employees, including but not limited to, worker's compensation
     premiums and deductible, unemployment compensation tax withholding
     contributions, tax withholding contributions, and similar items.


11.  INCORPORATION BY REFERENCE


     The provisions of the RFP and the UII Proposal are hereby incorporated into
this Contract and made a part hereof.  If there is any conflict among the
provisions of the RFP, the UII Proposal, this Contract, and the laws of the
State, then those conflicts will be resolved in the following order precedence:

1.   Utah law

2.   Standard Terms and Conditions Contract Attachment A

3.   Contract Attachment B

4.   The RFP and addenda & the UII Proposal, equally.


                                      15

<PAGE>

This Contract may be amended only by mutual expressed written consent.


12.  INSURANCE AND BONDS


     UII shall provide the UECC written proof of the following insurance
provided by a qualified firm authorized/admitted to do business in Utah:

     A.   General comprehensive liability insurance policy in the amount of at
least  $1,000,000.

     B.   Workers' compensation insurance coverage as required by State law on
     all UII employees.

     C.   Fidelity bond in the amount of at least $100,000 per UII employee.

13.  CHANGES IN INFORMATION NETWORK

     A.   Network operations and development shall be generally in accordance
     with the UII Proposal, the RFP and this contract as described in Section
     11, and Section 13.B.

     B.   A planned material change in Network operations cannot be made by UII
     without the prior written consent of the UECC.  A "material change"
     includes, but is not limited to, a change which is substantial and which
     increases response time to inquires, adds to the complexity of Network use,
     diminishes services provided to users, or results in a comparable impact on
     operations noticeable by users.


                                      16


<PAGE>

     C.   UII will provide to the UECC at least thirty (30) days prior written
     notice of a planned material change in Network operations.

     D.   UII shall timely provide to the UECC such other management reports as
     the UECC may reasonably request.

14.  NOTICES

     Each party may change its designation for notice following written notice
     to the other party to this Contract.

     UECC
          Mr. Alan C. Sherwood
          Chair, Electronic Commerce Council
          State Office Building
          Salt Lake City, Utah



     UII
          Joseph Nemelka and Richard L. Brown
          Utah Interactive, Inc.
          Salt Lake City, Utah


                                      17

<PAGE>

     Notices by the parties to one another shall be given in writing to the
     persons identified above or to such other persons as may be subsequently
     identified in a written notice.  Such notices shall be effective on the
     date of receipt if sent by U.S. first-class or restricted delivery mail,
     postpaid, or by any reputable overnight delivery service, prepaid.


15.  TERMINATION OF CONTRACT


     The State shall have the right to terminate this Contract for cause,
subject to cure, by providing written notice of termination to UII.  Such notice
shall specify the time, the specific provision of this Contract or "for cause"
reason that gives rise to the termination and shall specify reasonable
appropriate action that can be taken by UII to avoid termination of the
Contract.  The State shall provide a period of up to sixty (60) days, unless
otherwise specified in this Contract, for UII to cure breaches and deficiencies
of its performance obligations under this Contract.

     The State may terminate this Contract at any time, and without cause, if
directed to do so by statute.


16.  TERMINATION FOR CAUSE


     A.   For purposes of this Contract, the phrase "for cause" shall mean, but
     not be limited to:

          (1)  Any material breach or evasion by UII of the terms or conditions
          of this Contract and its amendments, if any; or,

          (2)  Substantial cessation of Network services by the Network; or,

          (3)  Fraud, misappropriation, embezzlement, malfeasance, significant
          misfeasance, or illegal conduct by UII, its officers, or directors;
          or,


                                       18

<PAGE>

          (4)  Dissolution of UII or forfeiture of its company existence; or,

          (5)  Amendment of the States's enabling authority making the network
          substantially impractical; or,

          (6)  An adverse judicial decision by a court of competent
          jurisdiction, which has the effect of rendering Network operations no
          longer feasible; or,

          (7)  Insolvency of UII; or,

          (8)  Material breach of an SLA; or,

          (9)  Negligent disclosure of any confidential information; or,

          (10) Legislation materially alters the ability of UII to operate the
          Network; or,

          (11) UII may terminate this Contract if the key premium service
          applications do not generate sufficient revenue to support the basic
          core functions required to operate the Network.


17.  CONTINUATION OF OPERATIONS DURING TRANSITION PERIOD


     If for any reason this contract shall be terminated or upon expiration of
the Contract without extension, or at the end of any extension UII shall, at the
option of the State, continue to operate under this Contract as Network Manager
in accordance with all terms and conditions of this Contract, together with any
amendments or modifications in existence at such time, for a period of up to
twelve (12) months from the time of expiration or notification of termination
from the State to UII.  The intent of this provision is to insure continuation
of information network operations while a successor network manager is chosen
and installed.  The State shall notify UII at the earliest possible opportunity
but in any event, no later than the date of notification of termination, or the
notifications dates set forth in Section 2 above whichever is earlier that it
shall continue operations and the duration of time for such continuation.


