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<SEC-DOCUMENT>/in/edgar/work/20000919/0001015402-00-002541/0001015402-00-002541.txt : 20000923
<SEC-HEADER>0001015402-00-002541.hdr.sgml : 20000923
ACCESSION NUMBER:		0001015402-00-002541
CONFORMED SUBMISSION TYPE:	10KSB
PUBLIC DOCUMENT COUNT:		14
CONFORMED PERIOD OF REPORT:	19990830
FILED AS OF DATE:		20000919

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			YP NET INC
		CENTRAL INDEX KEY:			0001045742
		STANDARD INDUSTRIAL CLASSIFICATION:	 [7371
]		IRS NUMBER:				85026668
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930
</COMPANY-DATA>

		FILING VALUES:
			FORM TYPE:		10KSB
			SEC ACT:		
			SEC FILE NUMBER:	000-24217
			FILM NUMBER:		724862
</FILING-VALUES>

			BUSINESS ADDRESS:	
				STREET 1:		4840 E JASMINE ST
				STREET 2:		STE 110
				CITY:			MESA
				STATE:			AZ
				ZIP:			85020
				BUSINESS PHONE:		4806549646
</BUSINESS-ADDRESS>

				MAIL ADDRESS:	
					STREET 1:		4840 EAST JASMINE STREET
					STREET 2:		SUITE 105
					CITY:			MESA
					STATE:			AZ
					ZIP:			85020
</MAIL-ADDRESS>

					FORMER COMPANY:	
						FORMER CONFORMED NAME:	RIGL CORP
						DATE OF NAME CHANGE:	19980707
</FORMER-COMPANY>

						FORMER COMPANY:	
							FORMER CONFORMED NAME:	RENAISSANCE INTERNATIONAL GROUP LTD
							DATE OF NAME CHANGE:	19980115
</FORMER-COMPANY>
</FILER>
</SEC-HEADER>
<DOCUMENT>
<TYPE>10KSB
<SEQUENCE>1
<FILENAME>0001.txt
<TEXT>

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

              (Mark one)

            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  For the fiscal year ended September 30, 1999

             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
       For the transition period from _______________ to ________________

                         Commission File Number: 0-24217

                                  YP.NET, INC.
                 (Name of Small Business Issuer in its Charter)

          NEVADA                                         85-0206668
    (State or other jurisdiction of                    (IRS Employer
     incorporation or organization)                 Identification No.)

   4840 EAST JASMINE STREET, SUITE 105
          MESA, ARIZONA                                    85205
(Address of principal executive offices)                 (Zip Code)

                                 (480) 654-9646
                           (Issuer's telephone number)
       Securities registered under Section 12(b) of the Exchange Act: NONE
         Securities registered under Section 12(g) of the Exchange Act:
                          COMMON STOCK, $.001 PAR VALUE
                                (Title of Class)

     Check  whether  the  issuer  (1)  filed all reports required to be filed by
Section  13  or 15(d) of the Exchange Act during the past 12 months (or for such
shorter  period  that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.  Yes   No X.
                                                                       --   --

     Check  if  there  is no disclosure of delinquent filers in response to Item
405  of  Regulation  S-B  contained  in  this  form,  and  no disclosure will be
contained,  to  the  best  of  registrant's  knowledge,  in  definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or  any  amendment  to  this  Form  10-KSB.  [  ]


     Registrant's revenues for its most recent fiscal year were      $8,572,185.

     The  aggregate  market  value  of  the  common stock held by non-affiliates
computed  based  on  the  closing  price  of  such  stock on August 14, 2000 was
approximately  $12,189,406.

     The  number  of  shares  outstanding  of the registrant's classes of common
stock,  as  of  August  14,  2000  was  40,900,798.

     Documents  incorporated  by  reference:  NONE

     Transitional  Small  Business  Disclosure  Format  (check  one):Yes   No X.
                                                                        --   --


<PAGE>
                                     PART I

     Except  for  historical  information  contained  herein,  this  Form 10-KSB
contains  forward-looking  statements  within  the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the
Securities  Exchange  Act  of  1934, as amended (the "Exchange Act").  We intend
that  the  forward-looking  statements be subject to the safe harbors created by
these  statutory  provisions.  Forward-looking  statements  involve  risks  and
uncertainties  and  include, but are not limited to, statements regarding future
events,  plans  and  expectations.  Wherever  possible,  we  have identified the
forward-looking  statements  by  words  such  as  "anticipates,"  "believes,"
"contemplates,"  estimates,"  "expects,"  "intends,"  "plans,"  "projects,"
"forecasts"  and  similar  expressions.

     Our  forward-looking statements reflect only our current views with respect
to  future  events  and financial performance or operations and speak only as of
the date the statements are made.  Our actual results may differ materially from
such  statements.  Factors  that  may  cause  or  contribute to such differences
include,  but  are  not limited to, those discussed in "Description of Business"
and  "Management's Discussion and Analysis of Financial Condition and Results of
Operations,"  as  well  as  elsewhere  in  this  report  and  in  the  exhibits
incorporated  by  reference.

     Although  we  believe  that  the assumptions underlying the forward-looking
statements  in  this  Form 10-KSB are reasonable, any of these assumptions could
prove  inaccurate.  In  addition,  our  business  and  operations are subject to
substantial  risks,  some  of  which  are  identified  in  this report and which
increase  the  uncertainties inherent in the forward-looking statements included
in this Form 10-KSB.  There can be no assurance that the results contemplated in
these  forward-looking  statements  will  be  realized.

     The  inclusion  of  forward-looking information should not be regarded as a
representation  by  YP.Net  or any other person that the future events, plans or
expectations  contemplated  will  be  achieved.  We  disclaim  any obligation to
subsequently  revise  forward-looking statements to reflect subsequent events or
circumstances  or  the  occurrence  of  unanticipated  events.

ITEM  1.               DESCRIPTION  OF  BUSINESS

GENERAL

     We  are  in  the  business  of providing Internet-based yellow page listing
services  on our Yellow-Page.Net and yp.net Web sites.  Our Web sites serve as a
                 ---------------     ------
search  engine  for  yellow  page  listings in the United States and Canada.  We
charge  our  customers for a "preferred" listing of their businesses on searches
conducted  by  consumers through our Web sites.  We currently have approximately
140,000  preferred  listing  customers  on  a  monthly  basis.

     The  predecessor   company,   Nuclear   Corporations   of  New  Mexico  was
incorporated  in state of New Mexico in 1968 and the domicile was changed to the
state  of  Nevada  in  1994.  Renaissance Center Inc.  which was incorporated in
1996  in  Nevada and Nuclear Corporation of New Mexico a Nevada Corporation were
merged  in  1997.  Our Articles of Incorporation were restated in July, 1997 and
our  name  was  changed  to  Renaissance International Group, Ltd.  Our name was
later  changed  to RIGL Corporation effective July, 1998.  Our original business
involved  the development of software to integrate digital multi-media equipment
and components and later changed to focus on the development of software for the
medial  billing  and  practice  management  industry.  None  of these activities
progressed  beyond  the  developmental  stage.  In June, 1999, we acquired Telco
Billing,  Inc.  and  commenced  our  current  operations  through  this  entity.


                                        2
<PAGE>
     From  August  through  December,  1999,  we  abandoned  all  subsidiaries
previously involved in the multi-media software and medical billing and practice
management  areas.  With the acquisition of Telco, our business focus shifted to
the  Internet  yellow  page services business and this business is currently our
sole  source  of  revenue.  In  October,  1999  we  amended  our  Articles  of
Incorporation  to  change  our corporate name to YP.Net, Inc. to better identify
our  company  with  our  business  focus.  Telco  is  operated as a wholly-owned
subsidiary  of  YP.Net.

OUR  WEB  SITES

     We  control  the domain names Yellow-Page.Net and yp.net and maintain these
                                   ---------------     ------
Web  pages  for  Internet  access.  At  these Web sites, consumers can search an
approximate  18  million  listing database containing United States and Canadian
businesses.  We  provide  yellow  page  listings for these businesses along with
directories  and  maps to the business location.  We also provide nationwide 800
and  888 directory listings and search engines for e-mail addresses and persons.
Our  site  offers  stock quotes, job searches, travel services, news and weather
information,  movie  reviews  and  listings,  and  entertainment  and restaurant
information.

     Our  directory  search  service  integrates  yellow  page  information  by
utilizing  yellow  page  category  headings  in  combination with a natural word
search  feature to provide a user-friendly interface and navigation vehicle.  We
enhance  accuracy of responses to user queries by utilizing criteria searches in
the directory services.  This allows users to search by specific city, state and
business  categories.

     We currently derive substantially all of our revenue from selling preferred
listings  in  the  search  results  on  our  Web  sites.  A preferred listing is
displayed  at  the  beginning of search results obtained by users in response to
their  specific  queries.  A  preferred  listing  is  enhanced on the display of
search results and includes a "mini-Web page" listing where the preferred lister
can  utilize  up  to  40  words  to advertise and provide additional information
regarding  its business.  A preferred listing customer can also link its own Web
page  to  the  search  results  identifying  the  preferred lister.  We are also
developing  banner advertisements and outside marketing efforts as an additional
revenue  source.

TECHNOLOGY  AND  INFRASTRUCTURE

     We  believe that one of our principal strengths is our internally developed
technology,  which we have designed specifically for handling our Internet-based
data.  Our  technology  architecture features specially designed capabilities to
enhance performance, reliability and scalability of data regarding our preferred
listing  customers.  These  features  consist  of  multiple proprietary software
modules  and  processes  that support the core internal functions of operations.
The  technologies  include  Customer Service Applications, Billing Applications,
LEC  Filtering  Processes  and  Database  Management.


                                        3
<PAGE>
     Customer  Service  Applications.  We  have  designed  proprietary  Customer
Service  Applications  to enable rapid development and management of information
related  to  our  preferred  listing  customers  in  a variety of formats.  This
application  incorporates an automated retrieval system that integrates with our
other  technologies.  This integration enables real-time updates to our database
as  our  customer service representatives interact with and obtain data from our
preferred listing clientele.  This application also operates in conjunction with
the  Billing  Applications.

     Billing  Applications.  Our  billing  process  is  primarily  through local
exchange carriers ("LECs") which are local telephone service providers.  Our LEC
billings  are  routed  to  the  LEC's  and  appear  on  our preferred customers'
telephone  billing statements.  To a lesser extent, we direct bill our preferred
customers.  Our  Billing Applications facilitate both our LEC and direct billing
functions.

     LEC Filtering Processes.  The LEC Filtering Processes are core technologies
developed  to  enhance  the applications that support our systems.  By utilizing
these  processes,  we  are  able  to  more accurately bill our preferred listers
through  the  appropriate  LEC.  These  processes  are  a vital component of our
ability  to  aggregate  content  from  multiple sources for our billing process.
Information  is  sorted  and  updated  with a method of maintaining an expanding
heterogeneous  database  and  allows  disparate  data sources to be combined and
deployed  through  a  single  uniform interface, regardless of data structure or
content.  This  allows  a  single  database query to produce a single result set
containing  data extracted from multiple databases.  Database clustering in this
manner  reduces  the dependence on single data sources, facilitates data updates
and  reduces  non-conforming  data  submitted  to  the  LECs.

     Database  Management.  We  have  also  developed  a  proprietary  database
technology  to  address  specific  requirements  of  our  business  strategy and
information  infrastructure services.  This technology enables us to provide our
services  with  fewer  service  personnel.  Our  database is integrated with the
applications modules and the LEC Filtering Processes.  This database consists of
our  current  and  potential  customers and is updated on a real-time basis as a
customer's  data  is  received from new listings or through our customer service
representatives.  We  utilize  this  database  to  maintain customer service and
monitor  the  quality of service provided by our customer service personnel.  We
also  use  the database to determine new products desired by our customers.  Our
technology  has  been  specifically  designed  to function with a high degree of
efficiency within the unique operating parameters of the Internet, as opposed to
commonly  used  database  systems.


                                        4
<PAGE>
STRATEGIC  ALLIANCES

     In  order  to  service  users  more  effectively  and  to  extend  our
Yellow-Page.Net  brand to other Internet sources, we have entered into strategic
- ---------------
relationships  with  business  partners  offering  content,  technology  and
distribution capabilities.     We utilize Worldpages.com as our data listing and
                                          --------------
Web  page hosting provider. Worldpages.com provides the server for our Web pages
                            --------------
and  our  search  engine capabilities.  We have a cross-listing arrangement with
Superior Business Network ("SBN").  This cross-listing arrangement increases our
circulation  by  an  additional  10,000,000  page  views  per  month.

     We  are  members  of  the  Yellow  Page  Publication  Association  and  the
Association of Directory Publishers.  These organizations are trade associations
for  yellow  page  publishers  that  promote  quality  of  published content and
advertising  methods.

     In  order  to  broaden  Yellow-Page.Net's  user  base  we  have established
                             ---------------
cross-linking  relationships with operators of commercial Web sites and Internet
access  providers.  We  have  over  400  affiliated  Web  sites  that  link  to
Yellow-Page.Net.  We  believe  these arrangements are important to the promotion
- ---------------
of  Yellow-Page.Net,  particularly  among  new  Web  users  that  may access the
    ---------------
Internet  through  these  other  Web  sites.  These  co-promotional arrangements
typically  are  terminable  at  will.  We  also  utilize  Fax4free.com  in  a
co-promotional  effort  to provide services to our Web site users to allow these
users  to receive and send unlimited facsimiles, and receive voicemail on e-mail
at  no  charge.

     Our  future success will depend on our ability and to continue to integrate
and  distribute  information  services of broad appeal.  Our ability to maintain
our  relationships  with  content  providers and to build new relationships with
additional  content providers is critical to our marketing effect the success of
our  business.

BILLING  SERVICE  AGREEMENTS

     In order to bill our preferred listing customers through their LECs, we are
required  to utilize one or more billing service integrators.  These integrators
have  been  approved  by various LECs to provide billing, collection and related
services  through  the  LECs.  We  have  entered  into  customer billing service
agreements  with  Integretel,  Inc.  ("IGT") and with Enhanced Services Billing,
Inc. ("ESBI") for these services.  Under these agreements, our service providers
bill  and  collect  our  charges  to  preferred  listing  customers  through LEC
billings.  These  amounts,  net  of reserves for bad debts, billing adjustments,
telephone  company  fees  and  the  integrator's  fees,  are remitted to us on a
monthly  basis.

MARKETING

     Our  primary  marketing  efforts are through direct mail solicitations that
utilize  a  promotional  discount for listing in the form of a check.  We market
exclusively  to  businesses  and  focus  on  businesses that utilize traditional
published  yellow  page  services.  We  utilize our database as a source for our
mailing  list.  We  have  also  implemented  a  "customer satisfaction" program.
Through this program we have retained a firm to contact each of our customers to
update  the  customer  information regarding the customers business and links to
the  customer's  Web  page  if  applicable.


                                        5
<PAGE>
     We intend to increase market share in our current markets through strategic
acquisitions  providing  value-added  services  to  our core business as well as
other  marketing  campaigns.  We  are  not  presently a party to any acquisition
agreement.  We  intend  to  develop marketing strategies to increase credibility
and  visibility  of our Web page service to targeted markets.  We also intend to
promote  value-added services and product areas.  Our future success will depend
on  our  ability to continue to integrate and distribute information services of
broad  appeal.  Our  ability  to  maintain  and  to build new relationships with
content  providers  will  be  critical  to  the  success  of  our  business.

COMPETITION

     We operate in the Internet services market, which is highly competitive and
rapidly  expanding.  We  compete  with online services, other Web site operators
and  advertising  networks,  as  well  as  traditional  offline  media  such  as
television,  radio, traditional yellow page directory publishers and print share
advertising.  Our  services  compete,  or  we  expect  to compete, with numerous
directory,  content,  Web site production and other Internet information service
providers.  In  particular,  most  larger LECs provide services similar to ours.

     The  principal competitive factors of these markets include personalization
of  service,  ease  and use of directories, quality and responsiveness of search
results,  availability of quality content, value-added products and services and
access to end users.  Competition among current and future suppliers of Internet
navigational  and  informational  services,  high-traffic Web sites and Internet
access  providers,  as  well  as  competition  with  other media for advertising
listings,  could  result  in  significantly  lower  prices  for  advertising and
reductions  in  advertising  revenues.

     Most,  if  not  all, of our competitors have capital resources greater than
ours.  These  capital  resources  may  allow  our  competitors  to  engage  in
advertising  and other promotional activities that will enhance their brand name
recognition.  The  LECs  have  the advantage of name recognition and far greater
access  to potential customers because they already provide these customers with
local  telephone  exchange  services.

     We  believe we can successfully compete in this market by providing quality
services  at competitive prices and due to the name recognition of our Web site.

REGULATION

     The  Federal Trade Commission has aggressively pursued what it perceives as
deceptive  practices related to direct mailer and other promotions and involving
LEC  billing  type  practices.  We  have  been involved in a significant Federal
Trade  Commission  enforcement  action  regarding  these  matters.  See  "Legal
Proceedings"  below.

     We  are also subject to provisions of the Federal Trade Commission Act that
regulate  advertising  in  all  media,  including  the  Internet,  and  require
advertisers to substantiate advertising claims before disseminating advertising.
The  Federal  Trade  Commission  has  recently  brought several actions charging
deceptive  advertising  via  the  Internet  and  is  actively  seeking new cases
involving  advertising  via  the  Internet.


                                        6
<PAGE>
     Due  to  increased  use, laws and regulations relating to the Internet have
been adopted.  These include regulation issues related to user privacy, pricing,
content,  taxation,  copyrights, distribution, and product and services quality.
Concern  regarding  Internet user privacy has led to the introduction of federal
and  state  legislation  to  protect  Internet  user  privacy.  In addition, the
Federal  Trade  Commission  has  initiated investigations and hearings regarding
Internet  user  privacy  that  could  result  in rules or regulations that could
adversely affect our business.  As a result, we could become subject to new laws
and regulations that could limit our ability to conduct targeted advertising, or
distribute  or  collect  user  information.

     These  or  any  other laws or regulations that may be enacted in the future
could  have  several  adverse  effects  on  our business.  These effects include
substantial  liability including fines and criminal penalties, the prevention of
certain  products  or  service  offerings  and  the  prevention or limitation of
certain  marketing  practices.   As  a  result  of  these  and  future  laws and
regulations,  the  growth in Internet usage could also be substantially limited.

EMPLOYEES

     At  August  31,  2000,  we employed 16 full time personnel, including three
software  developers,  five  customer  service  representatives  and  eight
administrative  personnel.  Our  employees  are  not  covered  by any collective
bargaining  agreements.

ITEM  2.     DESCRIPTION  OF  PROPERTY

     Our  corporate  offices  are  located  in Mesa, Arizona.  We lease a 16,772
square  foot  facility  for annual cost of approximately $125,000 on a long-term
operating  lease  through June 2003. As part of the consideration related to our
license  of the Yellow-Page.Net URL, we sublease approximately 8,000 square feet
                ---------------
of  leased  space  to  Business Executive Services, Inc. through August 2003 for
$1.00  per  year  annual  rent.  See  "Certain  Relationships  and  Related
Transactions."

     We  are  also obligated on another lease for office space that was utilized
prior  to  consolidating  operations at the Mesa facility.  The lease is through
August  2002  and  annual  rent  ranges  from  $202,000  to $280,000 through the
remaining  lease  term.  This  space  has been sublet for the full amount of the
lease  payment through its term.  However, YP.Net remains obligated on the lease
in  the  event  the  sub-tenant  defaults.

ITEM  3.     LEGAL  PROCEEDINGS

     We  are  currently  involved  in  the  following  legal  proceedings:

     Federal  Trade  Commission.  On June 26, 2000, the Federal Trade Commission
("FTC") filed a complaint in the United States District Court of Arizona against
YP.Net,  Inc.,  certain of its past and present officers and directors and other
associated  companies.  The  complaint  alleged  that  YP.Net  and  the  other
defendants  had  engaged  in  deceptive advertising practices and sought certain
preliminary injunctive remedies.  The alleged deceptive practices related to the
direct  mailer  solicitation  utilized  in  our  marketing  activities.


                                        7
<PAGE>
     On July 13, 2000, YP.Net entered into a negotiated settlement of the matter
with  the  FTC.  Under  the  terms  of  a  stipulated  preliminary order, YP.Net
specifically  denied that any of its practices with respect to the direct mailer
were  deceptive  or  otherwise  in  violation of applicable law.  The stipulated
preliminary  order  specified that the settlement agreement with the FTC was not
an  admission  of violation of any applicable law or rule or that any allegation
made by the FTC was true.  YP.Net and the FTC agreed to certain modifications of
the  mailer  and related marketing program, and the FTC agreed that the modified
mailer  and  program  would  not  be considered by their agency to be deceptive.
Upon  hearing  on  July  13,  2000,  the  District Court approved the stipulated
preliminary  order.  YP.Net  anticipates  that  it  will enter into a stipulated
final  consent  decree  with the same terms of the stipulated preliminary order.
However,  the  FTC  has  requested  additional  terms to the consent decree, the
majority  of  which are unacceptable and contrary to the terms of the settlement
agreement  and  stipulated  preliminary  order.

     A  Women's Place.  In August, 1999, we filed a lawsuit in Superior Court of
Coconino  County,  Arizona  against  Holly  K.  Virgil, M.D., P.C. dba A Women's
Place.  Prior  management  had  negotiated  an agreement to provide this medical
practice  with  management services and thereafter advanced interim funding.  To
current  management's  knowledge  no services contract was entered into.  We are
seeking  damages  of  approximately  $235,000  for  recovery  of  advances.  The
defendant has counter-claimed for breach of contract and has claimed unspecified
damages.

     Hudson Consulting Group.  We are a party to an interpleader action filed by
American  Registrar  Transfer  Agent,  our  stock  transfer  agent, in the Third
Judicial  Court  for Salt Lake County, Utah.  The suit names Bruce M. Pritchett,
Hudson  Consulting  Group, Inc., Montana Capital International, Ltd. and Moore &
Elrod,  Inc., as well as YP.Net as defendants.  Prior management had engaged the
Hudson  Consulting  Group  to  obtain equity financing for the company.  Current
management became aware that the Hudson Consulting Group and its principals were
involved  in  potential  illegal  activities  and subject to Securities Exchange
Commission  enforcement action.  Prior management had issued 2,000,000 shares of
common  stock to the Hudson Consulting Group for their services.  Upon discovery
of  the  potential  illegal activity, current management instructed its transfer
agent  to stop all transfers of the subject shares.  The Hudson Consulting Group
and  other  defendants  threatened  litigation if the transfer agent refused the
transfer  of  the  shares  in  question.  The  transfer  agent  then  filed  an
interpleader action to seek a court determination of the ownership of the shares
and  rights  to  transfer.  YP.Net is seeking the return and cancellation of the
shares. The Hudson Consulting Group and other defendants are seeking transfer of
the  shares  and  consequential  damages.

ITEM  4.     SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

     No  matters  were submitted to a vote of the shareholders during the fourth
fiscal  quarter  covered  by  this  Form  10-KSB.


                                        8
<PAGE>
                                     PART II

ITEM  5.     MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS

OUR  COMMON  STOCK

     Our  common stock is traded in the over-the-counter market under the symbol
"YPNT."  Our  symbol had been "RIGL" prior to October, 1999.  Prior to March 23,
2000 our common stock was traded on the OTC Bulletin Board, but was delisted due
to  failure  to  timely  file required reports under the Exchange Act, including
this  Form  10-KSB.  We anticipate that our common stock will be relisted on the
OTC  Bulletin  Board when all Exchange Act filings are current and other listing
criteria  has  been  satisfied.

     The  following  table  sets forth the quarterly high and low bid prices per
share  for  the  common  stock,  as  reported  by the OTC Bulletin Board for the
periods  stated.  The  quotations  represent  inter-dealer  quotations,  without
adjustment  for  retail  mark-up,  markdown  or commission and may not represent
actual  transactions.

FISCAL YEAR  QUARTER ENDED               HIGH            LOW
- -----------  -------------------         -----          -----
       1998  December 31, 1997 . . . . . $2.50 . . . . .$1.03
             March 31, 1998 . . . . . . .$2.37 . . . . .$1.10
             June 30, 1998 . . . . . . . $3.50 . . . . .$0.83
             September 30, 1998 . . . . .$1.94 . . . . .$0.37
       1999  December 31, 1998 . . . . . $0.50 . . . . .$0.50
             March 31, 1999 . . . . . . .$1.19 . . . . .$1.00
             June 30, 1999 . . . . . . . $1.50 . . . . .$1.50
             September 30, 1999 . . . . .$1.06 . . . . .$1.00

     On  September 30, 1999, there were approximately 650 shareholders of record
of  our  common  stock.     The  transfer agent for our common stock is American
Registrar  Transfer  Agent  in  Salt  Lake  City,  Utah.

DIVIDEND  POLICY

     Under  Nevada law, dividends may only be paid out of net profits.  Prior to
our  acquisition  of  Telco, no significant revenue had been generated.  We have
not paid, and do not currently intend to pay, cash dividends on our common stock
in  the  foreseeable future.  The current policy of the Board of Directors is to
retain all earnings, if any, to provide funds for operation and expansion of our
business.  We  are also subject to restrictions and restrictive covenants on the
payment  of  dividends under the terms of our credit facility provided by Finova
Financial,  Inc.  In  addition  to  statutory  and contractual requirements, the
declaration of dividends, if any, will be subject to the discretion of the Board
of  Directors,  which  may  consider  such factors as our results of operations,
financial  condition,  capital  needs  and acquisition strategies, among others.


                                        9
<PAGE>
SALES  OF  UNREGISTERED  SECURITIES

     During  the  fiscal year ended September 30, 1999, YP.Net issued a total of
23,094,500  shares  of  common  stock and 1,700,000 shares of Series B preferred
stock  in  reliance  on  exemptions  from  the  registration requirements of the
Securities  Act.

     In  June,  1999, YP.Net issued 17,000,000 shares of common stock to acquire
Telco  in  a  stock  for  stock  exchange.  The  shares  were  issued to the two
shareholders  of  Telco  in  reliance  on  Section  4(2)  of the Securities Act.

     YP.Net issued 4,500,000 shares of its common stock to secure two promissory
notes.  In  May,  1999, 2,500,000 shares were issued to secure a $2,000,000 note
payable  and  in  June,  1999, 2,000,000 shares were issued to secure a separate
$2,000,000 note payable.  Each note is a separate obligation with no contractual
relationship  between  the  two obligations.  Unless a default on the obligation
exists  and  the  shares  are transferred to the note holder, the shares are not
voted.  Upon  payment  of the note obligation, the shares securing such note are
to  be  returned for cancellation.  If YP.Net defaults under either note, shares
may  be  distributed  solely to the note holder in satisfaction of the defaulted
obligation.  If distributed, YP.Net anticipates that the shares will qualify for
the  exemption  from  registration as provided by Section 4(2) of the Securities
Act.

     Throughout  the  fiscal  year  ended  September  30,  1999,  YP.Net  issued
1,694,500  shares  of common stock to consultants and officers.  The total value
of  these  shares  was determined to be $2,145,178, which represents the trading
value  of  the  shares  on the date YP.Net became obligated to issue the shares.
The  shares  were issued in reliance on the exemption from registration provided
by  Section  4(2)  of  the  Securities  Act.

     In  September,  1999,  YP.Net  issued 400,000 shares of its common stock in
cancellation  of  a  $350,000 debt.  The shares were issued to a shareholder who
had  made  a  loan  to  YP.Net and who later became a director.  The shares were
issued  in  reliance on the exemption from registration provided by Section 4(2)
of  the  Securities  Act.

     On  January  1,  1999,  YP.Net  issued  1,500,000  shares  of  its Series B
preferred  stock  to  certain  of  its  directors, officers and employees and an
additional 2,000,000 shares on August 1, 2000.  Shares of Series B preferred are
convertible  into  shares  of common stock at varying rates based on the trading
price  of the common stock upon conversion.  The Series B shares are convertible
only  upon  the  trading  price of the YP.Net common stock reaching or exceeding
$5.00  or  net  annual  income  reaching  or exceeding $5,000,000.  The Series B
preferred  has no dividend rate or liquidation value.  No consideration was paid
for  and  no  value was assigned to the Series B preferred shares for accounting
purposes.  The shares were issued in reliance on the exemption from registration
under  the  Securities  Act  provided  by  Section  4(2)  of the Securities Act.
Current  management  is  reviewing  the propriety of the issuance and intends to
seek  rescission  of  these  shares.


                                       10
<PAGE>
ITEM  6.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
             RESULTS  OF  OPERATIONS

     Certain  statements  in  this  report  are  forward-looking statements that
involve  risks and uncertainties.  Several factors could cause actual results to
differ  materially  from  those  described  in  such forward-looking statements.
These  include  our  ability  to  manage  growth,  involvement  in  litigation,
competition  in  the  advertising  market,  ongoing  contractual  relationships,
dependence upon key personnel, changes in customer attrition and the adoption of
new,  or  changes  in,  accounting  policies  or practices and estimates and the
application  of  such  policies, practices, and estimates, and federal and state
governmental  regulation,  specifically  in  the  areas  of Internet advertising
products  and  services.

FISCAL  1999  OPERATIONS

     General.  Our  operations  changed  in July, 1999 due to the acquisition of
Telco  Billing,  Inc.  Our  prior  operations  in  the  multi-media software and
medical  billing  and  practice  management  areas  were  abandoned  and  our
subsidiaries  engaged  in these operations were closed.  With the acquisition of
Telco, our business operations focused on Internet yellow page listing services.
In  September,  1999,  our  Board  of Directors and shareholders approved a name
change  from  RIGL  Corporation  to YP.Net, Inc. effective October 1, 1999.  The
name  change was chosen to reflect our new focus on Internet strategy and yellow
page  Web  sites.

     Management  Changes.  In  March,  1999,  Tennessee  Webb  resigned  as  the
Chairman of the Board and in April, 1999, Eugene Starr resigned as a director of
YP.Net.  In  September of 1999, the resignations of Kevin Jones (Chief Executive
Officer,  Chairman  of  the  Board,  Chief  Financial  Officer,  Treasurer  and
President),  James  Jones  (Chief  Technology  Officer,  President  of  RIGL
Technologies,  Inc.),  Peter DeKray (Secretary and Chief Operating Officer), and
Michael  McKay  (President  of  Renaissance  Center  Ltd.)  were  accepted to be
effective  October  1999.  In  February  2000,  William  O'Neal  resigned  as  a
director,  General  Counsel  and  Interim  President  effective  March  1, 2000.

     On  February  3,  2000  a  new Board of Directors was appointed by the sole
remaining  director,  DeVal  Johnson,  Pamela  Thompson  and  Greg Cessna having
previously  resigned  as the only other remaining Board members after removal of
prior  management.  The  new  board members included Angelo Tullo, Walter Vogel,
Daniel  L.  Coury, Sr., Wallace Olsen, Jr., Gregory B. Crane and Harold Roberts.
This  change  of  management  was  initiated in part by changes in core business
endeavors  and  strategies resulting from the acquisition of Telco and our focus
on  the  Internet  electronic  yellow  page  advertising  business.

     Acquisition  of  Telco  Billing,  Inc.  On  June  16,  1999,  we  exchanged
17,000,000  shares  of  common  stock for all of the outstanding common stock of
Telco.  We  also licensed the right to use the URL Yellow-Page.Net for a 20-year
                                                   ---------------
period  for  $5,000,000.  Our  prior  operations had not produced any meaningful
results and it was doubtful if any material results would materialize from these
operations.  For  financial  accounting  purposes, the acquisition was accounted


                                       11
<PAGE>
for  as a reverse merger and was treated as a recapitalization with Telco as the
acquirer.  The  accompanying  financial  statements  present the historical cost
bases  of assets and liabilities and results of operations of Telco.  Subsequent
to  the  merger,  YP.Net ceased the previous operations and abandoned the assets
related  to  those operations.  The assets which were not abandoned are recorded
at their historical cost.  The recapitalization of Telco reflects the book value
of  the  net assets of RIGL as of the date of the acquisition, June 16, 1999, of
$1,722,563.

     Discontinued Operations.  From  September  to  December 1999, YP.Net closed
down  and  ceased  all  operations conducted by its five subsidiaries engaged in
multi-media  software  and  medical  billing and practice management operations.
These  included:

     Renaissance  Center,  Ltd.  This  subsidiary  was engaged in the design and
     --------------------------
implementation of asset management software for the multimedia and entertainment
industry.  The  primary  technology utilized by Renaissance Center, Ltd. was the
Asset  Management  and  Information  Retrieval  Environment (AMIRE).  Management
determined  that  the  capital  resources  of YP.Net would no longer support the
viability  of  the  AMIRE  system.

     RIGL  Technologies,  Inc.  RIGL  Technologies, Inc. was responsible for the
     -------------------------
design  and  implementation  of  AMIRE.  This  research  and  development  stage
subsidiary  was  divested  because management had misgivings regarding the heavy
research  and  development  expenditures  incurred,  and  consequently, would no
longer  support  any  further  capital  funding  for  these  concepts.

     RIGL  Medical  Systems,  Inc.  RIGL  Medical  Systems,  Inc.  was  to  be
     -----------------------------
responsible  for  creating  the  interface between the Medical AMIRE development
team and the ultimate end users.  This development stage subsidiary was divested
because AMIRE and Medical AMIRE systems were deemed to be unprofitable resulting
in  this  subsidiary  no  longer having business purpose and management would no
longer  support  any  further  capital  funding  from  YP.Net.

     Medical  Resource  Systems,  Inc.  Medical  Resource  Systems,  Inc.,  a
     ---------------------------------
subsidiary  of  RIGL  Medical  Systems,  Inc.  provided  billing  and collection
services  to  physician  groups,  primarily in the Phoenix, Arizona metropolitan
area.  The  subsidiary  was  acquired  as a beta test site for the Medical AMIRE
system.     This development stage subsidiary was divested because Medical AMIRE
system  was  deemed  to  be  unprofitable.

     Mountain  Office  Management  Systems,  Inc.  Mountain  Office  Management
     --------------------------------------------
Systems,  Inc.,  a  subsidiary  of  RIGL  Medical Systems, Inc., was expected to
provide  administrative  support  to  physician  practices.     This development
stage  subsidiary  was divested because the Medical AMIRE systems were deemed to
be  unprofitable  and  this  line  of  business  was  abandoned.

RESULTS  OF  OPERATIONS

     The  acquisition  of  Telco  was  treated as a reverse merger for financial
accounting  purposes.  As  a  result of being treated as a reverse merger, Telco
was deemed to be the acquiring entity.  For financial accounting purposes, Telco
was  considered to have engaged in a recapitalization and acquired the assets of


                                       12
<PAGE>
RIGL  as of June, 1999.  As a result of this treatment, the financial statements
for  the year ended September 30, 1999 are the historic statements of Telco with
the  operations  of  "old"  RIGL  being  included  from  June,  1999  forward.

     The  financial statements for the year ended September 30, 1998 reflect the
historic  operations  of  "old"  RIGL.  Financial  statements for the year ended
September 30, 1998 are not included in this Form 10-KSB, but are included in the
Form  10-KSB  for  the fiscal year ended September 30, 1998.  All comparisons of
fiscal  year operating results in this section are comparing historic operations
of  two  distinct  entities  and  are  presented  solely  to compare predecessor
operations  with  our  current  operations.

     During  the  fiscal  year  ended  September 30, 1999, significant shares of
stock  were issued to prior officers and consultants for services.  The value of
those  shares  was  determined  based  on the trading value of the shares at the
dates  on which the agreements were made for the services.  The expense recorded
for  that  consideration is equal to 90% of the trading value of the shares as a
discount for the regulatory restrictions on trading of those shares.  During the
year  ended  September  30,  1999, YP.Net issued 1,694,500 shares to consultants
valued  at  $2,145,178.00.

     The  cost  of  the  Yellow-Page.Net  URL  was  capitalized  at  its cost of
                         ---------------
$5,000,000.  The  URL  is amortized on an accelerated basis over the twenty-year
term  of  the licensing agreement.  Amortization expense on the URL was $149,166
for  the  year  ended September 30, 1999.  Annual amortization expense in future
years  related  to  the  URL  is  anticipated  to  be  approximately  $250,000.

Fiscal  Year  End  September  30,  1999  Compared  to  Fiscal Year End September
30,1998.

     Revenues  for  the  year  ended  September  30,  1999  increased  1,019% to
$8,572,185 from $841,045 during the year ended September 30, 1998.  The increase
in  revenue  is principally the result of the acquisition of Telco's operations.
Prior  to  the  acquisition,  no  material  operations  had  been  commenced.

     Sales  and  marketing  expenses  for  the  year  ended  September  30, 1999
increased  to  $3,714,427.  No  sales  and  marketing expenses had been incurred
during  the  year  ended  September  30,  1998. The increase was principally the
result  of  expended  marketing  due  to the operations of Telco.  The marketing
expenses  are  attributed to our direct response marketing, which is our primary
source  of  attracting  new  customers.

     General  and  administrative expenses for the year ended September 30, 1999
decreased  35% to $1,731,209 from $2,659,924 during the year ended September 30,
1998.  The  decrease  was principally due to the change in our core business and
the  reduction  of officer compensation, rent expenses and development costs and
associated  development  stage  endeavors.

     Interest  expense for the year ended September 30, 1999 increased 19,623.1%
to  $410,319 from $2,091 during the year ended September 30, 1998.  The increase
in  interest  expense  was  a result of increased debt due to the acquisition of
Telco  and  the  acquisition  of  the  URL  Yellow-Page.Net.
                                            ---------------


                                       13
<PAGE>
     At  September  30,  1999, YP.Net had unused available federal net operating
losses  of  $7,804,435  which  expire  from  2011 through 2014.  YP.Net also has
available net operating loss carry forward of $2,744,800 and has unavailable net
operating  loss  carry  forward  of  $5,059,634.  YP.Net  may  only  utilize the
unavailable  net  operating loss of $5,059,634 upon generating taxable income at
the  parent  company  level.

     At  September  30,  1999,  YP.Net  had unused state net operating losses of
$5,750,373 expiring 2003.  YP.Net had available net operating loss carry forward
of $2,744,800 and an unavailable net operating loss carry forward of $3,005,572.
YP.Net  may  only  utilize the unavailable net operating loss of $3,005,572 upon
generating  taxable  income  at  the  parent  company  level.

     Net  losses  for the year ended September 30, 1999 were $4,363,687, or $.20
per  share,  compared  to losses of $1,941,202, or $.17 per share the year ended
September  30,  1998.

LIQUIDITY  AND  CAPITAL  RESOURCES

     Our  cash  balance  increased  to $255,324 at year ended September 30, 1999
from  $30,252  at  the year ended September 30, 1998.  We funded working capital
requirements  primarily  from  cash  generated  from  financing  activities  and
utilized  cash  in  operating  activities  and  investing activities.  We have a
credit  facility  used  primarily  to  finance  our  receivables.

     Operating  Activities.  Cash used by operating activities decreased for the
year  ended  September 30, 1999 to $691,780 compared to $1,770,397 from the year
ended  September  30,  1998,  a  78%  decrease.  The  principal  source  of  our
operations  revenue  is  from  sales  of  electronic  yellow  page  advertising.

     Investing  Activities.  Cash  used by investing activities was $106,512 for
the  year  ended  September  30,  1999  compared  to $478,409 for the year ended
September  30,  1998.  We purchased $230,662 of additional computer equipment to
upgrade  and  replace  incompatible  equipment.  We  used $3,000,000 for partial
payment of the purchase of the 20-year license right to the URL Yellow-Page.Net,
                                                                ---------------
the  domain name for our Web site.  We obtained cash in the amount of $3,124,150
which  was  utilized  in  the  business  combination.

     Financing  Activities.  Cash  flows provided from financing activities were
$1,023,364  in  the year ended September 30, 1999 compared to $2,604,135 for the
year  ended  September  30,  1998,  a 61% decrease.  We had cash inflow from the
financing  arrangements  in  the  amount of $788,306 and from the sale of common
stock  of  $629,681.  We  had  cash  outflow  for  notes  paid  in the amount of
$394,623.

     We  incurred  debt  in  the  acquisition  of  the  license  right  to  the
Yellow-Page.Net URL.  A total of $4,000,000 was borrowed, $2,000,000 from Joseph
and  Helen  VanSickle and $2,000,000 as a carry-back from Matthew & Markson Ltd.
Management  has  dedicated  payments in the amount of $100,000 per month for the
payment  of  the  VanSickle note.  Management has also dedicated payments to the


                                       14
<PAGE>
Matthew  &  Markson note in the amount of $100,000 per month, with the provision
that  no  payment  be  made  if  YP.Net  has less than 30 days operating capital
reserved, or if it is in an uncured default with any of its lenders.  A total of
4,000,000  shares  were  issued  to  secure  these notes and are held in escrow.

     Collections  on  accounts  receivables  are  received primarily through the
billing  service  integrators  under  contract  to  administer  this billing and
collection  process.  The billing service providers generally do not remit funds
until  they are collected.  The billing companies maintain holdbacks for refunds
and  other  uncertainties.  Generally,  cash is collected and remitted to YP.Net
over  a  90  to  120  day  period  subsequent  to  the  billing  dates.

     At  September  30,  1999,  YP.Net  had  a  working  capital  deficiency  of
$3,873,008.  Subsequent  to September 30, 1999, YP.Net restructured certain debt
and  has increased the volume of its operations resulting in elimination of that
deficit  at  June  30,  2000.  Management  believes that it will have sufficient
working  capital  to  implement  its  business  plan.

     YP.Net  markets  it products primarily through the use of direct mailers to
businesses  throughout  the  United  States.  YP.Net  generally  pays  for these
marketing  costs  when  incurred  and  amortizes  the  costs  of direct-response
advertising  on a straight-line basis over eight months.  The amortization lives
are  based  on  estimated  attrition rates.  During the year ended September 30,
1999,  YP.Net  paid  $2,029,575  for  direct-response  advertising.  Management
anticipates  the  outlays  for  direct-response advertising to remain consistent
over  the  near  term.

     YP.Net  does  not  intend  to incur significant capital expenditures in the
near  term.

     Financial  Institution Lending Agreements.  We have an existing asset-based
collateralized  line of credit with Finova Financial, Inc.  Recently, Finova has
requested YP.Net to execute a forbearance agreement that will extend the line of
credit terms to October 3, 2000.  Finova has requested that YP.Net seek a lender
that  can  accommodate  its specialized Internet advertising business along with
its  LEC  billing  practices.  As a result, management has decided to seek other
potential  lenders  that  specialize  in  this  area  of  financing.

     We  have  received  a  proposal  from  RFC Capital, a LEC billing financial
factoring  company, and we have presented a loan request to Pacific Century Bank
for  a  line-of-credit  facility  of at least $3,000,000 to replace the facility
provided  by  Finova.


                                       15
<PAGE>
ITEM  7.          FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

                          INDEX TO FINANCIAL STATEMENTS

INDEPENDENT AUDITORS' REPORT. . . . . . . . . . . . . . . . . . . . . . . . . 17

  CONSOLIDATED FINANCIAL STATEMENTS:

     Consolidated Balance Sheet at September 30, 1999. . . . . . . . . . . . .18

     Consolidated Statement of Operations for the
      year ended September 30, 1999 . . . . . . . . . . . . . . . . . . . . . 19

     Consolidated Statement of Stockholders' Equity for the
      year ended September 30, 1999 . . . . . . . . . . . . . . . . . . . . . 20

     Consolidated Statement of Cash Flows for the year ended
      September 30, 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . .21

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . 23


                                       16
<PAGE>
                         INDEPENDENT ACCOUNTANTS' REPORT
                         -------------------------------

To  the  Stockholders  and  Board  of  Directors  of
     YP.Net,  Inc.:

We  have  audited the accompanying balance sheet of YP.Net, Inc. as of September
30, 1999 and the related statements of operations, stockholders' equity and cash
flows for the year then ended. 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 audit in accordance with generally accepted auditing standards.
Those  standards require that we plan and perform the audit to obtain reasonable
assurance  about  whether  the  financial  statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing  the  accounting  principles  used  and  significant estimates made by
management,  as well as evaluating the overall financial statement presentation.
We  believe  our  audit  provides  a  reasonable  basis  for  our  opinion.

In  our  opinion,  the financial statements referred to above present fairly, in
all  material  respects,  the financial position of YP.Net, Inc. as of September
30,  1999,  and  the  results of its operations and cash flows for the year then
ended,  in  conformity  with  generally  accepted  accounting  principles.



/s/  KING, WEBER & ASSOCIATES, P.C.
     Tempe,  Arizona
     June  12,  2000


                                       17
<PAGE>
YP.NET,  INC.

CONSOLIDATED  BALANCE  SHEET
SEPTEMBER  30,  1999
- --------------------

ASSETS:
CURRENT ASSETS
   Cash                                                          $   255,323
   Accounts receivable, net of allowance of $206,012                 951,177
   Customer acquisition costs, net of accumulated amortization
     of $1,395,675                                                   633,900
   Other receivable                                                   77,182
   Prepaid expenses and other assets                                  14,650
   Deferred income taxes                                              91,172
                                                                 ------------
      Total current assets                                         2,023,404

PROPERTY AND EQUIPMENT, net                                          435,898

DEPOSITS                                                              13,287

INTELLECTUAL PROPERTY- URL, net of accumulated
  amortization of $159,166                                         4,850,834

DEFERRED FINANCING COSTS                                             123,750
                                                                 ------------
      TOTAL ASSETS                                               $ 7,447,173
                                                                 ============

LIABILITIES AND STOCKHOLDERS' EQUITY:

CURRENT LIABILITIES:
   Accounts payable                                              $    55,000
   Accrued liabilities                                               447,360
   Line of credit                                                    788,306
   Notes payable - current portion                                 4,020,559
   Deferred revenue                                                  324,760
   Income taxes payable                                              260,427
                                                                 ------------
      Total current liabilities                                    5,896,412

DEFERRED INCOME TAXES                                                 70,865

NOTES PAYABLE - long-term portion                                      7,241
                                                                 ------------

      Total liabilities                                            5,974,518
                                                                 ------------

STOCKHOLDERS' EQUITY:
   Series B preferred stock, $.001par value, 2,500,000 shares
      designated, 1,700,000 issued                                     1,700
   Common stock, $.001 par value, 50,000,000 shares authorized,
      39,156,853 issued and outstanding                               39,157
   Paid in capital                                                 4,892,538
   Treasury stock at cost                                            (69,822)
   Accumulated deficit                                            (3,390,918)
                                                                 ------------
      Total stockholders' equity                                   1,472,655
                                                                 ------------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                 $ 7,447,173
                                                                 ============

    The accompanying notes are an integral part of these consolidated financial
                                   statements.


                                       18
<PAGE>
YP.NET,  INC.

CONSOLIDATED  STATEMENT  OF  OPERATIONS
FOR  THE  YEAR  ENDED  SEPTEMBER  30,  1999
- -------------------------------------------

NET REVENUES                                                  $   8,572,185
                                                              --------------

OPERATING  EXPENSES:
   Cost of services                                               4,760,026
   General and administrative expenses                            1,731,209
   Sales and marketing expenses                                   3,714,427
   Depreciation and amortization                                    192,469
                                                              --------------
     Total operating expenses                                    10,398,131
                                                              --------------

OPERATING LOSS                                                   (1,825,946)
                                                              --------------

OTHER  (INCOME)  AND  EXPENSES
   Interest expense                                                 410,319
   Interest income                                                   (5,401)
                                                              --------------

     Total other expense                                            404,918
                                                              --------------

LOSS BEFORE DISCONTINUED OPERATIONS AND INCOME TAXES             (2,230,864)

INCOME TAX PROVISION                                                240,119
                                                              --------------

LOSS FROM CONTINUING OPERATIONS                                  (2,470,983)

LOSS  FROM  DISCONTINUED  OPERATIONS
  Loss from operations of medical billing services segment
    (no effect for income taxes)                                   (221,194)
  Loss from abandonment of medical billing services segment
    (no effect for income taxes)                                 (1,671,510)
                                                              --------------
     Total                                                       (1,892,704)

                                                              --------------
NET LOSS                                                      $  (4,363,687)
                                                              ==============

NET  LOSS  PER  SHARE:
  Basic:
  Continuing operations                                       $       (0.11)

  Discontinued operations                                             (0.09)
                                                              --------------
     Total Basic                                              $       (0.20)
                                                              ==============

Diluted:
  Continuing operations                                       $       (0.11)

  Discontinued operations                                             (0.09)
                                                              --------------
     Total Diluted                                            $       (0.20)
                                                              ==============

WEIGHTED  AVERAGE  COMMON  SHARES  OUTSTANDING:
  Basic                                                          22,223,757
                                                              ==============

  Diluted                                                        22,223,757
                                                              ==============

    The accompanying notes are an  integral part of these consolidated financial
                                   statements.


                                       19
<PAGE>
<TABLE>
<CAPTION>
                                  YP.NET, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY FOR THE
FOR  THE  YEAR  ENDED  SEPTEMBER  30,  1999
- -------------------------------------------

                                 COMMON STOCK            PREFERRED A           TREASURY     PAID-IN    ACCUMULATED
                              SHARES      AMOUNT       SHARES      AMOUNT       STOCK       CAPITAL       DEFICIT      TOTAL
                           -----------  ------------  ----------  ----------  -----------  ----------  ------------  -----------
<S>                        <C>          <C>           <C>         <C>         <C>          <C>         <C>           <C>
BALANCE OCTOBER 1, 1998    17,000,000   $    17,000           -   $        -  $        -   $        -  $   972,769   $  989,769

  Reverse merger           14,714,603        14,715                              (69,822)   1,777,670                 1,722,563

  Common stock issued for
    service rendered        1,694,500         1,695                                         2,143,483                 2,145,178

  Common stock
    issued for cash           847,750           848                                           627,985                   628,833

  Common stock issued
    as collateral for on
    note payable            2,000,000         2,000                                            (2,000)                        0

  Common stock
    placed in escrow as
    collateral on debt      2,500,000         2,500                                            (2,500)                        0

  Employee preferred
    stock grants                                          1,700        1,700                   (1,700)                        0

  Conversion of debt          400,000           400                                           349,600                   350,000

  Net loss                                                                                              (4,363,687)  (4,363,687)
                           -----------  ------------  ----------  ----------  -----------  ----------  ------------  -----------
BALANCE
    SEPTEMBER 30, 1999     39,156,853   $    39,157       1,700   $    1,700  $  (69,822)  $4,892,538  $(3,390,918)  $1,472,655
                           ===========  ============  ==========  ==========  ===========  ==========  ============  ===========

    The accompanying notes are an integral part of these consolidated financial statements
</TABLE>


                                       20
<PAGE>
<TABLE>
<CAPTION>
YP.NET,  INC.

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE
YEAR  ENDED  SEPTEMBER  30,  1999
- ---------------------------------
<S>                                                                                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

  Net (loss)                                                                         $(4,363,687)
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
  Loss from discontinued operations                                                      221,194
  Loss on abandonment of net assets of discontinued operations                         1,671,510
  Depreciation and amortization                                                           30,338
  Issuance of common stock as compensation for services                                2,146,872
  Loss on disposal of equipment                                                           89,319
  Deferred income taxes                                                                  (20,478)
  Conversion of accrued interest to common stock                                         100,000
  Amortization of intellectual property                                                  149,166
  Changes in assets and liabilities (net of business acquisitions and divestures):
    Trade and other accounts receivable                                                 (124,826)
    Customer acquisition costs                                                          (264,981)
    Other receivables                                                                    (32,671)
    Prepaid and other current assets                                                      (9,616)
    Other assets                                                                          49,525
    Accounts payable                                                                     (71,348)
    Accrued liabilities                                                                  202,289
    Income taxes payable                                                                 260,427
    Deferred revenue                                                                     324,760
                                                                                     ------------
     Cash provided by continuing operations                                              357,793
     Cash used by discontinued operations                                             (1,049,574)
                                                                                     ------------
          Net cash  (used in) operating activities                                      (691,781)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of  equipment                                                               (230,662)
  Purchase of intellectual property                                                   (3,000,000)
  Cash acquired in business acquisition                                                3,124,150
                                                                                     ------------
          Net cash (used in)  investing activities                                      (106,512)
                                                                                     ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from borrowings on line of credit                                             788,306
  Principal repayments on notes payable                                                 (394,623)
  Proceeds from sale of common stock                                                     629,681
                                                                                     ------------
          Net cash provided by financing activities                                    1,023,364
                                                                                     ------------

INCREASE IN CASH                                                                         225,071

CASH, BEGINNING OF YEAR                                                                   30,252
                                                                                     ------------

CASH, END OF YEAR                                                                    $   255,323
                                                                                     ============

    The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>


                                       21
<PAGE>
YP.NET,  INC.

CONSOLIDATED  STATEMENT  OF  CASH  FLOWS,  (CONTINUED)
FOR  THE  YEAR  ENDED  SEPTEMBER  30,  1999
- -------------------------------------------

SUPPLEMENTAL  CASH  FLOW  INFORMATION:

     Interest  paid                                        $  64,677
                                                           =========

     Income  taxes  paid                                   $     -0-
                                                           =========


SUPPLEMENTAL  SCHEDULE  OF  NONCASH  INVESTING  AND  FINANCING  ACTIVITIES:

     Conversion  of  debt  to  common  stock               $    250,000
                                                           ============

     Note payable issued for
     purchase of intellectual property                     $  2,000,000
                                                           ============

     Common  stock  issued  for  business  acquisition     $  1,722,563
                                                           ============


    The accompanying notes are an integral part of these consolidated financial
                                   statements.


                                       22
<PAGE>
YP.NET,  INC.

NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
FOR  THE  YEAR  ENDED  SEPTEMBER  30,  1999
- -------------------------------------------

1.   ORGANIZATION  AND  BASIS  OF  PRESENTATION

     YP.Net,  Inc. (the "Company"),  formally RIGL  Corporation,  had previously
     attempted to develop  software  solutions for medical  practice billing and
     administration.  The Company had made acquisitions of companies  performing
     medical  practice  billing  services as test sites for its  software and as
     business opportunities.  The Company was not successful in implementing its
     medical practice billing and administration software products and looked to
     other  business  opportunities.  The Company  acquired  Telco  Billing Inc.
     ("Telco") in June 1999,  through the issuance of  17,000,000  shares of the
     Company's  common stock.  Prior to its  acquisition of Telco,  RIGL had not
     generated significant or sufficient revenue from planned operations.

     Telco was  formed in April  1998,  to  provide  advertising  and  directory
     listings for businesses on its Internet Web site in a "Yellow Page" format.
                                                            -----------
     Telco provides those services to its  subscribers  for a monthly fee. These
     services are  provided  primarily  to all  business  throughout  the United
     States.  Telco became a wholly owned  subsidiary of YP.Net,  Inc. after the
     June 16, 1999 acquisition.

     The accompanying  financial statements represent the consolidated financial
     position and results of operations of the Company and includes the accounts
     and  results of  operations  of the  Company  and Telco,  its wholly  owned
     subsidiary, for the year ended September 30, 1999. The consolidated results
     of operations and cash flows for the year ended  September 30, 1999 include
     that of Telco for the year ended  September 30, 1999,  and the Company from
     the June 16, 1999 acquisition date through September 30, 1999.

     At the time that the  transaction was agreed to, the Company had 12,567,770
     common shares issued and outstanding. As a result of the merger transaction
     with Telco, there was 29,567,770 common shares outstanding,  and the former
     Telco  stockholders  held  approximately 57% of the Company's voting stock.
     For  financial   accounting   purposes,   the  acquisition  was  a  reverse
     acquisition  of  the  Company  by  Telco,  under  the  purchase  method  of
     accounting,  and  was  treated  as a  recapitalization  with  Telco  as the
     acquirer.  Accordingly,  the  historical  financial  statements  have  been
     restated  after  giving  effect to the June 16,  1999,  acquisition  of the
     Company.  The financial  statements have been prepared to give  retroactive
     effect to October 1, 1998, of the reverse acquisition completed on June 16,
     1999,  and  represent  the  operations  of Telco.  Consistent  with reverse
     acquisition  accounting:  (i)  all  of  Telco's  assets,  liabilities,  and
     accumulated  deficit,  are reflected at their combined  historical cost (as
     the accounting acquirer) and (ii) the preexisting outstanding shares of the
     Company (the accounting acquiree) are reflected at their net asset value as
     if issued on June 16, 1999.


                                       23
<PAGE>
2.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

     Cash:  Cash  includes all  short-term  highly liquid  investments  that are
     ----
     readily  convertible to known amounts of cash and have original  maturities
     of three  months or less.  At times cash  deposits  may  exceed  government
     insured limits. At September 30, 1999, cash deposits exceeded those insured
     limits by $89,000.

     Principles of Consolidation:  The consolidated financial statements include
     ---------------------------
     the accounts of the Company and its wholly owned subsidiary,  Telco Billing
     Company.  All  significant   intercompany  accounts  and  transactions  are
     eliminated.

     Customer  acquisition  costs:  These costs  represent  the direct  response
     ----------------------------
     marketing  costs that are incurred as the primary method by which customers
     subscribe to the Company's  services.  The Company  purchases mailing lists
     and sends  advertising  materials  to  prospective  subscribers  from those
     lists.  Customers  subscribe to the services by  positively  responding  to
     those   advertising   materials   which  serve  as  the  contract  for  the
     subscription.   The  Company   capitalizes   and  amortizes  the  costs  of
     direct-response advertising on a straight-line basis over eight months. The
     amortization lives are based on estimated attrition rates.

     The  Company  also  incurs   advertising  costs  that  are  not  considered
     direct-response  advertising.  These other  advertising  costs are expensed
     when incurred.  These advertising expenses were $168,744 for the year ended
     September 30, 1999.

     Property and  equipment:  These assets are stated at cost less  accumulated
     -----------------------
     depreciation.  Depreciation is recorded on a  straight-line  basis over the
     estimated   useful  lives  of  the  assets  ranging  from  3  to  5  years.
     Depreciation expense for the year ended September 30, 1999 was $30,338.

     Revenue  recognition:  The  Company's  revenue  is  generated  by  customer
     --------------------
     subscription of directory and advertising  services.  Revenue is billed and
     recognized  monthly for services  subscribed  in that specific  month.  The
     Company utilizes  outside billing  companies to transmit billing data, much
     of which is  forwarded to Local  Exchange  Carriers  ("LECs")  that provide
     local telephone service.  Monthly  subscription fees are generally included
     on the telephone  bills of the customers.  The Company  recognizes  revenue
     based on net billings accepted by the LEC's.

     Some customers  subscribe for a full year of service and pay in advance for
     the service.  The revenue  associated with these  subscriptions is deferred
     and recognized ratably over twelve months.

     Income taxes: The Company provides for income taxes based on the provisions
     ------------
     of Statement of Financial  Accounting  Standards  No. 109,  Accounting  for
     Income Taxes,  which,  among other things,  requires  that  recognition  of
     deferred  income taxes be measured by the provisions of enacted tax laws in
     effect at the date of financial statements.

     Financial  Instruments:  Financial  instruments  consist primarily of cash,
     ----------------------
     accounts  receivable,  and  obligations  under  accounts  payable,  accrued
     expenses  and  notes  payable.  The  carrying  amounts  of  cash,  accounts
     receivable,   accounts   payable,   accrued   expenses  and  notes  payable
     approximate fair value because of the short maturity of those  instruments.
     The  Company has  applied  certain  assumptions  in  estimating  these fair
     values.  The use of  different  assumptions  or  methodologies  may  have a
     material effect on the estimates of fair values.


                                       24
<PAGE>
     Net loss per share:  Net loss per share is  calculated  using the  weighted
     ------------------
     average number of shares of common stock  outstanding  during the year. The
     Company has adopted the provisions of SFAS No. 128 Earnings Per Share.

     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.

     Stock-Based Compensation:  Statements of Financial Accounting Standards No.
     ------------------------
     123,  Accounting for  Stock-Based  Compensation,  ("SFAS 123")  established
     accounting and disclosure  requirements  using a fair-value based method of
     accounting for stock-based employee  compensation.  In accordance with SFAS
     123,  the  Company  has  elected to  continue  accounting  for stock  based
     compensation  using the  intrinsic  value method  prescribed  by Accounting
     Principles   Board  Opinion  No.  25,   "Accounting  for  Stock  Issued  to
     Employees."  The  proforma  effect of the fair value method is discussed in
     Note 15.

     Impairment Loss: Impairment of long-lived assets is assessed by the Company
     ---------------
     for impairment  whenever there is an indication that the carrying amount of
     the  asset  may not be  recoverable.  Recoverability  of  these  assets  is
     determined by comparing the forecasted undiscounted cash flows generated by
     those assets to the assets' net carrying  value.  The amount of  impairment
     loss, if any, is measured as the  difference  between the net book value of
     the assets and the estimated fair value of the related assets.

3.   ACCOUNTS  RECEIVABLE

     The Company provides billing  information to third party billing  companies
     for the majority of its monthly billings. Billings submitted are "filtered"
     by these  billing  companies  and the  LEC's.  Net  accepted  billings  are
     recognized as revenue and accounts receivable.  The billing companies remit
     payments to the Company on the basis of cash  ultimately  received from the
     LEC's by those billing  companies.  The billing  companies and LEC's charge
     fees for  their  services  which are  netted  against  the  gross  accounts
     receivable  balance.  The billing  companies  also apply  holdbacks for the
     remittances for potentially  uncollectible  accounts. The Company estimates
     uncollectible   account   balances  and  provides  an  allowance  for  such
     estimates.

     The Company has entered  into a customer  billing  service  agreement  with
     Integretel, Inc. on January 6, 1998, which was amended on April 2, 1998 and
     again on September 1, 1999.  Integretel provides billing and collection and
     related  services.   Determining  the  net  realizable  value  requires  an
     estimation of both uncollectible receivables or any returns and allowances.
     The  trade  receivable  due  from  Integretel  at  September  30,  1999 was
     $304,423.  These receivables have been reduced by an allowance for doubtful
     accounts of $43,825.

     The Company has also entered into a customer billing service agreement with
     Olympic Telecommunications,  Inc. on June 2, 1998. Olympic provides billing
     and collection and related  services.  Determining the net realizable value
     requires an estimation of both uncollectible receivables or any returns and
     allowances. The trade receivable due from Olympic at September 30, 1999 was
     $180,102.


                                       25
<PAGE>
     The Company has also entered into a customer billing service agreement with
     Enhanced  Services  Billing,   Inc.  (ESBI).   ESBI  provides  billing  and
     collection  and related  services.  Determining  the net  realizable  value
     requires an estimation of both uncollectible receivables or any returns and
     allowances.  The trade  receivable  due from ESBI at September 30, 1999 was
     $592,235  less  aggregated  amounts for Telco fees,  and reserve  holdbacks
     based on dilution.  This trade  receivable has been reduced by an allowance
     for doubtful accounts of $162,187.

     Trade subscription receivables, which are directly administered and carried
     by the Company,  are valued and reported at net realizable  value,  the net
     amount  expected to be received.  This amount may or may not be necessarily
     the amount  received.  Determining  the net  realizable  value  requires an
     estimation of both  uncollectible  accounts or any returns and  allowances.
     The net trade subscriptions receivable at September 30, 1999 was $75,929.

4.   INTELLECTUAL  PROPERTY

     In connection  with the  Company's  acquisition  of Telco,  the Company was
     required to provide  accelerated payment of license fees for the use of the
     Internet domain name or Universal  Resource Locator (URL)  Yellow-Page.Net.
                                                                ---------------
     Telco had previously  entered into a 20-year license  agreement for the use
     of the URL  with  one of its two 50%  stockholders.  The  original  license
     agreement  required  annual  payments of $400,000.  However,  the agreement
     stated  that upon a change in control of Telco,  a  $5,000,000  accelerated
     payment is required to maintain the rights under the  licensing  agreement.
     The URL holder agreed to discount the accelerated  payments from $8,000,000
     to $5,000,000 at the time of the  acquisition.  The Company  agreed to make
     that payment upon effecting the acquisition of Telco.

     The Company  made a  $3,000,000  cash payment and issued a note payable for
     $2,000,000  to acquire the  licensing  rights of the URL.  The Company also
     issued 2,000,000 shares of its common stock to be held as collateral on the
     note.  The note payable was  originally  due on July 15, 1999.  The Company
     failed to make the  $2,000,000  payment when due. The repayment  terms were
     renegotiated  to extend the due date to January 15, 2000.  An extension fee
     of  $200,000  was paid by the  Company  at that  time.  The  Company  again
     renegotiated  the repayment terms on April 26, 2000, to a demand note, with
     monthly  installments  of $100,000  subject to all operating  requirements,
     which have been met by the Company.  The URL is recorded at its cost net of
     accumulated  amortization.  Management believes that the Company's business
     is dependent on its ability to utilize  this URL given the  recognition  of
     the yellow page term. Management believes that the current revenue and cash
         -----------
     flow generated  through use of  Yellow-Page.Net  substantiates the net book
                                     ---------------
     value of the asset.  The  Company  will  periodically  analyze the net book
     value of this asset and determine if an impairment has been  incurred.  The
     URL is amortized on an accelerated  basis over the twenty-year  term of the
     licensing  agreement.  Amortization expense on the URL was $149,166 for the
     year ended September 30, 1999.

5.   PROPERTY  AND  EQUIPMENT

     Property  and  equipment consisted of the following at September 30, 1999:

               Leasehold  improvements          $   287,507
               Furnishings  and  fixtures           105,333
          Office  and  computer  equipment          159,891
                                               -------------

               Total                                552,731
               Less  accumulated depreciation      (116,833)
                                               -------------

               Property  and  equipment,  net   $   435,898
                                               =============


                                       26
<PAGE>
6.   NOTES  PAYABLE  AND  LINE  OF  CREDIT

     Notes  payable  at  September  30,  1999  are comprised of the following:

       3,000,000 Revolving line of credit, interest at the
       prime rate plus 3% (11.25% at September 30, 1999).
       The facility is limited to 80% of eligible accounts
       receivable. Assets of the Company collateralize the
       credit facility.  The credit facility expires on August 31,
       2003.  The institution may withdraw the line with a
       notification within 90 days                                  $   788,306

       Term loan from bank.  Original balance of $40,525.
       Repayment terms require monthly installments of
       principal and interest of $1,844.  Interest at 8.5% per
       annum.  Due January 1, 2001. Collateralized by
       equipment                                                         27,800

       Note payable to stockholders, original balance of
       2,000,000, interest at 8% per annum.  Interest
       payments due monthly through due date of November
       11, 1999 Collateralized by 2,000,000 shares of the
       Company's common stock.  Subsequent to September
       30, 1999, the repayment terms were subsequently
       renegotiated extending the due date to January 11, 2001
       with monthly payments of $100,000 plus interest                2,000,000

       Note payable to former Telco shareholder for balance
       of URL purchase price (Note 4). Repayment terms have
       been extended requiring monthly installments of
       principal and interest at 20% per annum of $100,000
       and due upon demand.  Collateralized by 2,000,000
       shares of the Company's common stock                           2,000,000

         Totals                                                       4,816,106

         Less current portion                                        (4,808,865)

         Long-term portion                                          $     7,241

     Principal  payments  due  as  follows:

         Years  ended  September  30:     2000                     $  4,808,865
                                          2001                            7,241
                                                                 ---------------
                                      Total                        $  4,816,106
                                                                 ===============


                                       27
<PAGE>
7.   BUSINESS  COMBINATION

     On June 16, 1999, the Company  exchanged  17,000,000 shares of common stock
     for all of the common stock of Telco Billing  Company  ("Telco").  Prior to
     the merger,  the Company had not yet  commenced  material  operations.  For
     financial  accounting  purposes,  the  acquisition  was  accounted for as a
     reverse  merger  and was  treated as a  recapitalization  with Telco as the
     acquirer. The accompanying financial statements present the historical cost
     bases of  assets  and  liabilities  and  results  of  operations  of Telco.
     Subsequent to the merger,  the Company  ceased its previous  operations and
     abandoned assets related to those operations.  The remaining Company assets
     are  recorded  at their  historical  cost.  The  recapitalization  of Telco
     reflects  the book  value of the net  assets  of RIGL as of the date of the
     merger as of June 16, 1999 of $1,722,563.

8.   DISCONTINUED  OPERATIONS

     Effective  with the  acquisition  of Telco  on June 16  1999,  the  Company
     determined  that it would  abandon  its  efforts to develop  and market the
     medical practice billing and  administration  business.  The operations for
     this segment are reflected as discontinued  operations in the  accompanying
     statement of  operations.  Revenues of this  segment were  $160,154 for the
     year ended September 30, 1999. The Company divested asset balances totaling
     $1,646,000 related to this segment. The disposed components are as follows:

                                  Capitalized software costs          $  673,000
                                  Goodwill                               152,000
                                  Security deposits                       62,000
                                  Receivables                            436,000
                                  Other                                  323,000
                                                                      ----------
                                    Total                             $1,646,000
                                                                      ==========

9.   PROVISION  FOR  INCOME  TAXES

     Deferred income taxes reflect the net tax effects of temporary  differences
     between  the  carrying  amounts of assets  and  liabilities  for  financial
     reporting purposes and the amounts used for income tax purposes.

     The deferred tax  consequences of temporary  differences in reporting items
     for  financial  statement  and  income  tax  purposes  are  recognized,  if
     appropriate. Realization of the future tax benefits related to the deferred
     tax assets is dependent on many factors, including the Company's ability to
     generate  taxable income within the net operating loss period.  The Company
     has considered these factors in reaching its conclusion as to the valuation
     allowance for financial reporting purposes.

     At September 30, 1999 the Company has unused  federal net operating  losses
     of $7,804,435 available under Internal Revenue Code 382 - change in control
     rules  expiring  from 2011  through  2014.  The Company has  available  net
     operating loss carry forward under the separate  return  limitation year of
     $2,744,800  and  has  unavailable  net  operating  loss  carry  forward  of
     $5,059,634.  The Company may utilize the  unavailable net operating loss of
     $5,059,634 upon generating taxable income in that operating entity.


                                       28
<PAGE>
     At September 30, 1999 the Company has unused state net operating  losses of
     $5,750,373  available  under the change in control rules expiring 2003. The
     Company has available  net operating  loss carry forward under the separate
     return limitation year of $2,744,800 and has unavailable net operating loss
     carry forward of $3,005,572.  The Company may utilize the  unavailable  net
     operating  loss  of  $3,005,572  upon  generating  taxable  income  in that
     operating entity.

     Prior to the  acquisition  date of June 16,  1999 RIGL agreed to assume the
     tax liability of Telco for the taxable income  generated  prior to June 16,
     1999. The provision for income taxes is computed based on the pretax income
     generated  prior to the  acquisition  of  Telco.  The  current  income  tax
     provision of  $260,427,  less a net deferred  benefit  $20,478,  related to
     Telco for the year ended  September  30,  1999,  has been  included  in the
     statement of income.

        Income taxes for year ended September 30, 1999 is summarized as follows:

        Current  (Benefit)                 $  (1,708,515)
        Deferred  Benefit  (Provision)         1,948,634
                                           --------------

     Net  income  tax  provision           $     240,119
                                           ==============

     The net  income  tax  provision  of  $240,119  incurred  for the year ended
     September 30, 1999, was allocated to continuing operations.  This provision
     amount  relates   primarily  to  taxable  income  of  Telco  prior  to  the
     acquisition. The loss from discontinued operations generated additional net
     operating  loss  carryforwards  which  were  fully  offset  by a  valuation
     allowance resulting in no tax effect.

     A  reconciliation  for the differences  between the effective and statutory
     income tax rates is as follows:

          Federal statutory rates                         $(1,402,013)     (34)%
          State income taxes                                 (329,885)     ( 8)%

          Provision due to income generated
             prior to merger                                  260,597        6 %
          Valuation  allowance  for  operating
             loss  carryforwards                            1,694,534       42 %
          Other                                                16,887        -
                                                          ----------------------
          Effective rate                                  $   240,119        6 %
                                                          ======================

     Deferred  tax assets  totaling  $2,632,000  are  substantially  offset by a
     valuation  allowance of $2,541,000  resulting in a net deferred  income tax
     asset  of  $91,172.  The  valuation  allowance  was  provided  due  to  the
     uncertainty  of future  realization of federal and state net operating loss
     carryforwards  that give rise to  approximately  $2,541,000 of the deferred
     tax asset.  The balance of the deferred tax asset relates to differences in
     book and tax  accounting  relative to the previous  allowances  on accounts
     receivable and compensation.  The valuation allowance increased  $1,694,534
     in the year  ended  September  30,  1999,  due to  uncertainties  as to the
     Company's ability to generate  sufficient taxable income to utilize the net
     operating  loss  carryforwards  because of the  change in  control  matters
     discussed above.


                                       29
<PAGE>
10.  LEASES

     The  Company  leases its office  space  under  long-term  operating  leases
     expiring  through 2003. Rent expense under these leases was $87,250 for the
     year ended September 30, 1999. The Company consolidated office space from a
     variety of locations to a single  facility.  The Company has  subleased the
     former Telco office space.

     Future minimum annual lease payments and sublease  rentals under  operating
     lease agreements for years ended September 30, 1999: Sublease

                       Rents                    Rentals
                       -----                    -------

          2000     $      351,095          $       202,571
          2001            407,676                  280,212
          2002            392,862                  265,398
          2003             95,598                        -
                   --------------          ---------------

                   $    1,247,231          $       748,181
                   ==============          ===============


11.  STOCKHOLDERS'  EQUITY

     Telco  Acquisition
     ------------------

     The Company issued 17,000,000 shares of its Common Stock in connection with
     the Telco acquisition.  The transaction was valued at the book value of the
     net assets of RIGL as of the date of the transaction.

     Actions  of  the  Board
     -----------------------

     Significant  blocks  of  stock  have  been  issued  to prior  officers  and
     consultants  for services  rendered.  It is not  possible to determine  the
     effect,  if any, of bringing current the required Exchange Act of 1934 (the
     "1934 Act") filings and the financial statements and disclosures  contained
     therein,  may have on the actions of current or former  shareholders of the
     Company  affected  by these  transactions.  The value of those  shares  was
     determined  based on the  trading  value of the stock at the dates on which
     the  agreements   were  made  for  the  services.   The  expense  for  that
     consideration  is 90% of the  trading  value of the  shares  to factor in a
     discount for the regulatory restrictions on trading of those shares. During
     the year ended September 30, 1999, the Company issued  1,694,500  shares to
     officers and consultants valued at $2,145,178.

     Other
     -----

     During the year ended  September  30, 1999,  the Company  issued  4,500,000
     shares of its common stock as collateral on two notes  payable.  The shares
     are held in escrow pending  repayments of the obligations.  Both notes have
     been  restructured,  extending the due dates.  The shares are non-voting as
     long as they are held in  escrow.  These  shares  are not  included  in the
     weighted  average  shares  outstanding  for  purposes  of  calculating  the
     Company's  basic net loss per common share for the year ended September 30,
     1999.


                                       30
<PAGE>
     During the year ended September 30, 1999, the Company issued 400,000 shares
     of its  common  stock as  conversion  of the  remaining  balance  of a note
     payable.  The unpaid  principal  balance of the note converted was $250,000
     and accrued interest of $100,000 was also converted.

     The Company granted 1,700,000 shares of Series B preferred stock to certain
     employees  during the year ended September 30, 1999. The Series B preferred
     stock has no stated  dividend.  The  preferred  shares are  convertible  to
     common  stock at the option of the holder.  The shares are  convertible  at
     varying rates  depending  upon the trading price of the common stock at the
     time of conversion.  The initial conversion rate is one share of common for
     each share of preferred.  Conversion  may not occur until certain  "trigger
     events" occur and all rights with respect to the preferred shares terminate
     on November 30, 2004. "Trigger events" are defined as trading prices of the
     Company's  common stock  reaching or exceeding $5 through $10 per share and
     net income reaching or exceeding  $5,000,000.  No value was assigned to the
     preferred shares in the accompanying balance sheet nor was any compensation
     expense  recognized  for the year ended  September  30,  1999,  because the
     preferred  shares were not exercisable at the time of issuances  because of
     the failure of the Company to meet the "trigger events".  Subsequently, new
     management  has cancelled the Series B preferred  stock and recinded  those
     issuances

     Effects  of  Delinquent  Filings  on  Market  Activity
     ------------------------------------------------------

     The  Company is  delinquent  in its  filings  under the 1934 Act.  The last
     filing  was the June 30,  1998  Form  10-QSB.  Significant  trading  of the
     Company stock has occurred by both related and unrelated parties during the
     period  subsequent  to its  filing.  It is not  possible to  determine  the
     effect,  if any, of bringing  current the required 1934 Act filings and the
     financial  statements and disclosures  contained  therein,  may have on the
     actions of current or former  shareholders of the Company affected by these
     revisions.

     Effects  of  Delinquent  Filings  on  Rule  144  and  Reg S Stock Issuances
     ---------------------------------------------------------------------------

     The Company has been  delinquent in its public filings but has attempted to
     keep the public  informed  through press  releases and 8-K filings while it
     makes a concerted  effort to become current in its filings.  The Company is
     determining  the factual  issues of this matter and is currently  unable to
     determine the  materiality  of  violations,  if any, or their impact on the
     financial statements of the Company.

12.  COMMITMENTS  AND  CONTINGENCIES

     Telco  Billing
     --------------

     The  acquisition  of  Telco  by the  Company  called  for the  issuance  of
     17,000,000 new shares of stock in exchange of the existing shares of Telco.
     As part of that  agreement,  the Company gave the former  shareholders  the
     right to "Put"  back to the  Company  certain  shares of stock at a minimum
     stock price of 80% of the current trading price with a minimum strike price
     of $1.00.  The net effect of which was that the former  Telco  shareholders
     could require the Company to repurchase shares of stock of the Company at a
     minimum cost of $10,000,000.  The agreement  required the Company to attain
     certain market share levels.

     New  management  has  renegotiated  the  "Puts," by which the  "Puts"  were
     retired and the Company  provided a credit  facility of up to $5,000,000 to
     the  former  Telco  shareholders,  collateralized  by the stock held by the
     shareholders,  with interest at least 0.25 points higher than the Company's
     average cost of borrowing.  Additional  covenants warrant that no more that
     $1,000,000 can be advanced at any point in time and no advances can be made
     in excess with out allowing at least 30 days operating capital plus reserve
     or if the company is in an uncured default with any of its lenders.


                                       31
<PAGE>
     Billing  Service  Agreements
     ----------------------------

     The Company has entered  into a customer  billing  service  agreement  with
     Integretel,  Inc.  (IGT) on January 6, 1998,  which was amended on April 2,
     1998 and again on September 1, 1999.  IGT provides  billing and  collection
     and related services  associated to the  telecommunications  industry.  The
     agreement  term is for  two  years,  automatically  renewable  in  two-year
     increments unless appropriate notice to terminate is given by either party.
     Under the agreement,  IGT bills,  collects and remits the proceeds to Telco
     net of reserves for bad debts, billing adjustments,  telephone company fees
     and IGT fees. If either the Company's  transaction  volume decreases by 25%
     from the preceding month, less than 75% of the traffic is billable to major
     telephone  companies,  IGT may at its own discretion  increase the reserves
     and holdbacks under this agreement.

     The Company has also entered into a customer billing service agreement with
     Enhanced  Services  Billing,  Inc.  (ESBI) on February  1, 1999,  which was
     renewed on December 3, 1999.  ESBI  provides  billing  and  collection  and
     related  services  associated  to  the  telecommunications   industry.  The
     agreement  term is for  two  years,  automatically  renewable  in  one-year
     increments unless appropriate notice to terminate is given by either party.
     Under the agreement,  ESBI bills, collects and remits the proceeds to Telco
     net of reserves for bad debts, billing adjustments,  telephone company fees
     and ESBI fees. If either the Company's  transaction volume decreases by 25%
     from the preceding month, less than 75% of the traffic is billable to major
     telephone  companies,  ESBI may at its own discretion increase the reserves
     and holdbacks under this agreement.

     The Company has also entered into a customer billing service agreement with
     Olympic  Telecommunications,  Inc. (OLY) on June 2, 1998, and as a customer
     Olympic provides billing and collection and related services  associated to
     the  telecommunications  industry.  The  agreement  term is for  one  year,
     automatically renewable in one-year increments unless appropriate notice to
     terminate  is given by  either  party.  Under  the  agreement,  OLY  bills,
     collects  and remits the  proceeds to Telco net of reserves  for bad debts,
     billing  adjustments,  telephone  company fees and OLY fees.  If either the
     Company's  transaction  volume  decreases by 25% from the preceding  month,
     less than 75% of the traffic is billable to major telephone companies,  OLY
     may at its own  discretion  increase the reserves and holdbacks  under this
     agreement.  Both parties mutually terminated the agreement before September
     30, 1999.

     Pending  Litigation:

     A  Women's  Place
     -----------------

     The Company in the course of pursing  the  promotion  of medical  practices
     entered into an agreement to provide  practice  management  services to the
     Flagstaff  Arizona and Cottonwood  Arizona offices of A Women's Place.  The
     Company  advanced  operating  expenses  of  A  Women's'  Place  during  the
     negotiations.  No  agreement  was reached and A Women's'  Place  refused to
     return the interim funding.  The Company is presently  pursuing  litigation
     for return of the advances in the amount of $236,000.  A Woman's  Place has
     counter-claimed for unspecified damages for alleged breach of contract.


                                       32
<PAGE>
     Hudson  Consulting  Group  et  al
     ---------------------------------

     The Company under prior management and directors,  in the course of pursing
     equity financing,  engaged the services of The Hudson Consulting Group. The
     Company later became aware of certain legal issues of The Hudson Consulting
     Group and some of its  principals.  The  Company  believes  the shares were
     improperly issued for no valid consideration.  Current management ordered a
     "stop  transfer"  on the  shares.  Upon the  transfer  agent  refusing  the
     transfer,  The  Hudson  Consulting  Group  and its  transferees  threatened
     litigation.  The transfer agent filed an  interpleader  action and tendered
     the  shares to the court to  determine  ownership.  The  Company is seeking
     return of the outstanding  2,000,000  shares of the common stock. The other
     parties are seeking a determination to transfer the shares and for recovery
     of consequential damages.


13.  NET  LOSS  PER  SHARE

          Net loss per share is calculated  using the weighted average number of
          shares of common stock  outstanding  during the year.  Preferred stock
          dividends are  subtracted  from the net income to determine the amount
          available  to common  shareholders.  Preferred  stock  convertible  to
          1,700,000  common shares were not  considered in the  calculation  for
          diluted  earnings  per share for the year  ended  September  30,  1999
          because the effect of their  inclusion  would be  antidilutive.  There
          were no  preferred  stock  dividends in the year ended  September  30,
          1999. The following presents the computation of basic and diluted loss
          per share from continuing operations:

                                           (Loss)       Shares     Per share
                                        ------------  ----------  -----------
Net (Loss)                              $(4,363,687)
Preferred stock dividends                         -
Discontinued operations                   1,892,704
                                        ------------
  Loss from continuing operations        (2,470,983)

BASIC EARNINGS PER SHARE

Loss available to common stockholders   $(2,470,983)  22,223,757  $    (0.11)

Effect of dilutive securities           N/A

DILUTED EARNINGS PER SHARE              $(3,191,426)  22,223,757  $    (0.11)

14.  RELATED  PARTY  TRANSACTIONS

     During the year ended  September 30, 1999,  the Company  borrowed  $500,000
     from one of its  shareholders,  who  later  became a member of the board of
     directors  effective  February 3, 2000. The Company repaid  $250,000 of the
     balance in cash and the board member converted the remaining  $250,000 plus
     $100,000 in accrued  interest  to 400,000  shares of the  Company's  common
     stock. (Also see Note 4).


                                       33
<PAGE>
15.  CONCENTRATION  OF  CREDIT  RISK

     The Company  maintains  cash  balances at banks in  Arizona.  Accounts  are
     insured by the Federal  Deposit  Insurance  Corporation up to $100,000.  At
     September 30, 1999, the Company had bank balances  exceeding  those insured
     limits of $89,000.

     Financial   instruments   that   potentially   subject   the   Company   to
     concentrations of credit risk are primarily trade accounts receivable.  The
     trade accounts  receivable  are due primarily from business  customers over
     widespread  geographical  locations within the LEC billing areas across the
     United  States.  The  Company  historically  has  experienced   significant
     dilution and customer credits due to billing difficulties and uncollectible
     trade accounts receivable.  The Company estimates and provides an allowance
     for uncollectible accounts receivable.

16.  STOCK  BASED  COMPENSATION

     The Company issues stock options to  executives,  key employees and members
     of the Board of  Directors.  The Company  has  adopted the  disclosure-only
     provisions  of  Statement  of  Financial   Accounting  Standards  No.  123,
     "Accounting  for  Stock-Based  Compensation,"  and continues to account for
     stock based  compensation  using the intrinsic  value method  prescribed by
     Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
     Employees".  Accordingly,  no compensation cost has been recognized for the
     stock options granted to employees. Had compensation cost for the Company's
     stock options been determined based on the fair value at the grant date for
     awards  in 1999,  consistent  with the  provisions  of SFAS  No.  123,  the
     Company's net loss and loss per share would have been  increased to the pro
     forma amounts indicated below:

                                                         1999
                                                         ----
     Net  Loss  -  as  reported                    $(  4,363,687)
     Net  Loss  -  pro  forma                      $(  5,392,675)
     Loss  per  share  -  as  reported             $       (0.20)
        Loss  per  share  -  pro  forma            $       (0.24)

     Under the  provisions of SFAS No. 123,  there were  1,212,000  fully vested
     options and no proportionately  vested options for the year ended September
     30, 1999 used to determine  net earnings and earnings per share under a pro
     forma basis.

     The fair value of each option grant is estimated on the date of grant using
     the Black-Scholes  option-pricing model with the following  assumptions for
     years ended September 30, 1999:

                        Dividend yield               None
                        Volatility                  1.771
                        Risk free interest rate     6.00%
                        Expected asset life       2.5 years

     Under the Employee Incentive Stock Option Plan approved by the stockholders
     in 1998,  the total number of shares of common stock that may be granted is
     1,500,000.   The  plan   provides   that  shares   granted  come  from  the
     Corporation's  authorized  but  unissued  common  stock.  The  price of the
     options granted pursuant to this plan shall not be less than 100 percent of
     the fair  market  value of the  shares  on the date of grant.  The  options
     expire from five to ten years from date of grant.  At  September  30, 1999,
     the Company had granted an aggregate of 1,212,000 options under this plan.


                                       34
<PAGE>
     In addition to the Employee  Incentive  Stock Option Plan, the Company will
     occasionally  grant  options  to  consultants  and  members of the board of
     directors  under  specific  stock  option  agreements.  There  were no such
     options granted in the year ended September 30, 1999.

     During the year ended  September 30, 1999,  the Company  granted  1,212,000
     options  to certain  key  employees.  These  options  all were  immediately
     vested. These options were granted at exercise prices of $1.00 to $2.50 the
     fair  market  value of the  underlying  shares  on the date of  grant.  The
     options  expire five years from date of grant.  The summary of activity for
     the Company's stock options is presented below:


                                                                  Weighted
                                                               Average Exercise
                                                      1999          Price
                                                      ----     ----------------
Options outstanding at beginning of year           1,374,474       $2.27
Granted                                            1,212,000       $1.31
Exercised                                         (  105,000)      $1.00
Terminated/Expired                               ( 1,374,474)      $2.27
Options outstanding at end of year                 1,107,000       $1.34
Options exercisable at end of year                 1,107,000
Options available for grant at end of year           288,000

Price per share of options outstanding          $ 1.00-$2.50
Weighted average remaining contractual lives       4.3 years
Weighted Average fair value of options
granted during the year                         $       0.85


     The Company has issued  warrants in connection with certain debt and equity
     transactions. Warrants outstanding are summarized as follows:

                                                            Weighted
                                                             Average
                                                          Exercise Price
                                                          --------------

Warrants outstanding at beginning of year  3,416,920          $2.07
Granted                                    1,555,250          $2.00
Expired                                   (3,417,170)         $2.05
Exercised                                   (200,000)
                                          -----------     ---------
  Outstanding at September 30, 1999        1,355,000          $2.00
                                          ===========     =========


                                       35
<PAGE>
     The 720,000 warrants outstanding at September 30, 1999, expire as follows:

                     June 3, 2000           20,000
                     June 7, 2000          200,000
                     July 23,2000          635,000
                  September 9, 2000        150,000
                  October 22, 2000         250,000
                    March 23, 2001         100,000

17.  EMPLOYEE  BENEFIT  PLAN

     The  Company  maintains a 401(k)  profit  sharing  plan for its  employees.
     Employees are eligible to  participate in the plan upon reaching age 21 and
     completion of three months of service. The Company made no contributions to
     the plan for the year ended September 30, 1999.


                                       36
<PAGE>
ITEM  8.     CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON
             ACCOUNTING  AND  FINANCIAL  DISCLOSURES

     In November, 1999, YP.Net dismissed Singer Lewak Greenbaum & Goldstein, LLP
("Singer  Lewak")  which  had  been its principal independent accountant for the
audit  of  its  1998  and  1997 fiscal year financial statements.   Except for a
"going  concern"  qualification,  Singer  Lewak's  reports  on  these  financial
statements  contained  no  adverse opinion or disclaimer of opinion.  Neither of
these  reports  on  the  financial  statements  were qualified or modified as to
uncertainty,  audit scope, or accounting principles.     The decision to replace
Singer Lewak was recommended and approved by our board of directors.  During the
two  past  fiscal  years  and  the  subsequent  interim  periods,  YP.Net had no
disagreements with Singer Lewak regarding any matter of accounting principles or
practices,  financial  statement  disclosure,  or  auditing  scope or procedure.

     On March 14, 1999, YP.Net reported that it replaced McGladry and Pullen LLP
as its principal certified public accountants.  McGladry and Pullen LLP had been
engaged  as  the  independent  auditors, but had not issued any audited reports.

     On  March 30, 2000, YP.Net appointed King, Weber & Associates, P.C., as its
independent  auditors to conduct the audit of the September 30, 1999 fiscal year
financial  statements.


                                       37
<PAGE>
                                    PART III

ITEM  9.     DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS;
             COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT

DIRECTORS  AND  EXECUTIVE  OFFICERS

     The  directors  and  executive officers of YP.Net, their ages and positions
are  as  follows:

     NAME                   AGE    POSITIONS HELD (1)
     ----                   ---    ------------------

     Angelo Tullo            43    Director, Chairman of the Board
     Walter Vogel            60    Director, Vice Chairman of
                                   the Board
     Gregory B. Crane        36    Director, Director of Operations
     Daniel L. Coury, Sr.    47    Director
     Harold A. Roberts       71    Director
     Wallace Olsen           59    Director
     DeVal Johnson           35    Director, Secretary

     (1) All current directors serve until the next annual shareholders  meeting
     or their earlier  resignation  or removal and until their  successors  have
     been duly elected and qualified.

     Angelo  Tullo.  Mr. Tullo has served as the Chairman of the Board of YP.Net
since  February  2000.  From  December,  1999 to present, Mr. Tullo has been the
principal  of  Sunbelt  Financial  Solutions,  Inc.,  an  investment banking and
consultant  firm  in  Scottsdale, Arizona.  For over twenty years, Mr. Tullo has
been  active  as  a  business  consultant.  Mr.  Tullo  has actively worked with
commercial  financial  factoring  for  the  past  ten  years.  He  has owned and
operated factoring companies, leasing companies, consulting companies, wholesale
companies,  professional  employment  organizations, insurance agencies, heating
and  air-conditioning  contractors,  retail oil companies, real estate companies
and  restaurants.  He  is  a  former  member  of  the  CEO  Club  in  New  York.

     In  February,  2000,  American  Business Funding Corp. filed for protection
under  Chapter  11  of  the  Bankruptcy  Code  in  the Federal District Court of
Arizona.  Mr.  Tullo  had  been  a director, officer and shareholder of American
Business  Funding  immediately  prior  to  the  time  of  the bankruptcy filing.

     Walter  Vogel.  Mr.  Vogel has been a director of YP.Net since February and
was previously a member of its board from March to October, 1998.  Mr. Vogel has
been  involved  extensively in international business for many years.  From 1996
to  present, Mr. Vogel has been the owner and president of MC Management GmbH, a
business-consulting  firm  in  Ottenfing,  Germany.  Mr.  Vogel  has served as a
director  of  several  companies  both  in  the  United  States  and  Europe.


                                       38
<PAGE>
     Gregory  B. Crane.  Mr. Crane has been a director of YP.Net since February,
2000  and  also  has served as its Director of Operations since this time.  From
September  1998  to  June,  1999,  Mr.  Crane  was  the General Manager of Telco
Billing,  Inc.  Mr.  Crane  owned  and  operated  several  businesses  including
residential  and  commercial  builders,  multi-state  mail  order,  and  a
document-preparation  company,  and  was also the creator of the Yellow-Page.Net
                                                                 ---------------
concept.  Mr.  Crane  was  a  member  of  the  Young Entrepreneur's Organization
("YEO").

     Mr.  Crane  has  owned  and  operated  various  businesses  involved in the
homestead  declaration  document  preparation and filing service.  In connection
with  these  activities,  Mr.  Crane  and  certain of these businesses have been
subject  to  injunctive actions brought by the states of Arizona, Florida, Texas
and  Washington.  These  actions generally involved mailer solicitations for the
document  preparation  services and all of these activites occurred prior to the
commencement  of Telco Billing, Inc and are unrelated to Telco Billuing, Inc. or
YP.Net..  Mr.  Crane  and  the subject entities have entered into consent orders
related  to  these  actions which primarily required modification to the mailers
and  the  payment ofcertain amounts that are a matter of public record.  The use
of  the  mailer  solicitation  was  prohibited  in  the State of Washington.  In
connection  with  violation  of  the  Florida  order,  Mr. Crane is subject to a
judgment in the amount of approximately $1.4 million plus accrued interest.  Mr.
Crane has satisfied judgments related to orders in all other states..  Mr. Crane
was  also  named  in  the  action  filed  by the FTC against YP.Net and has been
included in the stipulated preliminary order entered into by YP.Net and the FTC.
See  "Legal  Proceedings".

     Daniel  L.  Coury.  Mr.  Coury  has  served  as  a director of YP.Net since
February, 2000.  Mr. Coury's principal business is Mesa Cold Storage, Inc. which
owns  and operates several cold storage facilities located in Mesa, Arizona.  He
has  also  participated  in  the  ownership and operation of various real estate
projects  and  business  ventures.

     Harold  Roberts.  Mr.  Roberts  has  served  as  a director of YP.Net since
February,  2000 and previously served as a director of its predecessor from 1994
to  1998.  Mr.  Roberts has practiced law in Santa Fe, New Mexico since 1955 and
since  1975  has  engaged  primarily  in matters regulated by various regulatory
agencies,  including the Securities and Exchange Commission.  He has served as a
director  and  president  of  SunRay Oil Company, a company engaged in drilling,
exploration and distribution, from 1996 to present, as a director and officer of
Candu, Inc., a company engaged in electronic marketing, from 1985 to the present
and  as  a  director  and  president of Verilite Aircraft Corporation, a company
engaged  in  air  craft development, from 1994 to the present.  Mr. Roberts is a
graduate  of  the  University  of  Colorado  Law  School.

     Wallace Olsen, Jr.  Mr. Olsen has been a director of YP.Net since February,
2000.  Mr.  Olsen  has  been active in several businesses in the transportation,
hospitality,  real  estate  and  assisted  living  centers  industries.


                                       39
<PAGE>
     DeVal  Johnson.  Mr.  Johnson  has served as a director since October, 1999
and  Secretary  of  YP.Net  since  February, 2000.  Mr. Johnson was the graphics
designer  and  director  of  Telco Billing from September, 1998 until July, 1999
when it was acquired. Mr. Johnson was responsible for the design of the in-house
sales  presentation and creation of the corporate logo for YP.Net.  Prior to his
role  at  Telco,  Mr.  Johnson  was  a graphics designer for Print Pro, Inc. Mr.
Johnson  is  actively  involved  with  Website promotion, interactive design and
Internet  advertising.

COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT

     Based  upon  current  management's knowledge, YP.Net has not been furnished
with  any  reports  under Section 16(a) of the Exchange Act filed by persons who
would  have  been  required to file such reports with respect to YP.Net's fiscal
year  ended  September  30,  2000.  YP.Net  has  also  not  received  written
representation  from any person that no report under Form 5 would be required to
be  filed  by such person.  YP.Net is currently attempting to obtain information
regarding  the  reports  and to determine if delinquencies actually exist.  Upon
completing  this  review, it will advise any person it believes to be delinquent
of  such  person's  reporting  obligations  under  the  Exchange  Act.

ITEM  10.     EXECUTIVE  COMPENSATION

     The following table reflects all forms of compensation for the fiscal years
ended  September 30, 1999, 1998 and 1997 for the Chief Executive Officer and the
other  four  most  highly compensated executive officers of YP.Net for the years
stated.


                                       40
<PAGE>
                           SUMMARY COMPENSATION TABLE

                                           ANNUAL COMPENSATION
                                                             OTHER
                                        FISCAL               ANNUAL
NAME AND PRINCIPAL POSITION              YEAR    SALARY    COMPENSATION
- --------------------------------------  ------  --------  -------------
Tennessee Webb (1)                        1999  $130,000              -
Chief Executive Officer                   1998  $ 93,333  $      55,750
                                          1997  $ 82,344  $      18,000
- --------------------------------------  ------  --------  -------------
Michael McKay (2)                         1999  $130,000              -
Chief Technology Officer                  1998  $143,710              -
                                          1997  $ 64,329  $      46,000
- --------------------------------------  ------  --------  -------------
Peter DeKray (2)                          1999  $130,000              -
Vice President and Secretary              1998  $162,825              -
                                          1997  $ 61,224              -
- --------------------------------------  ------  --------  -------------
William O'Neal (3)                        1999  $130,000              -
Senior Vice President                     1998  $130,000              -
                                          1997         -              -
- --------------------------------------  ------  --------  -------------
Kevin Jones (3)                           1999  $130,000              -
Chief Operating Officer and               1998  $130,000              -
President                                 1997  $ 20,000  $      40,000
- --------------------------------------  ------  --------  -------------
(1)   Mr.  Webb  resigned  in  March,  1999.
(2)   Messrs.  McKay,  DeKray  and  Jones  resigned  in  September,  1999.
(3)   Mr.  O'Neal  resigned  in  February,  2000.

     All options to acquire YP.Net stock granted to the above executive officers
expired  unexercised  90 days after their termination of employment with YP.Net.

DIRECTOR  COMPENSATION

     Upon  appointment  to  the  Board,  Mr. Tullo was awarded 100,000 shares of
YP.Net  common  stock  and  Mr.  Vogel  was  awarded  75,000  shares.  All other
directors  were awarded 50,000 shares.  None of these shares have been issued to
date.  Additionally, the directors receive $2,000 per month for their service on
the Board and $250 per hour for services related to any Board committee on which
they  serve.

EMPLOYMENT  AGREEMENTS

     Since  February,  2000,  Gregory  B.  Crane  has  served as the Director of
Operations  of  YP.Net.  His  services  are  provided through Business Executive
Services,  Inc. which began to receive compensation in May of 2000 in the amount
of  $13,000 per month for these services.  These services provided "at will" and
no  written  agreement  exists.


                                       41
<PAGE>
1998  STOCK  OPTION  PLAN

     YP.Net's  Board of Directors adopted and its shareholders approved in June,
1998  the  1998  Stock  Option  Plan.  The  purpose  of  the Plan was to provide
incentives  to employees, directors and service providers to promote the success
of  YP.Net.  The Plan provides for the grant of both qualified and non-qualified
options  to  purchase  up  to  1,500,000  shares  of  its common stock at prices
determined  but,  in the case of incentive options, at a price not less than the
fair  market  value  of  the  stock  on  the  date  of  the  grant.  The Plan is
administered by the Board of Directors or by a committee appointed by the Board.
As  of  September  30,  1999,  options  to  purchase  1,107,000  shares  remain
outstanding  which  are  exercisable  at  prices  of  $1.00  to  $2.50.


                                       42
<PAGE>
ITEM  11.     SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND
              MANAGEMENT

     The  following table sets forth, as of June 30, 2000, the ownership of each
person known by management to be the beneficial owner of five percent or more of
YP.Net's  common stock, each officer and director individually, and all officers
and  directors  as  a  group.  YP.Net has been advised that each person has sole
voting  and  investment  power  over  the  shares  listed below unless otherwise
indicated.

NAME AND ADDRESS                      AMOUNT AND NATURE
OF BENEFICIAL OWNER                     OF OWNERSHIP      PERCENT OF CLASS(1)
- ------------------------------------  ------------------  -------------------

Angelo Tullo (2)                                   0                  -
4840 East Jasmine Street
Suite 105
Mesa, AZ  85205

Walter Vogel (3)                            120,000                 .32%
4840 East Jasmine Street
Suite 105
Mesa, AZ  85205

Gregory B. Crane (4)                              500                (5)
4840 East Jasmine Street
Suite 105
Mesa, AZ  85205

Daniel L. Coury, Sr. (4)                     130,000                .35%
4840 East Jasmine Street
Suite 105
Mesa, AZ  85205

Harold A. Roberts (4)                       208,000                 .56%
4840 East Jasmine Street
Suite 105
Mesa, AZ  85205

Wallace Olsen, Jr. (4)                       497,500               1.33%
4840 East Jasmine Street
Suite 105
Mesa, AZ  85205


                                       43
<PAGE>
NAME AND ADDRESS                      AMOUNT AND NATURE
OF BENEFICIAL OWNER                     OF OWNERSHIP      PERCENT OF CLASS(1)
- ------------------------------------  ------------------  -------------------

DeVal Johnson (4)                            75,000                 .20%
4840 East Jasmine Street
Suite 105
Mesa, AZ  85205

Matthew & Markson Ltd. (6)                7,600,000               20.32%
Woods Centre, Frair's Road
P.O. Box 1407
St. John's
Antigua, West Indies

Morris & Miller Ltd.                      9,350,000               25.00%
Woods Centre, Frair's Road
P.O. Box 1407
St. John's
Antigua, West Indies

All Directors as a Group (7 persons)      1,031,000                2.76%

(1)  Based  on  37,400,798  shares outstanding as of June 30, 2000.  This amount
excludes  4,500,000  shares  issued  and  held  as collateral for obligations of
YP.Net  under  two promissory notes.  Upon payment of the notes, the shares will
be  returned  to  YP.Net  for  cancellation.
(2)  Mr.  Tullo  has  been awarded 100,000 shares which have not been issued and
are  not  included  in  this  table.
(3)  Mr. Vogel has been awarded 75,000 shares which have not been issued and are
not  included  in  this  table.
(4)  All  directors  except  Mr.  Tullo  and Mr. Vogel, have been awarded 50,000
shares  which  have  not  been  issued  and  are  not  included  in  this table.
(5)  Less  than  0.01%.
(6)  The  number  of  shares  held by Matthew & Markson, Ltd. excludes 2,000,000
shares  issued  as collateral for a note payable issued by YP.Net.  These shares
will  be  returned  to  YP.Net  and  cancelled  upon  payment  of  the  note.

ITEM  12.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     Note  Conversion.  YP.Net  borrowed  $500,000  from  Mr.  Wallace  Olsen, a
shareholder  who  later  became  a  member  of  the Board of Directors effective
February  4, 2000.  In September, 1999, YP.Net repaid $250,000 of the balance in
cash  and  Mr.  Wallace  Olsen converted the remaining $250,000 plus $100,000 in
accrued  interest  to  400,000  shares  of  YP.Net's  common  stock.

     Acquisition  of Telco.  In June, 1999, YP.Net's predecessor acquired all of
the  outstanding  stock of Telco Billing, Inc. in exchange for 17,000,000 shares
of  its  common  stock.  Matthew & Markson, Ltd. and Morrison & Miller, Ltd., as
the  shareholders  of  Telco,  were  issued  7,650,000  and  9,350,000  shares,
respectively.  The  original  agreement  provided  for  certain  put rights with
respect  to  these shares that were terminated.  In exchange for cancellation of


                                       44
<PAGE>
the  put  rights,  YP.Net agreed to provide the former Telco shareholders with a
$5,000,000  credit  facility.  The  obligations  under  this  facility are to be
secured  by  a  pledge of the former Telco shareholders' YP.Net stock.  Interest
for  borrowings under this facility is to be at least 0.25% higher than YP.Net's
average borrowing costs.  No advances in excess of $1,000,000 may be made at any
one  time  and  no advances in excess of $1,000,000 are to be made unless YP.Net
has  available at least 30 days operating capital plus other reserves available.
No  advances  are  to be made if YP.Net is in default with respect to any of its
lender obligations.  The credit facility has not been formerly documented and no
advances  have  been  made  or  are  expected  until documentation is completed.

     Gregory B. Crane and DeVal Johnson were employees of and primarily involved
in the start-up of Telco.  Mr. Crane, on behalf of the former Telco shareholders
negotiated  the  acquisition  of  Telco  by  YP.Net's  predecessor.

     License  of  URL.  In  connection  with  the acquisition of Telco, YP.Net's
predecessor  also  agreed  to  pay  Matthew & Markson $5,000,000 as a discounted
accelerated  royalty  payment  for a 20-year license of the URL Yellow-Page.Net.
                                                                ---------------
The  accelerated  payment  was  made  under  the terms of an Exclusive Licensing
Agreement  dated  September  21,  1998 between Telco and Matthew & Markson.  The
payment  was  originally  to  be  paid  in full on the acquisition of Telco.  To
extend  the  payment obligations, YP.Net advanced a $1,000,000 extension fee and
agreed  to  provide $250,000 of tenant improvements to approximately one-half of
its  Mesa facility to Matthew & Markson's designee for $1.00 per year throughout
the  term  of  the  lease.  The  $1,000,000  extension  fee  was  applied to the
$5,000,000  accelerated  royalty  and an additional $2,000,000 was paid in July,
1999.  Matthew  &  Markson also agreed to take a $2,000,000 note for the balance
due.

     YP.Net  defaulted  on  payment of the $2,000,000 note on September 15, 1999
and  also defaulted on extensions of the note on January 15, 2000.  On April 20,
2000,  the  note  was renegotiated to a demand note with monthly installments of
$100,000  per  month.  The  payments  may  be  suspended if YP.Net does not have
certain  cash  reserves or is otherwise in default under other obligations.  The
note  is secured by 2,000,000 shares of YP.Net common stock held in escrow.  The
shares  are  to  be  returned  for  cancellation  upon  payment of the note.  As
consideration  for  the  September  15,  1999  extension,  YP.Net paid Matthew &
Markson  an  extension  fee  of  $200,000.

     The  sub-lessee  of  the  nominal  rent  sub-lease  was  Business Executive
Services,  Inc.  ("BESI").  BESI  leases  portions of the facility to  unrelated
third  parties  as  well  as businesses associated with Mr. Crane and Mr. Tullo.
Mr.  Crane is employed by BESI and receives a salary of approximately $2,000 per
month  from  BESI  and  bonuses  in  an  undetermined  amount.


                                       45
<PAGE>
     Related  Party  Transaction  Policy.  Our  general policy for entering into
transactions  with  directors,  officers  and  affiliates  that have a financial
interest  in  the transaction is to adhere to Nevada corporate law regarding the
approval  of  such  transactions.  In  general,  a  transaction between a Nevada
corporation  and  a  director,  officer or affiliate of the corporation in which
such  person has a financial interest is not void or voidable if the interest is
disclosed  and  approved  by  disinterested  directors or shareholders or if the
transaction  is  otherwise  fair  to  the  corporation.

  ITEM 13.  EXHIBITS AND REPORTS  N  FORM  8-K

EXHIBITS

             3.1(1)     Certificate of Restated Articles of Incorporation of
             Renaissance  International,  Inc.

              3.2       Amended Articles - Name Change to RIGL Corporation &,
              authorized Capital Increased.

             3.3        Amended  Articles  -  Name  Change  to  YP.Net

             3.5(1)     Bylaws  of  Renaissance  International  Group,  Ltd.

             3.6        Addendum  to  Bylaws  to  add  office  of  Vice Chairman

             10.1(2)    1998  Stock  Option  Plan

             10.2       Reseller  Agreement  with  Worldpages.com

             10.3       Billing  Service  Agreement  with  Integretel

             10.4       Enhanced Services Billing and Information Management
             Services Agreement with Enhanced Services Billing, Inc.

             10.5       Standard Industrial Commercial Multi-Tenant Lease Gross
             regarding Mesa Facility and amendment

             10.6       Sub-Lease Agreement to Business Executive Services, Inc.

             10.7       VanSickle Loan Agreement, Stock Pledge Agreement, and
             Modifications

             10.8(3)    First Amendment to Loan Agreement between YP.Net,Inc.and
             Joseph and Helen  VanSickle  dated  March  31,  2000

             10.9(4)    Stock Purchase Agreement between RIGL Corporation, Telco
             Billing, Inc. and Matthew  &  Markson, Ltd. dated March 16, 1999

             10.10(4)   Amendment to Stock Purchase Agreement between RIGL
             Corporation, Telco  Billing,  Inc.,  Morris  &  Miller,  Ltd.

             10.11(4)   Exclusive  License Agreement between Matthews & Markson,
             Ltd. and Telco  Billing,  Inc.  dated  September  21,  1998

             10.12      Modification  to  Matthew  &  Markson  Promissory  Note.

             11         Statement  Regarding  Computation of Per Share Earnings.

             16.1(5)    Letter of Singer Lewak Greenbaum & Goldstein LLP dated
             November 24,  1999

             16.2(6)    Letter of McGladrey & Pullen LLP dated March 23, 2000;
             Letter of McGladrey  &  Pullen,  LLP  dated  February  4,  2000

             21         Subsidiaries:  Telco  Billing,  Inc.

             27         Financial  Data  Schedule


                                       46
<PAGE>
1  Incorporated  by  reference  from  Form  10-SB  as  filed  May  6,  1998.
2  Incorporated  by  reference  from  Form  S-8  as  filed  July  10,  1998.
3  Incorporated  by  reference  from  Form  8-K  as  filed  on  May  22,  2000.
4  Incorporated  by  reference  from  Form  8-K/A  as  filed  on  June 30, 1999.
5  Incorporated  by  reference  from  Form  8-K  as  filed  on December 3, 1999.
6  Incorporated  by  reference from Form 8-K as filed on March 29, 2000 and Form
   8-K/A  as  filed  on  May  22,  2000.

REPORTS  ON  FORM  8-K

     Three  reports on Form 8-K were filed in the fiscal quarter ended September
30,  1999.  These  reports  are  as  follows:

     Form  8-K  filed on June 7, 1999 disclosing under Item 6 of such report the
resignation  of  Tennessee  Webb  as  the Chairman of the Board of Directors and
Eugene  Starr  as  a  director.

     Form  8-K filed on June 30, 1999 disclosing under Item 2 of such report the
acquisition  of  Telco  Billing,  Inc.  and  Exclusive License Agreement for the
Yellow-Page.Net URL.  Financial statements of Telco Billing, Inc. as of February
- ---------------
28,  1999  were  attached  as  an  exhibit.

     Form  8-K  filed  September 16, 1999 disclosing under Item 2 of such report
the obtaining of a $3,000,000 credit facility from Fremont Financial Corporation
by  Telco  in accordance with the terms of the agreement of acquisition of Telco
under  Item  2  of  such  report.

                                       47
<PAGE>
     In  accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                    YP.NET,  INC.



Dated:  __________,  2000           By  /s/  Angelo  Tullo
                                      --------------------------------------
                                         Angelo Tullo, Chairman of the Board


                                    BOARD  OF  DIRECTORS



Dated:  __________,  2000           By  /s/  Angelo  Tullo
                                      ----------------------
                                         Angelo  Tullo


Dated:  __________,  2000           By
                                      --------------------------------------
                                         Walter  Vogel


Dated:  __________,  2000           By  /s/  Gregory  B.  Crane
                                      --------------------------------------
                                         Gregory  B.  Crane


Dated:  __________,  2000           By  /s/  Daniel  L.  Coury,  Sr.
                                      --------------------------------------
                                         Daniel  L.  Coury,  Sr.


Dated:  __________,  2000           By
                                      --------------------------------------
                                         Harold  A.  Roberts


Dated:  __________,  2000           By
                                      --------------------------------------
                                         Wallace  Olsen

Dated:  __________,  2000           By  /s/  DeVal  Johnson
                                      --------------------------------------
                                        DeVal  Johnson


<PAGE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>2
<FILENAME>0002.txt
<TEXT>

FILED
IN  THE  OFFICE  OF  THE
SECRETARY  OF  STATE  OF  THE
STATE  OF  NEVADA

JUN  25  1996

No.  C6242-94
   -------------

DEAN HELLER, SECRETARY OF STATE   CERTIFICATE  of  AMENDMENT
                                         TO THE
                              ARTICLES OF  INCORPORATION OF
                          RENAISSANCE INTERNATIONAL. GROUP, LTD.

     Pursuant to the provisions of the Nevada Revised Statutes, Title 7, Chapter
78,  the  undersigned  officers  do  hereby  certify:

FIRST     The  name  of the corporation is Renaissance International Group, Ltd.

SECOND    The  following sets forth the amendment to the following article:

               1.     Name:     The  name  of  the  corporation  is
                      ----

                      RIGL  Corporation  (the  "Corporation").

THIRD:     The  amendment was adopted and approved by the board of directors and
           shareholders  on  June 22, 1998.  The number of shares outstanding at
           the  time  of such  adoption  was 12,952,134 and the number of shares
           entitled  to  vole thereon was 12,272,842. The number of shares voted
           for  the  amendment  were 6,106,993.  The number  of  votes  for  the
           amendment  were  sufficient  for  approval.

FOURTH;    Increase  Authorized  Capital.

FIFTH:     The  following  sets  forth  the  amendment to the following ARTICLE:

               3.     Authorized  Capital.  The  Corporation  shall  have  the
                      -------------------
                      authority to issue 50,000,000  shares of Common Stock, par
                      value $.00l per share and and each share having one vote.

SIXTH:     The  amendment  was  adopted  and  approved by the board of directors
           and  shareholders on June 22, 1998.  The number of shares outstanding
           at the time of  such adoption was 12,952,134 and the number of shares
           entitled to vote thereon was 12,272,842.  The number of shares  voted
           for  the  amendment  were  6,088,993.  The  number  of  votes for the
           amendment were sufficient for approval

DATED  June 23, 1998                     Renaissance Internationa1 Group, Ltd.
                                         (t/b/a  RIGL  Corporation)


                                         By:  William  D.  O'Neal
                                            ------------------------------------
                                         WILLIAM  d.  o'Neal,  Vice President

                                         By:  Peter  de  Krey
                                            ------------------------------------
                                         Peter  de  Krey,  Secretary


<PAGE>
STATE  OF  ARIZONA      )
                        )  ss
COUNTY  OF  MARICOPA    )

     On  Jime23  1998,  personally  appeared  before me, a Notary Public for the
State  and County aforesaid WILLIAM D. 0' NEAL. as Vice President of Renaissance
International  Group,  Ltd,  who  acknowledged  that  he  executed  the  above
instrument.

         Official Seal
       DIANE N. LEONARD                           Diane  N.  Leonard
Notary Public - State of Arizona                  -----------------------------
       MARICOPA COUNTY                            Notary  Public
My Comm. Expires May 15, 2002

(Notary Seal)


STATE  OF  ARIZONA      )
                        )  ss
COUNTY  OF  MARICOPA    )

     On  Jime23  1998,  personally  appeared  before me, a Notary Public for the
State  and  County  aforesaid  PETER  DE  KREY.  as  Secretary  of  Renaissance
International  Group,  Ltd,  who  acknowledged  that  he  executed  the  above
instrument.

         Official Seal
       DIANE N. LEONARD                           Diane  N.  Leonard
Notary Public - State of Arizona                  -----------------------------
       MARICOPA COUNTY                            Notary  Public
My Comm. Expires May 15, 2002

(Notary Seal)


        STATE OF NEVADA
      Secretary of State
I hereby certify that this is a
true and complete copy of
the document as filed in this
office.


     JUN  26  '98



     DEAN  HELLER
Secretary  of  State
By  D.  Farmer


<PAGE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.3
<SEQUENCE>3
<FILENAME>0003.txt
<TEXT>

                                 WRITTEN CONSENT
                             OF THE SHAREHOLDERS OF
                                RIGL CORPORATION

     Pursuant  to  the  authority  of Section 71.320, paragraph, 2 of the Nevada
Revised  Statutes,  the  undersigned  individuals,  collectively  constitute  a
majority  of  the  issued  and  outstanding  shares  entitled  to  vote  of RIGL
Corporation,  a  Nevada  corporation  (the  "Corporation"),  do  hereby take the
following  action and approve the adoption of the following resolutions by their
written  consent  as  of  this  12  day  of  August,  1999.

          RESOLVED,  that the Articles of  Incorporation  of the Corporation are
          hereby amended,  effective October 1, 1999, to reflect a change in the
          name of the Corporation from "RIGL Corporation" to "YP.Net, Inc."


          FURTHER  RESOLVED,  that  management  of  the  Corporation  is  hereby
          authorized  and  empowered  to take any and all  necessary  actions to
          effect such name change,  including but not limited to, filing any and
          all documents and instruments required to be filed with all applicable
          state and federal regulatory agencies and authorities.

Dated:  August 12, 1999
                                            SHAREHOLDERS:
                                              MORRIS  &  MILLER  LTD.


                                            ------------------------------------
                                            BY:  PAT  DIEDRICK
                                                 ANTIGUA MANAGEMENT & TRUST LTD.
                                            ITS: DIRECTOR


                                            MATTHEW  &  MARKSON,  LTD.
                                            --------------------------



                                            ------------------------------------
                                            BY:  USE  COOPER
                                            Antigua  Management  &  Trust  Ltd.
                                            ITS: DIRECTOR


<PAGE>
                                 WRITTEN CONSENT
                             OF THE SHAREHOLDERS OF
                                RIGL CORPORATION

     Pursuant  to  the  authority  of Section 71.320, paragraph, 2 of the Nevada
Revised  Statutes,  the  undersigned  individuals,  collectively  constitute  a
majority  of  the  issued  and  outstanding  shares  entitled  to  vote  of RIGL
Corporation,  a  Nevada  corporation  (the  "Corporation"),  do  hereby take the
following  action and approve the adoption of the following resolutions by their
written  consent  as  of  this  12  day  of  August,  1999.

          RESOLVED,  that the Articles of  Incorporation  of the Corporation are
          hereby amended,  effective October 1, 1999, to reflect a change in the
          name of the Corporation from "RIGL Corporation" to "YP.Net, Inc."


          FURTHER  RESOLVED,  that  management  of  the  Corporation  is  hereby
          authorized  and  empowered  to take any and all  necessary  actions to
          effect such name change,  including but not limited to, filing any and
          all documents and instruments required to be filed with all applicable
          state and federal regulatory agencies and authorities.

Dated:  August 12, 1999
                                                SHAREHOLDERS:

                                                /s/    Kevin  L.  Jones
                                                --------------------------------
                                                         [Signature]



                                                       Kevin  L.Jones
                                                --------------------------------
                                                        [Print  Name]


<PAGE>
                                 WRITTEN CONSENT
                             OF THE SHAREHOLDERS OF
                                RIGL CORPORATION

     Pursuant  to  the  authority  of Section 71.320, paragraph, 2 of the Nevada
Revised  Statutes,  the  undersigned  individuals,  collectively  constitute  a
majority  of  the  issued  and  outstanding  shares  entitled  to  vote  of RIGL
Corporation,  a  Nevada  corporation  (the  "Corporation"),  do  hereby take the
following  action and approve the adoption of the following resolutions by their
written  consent  as  of  this  12  day  of  August,  1999.

          RESOLVED,  that the Articles of  Incorporation  of the Corporation are
          hereby amended,  effective October 1, 1999, to reflect a change in the
          name of the Corporation from "RIGL Corporation" to "YP.Net, Inc."


          FURTHER  RESOLVED,  that  management  of  the  Corporation  is  hereby
          authorized  and  empowered  to take any and all  necessary  actions to
          effect such name change,  including but not limited to, filing any and
          all documents and instruments required to be filed with all applicable
          state and federal regulatory agencies and authorities.