                                      19

<PAGE>

18.  PATENT, COPYRIGHT, TRADEMARK, TRADE SECRET INDEMNITY


     UII warrants that its proposed operation of the Network does not and shall
not infringe on the United States patent, copyright, trademark or trade secret
right of any person or entity.  The State shall be provided with prompt notice
of any such claim of infringement and UII shall have the exclusive right to
defend or settle such claim at UII's option.  The State shall cooperate with UII
in its defense or settlement of such claim at no expense and no liability to the
State.


19.  MARKETING


     It is recognized that UII and its affiliated companies intend to use its
experience with the State, the UECC and DPE's as a marketing tool with third
parties.  It is agreed that UII may make references to and use the State as a
reference.  If UII intends to claim that the State "endorses" UII or use the
State seal, UECC or Network logo or claim representations made by the State, all
such material must be submitted to UECC for review and approval prior to use by
UII.


20.  LIABILITY


     A.   The State, its agents, and employees shall not be legally responsible
     for errors due to problems caused by UII's operation of the Network.


                                      20

<PAGE>

     B.   UII agrees for itself, its agents, employees, and assigns to hold
     harmless, indemnify and defend the State, its agents and employees from any
     actions arising out of UII's negligence or material failure to perform
     under the terms of this Contract.


     C.   UII agrees that it has no right of subrogation or contribution from
     the State for any judgment rendered against UII to the extent such
     judgement results from UII's negligence or material failure to perform
     under the terms of this contract.


21.  ASSIGNMENT


     UII may not assign any of its rights or delegate any of its duties
hereunder unless done pursuant to prior written consent of the State, which
consent shall not be unreasonably withheld.


22.  CLAIMS


     This Contract shall be construed according to the laws of the State of
Utah.  Any legal proceedings against the State regarding this solicitation or
any resultant contract shall be brought in the State's administrative,
legislative, or judicial forums.

23.  ENTIRE AGREEMENT


                                      21

<PAGE>

     This Contract, including any documents incorporated by reference,
constitutes the entire agreement of the parties and supersedes all other prior
written or oral contracts between the parties with respect to the subject matter
hereof.  This Contract may be amended only by a writing signed by the parties
thereto.


                                      22



<PAGE>
                                                                    EXHIBIT 23.2

                       CONSENT OF INDEPENDENT ACCOUNTANTS


        We hereby consent to the use in this Registration Statement on Form S-1
of our report dated June 16, 1999, relating to the consolidated financial
statements of National Information Consortium, Inc., and of our reports dated
May 6, 1999, relating to the financial statements of Indian@ Interactive, Inc.,
Kansas Information Consortium, Inc., Nebrask@ Interactive, Inc. and Arkansas
Information Consortium, Inc., which appear in such Registration Statement. We
also consent to the references to us under the heading "Experts" in such
Registration Statement.


/s/ PRICEWATERHOUSECOOPERS LLP
Kansas City, Missouri


June 16, 1999


<PAGE>

                             POWER OF ATTORNEY

         KNOW ALL PERSONS BY THESE PRESENT, that the person whose signature
appears below constitutes and appoints Jeffery S. Fraser and James B. Dodd,
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) to this Registration Statement, and to
sign any registration statement for the same offering covered by the
Registration Statement that is to be effective upon filing pursuant to Rule
462(b) promulgated under the Securities Act of 1933 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 and about the premises, 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.

         IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
14th day of June, 1999.


                                                       /s/ Kevin C. Childress
                                                       ----------------------
                                                       Kevin C. Childress
                                                       Chief Financial Officer



<TABLE> <S> <C>

<PAGE>
<ARTICLE> 5
<RESTATED>

<S>                             <C>
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-1999
<PERIOD-START>                             JAN-01-1999
<PERIOD-END>                               MAR-31-1999
<CASH>                                       1,115,136
<SECURITIES>                                         0
<RECEIVABLES>                                3,694,625
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                             5,168,591
<PP&E>                                       1,684,850
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                              16,633,489
<CURRENT-LIABILITIES>                        6,150,552
<BONDS>                                              0
                                0
                                          0
<COMMON>                                             0
<OTHER-SE>                                   9,786,820
<TOTAL-LIABILITY-AND-EQUITY>                16,633,489
<SALES>                                     11,455,065
<TOTAL-REVENUES>                            11,455,065
<CGS>                                        8,603,698
<TOTAL-COSTS>                                8,603,698
<OTHER-EXPENSES>                             3,301,401
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                              36,995
<INCOME-PRETAX>                            (3,321,831)
<INCOME-TAX>                                  (22,788)
<INCOME-CONTINUING>                        (3,299,053)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                               (3,299,053)
<EPS-BASIC>                                   (0.08)
<EPS-DILUTED>                                   (0.08)


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