Dated: August 12, 1999
                                                SHAREHOLDERS:


                                                /s/    James.  Jones
                                                --------------------------------
                                                        [Signature]



                                                        James  Jones
                                                --------------------------------
                                                        [Print  Name]


<PAGE>
                                 WRITTEN CONSENT
                             OF THE SHAREHOLDERS OF
                                RIGL CORPORATION

     Pursuant  to  the  authority  of Section 71.320, paragraph, 2 of the Nevada
Revised  Statutes,  the  undersigned  individuals,  collectively  constitute  a
majority  of  the  issued  and  outstanding  shares  entitled  to  vote  of RIGL
Corporation,  a  Nevada  corporation  (the  "Corporation"),  do  hereby take the
following  action and approve the adoption of the following resolutions by their
written  consent  as  of  this  12  day  of  August,  1999.

          RESOLVED,  that the Articles of  Incorporation  of the Corporation are
          hereby amended,  effective October 1, 1999, to reflect a change in the
          name of the Corporation from "RIGL Corporation" to "YP.Net, Inc."


          FURTHER  RESOLVED,  that  management  of  the  Corporation  is  hereby
          authorized  and  empowered  to take any and all  necessary  actions to
          effect such name change,  including but not limited to, filing any and
          all documents and instruments required to be filed with all applicable
          state and federal regulatory agencies and authorities.

Dated:  August 12, 1999
                                                SHAREHOLDERS:

                                                /s/    Michael  Mackay
                                                --------------------------------
                                                         [Signature]



                                                       Michael  MacKay
                                                --------------------------------
                                                        [Print  Name]


<PAGE>
                                 WRITTEN CONSENT
                             OF THE SHAREHOLDERS OF
                                RIGL CORPORATION

     Pursuant  to  the  authority  of Section 71.320, paragraph, 2 of the Nevada
Revised  Statutes,  the  undersigned  individuals,  collectively  constitute  a
majority  of  the  issued  and  outstanding  shares  entitled  to  vote  of RIGL
Corporation,  a  Nevada  corporation  (the  "Corporation"),  do  hereby take the
following  action and approve the adoption of the following resolutions by their
written  consent  as  of  this  12  day  of  August,  1999.

          RESOLVED,  that the Articles of  Incorporation  of the Corporation are
          hereby amended,  effective October 1, 1999, to reflect a change in the
          name of the Corporation from "RIGL Corporation" to "YP.Net, Inc."


          FURTHER  RESOLVED,  that  management  of  the  Corporation  is  hereby
          authorized  and  empowered  to take any and all  necessary  actions to
          effect such name change,  including but not limited to, filing any and
          all documents and instruments required to be filed with all applicable
          state and federal regulatory agencies and authorities.

Dated:  August 12, 1999
                                                SHAREHOLDERS:

                                                /s/    Peter  DeKrey
                                                --------------------------------
                                                        [Signature]



                                                        Peter  DeKrey
                                                --------------------------------
                                                        [Print  Name]


<PAGE>
                                 WRITTEN CONSENT
                             OF THE SHAREHOLDERS OF
                                RIGL CORPORATION

     Pursuant  to  the  authority  of Section 71.320, paragraph, 2 of the Nevada
Revised  Statutes,  the  undersigned  individuals,  collectively  constitute  a
majority  of  the  issued  and  outstanding  shares  entitled  to  vote  of RIGL
Corporation,  a  Nevada  corporation  (the  "Corporation"),  do  hereby take the
following  action and approve the adoption of the following resolutions by their
written  consent  as  of  this  12  day  of  August,  1999.

          RESOLVED,  that the Articles of  Incorporation  of the Corporation are
          hereby amended,  effective October 1, 1999, to reflect a change in the
          name of the Corporation from "RIGL Corporation" to "YP.Net, Inc."


          FURTHER  RESOLVED,  that  management  of  the  Corporation  is  hereby
          authorized  and  empowered  to take any and all  necessary  actions to
          effect such name change,  including but not limited to, filing any and
          all documents and instruments required to be filed with all applicable
          state and federal regulatory agencies and authorities.

Dated:  August  12,  1999
                                                SHAREHOLDERS:

                                                /s/      William  O'Neal
                                                --------------------------------
                                                           [Signature]



                                                        William  O'Neal
                                                --------------------------------
                                                        [Print  Name]

    STATE  OF  NEVADA
   SECRETARY  OF  STATE
I HEREBY CERTIFY THAT THIS IS
A TRUE AND COMPLETE COPY OF
THE DOCUMENT AS FILED !N THIS
OFFICE.


SEP  16'99


    DEAN HELL R
SECRETARY OF STATE
BY  _____________________


<PAGE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.6
<SEQUENCE>4
<FILENAME>0004.txt
<TEXT>

                              ADDENDUM TO BYLAWS OF
                                RIGL CORPORATION
                            NOW KNOWN AS YP.NET, INC.
                              A NEVADA CORPORATION
                      (As Adopted effective June 22, 1998)

                             ADDENDUM TO ARTICLE IV
                     (As Adopted effective February 4, 2000)
                                    OFFICERS



     4.4.     Vice-Chairman of  the Board of  Directors. The Board of directors
              -----------------------------------------
will  elect  a  Vice  Chairman  to  serve  as  a  non-executive  Officer  of the
Corporation.  The  Vice  Chairman will in the absence of the Chairman preside at
all  meetings of the Board of Directors and he vested with such other powers and
duties  as  the  Board  may  from  time  to  time  delegate  to  him.


                             CERTIFICATE OF ADOPTION
                             -----------------------

The  undersigned  Secretary  of  the Corporation, hereby testifies the foregoing
Bylaws  were  adopted  by  the  Board  of  Directors  of  YP.Net,  Inc. a Nevada
corporation,  pursuant  to  a  written  consent  and  resolution of the Board of
Directors, Dated  February  4,  2000.



                                   /s/  Del Val Johnson Corporate: Secretary
                                   ---------------------------------------------
                                        Del Val Johnson Corporate: Secretary


<PAGE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>5
<FILENAME>0005.txt
<TEXT>

                                   WORLD PAGES
                        FIND ANYTHING. ANYONE. ANYWHERE.

                            HTTP://WWW.WORLDPAGES.COM



                      RIGL CORPORATION, RESELLER AGREEMENT

Web  YP,  Inc.,  a  Texas  corporation,  (World Pages) publishes a comprehensive
electronic  directory  service on the world wide web that provides access to the
names,  addresses  phone  numbers  and  other  information about individuals and
businesses  in  the  United  States  and  other  parts  of  the  world.

RIGL  Corporation,  via  the  URL's. Yellow-Page.Net & YP.net1 is engaged in the
business of specialized Internet advertising through its own sales force and has
to  established in conjunction with World Pages, a co-branded Internet directory
for  distribution  to  RIGL Corporations' customers as hereinafter provided. The
RIGL  Corporation  relationship  with  World  Pages  is  that  of an independent
contractor.

The  term  of  this  agreement  is  1  year.  At each anniversary of the date of
execution,  the  term  will  be  automatically  extended by one additional year,
unless World Pages gives RIGL Corporation written notice of cancellation 60 days
prior to any anniversary date. RIGL Corporation may cancel this agreement at any
time  by giving written notice to Web YP, inc. (World Pages) at least 60 days in
advance  of  the  date  selected  for  this  agreement  to  expire.

Effective  August 15,1999 and forward for the 12-month length of this agreement,
RIGL  Corporation,  agrees to pay an annual fee of $24,000.00 for the hosting of
its'  complete  volume  of mini-sites on the RIGL Corporation, Yellow-Page.Net &
YP.net  co-branded
sites.  Payments  are  due  at  $2000.00  per  month, with the first payment due
September  15,1999.  Subsequent  payments  are  due on the 15th of each month in
which  this
agreement  is  in  force,  net  10 days. Late payments will be charged at 1112 %
interest.  (No interest is due for the month of September, since World Pages has
billed  RIGL
Corporation,  Yellow-Page.Net  late.)

RIGL CORPORATION, YELLOW-PAGE.NET MAY NOT USE WORLDPAGES' TRADEMARKS, TRADENAMES
OR OTHER SYMBOLS WITHOUT PRIOR AND WRITTEN APPROVAL OF WORLDPAGES AND AGREES NOT
TO  REGISTER  ANY  TRADEMARKS, TRADENAMES OR SYMBOLS OF WORLDPAGES (OR WHICH ARE
CONFUSINGLY  SIMILAR  TO THOSE OF WORLD PAGES.) IN NO EVENT WILL EITHER PARTY BE
LIABLE  TO  THE  OTHER  FOR  ANY  SPECIAL  INCIDENTAL OR CONSEQUENTIAL DAMAGES,
WHETHER  BASED ON  BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE,
WHETHER  OR  NOT  THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
THE LIABILITY OF WORLDPAGES  FOR  DAMAGES  OR  ALLEGED  DAMAGES


                                                                               1
WEB YP, INC~, 291 GEARY ST., SUITE 310, SAN FRANCISCO, CA. 94102 PH 415~782~680O
                                FAX 415~782~6801
<PAGE>


HEREUNDER(1)  WHETHER  IN  CONTRACT(1)  TORT  OR  ANY  OTHER  LEGAL  THEORY
IS  LIMITED  TO)  AND  WILL  NOT  EXCEED)  THE  AMOUNTS  ACTUALLY  PAID  BY
CONTENT  PROVIDER  TO  WORLPAGES  HEREUNDER.


YP.NET,  INC
- -------------
4840  EAST  JASMINE  STREET  SUITE  105
MESA(1)  AZ  85205
TELEPHONE:     480  654-9646
FAX:     480  654-9727

SIGNATURE   WILLIAM  O'NEAL          DATE  11/8/99
          -------------------------

TITLE  PRESIDENT



WORLD  PAGES  /WEB  YP  INC.
291  GEARY  STREET)  SUITE  310
SAN  FRANCISCO(1)  CA  94102
TELEPHONE.  415  2~7B~6~00
FAX:     415  782-6861/

SIGNATURE  FREDERICK  KLEIN    DATE:  11/1/99
           ----------------
FREDERICK  KLEIN  PRESIDENT


<PAGE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>6
<FILENAME>0006.txt
<TEXT>

                              AMENDMENT NUMBER FOUR
                        TO THE BILLING SERVICES AGREEMENT
                                     BETWEEN
                          INTEGRETEL, INCORPORATED AND
                               TELCO BILLING, INC.
                              DATED JANUARY 6, 1998



Effective  5/1  , 2000,  the  above  referenced  Agreement  is hereby amended as
          ------
follows:

     1.  Account  Number 258 is added to the Agreement. The attached Exhibit "E"
         and  "J"  shall  apply  to  account  258  only.

     2.  All other terms and conditions of the Agreement remain in full force
         and  effect.


ACKNOWLEDGED  AND  AGREED


Integretel,  Incorporated                    Telco  Billing,  Inc.


By:  /s/  Joe Lynam                          By:  /s/  Angelo Tulb
   ------------------------------               ----------------------------

Name:  Joe Lynam                             Name:  Angelo Tulb
     ----------------------------                 --------------------------

Title:  CEO                                  Title:  Chairman
      ---------------------------                  -------------------------

Date:  5/1/00                                Date:  4/26/00
     ----------------------------                 --------------------------


Amendment  to  Telco  Billing,  Inc.
Page  1


<PAGE>
                                   EXHIBIT "E"
                                 Price Schedule
                                 --------------
                           Billing Services Agreement
                           --------------------------
                                  Page 1 of 2


Account  #258

Service  Fee:  IGT  shall  receive  the  following  fees  for Basic Services and
Subscriber  Inquiry  Services.

1.   Telco  Outclearing  (425001  Billing  Transactions)
     ---------------------------------------------------

     Gross Billable Dollars Per Month               Percent of Billing Dollars
     --------------------------------               --------------------------
     ALL  VOLUMES                                   6.50% Plus Telco Fees

     Each month,  IGT shall receive a Telco Clearing fee equal to the greater of
     the billable  dollars  multiplied  by the above  billing  percentage or the
     Billable Transactions  deposited times a $0.81 minimum transaction fee, but
     in no  event  shall  the  Telco  Outclearing  fee be less  than  the  Telco
     Outclearing Minimum Fee.


2.   Telco Outclearing Minimum Fee:      $5,000.00 per month for Client ID #258.
     ------------------------------

     During the remaining Term of this Agreement,  if Customer's aggregate Telco
     Outclearing  Minimum  Fee  paid  to  IGT  exceeds  sixty  thousand  dollars
     ($60,000) on Customer's  Account #258, then Customer shall not be liable to
     IGT for Telco Outclearing Minimum Fees on said Account for the remainder of
     the Term. For purposes of illustration only, if Customer has paid IGT sixty
     thousand  dollars  ($60,000) in Telco  Outclearing fees on its Account #258
     through the first nine (9) months of the remaining  Term,  and in the tenth
     month incurs three thousand  dollars ($3,000) in Telco  Outclearing Fees on
     said Account,  then Customer shall not be obligated to remit to IGT the two
     thousand dollar ($2,000)  difference between the Telco Outclearing  Minimum
     Fee and the Telco  Outclearing  fee.  The  Telco  Outclearing  Minimum  Fee
     limitation  provided  in this  paragraph  shall  not be  applicable  to any
     additional Account(s) ordered by Customer.

     Customer's  Telco  Outclearing  Minimum  Fee  shall  be in  effect  for the
     September, 2000 deposit month.

3.   Subscriber Inquiry Services Fees:        $3.50 per each live agent inquiry.
     --------------------------------

     If the Customer,  subject to terms in this Agreement,  and upon IGT written
     approval, provides its own End-User inquiry service in lieu of IGT provided
     Subscriber  Inquiry Services,  IGT shall i) refer End-User phone inquiry to
     Customer for $1.00 per automated  (no agent)  referred  inquiry,  ii) refer
     End-User  phone  inquiry  to  Customer  for $2.00 per live  agent  referred
     inquiry and iii) process  Customer  generated  adjustments (41 records) for
     fifty cents  ($0.50) per  adjustment.  Customer  shall be  responsible  for
     generation of adjustment vouchers in Telcos that do not accept 41 records.

     Customer must adhere to the following  call handling  guidelines:  Customer
     must provide  toll-free access to its call center.  IGT will route calls to
     this  toll-free  number.   Customer  must  complete  the  Referral  Inquiry
     Worksheet.  Hours of  operation  must be 8-5 for all time  zones  where its
     customers  reside.  Calls cannot be muted to  voicemail;  a live agent must
     answer the call. Calls should ---- have an average speed of answer of <= 45
     seconds.  Call  abandon rate <= 5%. IGT  monitors  the  performance  of its
     Referral  Inquiry  Customers.  IGT will notify Customer  through any metric
     that is not being met as a result of the monitoring.

     IGT,  in its sole  discretion,  may  resume  providing  inquiry  upon prior
     written notice and at the prices contained herein.


Amendment  to  Telco  Billing,  Inc.
Page  2


<PAGE>
                                   EXHIBIT "E"
                                 Price Schedule
                                 --------------
                           Billing Services Agreement
                           --------------------------
                                  Page 2 of 2


4.   Initial  Account Activation:         $1,500.00 for Account 258 sub-cic due
     ---------------------------          upon  receipt  of  invoice.


5.   Telco  Fees:                         IGT shall be entitled to an additional
     -----------                          fee  to  recover  all  Telco  imposed
                                          processing  and  other  charges
                                          associated  with  Customer's  Billing
                                          Transactions.  The  Telco  processing
                                          fees  are  set  forth  on  Exhibit  J


6.   Telco  Holdback:                     5%    Per  Deposit  Month.
     ---------------


7.   IGT  Reserve:                        5%    Per  Deposit  Month.
     ------------



Amendment  to  Telco  Billing,  Inc.
Page  3


<PAGE>
<TABLE>
<CAPTION>
                                                                                  CONFIDENTIAL


                                                     EXHIBIT "J"
                                                     Telco Fees
                                                     ----------
                                                     Page 1 of 1


As of January 2000
                                                                         < ------ Toll ---- >
Telco Group           SID       Telco Name      Bill Render  Interstate  Intrastate  Bulk 4250     SSM     Pay/Call
                                                              Per Msg.    Per Msg.    Per Msg.    010118    010116
                                                                                                 Per Msg.  Per Msg.
<S>                   <C>   <C>                 <C>          <C>         <C>         <C>         <C>       <C>
Ameritech             9321  Ohio Bell                 0.400       0.050       0.050      0.100      0.100     0.100
                      9323  Michigan Bell             0.400       0.050       0.050      0.100      0.100     0.100
                      9325  Indiana Bell              0.400       0.050       0.050      0.100      0.100     0.100
                      9327  Wisconsin Bell            0.400       0.050       0.050      0.100      0.100     0.100
                      9329  Illinois Bell             0.400       0.050       0.050      0.100      0.100     0.100
Bell Atlantic         9206  New Jersey Tel            0.330       0.024       0.024      0.250      0.027     0.024
                      9208  Bell Penn.                0.330       0.024       0.024      0.250      0.027     0.024
                      9210  Diamond State             0.330       0.024       0.024      0.250      0.027     0.024
                      9211  C&P DC                    0.330       0.024       0.024      0.250      0.027     0.024
                      9212  C&F' MD                   0.330       0.024       0.024      0.250      0.027     0.024
                      9213  C&P VA                    0.330       0.024       0.024      0.250      0.027     0.024
                      9214  C&P WVA                   0.330       0.024       0.024      0.250      0.027     0.024
Bell South            9417  Bell South                0.505       0.055       0.061       2.50%     0.060      2.50%

GTE Companies          169  GTE North                 0.390       0.055       0.076      0.135      0.135     0.073
                       328  GTE Florida               0.390       0.055       0.076      0.135       0135     0.073
                       479  GTE South                 0.390       0.055       0.076      0.135      0.135     0.073
                      2080  GTE South West            0.390       0.055       0.076      0.135      0.135     0.073
                      2319  GTE California            0.390       0.055       0.076      0.135      0.135     0.073
                      2320  GTE West                  0.390       0.055       0.076      0.135      0.135     0.073
                      2416  GTE North West            0.390       0.055       0.076      0.135      0.135     0.073
                      3100  GTE Hawaii                0.390       0.055       0.076      0.135      0.135     0.073
GTE Contel             170  GTE North Contel          0.390       0.045       0.076      0.135      0.163     0.073
                       480  GTE South Contel          0.390       0.045       0.076      0.135      0.163     0.073
                      2081  GTE S-W Contel            0.390       0.045       0.076      0.135      0.163     0.073
Citizens Tel          2308  Citizens Tel              0.820       0.080       0.080      0.080      0.080     0.080
NYNEX                 9102  New England Tel           0.010       0.300       0.300      0.550      0.300     0.300
(Less 4 MSG/Bill)     9104  New York Tel              0.010       0.300       0.300      0.550      0.300     0.300
NYNEX                 9102  New England Tel           0.960       0.010       0.010      0.260      0.010     0.010
(Greater 4 MSG/Bill)  9104  New York Tel              0.960       0.010       0.010      0.260      0.010     0.010
Pacific Bell          9740  Pacific Bell              0.350       0.030       0.030      0.030      0.030     0.280

Nevada Bell           9742  Nevada Bell               0.450       0.035       0.091      0.030      0.090     0.280

Southwestern Bell     9533  S-West Bell               0.350       0.031       0.031      0.280      0.250     0.550

U.S. West             9631  North West Bell           0.420       0.025       0.025      0.325      0.325      0025
                      9636  Mountain Bell             0.420       0.025       0.025      0.325      0.325     0.025
                      9638  PAC N-W Bell              0.420       0.025       0.025      0.325      0.325     0.025

Alltel                9995  Alltel                    0.880       0.080       0.100      0.100      0.100     0.135

Cincinnati Bell       9348  Cincinnati Bell           0.650       0.022       0.022      0.052      0.022     0.022

Illuminet             9999  Illuminet                 0.000       0.800       0.800      0.800      0.800     0.800

NECA                  9996  NECA                      0.000       0.550       0.550      0.550      0.550     0.550

SNET                  9147  SNET                      0.510       0.110       0.110      0.110      0.110     0.110

Sprint United          341  United Florida            0.390       0.190       0.090      0.190      0.190     0.190
                       470  Carolina Tel & Tel        0.390       0 190       0.090      0 190      0 190     0 190
                       832  United Indiana            0 390       0 190       0.090      0 190      0 190     0 190
                      9323  United Midwest            0 390       0 190       0.090      0.090      0.190     0.190
Telcom Canada         8050  Telcom Canada             0.000       0.560       0.560      0.560      0.560     0.560
</TABLE>

The  above  information is current at the time of printing and is to be used for
informative purposes only.  The information contained in this exhibit is subject
to  change  without  notice.  IGT  makes  no  guarantee that this information is
constant,  permanent,  all  inclusive  and/or  final.


Amendment  to  Telco  Billing,  Inc.
Page  4


<PAGE>
                             AMENDMENT NUMBER THREE
                                       TO
                           BILLING SERVICES AGREEMENT
                                     BETWEEN
                               TELCO BILLING, INC.
                                       AND
                            INTEGRETEL, INCORPORATED
                              DATED JANUARY 6,1998

Effective September 1, 1999, the above referenced Agreement is hereby amended as
follows:

1.   The Agreement terminated one year from the initial term of January 6, 1998.
     However,  both parties  continued to operate under the terms and conditions
     of the  Agreement  and  hereby  acknowledge  and  agree  that the terms and
     conditions of the Agreement  apply to all billing and  collection  services
     performed through the date of this amendment number 3.

2.   Section  3.  Term  is  deleted  and  replaced  with  the  following:
                  ----

     "The term of this Agreement shall be for two years  commencing on September
     1,1999 ("TERM") and shall  automatically renew for one successive period of
     two (2) years  unless  terminated  by written  notice from either  party at
     least ninety (90) days prior to scheduled termination.

3.   This Agreement is limited to Customer Account Number 227 which has a $5,000
     monthly  minimum.  The parties  will  negotiate  new pricing  exhibits  far
     additional Customer accounts and programs, which may be activated under the
     Agreement in the future.

4.   All other terms and  conditions of the  Agreement  remain in full force and
     effect.

ACKNOWLEDGED  AND  AGREED

Telco  Billing,  Inc.                           Integretel,  Incorporated

By:  /s/  Kevin L. Jones                        By:  /s/  Kevin Dawson
   ------------------------------                  -----------------------------

Name:  Kevin L. Jones                           Name:  Kevin Dawson
     ----------------------------                    ---------------------------

Title: Secretary                                Title: President
      ---------------------------                     --------------------------

Date:  8/31/99                                  Date:  9/2/99
     ----------------------------                    ---------------------------


<PAGE>
                           BILLING SERVICES AGREEMENT

     THIS  BILLING  SERVICES  AGREEMENT  (the "Agreement") is entered into as of
January  6,  1998 ("Effective Date"), by and between INTEGRETEL, INCORPORATED a1
California  corporation  ("IGT"),  and PUBLICATION MANAGEMENT, a Washington D.C.
Trust  ("Customer").

                                    RECITALS

     WHEREAS,  Customer  is  a  provider  of  information,  operator  and  other
telecommunications  services  ("Services")  via  the  telephone to users of such
services;  and

     WHEREAS,  IGT  is  engaged  in  the business of providing telephone company
billing  and  collection  and  associated  services  to  the  telecommunications
industry;  and

     WHEREAS,  IGT  is willing to provide its services to Customer, and Customer
desires  to  obtain such services from IGT, upon the terms and conditions stated
herein;

     NOW,  THEREFORE,  the  parties hereto, in consideration of mutual covenants
and  agreements  contained  herein,  do  hereby  agree  as  follows:

                              TERMS AND CONDITIONS

     1.     DEFINITIONS.
            -----------

     The  following  terms  shall  have  the  meanings  set  forth  below:

          (a) "Account  Number"  also  referred  to  herein  as  Account  or
               ---------------
Client-ID,  shall  mean  a  separate  account  of  Customer  under which Billing
Transactions  and  settlement  funds  are  tracked  and  reported.
          (b)  "Adjustments"  shall  mean  adjustments  made  to  an  End-User's
                ------------
bill  for Customer's or Customer's IP's Services and is synonymous with the term
Recourse.
          (c)  "Basic  Services"  shall  mean,  generally: (i) the submission of
                ---------------
Customer's Billing Transactions to the Telcos; (ii) the collection of funds from
the Telcos with respect to Customer's Billing Transactions; (iii) the remittance
to  Customer  of  funds  to  it  is entitled; (iv) the provision of bill inquiry
service  to  End-Users  in  response to direct contact from End-Users or through
Telco  referral;  and  (v)  handling  of  written disputes from End-Users either
directly  or  by  referral  to  Customer, including but not limited to, disputes
directed  through  regulatory  agencies, as more specifically 'described herein.
          (d)  "Billing  Contract(s)"  shall  mean  those billing and collection
                --------------------
agreements into between IGT and certain telephone companies and/or certain third
parties  who  contract  directly  with such telephone companies as identified in
Exhibit  A.


BILLING  SERVICES  AGREEMENT
PUBLICATION  MANAGEMENT
Page  1


<PAGE>
          (e)  "Billing  Transaction(s)"  shall  mean  the  use  by End-Users of
                -----------------------
Customer'  or  Customer's IP's Services which give rise to billable transactions
submitted  by  customer  to  IGT  for  billing  and  collection.
          (f)  "Billing  Transaction Data"  shall  mean  the data summarizing or
                -------------------------
evidencing  Customer's  or  Customer's  IP's  Billing  Transactions.
          (g)  "End-User(s)"  shall  mean  the  users  of  IP's  Services.
                -----------
          (h)  "IP's"  shall  mean  information  providers who offer information
                ----
and/or Entertainment services to End-Users. IP's generally receive services from
IGT's  customers.
          (i)  "Major  Telcos"  shall  mean  U.S.  West,  Pacific  Telesis,
                -------------
Ameritech,  Bell  Atlantic,  Nynex,  Bell  South,  Southwestern Bell, GTE or any
others as designated  by  IGT.
          (j)  "Recourse"  shall  mean  a  post-billing  adjustment  where an
                --------
End-User challenges  charges.  It  generally  occurs within sixty (60) days of a
deposit  cycle  but  may  be  delayed.  Recourse  is authorized by the Telcos as
provided in the Billing contracts or by IGT in accordance with  this  Agreement.
          (k)  "Reserves"  shall  mean  collectively  the  Telco Holdback, Telco
                --------
Reserve  and  IGT  Reserves.
          (l)  "Subscriber  Inquiry  Services"  shall  mean  the  bill  inquiry
                -----------------------------
services  which  IGT  provides  to  End-Users in response to direct contact from
End-Users  or  through  Telco  referrals,  performed  in  accordance  with  the
Subscriber Inquiry Guidelines  attached  hereto  as  Exhibit  G.
          (m)  "Taxes,"  shall  mean  all  federal,  state  or local sales, use,
                ------
excise, gross  receipts  or other taxes imposed on or with respect to Customer's
Billing Transactions.
          (n)  "Telco(s)"  shall  mean  those  telephone  companies  listed  on
               ---------
Exhibit A hereto, as may be amended by IGT from time to time, with which IGT has
Entered  into  Billing  Contracts  either  directly  or indirectly through third
parties  who contract  directly  with  such  telephone  companies.
          (o)  "Telco  Holdback"  shall  mean  the  amount  of  offset  against
                ---------------
Customer's Billing  Transactions  to  cover  Customer's  reasonable share of the
Telco Reserve.
          (p)  "Telco  Holdback Rate"  shall  mean  the  percentage  rate  of
                --------------------
Customer's Transactions  required  for  the  Telco  Holdback  amount.
          (q)  "Telco  Reserve"  shall  mean  an  amount  withheld by the Telco,
                --------------
in  anticipation  of  Uncollectibles,  based  on  IGT's  aggregate customer mix.
          (r)  "Telco  Reserve  Rate"  shall  mean  the  percentage  of  gross
                --------------------
billings  by  the  Telco  and is determined by the Telco based on the results of
Telco  True-ups  and  their  internal  calculation  methodologies.
          (s)  "Telco  True-up"  shall  mean  the process by which a Telco, from
                --------------
time to  time:  (i)  determines  whether  amounts held back as Telco Reserve for
Uncollectible Billing Transactions were in excess or less than the amount of the
Telco's actual Uncollectibles for a particular period, and (ii) collects from or
refunds  to  IGT,  as the case may be, any difference between the Telco Reserves
and  the  Uncollectibles.
          (t)  "True-up"  shall  mean  the  process  by which IGT reconciles the
                -------
Telco Holdback  held from Customer's funds and the Uncollectibles as  it  fairly
relates to  Customer's Billing Transactions.  Such True-up shall be conducted in
accordance  with  IGT's  internal  methodology  and  shall  be based on the time
periods  and  data  supplied  to  IGT  through  the  Telco  True-up  process.


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<PAGE>
          (u)  "Unbillables"  shall  mean  Billing  Transactions designated by a
                -----------
Telco as  not  billable  based  on  their  own  internal  editing  process.
          (v)  "Uncollectibles"  shall  mean  amounts  designated  by a Telco as
                --------------
not collectable  based  on  their  internal  editing  process.
          (w)  "IGT  Reserve"  shall  mean  an  amount  withheld  from the money
                ------------
otherwise  owed  Customer  for  Billing Transactions to cover Adjustments, Telco
Unbillables,  Uncollectibles  and  other  sums  charged  by the Telco to IGT for
Customer  funds  advanced  to  IGT  but  not  collected  by  the  Telcos.

2.   IGT  SERVICES.  IGT, as a limited agent for Customer, agrees to provide the
     -------------
Basic Services to Customer in accordance with the terms and conditions contained
herein.

3.   TERM.  The  term  of  this  Agreement  shall  be  for one (1) year from the
     ----
Effective  Date  ("Term").  This  Agreement shall not automatically renew unless
both  parties  agree  o  an  extension  of  the  Agreement  in a signed writing.

4.   CUSTOMER  ACCOUNTS.  IGT  shall  review  and,  if appropriate, approve each
     ------------------
Service for which IGT shall provide Basic Services hereunder, as well as for any
changes in preamble scripts, pricing, advertising or program content relating to
any  of  such Services. All Services, or changes thereto, shall be registered on
the  form  attached  hereto  as  Exhibit  B.  Customer  shall  provide  IGT with
information  regarding  Customer's  Services,  which  shall  include,  without
limitation,  preamble  scripts,  pricing,  copies  of  advertising,  and program
content  upon  IGT  request.

5.   CUSTOMER  SUBMISSION  OP  BILLING  TRANSACTIONS  TO  IGT.
     ---------------------------------------------------------

     (a) After  receiving  approval as  described in Section 4,  Customer  shall
     submit  to IGT its  Billing  Transaction  Data in the  format  set forth on
     Exhibit C or other mutually agreed upon format.  Customer shall submit such
     information  in a timely manner  consistent  with the schedule set forth in
     Exhibit D hereto.
     (b) IGT  reserves  the right to refuse to accept  any or all of  Customer's
     Billing  Transactions  that are not formatted as set forth above or are not
     submitted in a timely manner consistent with Exhibit D.

6.   IGT  EDIT.
     ---------

     (a) Upon IGT's receipt of Customer's Billing  Transaction Data as set forth
     above,  IGT shall subject such information to its proprietary edit process.
     This edit  process  shall  screen the call  information  for,  among  other
     things, compliance with Telco policies, legal requirements, regulations and
     the other requirements set forth herein before the information is forwarded
     to the Telcos.  IGT has sole  discretion  to determine  whether  Customer's
     Billing  Transaction  Data  meets  IGT's  screening  criteria.  If  any  of
     Customer's Billing  Transactions are found by the foregoing edit process to
     fail to meet the applicable requirements,  IGT shall reject and return such
     transactions (Non-Billables") to Customer and shall not charge Customer any
     fee  with  respect  to  such  Non-Billables.  IGT  shall  have  no  further
     responsibility for any such returned Billing Transactions.


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<PAGE>
     (b) Any  Billing  Transactions  submitted  to IGT which were  initiated  by
     End-Users  residing in an area where IGT has no Billing  Contract  with the
     Telco  servicing  such area,  will be rejected  and returned to Customer as
     additional  Non-Billables.  Customer agrees and  acknowledges  that IGT may
     unilaterally  amend,  from  time to time,  Exhibit  A hereto  by  adding or
     deleting Telcos.  IGT shall notify Customer in writing  reasonably promptly
     after making any such changes.  IGT shall use reasonable  efforts to notify
     Customer prior to the incorporation of any changes to the available billing
     area.

7.   TELCO  SUBMISSION  AND  EDIT.
     ----------------------------

     (a) In accordance with the schedule set forth on Exhibit D, as updated from
     time to time, IGT shall submit to the Telcos those Billing  Transactions of
     Customer that have passed 101's edit  process.  In addition IGT may provide
     Telco billing  coverage  updates on its bulletin  board on an as-needed and
     communicated  basis.  Customer shall be responsible for on-net coverage and
     updates  from IGT's  bulletin  board by dialing the  current  TOT  provided
     number. The applicable Telco may subject  Customer's  Billing  Transactions
     submitted to it by IGT to its own edit  process and thereby  refuse to bill
     certain  transactions  even  though such  transactions  passed the IGT edit
     process.  After  receipt  of notice  from the Telco  that  certain  Billing
     Transactions  are  Unbillable  or have been  rejected by the  Telco's  edit
     process,  IGT may take  steps to  correct  the  problem  and  resubmit  the
     rejected Billing Transactions to the Telcos if IGT, in its sole discretion,
     believes that the problem can be remedied by reasonable  efforts.  Customer
     agrees  to  fully   cooperate   with  IGT  in  making  any  such  necessary
     corrections.  Transactions  rejected and  returned to IGT in an  electronic
     format by the Telco which IGT  determines  not to resubmit will be returned
     to Customer,  IGT shall have no further  responsibility  for such  rejected
     transactions.
     (b) Subject to terms and conditions set forth herein and in accordance with
     the Billing Contracts with Telcos, IGT shall collect funds  from the Telcos
     with respect to the Billing Transactions;


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<PAGE>
8.   TELCO  DEDUCTIONS.
     -----------------

     Telcos  may  withhold  from the gross  billed  dollars in  relation  to the
     Billing Transactions submitted by IGT the following fees and charges:

     (a) Telco  Holdback.  With  respect  to  Customer's  Billing  Transactions,
         ---------------
     Customer acknowledges and agrees that there may be withheld from sums owing
     Customer a reserve for Uncollectibles that may be experienced by the Telcos
     many months after the settlement of the sums for the Billing  Transactions.
     The percentage rate for such Holdback is determined by either

          (i)  The current  Telco  Reserve  Rate which is subject to  unilateral
               change without notice;

          (ii) IGT based on analysis of Telco supplied account  write-off detail
               as applicable to Customer's specific End-User accounts; or

          (iii)An  initial  start  rate of ten  percent  (10%) for those  Telcos
               capable  of  providing   account   write-off   detail  for  which
               Customer's specific history has not yet been established.

     IGT shall  exercise  reasonable  efforts  to report  to  Customer  in IGT's
     standard  transaction  reports current Telco Holdback  rates.  From time to
     time,  the Telcos will conduct a Telco True-up for a particular  period and
     may subsequently  revise the Reserve Rate as well as collect from or refund
     to JOT any  difference  between the amounts  withheld by the Telcos and the
     actual Uncollectibles.  As each Telco performs its True-Up and includes its
     results on Telco payment  summaries to IGT, IGT will, as soon as reasonably
     possible, True-Up Customer's account(s). If the Telco has supplied IGT with
     sufficient   write-off   detail  to   fairly   and   accurately   attribute
     Uncollectibles  to  Customer,  then  Customer's  share shall be based on an
     analysis of such write-off  detail,  otherwise,  Customer's  share shall be
     based on Customer's  specific  experience in other Telcos combined with the
     Customer's pro-rata  contribution to the period being Trued-up.  IGT shall,
     as soon as  reasonably  possible,  include these results on the current lOT
     True-Up summary to Customer. Customer hereby agrees that any amount owed to
     JOT by Customer as a result of this  True-Up  process  shall be offset from
     Customer's  payment  summary.  If  any  of  Customer's   account(s)  is/are
     negative,  IGT shall offset the amount due from the next  Customer  payment
     summaries or, at IGT's sole option,  IGT shall invoice  Customer.  Customer
     shall pay the  invoiced  amount  in full  within  fifteen  (16) days of the
     invoice date.  Any amounts due Customer may be held in accordance  with the
     IGT Reserve.
     (b) Unbillables. Telcos may reject Billing Transactions or apply Unbillable
         -----------
     charges for Billing Transactions that do not pass their edit process. Telco
     rejected Billing Transactions applicable to Customer and returned to IGT by
     the Telco shall be returned to Customer Within  seven (7) business  days of
     receipt by IGT from the Telco.


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<PAGE>
     (c) Adjustments. Telcos may deduct from the funds paid to IGT the amount of
         -----------
     any Adjustments that are made by the Telcos and IGT. Customer  acknowledges
     that: (I)  Adjustments  may be performed by a Telco before and/or after any
     Customer-specific  funds  are  paid to IGT by the  Telcos,  and  (ii)  some
     Adjustments  may  not  be   Customer-specific   (i.e.,  cannot  be  related
     specifically  to the  Billing  Transactions  of the  Customer).  Adjustment
     information available to IGT shall be provided to Customer.

9.   TAXES.  Absent  Customer  providing  IGT  the  appropriate  tax  exception
     -----
certificates  required  by  the  applicable  jurisdictions,  Customer  shall  be
responsible  for any Taxes associated with this Agreement. Customer acknowledges
that:  1)  with  respect  to Taxes arising from Customer's Billing Transactions,
certain  Telcos remit Taxes directly to the appropriate taxing authority, and 2)
certain other Telcos return Taxes to IGT with instructions for remittance of the
Taxes  by IGT. IGT shall not be responsible for the Telco's tax determination or
the  Telco's  failure to remit Taxes. IGT shall use reasonable efforts to assist
Customer  in resolving Tax disputes. Customer shall not be liable for IGT income
taxes.

10.  SERVICE  FEES  AND  OTHER  DEDUCTIONS.
     -------------------------------------

From amounts collected from Telco in respect to Customer's Billing Transactions,
IGT  shall  be  entitled  to  withhold  from  its disbursements to Customer, the
following  fees  and  charges:

     (a) IGT Fees. For Basic  Services,  IGT shall  receive,  and Customer shall
         --------
     pay, a fee relating to the gross  dollars  billed by IGT. IGT5 billing fees
     shall be as set forth in Exhibit E hereto.  IGT fees shall be assessed with
     respect  to  each  Billing  Transaction   submitted  to  a  Telco.  Billing
     Transactions  rejected by a Telco and resubmitted by IGT hall be subject to
     the IGT fee unless such  resubmitted  was  necessitated  by an error on the
     part of IGT. IGT's billing fees shall include  billing and collection  fees
     imposed  by the  Telco's.  Notwithstanding  the  foregoing,  IGT  shall  be
     entitled to a minimum fee from Customer, as provided in Exhibit E, for each
     separate Account Number  established by Customer,  regardless of the number
     of Billing  Transactions  submitted  to the  Telco's in such month for such
     account. After the initial term of this Agreement,  IGT may adjust its fees
     on sixty (60) days prior  written  notice to Customer,  provided,  however,
     that  said  adjustment  shall  not  exceed  ten  percent  (10%)  per  year.
     (b) Subscriber inquiry Service Fees. IGT shall receive a Subscriber Inquiry
         -------------------------------
     Service fee for  performance  of  Subscriber  Inquiry  Services on End-User
     phone and written  Inquiry.  IGT's fees shall be as set forth in Exhibit E.
     The fee for written  inquiry from End-Users is $50.00 per inquiry.  The fee
     for written inquiry from  governmental or other  regulatory  authorities is
     $150.00 per inquiry.  IGT shall  invoice  Customer for  Subscriber  inquiry
     Services,  and Customer  shall pay the invoice  within ten (10) days of the
     date of the  invoice.  If  Customer  does not pay the  invoice  within  the
     prescribed time, IGT may offset Subscriber Inquiry


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<PAGE>
     Services fees from Customer disbursements. IGT may adjust its fees on sixty
     (60) days prior written  notice to Customer  provided,  however,  that said
     adjustment shall not exceed ten percent (10%) per year.
     (c) IGT Reserve. IGT shall withhold from sums that would otherwise be owing
         -----------
     with respect to Customer's Billing  Transactions such sums as are necessary
     to fund  the IGT  Reserve.  The IGT  Reserve  amount  for  Account  Numbers
     established  under this  Agreement  will  initially be  established  at ten
     percent (10%) of gross billed dollars,  by Account Number, for each deposit
     of Billing  Transactions made by Customer,  and the IGT Reserve will adjust
     down, by Account Number, to four percent (4%) six (6) months from the first
     deposit month. The above notwithstanding, IGT reserves the unilateral right
     to adjust the IGT Reserve for any Account  Number to offset any  shortfalls
     in the IGT Reserve.  Any  increase in the reserve  amount will be funded by
     either:

          (i)  Increasing  the  previously  agreed upon reserve  percentage  and
               amount for the Account Number; and/or
          (ii) Increasing  and/or  offsetting  another  Customer Account Number;
               and/or
          (iii)Invoicing  Customer  directly for the amount  required.  Customer
               shall pay IGT's invoice within ten (10) business days.

     In addition, Customer acknowledges that to the extent the Telco Holdback is
     insufficient  to cover  Uncollectibles,  IGT  shall be  responsible  to the
     Telcos for any  shortfall,  which shall be paid out of the IGT Reserve,  if
     available. If the IGT Reserve is not sufficient then, at the option of IGT,
     the needed amount may be invoiced to Customer  (payable within fifteen (15)
     days) or otherwise deducted from Customer's funds.

     (d) Legal Process  Expenses.  If IGT is served with legal  process  arising
         -----------------------
     from IGT's service to Customer and/or  Customer's  service to End-Users and
     IGT is not a party to the  action,  then IGT may  assess  Customer  for its
     reasonable  time and expenses  incurred in responding to said process.  IGT
     shall invoice  Customer,  and Customer  shall pay the invoice within thirty
     (30) days of the date of the invoice.  If Customer fails to pay the invoice
     in a timely manner, IGT may offset the amount due.

11.  Remittance  OF  CUSTOMER  FUNDS.
     -------------------------------

     (a)  Remittances.  Customer shall be entitled to such funds as are remitted
          -----------
     to IGT by the Telcos in respect of Customer's Billing Transactions less the
     deductions,  to the extent  applicable,  described in Sections 8, 9 and 10.
     IGT shall transfer to Customer, or Customer's designated account, the funds
     collected  the prior week to which  Customer  is entitled  hereunder.  Such
     remittance  shall be paid by check and delivered to Customer's  address set
     forth herein, provided that remittances in excess of $10,000 may be made by
     wire transfer.  It shall be Customer's  responsibility  to provide IGT with
     complete and accurate  wire transfer instructions in writing as well as any
     changes to Customer's address.


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<PAGE>
     (b) IGT Reserve Roll-Down. With regard to the periodic roll-down of the IGT
         ---------------------
     Reserve,  at thirteen (13) months from the close of a given deposit  month,
     IGT shall  remit  fifty  percent  (50%) of the given  Account  Numbers  IGT
     Reserve to Customer. Furthermore, at eighteen (18) months from the close of
     said deposit month, IGT shall remit the balance of a given Account Number's
     IGT Reserve. The above  notwithstanding,  IGT reserves the unilateral right
     to  withhold  remittances  under  this  section  to  offset  any  actual or
     reasonably anticipated shortfalls in the IGT Reserve.
     (c)  Final   Disbursement  of  IGT  Reserve.   With  regard  to  the  final
          --------------------------------------
     disbursement  of the IGT  Reserve,  the  balance  not  applied in the Telco
     True-up,  if any,  shall be accounted for within thirty (30) days after the
     final Telco True-up for the relevant deposit period. If the IGT Reserve was
     insufficient to cover Customer's share of the Uncollectibles, then IGT may,
     at its option, deduct any shortfall from subsequent payments to Customer or
     invoice  Customer  for the amount  owing.  Customer  agrees to pay any such
     amount invoiced within fifteen (15) days after receipt of invoice. Customer
     acknowledges that the Telcos may provide  additional  Uncollectibles  after
     the True-up period, IGT shall promptly notify Customer and provide Customer
     with data from the Telco,  if  available.  IGT shall  invoice  Customer and
     Customer shall pay IGT within fifteen (15) days of the invoice date.
     (d) Assignment of Proceeds. If Customer assigns to a third-party any of its
     rights to any sums owing to it by IGT  hereunder,  Customer shall so notify
     IGT of such  assignment  by means of, and subject to the terms of, the form
     attached  hereto as Exhibit H. IGT shall have no obligation with respect to
     any assignment or payment direction of Customer which does not conform with
     Exhibit  H.  Further,  IGT  shall  have no  obligation  to  enter  into any
     understanding  or  agreement  with any third  party  with  respect  to such
     assignment.

12.  REPORTS.
     -------

     (a) Standard Reporting.  IGT agrees to provide Customer with IGT's standard
         ------------------
     transaction  reports  per the  delivery  schedule  set forth on  Exhibit F.
     Customer  may request  that IGT provide  additional  reports or a different
     formatted  report.  To the  extent IGT can comply  with such  request  with
     reasonable effort, IGT shall supply such reports at an additional charge to
     be determined  solely by IGT,  based upon the time and expense  required to
     generate such reports.
     (b) Audit. Upon written notice by  Customer,  and no more  frequently  than
         -----
     twice during a twelve (12) month period,  IGT shall provide Customer access
     to the  information  IGT receives  from Telcos with  respect to  Customer's
     Billing   Transactions.   Customer  may  request  such   information   more
     frequently,  but such additional  requests shall be serviced only on an "as
     available" basis and at an additional cost to the Customer to be determined
     solely  by IGT.  The charges for additional  requests shall be based on the
     time and other costs incurred by IGT to comply with such request(s)


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<PAGE>
     (c)  Report  Review.  Customer  agrees  that it is solely  responsible  for
          --------------
     inspecting  and  reviewing  all reports  provided by IGT within thirty (30)
     days of receipt  by  Customer.  Customer's  failure to report any errors or
     inconsistencies with respect to such reports shall constitute acceptance by
     Customer.
     (d) Report Detail. Customer acknowledges and agrees that (1) the individual
         -------------
     Telcos may not provide  definitive  detail to IGT for Billing  Transactions
     the Telco deems to be Unbillable,  Recoursed,  or  Uncollectible,  (ii) IGT
     shall not be held to a higher  standard of  accounting  pertaining to Telco
     performance  as  provided  by  the  individual   Telco,   and  (iii)  IGT's
     methodology  associated  with  the  determination  of  Customer's  share of
     Unbillables, Recourse or Uncollectibles is reasonable and appropriate given
     the detail received from the individual Telco.

13.  BILLING  APPEARANCE.  Where  the  applicable  Telco  provides  sub-carrier
     -------------------
billing,  Customer's Billing Transaction shall appear on such Telco's subscriber
bills  with  charges  from  YP Net" (or A name similar thereto) or, if possible,
under  the  name  of  Customer  (no  more than 20 characters, including spaces).

14.  END-USER  INQUIRIES.
     -------------------

     (a) Processed  Inquiry.  The Telcos, in some instances,  requires that they
         ------------------
     will handle  certain  End-User  billing  inquiries  with respect to Billing
     Transactions  submitted  by IGT to that  Telco.  Upon  request,  IGT  shall
     provide  a  description  of such  arrangements  to  Customer  for any Telco
     pertinent   to   Customer's   Billing   Transactions,    subject   to   any
     confidentiality  requirement  between  IGT  or  IGTs  agent and such Telco.
     (b) IGT Processed  Inquiry.  Unless otherwise  provided by the Telcos,  IGT
         ----------------------
     shall  provide  Subscriber  inquiry  Services  as  described  in Exhibit G.
     (c) Customer Information.  Customer agrees to cooperate with the applicable
         --------------------
     Telcos and IGT with respect to any subscriber inquiries,  which cooperation
     shall  include,   without  limitation,   providing   originating   numbers,
     locations,  and applicable rate tables.  IGT and Customer shall establish a
     contact  within each  organization  for the purpose of  resolving  End-User
     inquiries.

15.  CUSTOMER  REPRESENTATIONS  AND  WARRANTIES.
     ------------------------------------------

     Customer  represents  and  warrants  to  IGT,  as  follows:

     (a)  Compliance  With Laws.  Customer is, and  throughout  the Term of this
          ---------------------
     Agreement shall be, in compliance  with all applicable IGT policies,  Telco
     policies and federal,  state, and local, legal and regulatory  requirements
     applicable  to any Billing  Transactions  submitted by the Customer to IGT,
     including,  without limitation,  all certification  requirements,  tariffs,
     rate  caps,  validation  requirements,  preamble,  disclosure, advertising,
     solicitation,  and  content  applicable to Customer's Billing Transactions.


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<PAGE>
     (b) Audio Text.  Customer  is, and  throughout  the Term of this  Agreement
         ----------
     shall be, in compliance with all IGT policies, Telco policies and state and
     federal  laws,  regulations  and rules with  respect to the  content of the
     audio text of its  Services,  specifically  including,  but not limited to,
     laws,  regulations  and rules relating to the  transmission  of obscene and
     indecent material.
     (c) Approved Programs Only. All Billing Transactions  submitted by Customer
         ----------------------
     shall  represent only those  information  service  programs which have been
     approved by IGT.
     (d) Customer acknowledges and agrees:

         (i)  IGT shall not be  responsible  for the  content of the  Customer's
              services.
         (ii) IGT  shall  not  be  required hereunder to commence any litigation
              for collection of bills rendered to End-Users.
         (iii)In  the  absence  of  willful  misconduct,  IGT  shall  have  no
              liability  to  Customer  in  respect  of its acts or  omissions in
              the  performance  of  services  under  this  Agreement.

16.  IGT'S  REPRESENTATION  AND WARRANTY.  IGT  represents  and warrants that it
     -----------------------------------
is  in compliance with all applicable federal and state regulations with respect
to  the services to be rendered hereunder, and it shall maintain such compliance
throughout  the  Term  of  this  Agreement. IGT shall not be deemed a trustee or
fiduciary  in  its  performance  of  this  Agreement.

17.  PROOF OF COMPLIANCE.  Customer  agrees  to  provide  written  proof of such
     -------------------
compliance  (as  required  in  Section  15)  to IGT within five (5) days of IGTs
request.  Customer  acknowledges  that  IGT  shall have the right to immediately
suspend  any  and  all  obligations  and IGT shall have no liability to Customer
hereunder  in  the event IGT does not receive satisfactory written proof of such
compliance.  Customer  agrees  to  advise  IGT  in writing as soon as reasonably
possible  of  any  instances  where it is not in compliance with such regulatory
requirements.  Customer  agrees  to indemnify and hold IGT harmless from any and
all third party claims that may arise with regard to the Billing Transactions or
the  provision  of  services  hereunder.

18.  LIMITATION OF LIABILITY.
     -----------------------
     IN NO EVENT WILL IGT BE LIABLE FOR ANY LOSS OF PROFITS,  LOSS OF USE,  LOSS
OF GOODWILL,  CONSEQUENTIAL,  SPECIAL OR PUNITIVE DAMAGES REGARDLESS OF THE FORM
OF ANY CLAIM,  WHETHER IN  CONTRACT  OR IN TORT OR WHETHER  FROM  BREACH OF THIS
AGREEMENT,  IRRESPECTIVE  OF WHETHER IGT HAS BEEN  ADVISED OR SHOULD BE AWARE OF
THE POSSIBILITY OF SUCH DAMAGES.  CUSTOMER HEREBY  ACKNOWLEDGES  AND AGREES THAT
IGT'S  LIABILITY  WITH  RESPECT TO THE  PERFORMANCE  OF IGTS  Services  SHALL BE
LIMITED TO THE AMOUNT OF IGT FEES  PAID  BY  CUSTOMER  FOR  THE AFFECTED BILLING
TRANSACTIONS.  CUSTOMER FURTHER AGREES TO INDEMNIFY AND HOLD  IGT  HARMLESS  FOR


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<PAGE>
ANY  AND  ALL  CLAIMS  THAT  MAY  ARISE  FROM  ANY  THIRD  PARTIES  RELATING
TO  CR  RESULTING  FROM  THE  SERVICES  PROVIDED  HEREUNDER.

19.  INDEMNIFICATION.
     ---------------

     (a) By Customer.  Customer hereby agrees to indemnify and hold IGT harmless
         -----------
     against all obligations,  liabilities,  claims,  demands,  losses, damages,
     costs or expenses (including  attorney's fees),  arising out of or relating
     to: (1) Customer's use of IGT's services,  (ii)  Customer's  inadvertent or
     intentional   submission  of  non-approved  Billing   Transactions,   (iii)
     Customer's  advertising of IGT's  services,  (iv) the content of Customer's
     audio text or the provision by Customer of the Services  billed by IGT, (v)
     any Taxes,  penalties,  interest,  -additions  to tax,  surcharges or other
     charges or expenses  payable or  incurred  by IGT in respect of  Customer's
     Billing Transactions or resulting from the Customer's use of IGTs services,
     or (vi) any breach by Customer of any representation,  warranty or covenant
     under this  Agreement.  In the event that IGT is joined as defendant in any
     action or proceeding  arising out of any of the foregoing,  IGT may, at its
     option,  engage  its own  attorneys  to defend  IGT  and/or  Customer,  and
     Customer  shall  pay all  reasonable  attorney  fees,  costs  and  expenses
     incurred by IGT.
     (b) By IGT.  IGT hereby  agrees to  indemnify  and hold  Customer  harmless
         ------
     against all obligations,  liabilities,  claims,  demands,  losses, damages,
     costs or expenses (including  attorney's fees),  arising out of or relating
     to any breach by IGT of any representation, warranty or covenant under this
     Agreement.

20.  TERMINATION FOR DEFAULT.
     -----------------------

          Either  party  may  terminate  this  Agreement,  without  liability,
effective immediately  upon  written  notice  to the other party upon any of the
following events:

     (a) The other party defaults on any payment obligation  hereunder and fails
     to cure such  payment  default  within  ten (10)  business  days of written
     notice  of  such   payment   default  to  the   defaulting   party  by  the
     non-defaulting party; or
     (b) The other party defaults with respect to any other  material  provision
     of this Agreement and fails to cure such default within thirty (30) days of
     written   notice  of  such   default  to  the   defaulting   party  by  the
     non-defaulting party; or
     (c) The other party is found by an  appropriate  governmental  authority to
     have  violated or to be in  violation  of  federal,  state or local laws or
     regulations  relating to the providing,  soliciting,  or advertising of its
     services,  and such  violation  has not been cured within  thirty (30) days
     after such finding; or
     (d) The other  party has  violated a  representation,  warranty or covenant
     contained in this  Agreement and such violation  remains  uncured after ten
     (10)  days  following  written  notice  of  such  violation  from  the
     non-defaulting  party specifying the nature of the violation; or


Billing  Services  Agreement
Publication  Management
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<PAGE>
     (e) The other party has (i) filed a voluntary  petition  in  bankruptcy  or
     voluntary  petition  or  an  answer  seeking  reorganization,  arrangement,
     readjustment of its debts, or any other relief under the Federal Bankruptcy
     Code or under any other  insolvency act or law, now or hereafter  existing,
     or (ii) a receiver or trustee appointed involuntarily, and such petition or
     action is not suspended,  stayed or dismissed  within sixty (60) days after
     such filing or appointment, as the case may be or
     (f)  if  seventy-five   percent  (75%)  of  Customer's   submitted  Billing
     Transactions are not billable with one or more of the Major Telcos.

21.  SPECIAL RIGHTS OF IGT TO TERMINATE  AGREEMENT.
     ---------------------------------------------

     (a) Damage to Public Image. If IGT determines, in its sole discretion, that
         ----------------------
     its business may be adversely affected or that the Services offered by such
     Customer may adversely affect IGT's public image or damage IGT's reputation
     or goodwill and if, after  notification from IGT to Customer,  Customer has
     not  cured the  indicated  problem  to IGT'  satisfaction  within  five (5)
     business days, IGT reserves the right to terminate services to Customer and
     the Customer's use of the IGT' services  immediately upon written notice to
     Customer.
     (b)  Termination due to Violation of Law. IGT reserves the right to monitor
          -----------------------------------
     any program  being  billed by [CT,  and,  if IGT,  in its sole  discretion,
     believes any program to be in violation of Telco  policies,  IGT's business
     policies,  any state,  local or federal laws or  regulations,  to terminate
     Basic  Services  for those  programs  if,  after  notification  from IGT to
     Customer,   Customer  has  not  cured  the   indicated   problem  to  IGT's
     satisfaction within five (5) business days. IGT will provide the Customer a
     report  summarizing  the quantity of calls and dollars being suspended from
     the billing process. The Billing Transaction Data and account records shall
     be returned to the Customer.

22.  EFFECT OF TERMINATION.
     ---------------------

     (a)  Termination  of this  Agreement  shall  terminate  all the  rights and
     obligations of the parties hereunder, except that:

          (i)  neither  Customer  nor IGT shall be  released  of its  respective
               obligations  to pay any sums of money due or  payable  or accrued
               under this Agreement;
          (ii) confidential information, as defined herein, and any copies shall
               be returned to the  Disclosing  Party within  thirty (30) days of
               termination of this Agreement and the Receiving  Party shall keep
               such confidential information confidential for two (2) years from
               the date of termination; and


Billing  Services  Agreement
Publication  Management
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<PAGE>
          (iii)in the  event  the  termination  is a result  of the  default  or
               breach by a party,  the other  party  shall be entitled to pursue
               any and all rights and remedies it has to redress  such  default,
               breach or inequity.

     (b) The parties agree that the  termination of this  Agreement  pursuant to
     any provision or section hereof, or for any other reasons, shall not affect
     or terminate  any  obligation  or  liability  incurred or assumed by either
     party prior to effective  date of termination  of this  Agreement,  and the
     provisions of this Agreement shall survive its termination  with respect to
     conclusion of any unresolved matters or payment obligation  relating to the
     services performed prior to termination.
     (c) Upon  termination  of this Agreement or of Basic Services to a specific
     Customer account,  no call records shall be received or processed after the
     effective  date of the  termination,  and  IGT  shall  have  no  obligation
     hereunder. IGT shall proceed to process Billing Transactions already in its
     billing system as of the termination date.
     (d)  Upon  termination  of this  Agreement,  Customer  agrees  that IGT may
     withhold  reasonable amounts as Reserves thereby increasing the IGT Reserve
     to offset any service  related  costs  and/or  charges that may occur after
     settlement of Customer's final submission of Billing Transactions. Upon the
     last Telco's  final True-up for the last deposit  month,  IGT shall provide
     Customer with a final  accounting and remit any remaining  amounts withheld
     or shall invoice  Customer as appropriate.  Any amount owing from one party
     to the other as a result of the True-up  shall be paid within  fifteen (15)
     days of IGT's final accounting.

23.  CONFIDENTIALITY.
     ---------------

     (a) As used in this Agreement "Confidential Information" of either Customer
     or IGT shall mean any written or  documentary  information  relating to the
     service or business  operation~ of the party  ("Disclosing  Party") that is
     given to the other Party ("Receiving  Party") pursuant to this Agreement or
     otherwise if such information is marked "Confidential",  bears a marking of
     like  import,   or  is  or  was  identified  by  the  Disclosing  Party  as
     "Confidential"  at the time of  transmittal  to or receipt by the Receiving
     Party.  Orally  disclosed  information  shall  be  considered  Confidential
     Information  if it is  identified  as such at the time of disclosure by the
     Disclosing Party and within twenty (20) days after oral disclosure  thereof
     the  Disclosing  party  confirms  in  writing  to the  Receiving  Party the
     confidential nature of such information.  "Confidential  Information" shall
     also include any equipment,  hardware or software (including firmware) made
     available  to a  Receiving  Party by a  Disclosing  Party that  includes or
     represents   a   tangible   manifestation   of  a   Party's   "Confidential
     Information",  whether or not such equipment bears any confidential  legend
     or marking.
     (b) Each party  agrees  that  Confidential  Information  of the other party
     which is disclosed or obtained by it hereunder or otherwise, shall, subject
     to the terms and  conditions of this  Agreement,  be retained in confidence
     and  shall be  protected  to the same  extent  and in the  same  manner  as
     comparable  confidential  information  of  the Receiving Party, but no less
     than a reasonable standard  of  care.


Billing  Services  Agreement
Publication  Management
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<PAGE>
     (c) Information shall not be deemed confidential, and Receiving Party shall
     have no obligation under this provision with respect to any:

          (i)  Information which now or hereinafter comes into the public domain
               without breach of this Agreement;
          (ii) Information  already  in  the  possession  of  or  known  to  the
               Receiving  Party at the time of  disclosure as evidenced by prior
               written documentation thereof;
          (iii)Information  rightfully  and  lawfully  received  by a  Receiving
               Party from a third party without  breach of this Agreement or any
               other  agreement as evidenced by existing  written  documentation
               thereof;
          (iv) Information developed  independently or discovered by a Receiving
               Party  without  use  of  the  Disclosing   Party's   Confidential
               Information  as  evidenced  by  existing  written   documentation
               thereof;
          (v)  Information approved for release by written authorizations of the
               Disclosing Party; or
          (vi) Information disclosed pursuant to the requirement or request of a
               governmental  agency or court of  competent  jurisdiction  to the
               extent such disclosure is required by a valid law,  regulation or
               court order and sufficient notice is given by the Receiving Party
               to the  Disclosing  party of any such  requirement  or request to
               permit the Disclosing party to seek appropriate  protective order
               or exemption from such requirement or request.

     (d) All information and all tangible forms of information,  including,  but
     not limited to documents, drawings, specification,  prototypes, samples and
     the like received  hereunder by a Receiving party shall remain the property
     of the  Disclosing  Party.  Upon written  request by a Disclosing  Party, a
     Receiving  party shall return to a Disclosing  Party all tangible  forms of
     the  Disclosing  Party's  Confidential  Information  received by  Receiving
     party, including all copies thereof.

24. CHOICE OF LAW AND VENUE. THE VALIDITY OF THIS AGREEMENT,  ITS  CONSTRUCTION,
    -----------------------
INTERPRETATION,  AND ENFORCEMENT,  AND THE RIGHTS OF THE PARTIES HERETO SHALL BE
DETERMINED UNDER,  GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF California.  THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS  ARISING
IN CONNECTION  WITH THIS AGREEMENT  SHALL BE TRIED AND LITIGATED  EXCLUSIVELY IN
AND VENUE SHALL BE PROPER ONLY IN THE STATE AND  FEDERAL  COURTS  LOCATED IN THE
COUNTY OF SANTA CLARA, STATE CF CALIFORNIA OR, AT THE SOLE OPTION OF IGT, in ANY
OTHER COURT IN WHICH IGT SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH
HAS  SUBJECT  MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY.  EACH  OF  THE


Billing  Services  Agreement
Public  Management
Page  14


<PAGE>
PARTIES  HERETO  WAIVES,  TO  THE  EXTENT  PERMITTED  UNDER APPLICABLE  LAW, ANY
RIGHT  EACH  MAY  HAVE  TO  ASSERT  THE  DOCTRINE  OF FORUM  NON  CONVENIENS  OR
TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT  IN  ACCORDANCE  WITH
THIS  SECTION.

25.  ANNOUNCEMENTS AND RELEASES. Neither party may use the other party's name in
     --------------------------
promotional  or  marketing   advertisements,   public  announcements  or  public
disclosures  nor shall  either  party  disclose  the  existence or terms of this
Agreement or its subject matter,  without the prior written consent of the other
party.

26.  NOTICES.  Alt notices and other communications which are required or may be
     -------
given hereunder shall be in writing and shall be delivered personally or sent by
U.S.  mail, by facsimile,  or by reputable  overnight  carrier.  All notices and
other  communications  shall be deemed given when actually  received by a party.
Notice by mail shall be  directed  to a party at its  address set forth below or
such other address as shall be given in accordance with this Agreement.

Integretel  Incorporated,        Greg  Crane
5883  Rue  Ferrari               Trust  Manager
San  Jose,  CA  95138            9420  E.  Doubletree,  Suite  C102
Attention:  General  Counsel     Scottsdale,  AZ  85258

27.  DISPUTE  RESOLUTION  AND  ARBITRATION:
     -------------------------------------

Except for an action seeking a temporary restraining order or injunction related
to  the  purposes  of  this  Agreement, or a suit to compel compliance with this
dispute  resolution  process,  the  parties  shall use the following alternative
dispute  resolution  procedures  as their sole remedy with respect to any claim,
dispute,  or  other  controversy arising out of or relating to this Agreement or
its  breach.

     (a) Dispute Resolution. At the written request of a party, each party shall
         ------------------
     appoint an officer or employee representative to meet and negotiate in good
     faith and attempt  resolve any dispute  arising under this  Agreement.  The
     location, format, frequency,  duration? and conclusion of these discussions
     shall be left to the discretion of the representatives. Upon agreement, the
     representative may utilize other alternative dispute resolution  procedures
     such  as  mediation  to  assist  in  the   negotiations.   Discussions  and
     correspondence among the representatives for purposes of these negotiations
     shall be treated as  confidential  information  developed  for  purposes of
     settlement,  exempt  from  discovery  and  production,  which  shall not be
     admissible in the  arbitration  described  below or in many lawsuit without
     the  concurrence of the parties.  Documents  identified in or provided with
     such   communications,   which  are  not   prepared  for  purposes  of  the
     negotiations,  are not so exempted  and may, if  otherwise  admissible,  be
     admitted in evidence in the arbitration or lawsuit.


Billing  Services  Agreement
Public  Management
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<PAGE>
     (b)  Arbitration.  If the  negotiations  do not resolve the dispute  within
          -----------
     sixty (60) calendar days of the initial written request,  the dispute shall
     be submitted to binding  arbitration by a single arbitrator pursuant to the
     Commercial  Arbitration rules of the American  Arbitration  Association.  A
     party may demand such arbitration in accordance with the procedures set out
     in those rules.  Discovery  shall be controlled by the arbitrator and shall
     be permitted to the extent set out in this section. The arbitration hearing
     shall be  commenced  within  sixty  (60)  calendar  days of the  demand for
     arbitration.  The  arbitration  shall be held in San Jose  California.  The
     arbitrator  shall  control  the  scheduling  so as to  process  the  matter
     expeditiously.  The parties may submit written briefs. The arbitrator shall
     rule on the  dispute  by  issuing  a written  opinion  within  thirty  (30)
     calendar days after the close of the hearings.  The times specified in this
     section may be  extended  upon  mutual  agreement  of the parties or by the
     arbitrator  upon a showing of good cause.  Judgment upon the award rendered
     by the  arbitrator  may be entered in any court having  jurisdiction.  Each
     party  shall  bear  its own  costs  of these  procedures.  A party  seeking
     discovery shall  reimburse the responding  party the costs of production of
     documents (including search time and reproduction costs). The parties shall
     equally split the fees of the arbitration and the arbitrator.

28.  GENERAL  PROVISIONS.
     -------------------

     (a) Attorney's Fees. IN the event of any dispute, claim or legal proceeding
         ---------------
     (arbitrations  excepted as provided  herein)  arising out of or relating to
     this  Agreement,   the  prevailing  party  thereto  shall  be  entitled  to
     reimbursement from the other(s) of all reasonable attorney's fees and costs
     incurred in connections therewith.
     (b) Collection Fees. In the event that IGT must hire a collection agency or
         ---------------
     service to collect fees or any funds owed IGT  pursuant to this  Agreement,
     Customer shall be responsible  for all such  collection fees and will remit
     payment  to  IGT  within  fifteen  (15)  days  of  receipt  of  invoice.
     (c) Severability. If any provision of this Agreement is found to be invalid
         ------------
     by any  court,  the  invalidity  of such  provision  shall not  affect  the
     validity of the remaining provisions hereof.
     (d) Captions.  The paragraph  headings  contained in this Agreement are for
         --------
     reference  purposes  only and shall not  affect in any way the  meaning  or
     interpretation of this Agreement.
     (e)  Assignment.  Customer may not assign any of its rights or  obligations
          ----------
     hereunder without the prior written consent of IGT.  IGT consent may not be
     unreasonably  withheld.  This Agreement  shall be binding upon and inure to
     the  benefit  of  each  of  the  parties,  their  successors  and  assigns.
     (f) Amendments.  Except as otherwise provided herein, this Agreement may be
         ----------
     amended or modified only by a written instrument  executed and delivered by
     all of the parties  hereto.  No waiver by either party of any breach by the
     other party or of the  provisions of this Agreement shall be construed as a
     waiver  of  that  or  any  other  provision  on  any  other  occasion.


Billing  Services  Agreement
Public  Management
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<PAGE>
     (g) Third  Party  Rights.  The  parties do not intend to confer any benefit
         --------------------
     hereunder  on  any  person  or  entity  other  than  the  parties  hereto.

     (h) Further  Assurances.  The parties  agree to do such further acts and to
         -------------------
     execute  and  deliver  such  additional  agreements  and  documents  as the
     other(s)  may  reasonably  request to  consummate,  evidence or confirm the
     agreements  contained  herein  and  the  matters  contemplated  hereby.

     (i)  Force  Majeure.  Neither  party  shall be deemed  in  default  of this
          --------------
     Agreement  to  the  extent that any delay or failure in  performance of its
     obligation results, without its fault or negligence,  from any cause beyond
     its  control,  such as acts of God,  acts of civil or  military  authority,
     government regulation,  embargoes,  epidemics,  war, terrorist acts, riots,
     insurrections,  fires,  floods,  earthquakes,  nuclear accidents,  strikes,
     power blackouts,  unusually server weather conditions,  inability to secure
     products or services of other persons or transportation  facilities, or act
     of or omission of transportation common carriers.

     (j) Counterparts.  This Agreement may be executed in separate counterparts,
         ------------
     each of which shall be deemed an original, and both of which together shall
     constitute one and the same- instrument.

     (k)  Integration  of Agreement.  This Agreement and  accompanying  exhibits
          -------------------------
     contain the entire understanding of the parties with respect to its subject
     matter   and   supersedes   all  prior  and   contemporaneous   agreements,
     representations  and  understandings  among the  parties,  whether  oral or
     written, relating to the subject matter hereof.



Billing  Services  Agreement
Public  Management
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<PAGE>
(l)  Corporate  Authority.  The parties  hereto  represent and warrant that they
     --------------------
     have the capacity,  power and authority to enter into this  Agreement,  and
     that the  individuals  signing on behalf of both parties have the authority
     to so sign.

     IN  WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date  set  forth  above.

INTEGRETEL,  INCORPORATED

By:  /s/  Ken Dawson
   --------------------------------------

Name:  Ken Dawson
     ------------------------------------

Title:  President
      -----------------------------------

Date:  1/9/98
     ------------------------------------


PUBLICATION  MANAGEMENT,  A  WASHINGTON  D.C.  TRUST

By:  /s/  Greg Crane
   --------------------------------------

Name:  Greg Crane
     ------------------------------------

Title:  Trust Manager
      -----------------------------------

Date:  1/9/98
     ------------------------------------


Billing  Services  Agreement
Public  Management
Page  18


<PAGE>
                                   EXHIBIT "A"

                         (Where Misc. Records available)


                            ----------------------------------------------------
TELCO


Ameritech
Bell  Atlantic
Bell  South
          Interstate
Cincinnati  Bell
          Interstate
GTE
Nevada  Bell
          Interstate
NYNEX
Pacific  Bell
          Interstate
Southwestern
US  West

                12-02-96

All  miscellaneous programs are subject to initial and continuing Telco approval
and  can  be  terminated  at  any  time.  Additional Telcos may be available for
service,  subject  to  Telco  approval,  upon IGT review and recommendation. The
above information is generally current at the time of printing and is to be used
for  informative  purposes  only.  The  information contained in this exhibit is
subject  to change without notice. Inclusion in the above list does not indicate
or  imply  that  the named Telcos approve the program(s) contemplated under this
Agreement.  IGT makes no promise or guarantee that this information is constant,
permanent,  all  inclusive  and/or  final.


Billing  Services  Agreement
Publication  Management
Page  19


<PAGE>
                                   EXHIBIT "B"

                      {This page intentionally left blank)



Billing  Services  Agreement
Publication  Management
Page  20


<PAGE>
                                           JANUARY 1998
                                 ---------------------------------
                                 SUN  MON  TUE  WED  THU  FRI  SAT
                                 ---  ---  ---  ---  ---  ---  ---
                                                     1    2    3
                                                      X
                                 ---  ---  ---  ---  ---  ---  ---
                                 4    5    6    7    8    9    10
                                       B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 11  12    13   14   15   16   17
                                       B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 18  19    20   21   22   23   24
                                       B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 25  26    27   28   29   30   31
                                       B         EP   A
                                 A=DEADLINE for billing Integretel
                                               (By noon PST)
                                 B=DEPOSIT tapes shipped to Telcos
                                 EP=Early Pay Wires Sent
                                 X=Holiday


                                             FEBRUARY 1998
                                 ---------------------------------
                                 SUN  MON  TUE  WED  THU  FRI  SAT
                                 ---  ---  ---  ---  ---  ---  ---
                                 1    2    3    4    5    6    7
                                       B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 8    9    10   11   12   13   14
                                       B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 15   16   17   18   19   20   21
                                       B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 22   23   24   25   26   27   28
                                       B         EP   A
                                 A=DEADLINE for billing Integretel
                                               (By noon PST)
                                 B=DEPOSIT tapes shipped to Telcos
                                 EP=Early Pay Wires Sent
                                 X=Holiday


                                           MARCH 1998
                                 ---------------------------------
                                 SUN  MON  TUE  WED  THU  FRI  SAT
                                 ---  ---  ---  ---  ---  ---  ---
                                 1    2    3    4    5    6    7
                                       B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 8    9    10   11   12   13   14
                                       B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 15   16   17   18   19   20   21
                                       B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 22   23   24   25   26   27   28
                                       B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 29   30   31
                                       B
                                 A=DEADLINE for billing Integretel
                                               (By noon PST)
                                 B=DEPOSIT tapes shipped to Telcos
                                 EP=Early Pay Wires Sent
                                 X=Holiday


                                            APRIL 1998
                                 ---------------------------------
                                 SUN  MON  TUE  WED  THU  FRI  SAT
                                 ---  ---  ---  ---  ---  ---  ---
                                                1    2    3    4
                                                      X
                                 ---  ---  ---  ---  ---  ---  ---
                                 5    6    7    8    9    10   11
                                       B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 12   13   14   15   16   17   18
                                       B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 19   20   21   22   23   24   25
                                       B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 26   27   28   29   30
                                       B         EP   A
                                 A=DEADLINE for billing Integretel
                                               (By noon PST)
                                 B=DEPOSIT tapes shipped to Telcos
                                 EP=Early Pay Wires Sent
                                 X=Holiday


                                            MAY 1998
                                 ---------------------------------
                                 SUN  MON  TUE  WED  THU  FRI  SAT
                                 ---  ---  ---  ---  ---  ---  ---
                                                          1    2
                                 ---  ---  ---  ---  ---  ---  ---
                                 3    4    5    6    7    8    9
                                       B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 10   11  12    13   14   15   16
                                       B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 17   18  19    20   21   22   23
                                       B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 24   25  26    27   28   29   30
                                       X    B    EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 31
                                 A=DEADLINE for billing Integretel
                                               (By noon PST)
                                 B=DEPOSIT tapes shipped to Telcos
                                 EP=Early Pay Wires Sent
                                 X=Holiday


                                            JUNE 1998
                                 ---------------------------------
                                 SUN  MON  TUE  WED  THU  FRI  SAT
                                 ---  ---  ---  ---  ---  ---  ---
                                      1    2    3    4    5    6
                                      B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 7    8    9    10   11   12   13
                                      B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 14   15   16   17   18   19   20
                                      B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 21   22   23   24   25   26   27
                                      B         EP   A
                                 ---  ---  ---  ---  ---  ---  ---
                                 28   29   30
                                      B
                                 A=DEADLINE for billing Integretel
                                               (By noon PST)
                                 B=DEPOSIT tapes shipped to Telcos
                                 EP=Early Pay Wires Sent
                                 X=Holiday


<PAGE>
                                   Exhibit "C"
                    Data Format Specification: EM1 Simplified
                    -----------------------------------------
                      Information Services: Detail Records
                      ------------------------------------
                                   Page 2 of 3

Billing  Services  Agreement
Publication  Management
Page  21


<PAGE>
<TABLE>
<CAPTION>
POSITION                   NAME                                      VALUES
- ---------  -------------------------------------  --------------------------------------------
<S>        <C>                                    <C>
82-101     INDICATOR 1 -20                        Zero fill except as noted:

87         Indicator 6                            l=Full minute rounded time

102-112    filler                                 Zeros

113-122    BILLING NUMBER                         Telephone number responsible for the charge.

123-134    FROM LOCATION                          Optional City, State of origination, or
                                                  Description of Service of name of IP.

135 - 146  TO LOCATION                            Description of Service or name of IP
                                                  No specialty character, letters only.

147-149    filler                                 Zeros

150-152    Client ID                              IGT assigned Client number

153-161    filler                                 Zeros

162 - 162  INDICATOR 25                           1 =Auto Collect positive ack,
                                                  0=1/A or passive accept

163-167    filler                                 Zeros
168-171    MEMBER/AGENT                           Client specific, to aid in Identifying IP's
                                                  and/or product types.


172 - 175  BATCH/SUB ACCT                         Client specific. Optional zero filled if not
                                                  used
</TABLE>


IN  GENERAL:
- -----------
- -    Bytes  I  thru  122  are  numeric,  zero  filled  if  not  used
- -    Bytes 123 thru 175 are either zero or blank (not null) filled, as specified
- -    Send  media  via 9-track (preferred), 3 112" or 5 114" diskettes, modem (in
     emergencies),
- -    18-track  (3480 style),  mountain  back-up  cartridge  or  Colorado back-up
     cartridge
- -    Always  INCLUDE  OUR  IGT TAPE CONTROL FORM, OR A SUITABLE SUBSTITUTE, with
     physical  media.


Billing  Services  Agreement
Publication  Management
Page  22


<PAGE>
<TABLE>
<CAPTION>
                                       EXHIBIT "C"
                        DATA FORMAT SPECIFICATION: EMI SIMPLIFIED
                        -----------------------------------------
                          INFORMATION SERVICES: SUMMARY RECORDS
                          -------------------------------------
                                       PAGE 3 OF 3


POSITION                      NAME                                   VALUES
- --------  --------------------------------------------  ---------------------------------
<S>       <C>                                           <C>
1-6       RECORD ID                                     425001 = Non Detail Charge

7-12      DATE OF CALL                                  yy/mm/dd

13-39     filler                                        Zeros

40-45     Charge                                        9999v99 (v=assumed decimal)

46-47     filler                                        Zeros

48-51     STATE TAX                                     99v99 (v=assumed decimal)

52-54     LOCAL TAX                                     9v99 (v=assumed decimal)

55-81     filler                                        Zeros

82-93     filler                                        Zeros

94-94     indicator 13                                  1=State Tax present
                                                        2=State and Local Tax present
                                                        3=Local Tax present

95-112    filler                                        Zeros

113-122   BILLING NUMBER                                Account number responsible
                                                        for changes.

123-1 49  filler                                        Zeros

150-152   CLIENT ID                                     Client specific account code.
                                                        (IGT/IGT assigned)

153-167   filler                                        Zeros
168-172   TEXT CODE                                     Client specific (Alpha/Numeric):
                                                        Identifies type of service IGT/IGT assigned)

173-175                                                 BATCH/SUB ACCT Client Specific
                                                        (Numeric only)
</TABLE>

IN  GENERAL:
- -----------
- -    Bytes  I  thru  122  are  numeric,  zero  filled  if  not  used
- -    Bytes 123 thru 175 are either zero or blank (not null) filled, as specified
- -    Send  media  via 9-track (preferred), 3 1/2" or 5 1/4" diskettes, modem (in
     emergencies), 18-track (3480 style), mountain back-up cartridge or Colorado
     back-up  cartridge
- -    Always  include  our  IGT Tape Control Form, or a suitable substitute, with
     physical  media.


BILLING  Services  Agreement
PUBLICATION  Management
Page  24


<PAGE>
                                   EXHIBIT "E"
                                 Price Schedule
                                 --------------
                           Billing Services Agreement
                           --------------------------
                                   Page 1 of 1

Service  Fee:  IGT  shall  receive  the  following  fees  for Basic Services and
Subscriber  Inquiry  Services.

1.   Telco  Outclearing  (425001  Billing  Transactions)
     Gross  dollars  Deposited  per  Month               Fee  per  Billing
     All                                                       6%

Each  month,  IGT shall receive a Telco Clearing fee equal to the greater of the
Deposited  dollars   multiplied  by the above billing percentage or the Billable
Transactions deposited  times a $1.35  minimum  transaction fee, but in no event
shall the Telco Outclearing fee be less than the Telco Outclearing Minimum  Fee.

2.  Telco Outclearing Minimum Fee*: $ 5,000.00  per  month  per initial Account.
                                    $ 5,000.00 per month per additional Account.

*During  the  Term  of  this Agreement, if Customers aggregate Telco Outclearing
Minimum  Fee  paid to IGT exceeds fifty thousand dollars ($50,000) on Customer's
initial  Account, then Customer shall not be liable to IGT for Telco Outclearing
Minimum  Fees  on  said  Account  for the remainder of the Term. For purposes of
illustration  only, if Customer has paid IGT fifty thousand dollars ($50,000) in
Telco Outclearing fees on its initial Account throught the first nine (9) months
of  the  Term.  and  in  the  ninth month incurs three thousand dollars ($3,000)
in Telco Outclearirig Fees on said Account, then Customer shall not be obligated
to  remit  to  IGT the two thousand dollar ($2,000) difference between the Telco
Outclearing  Minimum  Fee  and the Telco Outclearing fee.  The Telco Outclearing
Minimum Fee limitation provided in this paragraph shall not be applicable to any
additional  Account(s)  ordered  by  Customer.

** The Telco  Outclearing  Minimum Fee shall be effective the third full deposit
month  following  Customer's  first  deposit  of Billing Transactions under this
Agreement.  There  shall  be no ramp-up period for subsequently opened Accounts.

3.     Subscriber  Inquiry  Services  Fees:

The  Subscriber  Inquiry Services Fees for phone inquiry is $3.50 per live agent
processed  Inquiry made to End-User accounts (includes adjustments (41 records),
if  any,  made  to  the  End-User  account).

<TABLE>
<CAPTION>
<S>                             <C>
4. Initial Account Activation:  $ 3,000.00 initial Account activation.
                                Does include Customer specific sub-dc activation.
                                Due  upon  execution  of  Agreement.

                                $ 1,500.0 additional Account activation.
                                Does include Customer specific sub-cic activation.

5. Text Phrase Approval:        $  100.00  per approved
                                Customer  program.

6. Program Approval:            $100.00
</TABLE>

Billing  Services  Agreement
Publication  Management
Page  25


<PAGE>
                                   EXHIBIT "F"
                          Delivery Schedule of Reports
                          -------- ----------- -------
                                   Page l of l


The  following  reports  are  available  on  the  BBS:


Report                                        Available on BBS
- ------                                        ----------------
Conversion Report                             Day after data is submitted to IGT
Edit Reports                                  Day after data is submitted to IGT
Edit Reject arid Non-Bill Detail Data         Day after data is submitted to IGT
Edit Reject Detail and Summary Reports        Day after data is submitted to IGT
Inquiry Comments and Data                     Thursdays
Telco Recourse Detail Data                    Tuesdays
Telco Unbill Detail Data                      Mondays
True-Up Detail Data                           Thursdays
Deposit Duplicate Detail Data                 Day after data
Transaction Summary                           Friday
Payment Summary                               Friday
Dilution Summary                              Friday
- -(Unbillable Summary, Recourse
  Summary, Uncollectible Summary)

The  above reports are also available via 48 hour delivery service if you choose
not  to  use  the  BBS.

True-up  Summary  reports  are  not  currently  available on the BBS and will be
transmitted  on  the  last  Friday  of  each  month.

                              Exhibit Revised 11/96


Billing  Services  Agreement
Publication  Management
Page  26


<PAGE>
                                   EXHIBIT "G"
                                Inquiry Services
                                ----------------
                                   Page 1 of 2


During  the Term of this Agreement, IGT, in lieu of inquiry services provided by
one  or  more  Telcos,  will  provide  primary  inquiry services to the Customer
consisting  of,  but  not  limited  to:

1)     acceptance  of  End-User  inquiries  or  claims,
2)     resolution  of  End-User  inquiries  or  claims,
3)     credit,  adjustment. and investigation of charges billed to the End-User,
       as  appropriate.

To  the  extent  that  IGT  provides  such  primary inquiry services, IGT shall:

1)     establish  toll free ~8OO,' telephone numbers to be used by End-Users for
       the  purpose  of  making  inquiries or claims regarding charges appearing
       on bills issued  by  the  Telco,
2)     provide  inquiry  service  representatives  to assist End-Users with said
       inquiries  or  claims,
3)     IGT will instruct each Telco, that it has an agreement with, to refer all
       inquiries  or  claims  regarding Customer's services to the 580Gb numbers
       provided by  IGT.

IGT  will  establish and maintain written guidelines that describe the manner in
which  End-User  inquiries  or  claims  will be responded to, including, but not
limited  to,  the  manner  in  which  appropriate  credits,  adjustments,  and
investigations  will  be  made. Supplements and amendments to written guidelines
will  be  made  as  necessary  and  provided  to  the  client.

IGT  will  be  responsible  for  responding  to all End-User inquiries or claims
related  to  billable  messages  and  will  provide  credits  and adjustments as
appropriate,  in  accordance  with  the  guidelines  and procedures established.

Customer  will  designate  a  representative  who will cooperate with IGT in the
resolution  of  any  questions  or  problems  pertaining to primary inquiries or
claims.

Should  Customer have any member companies for whom they aggregate call records,
IGT  will  contact  and/or correspond with any of these companies as needed upon
written  authorization  of  Customer.


Billing  Services  Agreement
Publication  Management
Page27


<PAGE>
                                   EXHIBIT "G"
                                Inquiry Services
                                ----------------
                                   Page 2 of 2

Written  Inquiry  Processing

IGT  shall  process all End-User and regulatory complaints received on behalf of
Customer  unless  Customer  previously  requests  the option of handling written
complaints  independently  or  in  cooperation  with  IGT.


If  Customer requests that IGT handle all written inquiries, IGT will handle the
inquiries  according  to  its  current  procedures.


Billing  Services  Agreement
Publication  Management
Page28


<PAGE>
                                   EXHIBIT "H"
                        Payment & Reporting Distribution
                        --------------------------------
                                   Page 1 of 3


Client  ID  Number(s):
                      ----------------------------------------------------------

Company  Name:
              ------------------------------------------------------------------

Wire  Transfer  Designation:  (IGT  must  receive change in wire instructions by
- ---------------------------
Thursday  for  Friday  Wires)


Customer  Funds  Assigned  To  (if  applicable):________________________________
Attached  is  Letter  of  Assignment  or  suitable  document(s)  to  instruct
distribution  all  or  a  portion  of  Customer  Funds.


Bank  Name:
               -----------------------------------------------------------------

Bank  Address:
               -----------------------------------------------------------------

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

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

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

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

Account  Name:
               -----------------------------------------------------------------

Account  Number
               -----------------------------------------------------------------



Billing  Services  Agreement
Publication  Management
Page  29


<PAGE>
                                   EXHIBIT "H"
                        Payment & Reporting Distribution
                        --------------------------------
                                   Page 2 of 3


Bank  ABA  Transfer
Number:
       ------------------------------------------------------------------

Settlement  Report  Distribution
- --------------------------------


Attention:
          ----------------------------------------------------------------------

Phone:                                          Fax:
          -------------------------------------     ----------------------------

Address:  ----------------------------------------------------------------------

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

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

Report  and  Detail  Distribution  (Edits,  Inquiry,  Telco  Returns)
- ---------------------------------------------------------------------

Attention:
          ----------------------------------------------------------------------

Phone:                                          Fax:
          -------------------------------------     ----------------------------

Address: (if  different  from  above):

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

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

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

Media  Preference:  Reports  on:    Paper    Tape   3 1/2   5 1/4   BBS
                                 ---      ---    ---     ---     ---
Detail  Records  on:            Tape   3 1/2   5 1/4   BBS
                             ---    ---     ---     ---

Billing  Services  Agreement
Publication  Management
Page 30


<PAGE>
                                   EXHIBIT "H"
                         Payment & Reporting Distribution
                         --------------------------------
                                   Page 3 of 3

Inquiry  Contact  Information
- -----------------------------

For  IGT  Internal  Use:

Inquiry  Contact  Person:                         Phone#:
                         -----------------------         -----------------------
                                                  Fax#:
                                                          ----------------------

Information  for  End-Users:

Customer Services Number:                         (optional)
                         -------------------------


Customer  Service
Address:
         -----------------------------------------------------------------------

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

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


Would  you  prefer  IGT to give End-Users your customer services phone number or
address?
        ---------------------------




Authorized
Signature:                                 Date:
          --------------------------------      -----------------------------


Billing  Services  Agreement
Publication  Management
Page31


<PAGE>
                                   EXHIBIT "I"
                               Gaming Requirements
                               -------------------


Optional:   Only  for  use  with  customers  that  provide  gaming  services.




Billing  Services  Agreement
Publication  Management
Page  32


<PAGE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>7
<FILENAME>0007.txt
<TEXT>

                                                                         RENEWAL

     ENHANCED SERVICES BILLING AND INFORMATION MANAGEMENT SERVICES AGREEMENT


This  Enhanced  Services  Billing  and Information Management Services Agreement
(the  "Agreement") is made this 3 day of December 1999 (the "Effective Date") by
                               ---      ---------    -
Enhanced  Services  Billing, Inc. ("ESBI" or "Company"), a Delaware corporation,
whose  principal  address  and telephone number are 7411 John Smith Drive, Suite
200,  San  Antonio,  Texas  78229-4898,  (210) 949-7000, and Telco Billing, Inc.
("Customer"), a Nevada corporation, whose principal address and telephone number
are  9420  E.  Doubletree  C-102,  Scottsdale,  Arizona  85258,  (800) 300-3209.
Customer  and  Company,  and  their affiliates, are sometimes referred to as the
"parties."

                                    RECITALS

WHEREAS, Customer is engaged in the business of providing certain communications
products and services that it desires to bill and collect through Local Exchange
Carriers;  and

WHEREAS, Company has entered into billing and collection agreements with certain
LECs  ("LEC  Agreements")  that allow Company to provide billing and information
management services for Qualifying EMI Billing Records ("Qualifying Records") on
behalf  of  Company's  customers;  and

WHEREAS,  Customer  desires  to  obtain  such billing and information management
services  from  Company  on  the  terms  and  conditions  contained  herein:

NOW,  THEREFORE,  the  parties,  intending  to be legally bound, hereby agree as
follows:

SECTION  1.  DEFINITIONS.
- -------------------------
As  used in this Agreement, certain terms have the meanings set forth in Exhibit
"A,"  unless  the  context  requires  otherwise.

SECTION  2.  SCOPE  OF  AGREEMENT.
- -------------------------------------
Customer  will  purchase  from  Company and Company will provide, subject to the
terms  and  conditions set forth herein, such terms and conditions being subject
to  the limitations of the LEC Agreements and Coalition Guidelines, the services
described  in  Section  3.  As  Company  enters  into additional LEC Agreements,
Company  will  provide  services to Customer in such areas on the same terms and
conditions  as  contained  herein.

SECTION  3.  BILLING  SERVICES.
- --------------------------------
     (a)     Submission  of  EMI  Billing Records("Records"): Customer will
             ------------------------------------ ----------
submit  its  Records to Company for purchase and submission to the LEG. Customer
will submit Records at least once per week that contain adequate information for
Company  and  LEC  to process such Records. In the event Customer cannot satisfy
the  minimum  transmission  volumes  described  in  Section 4.(g), Customer will
submit  its  Records once per month. All costs related to these submissions will
be  borne  by  Customer.
     (b)     Company's  Edits  and  Screens:
             ------------------------------
Following receipt of Customer's Records, Company will process Customer's Records
through  Company's computer edits and screens. Those Records that pass Company's
edits  and  screens will be "Qualifying Records." Those Records that do not pass
Company's edits and screens will be "Company Rejected Records." Company Rejected
Records  will be returned to Customer, and Company will have no other obligation
with  respect  to  Company  Rejected  Records.
     (c)     Submission  to  LECs:  After  passing  Company's edits and screens,
             --------------------
Company  will transmit Customer's Qualifying Records to the appropriate LECs for
billing  and  collection  under  the  LEC  Agreements.
     (d)     Billing  and Collection by LECs: Customer acknowledges that the LEG
             -------------------------------
will  be  solely  responsible  for the billing and collection of the revenue for
Customer's  Qualifying  Records  from  End  Users residing within the applicable
billing  area  of  such  LEC,  subject  to  the  terms, conditions and operating
procedures  contained in each LEC Agreement, the terms of which are incorporated
herein.  Company  will  have  no  billing  or  collection obligations other than
transmission  of  the  Qualifying  Records  to  the  LECs.  Customer  expressly
acknowledges  and  agrees  that  Company is not a debt collector as that term is
used  or  defined in the Federal Debt Collection Practices Act or the Texas Debt
Collection  Act.
     (e)     Printing  of  Customer's  Name  on  End  User's LEC Telephone Bill:
             ------------------------------------------------------------------
Wherever  possible,  Company  will  use  reasonable efforts to cause each LEC to
print Customer's name, along with the associated Qualifying Records, on each End
User's  telephone  bill billed on behalf of Customer. Customer acknowledges that
where  the  LECs  do  not  provide  this  service,


                     COMPANY  CONFIDENTIAL  AND  PROPRIETARY
                                        1
<PAGE>
Customer's  name  will not appear on the End User's telephone bill. In the event
that  an  End User requests Customer's address or telephone number, Company will
provide  such  information  to  requesting  parties.
     (f)     End  User  Inquiry,  Investigation and Credit ("Customer Service"):
             ------------------------------------------------------------------
Company's  Customer Service procedures are set forth in Exhibit "F," as they may
be changed from time to time. Customer agrees that Company has sole and complete
discretion  to  address  any  inquiries addressed to or through it by End Users,
LEGs or regulatory or law enforcement bodies, and Customer agrees to be bound by
Company's  decisions  and to pay any credits, fees and penalties that may result
from  Customer's  Records.
     (g)     Reporting:  Company will provide electronic information and reports
             ---------
to  Customer  via ARRS. The Company may replace or discontinue these services on
thirty  (30)  days'  notice  to Customer. At this time, Company is not providing
written  reports  to  Customer.

SECTION  4.  CUSTOMER'S  OBLIGATIONS.
- ------------------------------------
     (a)     Cooperation  by  Customer:  Customer will cooperate with Company to
             -------------------------
the fullest extent possible to facilitate the provisioning of services described
in  Section  3 herein. Such cooperation will include, but not be limited to, the
following:
               (i) Supplying Company with Customer's  identification  codes, any
          and all certifications of regulatory  authority necessary for Customer
          to  offer  its  services,  and any  other  information  and  documents
          reasonably necessary or helpful to Company;
               (ii)  Supplying  Company  with  all  technical   information  and
          assistance with testing that may be reasonably necessary or helpful to
          Company in providing its services, as determined by Company;
               (iii) Supplying Company with requested  information on End Users,
          including LOAs and marketing  information within two (2) Business Days
          of Company's request; and
               (iv) Supplying Company with all information  requested by Company
          as set forth in Exhibit "G."
          (b)     Applicable  Approvals  and  Compliance with Law: Customer will
                  -----------------------------------------------
obtain  and  keep  current  all  applicable  federal,  state and local licenses,
Tariffs,  certifications  and approvals and will fully comply with, and has full
responsibility  to  comply  with,  all other applicable federal, state and local
rules, regulations, laws and Tariffs. No provision in this Agreement shall cause
or  be  construed  to  cause  either  party  to  violate any legal or regulatory
requirement.  Customer  certifies  that  all  Records submitted by Customer will
comply  with  the  service provider's certifications and Tariffs in the relevant
jurisdictions  for  that Record and with all applicable state and federal rules,
regulations,  laws  and  Coalition Guidelines. Customer agrees that Company will
assume  no  responsibility  for  such compliance whatsoever and that Company may
discontinue billing without notice for any product that it has reason to believe
does  not  comply  with  applicable rules, regulations and laws or the Coalition
Guidelines. Customer acknowledges that certain LEC billing systems contain edits
and screens that "block" Customer's Records from being billed to End Users until
Company  can  demonstrate  to  such  LECs that Customer has proper authority for
providing  its  services to the End User. Customer further acknowledges that the
LEG  controls  the  timeframe  for  such notification to become effective at the
LEGs.  Therefore,  Company  will  not  be  responsible for processing Customer's
Records  for services provided prior to the LECs removing their regulatory edits
and  screens  from  their  billing  systems.
     (c)     Authorized  Charges:  Customer  will submit Records to Company only
             -------------------
for  services  that  have been properly authorized by End Users, as described in
Exhibit  "G."  Customer  agrees  to  cancel  services for End Users that request
cancellation.  Customer certifies that its Records are supported by a valid LOA.
Customer  agrees  to  timely  provide Company with a valid 39 record (containing
authorization  information)  for  each  Record  submitted.
     (d)     Validation:  Customer  will  validate  all  collect,  third  party
             ----------
and LEC calling card billed Records using the LECs' LIDBs (Line Information Data
Bases)  or  other  alternative  validation  method that complies with applicable
rules,  regulations  and  laws  and  is  acceptable  to the LECs and Company. If
Company  determines  that Customer has not properly validated such Records, then
Company  will  have  the  right,  but  not  the  duty, to validate such calls at
Company's  then  applicable  validation  fee  or  to  reject  such  Records.
     (e)     Completed  Calls:  Customer  warrants that it is in compliance
             ----------------
with  the  FCC's  order  to determine call connection using hardware or software
"answer  detection." Customer further agrees that it will submit to Company only
those  Records  for  calls  that  represent valid, completed calls as defined in
Exhibit
     (f)     Aged Records:  Customer  will  not  submit  Records to Company that
             ------------
are more than one hundred twenty (120) days old or that exceed the "age of toll"
acceptable  by  the  LECs,  whichever  is  less.
     (g)     Minimum  Transmission  Volumes:
             ------------------------------
Customer  will  not  submit  to Company less than Five Hundred Dollars ($500) in
Company  Processing  Fees  per  Library  Code  in  any  single  transmission.


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        2
<PAGE>
     (h)     Review of Reporting: Customer will be responsible for reviewing all
             -------------------
reports  and  notices generated by ARRS, ARRS user manuals and other information
posted  to  any  bulletin  board  or  internet  service  maintained  by Company,
transmitted  by  e-mail, mail or otherwise by Company, and for notifying Company
of  any inaccuracies within ninety-one (91) days of the date such information is
made available to Customer. Failure to notify Company of any inaccuracies within
such time period will constitute acceptance thereof. Such reporting will be made
once  under this Agreement. If Customer requests additional copies of electronic
reports,  or  requests  that  electronic  reports  be  produced in printed form,
Customer  agrees  to  pay  Company's  then  prevailing rates for such additional
reports.  Additional charges will be incurred if information has to be retrieved
from archives. Such fees also will apply to material compelled to be produced in
response  to  first-party or third-party requests, including those of regulatory
or  law  enforcement  bodies  or  judicial  rules,  orders or subpoenas. Company
provides  reports,  notices,  user  manuals  and  individual  training to assist
Customer.  New  customers  should  attend  training  on  Company's  systems  and
reporting methods at Company's headquarters within one hundred eighty (180) days
of  the  Effective  Date.
     (i)     Objectionable  Content:  Customer  agrees,  as  a  condition  of
             ----------------------
Company's  performance  under  this  Agreement,  that  Customer  will not submit
Records  for  processing  under  this Agreement that contain or refer to matters
that  are harmful, damaging or against public policy, including, but not limited
to,  products  or  services  that:

               (i)     Explicitly or implicitly refer to sexual conduct;
               (ii)    profane language;
               (iii)   Allude  to  bigotry,  racism,  sexism  or  other forms of
          discrimination;
               (iv)    Are of a violent nature;
               (v)     Through advertising,  content or delivery, are deceptive,
          or may take unfair advantage of minors,  the  elderly  or the  general
          public;
               (vi)    Are publicly accessible, multi-party connections commonly
          known as or "chat" services;
               (vii)   Are  offered  by   Customer  or  its  agents   using box,
          sweepstakes or contest-type entry forms;
               (viii)  Are offered by Customer or negative  option sales offers;
          its agents using
               (ix)    Are 800 pay-per-call services;
               (x)     Are collect callback services;
               (xi)    Are phantom billing  (i.e., charging for calls never made
          or services never provided);
               (xii)   Have not been  properly authorized by End Users,  or that
          Company  determines,  in  its  sole  discretion,  have  had  excessive
          Customer Service or adjustments associated with such services;
               (xiii)  Are   prohibited  by  federal,   state  or  local  rules,
          regulations and laws, Tariffs or the Coalition Guidelines;
               (xiv)  Individual  LECs  exclude  from the types of  services  or
          products for which their  policies  permit them to bill and collect or
          that Company believes, in its sole discretion, will jeopardize its LEG
          Agreements; or
              (xv)    Company  determines,  in  its  sole  discretion,  to  be
          deceptive or anti-consumer.
Notwithstanding  any  other  provision  of this section, the parties acknowledge
that  Company  has  no  reasonable  means  of  determining  the  validity  of or
authorization  for  Records sent to Company for processing under this Agreement,
and  that  Company therefore strictly relies upon Customer to forward only valid
and  authorized  Records  that can be, if necessary, substantiated in a court of
law  or  to a regulatory body. Customer warrants and represents, when submitting
Records  to  Company,  that  such  Records  are  true and correct and accurately
reflect  proper charges legally owed by Customer's End User. Company may, at any
time  during the Tern, cease providing services under this Agreement immediately
upon  notice  to  Customer  as  a  result  of  a  violation  of  this paragraph.
     (j)     No  Other  Billing  Arrangement:
             -------------------------------
Customer  warrants that the Records submitted and to be submitted by Customer to
Company  pursuant to this Agreement are owned by Customer and not subject to any
Claims,  are  not  and  will  not be subject to any other billing and collection
agreement,  have not been billed previously by any method and will not be billed
by  Customer or another party following their submission by Customer to Company.
Notwithstanding  the  above,  Customer  may bill Company Rejected Records or LEG
Rejected  Records  after  the  deficiency  has  been  corrected.  Customer  may
not  double  bill  or initiate secondary collection efforts for any records that
have  billed through the LECs.  Customer has made a reasonable investigation and
is  not  aware  of  any  impediment  to  its  entering  into  this  Agreement.
     (k)     LEC  Billing  Compliance:  Customer  will  conduct  business  in
             ------------------------
accordance  with  all  policies  and  guidelines  of  those LECs responsible for
billing  and  collecting  Customer's  Qualifying  Records.


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        3
<PAGE>
     (1)     Company  Anti-Cramming  Consumer  Protection Standards of Practice:
             ------------------------------------------------------------------
Customer  will  comply  with  the  Company  Anti-Cramming  Consumer  Protection
Standards  of  Practice  set  forth  in  Exhibit  "G"  of this Agreement and the
Coalition  Guidelines,  as  they  may  be  revised  from  time  to  time.
     (m)     Payment  of  Amounts  Due Company: Customer will pay to Company any
             ---------------------------------
amounts determined by Company to be due Company by Customer under this Agreement
or  any  other agreement between the parties within ten (10) days of the date of
invoice by Company. Time is of the essence for such payments. Company may offset
any  amounts Customer or its affiliates owe Company or its affiliates under this
Agreement  or  any  other  agreement between the parties without notice. After a
period  of  thirty (30) days from such invoice date, interest on unpaid balances
will  accrue  at  the  lower  of eighteen percent (18%) per annum or the highest
legal  rate  allowed  by law. Customer further agrees that timely payment of all
amounts  due  Company  will  be  its  sole  responsibility.
     (n)     Attorneys'  Fees,  Costs  and  Expenses: Company also will have the
             ---------------------------------------
right  to  collect  from  Customer  all  attorneys'  fees,  costs  and  expenses
(including  in-house  legal services) incurred in collection of any amounts owed
by  Customer.

SECTION 5.  TERM  OF  AGREEMENT.
- -------------------------------
The  initial  term of this Agreement will backing on the Effective Date and will
("Initial  Term")  unless  terminated  in  accordance  with  the  terms  of this
Agreement.  Following  the Initial Term, this Agreement will renew automatically
for  successive  periods  of  one (1) year ("Renewal Term") unless terminated by
written  notice  of  non-renewal from either party delivered at least ninety-one
(91)  days  prior to the scheduled expiration date. The Initial Term and Renewal
Terms  will  constitute  the  "Term."

SECTION  6.  LEC  RELATED  PAYMENTS,  FEES  AND  ASSESSMENTS.
- -----------------------------------------------  -----------
     (a)     Payment  by  LECs:  Each  LEC  makes  payments  to  Company  for
             -----------------
Qualifying  Records purchased from Company in accordance with the LEC Agreement.
Company  will  not be responsible for payment to Customer of any funds collected
by  a  LEC  but  not  distributed  to  Company.
     (b)     Amount  Distributed  by  LECs:  Customer  acknowledges  that  each
             -----------------------------
LEG  distributes  to Company the gross amount of Qualifying Records purchased by
the  LEC  and  then  the LEC or Company deducts the then-applicable Assessments.
     (c)     Assessments:  Customer  acknowledges  that  Company  is and will be
             -----------
bound  by  the  terms  of the LEC Agreements with respect to each LEG's right to
deduct or to reduce its collectible funds for (i) the amount of LEG-related fees
and  costs  associated  with  processing Customer's Qualifying Records, a recent
list  of  which has either been disclosed or made available to Customer (subject
to  change  without notice to Customer), (ii) any Short-term Dilution, (iii) any
Post-billing  Adjustments  or Credits, (iv) any reserve for anticipated Bad Debt
("Bad  Debt  Reserve"),  (v)  any  periodic  reconciliation between the Bad Debt
Reserve  and  the actual Bad Debt realized by the LECs ("Bad Debt True-up"), and
(vi)  any  other related Assessments. In addition, Customer will) be responsible
for  any  data  transmission, data transmission correction, or distribution fees
incurred  in  the  delivery  or  receipt of Customer's Records and for any other
charges  related  to billing and collecting Customer's Records. Customer further
agrees  that  payment of all amounts described in this Section 6.(c) will be its
sole  responsibility and that Company may withhold such amounts from payments to
Customer. Should such amounts exceed the amounts due Customer, such amounts will
be  due  and  payable  by  Customer to Company in accordance with Section 4.(m).
     (d)     Bad  Debt Reserve:  Company  will  hold  back  or cause the LECs to
             -----------------
hold  back an amount estimated to be sufficient to set off any Bad Debt that may
be  determined  after  the  date  Company  makes  its  payment  to  Customer for
Customer's  Qualifying  Records  billed and collected by the LEG. Initially, any
Bad  Debt  Reserve  withheld  by  the  LEC  generally  will be passed through to
Customer  on  the  same percentage or the same amount as Company was assessed by
the  individual LECs. However, once sufficient data becomes available to Company
to  enable  Company  to  determine  a  specific Bad Debt history attributable to
Customer,  the  Bad Debt Reserve may be increased based on Customer's historical
Bad  Debt  Amounts,  Customer  Service,  adjustment  levels and other factors. A
schedule  setting forth the past twelve months' average Bad Debt Reserve by each
LEG  will  either  be  disclosed  or  made  available  to  Customer.
     (e)     Monthly  LEC  Bad  Debt  True-up:  Usually between six and eighteen
             --------------------------------
(6-18)  months  after  Company submits Customer's Qualifying Records to the LECs
for  billing  and  collection,  the  LECs  and Company will determine the actual
amount  of  Bad  Debt and true up the difference between this amount and the Bad
Debt Holdback Reserve. Company will provide Customer monthly reports on Bad Debt
True-ups  for  these  differences.  If the amount of these true-ups is positive,
Company will remit such amount to Customer on a regularly scheduled payment date
after  Company receives the true-up amount from the LECs. If the amount of these
true-ups  is  negative,  Company  will collect  such  amounts  from  Customer in
accordance  with  Section  4.(m).


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        4
<PAGE>
     (f)     Customer  Service:     Customer  understands  that each LEC has its
             -----------------
own  policies  regarding  assessment of credits, fees and penalties for Customer
Service,  in  addition  to  those  covered  by  rules, regulations, laws and the
Coalition  Guidelines,  and  Customer agrees to be bound by such policies and to
pay  such  credits,  fees  and  penalties  in  accordance  with  Section  4.(m).
     (g)     Allocation Method:  Customer acknowledges that Company is unable to
             -----------------
fully  document  or match all Assessments to specific customers and that Company
will  use  an  allocation  method  for such Assessments to determine amounts due
under  this  Agreement  when  Customer-specific  information  is  not matched or
available  from  the  LECs.

SECTION     7.     COMPANY  RELATED  ASSESSMENTS.
- -------------------------------------------------
     (a)     Assessments.  In  addition  to  the  LEC  Assessments  set forth in
             -----------
Section  6,  Customer  agrees to pay to Company, and Company may deduct from any
amounts  received  by  the  Company  from  the  LECs  on behalf of Customer, the
following  Company
Assessments:

          (i)     A  billing  and  information  management service fee ("Company
     Processing  Fee")  for each  Qualifying  Record  submitted  to the LECs for
     billing and  collection  by Company,  as  specified in Exhibit "C." Records
     rejected  by the LECs,  through no fault of Company,  and Records  that are
     resubmitted  to  the  LECs,  will  be  charged  the Company Processing Fee;
          (ii)    A  Basic  Customer  Service  Fee  as specified in Exhibit "C";
          (iii)   An  additional Customer Service fee for each  Customer Service
     that  exceeds the allowed  percentage,  as described in Exhibit "C," of the
     number of Qualifying  Records for each Library Code processed by Company on
     behalf of Customer each month;
          (iv)    Any credit amounts refunded to End Users by Company's Customer
     Service,  along with any LEC charges associated with making such refunds to
     End Users;
          (v)     A charge,  as  specified in Exhibit "C," for any submission of
     Records that contains less than the minimum volume  requirements of Company
     for each Library Code;
          (vi)    An  initial  set-up  fee,  as  described  in  Exhibit "C," for
     Company's ARRS;
          (vii)   An  Additional  Customer  Identification Code (subCIC) Fee, as
     described in Exhibit "C";
          (viii)  Any  credits,  fees and penalties that may result from Company
     or LECs addressing inquiries from  various  regulatory  or law  enforcement
     bodies;
          (ix)    Any Customer Service functions  (other than  Customer  Service
     specifically  covered by Exhibit "F") or special  programming tasks will be
     handled  on  a  time  and  cost  basis  at  the  then  current  rate;
     (b)     Reserves and True-ups for Short-term Dilution. Company will reserve
             ---------------------------------------------
an amount for Short-term Dilution based upon Customer's prior history pertaining
to  Short-term  Dilution and the regulatory environment. Company may recalculate
Customer's historical experience quarterly from its prior three months' results.
Until  such history can be determined for Customer, Company will reserve one and
one-half  percent (1.5%) from the amount due to Customer. Company may adjust the
reserve  and  Company  then  will  return excess amounts to Customer or withhold
additional  amounts  as  may  be  required to satisfy these liabilities from the
amounts  due  to  Customer.
     (c)     Collateral.     As  collateral  for all obligations now existing or
             -----------
hereafter  arising from Customer to Company, Customer hereby grants to Company a
security  interest  in all the following property of Customer, whether now owned
or  hereafter  acquired  or  created,  and  all  proceeds  and products thereof:
               (i)     All  amounts  paid, and all amounts owing, by each LEC to
          Company on accounts of Customer's Qualifying Records;
               (ii)    All  accounts  owing from an End User to Customer arising
          from services  which  give  rise  to  Customer's  Qualifying  Records;
               (iii)   All rights of and  proceeds  due Customer relating to all
          billing and  collection,  record  processing,  operator  services  and
          related communications services agreements;
               (iv)    All amounts  deposited by Customer with Company  pursuant
          to paragraph 13.(b) hereof;
               (v)     All  amounts  owing  and  all  amounts  to  be owing from
          Company to Customer; and
               (vi)    All  of  Customer's accounts with End Users, existing now
          or arising hereafter.

SECTION  8.  PAYMENTS  TO  CUSTOMER.
- -----------------------------------



                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        5
<PAGE>
     (a)     Determination  of  Customer:   Company  will  determine  Amount Due
             --------------------------
the estimated amount collected by each LEC for Customer's Qualifying Records and
deduct all assigned and allocated Assessments and Taxes of the LECs and Company.
If  the amount due Customer is not sufficient to satisfy these Assessments, then
Customer  will  pay  the difference to Company in accordance with Section 4.(m).
     (b)     Payment  Schedules:    Company  will  advance  to  Customer  the
             ------------------
estimated  amount  determined  under  paragraph  8.(a) above under the following
schedule:  Fifty  percent  (50%)  of  the amount determined on the first Tuesday
after the sixtieth (60~') day from the date Company receives Customer's Records;
fifty  percent  (50%)  of  the remaining balance of the amount determined on the
first  Tuesday  after  the  ninetieth  (90~") day from the date Company receives
Customer's  Records;  and  the remaining balance of the amounts so determined on
the  first  Tuesday  after  the  one hundred twentieth (l20~") day from the date
Company  receives  Customer's  Records;  provided, however, that if Customer has
ceased  doing  business  for  three  (3)  Business  Days;  is  the  subject of a
bankruptcy  proceeding;  has  a  receiver,  trustee  or custodian appointed over
substantially  all  of  Customer's assets; fails to make any deposit required by
paragraph 13.(b); undergoes a change of control or executive management; submits
Records,  the dollar value of which does not exceed estimated Assessments; or if
Company has reasonable grounds to believe that Assessments may exceed any amount
owing or to become owing from Company to Customer, Company may withhold payments
to  Customer or Company may make payments to Customer in accordance with Section
13.(b).  If  the  amount  owing  to Customer is determined to be insufficient to
satisfy  these  Assessments, then Customer will pay the difference to Company in
accordance  with  Section  4.(m).
     (c)     Method  of  Payment:   Company  will  make all advance payments and
             -------------------
final  payments  due  Customer  using  ACH  wire transfer on the Payment Date as
described  in  Section  8.(b)  herein.
     (d)     Accounting  for  Funds:    Funds  received  from  the  LECs  for
             ----------------------
Customer's  Qualifying  Records,  less applicable Assessments, will be deposited
and held by Company in a common account until such time as the amount determined
to  be due Customer is paid. Company will maintain an accounting via the ARRS of
the  balance  owing  or  to  be  owing  by  Company  to Customer of such amounts
deposited  and.  held  by  Company.

SECTION  9. TAXES.
- -----------------
     (a)     Calculation  of  Communications  Taxes:    Customer  acknowledges
             --------------------------------------
that  it  is  responsible  for compliance with all taxing requirements. Customer
will promptly notify Company of any tax or any other tax-like surcharges and the
associated  rates  that apply to Customer's Records in any specific jurisdiction
and  indicate  such  on  each Record submitted to Company. Either Company or the
LEGs will use reasonable efforts to assist Customer in calculating the following
taxes  that  may  be  applicable to MTS calls: federal excise tax, any state and
local  sales  taxes,  gross receipts tax or tax-like charges, foreign intrastate
tax,  any state or federal universal service taxes or assessments, and any other
standard toll communications sales or use taxes (" Taxes"). Any error by Company
or the LECs in calculating the applicable Taxes will not relieve Customer or End
Users  of  their  responsibility  to  pay  all  applicable  Taxes.
     (b)     Billing  and  Collection  of  Taxes:  Company  will  use reasonable
             -----------------------------------
efforts to cause the LECs to bill End Users for all Taxes when Customer provides
taxing  information.  Customer acknowledges that Company is merely arranging for
the billing and collection of Taxes, and in no event will Company be entitled to
retain  or  receive  from  Customer,  or from any End User, any statutory fee or
share  of  Taxes  to  which the person collecting the same may be entitled under
applicable  law  to  the  extent  permitted  by  law.
     (c)     Tax  Exempt  Status for End Users: Company will have the authority,
             ---------------------------------
on  behalf  of  Customer, to authorize the LECs to calculate Taxes and establish
the  tax  exempt  status  of  End Users in the same manner as the LECs calculate
Taxes  and  establish such status for their End Users. If Customer's Records are
exempt  from Taxes or tax-like charges, Customer will so indicate on each Record
submitted  to  Company.
     (d)     Filing  and  Payment of Taxes: Based upon information calculated by
             -----------------------------
Company  or  received  from  the LECs with respect to Taxes assessed, billed and
collected  by the LECs, Company will assist Customer in preparing and will file,
on  behalf  of  Customer where permitted, with the applicable taxing authorities
returns  covering Taxes, and will, on behalf of Customer, but only to the extent
of  amounts  otherwise owing from Company to Customer, advance and remit to such
taxing authorities all Taxes owed thereto. Customer acknowledges that Company is
required  by  some  states  to  provide an affidavit, executed by Customer, that
allows  Company  to  file  and  remit the applicable taxes on Customer's behalf;
therefore,  Customer  will  return the "Authorization to Act as Customer's Agent
for  Certain  Tax  Matters" form to Company upon Company's Request. Upon written
request,  Company will provide to Customer copies of any and all tax returns and
other  applicable information relating to the payment of Taxes by Company within
thirty  (30)  days  after  being  filed.
     (e)     Hold  Harmless:  Customer  will  indemnify and hold Company and its
             --------------
employees,  agents  and  representatives  harmless  from  and  against any Claim


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        6
<PAGE>
EVEN  IF  CAUSED,  IN  WHOLE  OR IN PART, BY COMPANY'S OWN NEGLIGENCE, BREACH OF
- --------------------------------------------------------------------------------
CONTRACT  OR  OTHER  MISCONDUCT  (including,  without  limitation,  reasonable
- -------------------------------
attorneys'  fees and expenses and court costs) relating to or arising out of any
Taxes, penalties, interest, additions to tax, computations of tax, surcharges or
other amounts that Company may  be  subject  to  or incur on behalf of Customer.
Company agrees to assist Customer  with  tax audits related to this Section, and
Customer shall give Company  the  option to participate in such audits.  Even if
Company or its representatives  assist  Customer with such audits, Company shall
have  no  liability  to  Customer  relating  to  any  tax assistance provided to
Customer  under  this  section.
     (f)     Billed  Taxes: Customer will be responsible for the payment of
             -------------
any  additional  Taxes  or  tax-like charges, excluding federal and state income
Taxes,  assessed  against Company based on the revenues collected by Company for
Customer's  Qualifying  Records  ("Billed  Taxes").
     (g)     Calculation  of  Special  Taxes:
             -------------------------------
Customer  will be responsible for calculating and adding to the charge amount in
all  Records,  prior  to  submission,  those  Taxes  specifically  applicable to
Customer's  Enhanced Telecommunications Services ("ETS") other than the standard
communications  taxes  described  in Section 9.(a) herein ("Special ETS Taxes").
     (h)     Filing  and  Payment  of  Special  ETS
             --------------------------------------
Taxes:  Customer  will  prepare, file and pay in a timely manner all Special ETS
Taxes  due  and owing to the applicable taxing authorities. At Company's written
request,  Customer  will  provide Company with copies of any and all tax returns
and  other  applicable  information relating to the calculation, application and
payment  of  Special  ETS  Taxes.

SECTION  10.  PROTECTION  OF  CONFIDENTIAL  INFORMATION.
- --------------------------------------------------------
As  used  herein,   "Confidential   Information"   will  mean  (a)   proprietary
information,  (b)  information  marked or designated  by either  party,  in good
faith,  as  confidential,(c)   information   otherwise  disclosed  in  a  manner
consistent  with its  confidential  nature,(d)  the terms and conditions of this
Agreement and(e)  information of one party submitted to a second party,  whether
or not in written form and whether or not  designated as  confidential,  that is
known or should  reasonably  be known by the  other  party as being  treated  as
confidential.  The parties  acknowledge  that,  as a result of the  provision of
services  pursuant  to this  Agreement,  Confidential  Information  that  may be
confidential or proprietary to each party must or may be disclosed to the other.
Each  party  hereby  agrees  that it will  make no  disclosure  of  Confidential
Information  provided under this Agreement  without the prior written consent of
the other  party.  Additionally,  each party will  restrict  disclosure  of such
information  to its own  employees,  agents or  independent  contractors to whom
disclosure  is  reasonably  required.  Such  employees,  agents  or  independent
contractors  will use  reasonable  care,  but not less  care  than they use with
respect to their own information of like character, to prevent disclosure of any
Confidential Information. Nothing contained in this Agreement will be considered
as granting or  conferring  rights by license or otherwise  in any  Confidential
Information  disclosed.  Notwithstanding the foregoing, Company may, in its sole
discretion, without notice or written consent of Customer, disclose information,
including  Confidential  Information,  to any state or federal regulatory or law
enforcement  agency  requesting  information.

SECTION  11.  EXCUSED  PERFORMANCE.
- -----------------------------------
Except  for  payment  of  obligations  or  compliance  with  applicable  rules,
regulations  and  laws, Customer will be excused from performance, and will have
no liability for failure to perform, for any period and to the extent that it is
prevented, hindered or delayed from performing any services or other obligations
under  this  Agreement,  in  whole or in part, as a result of acts, omissions or
events  beyond  the reasonable control of Customer. Company will be excused from
performance,  and  will have no liability for failure to perform, for any period
and  to the extent that it is prevented, hindered or delayed from performing any
services  or  other  obligations under this Agreement, in whole or in part, as a
result  of  acts,  omissions or events beyond the reasonable control of Company,
including  by  way  of  illustration  and  not  limitation, acts or omissions of
Customer  or  the  LECs,  third  party nonperformance, failure or malfunction of
computer  or  communications  hardware,  equipment  or software, breach or other
nonperformance  by  Company's  vendors and suppliers, strikes or labor disputes,
riots,  war,  fire,  acts  of  God  or  governmental  laws  and  regulations.

SECTION  12.  LIMITATION  OF  LIABILITY  AND  INDEMNITY.
- -------------------------------------------------------
     (a) Company makes no warranties or  representations  regarding its services
except as specifically stated in this Section l2.(a).  Company will use due care
in processing  all work  submitted to it by Customer and agrees that it will, at
its  expense,  correct  any errors  that are  solely due to errors by  Company's
employees or agents ("Error  Correction").  Error  Correction will be limited to
reprocessing  Customer's Records.  Company will not be responsible in any manner
for  failures  of, or errors in,  proprietary  systems  and  programs,  nor will
Company be liable for errors or failures of Customer's  software or  operational
systems.


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        7
<PAGE>
THIS  WARRANTY IS EXCLUSIVE AND IS IN LIEU OF ALL OTHER WARRANTIES. AND CUSTOMER
- --------------------------------------------------------------------------------
HEREBY  WAIVES  ALL  OTHER  EXPRESSED.  IMPLIED OR STATUTORY, INCLUDING, BUT NOT
- --------------------------------------------------------------------------------
LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
- --------------------------------------------------------------------------------
Should  there  be  any  failure in performance or errors or omissions by Company
with  respect  to  the Qualifying Records being processed and being submitted to
the  LECs  for  billing  and  collection, Company's liability will be limited to
using  reasonable  efforts  to correct such failure. In no event will Company be
liable  to  Customer  or ally third parties (including Customer's End Users) for
any  Claim,  even  if Company has been advised of the possibility of such Claim.
     (b)     Due  to  the  nature  of  the  services being performed by Company,
Customer  agrees that in no event will Company be liable for any Claim caused by
Company's  performance  or  failure to perform hereunder that is not reported by
Customer  in  writing to Company within ninety-one (91) days of such performance
or  failure  to  perform.
     (c)     Customer  will indemnify and save harmless Company from and against
any  Claim  asserted against Company by third parties arising from or related to
(customer's  provision  of  the  services provided under this Agreement.  Should
Customer  act  as  an  agent for a third party and forward billing to Company or
should  Customer purchase billing from a third party and forward such billing to
Company, Customer shall remain solely responsible to and for such third parties.
Customer  agrees to protect, indemnify and hold harmless Company for any and all
claims  by  third  parties  regarding  such  third parties' billing forwarded to
Company  by  Customer.  Customer  also  will indemnify and save harmless Company
from  and  against  any  Claim asserted against Company by third parties and any
assessments  or  fined  levied against Company by any state or federal agency or
law  enforcement  officer,  plus  any  attorneys'  fees  and expenses (including
in-house  legal  services),  arising from or related to any charges submitted by
Customer,  including  without  limitation,  for unauthorized charges or false or
inaccurate  information  provided  by  Customer  to  Company,  or any failure of
Customer  to  comply with legal or regulatory requirements, the requirements set
forth  in  Exhibit  "G"  of  this  Agreement  or  tie  Coalition  Guidelines.
THIS  INDEMNITY IS SPECIFICALLY INTENDED TO OPERATE AND BE APPLICABLE EVEN IF IT
- --------------------------------------------------------------------------------
IS ALLEGED OR PROVED THAT ALL OR SOME OF THE DAMAGES BEING SOUGHT WERE CAUSED AS
- --------------------------------------------------------------------------------
A WHOLE OR IN PART BY ANY ACT, OMISSION, NEGLIGENCE, GROSS NEGLIGENCE, BREACH OF
- --------------------------------------------------------------------------------
CONTRACT,  INTENTIONAL  CONDUCT,  VIOLATION 0F  STATUTE OR COMMON LAW, BREACH OF
- --------------------------------------------------------------------------------
WARRANTY,  PRODUCT  DEFECT,  STRICT LIABILITY OR ANY OTHER CONDUCT WHATSOEVER OF
- --------------------------------------------------------------------------------
THE  COMPANY.
- ------------
     (d)     Notwithstanding anything to the contrary  in  this  Agreement,  the
liability  of  Company  in  any  and  all  categories and for any and all Claims
arising  out  of  this  Agreement or out of any act or omission relating thereto
will,  in  the  aggregate,  not  exceed  one  (1)month's  average  of  Company's
Processing  Fees  charged  to Customer over the twelve (12) months preceding the
date  on  which  the  damage  or  injury  is alleged to have occurred; provided,
however,  that  if  this Agreement has not been in effect for twelve (12) months
preceding  such  date, then over such fewer number of preceding months that this
Agreement  has  been  in  effect. WITHOUT IN ANY WAY LIMITING THE APPLICATION OF
                                  ----------------------------------------------
THIS  SECTION.  THE RIGHT TO RECOVER DAMAGES  UNDER  THIS  PARAGRAPH CONSTITUTES
- --------------------------------------------------------------------------------
CUSTOMER'S  EXCLUSIVE ALTERNATIVE  REMEDY IN THE EVENT THAT THE ERROR CORRECTION
- --------------------------------------------------------------------------------
DESCRIBED  ABOVE OR ANY OTHER CONTRACTUAL REMEDY FAILS OF ITS ESSENTIAL PURPOSE.
- --------------------------------------------------------------------------------
     (e)     Under  no  circumstance  will  Company  be  liable  to Customer for
special,  incidental,  indirect,  consequential  or  punitive,  exemplary  or
additional damages, including, but not limited to, any lost profits or revenues.
     (f)     The  limitations  on  liability set forth herein shall not apply to
personal  injury,  bodily  injury  or  death  or  loss  of or damage to tangible
property.
     (g)     Waiver  of  Consumer  Rights:
             -----------------------------
Customer  waives its rights under the Texas Deceptive Trade Practices - Consumer
Protection  Act,  Section  17.41  et  seq., Business & Commerce Code, a law that
gives  consumers  special  rights  and  protections.  After consultation with an
attorney  of  its  own  selection, Customer voluntarily consents to this waiver.

SECTION  13.  EXPIRATION  OR  TERMINATION.
- ------------------------------------------
     (a)     Payment  Upon   Expiration  or  Termination: Upon the expiration or
             -------------------------------------------
termination  of  this Agreement for any reason, Customer agrees to satisfy, when
or  before  due,  its  obligations  under  this  Agreement.


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        8
<PAGE>
     (b)     Deposit  for  Charges:  Customer  acknowledges  that  certain
             ---------------------
Assessments  and any other  related  charges are not  determined  by the LECs or
Company for a period of up to eighteen (18) months after the final processing of
Customer's Records.  Customer further acknowledges that payment of these amounts
to Company will be its sole responsibility.  At the expiration or termination of
this  Agreement  for any reason,  Customer  will  deposit with Company an amount
equal to two and  one-half  percent  (2.5%) of the  amount of  Customer's  gross
billings  for the prior twelve (12) month period, or such other amount necessary
to satisfy such  Assessments as determined by Company,  in its sole  discretion,
based on Customer's prior history and the regulatory environment. Such deposited
amount will be used by Company to pay  Assessments.  Each quarter,  Company will
re-examine  the amount of funds  deposited and make such  adjustments as Company
estimates may be necessary to satisfy the  aforementioned  assessments.  Company
will  provide  Customer  with reports  reflecting  Assessments  attributable  or
allocated to Customer on the same and  consistent  method as Company  determines
such Assessments for all of its customers.  Eighteen (18) months after the Term,
Company will return all unused amounts to Customer.
     (c)     Remaining  Liability:  Notwithstanding  the  foregoing,  the
             --------------------
deposit  of such amounts does not relieve or waive Customer's responsibility and
obligation to pay its obligations to Company, including, without limitation, any
and  all  Assessments associated with billing and collecting its Records. In the
event  such  Assessments  exceed  the amount of the deposit described in Section
13.(b),  Customer  will remit to Company such additional amounts as are required
to  satisfy  Customer's  obligations  under  this  Agreement  in accordance with
Section  4.(m).
     (d)     Savings  Clause: Except as otherwise provided herein, expiration or
             ---------------
termination  of this Agreement will terminate all further rights and obligations
of  the  parties  hereunder,  provided  that:
          (i)     Neither  party  will be relieved of its respective obligations
     to  pay  any sums of money due or to become due or payable or accrued under
     this Agreement;
          (ii)    If such  expiration  or  termination  is a result of a default
     hereunder or a breach  hereof by a party,  the other party will be entitled
     to pursue any and all tights and remedies it has to redress such default or
     breach in law or equity; and
          (iii)   The  provisions of this Agreement and each party's obligations
     hereunder  which by their  nature or context  are  required  or intended to
     survive,  including but not limited to Sections 4, 6-10,  and 12-29 hereof,
     will  survive and remain in full force and effect after the  expiration  or
     termination of this Agreement.
     (e)     Early Termination of Extended Term Agreement:  If Customer elects a
             --------------------------------------------
multi-year  Initial  Term  and  Customer  terminates  or breaches this Agreement
before  the  expiration  of the full Initial Term, Customer will pay Company for
all  Records  processed  during the Term, at the one-year Company Processing Fee
rates  set  forth  in  Exhibit  "C,"  plus ten percent (10%), in accordance with
Section  4.(m).

SECTION  14.  DEFAULT  AND  REMEDIES.
- ------------------------------------
(a)     Default:  Either  party  will  be  in  default  hereunder  if  it:
        -------
          (i)     Fails to make any payment  specified  hereunder when or before
     due  and  such  failure  continues  for  five  (5)  Business Days after the
     effective date of written notice;
          (ii)    Breaches  any other  covenant or undertaking contained in this
     Agreement  and fails to remedy such breach  within  thirty (30) -days after
     written  notice  thereof  -from  the  non-defaulting   party,  unless  this
     Agreement specifically provides otherwise;
          (iii)   Is in default of any of the  provisions of Addendum A or B and
     such failure  continues for five (5) Business Days after the effective date
     of written notice;
          (iv)    Submits  Records  to  Company  for services that have not been
     properly authorized by End Users;
          (v)     Submits  Records to Company  that Company believes, in is sole
     discretion, generate excessive Customer Service;
          (vi)    Files,  or  there  is  filed  against  it,  any  voluntary  or
     involuntary  proceeding  under the Bankruptcy Code,  insolvency laws or any
     laws  relating  to  relief  of  debtors,   adjustment  of  indebtedness,
     benefit of reorganizations, compositions or extensions, makes an assignment
     for the  creditors,  dissolves,  ceases to conduct  business  for three (3)
     Business Days,  declares  that it is unable to pay its debts as they mature
     or admits in writing its  inability to pay its debts as they mature or if a
     receiver,  trustee  or  custodian  is  appointed  over,  or  an  execution,
     attachment or levy is  made  upon, all or any material part of the property
     of such party;
          (vii)   Attempts  to assign  its  rights  and  obligations  under this
     Agreement without the prior written consent of Company; or
          (viii)  Fails to  comply  with  any of the  obligations  set  forth in
     Exhibit "0" to this Agreement
     (b)     Remedies: In the event of any default hereunder, and in addition to
             --------
any other remedies it may have under this Agreement,  the  non-defaulting  party
will have the following rights and remedies:
          (i)     To  terminate  or  cancel  this  Agreement,  subject  to  the
     provisions  of Section  13.(d),  by giving  written  notice  thereof to the
     defaulting  party;


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        9
<PAGE>
          (ii)    To  declare  all  amounts  due  under  this Agreement from the
     defaulting  party to the  non-defaulting  party to be  immediately  due and
     payable,  including attorneys' fees, costs and expenses (including in-house
     legal services)  incurred or that may be incurred in the collection of such
     amounts;
          (iii)  Company may withhold, set off and retain, until all obligations
     of Customer to Company  have been  satisfied  in full,  any and all amounts
     that may  otherwise  be due and payable to Customer  or any  affiliates  of
     Customer  under this Agreement or any other contract with Company and apply
     Such  amounts to any balance due or to become due from Customer to Company;
          (iv)    Company  may  suspend  its  performance  of  this  Agreement
     immediately upon  notice to Customer if Customer is in breach or default of
     this or any other agreement between the parties;
          (v)     All  rights  and  remedies  allowed  by the applicable Uniform
     Commercial Code except as limited by Section 12 above;
          (vi)    All  other  tights  and remedies allowed by this Agreement and
     under applicable law except as limited by Section 12 above; and
          (vii)   All  tights  and  remedies  will  be  cumulative  and  can  be
     exercised separately or concurrently.

SECTION  15.  ASSIGNMENT.
- ------------------------
     (a)     Neither  party  will  assign  any  right  or  obligation under this
Agreement  without  the  other party's written consent. Any attempted assignment
will  be  void.
     (b)     Assignment  to  Affiliates:
             ---------------------------
Notwithstanding  Section  l5.(a), Company may assign this Agreement, in whole or
in  part,  to:

          i)     A parent corporation;
          ii)    Any company into which Company may merge or consolidate or that
          acquires substantially all of its assets or stock; or
          iii)   A wholly owned affiliate or the parent corporation that is of a
          financial standing  equal to or greater  than that of the  assignor.
Any  assignment  under this  subsection  (b) shall not  require  the  consent of
Customer, but Company shall provide written notice to the Customer within thirty
(30) days of such assignment.
     (c)     Generally:  All  tights,  obligations,  duties and interests of any
             ---------
party under  this  Agreement  will inure to the benefit of and be binding on all
successors  in  interest  and  assigns  of  such  party  and  will  survive  any
acquisition, merger, reorganization or other business combination to which it is
a  party.

SECTION  16.  NOTICES  AND  DEMANDS.
- ------------------------------------
Except  as  otherwise  provided  in  this  Agreement,  all  notices, demands and
requests  given by any party to the other party will be in writing and be deemed
to  have  been  duly given on the date: (i) delivered in person, and for which a
receipt for such delivery will be obtained; (ii) of the return receipt for those
sent  postage  prepaid  in  the  United  States  mail via Certified Mail, Return
Receipt  Requested,  or  three  (3)  Business Days after being mailed by regular
mail;  (iii)  received  from a national overnight delivery service; (iv) sent by
facsimile  transmission to the recipient's facsimile. machine, provided that the
receiving machine delivers confirmation to the sender and receipt is verified by
telephone,  with an extra copy immediately following by first-class mail; or (v)
notice  is  posted  and  made  available to Customer through electronic media as
described  in  Section  3.(g)  or  to Customer's designated e-mail address. Such
notice. shall constitute written notice. Customer assumes the duty to check such
media  on  a  regular  basis.  The  following  addresses  shall  be used for the
respective  forms  of  notice  and  maybe  changed  by  giving  notice.

If  to  Company:

Enhanced  Services  Billing,  Inc.
Attention:  President
7411  John  Smith  Drive,  Suite  200
San  Antonio,  Texas  78229-4898
Telephone:  (210)  949-7000
Fax:  (210)  949-7100

With  a  copy  to:  General  Counsel,  by  certified  mail to the above address.

If  to  Customer:

Telco  Billing,  Inc.

Attention:  William  O'Neal,  President
4840  E.  Jasmine  St.  #105
Mesa,  AZ  85205

Telephone:  (480) 654-9646  ext.  234
Fax:  (602) 860-0800

E-mail  Address:  bill.oneal@yp.net


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        10
<PAGE>
SECTION 17.  NO THIRD-PARTY  BENEFICIARIES.
- -------------------------------------------
This  Agreement  will  not  provide  any  person  or  entity not a party to this
Agreement  with  any remedy, claim, liability, reimbursement, cause of action or
other  tight.

SECTION  18.  EMPLOYEES.
- ------------------------
Customer  acknowledges  that  Company's  success  in  its  industry  is  largely
dependent  on  the  performance  of  its  personnel  and  that  Company  expends
substantial  resources in connection with employment and training.  Accordingly,
Customer  will  not  hire  or  retain,  either as an employee or contractor, any
person  who  was  a Restricted Employee of Company at any time during the twelve
(12) month period preceding such hiring or retention without the advance written
consent of Company.  "Restricted Employee" of Company is any. Employee  or third
party  contractor  of  Company  that has signed a non-competition or restrictive
covenant,  except  a  member  of  the  clerical staff.  This undertaking by both
parties  will  be deemed an essential element of this Agreement and will survive
its  termination.

SECTION  19.  RELATIONSHIP  OF  THE  PARTIES.
- ---------------------------------------------
In  furnishing  services  to  Customer, Company is acting only as an independent
contractor.  Except  as  expressly set forth in this Agreement, Company does not
undertake  by this Agreement or otherwise to perform any obligation of Customer,
whether  regulatory  or  contractual,  or  to  assume  any  responsibility  for
Customer's business or operations. This Agreement will not be deemed to create a
partnership,  joint  venture,  agency  or  fiduciary  relationship  between  the
parties.

SECTION  20.  GOVERNING  LAW  AND  VENUE.
- -----------------------------------------
This Agreement will be governed and construed in accordance with the laws of the
State  of  Texas, without regard to the choice of law rules of Texas. Except for
the  arbitration  proceedings  provided  for  herein, exclusive jurisdiction and
venue  over  any  and  all matters of dispute arising under or by virtue of this
Agreement  or  between  the  parties  will  rest  in the state or federal courts
located  in  Bexar  County,  Texas.

SECTION  21.  ENTIRE  AGREEMENT.
- --------------------------------
This  Agreement,  including  all  exhibits  and  attachments,  each  of which is
incorporated  herein,  constitutes the en(ire agreement between the parties with
respect  to  the  subject  matter  hereof  and  supersedes  all  prior  and
contemporaneous  representations,  understandings or agreements, whether oral or
written,  relating  to  the  subject  matter  hereof.

SECTION  22  AMENDMENTS:  WAIVERS.
- ----------------------------------
This Agreement (or any part thereof, including its incorporated exhibits) may be
modified or additional provisions may be added by written agreement signed by or
on  behalf  of  the  parties  by  an authorized representative, unless otherwise
provided  herein.  No modification, amendment or waiver of any provision of this
Agreement,  including  its  incorporated exhibits, and no consent to any default
under  this  Agreement, will be effective unless the same will be in writing and
signed  by  or on behalf of the party against whom such modification, amendment,
waiver  or  consent  is  claimed.

SECTION  23.  SEVERABILITY.
- ---------------------------
The  illegality  or  unenforceability  for any reason of any  provision  of this
Agreement,  or any  document or  instrument  required or referred to  hereunder,
shall not in any way  affect or impair the  legality  or  enforceability  of the
remaining provisions of this Agreement or any document or instrument required or
referred to hereunder.

SECTION  24.  EXECUTION  IN  COUNTERPARTS.
- ------------------------------------------
This Agreement may be executed in any number of counterparts, each of which will
be  deemed  an  original, but such counterparts will together constitute but one
and  the same document. Facsimile copies of this Agreement are given the dignity
of  original  documents.

SECTION  25.  HEADINGS.
- -----------------------
The  headings  in  this  Agreement  are  for  convenience  only  and will not be
construed  to  define  or limit any of the terms herein or affect the meaning or
interpretation  of  this  Agreement.

SECTION  26.  DISPUTE  RESOLUTION.
- ----------------------------------
This  Section  26  governs  all disputes, disagreements, claims or controversies
between  Customer  and Company, including, but not limited to, those arising out
of or related to this Agreement, tort claims and claims of violation of statutes
("Disputed  Matters").  All  Disputed Matters will be submitted to the following
dispute  resolution  process:

     (a)     Internal  Escalation.  First,  the Disputed Matter will be referred
             ---------------------
jointly to senior  executives of each of the parties.  If such executives do not
agree upon a resolution  within  forty-five (45) Business Days after referral of
the matter to them, the complaining party will proceed to mediation as set forth
below.

     (b)     Mediation.  The complaining  party will, upon  written  notice  and
             ---------
within  forty-five  (45)  Business  Days  after  the  conclusion of the internal
escalation  procedure, elect to have the Disputed Matter referred to non-binding
mediation  before  a  single impartial mediator to be jointly agreed upon by the
panics.  The  mediation  hearing  will be attended by executives of both parties
possessing  authority  to  resolve  the Disputed Matter and will be conducted no
more  than  sixty (60) Business Days after a party serves a written notice of an
intention to mediate.  Customer and Company will share equally all costs of such
mediation.  If  the  Disputed  Matter  cannot  be  resolved  at  mediation,  the
complaining  party  will  proceed  to  Arbitration.


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        11
<PAGE>
     (c)     Arbitration.  In  the  event  that the Disputed Matter has not been
             -----------
resolved  through  mediation,  the  complaining  party will submit the  Disputed
Matter to binding arbitration before the American  Arbitration  Association (the
"AAA") pursuant to its Commercial Arbitration Rules. The arbitrator(s) will have
the  authority  to render any award or remedy  allowed by law.  If the amount in
controversy  exceeds  $150,000.00,  exclusive of  attorneys'  fees and expenses,
interest and costs,  the Disputed Matter will be decided by a panel of three (3)
neutral arbitrators; otherwise, all disputes will be decided by a single neutral
arbitrator.  Each arbitrator will be selected from the AAA's Panel of Commercial
Arbitrators,  and the  arbitration  hearing  will be  conducted  in San Antonio,
Texas.  The cost of the  arbitration  proceeding  will be shared  equally by the
parties, but the prevailing party in any arbitration proceeding will be entitled
to recover its  reasonable  and necessary  attorneys'  fees,  costs and expenses
(including in-house legal services) incurred in connection with the arbitration.
Provided  that  Customer  continues to timely pa Company for  services  rendered
under this  Agreement  and there has been no default by  Customer,  Company  may
continue  to  provide  services  during  the  presidency of any Disputed Matter.

SECTION  27.  ATTORNEYS'  FEES.
- -------------------------------
In the event  Company  retains the services of an attorney  (including  in-house
legal services) to enforce this Agreement or any other obligation of Customer to
Company,  or to  collect  or  attempt  to  collect  any  Record or any  accounts
receivable  purchased by Company from  Customer,  Customer  shall pay to Company
attorneys' fee (including  in-house legal services),  accountants'  fees, expert
witness  fees and other costs and  expenses  incurred by Company  even though no
suit,  action or  proceeding is filed.  If such a suit,  action or proceeding is
filed,  Customer also shall pay to Company  attorneys' fees,  accountants' fees,
expert  witness  fees and other  costs  and  expenses  incurred  by  Company  in
enforcing,  in any way,  any and all of  Company's  rights, in the trial courts,
appellate courts and bankruptcy courts,  including, but not limited to, the cost
of  successfully  defending any claims or causes of action  asserted by Customer
against Company.  Customer further agrees to pay to Company all of the foregoing
fees,  expenses  and  attorneys'  fees  incurred  by Company  in any  bankruptcy
proceeding  and  in  appellate  court  relating  thereto,   including,   without
limitation,  such attorneys'  fees and expenses  incurred m regard to lifting or
modifying the automatic stay,  determining  adequate  protection,  using of cash
collateral,  appointing  a  trustee,  converting  or  dismissing  the case,  and
relating to any disclosure statement and plan of reorganization.

SECTION  28.  INTELLECTUAL  PROPERTY.
- -------------------------------------
Except  as  otherwise  expressly  provided  herein,  nothing  contained  in this
Agreement shall be construed as conferring by implication, estoppel or otherwise
any license or right under any patent, trademark, trade name, copyright or other
intellectual  property  right  of  either  party.

SECTION  29.  YEAR  2000  COMPLIANCE.
- -------------------------------------
Company  filed  a  Year  2000  Certification  Request  with  ITAA  (Information
Technology  Association  of  America)  in  January  1999.  Company  received
Certification  from  ITAA  in  March  1999.  Company  warrants  that its service
obligations  for  billing  and  other  aspects of its business relationship with
Customer  will  not  be  adversely  affected  by  Year 2000 defects in Company's
internal  systems  or  processes. However, should such disruption occur, Company
agrees  to  use  its  best  efforts  to  promptly  correct  any such disruption.
Notwithstanding  the  above,  Company  will  not  be  liable for any indirect or
consequential  damages,  including  any lost profits, loss of business income or
revenues  resulting from any Year 2000 defects in the Company's internal systems
or  processes.

The above Year 2000 disclosure constitutes a "Year 2000 Readiness Disclosure" as
defined in the Year 2000  Information and Readiness  Disclosure Act (the "Act"),
which was signed into law on October 19, 1998. The Act provides added protection
from liability for certain public and private statements  concerning a company's
Year 2000 readiness.


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        12
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.

Enhanced  Services  Billing,  Inc.:



By:  /s/  Jacquelene K. Mitchell
   -----------------------------------
         Jacquelene K. Mitchell
         President and Chief Operating Officer

CUSTOMER:

Telco  Billing,  Inc.

By:  /s/  William O'Neal
   -----------------------------------

Name:  William O'Neal
       -------------------------------

Title:  President
       -------------------------------

Date:  11/11/99
       -------------------------------



                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        13
<PAGE>
                                   EXHIBIT "A"
                                   DEFINITIONS
- --------------------------------------------------------------------------------

The  following  definitions are intended to supplement and define specific terms
used  in  the  Agreement.

39 Record: A record populated by Customer identifying the bill name, address and
- ----------
any additional information on the End User who authorized Customer's products or
services.

ARRS:  Company's  Accounts  Receivable  Reconciliation System presently known as
- -----
FASTRACK  and  Paradigm  or  BC  WebTrack  or  any  successor,  as well as other
information  posted  or  delivered  through  other  electronic  media.

Assessments:  LEC  or  Company  fees,  charges,  chargebacks, credits, reserves,
- -----------
offsets, adjustments and allocations, including, but not limited to such charges
and  chargebacks for Short-term Dilution, Bad Debt, LEC Processing Fees, Company
Processing Fees, Post-billing Adjustments or Credits, Bad Debt Reserve, true-ups
and  Customer  Service  Fees.  Assessments  includes,  without  limitation,  the
charges  covered  in  Sections  6  and  7.

Bad  Debt: A billed EMI Record that will not be collected from the party to whom
- ---------
it  was  billed.

BOC:     Bell  Operating  Company.
- ---

Business  Day:  A day other than Saturday and Sunday or a legal holiday on which
- -------------
commercial  banks  are  open  in  the  State  of  Texas.

Coalition  Guidelines:  The  Anti-Cramming  Consumer  Protection  Standards  of
- ---------------------
Practice  of the Coalition to Ensure Responsible Billing ("CERB"), the. terms of
which  have either been disclosed or made available to Customer, the current and
any  future  terms  of  which  are  incorporated  herein.

Claim: Any claim, dispute, demand, investigation, suit, loss, liability, damage,
- -----
attorneys'  fees and expenses,  cot,  correction or expense,  whether  ordinary,
special,  consequential or otherwise,  that may be asserted against an' party to
this Agreement.  Claim includes all direct damages, including without limitation
contract damages an damages for injuries to persons or property, whether arising
from a  breach  of  this  Agreement,  breach  of  warranty,  negligence,  strict
liability  or any other tort wish  respect to the  services  provided by Company
hereunder.

Customer  Service:  Basic  End  User  inquiry,  investigation  and  credit  or
- -----------------
adjustment  services.

EMI  Billing  Record:  Computer  readable record containing the billing data for
- --------------------
Records,  in  the  industry standard EMI (exchange message interface) format set
forth  in  Exhibit  "E,"  for  which  each  LEC has the capability of processing
through  its  billing  and  collection systems. A Customer Service credit record
submitted  to  a  LEC  by  Company  shall  be  included  within this definition.

End  User:  A  natural  person,  partnership, corporation, business trust, joint
- ---------
stock  company,  trust,  unincorporated association, joint venture, governmental
agency  or instrumentality, or other entity that purchases, acquires, subscribes
to  or  uses  communications  products  or  services.

FCC:  The  Federal  Communications  Commission.
- ---

FTC:  The  Federal  Trade  Commission.
- ---

Foreign  Intrastate  Taxes:  Those  applicable  taxes  for Operator Services and
- --------------------------
Travel  Card  calls  originating and terminating in the same state but billed in
another  state.

Independent  Telephone  Companies:  Those  LECs  that  are  not  BOCs.
- ---------------------------------

Interexchange  Carrier  (IXC):  A  telephone company, other than a LEC, that can
- -----------------------------
provide  intraLATA  (where  applicable), interLATA, interstate and international
telecommunications  service.

LEC  Agreement:  Company's  agreement  with  an  individual  LEC  as well as any
- --------------
additional  terms,  conditions and operating guidelines and procedures agreed to
by  the parties or imposed by the LEC, the current and future terms of which are
incorporated  herein.

Library Code: An accounting identification code assigned exclusively to Customer
- ------------
by  Company  that  Customer  encodes within each Record submitted to Company and
that  is  used  to  account  for  Customer's  funds  and  Assessments.

LOA:  Letter  of Authorization or other valid form of authorization from the End
- ---
User  meeting  the  requirements  of  applicable  rules,  regulations  and  laws


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        14
<PAGE>
                                   EXHIBIT  "A"
                                    DEFINITIONS
- --------------------------------------------------------------------------------


and  the  specifications  set  forth  in Exhibit "G" for non-1OXXX direct-dialed
products  and  services.

LEC  or  Local  Exchange  Carrier:  Any  incumbent (ILEC), competitive (CLEC) or
- ---------------------------------
alternate  local exchange carrier providing local access telephone services with
whom Company has entered into a billing and collection agreement. A current list
of  LECs is attached as Exhibit "Bi" Customer acknowledges that the list of LECs
may  charge from time to time without notice. A LEC also ma' be referred to as a
Billing  Telephone  Company

Post-billing  Adjustment  or Credit: Credit or rate adjustment applied to an End
- -----------------------------------
User's  account  by  the  LEC  or by  Company.

Qualifying EMI Billing  Record:     Enhanced  Telecommunications  Services  that
- -------------------------------
are  not  of  objectionable  content  as set forth in the Customer's Obligations
section  of  this  Agreement and that pass Company's edits and data transmission
corrections. The parties agree to amend or supplement these service descriptions
from  time to time to conform to changes in business circumstances or regulatory
requirements.  Company's  agreement to bill new or additional ETS will be at its
election.

          1.     "900 Services" is any information service offered  by  Customer
                 -------------
     to an End  User using the 900-service access code (SAC) or dialing pattern.
          2.     "Audiotex Gateway" is a communications  system in which an  End
                 -----------------
     User  can  selectively  access  remote information services.  End Users can
     interact  with  the  system  to  select  desired  services  and  specific
     information  sources.  Ordinary push-button telephone instruments  are  the
     devices  typically  used to interface  with the Public  Switched  Telephone
     Network  (PSTN) and Information Providers' services.
          3.     "Electronic   Messaging/Email"  is  the  process of sending and
                 -----------------------------
     receiving "objects" electronically.  An object consists of a data structure
     and well-defined  procedures that can operate on the data. Types of objects
     that can be exchanged  include text messages,  business  documents,  files,
     computer  application  software  and  still-frame  pictures  or  images.
          4.     "Facsimile (FAX) Service" is a  system  used  for  transmitting
                 ------------------------
     images (e.g., printed copy, pictures, maps, diagrams, etc.). The images are
     scanned at the transmitter (i.e., originating) end and reconstructed at the
     receiving station. Such system usually employs the PSTN to transmit between
     the originating and terminating locations.
          5.     "Information  Service"  is any service whereby  audio,  .video,
                 ---------------------
     computer  readable or hard copy  information is requested or provided using
     the PSTN.
          6.     "Internet Service"  is  any  service which provides End Users a
                 -----------------
     means to access and utilize the networks commonly known as the  "Internet,"
     including,  but not limited to, all related services and enhancements  such
     as  electronic  mail,  UseNet  news,  and  FTP  file transfer capabilities.
          7.     "Paging" also referred to as "radio paging,"  "pocket  paging,"
              ------
     or "beeper service" is a one-way  radio  transmission  service  in  which a
     portable radio receiver capable of recognizing a radio signal  specifically
     addressed  to it is used to locate or alert a  subscriber  by a variety  of
     methods including:  audible tones,  vibration,  visual display,  or audible
     voice message.

          8.     "Pay-Per-Call  Service"  is  a  service  whereby an End User is
                 ----------------------
     charged  a "per-call" or "per-time" interval fee that is greater than or in
     addition to the normal transmission cost of the PSTN call for the  delivery
     of an  ETS.
          9.     "Special  Purpose  MTS" shall mean when the primary purpose for
                 ----------------------
     placing  the toll  call  using the PSTN at the  tariffed  rate is to obtain
     advertised  or marketed information and not the transmission or call itself
          10.     "Telegram" is a telegraphic dispatch transmitted or received
                  ---------
     using an apparatus,  system,  or process for communication at a distance by
     coded signals and shall not include any goods or services  associated  with
     or delivered, with such telegrams.
          11.     "Video Conferencing"  is the process of connecting two or more
                   ------------------
     stations  simultaneously in such a manner that each station user is capable
     of viewing  users at the other  remote  stations in addition to carrying on
     audio or voice communications.


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        15
<PAGE>
                                   EXHIBIT "A"
                                   DEFINITIONS
- --------------------------------------------------------------------------------

          12.     "Voice  Messaging  / Voice  Mail" is the process of recording,
                  --------------------------------
     translating and delivering  voice messages  carried over the PSTN to an End
     User and it  provides  the  ability  for an End User to access an  optional
     Voice  message recording facility and leave a message for another End User.

          13.     "Voice Store and Forward"  is  the  process  of  recording and
                   -----------------------
     storing  a  message  carried  over  the PSTN  that will be  delivered  to a
     specific  terminal point on a predetermined schedule.

RBOCs:  Regional  Bell  Operating  Companies.
- -----

Short-term  Dilution:  Those  EMI  Billing Records that pass Company's edits and
- --------------------
screens  and  are  submitted  to  the  LECs  for  billing  and  collection  but
subsequently  cannot be posted to an End User's account by the LECs or re posted
to  the  End  User's  account  and  then  adjusted  by  the  LECs.

Tariffs:  The  rates,  terms  and  conditions for providing intraLATA, interLATA
- -------
(intrastate), interstate and international communications services as authorized
and  filed with the appropriate regulators, including the FCC or state and local
regulatory  authorities.


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        16
<PAGE>
                                   EXHIBIT "B"
                        ESBI BILLING TELEPHONE COMPANIES
- --------------------------------------------------------------------------------

The following companies are current Billing Telephone Companies for Company:

Alltel
Ameritech
Bell  Atlantic  North
Bell  Atlantic  South
Bell  South
Century  Telephone
Chillicothe  Telephone
Cincinnati  Bell  Telephone
Citizens  Communications
Cox  Communications
GTE  Central
GTE  North
GTE  South
GTE  West
Illuminet
NECA
Nevada  Bell
Nm
Pacific  Bell
Southern  New  England  Telephone
Southwestern  Bell  Telephone  Company
Sprint  Mid-Atlantic
Sprint  North  Central
Sprint  Southern
Sprint  Western
US  WEST  Communications,  Inc.


The NPA-NXX list (ONNET File) of BTCs will be furnished to Customer periodically
via ARES.  Customer  acknowledges  that Company has made a reasonable  effort to
list the  current  BTCs and that the list may change  from time to time  without
notice to Customer.


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        17
<PAGE>
                                   EXHIBIT "C"
                                  ESBI PRICING
 -------------------------------------------------------------------------------

(1)  Company  Processing  Fees  (rate  per  Record):
<TABLE>
<CAPTION>
      *Record Dollar        Monthly Record Volumes   Per EMI Billing
         Average                                     Record Per Month
- --------------------------  -----------------------  ---------------------
<S>                         <C>                      <C>
 $0-$10.00                        0 -      5,000  LEC Charges + $.l80
                               NEXT -     50,000  LEC Charges + $.160
                               NEXT -    100,000  LEC Charges + $.l40
                               NEXT -    300,000  LEC Charges + $.120
                               NEXT -    500,000  LEC Charges + $.llO
                               NEXT -  1,000,000  LEC Charges + $.100
                               NEXT -  2,000,000  LEC Charges + $.090
                               NEXT -  4,000,000  LEC Charges + $.080

$10.01  -  $17.50                         LEC  Charges  +  2.0%  of  Billed  Revenue
$17.51  -  $25.00                         LEC  Charges  +  2.5%  of  Billed  Revenue
$25.01  -  $37.50                         LEC  Charges  +  3.0%  of  Billed  Revenue
$37.51  -  $50.00                         LEC  Charges  +  3.5%  of  Billed  Revenue
Over  -    $50.00                         LEC  Charges  +  4.0%  of  Billed  Revenue

<FN>
      *Pricing will be calculated by the average dollar amount per record based on all
      call  records  submitted  during  a  calendar  month.
</TABLE>

      Customer  will  receive  a  twenty percent (20%) discount on  the  monthly
      Company Processing  Fee  If  Customer  elects  to  sign  a  three (3) year
      agreement.

      Company  Processing  Fees  are  charged in addition to LEC Processing Fees
      and Assessments  and  LEC  related payments,  fees  and  Assessments.

(2)  Customer  Service:
     Company  will  perform  Customer  Service  in  those  areas  where  the LEC
     Agreements provide for such service in accordance with Company's procedures
     and  guidelines,  which are  subject  to change  from time to time  without
     notice.  Customer  will be charged and agrees to pay a monthly cost of five
     cents ($.05) per  Qualified  Record.  submitted to the LECs for billing and
     collection  during each month ("Basic  Customer Service Fee"). In the event
     of a call transfer for issues other than billing  issues,  Customer will be
     charged  $0.18 per minute.  If the transfer is via  Customer's  800 number,
     Company will charge $0.09 per minute plus the cost of business lines needed
     to transfer calls to Customer.

(3)  Excessive  Customer  Service:
     In addition to the Basic Customer  Service Fee,  Customer  agrees to pay an
     additional  fee of Four  Dollars  ($4.00) for each  Customer  Service  that
     exceeds one percent  (1%) of the number of Records  processed by Company on
     behalf  of  Customer  for  each  Library  Code  in  each  calendar  month.

(4)  ARRS:
     Customer will pay an initial  set-up fee for Company's  ARRS. The charge is
     One Thousand Five Hundred  Dollars  ($1,500) for the first Library Code and
     Five Hundred Dollars ($500) for each additional  Library Code. These set-up
     fees will not be charged during Renewal Term is unless  additional  Library
     Codes  are  added.  There  is  currently  no  charge  for  weekly  accounts
     receivable status updates when downloaded from ARRS.

(5)  Minimum  Company  Processing  Fee  per  Transmission:
     Because of fixed expenses  associated with processing small  transmissions,
     Company will impose a Minimum Company  Processing Fee per  transmission per
     Library Code of $500. Company will require Customer to ship a


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        19
<PAGE>
                                  EXHIBIT "C"
                                  ESBI PRICING
- --------------------------------------------------------------------------------

     minimum of $1,000 in Company  Processing Fees each calendar month after the
     third (3rd)  calendar  month (the  ramp-up  period).  If Customer  fails to
     submit  sufficient EMI Billing Records to meet this  requirement,  Customer
     will be charged the $1,000 monthly minimum Company  Processing Fee for that
     month. If Customer elects the three (3) year agreement Company will require
     Customer  to ship a minimum  of $25,000  in  Company  Processing  Fees each
     calendar month after the third (3rd)  calendar month (the ramp-up  period).
     If Customer  fails to submit  sufficient  EMI Billing  Records to meet this
     requirement,  Customer will be charged the $25,000  monthly minimum Company
     Processing Fee for that month.

(6)  Additional  subCIC  Fee:
     Customer shall receive one subCIC at no charge.  Due to LEC set-up charges,
     however,  Customer  will  be  charged  $1500  for  each  additional  subCIC
     requested by Customer.

(7)  LEC  Specific  Billing  Text  Phrases:
     For each text phrase used by Customer to identify its products and services
     to be billed by the LECs,  the  Customer  shall pay Company a set up fee of
     $2,000.00.  This  set-up  fee  will  not be  charged  for the  first  three
     requested  text  phrases or text phrases that  represent  fees  required by
     laws, rules or regulations (i.e. Universal Service Fund).

(8)  Customer  Service  and  Special  Programming  Task  Fees:
     Customer  will pay a time and  expense  rate for any  Customer  Service not
     provided  herein and for any  special  programming  tasks or  requests  for
     additional information. The current hourly rate is $125.


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        19
<PAGE>
                                    EXHIBIT 9
                          ESBI CALL COMPLETION CRITERIA
- --------------------------------------------------------------------------------


A call is  completed  when some  type of direct  communication  or  hardware  or
software answer  detection has been established  between the originating  person
and the terminating location. Verification must be made that the receiving party
or third party agrees to accept the charges for collect and third number  billed
calls. If automated  technologies  are used, the receiving party must positively
acknowledge the acceptance of the call. In the case of  person-to-person  calls,
the  operator  must  verify  that the  receiving  party is the  person  whom the
originating party requested.  For other direct dialed, automated calling card or
operator  assisted  calls,  the  call  will be  considered  completed  when  the
connection is verified by means of hardware or software detection as required by
federal, state and local regulatory authorities.

In  those  cases  where Customer cannot determine the exact time the terminating
person  has  gone  "off  hook"  (beginning of communication with the originating
party),  and  federal,  state  or  local  regulatory  authorities do not require
hardware or software answer detection, a call will be considered to be connected
if  the  originating  and  receiving  parties  hold the connection for more than
thirty-six  (36)  seconds.

Customer  agrees  that  the  following  maximum  per-call  charges  apply:

Domestic  0+  and  1+          $124.99
International  0+  and  1+     $249.99

Call  for four hundred eighty (480) minutes (8 hours) or more are not considered
valid,  completed  calls  and  will  not  be  billed regardless of the amount of
charges.

Call to operators,  customer announcements,  busy signals or ringing will not be
considered completed calls and will not be billed.


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        20
<PAGE>
                                   EXHIBIT "E"
                  ESBI EXCHANGE MESSAGE INTERFACE (EMI) RECORDS
- --------------------------------------------------------------------------------

Subject  to  the  terms  of  this  Agreement,  Company  currently  processes the
following  EMI  billing  record formats for LECs that are capable of billing and
collecting  for  services  using  the  following  EMI  billing  record  formats:

RECORD  ID
010101     Domestic  Message  Telephone  Service
           (MTS)  Charge
010116     Domestic  Information  Provider  Service
           Charge
010118     Domestic  Specialized  Service/Service
           Provider  Charge
010132     Domestic  Directory  Assistance  Charge
010133     Domestic  Mobile  Channel  Usage
           Charge
010201     North  American Originated and Billable International Charge Overseas
010501     Originated  and  North  American  Terminated  Message
           Telephone  Charge
010701     Overseas  Originated  and  Terminated
           Message  Telephone  Service  Charge
391001     Customer  Name  and  Address
           Information
415001     Non-detailed  Miscellaneous  Credit
425001     Miscellaneous  Recurring and  Non-recurring  Service  Charge
425016     Miscellaneous  Charge  Information
           Provider  Service  Charge

Company  reserves  the  right  to discontinue any of these record formats at any
time  without  notice  to  Customer.


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        21
<PAGE>
                                   EXHIBIT "F"
                      ESBI PROCEDURES FOR CUSTOMER SERVICE
- --------------------------------------------------------------------------------

In  addition  to  applicable  rules,  regulations,  laws  and Company's Customer
Service  procedures  and  operating policies, the parties agree to the following
Customer  Service  procedures:

I.  For  those  LECs  that  permit Company to handle Customer Service, Company's
toll-free  number will appear on the End User's LEC telephone bill as a Customer
Service  inquiry  number.

II.  At  the  time  of  the  initial  call  from an End User, Company's Customer
Service representative will access the End User's account.  Once the account has
been  accessed,  the calls or charges in dispute will be determined.  If the End
User  is  disputing  any  of  the  following,  including  but  not  limited  to:
     (A)     Denying  All  Knowledge  (DAK)  of  calls  or service;
     (B)     Rates;  or
     (C)     Charges  for  unanswered  calls;
the  an  automated  internal  credit  form  will  be prepared that customarily
contains  the  following  information:
     (D)     Bill  name  and  number;
     (E)     Reason  and  dollar  amount  in  dispute;  and
     (F)     Copy  of  the  Records  being  disputed.

III. Company will establish standard guidelines and Customer specific guidelines
for  handling  certain classes of inquiries to supplement its standard operating
procedures  ("Guidelines").  Disputes generally will be handled according to the
Guidelines.  The  Company  reserves the right to use its judgment to resolve all
Customer  Services.  All  such  determinations  will  be  final  and  binding on
Customer.  Customer  will  provide  Company with suggested written guidelines or
modifications in a timely fashion. Company reserves the right to approve, modify
or  disapprove  of  all  such  guidelines.

All  inquiries  over  fifty  dollars  ($50.00)  will  be  forwarded to Company's
Investigations  Department. Upon receipt of the internal credit form and the End
User's  records  in  dispute,  the  following  procedures  will  be  followed:
      (A)  Notify  Customer  (via  automated  fax) that an End User is disputing
calls  or  charges  over $50.00, and that Company will determine the validity of
such  claim.  That  following  information  usually  will  be  given:
         (1)  End  User's  full  name;
         (2)  Telephone  number;
         (3)  Call  detail;  and
         (4)  Amount  in  dispute.
     (B)     Confer  with the LEC as needed to obtain pertinent information such
as  whether  Customer  was assigned the telephone number at the time of billing,
etc.
     (C)  As  deemed  necessary  by  Company,  confer  with  Customer  to obtain
pertinent  information  such  as  date  service  was  canceled,  etc.
     (D)     Maintain details of conversations when investigating the calls such
as  person's  name,  complete  telephone  number,  etc.
     (E)     Notify  the  End  User  and  Customer concerning disposition of the
dispute.

IV. The following procedures will be utilized for credit issued through BOCs and
LECs:
     (A)     An  electronic  EMI  credit  record will be submitted with the next
billing  submission.
     (B)     For  those  situations  where  an  electronic  credit  cannot  be
submitted,  an  IC/EC  memorandum may be mailed to the End User's LEC for credit
toward  End  User's  account  if  the credit amount is over seventy-five dollars
($75.00).  For  amounts less than $75.00, a check may be issued and made payable
to  the  local  telephone  company,  but  forwarded  to  the  End  User.

The  above procedures for refund checks, electronic EMI credit records and IC/EC
memorandums  may  take up to a total of five (5) Business Days. Customer may not
double  bill  or initiate secondary collection efforts for any Records that have
been  billed  by  the  LECs.

V. A record of all disputes and resolutions will be provided by Customer Service
reports  that  are  made  available  on a weekly basis to Customer through ARRS.

VI.  Company  will  handle  all  formal  and  informal  regulatory inquiries and
complaints.  If the regulatory agency serves both Company and Customer, Customer
is  responsible  for  its  response  to  the agency. If Customer is permitted to
handle  its own regulatory complaints, Company reserves the right to assume this
function  from Customer if deemed necessary to ensure proper handling and timely
responses  to  the  agency.  Whether  Customer  or  Company normally handles the
complaint  procedure, Company reserves the right to respond to an inquiry and to
make  any  decisions  regarding  credit  in response to an inquiry or complaint.

VII.  Company  policy regarding refunds relating to miscellaneous charges or the
unauthorized  switch  of  service  is  as  follows:


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        22
<PAGE>
                                   EXHIBIT "F"
                      ESBI PROCEDURES FOR CUSTOMER SERVICE
- --------------------------------------------------------------------------------
     (A)  If  an  End User disputes a fee billed as a 42 Record (i.e., a monthly
recurring  charge,  voice  mail service, etc.), Company will, to the best of its
knowledge,  explain  the  service  and  how  the  End User m4' have obtained the
service.  If  the  End User continues to dispute the service or states that they
are  refusing  to  pay,  Company  will  refund  the  42  Record  fee.
     (B)  In  the  case  of a dispute of an unauthorized switch of long distance
service,  not  only  will  the  charge  for he 42 Record be refunded, but a rate
adjustment  or  full  credit  to  satisfy  the  End  User also will be provided.
Nothing  in  this  Agreement  will  be  deemed to limit remedies available under
rules,  regulations  and  laws.
     (C)  If  the  End  User  requests  that  a  service be cancelled, or if LOA
information is requested after  are refund has been provided by Company, the End
User  will  be referred to Customer and Company will code the account as "Canx,"
"SLAM,"  "CAN,"  "Lcanx"  or  another cancellation code on the Customer Service
report.  Customer  agrees  to  cancel  services  for  End  Users  that  request
cancellation.
     (D)  If  the  End  User  disputes  a  subsequent  charge  after  requesting
cancellation  of  service  from the Customer, credit will be provided to satisfy
the End User.


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        23
<PAGE>
                                   EXHIBIT "G"
          ESBI ANTI-CRAMMING CONSUMER PROTECTION STANDARDS OF PRACTICE
- --------------------------------------------------------------------------------

Customer agrees  to  comply  with  each  of  the following standards designed to
protect  consumers  from  cramming and' other unfair billing practices. Customer
also  agrees  to  notify  Company  of  any  changes in the following information
before  such change occurs and to provide assurance to Company that such changes
are  consistent  these  standards.

I.     PRESCREENING  OF  CUSTOMER.
       ---------------------------

On or before the Effective Date, Customer will provide the following information
in  writing  in  a  document entitled prescreening  Information  to  Company:
     (a)     Customer's  corporate.  name  and  address;
     (b)     The names and titles of all officers and or principals of Customer;
     (c)     The names of other companies or entities owned or controlled by the
officers  or  principals  identified  in  subsection  (b)  above;
     (d)     A  copy  of  a  corporate  Certificate of Good Standing or proof of
partnership  status;
     (e)     A  copy  of  the  certifications  demonstrating  that  Customer  is
qualified  to  do  business  in  each of the states in which  Customer  provides
communications  products  or  services  to End Users;
     (f)     A  statement of whether Customer, its affiliates or its officers or
directors  have  been  subject  to  prior  conviction for fraud, or have had any
billing  services terminated  for  any  reason; and, if so, providing a detailed
description  of  the  circumstances,  date  and  person(s) or entities involved;
     (g)     Copies  of  all  Tariffs  in  effect  with  any  state  or  federal
regulatory  agency;
     (h)  The  names  and addresses of any telemarketing companies to be used by
Customer;  and
     (i)     The  names  and addresses of any third-party verification companies
to  be  used  by  Customer.

Customer  agrees  that  it  will update this information within ten (10) days of
Company's  request  and  annually.

II.     SCREENING  OF  PROGRAMS.  PRODUCTS  SERVICES.
        ---------------------------------------------
On or  before  the  Effective  Date  and  during the Term, Customer will provide
Company  with  copies  of  the  following  information:
     (a)     Marketing  materials  used  by  Customer,
     (b)     Advertisements  (print  or  media)  used  by  Customer;
     (c)     Fulfillment  packages  sent  to  End  Users  (which  must  include
cancellation  information  if  not  included  elsewhere and a toll free Customer
Service  number);
     (d)     Scripts  for  both  sales  and  validation;  and
     (e)     Honest, clear and understandable text phrase for the telephone bill
to  End  Users.

II.     ACCESS  TO  COMPLIANCE  MONITORING  INFORMATION.
        -----------------------------------------------
During the Term of this Agreement, Customer will provide Company with reasonable
access  to  information  and  data  to  enable  Company  to:
     (a)     Monitor,  investigate  and  resolve  consumer  inquiries  regarding
Customer;
     (b)     Monitor,  investigate and resolve consumer complaints to government
agencies  concerning  Customer;
     (c)     Monitor,  investigate and resolve escalated complaints by End Users
to  the  LEC  concerning  Customer;
     (d)     Maintain up-to-date records regarding complaints and inquiries made
by  End  Users  concerning  Customer,
     (e)     Investigate  and  respond  to  complaints and inquiries made by End
Users  concerning  Customer;
     (f)     Conduct investigations with regard to complaints and inquiries made
by  End  Users  or  regulatory  bodies  concerning  Customer,
     (g)     Confirm  authorizations  provided  by End Users as required herein;
and
     (h)     Inform  End  Users  as to how they may cancel a product or service.

IV.     AUTHORIZATIONS  USED  BY  CUSTOMER.
        -----------------------------------
On  or  before  the Effective Date and during the Term, Customer will verify all
End  User  authorizations  to  receive  products or services offered by Customer
through  one  of  the  following methods and will provide such verification upon
Company's  request:
     (a)     Independent  third-party  verification;
     (b)     Written  letters  of  authorization  or  sales  orders;  or
     (c)     Voice  recordings  of  telephone  sales authorizations.

A  valid  authorization  must  comply  with  applicable federal and state rules,
regulations  and  laws  and  include  at  least  the  following:

     (a)     The  date  of  the  authorization;
     (b)     The  name,  address  and  telephone  number  of  the  End  User;


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        24
<PAGE>
                                   EXHIBIT "G"
                     ESBI ANTI-CRAMMING CONSUMER PROTECTION
                              STANDARDS OF PRACTICE
- --------------------------------------------------------------------------------

     (c)     Assurance  that  the End  User is qua fled to authorize billing for
the product  or  service  on  that  phone  bill;
     (d)     A  description  of  the  product  or  service  to  be  provided;
     (e)     A  description  of  the  applicable  charges  for  be  products  or
services;
     (f)     An explicit acknowledgment by the End User that the charges for the
product  or  service  will  appear  on  his/her  telephone  bill;  and
     (g)     The  acceptance  by  the  End  User  of  the  offer.

V.    BILLING  INFORMATION
      --------------------
On  the Effective Date and during the Term, Customer will provide Company or the
LECs  with  information  that  will enable the billing statements to End User to
include:
     (a)     A  clear  identification  of  Customer
     (b)     A  clear  description  of  the  products  or  services  billed;
     (c)     A  clear  identification  of  the  charges; and
     (d)     A  toll  free number that End  Users  may  use  to  make  inquiries
concerning the  bill.


                      COMPANY CONFIDENTIAL AND PROPRIETARY
                                        25
<PAGE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>8
<FILENAME>0008.txt
<TEXT>

           STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE -- GROSS
                   AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
                      McKellops Corporate Square Suite 105

1.  Basic  Provisions  ("Basic  Provisions").

     1.1 Parties:  This Lease (Lease"),  dated for reference purposes only, June
                                                                            ----
1, 1998, is made by and between Mr. Art Grandlich,  D.B.A.  McKellips  Corporate
- -------                         ------------------------------------------------
Square  (Lessee"),  and  Renaissance  International  Group, a Nevada corporation
- ------                   -------------------------------------------------------
("Lessee") (collectively the "Parties," or Individually a "Party").


     1.2(a)  Premises:  That  certain  portion of the  Building,  Including  all
Improvements  therein or to be provided by Lessor under the terms of this Lease,
commonly  known by the street  address of 4840 East Jasmine  Street,  Suite 105,
                                          -------------------------------------
located in the City of Mesa County of Maricopa,  State of Arizona, with zip code
                       ----           --------            -------
85205,  as on Exhibit A attached  hereto  (Premises").  The  "Building"  is that
- -----                 -
certain  building  containing the Premises and generally  described as (describe
briefly  the  nature  of  the  Building):  an  approximate  16,772  square  foot
- --------------------------------------------------------------------------------
office/warehouse  suite  located at  McKellops  Corporate  Square per  Exhibit A
- --------------------------------------------------------------------------------
attached.
- ---------

In  addition  to  Lessee's  rights to use and occupy the Premises as hereinafter
specified,  Lessee  shall  have  non-exclusive  rights  to  the Common Areas (as
defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any
rights to the roof, exterior walls or utility raceways of the Building or to any
other  buildings  in  the  Industrial  Center.  The  Premises, the Building, the
Common  Areas,  the  land  upon  which  they  are  located, along with all other
buildings  and  Improvements thereon, are herein collectively referred to as the
"Industrial  Center."  (Also  see  Paragraph  2.)

     1.2(b) Parking: 57 unreserved vehicle parking spaces  ("Unreserved  Parking
                     --
Spaces");  and 3 reserved  vehicle parking spaces  (Reserved  Parking  Spaces").
               -
(Also see Paragraph 2.6)

     1.3  Term  5  years  and 0 months ("Original Term") commencing July 1, 1998
                -             -                                     ------------
("Commencement  Date"  and  ending  June 30, 2003 (Expiration Date").  (Also see
                                    -------------
Paragraphs  3.2  and  3.3.)

      1.4  Early  Possession:  June  1998  ("Early Possession Date").  (Also see
                               ----------
Paragraphs  3.2  and  3.3.)

     1.5  Base  Rent:  $  See  Addendum  per  month (Base Rent"), payable on the
                          -------------
first  day  of  each  month  commencing  July  1, 1998.  (Also see Paragraph 4.)
- -----                                    -------------

[  ]   If this box is  checked,  this  Lease  provides  for the Base  Rent to be
       adjusted per Addendum _______, attached hereto.

     1.6(a) Base  Rent  Paid  Upon  Execution:  $14,324.93  as Base Rent for the
                                                ----------
            period July 1998 & June 2003
                   ---------------------

     1.6(b)  Lessee's Share of Common Area Operating Expenses:  19.62% percent (
                                                                ------
%)  (Kessee's  Square")  as  determined  but [ x ] prorate square footage of the
Premises  as compared to the total square footage of the Building or [   ] other
criteria  as  described  in  Addendum  ______.

     1.7  Security  Deposit:  $9,000.00  ("Security  Deposit").  (Also  see
                              ---------
Paragraph  5.)

      1.8  Permitted  Use:  General  office  use, warehouse use and research and
                            ----------------------------------------------------
development  for  a  financial  service  company.  ("Permitted  Use")  (Also see
- -------------------------------------------------
Paragraph  6.)

      1.9  Insuring Party.  Lessor is the "Insuring Party."  (Also see Paragraph
8.)  Annual  Premium  $12,517.00  (July  97,  July  98)

       1.10(a)  Real  Estate  Brokers.  The  following  real  estate  broker(s)
(collectively,  the  "Brokers")  and  brokerage  relationships  exist  in  this
transaction  and  are  consented  to  by  the  Parties (check applicable boxes):

[  x]  Lee  &  Associates  - Robertson represent Lessor exclusively ("Lessor's
       -------------------------------
Broker");    See  Addendum  for

[  x]  Grubb  &  Ellis  -  Hartland  represents  Lessee  exclusively  ("Lessee's
       -----------------------------
Broker");  or        commission  payment
schedule.

[   ] represents  both  Lessor  and Lessee  ((Dual  Agency").  (Also  see
Paragraph  15.)

2. Premises, Parking and Common Areas.

     2.1 Letting.  Lessor hereby leases to Lessee, and Lessee hereby teases from
Lessor,  the Premises,  for the term, at the rental,  and upon all of the terms,
covenants and  conditions  set forth in this Lease.  Unless  otherwise  provided
herein,  any  statement of square  footage set forth in this Lease,  or that may
have been used in calculating rental and/or Common Area Operating  Expenses,  is
an approximation  which Lessor and Lessee agree is reasonable and the rental and
Lessee's Share (as defined in Paragraph  1.6(b)) based thereon is not subject to
revision whether or not the actual square footage is more or less.

     2.2  Condition.  Lessor shall deliver the Premises to Lessee clean and free
of debris on the  Commencement  Date and  warrants to Lessee  that the  exalting
plumbing,  electrical systems, fire sprinkler system, lighting, air conditioning
and heating systems and loading doors, if any, in the Premises, other than those
con-structed by Lessee, shall be in good operating condition on the Commencement
Date. If a non-compliance with said warranty exists as of the Commencement Date,
Lessor shall, except as otherwise provided in this Lease, promptly alter receipt
of written  notice term Lessee  setting forth with specify the nature and extent
of such  non-compliance,  rectify same at Lessor's  expense.  If Lessee does not
give Lessor written notice of a non-compliance  with this warranty within thirty
(30) days after the Commencement Date,  correction of that non-compliance  shall
be the obligation of Lessee at Lessee's sole cost and expense.

     2.3 Compliance  with  Covenants,  Restrictions  and Building  Code.  Lessor
warrants that any  improvements  (other than those  constructed  by Lessee or at
Lessee's  direction)  on or in the  Premises  which  have  been  constructed  or
installed  by Lessor or with  Lessor's  consent or at Lessor's  direction  shall
comply with all applicable  covenants or  restrictions  of record and applicable
building codes,  regulations and ordinances in effect on the Commencement  Date.
Lessor  further  warrants to Lessee that  Lessor has no  knowledge  of any claim
having been made by any  governmental  agency that a violation or  violations of
applicable building codes,  regulations,  or ordinances exist with regard to the
Premises as of the  Commencement  Date. Said  warranties  shall not apply to any
Alterations or Utility Installations (defined in Paragraph 7.3(a)) made or to be
made by Lessee, If the Premises do not comply with aid warranties, Lessor shall,
except as otherwise  provided In this Lease,  promptly  after receipt of written
notice from Lessee given within six (6) months following the  Commencement  Date
and setting forth with the nature and extent of such  non-compliance,  take such
action, at Lessor's expense,  as may be reasonable or appropriate to rectify the
non-compli-ance.  Lessor makes no warranty  that the  Permitted Use in Paragraph
1.8 is permitted for the Premises under Applicable Laws (as defined in Paragraph
2.4).

     2.4  Acceptance of Premises.  Lessee hereby  acknowledges:  (a) that it has
been advised by the Broker(s) to satisfy itself with respect to the condition of
the Premises  (including  but not limited to the  electrical  and fire sprinkler
systems,  security,  environmental aspects, seismic and earthquake requirements,
and com-pliance with the Americans with Disabilities Act and applicable  zoning,
municipal,  county,  state and federal laws,  ordinances and regulations and any
covenants or restrictions of record  (collectively.  "Applicable  Laws") and the
present and future  suitability  of the Premises for Lessee's  Intended use; (b)
that Lessee has made such  Investigation as it deems necessary with reference to
such  matters,   is  satisfied   with   reference   thereto,   and  assumes  all
responsibility  therefore  as the  same  relate  to  Lessee's  occupancy  of the
Premises and/or the terms of this Lease; and (c) that neither Lessor, nor any of
Lessor's agents, has made any oral or written representations or warranties with
respect to said matters other than as set forth in this Lease.

     2.5 Lessee as Prior  Owner/Occupant.  The warranties made by Lessor In this
Paragraph 2 shall be of no force or effect if immediately  prior to the date set
forth in Paragraph 1.1 Lessee was the owner or occupant of the Premises. in such
event,   Lessee  shall,   at  Lessee's  sole  cost  and  expense,   correct  any
non-compliance of the Premises with said warranties.


<PAGE>
     2.6  Vehicle  Parking.  Lessee  shall  be  entitled  to use the  number  of
Unreserved  Parking Spaces and Reserved  Parking  Spaces  specified in Paragraph
1.2(b) on those  portions of the Common  Areas  designated  from time ho time by
Lessor for parking.  Lessee shall not use more parking  spaces than said number.
Said  parking  spaces  shall be used for  parking  by  vehicles  no larger  than
full-size passenger automobiles or pick-up trucks, herein carted "Permitted Size
Vehicles."  Vehicles  other than  Permitted  Size  Vehicles  shall be parked and
loaded or  unloaded  as  directed  by Lessor  in the Rules and  Regulations  (as
defined In Paragraph 40) issued by Lessor. (Also see Paragraph 2.9.)

          (a) Lessee  shall not permit or allow any  vehicles  that belong to or
are controlled by Lessee or Lessee's employees,  suppliers, shippers, customers.
contractors  or invitees to be loaded,  unloaded,  or parked In areas other than
those designated by Lessor or such activities.

          (b) it Lessee  permits  or  allows  any at the  prohibited  activities
described  in this  Paragraph  2.6,  then Lessor  shall have the right,  without
notice,  In  addition to such other  rights and  remedies  that It may have,  to
remove or tow away the  vehicle  involved  and charge the cost to Lessee,  which
cost shall be immediately payable upon demand by Lessor.

          (c) Lessor shall at lbs Commencement Date chi this Lease,  provide the
parking required by Applicable Law.

     2.7  Common  Areas-  The term  "Common  Areas"  is  delved as all areas and
facilities  outside the  Premises  and within the  exterior  boundary the of the
Industrial  Center and interior  utility  raceways  within the Premises that are
provided  and  designated  by the  Lessor  from  time  to time  for the  general
non-exclusive use of Lessor,  Lessee and other lessees the industrial Center and
their respective  employees,  suppliers,  shippers,  customers,  contractors and
invitees.  Including  parking areas,  loading and unloading areas,  trash areas,
roadways, sidewalks, walkways, parkways, driveways and landscaped areas.

     2.8 Common  Areas-Lessee's  Rights. Lessor hereby grants to Lessee, for the
benefit of lessee and Its employees, suppliers, shippers, contractors, customers
and invitees,  during the term of this Lease, the non-exclusive right to use, In
common with others  entitled  to such use,  the Common  Areas as they exist from
time to time,  subject to any rights,  powers,  and pillages  reserved by Lessor
under the terms  hereof  or under  the  terms of any  rules and  regulations  or
restrictions   governing  the  use  of  the  Industrial  Center.   Under  no  of
circumstances  shall the right herein  granted to use the Common Areas be deemed
to Include the right to store any property,  temporarily or permanently.  in the
Common  Areas.  Any such storage  shall be permitted  only by the prior  written
consent of Lessor or Lessor's  designated agent, which consent may be revoked at
any time.  In the event that any  unauthorized  storage  shall occur then Lessor
shall have the right,  without  notice,  In  addition  to such other  rights and
remedies that It may have, to remove the properly and charge the cost to Lessee,
which cost shall be Immedi-ately payable upon demand by Lessor.

     2.9 Common  Areas-Rules and Regulations.  Lessor or such other person(s) as
Lessor may appoint shall have the exclusive control and management of the Common
Areas and shall have the right, from lime to time, to establish,  modify,  amend
and enforce  reasonable Rules and Regulations with respect thereto in accordance
with  Paragraph  40. Lessee agrees to abide by and conform to all such Rules and
Regulations,  and to  cause  its  employees,  suppliers,  shippers,  cus-tomers,
contractors  and  invitees  to  so  abide  and  conform.  Lesson  shall  not  be
responsible to Lessee Ion the non-compliance  with said rules and regulations by
other lessees of the Industrial Center.

     2.10 Common  Areas--Changes.  Lessor shall have the right, In Lessor's sole
discretion, from time to time:

          (a)  To  make  changes  to  the  Common  Areas,   Including,   without
limitation,   changes  In  the  location,  size,  shape  and  number  driveways,
entrances,  parking spaces, parking areas, loading and unloading areas, Ingress,
egress, direction of traffic, landscaped areas, walkways and utility raceways;

          (b) To close  temporarily  any of the  Common  Areas  for  maintenance
purposes so long as reasonable access to the Premises remains available;

          (c) To designate  other land outside the  boundaries of the Industrial
Center to be a part of the Common Areas;

          (d) To add additional buildings and Improvements to the Common Areas;

          (a) for use the  Common  Areas  while  engaged  In  making  additional
improvements,  repairs or allegations to the Industrial  Center,  or any portion
thereof; and

          (f) To do and perform such other acts and make such other  changes in,
to or with respect to the Common Areas and  Industrial  Center as Lessor may. In
the exteriors of sound business judgment, deem to be appropriate.

3. Term.

     3.1 Term. The Commencement Date,  Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.

     3.2 Early Possession. II an Early Possession Date is specified in Paragraph
1.4 and If Lessee  totally or partially  occupies  the Premises  alter the Early
Possession Date but prior to The  Commencement  Date, the obligation to pay Base
Rent shall be abated for the period of such early occupancy.  All other Terms of
this  Lease,  however,  (including  but not  limited to the  Obligations  to pay
Lessee's  Share of Common Area  Operating  Expenses  and ho carry the  Insurance
required by Paragraph B) shall be In effect  during such period.  Any such early
possession  shall not affect nor advance  the  Expiration  Date of the  Original
Term.

     3.3 Delay In Possession. It for any reason Lessor cannot deliver possession
of the  Premises  Lessee by the Early  Possession  Date,  If one Is specified In
Paragraph 1.4, no Early Possession Dale is specified,  by the Commencement Date,
Lessor shah not be subject to any  liability  therefore,  nor shall such failure
affect the validity of this Lease,  or the Obligations of Lessee  hereunder,  or
extend the term hereof, but in such case, Lessee shall riot, except as otherwise
provided  herein,  be obligated to pay rent or perform any other  obligation  at
Lessee under this terms of this Lease until Lessor  delivers  possession  of the
Premises to Lessee. If possession of the Premises Is not delivered Lessee within
sixty (60) days after the  Commencement  Date,  Lessee may,  at Its  option,  by
notice In  writ-ing  to Lessor  within ten (10) days alter the end of said sixty
(60) day  period,  cancel  this  Lease,  In which  event  the  parties  shall be
discharged from all Obligations  hereunder;  provided further,  however, if such
written  notice of Lessee is not  received  by Lessor  within  said ten (10) day
period,  Lessee's right to cancel this Lease hereunder shall terminate and be of
no further Force or elf act. Except as may be otherwise provided, and regardless
of when this Original Term actually com-mences, if possession Is not tendered to
Lessee when required by this Lease and Lessee does not terminate this Lease,  as
aforesaid,  the period tree of the  oblig-ation  to pay Base Rent,  If any. that
Lessee  would  otherwise  have  enjoyed  shall run from the date of  delivery of
possession  and  continue  for a period equal to the nod during which the Lessee
would have otherwise enjoyed under the terms hereof, but minus any days of delay
caused by the acts, changes or omissions of lessee.

4. Rent.

     4.1 Base Rent. Lessee shah pay Base Rent and other rent or charges,  as the
same may be adjusted  from time to time, to Lessor In lawful money of the United
States,  without  offset or  deduction,  on or before  the day on which ills due
under the terms of this Lease.  Base Rent and all other rent and charges for any
period  during  this torn none  which Is Ice less than one full  month  shall be
prorated based upon Ibis actual number of days of the month Involved  Payment of
Base Rent and other charges shall be made to Lessor at its address stated herein
onto such other  persons or at such other  addresses  as Lessor may trim lime to
lime designate In to Lessee.

     4.2 Common Area Operating  Expenses.  Lessee shall pay to Lessor during the
term  hereof,  in addition to the Base Rent,  Lessee's  Share (as  specified  in
Paragraph 1.6(b)) of all Common Area Operating Expenses, as hereinafter defined,
during each  calendar  year of the term of this Lease,  In  accordance  with the
fol-lowing provisions:

          a) "Common Ares Operating Expenses" are ditched,  Ion purposes of this
     Lease,  as all costs  incurred  by Lessor  relating  to the  ownership  and
     operation  of the  industrial  Center,  including,  but not limited to, the
     following:

               (I) The operation,  repair and maintenance,  In neat, clean, good
          order and condition, of the following:

                    (aa) The Common Areas,  including parking areas, loading and
               unloading  areas,  trash areas,  roadways,  sidewalks,  walkways,
               parkways,   drive-ways,   landscaped  areas,  striping,  bumpers,
               Irrigation systems,  Common Area lighting facilities,  fences and
               gales, elevators and roof.

                    (bb) Exterior signs and any tenant directories.

                    (cc) Fire detection and sprinkler systems.

               (II) The cost of water, gas, electricity and telephone to service
          the Common Areas.

               (III) Trash disposal,  property  management and security services
          and the costs of any environmental Inspections.

               (IV  Reserves  set aside for  maintenance  and  repair of Common
          Areas.

               (v) An',' Increase above the Base Real Property Taxes (as defined
          In Paragraph 10.2(b)) Ion this Building and the Common Areas.

               (vi) Any insurance Cost increase" (as defined in Paragraph 8.1).

               (vii) The cost of Insurance carried by Lessor with respect to the
          Common Areas.

               (VIII) Any deductible  portion of an insured toss  concerning the
          Building or the Common Areas,

               (ix) Any other  services to be provided by Lessor that are slated
          elsewhere In this Lease ho be a Common Area Operating Expense.

     (b) My Common Area  Operating  Expenses  and Real  Properly  Taxes that are
specially attributable to the Building onto any other building In the Industrial
Center onto the  operation,  repair and  maintenance  hereof,  shah be allocated
enthalpy to the Building onto such other  building.  t-however,  any Common Area
Operating   Expenses  and  Float  Property  Taxes  that  are  not  superficially
attributable to the Building onto any other building onto the operation,  repair
and maintenance thereof, shall be equitably allocated by Lessor to alt buildings
In the Industrial Center.

     (c)  The  Inclusion  of  this  Improvements,  and  services  set  forth  In
Subparagraph  4.2(a) shall not be deemed to Impose an obligation  upon Lessor no
sillier have said  improvements  or faultiest onto provide those services unless
this  Industrial  Center  already  has the same,  Lessor  already  provides  the
services,  or Lessor bias agreed  elsewhere In this Lease to provide the same or
some of them.

     (d) Lessee's  Share of Common Area  Operating  Expenses shall be payable by
Lessee  within  tan (10) days alter a  reasonably  delayed  statement  of actual
expenses Is  presented  to Lessee by Lessor.  At Lessor's  option,  however,  an
amount may be estimated by Lessor from time to lime of Lessee's  Share of annual
Common  Area  Operating  Expenses  and the same  shall  be  payable  monthly  or
quarterly,  as Lessor shall designate,  during each 12-month period of the Lease
term, on the same day as the Base Rent Is due hereunder. Lessor shall deliver to
Lessee  within  sixty (60) days alter the  expiration  of each  calendar  year a
reasonably  detail  statement  showing Lessee's Share of this actual Common Area
Operating  Expenses  incurred during this preceding  year. If Lessee's  payments
under this Paragraph  4.2(d) during said preceding year exceed Lessee's Share as
Indicated on said statement, Lesson shaft be credited the amount of such over-


<PAGE>
payment  against Lessee's Share of Common Area Operating Expenses next becoming
due. It Lessee's payments under this Paragraph 4.2(d) during said preceding year
were  less 'than Lessee's Share as indicated on said statement, Lessee shall pay
to  Lessor  the  amount of the deficiency within tan (10) days alter delivery by
Lessor  to  Lessee  of  said  statement.

5,  Security  Deposit.  Lessee shall deposal with Lessor upon Lessee's execution
hereof  the Security Deposit set forth In Paragraph 1.7 as security for Lessee's
faithful  performance  of Lessee's Obligations under this Lease. if Lessee falls
to  pay  Base Rent or other rent or charges due hereunder, or otherwise defaults
under this Lease (as defined In Paragraph 13.1), Lessor may use, apply or retain
alt  or  any  portion to said Security Deposit for the payment of any amount due
Lessor  or  to  reimburse or compensate Lessor for any liability, cost, expense,
loss  or  damage (Including attorneys' lees) which Lessor may suffer or Incur by
reason  thereof.  If  Lessor uses or applies alt or any portion of said Security
Deposit,  Lessee  shall  within  ten  (10)  days alter written request therefore
deposit  monies  with Lessor sudden to restore said Security Deposit to the lull
amount required by this Lease. Any time the Base Rent increases during this term
of  this  Lease,  Lessee  shall,  upon  written  request  from  Lessor,  deposit
additional monies with Lessor as an addition to the Security Deposit so that The
total amount of the Security Deposit shall at all times bear the same proportion
to  the  then  current  Base  Rent  as the Initial Security Deposit bears to the
initial  Base  Rent  set forth In Paragraph 1,5. Lessor shall not be required to
keep  all  or  any  part  of  this  Security  Deposit  separate from its general
accounts.  Lessor  shall,  at  the expiration or earlier termination of the term
hereof  and  after  Lessee  has  vacated  the Premises, return to Lessee (or, at
Lessor's  option,  to  the  last assignee, If any, of Lessee's Interest herein),
that  portion  of  the  Security  Deposit  not used or applied by Lessor. Unless
otherwise expressly agreed In writing by Lessor, no part dl the Security Deposit
shall be considered to be held In trust, to bear Interest or other increment for
Its  use,  onto  be  prepayment  for  any monies to be paid by Lessee under this
Lease.

6.     Use.

     6.1 Permitted Use.

          (a) Lessee  shall use and occupy the Premises  only for the  Permitted
     Use set forth In Paragraph  1.8, or any other legal use which Is reasonably
     comparable  thereto,  and for no other  purpose.  Lessee  shall  not use or
     permit the use of the Premises In a manner that Is unlawful,  creates waste
     or a nuisance,  or that  disturbs  owners  and/or  occupants  of, or causes
     damage to the Premises or neighboring premises or properties.

          (b) Lessor  hereby  agrees to not  unreasonably  withhold or delay Its
     consent to any written request by Lessee, Lessee's assignees or subtenants,
     and by prospective  assignees and  subtenants on Lessee,  its assignees and
     subtenants,  Ion a modification  of said Permitted Use, so long as the same
     will  not  impair  the  structural  integrity  of the  improvements  on the
     Premises  or in this  Building  or the  mechanical  or  electrical  systems
     therein, does not conflict with uses by other lessees, is not significantly
     more  burdensome  to the  Premises  or the  Building  and the  Improvements
     thereon,  and is  otherwise  permissible  pursuant to this  Paragraph 6. If
     Lessor  elects to  withhold  such  consent,  Lessor  shall  within live (5)
     business days alter such request give a written notification of same, which
     notice shall Include an  explanation on Lessor's  reasonable  objections to
     the change In use.

6.2     Hazardous  Substances.

          (a) Reportable Uses Require Consent. The term "Hazardous Substance" as
     used In this Lease shall mean any product, substance, chemical, material or
     waste whose presence,  nature, quantity and/or intensity of existence, use,
     manufacture, disposal, transportation,  spill, release or effect, either by
     itself  or In  combination  with  other  materials  expected  to be on this
     Premises,  Is sillier:  (I)  potentially  Injurious  to the public  health,
     safety or welfare,  the  environment,  or the Premises;  (Ii)  regulated or
     monitored by any  governmental  authority;  or (Ill) a basis for  potential
     liability  of Lessor to any  governmental  agency or third  party under any
     applicable statute or common law theory. Hazardous Substance shall include,
     but not be limited to, hydrocarbons,  petroleum,  gas the, crude oil on any
     products or by-products thereof. Lessee shall not engage in any activity in
     or about the Premises which  constitutes a Reportable  Use (as  hereinafter
     defined) of I]  hazardous  Substances  without the  express  prior  written
     consent of Lessor and  compliance in a timely manner (at Lessee's sole cost
     and  expense)  with all  Applicable  Requirements  (as defined In Paragraph
     6.3).  "Reportable Use" shall mean (I) the installation or use at any above
     or below ground storage tank,  (II) the  generation,  possession,  storage,
     use, transportation,  or disposal of a [hazardous Substance that requires a
     permit from,  or with respect to which a report,  notice,  registration  or
     business  plan Is required to be tiled with,  any  government at authority,
     and (iii)  the  presence  In,  on or about  this  Premises  of a  Hazardous
     Substance with respect to which any  Applicable  Laws require lust a notice
     be given to persons  entering or  occupying  the  Premises  or  neighboring
     properties.  Notwithstanding  this foregoing,  Lessee may, without Lessor's
     prior  consent,  but upon  notice  to  Lessor  and In  compliance  with all
     Applicable   Requirements,   use  any  Ordinary  and  customary   materials
     reasonably  required  to be used by  Lessee  In the  normal  course  of the
     Permitted  Use,  so long as such use Is not a  Reportable  Use and doss not
     expose the Premises or  neighboring  properties to any  meaningful  risk at
     contamination  or damage or expose  Lessor to any  liability  therefor.  In
     addition,  Lessor may (but without any  obligation  to do so) condition its
     consent to any  Reportable  Use at any  Hazardous  Substance by Lessee upon
     Lessee's  giving  Lessor  such  additional  assurances  as  Lessor,  In its
     reasonable  discretion,  deems necessary to protect Itself, the public, the
     Premises  and this  environment  against  damage,  contamination  or Injury
     and/or liability  thereof or, Including but not limited to the installation
     (and, at Lessor's option,  removal on or before Lease expiration or earlier
     termination)  of  reasonably  necessary  protective  notifications  to this
     Premises (such as concrete encasements) and/or the deposit of an additional
     Security Deposit under Paragraph 5 hereof.

          (b) Duty to Inform Lessor. II Lessee knows, or has reasonable cause to
     believe, that a Hazardous Substance has cone to be located In, on, under or
     about the Premises or this Building,  other than as previously consented to
     by Lessor,  Lessee shall  immediately  give Lessor written notice  thereof,
     together  with  a copy  of any  statement,  report,  notice,  registration,
     application,  or business plan, license, claim, action, or proceeding given
     to,  or  received  from,  any  governmental   authority  or  private  party
     concerning the presence, spill, release, discharge of, or exposure to, such
     Hazardous  Substance including but not limited to all such documents as may
     be involved in arty Reportable Use involving the Premises. Lessee shall not
     cause or permit any  Hazardous  Substance to be spilled or released In, on,
     under or about this Premises  (Including,  without limitation,  through the
     plumbing or sanitary sewer system).

          (c) Indemnification,  Lessee shall indemnify, protect, defend and hold
     Lessor, Its agents,  employees,  lenders and ground lessor, if any, and the
     Premises;  harmless  from and  against  any and all  damages,  liabilities,
     judgments,  costs, claims, liens, expenses,  penalties, loss of permits and
     attorneys' and con-sultants' lees arising out of or Involving any Hazardous
     Substandard  brought  onto the  Premises by Orion Lessee or by anyone under
     Lessee's  control.  Lessee's  Obligations under this Paragraph 6.2(c) shall
     Include,  but riot be limited  to,  this elf acts on any  contamination  or
     injury to  person,  property  or the  environment  created or suit snarl by
     Lessee,  and  the  cost  of  investigation  (including  consultancies'  and
     attorneys'  fees and selling),  removal,  remediation,  restoration  and/or
     abatement  thereof,  or of any  contamination  therein  involved,  and shah
     survive  the  expiration  or  earlier   termination   of  this  Lease.   No
     termination,  cancellation or release  agreement entered Into by Lessor and
     Lessee  shall  release  Lessee from its  obligations  under this Lease with
     respect to Hazardous  Substances,  unless superficially so agreed by Lessor
     in writing at this time of such agreement.

6.3     Lessee's  Compliance  with  Requirements. Lessee shall, at Lessee's sole
cost  and  expense,  fully,  diligently  and in a timely manner, comply with all
"Applicable  Requirements,"  which  term is used In this Lease to mean aft laws,
rules,  regulations,  ordinances,  directives,  covenants,  easements  and
restrictions  of  record,  permits,  the  requirements  of  any  applicable fire
Insurance  underwriter  en  rating  bureau,  and the recommendations of Lessor's
engineers and/or consul-tants, relating in any manner to the Premises (including
but  not  limited  to  matters  pertaining  to  (I)  industrial  hygiene,  (ii)
environmental  conditions  on,  in. tinder or about the Premises, including soil
and  groundwater  conditions,  and  (iii)  the  use,  generation,  manufacture,
production, Installation, maintenance, removal, trans-portation, storage, spill,
or  release  of any Hazardous Substance), now  sued or which may hereof ten come
Into  effect.  Lessee  shall,  within  five  (5)  days after receipt of Lessor's
written  request,  provide  Lessor with copies of all documents and information,
including  but  not  limited to permits, registrations, manifests, applications,
reports  and  certificates, Lessee's compliance with any Applicable Requirements
specified  by  Lessor,  and  shall  immediately  upon  receipt, notify Lessor in
writing (with copies of any documents Involved)  any threatened or actual claim,
notice,  warning,  complaint  or  report  pertaining  to or involving failure by
Lessee  cribs  Premises  to  comply  with  any  Applicable  Requirements.

6.4     Inspection;  Compliance  with  Law.  Lessor, Lessor's agents, employees,
contractors  and  designated representatives, and the holders of any mort-gages,
deeds of trust or ground leases on the Premises ("Lenders") shall have the right
to enter this Premises at any time in the case at an emergency, and otherwise at
reasonable  times,  for  the purpose of Inspecting the condition of the Premises
and  for  verifying  compliance  by  Lessee  with  this Lease and all Applicable
Requirements  (as  defined  In  Paragraph  6.3), and Lessor shall be entitled to
employ  experts and/or consultants In connection therewith to advise Lessor with
respect  to  Lessee's  activities,  including  but  not  limited  to  Lessee's
installation,  operation,  use,  monitoring,  maintenance,  or  removal  at  any
Hazardous  Substance  on  or  from this Premises. This costs and expenses of any
such Inspections shall be paid by the party requesting same, unless a Default or
Breach  of  this  Lease by Lessee or a violation of Applicable Requirements or a
contamination,  caused or materially contributed to by Lessee, is found to exist
onto  be  imminent,  or  unless  the  inspection  Is  requested  or ordered by a
governmental  authority as the result on any such existing or imminent violation
or  contamination.  in  such case, Lessee shall upon request reimburse Lessor or
Lessor's  Lender,  as  this  case  may  be,  ton  the costs and expenses of such
Inspections.

7. Maintenance, Repairs. Utility Installations, Trade Fixtures and Alterations.

     7.1 Lessee's Obligations.

          (a) Subject to the  provisions  of  Paragraphs  2.2  (Condition),  2.3
     (Compliance with Covenants,  Restrictions and Building Code), 7.2 (Lessor's
     Obligations),  9 (Damage or  Destruction),  and 14  (Condemnation),  Lessee
     shall,  at  Lessee's  sole  cost and  expense  and at all  times,  keep the
     Premises  and every  part  thereof  In good  order,  condition  and  repair
     (whether or not such portion of the Premises requiring repair, or the means
     of repairing the same, are reasonably or readily  accessible to Lessee, and
     whether or riot this need Ion such  repairs  occurs as a result of Lessee's
     use,  any prior use,  this  elements  or this age of such  por-tion of this
     Premises), including, without limiting the generality of the foregoing, all
     equipment  or  facilities  superficially  serving  the  Premises,  such  as
     plumbing,  heating,  air conditioning,  ventilating,  electrical,  lighting
     facilities,   boilers,   fired  or  unfired  pressure  vessels,   the  hose
     connections  if within the Premises,  fixtures,  interior  walls,  Interior
     surfaces of exterior walls, ceilings,  Floors, windows, doors, plate glass,
     and  skylights,  but  excluding any items which are the  responsibility  of
     Lessor pursuant to Paragraph

     7.2 below.  Lessee,  In keeping the Premises In good order,  condition  and
repair,  shall  exercise  and  perform  good  maintenance  practices.   Lessee's
Obligations shall Include restorations,  replacements or renewals when necessary
to keep this and all  improvements  thereon  or a part  thereof  in good  order,
condition and state of repair.

          (b) Lessee  shall,  at  Lessee's  sole cost and  expense,  procure and
     maintain a contract, with copies to Lessor, In customary form and substance
     for and with a contractor  specializing and experienced in this Inspection,
     maintenance and service of the heating,  air  conditioning  and ventilation
     system Ion the Premises. However, Lessor reserves the right, upon notice to
     Lessee,  to  procure  and  maintain  this  contract  for the  heating,  air
     conditioning and ventilating systems, and If Lessor so elects, Lessee shall
     reimburse Lessor, upon demand, I or the cost thereof.

          (c) If  Lessee  fails  to  perform  lessee's  Obligations  under  this
     Paragraph

          7.1,  Lessor may enter upon the  Premises  after ten (10) days'  prior
     written notice to Lessee (except In the case of an emergency, In which case
     no notice shall be required),  perform such Obligations on Lessee's behalf,
     and put the Premises in good order,  condition  and repair,  In  accordance
     with Paragraph 13.2 below.

          7.2 Lessor's Obligations.  Subject to the provisions of Paragraphs 2.2
     (Condition),  2.3  (Compliance  with Covenants,  Restrictions  and Building
     Code),  4.2  (Common  Area  Operating  Expenses),  6 (Use),  7.1  (Lessee's
     Obligations),  9 (Damage on  Destruction)  and 14  (Condemnation),  Lessor,
     subject to  reimbursement  pursuant to  Paragraph  4.2,  shall keep In good
     order,  condition and repair the  foundations,  exterior walls,  structural
     condition of Interior  bearing walls,  exterior roof, fire sprinkler and/or
     standpipe and hose (if located in the Common Areas) or other automatic hire
     extinguishing system Including the alarm and/or smoke detection


<PAGE>
               C American  industrial Real Estate  Association  1993 systems and
          equipment, fire hydrants, parking lots, walkways, parkways, driveways,
          landscaping,  fences,  signs and  utility  systems  serving the Common
          Areas and all parts  thereof,  as well as  providing  the services for
          which there is a Common Area Operating  Expense  pursuant to Paragraph
          4.2.  Lessor  shall not be obligated to paint the exterior or interior
          surfaces of exterior  walls nor shah Lessor be  obligated to maintain,
          repair or  replace.  windows,  doors or plate  glass of the  Premises.
          Lessee expressly waives the benefit of any statute now or hereafter in
          effect which would  otherwise  afford Lessee the right to make repairs
          at Lessor's  expense or to  terminate  this Lease  because of Lessor's
          failure to keep the  Building,  Industrial  Center or Common  Areas in
          good order, condition and repair.

7.3 Utility installations, Trade Fixtures, Alterations.

               (a)   Definitions;    Consent   Required.   The   term   "Utility
          Installations" Is used In this Lease to refer to all air these,  power
          panels,  electrical  distribution,  security, fire protection systems,
          communications systems,  lighting fixtures,  heating,  ventilating and
          air conditioning  equipment,  plumbing, and fining In, on or about the
          Premises.  The term "Trade Fixtures" shall mean Lessee's machinery and
          equipment  which can be removed  without doing material  damage to the
          Premises.  The term "Alterations"  shall meant any modification of the
          Improvements  on the  Premises  which are provided by Lessor under the
          terms  of this  Lease,  other  than  Utility  Installations  or  Trade
          Fixtures.  "Lessee-Owned Alterations and/or Utility installations" are
          defined as  Alterations  and/or Utility  Installations  made by Lessee
          that are not yet owned by Lessor pursuant to Paragraph 7.4(a).  Lessee
          shall  not  take  nor  cause to be made  any  Alterations  or  Utility
          Installations  In, on,  under or about the Premises  without  Lessor's
          prior written  consent.  Lessee inlay,  however,  make  non-structural
          Utility  installations to the Interior of the Premises (excluding this
          real) without Lessor's  consent but upon notice to Lessor,  so long as
          they  are not  visible  from  the outs  Idea of the  Premises,  do not
          Involve  puncturing,  relocating  or removing the roof or any existing
          wails,  or  changing  or with the  fire  sprinkler  or fire  detection
          systems and the cumulative  cost thereof during the term of this Lease
          as extended does not exceed $2,500.00.

               (b) Consent. Any Alterations or Utility installations that Lessee
          shall desire to make and which require the consent of the Lessor shall
          be  presented  to Lessor in  written  form with  detailed  plans.  All
          consents given by Lessor,  whether by virtue of Paragraph 7.3(a) or by
          subsequent  specific  consent,  shall be deemed  conditioned upon: (I)
          Lessee's  acquiring all applicable  permits  required by  governmental
          authorities;  (ii) the  furnishing of copies of such permits  together
          with a copy of the  plans and  specifications  for the  Alteration  or
          Utility  Installation  to Lessor  prior to  commencement  of this work
          thereon and (iii) this  compliance  by Lessee with all  conditions  of
          said permits in a prompt and  expeditious  manner.  Any Alterations on
          Utility installations by Lessee during the term of this Lease shall be
          done in a good  and  workmanlike  manner,  with  good  and  sufficient
          materials,  and be in  compliance  with all  Applicable  Requirements.
          Lessee shall  promptly upon  completion  thereof  furnish  Lessor with
          as-built plans and specifications  therefor.  Lessor may, (but without
          obligation to do so) condition its consent to any requested Alteration
          or Utility  installation  that costs  $2,500.00 or more upon  Lessee's
          providing Lessor with a lien and completion bond In an amount equal to
          one and  one-halt  times  the  estimated  cost of such  Alteration  or
          Utility Installation.

               (c) Lien  Protection.  Lessee  shall say when due all  claims for
          labor or materials  furnished or alleged to have been  furnished to or
          for Lessee at or for use on the  Premises,  which claims are or may be
          secured by any mechanic's or lien against the Premises or any interest
          therein.  Lessee shall give Lessor not less than ten (10) days' notice
          prior to the  commencement of any work In, on, or about this Premises,
          and Lessor shall have the right to post notices of  non-responsibility
          In or on the  Premises as provided  by law. II Lessee  shall,  In good
          faith,  contest the validity of any such lien,  claim or demand,  then
          Lessee shall, at its sole expense, del and protect itself,  Lessor and
          this  Premises  against  the same and shall pay and  satisfy  any such
          adverse judgment that may be ren-dered  thereon before the enforcement
          thereof against this Lessor cribs  Premises.  If Lessor shall require,
          Lessee shall furnish to Lessor a surety bond satisfactory to Lessor In
          an  amount  equal  to one  and  one-half  times  this  amount  at such
          congested lien claim or demand, Indemnifying Lessor( against liability
          for the same,  as required by law for the holding of the Premises made
          from the effect of such lien or claim. in addition, Lessor may require
          Lessee to pay Lessor's  attorneys' fees and costs In  participating In
          such action if Lessor shall diode ills to its best Interest Is do so.

7.4     Ownership,  Removal,  Surrender,  and  Restoration.

               (a) Ownership. Subject to Lessor's right to require their removal
          and to cause  Lessee  to  become  the  owner  thereof  as  hereinafter
          provided  In  this   Paragraph  7.4,  all   Alterations   and  Utility
          Installations made to this Premises by Lessee shall be lbs property of
          and owned by Lessee,  but considered a part of this  Premises.  Lessor
          may, at any time and at its  option,  elect in writing to Lessee to be
          this owner at all or any special part of the Lessee-Owned  Alterations
          and   Utility   Installations.   Unless   otherwise   instructed   per
          Subparagraph  7.4(b) hereof, all Lessee-Owned  Alterations and Utility
          installations  shall, at the expiration or earlier termination of this
          Lease,  become the property at Lessor and remain upon the Premises and
          be surrendered with the Premises by Lessee.

               (b)  Removal.  Unless  otherwise  agreed In  writing,  Lessor may
          require  that  any  or  all   Lessee-Owned   Alterations   or  Utility
          Installations  be removed by the expiration or earlier  termination of
          this  Lease,  notwithstanding  that their  installation  may have been
          consented to by Lessor.  Lessor may require the removal at any time of
          alt or any  part of any  Alterations  or  Utility  Installations  made
          without this required consent of Lessor.

               (c) Surrender/Restoration. Lessee shall surrender the Premises by
          the end of this last day of the Lease term or any earlier  termination
          date, clean and free of debris and In good operating order,  condition
          and state of repair,  Ordinary wear and tear  excepted.  Ordinary wear
          and tear shall not Include any damage or deterioration that would have
          been prevented by good  maintenance  practice or by Lessee  performing
          all of its Obligations under this Lease. Except as otherwise agreed or
          specified  herein,  this Premises,  as surrendered,  shall include the
          Alterations and Utility Installations.  The obligation of Lessee shall
          Include  the  repair of any  damage  occasioned  by the  installation,
          maintenance  or  removal  of  Lessee's  Trade  Fixtures,  furnishings,
          equipment, and Lessee-Owned Alterations and Utility Installations,  as
          well as the removal of any storage  tank  installed  by or for Lessee,
          and the removal,  replacement, or remediation of any soil, material or
          ground water  contaminated  by Lessee,  all as may then be required by
          Applicable Requirements and/or good practice.  Lessee's Trade Fixtures
          shall  remain  the  property  of Lessee and shall be removed by Lessee
          subject to its  obligation to repair and restore the Premises per this
          Lease.

8.     Insurance;  indemnity.

          8.1 Payment of Premium Increases.

               (a) As used herein, the term "Insurance Cost increase" is defined
          as any increase in the actual cost of this insurance applicable to the
          Building and required to be carried by Lessor  pursuant to  Paragraphs
          0.2(b), 8.3(a) and 8.3(b), ('Required insurance"),  over and above the
          Base Premium, as hereinafter  defined,  calculated on an annual basis.
          "insurance  Cost  increase"  shall  include,  but not be  limited  to,
          requirements  of this holder of a mortgage  or deed of trust  covering
          the Premises,  increased  valuation of the Premises,  and/or a general
          premium rate Increase.  The term  'Insurance Cost Increase" shall not,
          however,  Include any premium  Increases  resulting from the nature of
          the  occupancy  of any other  lessee of the  Building.  It the parties
          insert  a  dollar  amount  in  Paragraph  1.9,  such  amount  shall be
          considered  the  "Bass  Premium."  it a  dollar  amount  has not  been
          inserted in Paragraph 1.9 and if this  Building  lies been  previously
          occupied  dur-ing the twelve (12) menu  period  immediately  preceding
          this  Commencement  Date,  this  'Base  Premium"  shall be the  annual
          premium  applicable to such twelve (12) month period.  tithe  Building
          was not fully  occupied  during such twelve  (12) month  period,  this
          "Base  Premium"   shall  be  the  lowest  annual  premium   reasonably
          obtainable ion this Required  insurance as of the  Commencement  Date,
          assuming this most nominal use possible of the Building.  in no event,
          however,  shall Lessee be  responsible  for any portion of the premium
          cost  attributable  to  liability  insurance  coverage  in  excess  of
          $1,000,000 procured under Paragraph 8.2(b).

               (b)  Lessee  shall  pay any  Insurance  Cost  Increase  to Lessor
          pursuant to  Paragraph  4.2.  Premiums I or policy  periods  communing
          prior  to,  or  extending  beyond,  the term old this  Lease  shall be
          prorated to confide  with this  corresponding  Commencernment  Date or
          Expiration Date.

     8.2 Liability Insurance.

               (a)  Carried by  Lessee.  Lessee  shall  obtain and keep in force
          dinning the term of this Lease a Commercial  General  Liability policy
          of Insurance  protect-ing Lessee, Lessor and any Lender(s) whose names
          have been  provided  to Lessee in writing  (as  additional  instanced)
          against claims for bodily Injury,  personal Injury and property damage
          based upon, involving or arising out of the ownership,  use, occupancy
          or maintenance of the Premises and all areas appurtenant thereto. Such
          Insurance  shall be on an  occurrence  basis  providing  single  limit
          coverage In an amount not less than  $1,000,000 per occurrence with an
          "Additional  Insured-Managers or Lessors of Premises"  endorsement and
          contain the  "Amendment of the Pollution  Exclusion"  endorsement  for
          damage caused by heat,  smoke or-fumes from a hostile fire. The policy
          shall not  contain any  intra-insured  exclusions  as between  insured
          persons or  organizations,  but shall  include  coverage for liability
          assumed under this Lease as an 'insured  contract" for the performance
          of Lessee's  Indemnity  Obligations  tinder this Lease. This limits of
          said  Insurance  required by this Lease or as carried by Lessee  shall
          not,  however,  linarite the liability of Lessee nor relieve Lessee of
          any obligation hereunder.  All Insurance to be carried by Lessee shall
          be primary to and not with any  similar  Insurance  carried by Lessor,
          whose insurance shall be considered excess insurance only.

          (b) Carried by Lessor.  Lessor shall also maintain liability Insurance
     described in Paragraph 6.2(a) above, In addition to and not in lieu of, the
     Insur-ance  required  to be by  Lessee.  Lessee  shall  riot be named as an
     additional insured therein.

     8.3  Property  insurance-Building,   improvements  and  Rental  Value.

     (a) Building and Improvements. Lessor shall obtain and keep in force during
the term of this Lease a policy or  policies  In the name of  Lessor,  with loss
payable  to  Lessor  and to any  Lender(s),  insuring  against  or damage to the
Premises.  Such Insurance shall be (or full replacement  cash, as the same shall
exist mom tin-re to time,  or the amount  required by any  Lender(s),  but in no
event  more than the  commercially  reasonable  and  available  insurable  value
thereof It, by reason or the us nature or age at the Improvements involved, such
latter amount is less than full replacement cost.  Lessee-Owned  Alterations and
Utility  installations,  Trade Fixtures and Lessee's personal pro p arty shah be
insured by Lessee  pursuant to Paragraph  6.4. Ii the coverage is available  and
commercially  appropriate,  Lessor's policy or policies shall insure against all
risks of direct  physical  loss or damage  (except  the  perils on flood  and/or
earthquake  unless  required  by a Lender  or  included  in the  Base  Premium),
including  coverage for any additional  costs  resulting from debris removal and
reasonable  amounts of coverage  for the  enforcement  of any  ordinance  or law
regulating the  reconstruction  or replacement of any undamaged  sections of the
Building  required to be demolished or removed ,y reason of the  enforcement  on
any building,  zoning,  safety or land use laws as the result of a covered loss,
but not  Including  plate glass  insurance.  Said policy or policies  shall also
contain an agreed valuation provision in lieu of any ca-insurance clause, waiver
of subrogation, and inflation guard protection causing an increase In the annual
property  insurance  coverage  amount by a factor at not less than the  adjusted
U.S.  Department of Labor Consumer  Price index far Alt Urban  Consumers Ion the
nearest to where this Premises are located.

     (b) Rental  Value.  Lessor  shall also obtain and keep in lance  during the
term of this  Lease a policy  or  policies  In this  name of  Lessor,  with toss
payable to Lessor and any  Lender(s),  insuring  the loss of lbs lull rental and
other  charges pay able by all lessees old this  Building to Lessor far one year
(including all Real Property Taxes,  insurance  costs, all Common Area Operating
Expenses and any such edited rental Increases).  Said Insurance may provide that
In the event the Lease is terminated  by reason of an stirred loss,  ibis period
of  indemnity  non.  such  coverage  shall be  extended  beyond  the date at the
completion of repairs or  replacement  of the Premises,  to provide for one lull
year's loss of renal  revenues  from the date of any such loss.  Said  Insurance
shall contain an agreed valuation provision In lieu old any co-insurance clause,
and this amount on coverage shall be adjusted  annually to reflect the protected
rental income, Real Property Taxes,  Insurance premium costs and other expenses,
II any, otherwise payable,  for the next 12-month period.  Common Area Operating
Expenses shall Include any deductible amount In the event of such loss.

     (c)  Adjacent  Premises.  Lessee shall pay for any increase In the premiums
for the property  Insurance of ibis  Building and for this Common Areas or other
buildings  in this  Industrial  Carrier If said  increase  is caused by Lessee's
acts, omissions, use or occupancy of the Premises.


<PAGE>
     MULTI-TENANT-  (d)  Lessee's  Improvements.  Since  Lessor Is the  Insuring
Party,  Lessor  shall not be required  to Insure  Lessee-Owned  Alterations  and
Utility  installations  units the item In question  has become this  property of
Lessor under the tennis on this Lease.

     8.4 Lessee's Property  insurance.  Subject to the requirements of Paragraph
8.5, Lessee at Its cost shah either by separate  policy or, at Lessor's  option,
by endorsement to a policy already carried,  mainland  Insurance coverage an all
of Lessee's personal property,  Trade Fixtures and Lessee-Owned  Alterations and
Utility installations in, on, or about this Premises similar in coverage to that
carried by Lessor as the insulin Party under  Paragraph  8.3(a).  Such insurance
shall be full  replacement  cost coverage with a deductible not to exceed $1,000
per occurrence. The proceeds from any such insurance shall be used by Lessee for
the  replacement of personal  property and the restoration of Trade Fixtures and
Lessee-Owned  Alterations and Utility  Installations.  Upon request from Lessor,
Lessee shall  provide  Lessor with written  evidence  that such  insurance Is in
force.

     8.5 Insurance  Policies.  insurance required hereunder shah be in companies
duly licensed to transact  business In the stats where the Premises are located,
and maintaining during this policy term a "General  Policyholders  Rating" on at
least 8+, V, or such other  rating as may be required by a Lender,  as set forth
in this most current issue of "Best's  Insurance  Guide." Lessee shall not do or
permit to be done anything which shah Invalidate the Insurance policies referred
to Inn this  Paragraph 8. Lessee  shall cause to be delivered to Lessor,  within
seven  (7)  days  after  the  earlier  of  this  Early  Possession  Dale  or the
Commencement  Date,  copies of, or  certificates  evidencing  the  existence and
amounts  at, the  Insurance  required  under  Paragraph  8.2(a) and 8.4. No such
policy shall be cancelable or subject to  modification  except alter thirty (30)
days' prior written  notice to Lessor.  Lessee shall at least thirty (30) days p
mien to the  expiration  of such  policies,  fur-nish  Lessor  with  evidence of
renewals or "Insurance  binders" evidencing renewal thereof, or Lessor may order
such  Insurance  and charge the cost  thereof to Lessee,  which  amount shall be
payable by Lessee to Lessor upon demand.

     8.6 Waiver of Subrogation.  Without affecting any other rights or remedies,
Lessee and Lesson each hereby release and relieve the other,  and waive their en
the right to recover damages  (whether In contract or In tort against the other,
ion loss or damage to their  property  arising  out on or incident to the perils
required to be Insured  against under  Paragraph 8. This effect of such releases
and waivers of the right to recover  damages  shall not be limited by the amount
of insurance  carried or required,  or by any  deductibles  applicable  thereto.
Lessor and Lessee agree to have their  respective  insurance  companies  issuing
property damage insurance waive any right to subrogation that such companies may
have against Lessor or Lessee,  as this case may be, so long as the insurance is
not Invalidated thereby.

     8.7  Indemnity.  Except for Lessor's  negligence  and/or  breach of express
warranties,  Lessee  shah  indemnify,  protect,  defend  and hold  harmless  the
Premises,  Lessor and his angels, Lessor's masher or ground lessor, partners and
Lenders,  from and  against any and all claims,  loss of rents  and/or  damages,
costs, liens, judgments, penalties, loss of permits, attorneys' and consultants'
tees,  expenses and/or liabilities  arising out of, Involving,  or in connection
with, the occupancy of the Premises by Lessee, the conduct of Lessee's business,
any act, omission or neglect of Lessee,  its agents,  contractors,  employees or
Invitees,  and out old any Default or Breach by Lessee In this  performance In a
timely  manner of any  obligation  on Lessee's  part to be performed  under this
tease.  The  foregoing  shall  include,  but not be limited  to, the  defense or
pursuit of any claim or any action or proceeding involved herein, and whether or
not (in this case of claims made against  Lessor)  litigated  and/or  reduced to
judgment.  In case any action cc proceeding be brought  against Lessor by reason
of any of the foregoing matters, Lessee upon notice from Lessor shall defend the
same at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first paid any
such damn in order to be so indemnified.

     8.8  Exemption  of Lessor from  Liability.  Lessor  shall not be liable for
Injury or damage to the person or goods, wares, merchandise or other property of
Lessee,  Lessee's  employees,  contractors,  invitees,  customers,  or any other
person In on about the  Premises,  whether such damage or Injury is caused by or
result from fire, steam, electricity, gas, water or rain, or from this breakage,
leakage,  obstruction  or  other  defects  of  pipes,  the  sprinklers,   wires,
appliances,  plumbing,  air conditioning or lighting fixtures, or from any other
cause,  whether said injury or damage results from  conditions  arising upon the
Premises or upon other  portions of the  Building  of which the  Premises  are a
part, from other sources or places,  and regardless of whether the cause of such
damage or Injury or the means of repairing the same Is accessible on not, Lessor
shah riot be liable ion any damages arising from any act or neglect of any other
lessee at Lessor nor from the failure by Lesson to enforce the provisions of any
other lease in the industrial  Center.  Notwithstanding  Lessor's  negligence or
breach of this Lease,  Lessor shall under no  circumstances be liable for injury
to Lessee's business or for any loss of income or profit therefrom.

9. Damage or Destruction.

     9.1 Definitions.

          (a) "Premises  Partial Damage" shall mean damage or destruction to the
     Premises,  other than Lessee-Owned  Alterations and Utility  installations,
     the repair cost of which damage or  destruction  Is less than fifty percent
     (50%) of the then Replacement Cost (as defined in Paragraph  9.1(d)) of the
     Premises (exclud-ing Lessee-Owned Alterations and Utility Installations and
     Trade Fixtures) immediately prior to such damage or destruction.

          (b) "Premises  Total  Destruction"  shah mean damage or destruction to
     to-re   Premises,   other  than   Lessee-Owned   Alterations   and  Utility
     Installations,  the repair  cost of which  damage or  destruction  is fifty
     percent  (50%)  or more  of  this  then  Replacement  Cost of the  Premises
     (excluding  Lessee-Owned  Alterations and Utility  Installations  and Trade
     Fixtures)  immediately  prior to such damage or  destruction.  in addition,
     damage or destruction to this Building, other than Lessee-Owned Alterations
     and  Utility  Installations  and  Trade  Fixtures  on  any  lessees  alibis
     Building, the cast of which damage or destruction Is fifty percent (50%) or
     more of the then Replacement Cost (excluding  Lessee-Owned  Alterations and
     Utility  installations  and Trade Fixtures of any lessees of this Building)
     at this Building shall,  at the option of Lessor,  be deemed to be Premises
     Total Destruction.

          (c) "insured  Loss" shall mean damage or  destruction to the Premises,
     other than  Lessee-Owned  Alterations and Installations and Trade Fixtures,
     which  was  caused  by an event  required  to b  covered  by the  insurance
     described in Paragraph  13.3(a)  Irrespective of any deductible  amounts or
     coverage hauls Involved.

          (d)  "Replacement  Cost" shah mean this cost to repair or rebuild  the
     improvements  owned  by  Lessor  at the  time on the  occurrence  to  their
     condition existing Immediately prior thereto, including demolition,  debris
     removal and  upgrading  required by the  operation of  applicable  building
     codes, ordinances or laws, and without deduction for depreciation.

          (e)  "Hazardous  Substance  Condition"  shall mean lbs  occurrence  or
     discovery of a condition  involving the presence of, or a contamination by,
     a hazardous  Substance as defined iii  Paragraph  6.2(a),  in, on, or under
     this Premises.

     9.2 Premises Partial  Damage-insured Loss. if Primaries Partial Damage that
Is an Insured Loss occurs,  then Lessor shall, at Lessor's expense,  repair such
damage (but not Lessee's Trade Fixtures or Lessee-Owned  Alterations and Utility
Installations)  as soon as reasonably  possible and this Lease shall continua in
full force and . in the event,  however,  that theirs Is a shortage at insurance
proceeds  and such  shortage  is due to the fact  that,  by reason of lbs unique
nature of this  improvements In the Premises,  full  replacement  cost insurance
coverage was not  commercially  reasonable  and  available,  Lessor shah have no
oblig-ation to pay for the shortage In insurance proceeds onto fully restore the
unique aspects of the Premises  unless Lessee  provides Lessor with the funds to
cover  same,  or  adequate  assurance  thereof,  within ten (10) days  following
receipt of written  notice on such  shortage  and request  that-el on. II Lessor
receives  said funds or  adequate  assurance  thereof  within  said ten (10) day
period, Lessor shall complete them as soon as reasonably possible and this Lease
shall remain In full lance and effect.  II Lessor does not receive such funds or
assurance  within said period,  Lessor  nevertheless  elect by written notice to
Lessee within ten (10) days thereafter to make such restoration and repair as is
commercially  reasonable  with Lessor paying any shortage In proceeds.  In which
case this  Lease  shall  remain in full  force and  effect.  ii Lessor  does not
receive such funds or assurance  within such ten (10) day period,  and II Lessor
doss not so elect to restore and repair,  then tins Lease shall  terminate sixty
(60)  days  following  the  occurrence  of the  damage  or  destruction.  Unless
otherwise agreed,  Lessee shall in no event have any might to reimbursement from
Lessor  for any  funds  contributed  by  Lessee  to  repair  any such  damage or
destruction.  Premises  Partial  Damage  due to  flood or  earth-quake  shall be
subject to Paragraph 9.3 rather than Paragraph 9.2,  notwithstanding  that there
may be some insurance coverage, but the net proceeds of any such insurance shall
be made available far tins repairs if made by either Party.

     9.3 Partial  Damage-Uninsured  Loss. It Premises Partial Damage that is not
an Insured Loss occurs,  unless caused by a negligent or willful act of Less (In
which event  Lessee  shah make the  repairs at  Lessee's  expense and this Lease
shall continue in full hence and oiled),  Lessor may at Lessor's option,  either
repair such damage as soon as reasonably  possible at Lessor's expense, In which
event this Lease shall continue in lull lance and elf act, or (11) give writ-ten
notice to Lessee within thirty (30) days alter receipt by Lessor of knowledge of
the  occurrence on such damage of Lesson's  desire to terminate this Lease as of
the dale sixty (60) days following the date of such notice.  In the event Lessor
elects to give such notice of Lessor's intention to terminate this Lease, Lessee
shall have this right written tern (10) days after the receipt of such notice to
give written  notice to Lessor on Lessee's  commitment  to pay for the repair of
such damage totally at Lessee's expense and without  reimbursement  from Lessor.
Lessee shall provide  Lessor with the required funds or  satisfactory  assurance
thereof within thirty (30) days following such commitment  from Lessee.  in such
event this Lease  shall  continue  In full force and  effect,  and Lessor  shall
proceed to make such repairs as soon as reasonably  possible alter this required
hinds are available. if Lessee does riot give such notice and provide this funds
or  assurance  thereof  within  the times  specified  above,  this  Lease  shall
terminate as of the date specified in Lessor's notice of termination.

     9.4 Total  Destruction.  Notwithstanding  any other  provision  hereof,  if
Premises Total  Destruction  occurs  (including any destruction  required by any
authorized  public  authority),  this  Lease  shall  terminate  sixty  (60) days
following  this date of such  Premises  Total  Destruction,  whether  or not the
damage or destruction Is an insured Loss or was caused by a negligent or willful
act of Lessee. In the event,  however, that the damage or destruction was caused
by Lessee,  Lessor shall have this right to recover Lessor's damages from Lessee
except as released and waived In Paragraph 9.7.

     9.5 Damage Near End of Term.  If at any time during the last six (6) months
of this term of this Lease there Is damage for which the cost to repair  exceeds
one month's Base Rent,  whether or not an insured Loss,  Lesser may, at Lesson's
option,  terminate  this Lease  effective  sixty (60) days following the date of
occurrence  of such  damage by  giving  written  notice  to  Lessee at  Lessor's
election to do so within  thirty (30) days after the date of  occurrence of such
damage.  Provided,  however, If Lessee at that time has an exercisable option to
extend this Lease or to purchase the  Premises,  then Lessee may  preserve  this
Lease by (a)  exercising  such  option,  an-rd  (b)  providing  Lessor  with any
shortage in insurance  proceeds (or adequate  assurance  thereof) needed to make
the  repairs  on or before  the  earlier  of (I) the date which is ten (10) days
alter Lessee's receipt of Lessor's  written notice  purporting to terminate this
Lease,  or (ii) the day prior to the date upon which  such  option  expires.  if
Lessee duly exercises  such opinion during such period and provides  Lessor with
funds (or  adequate  assurance  thereof)  to cover  any  shortage  In  Insurance
proceeds,  Lesson  shall,  at  Lessor's  expense  repair  such damage as soon as
reasonably  possible and tints Lease shall continue in full force and effect. if
Lessee fails to exercise such option and provide such funds or assurance  during
such  period,  then this Lease shall  terminate  as of the date set forth In the
first sentence of this Paragraph 9.5.

9.6 Abatement of Rent; Lessee's Remedies.

          (a) In the event of (I)  Premises  Partial  Damage  or (ii)  Hazardous
     Substance Condition ion which Lessee Is not legally  responsible,  the Base
     Rent, Common Area Operating Expenses and other charges,  If any, payable by
     Lessee hereunder hoc the period during which such damage or condition,  its
     repair, remediation or restoration continues, shall be abated in proportion
     to the degree ho which Lessee's use of the Premises Is Impaired, but not in
     excess of proceeds from  Insurance  required to be carried under  Paragraph
     8.3(b).  Except for abatement of Base Rent, Common Area Operating  Expenses
     and other charges,  it any, as aforesaid,  all other  Obligations of Lessee
     thereunder  shall be  performed  by Lessee,  and Lessee shall have no claim
     against  Lessor  tar any  damage  suffered  y rea-son  of any such  damage,
     destruction, repair, ran-radiation or restoration.


<PAGE>
          (b) If Lessor  shall be  obligated  to repair or restore the  Premises
     under the  provisions  of this  Paragraph  9 and shall not  commence,  in a
     substantial  and meaningful  way, the repair or restoration at the Premises
     within ninety (90) days alter such obligation shall accrue,  Lessee may, at
     any time prior to the  commence-ment  of such repair or  restoration,  give
     written  notice to Lessor  and to any  Lenders  of which  Lessee has actual
     notice of Lessee's election to terminate this Lease on a date not lass than
     sixty (60) days  following the giving of such notice,  hi Lessee gives such
     notice ho Lessor and such  Lenders  and such repair or  restoration  Is not
     commenced within thirty (30) days after receipt of such notice,  this Lease
     shall  terminate as of the date  specified  in said notice,  if Lessor or a
     Lender  commences the repair or restoration of this Premises  within thirty
     (30) days after the receipt at such  notice,  this Lease shall  continue In
     lull force and effect. "Commence" as used In this Paragraph

     9.6 shall mean either the unconditional authorization of the preparation of
the  required  plans,  or this  beginning  of the actual  work on the  Premises,
whichever occurs first.

     9.7 Hazardous  Substance  Conditions,  if a Hazardous  Substance  Condition
occurs,  unless  Lessee is legally  responsible  therefor  (In which case Lessee
shall make this  Investigation  and remediation  thereat  required by Applicable
Requirements and this Lease shall continue in full force and effect, but subject
to Lessor's  rights under  Paragraph  6.2(c) and  Paragraph  13),  Lessor may at
Lessor's option either (I)  investigate  and remediate such Hazardous  Substance
Condition,  If required,  as soon as reasonably possible at Lessor's expense, in
which  event this Lease  shall  continue In full force and elf ed, or (II) lithe
estimated cost to investigate  and remediate such condition  exceeds twelve (12)
times the then monthly Base rent or $100,000 which ever is greater, give written
notice to Lessee  within  thirty (30) days after  receipt by Lessor at knowledge
alit-re occurrence on such Hazardous  Substance  Condition of Lessor's desire to
terminate  this Lease as of the date sixty (60) days  following the date on such
notice, In this event Lessor elects to give such notice of Lessor's Intention to
terminate this Lease. Lessee shall have the night within ten (10) days after the
receipt old such notice to give written notice to Lessor of Lessee's  commitment
to pay  for  the  excess  costs  of(s)  Investigation  and  remediation  on such
Hazardous Substance Condition to lbs extent required by Applicable Requirements,
over (b) an amount  equal to twelve (12) times the bi-ran  monthly  Base Rent or
$100,000,  whichever  Is greater.  Lessee  shall  provide  Lessor with the funds
required of Lessee or  satisfactory  assurance  thereof  within thirty (30) days
hollowing said  commitment by Lessee.  in such event this Lease shah continue in
full lance and effect,  and Lessor shall pro-ceed to make such investigation and
remediation  as soon  as  reasonably  possible  after  the  required  funds  are
available, If Lessee does not give such notice end provide the required Funds or
assurance  thereof  within  the time  period  specified  above,  this Lease shah
terminate as of the date specified In Lessor's notice after,

     9.8 Terminator-Advance Payments, Upon termination on this Lease pursuant to
this Paragraph 9, Lessor  is-rail  return to Lessee any advance  payment made by
Lessee to Lessor and so much of Lessee's Security Deposit as has not been, or is
not then required to be, used by Lessor under the terms at -us Lease, the Waiver
of  Statutes.  Lessor and Lessee  agree that the terms alibis Lease shall govern
the sued of any damage to or  destruction  of the-re  Premises and Building with
respect to the  termination of thus Lease an-rd hereby waive this  provisions of
any present or future statue to the extent ills inconsistent herewith.

10.  Real  Property  Taxes.

     10.1  Payment of Taxes.  Lessor  strait  pay the Real  Property  Taxes,  as
defined In Paragraph 10.2(a), applicable to the industrial Center, and except as
otherwise  provided in Paragraph  10.3,  any  Increases in such amounts over the
Base Real  Property  Taxes shall be included in the  calculation  of Common Area
Operating Expenses In accordance with the provisions of Paragraph 4.2.

     10.2 Real Property Tax Definitions. 1997 Property Taxes $59,744.06

          (a) As used herein,  this term "Real Property Taxes" shall Include any
     form  Eli Sal  slate  tax or  assessment,  general,  special,  Ordinary  or
     extraordinary, and any license fee, commercial rental tax, Improvement bond
     or bonds, levy or tax (other ti-ran inheritance,  personal Income or estate
     taxes)  Imposed upon the  Industrial  Center by any authority  b-raving the
     direct  or  indirect  power  to  tax,   Including  any,  state  or  federal
     government, or any school, agricultural,  sanitary, fire, street, drainage,
     or  other  Improvement  district  thereof,  levied  against  any  legal  or
     equitable  Interest  on Lessor  in the  Industrial  Center  or any  portion
     thereof,  Lessor's  right  to rent or  other  Income  thereof  ram,  and/or
     Lessor's business of leasing The Premises.  This term "Real Property Taxes"
     shall also  include  any lax,  fee,  levy,  assessment  or  charge,  or any
     Increase therein,  imposed by reason.  of events  occurring,  or changes In
     Applicable Law taking effect, during the term of this Lease,  including but
     not limited lo a change In time ownership of this  Industrial  Center on in
     the Improvements thereon, the execution of this Lease, or any modification,
     amendment  or transfer  thereof,  and what're or not  contemplated  by Ibis
     Parties.

          (b) As used herein,  this term Base Real Property Taxes is-rail be the
     amount of Real  Property  Taxes,  which are assessed  against the Premises,
     Building or Common  Areas In the  calendar  year during  which the Lease is
     executed. in calculating Real Property Taxes by any calendar year, the Real
     Property  Taxes I or any real  estate  tax year shall be  included  In time
     calculation  on Real  Property  Taxes Ion such calendar year based upon the
     number of days which such calendar year and tax year h-rave common.

     10.3  Additional  Improvements.  Common Area  Operating  Expenses shall not
Include Real Property Taxes  specified In this tax  assessor's  records and work
sheets as belong caused by additional  improvements  placed upon the  Industrial
Center by other lessees or by Lesson for the exclusive  employment at such other
lessees.  Notwithstanding Paragraph 10.1 , Lessee small, whatever, pay to Lessor
at the time Common Area Operating  Expenses are payable under Paragraph 4.2, the
entreaty of any Increase in Real Property Taxes if assessed  solely by reason 01
Alterations, Trade Fixtures or Utility installations placed upon the Premises by
Lessee or at Lessees request.

     10.4 Joint Assessment.  if this Building is all separately  assessed,  Real
Property Taxes allocated to the Building shall be an equitable proportion of the
Real Property Taxes for all on Lbs land and Improvements Included within the tax
parcel assessed, such proportion to be determined by Lessor from flue respective
valuations  assigned in fire assessor's work sheets or such other information as
may be reasonably available.  Lessor's reasonable determination thereof, In good
faith, shall be conclusive.

     10.5 Lessee's  Property  Taxes.  Lessee shall pay prior to delinquency  all
taxes  assessed  against and levied upon  Lessee-Owned  Alterations  and Utility
Installations,  Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises or stored within the industrial Center. When
possible,  Lessee shall cause Its  Lessee-Owned  Alterations and Utility,  Trade
Fixtures, furnishings,  equipment and all other personal property to be assessed
and billed  separately from the real property of Lessor. if any of Lessee's said
property shall be assessed with Lessor's real property,  Lessee shall pay Lessor
the taxes  attributable to Lessee's  property within ten (10) days after receipt
of a written statement setting forth the taxes applicable to Lessee's property.

     11,  Utilities.  Lessee shall pay directly for all  utilities  and services
supplied to the Premises,  including  but not limited to  electrify,  telephone,
security, gas and cleaning of the Premises,  together with any taxes thereon. It
any such  services  are not  separately  metered to lbs  Premises or  separately
billed to the Premises, Lessee shall pay to Lessor a reasonable proportion to be
determined by Lessor of all such cal-ranges Jointly metered or billed with other
premises in the  Building,  In the manner and within the limo periods set hurter
In Paragraph 4.2(d).

     12. Assignment and Subletting.

     12.1 Lessor's Consent Required.

          (a)  Lessee  shah  not  voluntarily  or by  operation  of law  assign,
     transfer,  mortgage  or transfer  on  encumber  (collectively,  "assign) or
     sublet  all or any  part on  Lessee's  interest  inn  this  Lease or in the
     Premises wilt-rout Lessor's prior written consent given under and sublet to
     the terms at Paragraph 36.

          (b) A change in the control of Lessee shall  constitute  an assignment
     requiring  Lessor's  consent.  The  transfer,  on a  cumulative  basis,  of
     twenty-live  percent  (25%) or more of the voting  control  of Lessee  shah
     constitute a change In control purpose.

          (c) The  Involvement  of Lessee or its assets in any  transaction,  or
     series old transactions (by way of merger,  sale,  acquisition,  fanning, ,
     transfer,  leveraged  buy-out  or  otherwise),  whether  or  not  a  formal
     assignment or hypothecation on this Lease or Lessee's assets occurs,  which
     results  on will  result  in a  reduction  of lbs Net Worth of  Lessee,  as
     hereinafter  defined,  by an amount  equal to or greater  than  twenty-live
     percent (25%) of such Net Worth of Lessee as It was  represented  to Lesson
     at the limo of hull  execution and delivery of this Lease or at the time of
     lbs most recent assignment to which Lessor has consented,  err as It exists
     immediately  prior to said  transition or  transactions  constituting  such
     reduction,  at  whichever  time said Net Worth of Lessee was or Is greater,
     shall be  considered  an assignment of this Lease by Lessee to which Lessor
     may  reasonably  with-rah-raid  its  consent.  "Net  Worth of  Lessee"  for
     purposes  of this  Lease  shall be the net worth of Lessee  (excluding  any
     Guarantors)  establish-red under generally accepted  accounting  pineapples
     consistently applied.

          (d) An assignment  on  subletting  on Lessee's  Interest in this Lease
     without Lessor's  specific prior written consent shall, at Lessor's option,
     be a Default  curable  after notice per  Paragraph  13.1,  or a non-curable
     Breach  without the necessity of any notice an-rd grace  period,  if Lesson
     elects  to  treat  such  unconcealed  to  assignment  or  subjecting  as  a
     non-curable Breach,  Lessor shall have the right to either: (I) hermit-rate
     Ibis  Lease,  or (Ii) upon  thirty  (30) days'  written  notice  ("Lessor's
     Notice"), Increase the monthly Base Rent ion the Premises to the greater of
     the  then  fair  market  rental  value  of  this  Premises,  as  reasonably
     determined  by Lessor,  or one hundred ten percent  (110%) of the Base Rent
     Insured.  Pending the new fair market rental value,  If disputed by Lessee,
     Lessee  shall  pay the  amount  set  forth  In  Lessor's  Notice,  with any
     overpayment  credited  against the next s) of Base Rent coming due, and any
     underpayment  for the period  retroactively  to The elf active  dale of the
     adjustment  being due and payable  immediately  upon this  determination  .
     Further,  in the  event  of such  Breach  and  mental  adjustment,  (I) the
     purchase price on any option to purchase it Premises  I-Reid by Lessee shah
     be subject to similar  adjustment  to the fair market  value as  reasonably
     determined by Lessor (without -us Lease being  considered an encumbrance or
     any deduction for derogation or obsolescence, and considering this Premises
     at us highest and best use and in good condition) arena hundred hen percent
     (110%) of the price previously In elect, (II) any Index-oriented  rental or
     price  adjustment  formulas  contained  in ibis Lease  shall be adjusted to
     require  that the base  index be  determined  with  reference  to the index
     applicable  to this time of such  adjustment,  and  (ill) any fixed  rental
     adjustments  during the  remainder  of the Lease term shall be increased In
     the same as the new rental  bears to the Bass Rent inn effect prior to this
     adjustment specified in Lessor's Notice.

          (a) Lessee's  remedy Ion any breach on this  Paragraph  12.1 by Lessor
     shall be limited to compensatory damages and/or injunctive relief.

12.2  Terms  and  Conditions  Applicable  to  Assignment  and  Subletting.

          (a) Regardless of Lessor's consent, any assignment on subletting shall
     not be elective  with-rout lbs express written  assumption by such assignee
     or Sublessee on the  Obligations  of Lessee under this Lease,  (ii) release
     Lessee of any Obligations hereunder,  nor (iii) alter the primary liability
     at Lessee tenths  payment of Base Rent and other sums due Lessor  hereunder
     or Ion Tim performance of any other  Obligations  performed by Lessee under
     this Lease.

          (b) Lessor may accept any rent or performance of Lessee's  Obligations
     from any person  other ran Lessee  pending  approval or  disapproval  of an
     assignment.  Neither  a  delay  In the  approval  or  disapproval  at  such
     assignment nor the acceptance of any rent for performance  shall constitute
     a waiver or estoppels of Lessor's  right to exteriors  Its remedies for the
     Default on Beach by Lessee of any on the terms,  covenants or conditions of
     this Lease.

          (c) The consent of Lessor to any  assignment  or  subletting  shah not
     constitute a consent to any  subsequent  assignment or subletting by Lessee
     or ho any  subsequent or success)  assignment or subletting by the assignee
     or  subleases.  However,  Lessor may consent to subsequent  subjecting  and
     assignments  on the sublease or any  amendments or  modifications  Thai-ole
     without  nullifying  Lessee or anyone else  liable  under this Lease or the
     sublease and Without  obtaining  their  consent,  and such action shall not
     relieve such persons from this Lease or the sublease.


<PAGE>
          (d) In this  event of any  Default  or Breach of  Lessee's  obligation
     under  this  Lease,   Lessor  may  proceed  directly  against  Lessee,  any
     Guarantors or anyone else  responsible  tar the performance of the Lessee's
     Obligations  under  this  Lease,  including  any  Sublessee,   without  hi-
     exhausting Lessor's remedies against any other person or entity responsible
     afar-afar to Lessor, or any security held by Lessor.

          (e) Each request for consent to an assignment  or subletting  shall be
     ti-u writing, accompanied by Information relevant to Lessor's determination
     as to the financial and operational  responsibility and  appropriateness on
     tins  proposed  assignee  or  Sublessee,  including  but not limited to the
     Intended use and/or required modification of the Premises, it any, together
     with a non-refundable deposit of $1,000 an ten percent (bob) at the monthly
     Base Rent applicable to the portion of the Premises which is the subject of
     the proposed  assignment or sublease,  whichever is greater,  as reasonable
     consideration  for  Lessor's  considering  and  processing  the request for
     consent.  Lessee  egress to provide  Lessor  with such other or  additional
     information and/or documentation as may be reasonably requested by Lesson.

          (f) Any assignee on, or Sublessee  under,  this Lease shall, by reason
     of accepting such assignment or entering Into such sublease, be deemed, for
     the  benefit of Lessor,  to have  assumed  and agreed to conform and comply
     with each and every term,  covenant,  condition and obligation herein to be
     observed  or  performed  by Lessee  during the term on said  assignment  or
     sublease,  other than such  Obligations as are contrary to or  inconsistent
     with   provisions  of  an  assignment  or  sublease  to  which  Lesson  has
     superficially consented in writing.

          (g) This  occurrence of a transaction  described in Paragraph  12.2(c)
     shall give Lessor the right (but not the  obligation)  to require  that the
     Security  Deposit  be  Increased  by an  amount  equal to six (6) times the
     monthly Base Rent,  and Lessor may make the actual receipt by Lessor on the
     Security   Deposit  Increase  a  condition  to  Lessor's  consent  to  such
     transaction.

          (h) Lessor,  as a condition to giving Its consent to any assignment or
     subletting, may require that the amount and adjustment schedule at the rent
     payable  under this  Lease be  adjusted  to what is them the  market  value
     and/or  adjustment  schedule for  property  similar to the Premises as then
     constituted, as determined by Lessor.

12.3  Additional  Terms and Conditions  Applicable to Subletting.  The following
terms and conditions  shall apply to any subletting by Lessee of all or any part
of the Premises and shall be deemed  Included in all subleases  under this Lease
wit-tether or not expressly Incorporated therein:

          (a) Lessee  hereby  assigns  and  transfers  to Lessor all of Lessee's
     interest  in all  rentals  and Income  arising am any  sublease of all or a
     portion  of the  Premises  heretofore  or bereave  tar made by Lessee,  and
     Lessor may  collect  such rent and Income  and apply same  toward  Lessee's
     Obligations under this Lease;  provided,  however,  that until a Breach (as
     defined In  Paragraph  13.1)  shall  occur In the  performance  of Lessee's
     Obligations under this Lease,  Lessee may. except as otherwise  provided in
     this  Lease,  receive,  collect  and enjoy the rents  accruing  under  such
     sublease.  Lessor  shall not, by reason of the  foregoing  provision or any
     other  assignment  of  such  sublease  to  Lessor,  nor  by  reason  of the
     collection on the rents a Sublessee, be deemed liable to this Sublessee for
     any  failure  of  Lessee  to  perform  and  comply  with  any  of  Lessee's
     Obligations   to  such  Sublessee   under  such  Sublease.   Lessee  hereby
     irrevocably  authorizes and directs any such  Sublessee,  upon receipt of a
     written notice from Lessor slating that a Breach exists In the  performance
     of Lessee's  Obligations  under this Lease,  to pay to Lessor the rents and
     other  charges due and to became due under the  sublease.  Sublessee  shall
     rely upon any such  statement  and  request  from Lessor and shall pay such
     rents and other ranges to Lessor without any obligation or right to inquire
     as to whether  such Breach  exists and  notwithstanding  any notice from or
     claim  from  Lessee to the  contrary.  Lessee  shall have no right or claim
     against  such  Sublessee,  or,  until the  Breach has been  cured,  against
     Lessor,  for any such rents and other charges so paid by said  Sublessee to
     tensor.

          (b) In the  event of a Breach by  Lessee  in the pert  ordnance  Ellis
     Obligations  under this  Lease,  Lessor,  at its option and  will-rout  any
     obligation  to do so, may require any  Sublessee  to althorn to Lessor,  in
     which event Lessor shall  undertake the  Obligations at the SubLessor under
     such  sublease  from  the  time  of the  exteriors  of said  option  to the
     expiration of such sublease;  provided, however, Lessor shall not be liable
     any prepaid  rents or security  deposit  paid by such sub-.  lessee to such
     SubLessor  or I or any other prior  defaults or breaches of such  SubLessor
     under such sublease.

          (c) Any  matter  requiring  the  consent  of the  SubLessor  tinder  a
     sublease shall also require the consent at Lessor herein.

          (d) No Sublessee  under a sublease  approved by Lessor  shall  further
     assign or sublet all or any part of the  Premises  without  Lessor's  prior
     written consent.

          (e) Lessor  shall  deliver a copy of any notice of Del audit or Breach
     by Lessee to the  Sublessee,  wino shall have the right to cure the Default
     of Lessee  with-rim  the grace  period,  II arty,  specified  in such.  The
     Sublessee shall have a right at  reimbursement  and ail set mom and against
     Lessee for any such Defaults cured by the Sublessee.

13. Default; Breach; Remedies.

     13.1  Default;  Breach.  Lessor and Lessee  agree  that II an  attorney  is
consulted  by  Lessor  in.  connection  with a  Lessee  Default  or  Breach  (as
hereinafter  ditched),  $350.00 is a reasonable  minimum sum per such occurrence
non legal  services  and costs In the  preparation  and  service  at a notice of
Default, and that Lessor may include The cost of such services and costs In said
notice as rent due and payable to cure said  default.  A "Default"  by Lessee is
delved as a failure by Lessee to observe,  comply with or  phi-loran  any at the
terms,  covenants,  conditions or rules applicable to Lessee under this Lease. A
"Breach"  by Lessee Is  ditched as this  occurrence  of any one or mane of the I
olio wing Defaults, and, where a grace period for cure alter notice is specified
herein,  the failure by Lessee to cure such Default  prior to the  expiration of
the applicable grace period, and shall entitle Lessor to pursue the remedies set
forth in Paragraphs 13.2 and/or 13.3:

          (a) This vacating of the Premises  will-rout the intention to reoccupy
     same, or the abandonment on the Premises.

          (b) Except as expressly  otherwise provided In this Lease, the failure
     by Lessee to make any payment of Base Rent,  Lessee's  Share of Common Area
     Operating  Expenses,  or any other monetary  payment required to be made by
     Lessee  hereunder as and when due, this failure by Lessee to provide Lessor
     with  reasonable  evidence of insurance or surety bond required  under this
     Lease,  or the failure of Lessee to tulip any  obligation  under this Lease
     whiff endangers or threatens life or property, where such failure continues
     for a period of lories (3) days written notice thereof by or on bat-rail of
     Lessor to Lessee.

          (c) Except as  expressly  otherwise  provided  lid-u Ibis  Lease,  the
     failure by Lessee to provide Lessor with reasonable witan evidence (in duly
     executed  original form, if applicable) of (I) compliance  with  Applicable
     Requirements  per  Paragraph  6.3,  (ii) the  inspection,  maintenance  and
     service contracts  required under Paragraph 7.1(b),  (ill) the recession of
     an unauthorized assignment or subletting per Paragraph 12.1, (iv) a Tenancy
     Statement   per   Paragraphs   16  or  37,   (v)   the   subordination   an
     non-subordination at Lids Lease pen Paragraph 30, (vi) this guaranty at the
     performer-race  of Lessee's  Obligations under this Lease if required under
     Paragraphs 1.11 and 37, (vii) the execution of any document requested under
     Paragraph 42 (easements),  or (viii) any other documentation or Information
     which  Lessor  may  reasonably  require  of Lessee  under the terms of this
     lease,  where  any such  failure  continues  ion a period  often  (10) days
     following written notice by an on behalf of Lessor to Lessee.

          (d) A Default by Lessee as to the  tennis,  covenants,  conditions  or
     provisions of Ibis Lease, on of the rules adopted under Paragraph 40 hereof
     that are to be observed,  corn p lied with or  performed  by Lessee,  other
     Hiram ti-rose  described in  Subparagraphs  13.1(a),  (b) or (c), above, we
     Rena such Saul  continues  for a period on thirty  (30) days alter  written
     notice thereof by or on befall of Lessor to Lessee; provided, however, that
     lithe  nature on  Lessee's  Default is such that mare than thirty (30) days
     are reasonably  required for its curs,  then it shall not be deemed to be a
     Breach of this Lease by Lessee it Lessee  commences  such cure  within said
     thirty (30) day period and thereafter  diligently  prosecutes  such cure to
     completion.

          (e) The occurrence of any air this following events: (I) the making by
     Lessee  at any  general  arrangement  or  assignment  far the  banal  It of
     creditors;  (ii)  Lessee's  becoming a "debtor" as defined In 11 U.S.  Code
     Section lob or any  successor  statute  (unless,  in the case of a petition
     filed against Lessee,  the same is dismissed within sixty (60) days); (iii)
     the   appointment   on  a  trustee  or  receiver  to  hake   possession  on
     substantially  all of Lessee's assets Locale at the Premises or of Lessee's
     interest In this Lease,  where  possession is not respired to Lessee within
     thirty  (30)  days;  or (iv) this  attachment,  execution  or other  judoka
     seizure oil  substantially all of Laser's assets located at the Premises or
     oil Lessee's  Interest in this Lease,  where such seizure is not discharged
     within thirty (30) days; provided, however, in the event that any provision
     on this  Subparagraph  13.1(e) is  contrary  to any  applicable  law,  such
     provision shall be of no force or effect, and shall not affect the validity
     of the remaining provisions.

          (f) The discovery by Lessor that any Financial  statement of Lessee or
     oil any  Guarantor,  given  to  Lessor  by  Lessee  or any  Guarantor,  was
     materially

          (g) lithe  performance  of  Laser's  Obligations  under  this Lease is
     guaranteed:  (I) the  detain  of a  Guarantor,  (ii) lye  termination  of a
     Guarantor's  liability with respect to this Lease other than inn accordance
     with the terms of such guaranty,  (Iii) a Guarantor's becoming Insolvent or
     the subject on a bankruptcy  tiling,  (iv) a Guarantor's  refusal to no nor
     this guaranty, or (v) a Guarantor's breach allies guaranty obligation on an
     breach  basis,  and  Lessee's  failure,  within  sixty (60) days  following
     written  notice by or on behalf of Lessor to Lessee of any such  event,  to
     provide Lessor with written alternative assurances of security, which, when
     coupled with the then existing  resources of Lessee,  equals or exceeds the
     combined  biannual  resources at Lessee and the Guarantors  that existed at
     the time of execution of this Lease.

     13.2  Remedies.  If  Lessee  fails to phi-f  chi any alt  invasive  duty or
obligation  of Lessee  under this Lease,  with-rim  Len (10) days after  written
notice to Lessee (or in case of an emergency,  whiteout  notice),  Lessor may at
its  opinion  (but  with-rout  obligation  to do so),  perform-run  such duly or
obligation on Lessee's  behalf,  Including but not limited to the obtain-ring of
reasonably  required  bonds,  insurance  policies,  of-  governmental  licenses,
permits or approvals.  The costs and expenses 01 any such  performance by Lessor
shah be due and  payable by Lessee to Lessor  upon  invoice  three-hour.  ii any
check given to Lessor by Lessee shall not be honored by the bank upon which Ills
drawn,  Lessor,  at its own option,  may require all Future  payments to be made
under this Lease by Lessee to be made only by cashier's check. In the event of a
Breach at  tennis  Lease by Lessee  (as  deigned  In  Paragraph  13.1),  with on
will-rout  further  malice  or  demand,  and  wilt-rout  limiting  Lessor In the
dextrose  of any  nagging  or remedy  which  Lessor may h-rave by reason of such
Breach, Lessor may:

          (a) Terminate  Lessee's night to possession of .11-re  Premises by any
     lawful means,  In which case this Lease and lye term hereof shall  germinal
     and Lessee  shall  immediately  surrender  possession-ref  the  Premises to
     Lessor. in such event Lessor shall be entitled to recover hi-cm Lessee: (I)
     the  worth at the time at the  award on the  unpaid  remit  which  had been
     earned at the time on termination;  (Ii) ibis worth at the time of award at
     the amount by which The unpaid  rent which would  I-rave bean earned  alter
     termination  until the time on award exceeds the amount of such rental loss
     that the Lessee proves could have been reasonably avoided;  (iii) the worth
     at the time of award  of the  amount  by which  the  unpaid  remit  for the
     balance to the term  alter the lines of award  exceeds  the amount  of-such
     rental loss that the Lessee proves could be reasonably avoided;  and (live)
     any other  amount  necessary  ho  compensate  Lessor Ice all the  detriment
     proximately caused by the Lessee's failure to perform its Obligations under
     lids  Lease or which In the  Ordinary  course of things  would be likely to
     result  therefrom.  Including  but not  limited  to the cost on  recovering
     possession  of the  Premises,  expenses of  relating,  Including  necessary
     renovation and alteration on the Premises,  reasonable attorneys' tees, and
     lb-rat portion of any leasing  commission paid by Lessor in connection with
     this Lease applicable to the unexposed term of this Lease. The worth at the
     Lime  to  award  old the  amount  retorted  to in  provision  (iii)  of the
     immediately  preceding  sentence  shall be  centupled by  discounting  such
     amount at the dis-count  rate of the Federal  Reserve Bank on San Francisco
     on the Federal  Reserve Bank  District in which the Premises are located at
     this time of award plus one  percent  (1%).  Efforts by Lessor to  mitigate
     damages  caused by Lessee's  Umlaut or Breach of this Lease shall not waive
     Lessor's right to recover damages under this Paragraph 13.2. If termination
     of lids  Lease Is  obtained  through  the  provisional  remedy of  unlawful
     detained, Lesson shall have the right to makeover in such pro-


<PAGE>
     ceding the unpaid rent and damages as are  recoverable  therein,  or Lessor
     may reserve the  nigh-rah to recover all or any part  thereof in a separate
     suit for such rent and/or  damages.  If a notice and grace period  required
     under Subparagraph 13.1(b), (c) or(d) was not previously given, a notice to
     pay rent or quit, onto perform or quit, as the case may be, given to Lessee
     under any statue  authorizing  the fort allure of leases for unlawful  data
     inner shall also constitute the applicable notice for grace period purposes
     required by  Subparagraph  13.1(b),(c) or (d). In such case, the applicable
     grace period under the unlawful staler statue shall run concur-rently alter
     the one such  statutory  notice,  and the  failure  of  Lessee  to cure the
     Default  with-rim  the  greater  of the two (2) such  grace  periods  shall
     constitute both an unlawful  detained and a Breach of lulls Lease entitling
     Lessor to the remedies provided for in this Lease and/or by said statute.

          (b) Coniine the Lease and Lessee's  right to  possession In effect (in
     California under California Oval Code Section 1951.4) after Lessee's Breach
     and recover the rent as it becomes  due,  provided  Lessee has The right to
     sublet or assign, subject only to reasonable limitations. Lessor and Lessee
     agree that the  limitations  on assignment and subletting In this Lease are
     reasonable.  Acts of  maintenance  or  preservation,  efforts to insist the
     Premises,  or the  appointment  of a  receiver  to  protect  this  Lessor's
     Interest  under this  Lease,  shall not  constitute  a  termination  of the
     Lessee's nigh-not to possession.

          (c) Pursue any other remedy now or hereafter available to Lesson under
     the laws or  judoka  diffusions  of the  state  wherein  the  Premises  are
     located.

          (d) The  expiration or this Lease and/or the  termination  of Lessee's
     right to  possession  shall not  relieve  Lessee lean  liability  under any
     Indemnity  provisions  of this Lease as to matters  occurring  on  accruing
     during the term hereof on by reason at Lessee's occupancy of the Premises.

     13.3 inducement  Recapture in Event of Breach.  Any agreement by Lessor for
tree or abased rant or other  charges  applicable  to the  Premises,  or for the
giving  on  paying  by  Lessor  to crier  Lessee  at any  cash or  other  bonus,
inducement or consideration  for Lessee's entering Into this Lease, all of which
concessions  are  hereinafter  referred to as "inducement  Provisions"  shall be
deemed  conditioned  upon Lessee's full and faithful  performance  of all of the
terms,  covenants and conditions of this Lease to be perform-teed or observed by
Lessee during the term hereof as the same may be extended.  Upon the  occurrence
of a Breach (as  defined In  Paragraph  13.1) of this Lease by Lessee,  any such
inducement  Provision  shah be deemed  deleted from this Lease and of no further
force or ailed, and any rent, other flange,  bonus,  Inducement or consideration
theretofore abated,  given or paid by Lessor under such an inducement  Provision
shall be immediately due and payable by Lessee to Lessor,.  an-rd recoverable by
Lessor, as additional rent due tinder this Lease, notwithstanding any subsequent
cure of said  Breach by  Lessee.  The  acceptance  by Lesson of rent or the cure
chit-re  Breach which  Initialed this operation of this Paragraph 13.3 shall not
be deemed a waiver by Lessor of ice  provisions  of this  Paragraph  13.3 unless
superficially so stated In writing by Lessor at the lime on such acceptance.

     13.4 Late Charges.  Lessee hereby  acknowledges that late payment by Lessee
to Lessor on ret-rim and tot-rein sums due hereunder  will cause Lessor to Incur
costs not  contemplated  by this Lease,  the exact of which will be extremely to
ascertain. Such costs include, but are not limited to, processing and accounting
charges,  and late changes  which may be Imposed upon Lessor by the terms of any
ground lease,  montage or deed of trust ,evening the Premises.  Accordingly,  if
any  Installment  of rent or other sum due from Lessee  shall not be received by
Lessor or Lessor's designee within ten (10) days after such amount shall be due,
then, without any requirement for notice to Lessee, Lessee shall pay to Lesson a
late charge equal to six percent (6%) of such overdue amount. The parties hereby
agree that such kits charge represents a lair and of the costs Lessor will Incur
by reason of ladle  payment by Lessee.  Acceptance of such late charge by Lesson
shall in no event  constitute a waiver on Lessee's Dalai or Breach with- respect
to such overdue  amount,  nor prevent  Lessor from  expressing  any of the other
rights and remedies granted hereunder.  in the event range Is payable hereunder,
whether or not collected,  for three (3)  consecutive  installments of Base Ran,
them  notwithstanding  Paragraph 4.1 or any other provision of this Lease to the
contrary,  Base Rent shall, at Lessor's option, become due and payable quarterly
in advance.

     13.5  Breach by Lessor.  Lessor  shah not be deemed in breach of this Lease
unless Lessor fails within a reasonable  time to perform an obligation  required
to be performed by Lesson. For imposes of this Paragraph 13.5, a reasonable time
shah In no event be less than thirty (30) days alter  receipt by Lessor,  and by
any  Lender(s)  whose name and address  shall have been  furnished  to Lessee in
willing ton such purpose, cal written notice spooling wherein such obligation of
Lessor has not been performed; provided, however, that if the nature of Lessor's
obligation  is such that more  than  thirty  (30) days  after  such  notice  are
reasonably  required for its then Lessor shall not be In breach of this Lease If
performance  Is  commenced  within  such  thirty  (30) day period and thereat at
dili-gently pursued to completion.

14.     Condemnation. if the Premises or any portion thereof are taken under the
power  of  eminent domain or sold under the threat of the dextrose of said power
(all  of wig-rich are herein called, this Lease is-nail terminals as to the part
so  taken  as  at It-re date the condemning authority lakes tithe or possession,
whichever  hi-sty occurs. if more than Len percent (10%) of the hoer area alibis
Premises,  or  more than twenty-live percent (25%) 0111-re portion of the Common
Areas  designated Ion Lessee's parking, is taken by condemnation, Lessee may, at
Lessee's  option,  to  be expressed In writing within Len (10) days attar Lessor
shall have given Lessee written notice on such taking (or in the absence of such
notice,  within  ten  (10)  days after the condemning authority shall have taken
possession)  terminate  this Lease as on the dale the condemning authority takes
such  possession. Ii Lessee does not terminate this Lease In accordance with the
lane  going, Ibis Lease shall remain in full force and effect as to this portion
of  this  Premises  remaining, except that the Base Rant shall be reduced in the
same  proportion  as  the  retable floor area alibis Premises taken beans to the
total  retable floor area of the Premises. No reduction of Base Rent shall occur
it  the  condemnation  does not apply to any portion of the Pram-uses. Any award
for  the  taking oil all on any part of this Premises under the power of eminent
domain  or  any payment made under threat of the dextrose of such power shall be
the  property  of  Lessor,  whether such award shall be made as compensation for
diminution  of  value  of  the  leasehold  an  for  the taking of the fee, or as
severance  damages;  provided,  however,  that  Lessee  shall be entitled to any
compensation,  separately  awarded  to  Lessee  for Lessee's relocation expenses
and/cry  loss  on  Lessee's  Trade Fixtures. In the event that this Lease Is not
terminated by reason of such condemnation, Lessor shall to the extent allies net
severance  damages  received,  over  and above Lessee's St-rare of the legal and
Eli-tar  expenses  incurred  by  Lessor  in the condemnation mat-ter, repair any
damage  to the Premises chatted by stitch condemnation auth-rarity. Lessee shall
be  responsible  for  the  payment of any amount In excess of such net severance
damages  required  to  complete  soon  repair.

15. Brokers' Fees.

     15.1 Procuring Cause. The Broken(s)  married in Paragraph 1.10 Is/are cause
of this Lease.

     15.2 Additional Terms.  Unless Lessor and Broker(s) I-rave otherwise agreed
in writing,  Lessor agrees plat: (a) II Lessee  expresses any Option (as defined
in Paragraph 39. granted under this Lease on any Option subsequently granted, or
(b) II Lessee  acquires any rights to the  Pram-rises or other premises in which
Lesson has an Interest, or (c) if Lessee ram-rains In possession of the Premises
with the consent at Lessor after the  expiration of the term of this Lease after
having  failed to dextrose an Option,  or (d) If said Brokers are the  procuring
cause of any amber lease or sale entered info between the Parties  pertaining to
the Premises  and/or any adjacent  property in which Lessor has an interest,  or
(a) If  Base  Rent  is  increased,  whether  by  agreement  or  operation  of an
escalation clause herein, then as to any of said transactions,  Lessor shall pay
said  Broker(s) a lee In  accordance  with the schedule of said  Broker(s) In of
tact at the time of the execution of this Lease.

     15.3  Assumption  of  Obligations.  Any  buyer or  transferee  of  Lessor's
interest In this Lease,  whether such transfer is by agreement or by operable of
law, shall be deemed to have assumed  Lessor's  obligation  under this Paragraph
15. Each Broken shall be an intended  third party of the provisions of Paragraph
1.10 and of this  Paragraph 15 to the extent of its  interest in any  commission
arising from Ibis Lease and may enforce right  directly  against  Lessor and its
successors,

     15.4  Representations and Warranties.  Lessee and Lessor each represent and
warrant  to the outer  that It has had no  dealings  with any p  son-son,  firm,
bro-ken or finder other ti-ran as named in Paragraph  1.10(a) in connection with
the  negotiation  of this Lease  and/or  hits  consummation  of the  transaction
contemplated  hereby,  and Thai no broker or other person,  firm or entity other
ti-ran said named  Broker(s) is enchained  to any  commission  or hider's fee in
connection  with said  trans-action.  Lessee and Lessor do each hereby  agree to
indemnify,  protect,  defend  and  hold the  other  harmless  horn  and  against
liability for  compensation  or charges which may be claimed by any such unnamed
broker,  finder or other  similar  party by reason of any dealings or actions of
the Indemnifying Party,  including any costs,  expenses,  and/or attorneys' fees
reasonably Incurred with respect thereto.

16 Tenancy and Biannual Statements.

     16.1 Tenancy Statement. Each-n Party (as "Responding Party") shall with-rim
ten (to) days after written notice from the other Party (the "Requesting Party")
execute, acknowledge and deliver Ian 11w Requesting Party a statement In writing
In a term similar to the then most current "Tenancy Statement" form published by
The  American  Industrial  Real  Estate  Association,   platys  such  additional
collimation  and/or statements as may be reasonably  requested by the Requesting
Party.

     16.2 Biannual Statement.  ii Lesson desires to finance,  reliance,  or sell
ibis Premises car-re Building, or any part thereof, Lessee and alt shall deliver
to any  potential  lender or purchaser  designated b Lessor such  statements  of
Lessee and such  Guarantors  as n-ray be  reasonably  requited by such tender or
purchaser,  Including but not limited ho Lessee's  statements  Ion the past line
(3) years.  All such shall be received by Lessor and such lender or purchaser in
confidence and shah be used only ice the purposes herein set forth.

17. Lessor's Liability. The term "Lessor" as used herein shall mean the owner or
owners at It-new  limner In  question of the fee tills to the  Premises.  in the
evenly of a transfer on Lessor's title  mi-Interest In 11-re Premises or In this
Lease,  Lessor  rail-rail  deliver to the or assignee (in cash or by credit) any
unused  Security  Deposit  held  by  Lessor  at the  time of  sect  transfer  or
assignment.  Except  as  provided  in  Paragraph  153,  upon  such  transfer  or
assignment and delivery of the Security Deposit, as aforesaid,  the prior Lessor
shall be  relieved  of all  liability  with  rasped Ice the  Obligations  and/or
covenants Linden lids Lease  thereat(tar to be performed by the Lessor.  Subject
to The foregoing, the Obligations and/or covenants in lids Lease to be performed
by the Lesson is-nail be binding only upon the Lesson as hereinabove defined.

18.  Severability.  This  Invalidly  of any  provision  on  Il-is  Lease,  as of
competent , shall In no way affect the validity of any other provision hereof.

19.  Interest  on  Past-Due  Obligations.   Arty  monetary  payment  due  Lessor
hereunder,  other Il-ran late charges,  not received by Lessor with-rim ten (10)
days follow-ing  this date on which-n it was due, shall bear Interest  hi-at-run
this dale due at the prime rate charged by the largest state  chartered batik In
the state in which the  Premises  are located  pies tour percent (4%) per annum,
but rich exceeding the maximum rate allowed by law, In addition to the potential
late range-range provided for In Paragraph 13.4.

20, lime of Essence.  lime is at the essence with respect Ice the performance of
all obligations to t)e performed or observed by the Parties under lures Lease.

21. Rent Deferred.  Alt monetary Obligations at Lessee to Lessor under the terms
of this Lease are deemed to be rent.

22. No Prior or rein-rein  Agreements;  Broker Disclaimer.  This Lease complains
all  agreements  between the  Parties  welting  respect to any mallet  mentioned
herein, and no other prior on contemporaneous agreement or understanding shah be
elective.  Lessor and Lessee each represents and warrants to the Brokers that It
has made, and is relying solely upon,  its awn  Investigation  as to the nature,
quality, character and responsibility of the other Party to this Lease and as to
the  nature,   quality  and   character  of  The   Premises.   Brokers  have  no
responsibility  with  rasped  thereto or with  respect to any  default or breach
hereof by either Party.  Each Broker nail-nail be an intended third party on the
provisions of this Paragraph 22.


<PAGE>
23. Notched.

     23.1 Notice . All notices  required or permitted by this Lease rail-rail be
In writing and may be  delivered in parson (by hand or by messenger or cot infer
serve's) or may be sent by regular,  certified or registered mall on U.S. Postal
Service  Express  Mail,  with  postage p repaid,  or by  facsimile  transmission
dun-mug normal business hours, and shall be deemed  sufficiently given served in
a manner  specified In this  Paragraph  23. The  addresses  noted  adjacent to a
Party's  signature on Hulls Lease shall be that Party's  address for delivery on
mailing on notice  purposes.  Either  Party may by written  notice to this other
spiffy a different address for malice purposes, except that upon Lessee's taking
possession of the Pram-rises, the Premises shall constitute Lessee's address for
the purpose at mail-ing or delivering  notices to Lessee.  A copy of all notices
required or  permitted  to be given to Lessor  hereunder  shall be  concurrently
transmitted to such party or parties at such addresses as Lessor may from tin-re
to time hereafter designate by written notice to Lessee.

     23.2 Date of Notice.  Any notice  sent by  registered  or  certified  mail,
return receipt requested, shall be deemed given an the date at delivery shown on
the receipt  card, or If no delivery date is shown,  this postmark  thereon.  hi
semi by regular mail, the notice shall be deemed given  forty-sigh-in (48) hours
after the same Is addressed as required herein and mailed with postage  prepaid.
Notices  delivered  by United  States  Express  Mail or  overnight  courier that
guarantees next day delivery shall be deemed given  twenty-tour (24) hours alter
delivery on the same to the United  States  Postal  Service or  courier,  If any
notice is transmitted  by fac-simile  transmission  or similar  means,  the same
shall be deemed served or delivered upon telephone or facsimile  confirmation of
receipt  on the  transmission  thereof,  provided a copy Is also  delivered  via
delivery  or malt.  If notice is  received  on a Saturday or a Sunday or a legal
holiday, it shall be deemed received on the next business day.

24, Waivers.  No waiver by Lessor of the Default or Breach of any term, covenant
or  condition  hereof by  Lessee,  shall be  deemed a waiver of any other  term,
covenant or condition hereof,  or of any subsequent  Default or Broach by Lessee
of the same or any other term,  covenant or condition  hereof.  Lessor's consent
to, or approval of, any such act shall not be denned to render  unnecessary  the
obtaining of Lessor's  consent to, or approval of, any subsequent or similar act
by Lessee,  or be construed as the basis of an stopped to enforce the  provision
or  provisions  at this Lease  requiring  such  consent.  Regardless of Lessor's
knowledge of a Default or Breach at the lime of accepting  rent,  the acceptance
of rent by Lessor  shall not be a waiver of any  Default  or Breach by Lessee of
any  provision  hereof.  Any payment  given  Lessor by Lessee may be accepted by
Lessor on account of moneys or damages due Lessor, any qualifying state-ments or
conditions made by Lessee in connection therewith,  which such statements and/or
conditions shall be of no force or effect whatsoever unless superficially agreed
to in writing by Lessor at or before the time of deposit of such payment.

25.  Recording.  Either  Lessor or Lessee  shall,  upon  request  of the  other,
execute,  acknowledge  and deliver to the other a short form  memorandum of this
Lease for recording  purposes.  The Party  requesting  recordation  nail-nail be
responsible for payment of any lees or taxes applicable thereto.

26.  No Right To  Holdover.  Lessee  has no night to  retain  possession  at the
Premises or any part thinnest  beyond the  expiration or earlier  termination of
this Lease.  In the event that Lessee holds over In violation at this  Paragraph
26 then the Base  Rent  payable  from and after  The time of the  expiration  or
earlier  termination  at this Lease shall be increased  to Iowa hundred  percent
(200%) at the Base Rent  applicable  during the  preceding  such  expiration  or
earlier termination. Nothing contained herein shall be construed as a consent by
Lessor ho any holding over by Lessee.

27.  Cumulative  Remedies.  No  remedy  or  election  hereunder  shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.

28,  Covenants  and  Conditions.  All  provisions  of  Lease to be  observed  or
performed by Lessee are both covenants and conditions.

29. Binding Effect; Choice of Law. This Lease shall be binding upon the Panties,
their personal  representatives,  successors and, assigns and be governed by the
laws of the State in which the Premises are located.  Any mitigation between the
Parties hereto  concerning  this Lease shall be initiated In the county in which
the Premises are located.

30. Subordination; Attainment; Non-Disturbance.

     30.1  Subordination.  Tints Lease and any Option  granted  hereby  shall be
subject and subordinate to any ground lease,  mortgage,  deed of trust, or other
hypothecation  or security  device  (collectively,  "Security  Device"),  now or
hereafter  placed by Lessor upon the real  property at which the  Premises are a
part,  to any and all  advances  made on this  security  thereof,  at-rd  to all
renewals, modifications,  consolidations, replacements and extensions to Israel.
Lessee agrees that tibia Lenders  holding any such Security Device shall have no
duty,  liability an  obligation to perform any on lb-new  Obligations  on Lesson
under tins Lease, but that In the event oil Lessor's default with respect to any
such obligation,  Lessee will give any Lender whose name and address h-nave been
punished Lessee In writing I or such purpose notice of Lessor's default pursuant
to Paragraph 13.5. if any Lender shall heel to have this Lease and/or any Option
granted  hereby  superior  to the lien old its  Security  Device  and shall give
written  notice  thereof to Lessee,  lids Lease and such Options shall be deemed
prior  to such  Security  Device,  notwithstanding  the  relative  dates  of the
documentation or recondition to Israel.

     30.2 Attainment. Subject to the non-disturbance provisions on Paragraph

     30.3,  Lessee  agrees to altar to a Lender or any other panty wire acquires
ownership of line Prentiss by reason of a foreclosure of a Security Device,  and
that in the event on such  foreclosure,  such new owner shall not: (I) be liable
for any act or omission of any prior lesson on with respect to events  occurring
prior to  acquisition  of ownership,  (ii) be subject to any offsets or defenses
which  Lessee  might  have  against  any  prior  lessor,  or  (lei)  be bound by
prepayment of more tab-ran one month's rent.

     30.3  Non-Disturbance.  With  respect to Security  Devices  entered Into by
Lessor abler the execution of this lease,  Lessee's  subordination of this Lease
shall be sublet to receiving  assurance (a non-disturbance  agreement") from the
Lender that Lessee's possession and this Lease,  including any options ho extend
the term  hereof,  will not be  disturbed so none as Lessee is rot-rot In Breach
hereof and althorns to the record owner of the Premises.

     30.4 Self-Executing. The agreements contained In this Paragraph 30 shall be
effective  without the execution of any further  documents;  provided,  however,
that upon  written  request from Lesson or a Lender in  connection  with a sale,
fanning or f Premises,  Lessee and Lessor shall execute such further writings as
may be reasonably  required to  separately  document any such  subordination  or
moon-subordination,  atonement and/or  non-disturbance  agreement as Is provided
tar herein.

31.  Attorneys'  Fees.  II any Party or Broken brings an action or proceeding to
enforce the terms hassle or declare rights  hereunder,  the Prevailing Party (as
here-alter defined) In any such proceeding,  action, or appeal terrain, shall be
entitled to  reasonable  attorneys'  lees.  Such lees may be awarded In the same
suit or recovered in a separate stilt,  whether or not such action or proceeding
Is pursued to diffusion or judgment. The trine "Prevailing Party" shall Include,
without limitation,  a Party or Broker who substantially obtains or defeats this
relief  sough-rim,  as this  case may be,  whether  by  compromise,  settlement,
judgment,  or the  abandonment  by this  other  Party on  Broker of its claim or
defense.  The attorneys' fee award shall not be computed iii accordance with any
court fee schedule,  but shall be such as to fully reimburse all attorneys' fees
reasonably  Incurred.  Lessor shall be entitled to  attorneys'  fees,  costs and
expenses  Incurred  in  preparation  and  ser-vice  of notices  old  Default and
consultations  In  connection  therewith,  whether  or  not a  legal  action  is
subsequently  commenced In connection  with such Default or resultant's  Breach.
Broker(s) shall be Intended third party beneficiaries of this Paragraph 31.

32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall
have  the  right  to  enter  Line  Premises  at any  lime,  in the case of , and
otherwise at reasonable times for the purpose of showing the same to prospective
purchasers,   lenders,  or  lessees,  and  making  such  alterations,   repairs,
improvements  or  additions  to the Premises  onto the  Building,  as Lessor may
reasonably deem necessary. Lessor may at any time place on or about the Premises
or Building any Ordinary  'for Sale" signs and Lessor may at any lime during the
last one  hundred  eighty  (180) days of the term  hereon  place on or about the
Premises any Ordinary "For Lease' signs.  Alt such activities at Lessor shall be
without abatement or liability to Lessee.

33.  Auctions.  Lessee  shall not  conduct,  nor permit to be  conduced,  either
voluntarily or Involuntarily, any auction upon the Premises without first having
obtained  Lessor's  prior  written  consent.  Notwithstanding  anything  to  the
contrary In this Lease,  Lesson  shall not be obligated to dextrose any standard
at reasonableness in determining whether to grant such consent.

34.  Signs.  Lessee  shall  not place  any sign  upon  Ibis  exterior  of T-bone
Pram-rises or the Building,  except that Lessee may, with Lessor's prior written
consent, Install (but riot on the roof) such signs as are reasonably required to
advertise  Lessee's  own  business  so  long  as such  signs  are in a  location
designated  by Lessor and comply with  Applicable  Requirements  and the signage
criteria  established for the Industrial  Center by Lessor.  The Installation on
any sign on the Premises by or for Lessee shall be subject to the  provisions at
Paragraph 7 (Maintenance,  Repairs, Utility Installations,  Trade Fixtures an-rd
Alterations).  Unless  otherwise  expressly  agreed herein,  Lesson reserves all
rights  to the use of the  roof of thus  Building,  and  the  right  to  install
advertising signs on the Building, Including the roof, which do not unreasonably
mien are within the conduct on Lessee's  business;  Lessor  shall be entitled to
alt revenues from such advertising signs.

35.  Termination;  Merger.  Unless stated  otherwise in writing by Lessor,  this
voluntary on toner surrender of lids Lease by Lessee,  the mutual termination or
cancellation  hereof,  or a termination  hereof by Lesson f or Breach by Lessee,
shall  automatically  terminate any sublease or lesser estate In thus  Premises;
provided, however, Lessor shah, in the event of Amy such surrender,  termination
or  cancellation,  have the option to continue  any one or all of any existing .
Lessor's  failure within ten (10) days following any such event to make a within
election  to Ice  contrary  by willed  notice to the  holder of any such  lesser
Interest,  shall constitute  Lessor's election to have such event constitute the
termination at such interest.

36. Consents,

          (a) Except Ion Paragraph 33 hereon  (Auctions) or as cherries provided
     herein,  wherever  In Hulls  Lease the consent of a Party Is required to an
     act by Or ion the other  Party.  such  consent  shall  not be  unreasonably
     withheld  or  delayed.   Lessor's  actual  reasonable  costs  and  expenses
     (including but not limited to architects', attorneys', engineers' and other
     consultants'  fees)  incurred in thus  consideration  of, or response to, a
     request by Lessee for any Lessor  consent  pertaining  to this Lease on the
     Premises,  including  but  not  limited  to  consents  to an  assignment  a
     subletting on the presence or use oil a Hazardous Substance,  shall be paid
     by Lessee to Lessor upon receipt at an invoice and supporting documentation
     therefore.  In addition  to the deposit  described  in  Paragraph  12.2(e),
     Lessor may.  as a  condition  to  considering  any such  request by Lessee,
     require that Lessee  deposit with Lesson an amount on money (In addition to
     the Security  Deposit held under  Paragraph  5):  reasonably  calculated by
     Lessor  to  represent  the  cost  Lessor  will  incur  in  considering  and
     responding to Laser's request.  Any unused portion at said deposit shall be
     refunded  to  Lessee  without  interest.   Lessor's  consent  to  any  act,
     assignment  of this Lease or subletting of the Premises by Lessee shall not
     constitute  an  acknowledgment  that no Default or Breach by Lessee on lids
     Lease  exists,  nor  shall  such  consent  be  deemed a waiver  of any then
     existing Default on Breach, except as may be otherwise superficially stated
     in writing by Lessor at the time of such consent.

          (b) All  conditions to Lessor's  consent  authorized by this Lease are
     acknowledged  by Lessee as being  reasonable.  The failure to spiffy herein
     any  particular  condition  to  Lessor's  consent  shall not  preclude  the
     transpositions  by Lessor at The lime of  consent  of sofa  Curler or other
     conditions as are then reasonable whir reference to It-re particular matter
     tar which consent is being given.

37. Guarantor.

     37.l  Farm of  Guaranty.  If there are to be any  Guanos of this  Lease per
Paragraph  1.11,  The harm of the guaranty to be executed by each such Guarantor
shall be in the form mast  recently  published by the American  industrial  Real
Estate and each such  Guarantor  shall have  T-bone same  obligations  as Lessee
under this lease,  Including  but not limited to the  obligation  to provide the
Tenancy Statement and required In Paragraph


<PAGE>
     37.2 Additional Obligation.  of Guarantor. it shall constitute a Default of
the  Lessee  under this Lease It any such-n  Guarantor  falls or  refuses,  upon
reasonable request by Lessor to give: (a) evidence of tubes due execution at the
guaranty  called for by times Lease,  Including the auth-rarity of The Guarantor
(and of this party signing on Guarantor's  behalf) to obligate such Guarantor on
said guaranty,  and resolution allies board of directors  authorizing the making
of  such  guaranty,  together  with a  certificate  of  Incumbency  showing  the
signatures of the parsons authorized to sign on Its behalf, (b) current biannual
statements  of Guarantor as may from time to time be requested by Lessor,  (c) a
Tenancy  Statement,  or (d) written  confirmation  that the guaranty is still In
effect.

38.  Quiet  Possession.  Upon payment by Lessee of the rent for the Premises and
the  performance of all of the covenants,  conditions and provisions on Lessee's
part to be observed  and  performed  under this Lease,  Lessee  shall have quiet
possession of the  Pram-n-rises ton the menthe term hereof subject to all of the
provisions of this Lease.

39. Options.

     39.1 Definition. As used In this Lease, the word "Option" has the following
meaning:  (a) the might to extend  Tim term of this Lease or to renew this Lease
or to extend or renew am-nay lease that Lessee has on other property on Lessor;

          (b) the right of first  refusal to lease the  Premises or the right of
     first offer to lease the  Premises  or The right of first  refusal to lease
     other  property  of Lessor on the  nigh-not  of first  alien to lease other
     property at Lessor; (c) the night to purchase toe Premises, on the nigh-not
     of first  refusal to  purchase  the  Promises,  anther  right old oilier to
     purchase the Premises,  or the night to purchase  other property of Lessor,
     on the right at first refusal to purchase other properly of Lessor,  anther
     nigh' it at lint oilier to purchase other properly of Lessor.

     39.2 Options Personal to Original Lessee.  Each Option granted to Lessee in
this Lease is personal to the original  Lessee  named in Paragraph  1.1 here-of,
and cannot be voluntarily or  Involuntarily  assigned or expressed by any person
on entity other than said original  Lessee while the original Lessee Is Iii lull
and actual  possession at the Premises and with-rout the Intention of thereafter
assigning or subletting. The Options, ii any, herein-n granted to Lessee are not
assignable,  either as a pant on an  assignment  of this Lease or  separately on
apart  and no  Opulent  may be  separated  from  this  Lease in any  manner,  by
reservation or otherwise.

     39.3 Multiple Options. In the event that Lessee has any multiple Options to
extend or renew lures Lease, a later option cannot be expressed unless the prior
Options to extend or renew this Lease have been validly expressed.

     39.4 Effect of Default on Options.

          (a) Lessee shall have no night to dextrose an Option,  notwithstanding
     any  provision  in T-bone grant of Option to the  contrary:  (I) during the
     period  communing  with-n  It-new  giving of any  notice of  Default  under
     Paragraph 13.1 and continuing  until the noticed  Default Is cured, or (ii)
     during the period of time any mone-tary  obligation  due Lessor from Lessee
     is unpaid  (without  regard to whether notice thereof is given Lessee),  or
     (iii)  during the time  Lessee Is In Breach of this  Lease,  or (Iv) In the
     event  ti-Nat  Lessor  has given to Lessee  three  (3) or more  notices  of
     separate  Defaults under Paragraph 13.1 during the twelve (12) month pennon
     Immediately  preceding  the dextrose of the Option,  Rollins Del caulis are
     cured.

          (b) The p silk of time  within-rich-n an Option may be expressed shall
     not be extended or enlarged by reason of Lessee's inability to extensors an
     Option because of The provisions of P paragraph 39.4(a)

          (c) All  rights  of  Lessee  under the  provisions  of an Option  shah
     terminate  and be of no further force or effect,  notwithstanding  Lessee's
     due and timely  dextrose of the Option,  II, after such dextrose and during
     Ibis tern-n on this Lease,  (rot)  Lessee lolls to pay to Lessor a monetary
     obligation  at  Lessee  Ion a period  at  thirty  (30)  days  after  such-n
     obligation  becomes due  (without  any  necessity  of Lessor to give notice
     it-eared  to  Lessee),  or (ii)  Lessor  gives to Lessee  three (3) or more
     notices of separate  Defaults under Paragraph-n 13.1 during any twelve (12)
     month-n  period,  whether or not the DePaul's are cured, or (iii) II Lessee
     commits a Breach of this Lease.

40.  Rules and  Regulations.  Lessee  agrees that II will abide by, and keep and
observe all reasonable rules and regulations  ("Rules and Regulations')  which-n
Lessor  may  make  Iron  time to time  Ion the  management,  safely,  care,  and
clianthus  of the  grounds,  the  parking  and  unloading  of  vehicles  and the
preservation of good order, as well as forth-new  convenience of other occupants
or tenants of the Building and the industrial Center and their ingles.

41. Security Measures.  Lessee hereby  acknowledges  payable to Lesson hereunder
does not include the cost at guard service or other security measures,  and that
Lessor shah have nark obligation  whatsoever to provide same, Lessee assumes all
responsibility  for the  protection  of the  Premises,  Lessee,  its  agents and
invitees and their property from the acts of ti-rind panties.

42.  Reservations.  Lessor  reserves  the right,  from lime to liars,  to grant,
without the consent on joiner of Lessee, such easements,  nights of way, utility
raceways,  and  dedications  lint  Lessor  deems  necessary,  and to  cause  the
recordation  of  parcel  maps and , so long as such  easements,  rights  of way,
utility race-ways, dedications, maps and restrictions do not reasonably intender
will-n Line use of the Premises by Lessee.  Lessee  agrees to sign any documents
reasonably   requested  by  Lesson  to  effectuate  any  such  easement  nights,
dedication, map or restrictions.

43.  Performance  Under Protest.  Ii at any time a dispute nail-nail anise as to
any  amount  or sum of money  to be paid by one  Party to the  other  under  the
provisions  hereof,  the Party  against whom the  obligation to pay the money Is
assented  shah have the right to  n-rake  payment  "under  protest"  and  such-n
payment shall not be regarded as a voluntary payment and there shall survive the
noggin on Line part on said Party to Institute suit for recovery of such sum. If
it shall be  adjudged  that  there was no legal  obligation  on the part of said
Panty to pay such Sinai or any part  thereof,  said Panty  shall be  entitled to
recover such sum or so. much thereof as ii was not legally required to pay under
this provisions of this Lease.

44.  Authority.  If either Party hereto is a corporation,  trust,  or general or
limited  partnership,  each  individual  executing  this Lease on behalf of such
entity no p  re-sents  and  warrants  that  h-new or she Is duly  authorized  to
execute and deliver this Lease on its behalf. II Lessee Is a corporation,  trust
or partnership,  Lessee shall,  within thirty (30) days after request by Lesson,
deliver to Lessor evidence satisfactory to Lessor on such-n authority.

45.      Any  conflict  between  the  printed  provisions  of this Lease and the
typewritten  on handwritten provisions shall be controlled by the typewritten or
handwritten  provisions.

46,  Offer.  Preparation  of this Lease by sillier  Lessor on Lessee or Lessor's
agent or Lessee's  agent and submission of same to Lessee or Lessor shall not be
deemed  an alter to  lease.  This  Lease Is not  Intended  to be  binding  until
executed and delivered by all Parties hereto.

47 Amendments. This Lease may be modified only In writing, signed by the parties
in interest at The time of the modification.  The Parties shall amend this Lease
from time to time to reflect any adjustments to Nat are made to the Base Rent or
other rent payable under this Lease.  As long as they do not  materially  change
Lessee's   Obligations   hereunder,   Lessee  agrees  to  make  such  reasonable
non-monetary  modifications  to this Lease as may be  reasonably  required by an
National  insurance  company  or  pension  plan  Lender In  connection  with the
obtaining of normal fanning or of the property of which the Premises are a pant.

48. Multiple  Parties.  Except as otherwise  expressly  provided herein, if more
than one  person or entity is named  herein  as  either  Lessor or  Lessee,  the
Obligations  of  such  multiple   parties  shah  be  the  join-rim  and  several
responsibility  old all persons on  entities  named  herein as such-n  Lesson or
Lessee.


<PAGE>
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED Tills LEASE AND EACH TERM AND
PROVISION  CONTAINED  HEREIN,  AND BY THE  EXECUTION  OF THIS  LEASE  SHOW THEIR
INFORMED AND VOLUNTARY  CONSENT  THERETO.  THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE  Tile INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.


     IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN  PREPARED FOR YOUR  ATTORNEYS
     REVIEW AND APPROVAL.  FURTHER, EXPERTS SHOULD BE CON-SULTED TO EVALUATE THE
     CONDITION  OF  THE   PROPERTY  FOR  THE  POSSIBLE   PRESENCE  OF  ASBESTOS,
     UNDERGROUND  STORAGE TANKS OR HAZ-ARDOUS  SUBSTANCES.  NO REPRESENTATION OR
     RECOMMENDATION IS MADE BY THE AMERICAN  INDUSTRIAL REAL ESTATE  ASSOSIATION
     OR BY THE REAL ESTATE BROKERS OR THEIR CONTRACTORS,  AGENTS OR EMPLOYEES AS
     TO THE LEGAL SUFFIOFENCY,  LEGAL EFFECT, OR TAX CONSE-QUENCES OF THIS LEASE
     OR THE TRANSACTION TO WHICH IT RELATES;  THE PARTIES SHALL RELY SOLELY UPON
     THE ADVICE OF THEIR OWN  COUNSEL AS TO Tile LEGAL AND TAX  CONSEQUENCES  OF
     THIS LEASE. IF THE SUBJECT PROPERTY IS IN A STATE OTHER THAN CALIFORNIA, AN
     ATTORNEY FROM THE STATE WHERE Tile PROPERTY IS LOCATED SHOULD BE CONSULTED.


The  parties  hereto  have  executed  this  Lease  at the place and on the dates
specified  above  their  respective  signatures.



Executed  at:                         Executed  at:   Phoenix, AZ
             -----------------------                ----------------------------

On:                                   On:         6/1/98
   ----------------------------------    ---------------------------------------



By  LESSOR:Mr. Art Grandlich d.b.a.   By LESSEE Renaissance International Group
           ---------------------------         ---------------------------------
           McKellips Corporate Square           a Nevada Corporation
           ---------------------------         ---------------------------------

By: /s/ A. Granduch                   By:  /S/ William O'Neal
   ----------------------------------    ---------------------------------------

Name  Printed: A. Granduch            Name  Printed:  William O'Neal
              -----------------------       ------------------------------------
Title: Owner                          Title: Senior Vice President
      -------------------------------        -----------------------------------
By:                                   By:
   ----------------------------------    ---------------------------------------
Name  Printed:                        Name  Printed:
               ----------------------               ----------------------------

Title:                                Title:
       ------------------------------       ------------------------------------

Address:201 West Apache Trail          Address:4840  East  Jasmine  Street,
        -----------------------------          -------------------------------
        Apache Junction,AZ 85220                 Mesa Az,  85205
        -----------------------------          -------------------------------

Telephone:(602) 983-2500                   Telephone(   )
          ---------------------------               ----------------------------

Facsimile:(602) 983-7963              Facsimile:
          ---------------------------           --------------------------------



BROKER:                               BROKER:
      -------------------------------        -----------------------------------

Executed at:                          Executed at:
      -------------------------------             ------------------------------

On:                                   On:
   ----------------------------------    ---------------------------------------

By:                                   By:
   ----------------------------------    ---------------------------------------

Name  Printed:                        Name  Printed:
              -----------------------         ----------------------------------

Title:                                Title:
      -------------------------------       ------------------------------------

By:                                   By:
   ----------------------------------    ---------------------------------------

Name  Printed:                        Name  Printed:
               ----------------------               ----------------------------

Title:                                Title:
       ------------------------------       ------------------------------------

Telephone:(     )                     Telephone(     )
               ----------------------               ----------------------------


Facsimile:                            Facsimile:
          ---------------------------           --------------------------------


NOTE:     These  forms  are  often modified to meet changing requirements of law
and  needs  of the industry. Always write or call to make sure you are utilizing
the  most  current  form:  AMERICAN  INDUSTRIAL  REAL ESTATE ASSOSIATION, 345 S.
Figueroa  St.,  N-  Los  Angeles,  CA  90071.  (213)  687-8777.


<PAGE>
                                 ADDENDUM

This  ADDENDUM is a part of that certain lease by and between Mr. Art Grandlich,
d.b.a. McKellips Corporate  Square (Lessor) and Renaissance International Group,
Ltd. (RIGL), a Nevada  corporation (Lessee)  of  even  date  herewith.

PRESSES
- -------
Per  Paragraph  2  of  the  Lease  Agreement,  Lessee hereby leases Suite 105 of
McKellips  Corporate  Square,  which  consists  of 16,772 square feet which is a
19.62%  portion  of  the menthe complex which totals 85,464 square feet. Subject
Suite  shall  be delivered to Lessee in the current condition without additional
tenant  improvements  by the Lessor. All HVAC to be in good operating condition.
After  thirty  (30)  days, Lessee to be responsible for all I-IVAC operating and
maintenance  expenses.

Rental  Schedule
- ----------------
The  following  rental  schedule  shall apply during the term of this agreement:

July 1, 1998 until June 30, 1999: $4,528.44 per month plus applicable rental tax
and  common  area  charges.
July 1, 1999 until June 30, 2000: $9,224.60 per month plus applicable rental tax
and  common  area  charges.
July 1, 2000 until June 30, 2003: $9,727.76 per month plus applicable rental tax
and  common  area  charges.

Note:  In  the  event that the Lessee does not complete the 6,000 square feet of
office  space  on  or  before  September  30,  1998,  the rent shall escalate to
$9,224.60  per  month  effective  October  1,1998.

TENANT
- -------
Lessee  shall  be  responsible  for  constructing all tenant improvements to the
Suite  in  a professional and workmanlike manner pursuant to all applicable  and
state  building codes, at Lessee's sole cost and expense. On or before September
30,  1998,  Lessee  shall  construct  a  minimum  of  6,000  square  feet  of
air-conditioned  office  area  and  any  demising  walls that may be required to
subdivide the space. The blueprints of the proposed tenant improvements shall be
submitted  to  the  Lessor  for  review  and  approval  prior to commencement of
construction.

OCCUPANCY
- ---------
Lessee  shall  have  occupancy  to  the  Premises  upon mutual execution of this
agreement  to  commence  Tenant Improvements  and begin to move employees into
subject property. No rental shall be  charged  during  this period.


ASSIGNMENT
- ------------
Lessee  shall  have the right to assign the lease to any entity or person owning
at  least  fifty-one  percent  (51  %) of the stock of RIGL or any subsidiary in
which  RIGL  owns  at  least  a  fifty-one  percent  (51%)  interest,

RIGHT OF FIRST REFUSAL
- ----------------------
Lessee  shall  have  a right of first refusal to lease the remaining premises of
Building B as such space becomes available, and upon substantially similar terms
as  set  forth  herein. Lessee must lease space in the current condition without
additional  tenant  improvements  by  the  Lessor.  Lessee must provide approval
within  seven  (7)  days  after  notification by Lessor that additional space is
available.

SIGNAGE
- --------
Lessee shall have the right, at its own expense, to maintain within the interior
of the leased Premises (not visible from the exterior) any signs and advertising
matter  customary or appropriate in the conduct of RIGL's business. Lessee shall
have  the  exclusive  right  to  the  use  of the exterior surface of the leased
Premises  for  the  largest  sign allowable by the Lofty of Mesa, which shall be
provided  at  Lessee's  expense. Lessor shall have the right to approve Lessee's
exterior  sign  plan,  which  approval  shall  not  be  unreasonably  withheld.

HAZARDOUS  WASTE
- ----------------
Lessor  hereby  represents and warrants to the best of Lessor's knowledge, there
is  no  hazardous  waste  on or under the property (McKellips Corporate Square).

BROKERAGE
- ---------
After  the  Tenant Improvements are completed and all lien waivers for labor and
materials  are delivered to the Lessor a leasing commission of five percent (5%)
of  the  total lease consideration ($25,761) shall be payable by the Lessor. The
commission shall be divided equally between Lee & Associates Arizona and Grubb &
Ellis  and  paid  on an annual basis on July 1 of each calendar year ($5,152 per
annum).

In  the  event  Grubb  &  Ellis  elects  not to collect the commission in annual
installments,  the  Lessor  agrees  to


<PAGE>
OPTION TO EXTEND
- ----------------
Provided  this  lease agreement is in full force and effect and neither party is
in  violation  of  any  terms  and conditions of the lease, Lessor hereby grants
Lessee an option to extend the lease for an additional five (5) year period. The
lease  rate  for the option period shall be pursuant to fair market value at the
time  the  lease  is  extended.  Lessee  must give one hundred twenty (120) days
written  notice  of  Lessee's  intention  to  dextrose  this  option.

PARKING
- -------
Lessee shall be entitled to 57 unreserved parking spaces and 3 reserved, covered
parking spaces. In the event Lessee wants additional covered parking, Lessee may
construct  additional  covered parking stalls at Lessee's sole cost and expense.
Lessor  will  have  the  right to approve location of additional covered parking
canopy and they shall be designed and constructed in a manner that is similar to
the  other  canopies  already  located  at  Muckheaps  Corporate  Square.

TELEPHONE EQUIPMENT
- -------------------
Lessee  shall  be responsible for all telephone equipment and telephone these to
subject  property.


<PAGE>


                         Exhibit "A"


                     {GRAPHIC OMMITED}


<PAGE>
                               AMENDMENT TO LEASE


     THIS AMENDMENT TO LEASE (this "Amendment') amends and modifies that certain
Lease  and  Addendum  thereto  by  and between MT. Art Grandlich d/b/a McKellips
Corporate  Square (Lessor) and Renaissance International  Group, Ltd. (RIGI), a
Nevada  corporation  (Lessee)  dated  1,  1  998.  as  follows:

"Lessee  shall  be  responsible  for constructing all tenant improvements to the
Suite  in  a  professional  and  workmanlike  manner  pursuant to all applicable
municipal  and state building codes, at Lessee's sole cost and expense. No later
than  90-days  from  the  dale  Lessee's plans are approved by the City of Mesa.
Lessee  shall construct a minimum of 6,000 square feet of air conditioned office
area  and any  walls that may be required to subdivide the space. The blueprints
of  the proposed tenant improvements shall be submitted to the Lessor for review
and approval prior to commencement of construction. In the event that the Lessee
does  not  complete the 6,000 square feet of office space on or before such date
of  the  rent  shall  escalate  to
$9,224.60  per  month  effective  upon  the

                           "Lessor"
                           Mr.  Art  Grandlich
                           d/b/a  McKellips  Corporate  Square
                           By: /s/ Art  Grandlich
                              --------------------------------------------
                           Art  Grandlich

                           "Lessee"
                           Renaissance  International  Group,  Ltd.,  a  Nevada
                           By: /s/ Kevin  Jones
                              --------------------------------------------
                           Kevin  Jones
                           Its  President


<PAGE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>9
<FILENAME>0009.txt
<TEXT>

                               LANDLORD'S CONSENT


     This Landlord's Consent is made and entered into in Mesa, Arizona, this day
of  March  7th  2000,  by  and  between  Arthur  G. Grandlich, doing business as
MoKellips  Corporate  Square  (landlord") and YP.Net, Inc., a Nevada corporation
("Tenant").

                                    RECITALS

     A.     Landlord  and  Tenant  entered  into  a  written Standard Industrial
Commercial Multi-Tenant Lease, dated June 1, 1998 (LEASE") by the terms of which
Landlord rented to tenant approximately 16,772 square feet (leased Premises") as
part  of the total rental square feet located at the industrial project known as
McKellips  Corporate  Square  at  4840 East Jasmine Street, Mesa, Arizona, 85205
("Project").

     B.     Landlord  was  advised  by  Tenant that Business Executive Services,
Inc.,  a  Nevada corporation, (the "Subtenant") had agreed to rent approximately
one-half  (50%)  of  the  Leased Premises, as described in Exhibit 'A" attached,
until  June 30,2003 subject to Landlord's approval ("Subtenant's Premises"), and
thereupon  Tenant  submitted  plans  for improvement of the space intended to be
leased  to  the  Subtenant,  and  received Landlord's tentative approval pending
submission  to  Landlord  of  a  written  Sublease  Agreement between Tenant and
Subtenant,  which  was  subsequently  executed  and  dated  October  1,1999, and
thereafter  submitted  to  Landlord.  A  true  copy of the Sublease Agreement is
attached  as  Exhibit  "B".

     C.     Upon  completion  of  the  tenant's  improvement for the Subtenant's
Premises,  the  Subtenant took occupancy of the Subtenant's Premises, and Tenant
now  seeks  formal approval of Landlord to the foregoing actions taken by Tenant
and  Subtenant,  and  to  the  Sublease  Agreement executed by them. Exhibit "C"
attached  represents  the  complete  improvements  to  the Subtenant's premises.

     Now  therefore  in  consideration of the mutual promises of the parties and
other  valuable  consideration  the  parties  hereto  agree  as  follows:

     1.     RECITALS.  All  of  the  Recitals  are deemed to be accurate and are
     ---------------
hereby  Incorporated  into  this  Agreement.

     2.     Consent  and  Effective  Date.  Landlord  does hereby consent to the
     ------------------------------------
Sublease of the Subtenant's Premises pursuant to the terms and conditions of the
Sublease Agreement dated October 1,1999, subject however to all of the terms and
conditions  set  forth  in  this  Landlord's  Consent.


<PAGE>
     3.     Tenant's  Liability  for  improvements  and  Payment of Rent. At all
     -------------------------------------------------------------------
times Tenant shall remain liable for payment of all rent, and all other payments
that  may  be  or become due and payable to Landlord pursuant to said Lease, and
for  the  performance  of all other actions undertaken to be performed by Tenant
under  said  Lease  respecting  the  use  and  occupancy of the Leased Premises.
Nothing in the Consent shall be held or construed to release the Tenant from any
liability  whatsoever  under  the Lease or from Tenant's covenants agreements or
obligations under the Lease. Any termination of the Lease, or of any of Tenant's
rights  to  possession  under  the  Lease,  shall  likewise terminate all of the
Subtenant's  rights  to  possession of the Subtenant's Premises. Tenant shall be
responsible  and  liable  for any and all improvements of Leased and Subtenant's
Premises  as  may  by  required  by  City,  State  or  County  codes.

     4.     Subtenant's  Liability  For  And Payment of Rent. Subtenant shall at
     -------------------------------------------------------
all  times  be  responsible  for the performance of all actions undertaken to be
performed  by  Subtenant  with  respect  to  the use and occupancy of the Leased
Premises as set forth in the Lease, but in no event shall Subtenant be or become
responsible  or  liable for the payment of Tenant's rent for the Lease premises.
In  all  events  Subtenant  shall  make  all  of  its  rental  payments  for the
Subtenant's  Premises  directly  to  the  Tenant.

     5.     Subordination  of  Sublease.  At all times the Sublease entered into
     ----------------------------------
between  Tenant  and  Subtenant  shall  be  and  remain subordinate to the Lease
between Landlord and Tenant, and in no way shall Landlord be bound by any of the
terms and conditions of the Sublease. In the event that Tenant shall fail to pay
the  rent  for the Lease Premises, the Landlord may take all action provided for
in  the Lease pertaining to defaults by Tenant irrespective of whether Subtenant
has  paid  its  rental payments under the Sublease Agreement In this connection,
Subtenant  shall have the right but not the obligation to cure Tenant's defaults
by  making the Tenant's rental payments directly to Landlord, or by taking other
actions  to  cure  Tenant's  default,  in  order  to  maintain the Lease in good
standing.

     6.     Effective Date. Landlord agrees that this Consent may relate back to
     ---------------------
October  1,  1999,  the date on which Tenant and Subtenant signed their Sublease
Agreement,  but  nothing  in  this  Consent  shall  be  deemed to be a waiver of
Landlord's  rights  to reject future assignments by Tenant. Tenant agrees to pay
Landlord  reasonable  attorney's  fees.

     This  Consent  was  executed  on  the  day  and year first above mentioned.


TENANT:                                    LANDLORD:
Yp.Net, Inc., a Nevada Corporation         Arthur  G.  Grandlich
                                           D.b.a.  McKellips  Corporate  Square


By  /s/  Greg  Crane                        /s/  Arthur  G.  Grandlich
  ------------------------------------    --------------------------------------
   Greg Crane, Director of Operations      Arthur  G.  Grandlich


<PAGE>



                                    EXHIBIT A



<PAGE>


                                 GRAPHIC OMITTED



<PAGE>



                                    EXHIBIT  B



<PAGE>
                               SUBLEASE AGREEMENT


     1.   PARTIES.
          -------

          This  Sublease Agreement ("Sublease") is made, entered into and deemed
to  be  effective  this  first  day  of  October,  1999,  by  and  between
RIGL-CORPORATION,  a  Nevada  corporation  ("Sublessor") and BUSINESS EXECUTIVES
SERVICES,  INC.,  a  Nevada  corporation  ("Sublessee").

     2.   LEASE.
          -----

          Sublessor is the Lessee under a written Standard Industrial/Commercial
Multi-Tenant Lease dated June 1, 1998 (the 'Lease") whereby Art Grandlich d.b.a.
McKellips  Corporate  Square,  ('Lessor")  leased to Sublessor the real property
located  in the City of Mesa, County of Marlcopa, State of Arizona, described as
Suite  106, 4840 East Jasmine ('Master Premises").  The Lease is attached hereto
as  Exhibit  A"  and  by  this  reference  made  a  part  hereof.

     3.   PREMISES.
          --------

          Sublessor  hereby  subleases  to  Sublessee that portion of the Master
Premises  as  described  in  Exhibit  'B" attached hereto (the 'Premises").  The
Sublessee  accepts  the  Premises  and  agrees  to  be  bound  by  the terms and
conditions of the Lease as it pertains to the use and occupancy of the Premises,
but  not  as  to  the  payment  of  rent  or other moneys required to be paid by
Sublessor.

     4.   WARRANTY  BY  SUBLESSOR.
          -----------------------

          Sublessor  warrants and represents to Sublessee that the Lease has not
been amended or modified except as expressly set forth herein, that Sublessor is
not now and as of the commencement of the Term hereof will not be, in default or
breach  of  any  of  the  provisions  of  the  Lease,  and that Sublessor has no
knowledge  of  any claim by Lessor that Sublessor Is in default or breach of any
of  the  provisions  of  the  Lease.

     5   TERM.
         -----

          a)     The Term of this Sublease shall commence on October 08, 1999 or
date  of available occupancy whichever comes later ('Commencement Date") subject
to terms and conditioned upon receipt of Lessor's written consent within 30 days
from  the date of this Agreement, Sublessor shall forthwith submit this Sublease
to the Lessor for consent, and will use its best efforts in good faith to obtain
such  consent  and  will  deliver to Sublessee a signed copy of Lessor's written
consent.


                                                                               2
<PAGE>
          b)     if  Sublessor  does  not deliver possession to the Sublessee on
the  Commencement  Date  due  to failure of Lessor to render Its consent to this
Sublease,  the Sublessor shall not be subject to any liability for such failure,
the Termination Date shall not be extended by the delay, and the validity of the
Sublease  shall  not  be  impaired,  but  rent  shall  abate  until  delivery of
possession.

          c)     If  Sublessor  fails  to deliver possession to Sublessee due to
Lessor's  failure  to consent to this Sublease on or before such effective date,
this Sublease shall be canceled, in which case all consideration previously paid
by  Sublessee  to  Sublessor  on  account  of this Sublease shall be returned to
Sublessee,  this Sublease shall thereafter be of no further force or effect, and
Sublessor  shall  have  no  liability  to  Sublessee on account of such delay or
cancellation.

          d)     If  Sublessor permits Sublessee to take possession prior to the
Commencement  Date, such early possession shall not advance the Termination Date
and  shall  be  subject  to  the provisions of this Sublease, including, without
limitation,  the  payment  of  rent

     6.   RENT.
          ----

          Minimum  Rent.  Sublessee  shall  pay  to Sublessor as rent the sum of
          -------------
$1.00  per  year for the entire Term of this Sublease without deduction, setoff,
notice,  or  demand,  at  RIGL  Corporation,  4840 E.  Jasmine, Suite 106, Mesa,
Arizona  86205, or at such other place as Sublessor shall designate form time to
time  by  notice  to Sublessee.  Sublessee shall also pay and be responsible for
Its pro rata share (based on square feet of occupancy) of Sublessor's" operating
expenses,  including utilities and common area expenses, but shall not be liable
for  payment  of  Sublessor's  rent  obligations.

     7.   SECURITY  DEPOSIT.
          -----------------

          Sublessee  shall  not  be  required  to  deposit  a  security deposit.

     8.   USE  OF  PREMISES.
          -----------------

          The  Premises  shall  be  used  and  occupied only for business office
purposes  and  for  no  other  use  or  purpose.

     9.   ASSIGNMENT  OF  SUBLETTING.
          --------------------------

          Sublessee  shall  have the right to assign this Sublease or sublet all
or any part of the premises without the prior written consent of Sublessor (with
the  consent  of  Lessor,  if  such  is  required under the terms of the Lease).


<PAGE>
     10.   OTHER  PROVISIONS  OF  SUBLEASE.
           --------------------------------

          All  applicable terms and conditions of the Lease, Exhibit IA,' except
for the payment of Sublessor's rent or other payment to Lessor, are incorporated
into  and  made  a  part  of  this  Sublease  as  if  Sublessor  were the lessor
thereunder,  and  Sublessee  the  lessee thereunder, and the Premises the Master
Premises;  provided  however,  that  nothing in this Sublease shall be deemed to
create  a partnership or Joint Venture between Sublessor and Sublessee not shall
Sublessee  be  deemed  to guarantee the performance by Sublessor of any terms or
provisions  of  the  Lease.

     11.   ATTORNEY'S  FEES.
           ----------------

          If  Sublessor  or  Broker  shall  commence an action against the other
arising  out  of or in connection with this Sublease, the prevailing party shall
be  entitled  to  recover  its  costs  of  suit  and reasonable attorney's fees.

      12.   AGENCY  DISCLOSURE.
            ------------------

          Sub  lessor  and  Sublessee  each warrant that they have dealt with no
real  estate  broker  in  connection  with  this  Sublease.

     13.   NOTICES.
           -------

          All  notices  and demands which may or are to be required or permitted
to  be  given  by either party on the other hereunder shall be in writing and be
sent  by  United  States  Mail,  postage  prepaid, addressed to the Sublessor or
Sublessee  as  may  be  applicable at the address herein below, or to such other
place  as  either  party  may  from  time to time designate in a written notice.


     To  Sublessor:           RIGL  Corporation
                              4840  E.  Jasmine,  Suite  106
                              Mesa,  Arizona  85206
                              Attention:  William  D.  O'Neal,  Esq.

     To  Sublessee:           Business  Executive  Services,  Inc.
                              4840  E.  Jasmine,  Suite  111
                              Mesa,  Arizona  85205
                              Attention:  Greg  Crane  -  Agent

     With  a  Copy  to:       Burton  M.  Bentley,  Esq.
                              7878  N.  l6th  Street,  Suite  110
                              Phoenix,  Arizona  85020

                                                                              3
<PAGE>


     14.   COMPLIANCE.
           ----------

          The  parties hereto agree to comply with all applicable federal, state
and  local laws, regulations, codes, ordinances and administrative orders having
jurisdiction over the parties, property or the subject matter of this Agreement,
including,  but  not  limited  to,  the 1964 Civil Rights Act and all amendments
thereto,  the  Foreign  Investment  in  Real Property Tax Act, the Comprehensive
Environmental  Response  Compensation  and Liability Act, and The Americans With
Disabilities  Act.

DATED:  10/1  , 1999
       -------

                                  SUBLESSOR:

                                  RIGL Corporation, a Nevada corporation

                                  By:  /s/  Kevin L. Jones
                                     ------------------------------------
                                            Kevin L. Jones, President


                                  SUBLESSEE

                                  Business  Executive  Services,  Inc.,  a
                                  Nevada  corporation

                                  By:  /s/  Mike Bloomquist
                                     ------------------------------------
                                  Its: Pres
                                      -----------------------------------
                                           Mike Bloomquist


                                                                               4
<PAGE>




                                    GRAPHIC OMITED




<PAGE>
                                        EXHIBIT  C




<PAGE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>10
<FILENAME>0010.txt
<TEXT>

                        FIRST AMENDMENT TO LOAN AGREEMENT


     This  First  Amendment  To Loan Agreement ("Amendment") is made and entered
into  at  Maricopa  County,  Arizona, this 31, day of March 2000, by and between
YP.Net,  Inc.,  a  Nevada  corporation, formerly RIGL Corporation ("YP.NET") and
Joseph  and  Helen  Van  Sickle  (collectively  "Lender').

                                    RECITALS

     A.     On  or  about May 26, 1999, a certain Loan Agreement was executed by
the  parties  above named in connection with a loan of $2,000,000 made by Lender
to  YP.NET (then known as RIGL Corporation and whose name was changed to YP.Net,
Inc.  on  or  about  October  1,  1999)  which  loan  is  evidenced by a certain
Promissory  Note  and Stock Pledge Agreement executed concurrently with the Loan
Agreement  (collectively  "Package").

     B.     The  Package  is  still  in  full  force and effect according to the
respective  terms  and  conditions  therein  contained in each of said documents
making  up  the  Package.

     C.     The Promissory Note is now past due, no default has been declared by
Lender,  and  to prevent the declaration of default the parties desire to extend
the  time  of  payment  provided  for  in  said  Promissory  Note.

     D.     The  Security  Agreement  executed  concurrently  with  execution of
documents  comprising  the Package is also deemed to be in full force and effect
according  to  its  terms,  and specifically provides for "all extensions" to be
regarded  as  part  of  the  original  Promissory  Note.

     E.     The  Form  U CC-I filed and recorded as required by law in the State
of  Arizona remains in full force and effect and is deemed by the parties hereto
to  be  and  remain  a  first  priority lien against all of the assets of YP.NET
included  within  the  scope  of  Form  UCC-I  filed  of  record. To insure that
priority, revised UCC Form 1 and 2 in the form attached will be filed of record.

     F.     By  this Amendment, it is the intention of the parties to permit the
balance  of $1,400,000 yet remaining unpaid on the Promissory Note to be paid in
accordance  with this Amendment by extended installment payments, and the annual
interest  rate  to  be raised from 8% as stated in the Promissory Note to 10% on
the  remaining  unpaid  balance.

     G.     Other than for the provisions for extended payments and an increased
rate  of  annual  interest  provided  for in this Amendment, each and all of the
terms, conditions and provisions of all documents making up the Package, as well
as  the  Security Agreement and Form UCC-1 shall be and remain in full force and
effect,  without  amendment  thereto.


                                   Page 1 of 3
<PAGE>
     In  consideration  of the mutual promises of the parties and other good and
valuable  consideration, the receipt and sufficiency of which is acknowledged by
the  parties  hereto,  it  is  agreed  as  follows:

            1.  Recitals.  Each and all of the Recitals above shall be deemed to
     be true and correct and are hereby incorporated as a part of this Agreement
     as though  set  forth  fully  herein.

            2. Payment  Schedule.

     a)     The principal balance of the Promissory Note is $1,400,000 as of the
            date hereof, and all interest accrued through January 24, 2000 has
            been paid in full.

     b)     The  principal  unpaid balance  shall  bear  interest at the rate of
            ten percent  (10%)  per annum,  default  interest  shall  remain 20%
            per  annum.

     c)     Concurrently  with  the execution of this Amendment YP.Net.lnc. will
            pay Lender the sum of $100,000 as    for the February 2000 principal
            payment, plus the  sum  of  $13,611.12  as and for accrued  interest
            through February 24, 2000.

      d)    YP.NET shall make payments to Lender  of  not  less than one hundred
            thousand   dollars  ($100,000)  plus  all  unpaid  accrued  interest
            per  month commencing  March 24,  2000,  and on the 24th day of each
            succeeding month, all principal  and  accrued interest to be paid in
            full on or before March 24, 2001.

       e)   YP.NET  agrees  to  execute  from  time  such  other  agreements or
            documents as shall  reasonably  be  requested  by  Lender  to  give
            effect to this Amendment.

     3.     Issuance  of  Certificates.  YP.NET  shall  cause  all  of  the RIGL
Corporation Common  Stock  share  Certificates  previously issued with the Stock
Pledge  Agreement  to  be  reissued  indicating  YP.Net,  Inc.  as  the  issuing
corporation, and the certificate for 1,000,000  Shares previously issued by RIGL
to Van Sickle shall also be replaced by  a YP.Net.lnc.  certificate.

     4.     No  Compromise of Position. Nothing herein contained shall be deemed
by  the  parties hereto to compromise or adversely affect the Lender's rights to
enforce  any of the documents making up the Package or the Security Agreement or
Financing  Statement  hereto executed by YP.NET, except as specifically provided
for  in this Amendment relating to the Promissory Note maturity date and rate of
interest.

     5.     Signatures.  Angelo  Tullo,  the Chairman of the Board of YP.NET and
DeVal  Johnson,  corporate  Secretary of YP.NET, have been authorized to execute
this  Amendment  on  behalf  of  YP.NET.

     The  parties hereto have executed this Agreement as of the date first above
written.


                                   Page 2 of 3
<PAGE>

                                           YP.NET,  INC.

                                         By:  /s/  Angelo Tullo Chairman
                                            ---------------------------------
                                              Angelo Tullo
                                              Chairman of the Board of Directors


                                         By:  /s/  DeVal Johnson Secretary
                                            ---------------------------------
                                                DeVal Johnson Secretary


                                                 Lender

                                                /s/ Joseph  Van  Sickle
                                                 ----------------------------
                                                 Joseph  Van  Sickle

                                                /s/ Helen  Van  Sickle
                                                 ----------------------------
                                                 Helen  Van  Sickle


                                   Page 3 of 3
<PAGE>
                                 LOAN AGREEMENT

     THIS  LOAN  AGREEMENT  ("Agreement")  is entered into as of the 25th day of
May,  1999  by  and between RIGL CORPORATION, a Nevada corporation ("Borrower"),
and  JOSEPH  and  HELEN  VAN  SICKLE ("Lender"), with reference to the following
facts:

                                   WITNESSETH:

     WHEREAS,  Borrower desires to borrow $2,000,000 from Lender for purposes of
Financing  the acquisition of Telco Billing, Inc., a Nevada corporation ("TBI").

     WHEREAS,  Lender  desires to make such loan to Borrower under the terms and
conditions  specified  in  this  Agreement.

     NOW,  THEREFORE,  in  consideration  of  the foregoing facts and the mutual
covenants  contained  herein,  Borrower  and  Lender  hereby  agree  as follows:

                              ARTICLE I - THE LOAN

1.1  The Loan. Lender hereby agrees to make, and Borrower hereby agrees to
     ---------
     accept,  a loan of $2,000,000  (the "Loan") under the terms and  conditions
     set forth in this  Agreement  and in certain  documents  to be executed and
     delivered by Borrower hereunder. The proceeds of the Loan are to be used by
     Borrower to finance the  acquisition  of TBI which is scheduled for closing
     on June 1, 1999.

1.2  Note.  The  Loan  shall  be  evidenced  by  a  Promissory Note of even date
     ----
     herewith in the amount of the Loan (the  "Note").  Payment of the Loan will
     be secured by a Stock Pledge  Agreement (the "Stock Pledge") from Borrower,
     as Pledgor,  and Lender, as Pledgee,  which will constitute a priority lien
     on the Pledged Collateral, as defined in the Stock Pledge.

1.3  Maturity.  The  outstanding  balance  of  the Loan, plus accrued and unpaid
     --------
     interest  thereon,  shall be due and  payable  on the date which is six (6)
     months after the date of this Agreement (the "Maturity Date").

1.4  Place of Payments.  All  payments,  whether of principal, interest or other
     -----------------
     amounts,  to be made by Borrower to Lender hereunder shall be paid prior to
     11:00 a.m.  (Eastern Standard Time) on the date upon which payment it to be
     made,  in lawful  money of the United  States of America,  to Lender at 664
     Ocean Road, Vero Beach,  Florida 32963, or at such other place as from time
     to time may be designated  by Lender.  If the day upon which any payment is
     to be made is not a business  day in the City of Vero Beach,  such  payment
     shall be made on the next  succeeding  business  day and such  extension of
     time shall be included  in  computing  any  interest  with  respect to such
     payment.


                                    Page -1-
<PAGE>
1.5  Prepayment.  Borrower  may  make prepayments of principal under the Note at
     ----------
     any  time,  or from  time to time,  in whole  or in part,  without  penalty
     provided that all previously  matured interest and other charges accrued to
     the date of prepayment are also paid in full.  Notwithstanding  any partial
     prepayments of principal under the Note,  there will be no extension in the
     Maturity Date or decrease in the amount of the scheduled payments due under
     the Note,  unless Lender,  in its sole and absolute  discretion,  agrees in
     writing to such change.

1.6  Loan  Fee.  Borrower  agrees  to  pay  Lender  a  loan  fee  of  1,000,000
     ---------
     restricted  shares of RIGL  Corporation  Common  Stock upon the  receipt of
     funds by Borrower  (the "Loan Fee").  Such shares shall be free of any lien
     or encumbrances, fully paid and non-accessible.

1.7  Past  Due Principal and Interest.  Any  amount  of principal or interest on
     --------------------------------
     the Loan or any fee or expense or other amount  payable  hereunder or under
     the Note,  the Stock Pledge or any other Loan  Documents  which is not paid
     when due shall, to the extent permitted by law, bear interest from such due
     date until paid at the rate of Twenty Percent (20%) per annum (the "Default
     Rate"),  which interest shall be immediately due and payable.  In addition,
     the Loan  shall  bear  interest  at the  Default  Rate at any time upon and
     during the continuance of any Event of Default.

1.8  Acceleration  Upon  Default.  Upon  the  occurrence  of an Event of Default
     ---------------------------
     hereunder,  under the  Note,  the  Stock  Pledge  or any of the other  Loan
     Documents,  the  holder  of the Note or any  part  thereof  shall  have the
     option,  without  demand or notice,  of  declaring  the  principal  balance
     thereof and the interest accrued thereon to be immediately due and payable.

1.9  Late  Payment  Charge.  Borrower  agrees  that  it  would  be  extremely
     ---------------------
     difficult  and  impractical  to ascertain  Lender's  actual  damages if any
     installment  of  principal  or  interest  is not paid when due.  Therefore,
     Borrower  agrees to pay  immediately to Lender in each such event an amount
     equal to five percent (5%) of such late  installment.  Borrower agrees that
     under the circumstances existing as of the date this Agreement is executed,
     such late charge  represents  a reasonable  estimate of the  administrative
     costs  and  expenses  which  Lender  will  incur as a result  of such  late
     payment.  The  provisions of this paragraph are intended to govern only the
     determination of damages in the event of a breach in the performance of the
     obligation of Borrower to make timely  payments  hereunder.  Nothing herein
     shall be construed as an express or implied  agreement by Lender to forbear
     in the collection of any delinquent  payment, or be construed as in any way
     giving  Borrower  the right,  express or  implied,  to fail to make  timely
     payments hereunder,  whether upon payment of such damages or otherwise. The
     right of Lender to receive  payment of such  liquidated and actual damages,
     and receipt thereof are without prejudice to the right of Lender to collect
     such  delinquent  payments  and  any  other  amounts  provided  to be  paid
     hereunder or under any security for the Note, shall not constitute a waiver
     of any default by Borrower,  and shall not in any way  prejudice or prevent
     Lender from  enforcing or exercising  any or all of its rights and remedies
     against Borrower or any other party.


                                    Page -2-
<PAGE>
1.10 No Deductions.  All  payments  of  principal and interest on the Loan shall
     -------------
     be made  without the right of set-off and without  deduction of any present
     and  future  taxes,  levies,  duties,  imposts,   deductions,   charges  or
     withholdings  imposed by any  existing  or future  law,  rule,  regulation,
     treaty,  directive or  requirement  whether or not having the force of law,
     which  amounts  shall be paid by  Borrower.  Borrower  will pay the amounts
     necessary such that the gross amount of the principal and interest received
     by Lender is not less than that required by this  Agreement.  All stamp and
     documentary  taxes  shall  be paid by  Borrower.  If,  notwithstanding  the
     foregoing,  Lender pays such taxes,  Borrower will reimburse Lender for the
     amount  paid,  as  additional  interest,  within  five (5) days of Lender's
     demand for payment.  Borrower will furnish Lender  official tax receipts or
     other evidence of payment of all such amounts.

                       ARTICLE 2- INTEREST RATE PROVISIONS

2.1  Interest  Rate.  Borrower  shall  pay  interest  on  the Loan at a rate per
     --------------
     annum equal to Eight Percent (8%).  Interest  shall accrue daily,  shall be
     calculated  based upon a 360 day year (which  will result in more  interest
     accruing than if interest accrued on the basis of a 365 day year) and shall
     be payable monthly, in arrears together with payments of principal, subject
     to and in accordance with the terms, covenants and provisions of the Note.

2.2  Savings  Clause.  If  for  any circumstances whatsoever, interest hereunder
     ---------------
     would  otherwise be payable to Lender at a rate in excess of that permitted
     under applicable law, then, the interest payable to Lender shall be reduced
     to the  maximum  amount  permitted  under  applicable  law,  and if for any
     circumstance Lender shall ever receive anything of value deemed interest by
     applicable  law which would exceed  interest at the highest lawful rate, an
     amount equal to any excessive interest shall be applied to the reduction of
     the principal amount owing under the Note, and the obligations  owing under
     this  Loan  Agreement  and  the  Stock  Pledge  and not to the  payment  of
     interest,  or if such  excessive  interest  exceeds  the unpaid  balance of
     principal of the Note and the  obligations  owing under this Loan Agreement
     and the Stock Pledge, such excess shall be refunded to Borrower.  All fees,
     charges,  goods,  things in  action  or any  other  sums or things of value
     (collectively,  referred  to as the  "Additional  Sums") paid or payable by
     Borrower,  whether  pursuant to the Note,  this Loan Agreement or the Stock
     Pledge or any other  document or  instrument  in any way  pertaining to the
     Loan  which,  under  the laws of the State of  Arizona  may be deemed to be
     interest with respect to the Loan shall, for the purpose of any laws of the
     State of  Arizona  which may limit the  maximum  amount of  interest  to be
     charged with  respect to the Loan,  be payable by Borrower as, and shall be
     deemed to be, additional  interest,  and for such purposes only, the agreed
     upon and contracted for rate of interest shall be deemed to be increased by
     the Additional Sums.


                                    Page -3-
<PAGE>
              ARTICLE 3- REPRESENTATIONS AND WARRANTIES OF BORROWER

     Borrower  hereby  represents  and  warrants  to  Lender  as  follows, which
representations will remain effective until payment in full of all amounts owing
under  the  Loan:

3.1  Organization:  Existence.  Borrower  is  a  corporation,  duly  organized,
     ------------------------
     validly  existing  and in good  standing  under  the  laws of the  State of
     Nevada.

3.2  Authority.  Borrower  has the power  and  authority  to execute and deliver
     ---------
     this  Agreement,  the Note,  the Stock Pledge and all other  documents  and
     instruments  required  hereunder  to be executed by Borrower  and to comply
     with the terms hereof and  thereof.  All of such  documents  have been duly
     authorized,  executed and delivered by Borrower and  constitute  the legal,
     valid and binding obligations of Borrower,  enforceable against Borrower in
     accordance with their respective terms.

3.3  Loan  Fee.  Borrower  has,  and  will  have,  the authority to -deliver the
     ---------
     Loan Fee upon the Closing.

3.4  Pledged Collateral.  Borrower  has,  and will have, the authority to pledge
     ------------------
     the Pledged  Collateral,  free of any liens and  encumbrances.  The Pledged
     Collateral shall be fully paid and non-accessible upon the Closing.

3.5  No  Violation.  To  the  best  of  its  knowledge  after  diligent inquiry,
     -------------
     Borrower is not in violation of any  agreement or instrument to which it is
     a party or to which any of its property is subject or of any statute, rule,
     regulation,  judgment,  decree,  order,  franchise or permit  applicable to
     Borrower. Neither the entry into nor the performance of this Agreement, the
     Note,  the Stock  Pledge  or any  other  instrument  executed  by  Borrower
     pursuant  hereto  or  thereto  will  result in any  violation  of, or be in
     conflict with, or result in the creation of any lien or encumbrance  (other
     than those  contemplated  in this  Agreement) upon any of the properties or
     assets  of  Borrower  pursuant  to, or  constitute  a  default  under,  any
     indenture,  contract, agreement, or instrument to which Borrower is a party
     or to which any of its property is subject or constitute a violation of any
     permit, judgment,  decree, order, statute, rule or regulation applicable to
     Borrower.

3.6  Actions.  There  is  no  action,  proceeding  or  investigation  pending or
     -------
     threatened (or any basis therefor) which questions, directly or indirectly,
     the  validity of this  Agreement,  the Note,  the Stock Pledge or any other
     document pertaining to the Loan or any action taken or to be taken pursuant
     hereto or thereto, or which affects Borrower or the Pledged Collateral.

3.7  Statements.  Neither  this  Agreement,  nor  any  document,  certificate or
     ----------
     statement  furnished to Lender in connection with the Loan, Borrower or the
     Pledged  Collateral,  whether  or not  referred  to  herein,  contains  any
     material misrepresentation or omits to state a material fact.


                                    Page -4-
<PAGE>
3.8  Governmental  Regulations.  Borrower  is  not  subject  to regulation under
     -------------------------
     the  Investment  Company  Act of 1940,  the Federal  Power Act,  the Public
     Utility  Holding  Company Act of 1935, the  Interstate  Commerce Act or any
     federal  or state  statute  or  regulation  limiting  its  ability to incur
     indebtedness for money borrowed.

3.9  Securities  Activities.  Borrower  is  not  engaged  principally  or
     ----------------------
     significantly  in the  business  of  extending  credit  for the  purpose of
     purchasing  or carrying any "Margin  Stock" (as defined in  Regulation U of
     the Board of Governors of the Federal Reserve System in effect from time to
     time)  and  not  more  than  twenty-five  percent  (25%)  of the  value  of
     Borrower's assets consists of such Margin Stock. No part of the proceeds of
     the Loan  will be used to  purchase  or carry any  Margin  Stock or for any
     other  purpose that violates the  provisions  of  Regulations U or X of the
     Board of Governors of the Federal Reserve System.

                   ARTICLE 4- CONDITIONS PRECEDENT TO THE LOAN

     Lender's  obligation to make the Loan to Borrower is conditioned  upon each
Of the following occurring prior to May 25, 1999 (the "Closing"):

4.1  Loan Documents. Borrower shall have executed and delivered to Lender the
     --------------
     Note, the Stock Pledge and this Agreement.  The documents described in this
     Section 4.1 together  with the other  documents  executed and delivered for
     the benefit of Lender in  connection  with the Loan,  are herein called the
     "Loan Documents."

4.2  Authorizing  Documents.  Borrower  shall  have  delivered  to Lender and
     ----------------------
     Lender  shall  have  approved  copies  of all  necessary  actions  taken by
     Borrower to authorize the execution,  delivery and  performance by Borrower
     of this Agreement, the Note, the Stock Pledge and all other Loan Documents.

4.3  Compliance  With  Loan  Documents.  All  of  the  representations  and
     ---------------------------------
     warranties  of Borrower in Article 3 above shall be true and  correct,  and
     Borrower shall be in compliance with all applicable  covenants set forth in
     Article 6 below.  All documents  and materials  required by Lender shall be
     satisfactory in form and substance to Lender and its counsel.

                             ARTICLE 5- DISBURSEMENT

5.1  Disbursement.  Upon  compliance  by  Borrower  with all of the terms and
     ------------
     conditions of this Agreement,  and so long as no Event of Default, or event
     has  occurred or state of facts exist which with notice or lapse of time or
     both, would become an Event of Default, Lender will advance the proceeds of
     the Loan upon the Closing in accordance with wiring  instructions  provided
     by Borrower.

5.2  Conditions  Solely for the Benefit of Lender.  All  conditions  of Lender's
     --------------------------------------------
     obligation  to make the Loan are  solely for the  benefit  of  Lender,  its
     successors and assigns. No other person  shall  have  standing  to  require
     satisfaction of any condition,  and no  other  person  shall  be  deemed  a
     beneficiary of any condition or have any right to rely on any determination
     made by  Lender, any and all of  which  may be freely waived in whole or in
     part by Lender in Lender's sole discretion.


                                    Page -5-
<PAGE>
                        ARTICLE 6- COVENANTS OF BORROWER

     In addition to the covenants  contained  elsewhere in this Agreement and in
the other Loan Documents, Borrower agrees as follows:

6.1  Inspection:  Books  and  Records.  Borrower  shall  keep,  at its principal
     --------------------------------
     place  of  business,  the  records,  books  of  accounting  and  all  other
     documents,  reports and papers relating to the Pledged Collateral.  Lender,
     or any agent of Lender,  shall be  entitled,  at any  reasonable  time,  to
     inspect all records  relating  thereto,  and the books and other  financial
     records of Borrower and Borrower shall  cooperate with Lender or such agent
     in enabling  Lender to accomplish such inspection and permit Lender or such
     agent to make  such  copies  as Lender  or such  agent  may  request.  This
     authority is for Lender's protection only and Lender shall not be deemed to
     have assumed any  responsibility to Borrower or any third party as a result
     of any such action.

6.2  Title  Exceptions.  Borrower  shall  not  create any  liens or encumbrances
     -----------------
     upon the Pledged Collateral without the prior written consent of Lender.

6.3  Lenders Expenses.  Subject to  the further  provisions of this Section 6.3,
     ---------------
     Borrower shall pay all reasonable expenses,  if any, directly or indirectly
     incurred in connection with the Loan and its documentation and closing (the
     "Loan Costs").  Notwithstanding the foregoing,  Borrower's liability to pay
     the Loan Costs shall not exceed $2,000.

6.4  Further  Assurances.  Borrower  will,  at  the  request of Lender, execute,
     -------------------
     deliver and furnish such  documents  or take such further  action as Lender
     may deem necessary or desirable to evidence the Loan,  perfect the security
     therefor,  or otherwise carry out the terms of the Agreement and any of the
     other documents delivered to Lender in connection herewith.

6.5  No  Further  Liens.  All  common  stock subject to the lien of the security
     ------------------
     interest  granted to Lender in the Stock  Pledge shall be fully paid for by
     Borrower and no security interest,  lien or other  encumbrance,  other than
     that granted to Lender shall exist thereon.

6.6  Removal  of  Liens.  If  at  any  time  an  encumbrance,  lien or charge is
     ------------------
     placed or claimed upon the Pledged  Collateral,  Borrower shall satisfy and
     remove  such  encumbrance,  lien or charge by  bonding  or by other  method
     satisfactory  to Lender.  In addition to all other  rights and  remedies of
     Lender referred to in this Agreement,  if such encumbrance,  lien or charge
     is not removed within thirty (30) days, Lender, at its sole discretion, may
     pay off the same and Borrower shall  reimburse  Lender within five (5) days
     of Lender's demand for payment.


                                    Page -6-
<PAGE>
6.7  No  Transfer or Further Encumbrance.  So  long  as any amount or obligation
     -----------------------------------
     is  outstanding  by  Borrower  to Lender  under any of the Loan  Documents,
     Borrower will not, without the prior written consent of Lender:

     a.   Further  Encumbrance.  Create,  incur,  assume,  permit or suffer to
          --------------------
          exist,  after  knowledge  of  the  existence  thereof,  pledge,  lien,
          hypothecation,  charge (fixed or floating), security interest or other
          encumbrance   whatsoever   on  the  Pledged   Collateral   except  the
          encumbrance created by and permitted by the Stock Pledge; or

     b.   Transfer  of  Property.  Sell,  convey,  or  otherwise  transfer  the
          ----------------------
          Pledged  Collateral or any portion  thereof  without the prior written
          consent of Lender.

                        ARTICLE  7-  DEFAULTS  BY  BORROWER

7.1  Defaults by Borrower.  The  occurrence  of any one or more of the following
     --------------------
     shall  constitute  an  "Event  of  Default":

     a.   Failure to make any payment when due in  accordance  with the terms of
          the Note, the Stock Pledge,  this Loan Agreement or any other document
          executed  in  connection  with the Note,  which  failure  is not cured
          within  five (5) days  after  written  notice  thereof  by  Lender  to
          Borrower;

     b.   Failure to perform any of the other terms, covenants and conditions in
          the  Note,  the  Stock  Pledge,  this  Loan  Agreement  or  any  other
          instrument now or hereafter  constituting  additional security for the
          Loan and after expiration often (10) days from the giving of notice of
          such failure by Lender to Borrower  without  such failure  having been
          cured,  unless such failure is of a nature which cannot  reasonably be
          cured  within  ten (10)  days  (which  determination  shall be made by
          Lender  in its  sole  discretion),  in which  event,  the  failure  to
          immediately  commence to. cure such failure and thereafter  diligently
          pursue such cure to completion  within a reasonable period of time not
          to exceed,  however,  twenty (20) days after written notice thereof by
          Lender to  Borrower,  it being  understood  and agreed that Lender may
          undertake any action  permitted under this Loan Agreement or the Stock
          Pledge,  during the foregoing  cure period if such action is deemed to
          be  reasonably  necessary  to protect or  preserve  any portion of the
          Pledged Collateral;  provided, however, that no notice and opportunity
          to cure any such failure  shall be required if in the sole  discretion
          of Lender the failure is of a nature which cannot be cured;

     c.   Breach  of any  warranties  or  representations  made by  Borrower  to
          Lender,  including  without  limitation,   those  representations  and
          warranties  contained  herein or in the Stock Pledge,  which breach is
          not  cured  within  ten (10)  days  from the  giving of notice of such
          breach by Lender to Borrower,  unless such breach is of a nature which
          cannot  reasonably be cured within ten (10) days (which  determination
          shall be made by Lender in its sole  discretion),  in which event, the


                                    Page -7-
<PAGE>
          failure by Borrower  to  immediately  commence to cure such breach and
          thereafter  diligently  pursue  such  cure  to  completion  within  a
          reasonable  period  of  time not to exceed,  however, twenty (20) days
          after  written  notice  thereof  by  Lender  to  Borrower,  it  begin
          understood  that Lender may undertake any action  permitted under this
          Loan Agreement or the Stock Pledge,  during the foregoing  cure period
          if such action is deemed to be  reasonably  necessary  to  protect  or
          preserve  any portion of the Pledged  Collateral;  provided,  however,
          that  no  notice  and  opportunity  to  cure  any such breach shall be
          required  if,  in  the sole  discretion of Lender, the failure is of a
          nature which cannot be cured;

     d.   Institution  of  foreclosure  or  other  proceedings  to  enforce  any
          subordinate security interest or other lien or encumbrance of any kind
          upon the Pledged Collateral or any portion thereof,

     e.   The occurrence of any of the events  described  in Section 6.7 without
          Borrower obtaining the prior written consent of Lender;

     f.   The  occurrence  of an Event of  Default  under  the  Note,  the Stock
          Pledge,  this  Loan Agreement or any other agreement given by Borrower
          to Lender for the purpose  of  further  securing  any  indebtedness or
          obligation secured by the Stock Pledge; or

     g.   Should Borrower or any successors or assigns thereof:

          i.   File a petition under any chapter of the Federal  Bankruptcy Code
               or any similar  law,  state of federal,  whether now or hereafter
               existing; or

          ii.  In any involuntary  bankruptcy  action commenced  against it: (1)
               file an answer  admitting  that it is  generally  not  paying its
               debts as such debts become due, (2) fail to obtain a dismissal of
               such action within forty-five (45) days of its commencement,  (3)
               convert the action  from one  chapter of the  Federal  Bankruptcy
               Code to another chapter of the Federal Bankruptcy Code, or (4) be
               the subject of an order for relief in such bankruptcy action; or

          iii. Have a  "custodian",  as that  term  is  defined  in the  Federal
               Bankruptcy   Code, appointed for  it,  or  have  any  court  take
               jurisdiction of its property,  or substantially  all thereof,  in
               any  voluntary  proceeding  for the  purpose  of  reorganization,
               arrangement, dissolution, or liquidation, if such custodian shall
               not  be  discharged  or  if  such   jurisdiction   shall  not  be
               relinquished,  vacated or stayed on appeal with  forty-five  (45)
               days of the appointment; or

          iv.  Make an assignment for the benefit of its creditors; or


                                    Page -8-
<PAGE>
          v.   Consent  to the  appointment  of a  "custodian",  as that term is
               defined in the Federal Bankruptcy Code, of all of its property or
               substantially all thereof.

7.2  Remedies.  Upon  the occurrence of any Event of Default, Lender shall be
     --------
     entitled to declare the Note  immediately  due and payable and exercise all
     other  remedies  provided  to Lender  under  the Stock  Pledge or any other
     document  or  assignment  evidencing  or  securing  the  Loan or  otherwise
     available  at law, in equity,  by statute or set forth  herein,  including,
     without  limitation,  the appointment of a receiver or the institution of a
     suit in equity or other appropriate proceedings for specific performance or
     an  injunction  against a  violation  of this Loan  Agreement  or the Stock
     Pledge. All such remedies shall be cumulative and the election of one shall
     not be exclusive of any other remedy.

                       ARTICLE 8- MISCELLANEOUS PROVISIONS

8.1  Notice.  Any  notice  given  hereunder  shall  be  given  in  the manner
     ------
     prescribed in the Stock Pledge.

8.2  No  Assignment.  Borrower  shall  not  assign  any of its rights under this
     --------------
     Agreement  without the prior  written  consent of Lender and any  purported
     assignment in violation of this Section  without such prior written consent
     shall be void.

8.3  Time.  Time  is  of  the  essence  hereunder.
     ----

8.4  Headings.  The  captions  and  headings  of  various  sections  of  this
     --------
     Agreement are for convenience only and are not to be considered as defining
     and limiting in any way the scope or intent of the provisions hereof.

8.5  Successors.  This  Agreement  shall  be binding upon and shall inure to the
     ----------
     benefit of all successors and permitted assigns of the parties.

8.6  No Partnership:  Indemnity.  Lender  shall not be deemed to be a partner or
     --------------------------
     joint  venturer  with  Borrower in  connection  with the Loan or any action
     taken  under this  Agreement  and  Borrower  shall  indemnify,  hold Lender
     harmless and defend  Lender for,  from and against any and all loss,  cost,
     damage, expense or liability, including reasonable attorneys' fees, arising
     out of or resulting from their relationship. The provisions of this Section
     shall survive the repayment of the Loan.

8.7  Effectiveness.  This  Agreement  shall continue in full force and effect so
     -------------
     long as Borrower  remains  obligated  to Lender under this  Agreement,  the
     Note, the Stock Pledge or the other Loan Documents.

8.8  No  Waiver.  No  failure  on  Lender's  part  at  any  time  to require the
     ----------
     performance  by  Borrower  of any term of this  Agreement  shall in any way
     affect Lender's rights to subsequently  enforce  such  term,  nor shall any


                                    Page -9-
<PAGE>
     omission  on  Lender's  part to notify  Borrower  of any event  which  with
     notice or the  passage of time or both would constitute an Event of Default
     be construed as a waiver of such Event of Default or any right or remedy of
     Lender, nor shall any waiver by Lender of any term hereof  be taken or held
     to be a  waiver  of any  other  term hereof.

8.9  Governing  Law.  This  Agreement  shall  be  interpreted and enforced under
     --------------
     the  laws of the  State  of  Arizona.  Borrower  consents  to the  personal
     jurisdiction of the appropriate  state or federal court located in Phoenix,
     Arizona.

8.10 Waiver  of Right to Trial by Jury.  To  facilitate  each  party's desire to
     ----------------------------------
     resolve disputes in an efficient and economical manner,  each party to this
     Agreement  hereby expressly waives any right to trial by jury of any claim,
     demand,  action or cause of action (i) arising under this  Agreement or any
     other Loan Document, or (ii) in any connected with or related or incidental
     to the  dealings of the parties  hereto or any of them with respect to this
     Agreement or any other Loan Document,  or the transactions  related -hereto
     or thereto,  in each case whether now existing or  hereafter  arising,  and
     whether arising in contract or tort or otherwise.  Each party hereby agrees
     and consents that any such claim,  demand,  action or cause of action shall
     be  decided  by court  trial  without  a jury,  and that any  party to this
     Agreement may file an original  counterpart  or a copy of this Section with
     any court as written  evidence of the consent of the parties  hereto to the
     waiver of their right to trial by jury.

8.11 Complete Agreement.  The  parties  hereto  hereby represent and acknowledge
     ------------------
     that the Loan  Documents  are fully  integrated  and contain  the  complete
     understanding  and  agreements  of the parties with respect to the Loan and
     all matters relative  thereto and accurately  reflect the intentions of the
     parties.  All prior  agreements,  negotiations,  drafts and other extrinsic
     communications   relating  thereto  have  been  incorporated  into  or  are
     superseded  by  the  terms  of the  Loan  Documents  and  have  no  further
     significance or evidentiary effect.

8.12 Counterparts.  This  Agreement  may  be  executed  in  one  or  more
     ------------
     counterparts,  each of which  together  shall  constitute  one and the same
     instrument.

8.13 Attorneys'  Fees.  In the event that an attorney be employed or expense
     ----------------
     be  incurred  to compel  payment of the Loan or any  portion  thereof or in
     connection  with any default  hereunder or under the Note or Stock  Pledge,
     whether or not any action or  proceeding  is commenced by Lender,  Borrower
     promises to pay all such expenses and  attorneys'  fees,  including but not
     limited to, attorneys' fees incurred in any bankruptcy (including,  without
     limitation, any action for relief from the automatic stay of any bankruptcy
     proceeding) or judicial or nonjudicial foreclosure proceedings.



                                    Page -10-
<PAGE>
8.14 Interpretation.  In  this  Agreement  and  the  other  Loan  Documents,
     --------------
     whenever  the  context so  requires,  the  masculine  gender  includes  the
     feminine  and/or  neuter  and  the  neuter  includes  the  feminine  and/or
     masculine and the singular number includes the plural.  In  this  Agreement
     and the other Loan Documents, the use of the word "or" is not exclusive and
     the use of the word "including" shall not be deemed to limit the generality
     of  the  term  or  clause  to  which  it  has  reference,  whether  or  not
     non-limiting language (such as "without limitation" or "but not limited to"
     or words of similar impact) is used with reference thereto.

     IN  WITNESS  WHEREOF, Borrower and Lender have executed this Loan Agreement
as of the  date  first  above  written.

                                                  BORROWER:

                                                  RIGL  CORPORATION,  a  Nevada
                                                  corporation

                                                  By:  /s/  Kevin Jones
                                                     ---------------------------
                                                       Kevin Jones

                                                  Its: President

                                                  LENDER



                                                  /s/  Joseph  Van  Sickle
                                                  ------------------------------
                                                       Joseph  Van  Sickle



                                                  /s/  Helen  Van  Sickle
                                                  ------------------------------
                                                       Helen  Van  Sickle


                                    Page -11-
<PAGE>
                             STOCK PLEDGE AGREEMENT

     This STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of May 25th, 1999,
by  and  between RIGL CORPORATION, a Nevada corporation having an office at 4840
E.  Jasmine  Street,  Suite 105, Mesa, Arizona 85205 (the "Pledgor"), and JOSEPH
and  HELEN VAN SICKLE whose address is 664 Ocean Road, Vero Beach, Florida 32963
("Pledgee").

                                   WITNESSETH:

     WHEREAS,  the  Pledgor  is the record and beneficial owner of the shares of
common  stock  (the  "Pledged Shares") of RIGL Corporation, a Nevada corporation
publicly  traded  on  the  OTC  Bulletin  Board under the Trading Symbol "RIGN",
described  in  Schedule  1  hereto;  and

     WHEREAS,  the Pledgor and Pledgee have entered into a Loan Agreement, dated
as of even date herewith, (as at any time amended, modified or supplemented, the
"Loan  Agreement"),  pursuant to which Pledgee has made or agreed to make a loan
to  Pledgor  in  the  amount  of  $2,000,000;  and

     WHEREAS,  as a condition precedent to the making of the loan under the Loan
Agreement  and  as  security for all of the obligations of the Pledgor under the
Loan  Agreement,  Pledgee  has required that the Pledgor shall have executed and
delivered  this  Stock  Pledge  Agreement  and  granted  the  security  interest
contemplated  hereby;  and

     NOW,  THEREFORE,  in  consideration  of the premises and in order to induce
Pledgee  to  make  the  loan  under the Loan Agreement, it is agreed as follows:

1.   Definitions.  Capitalized  terms  used in this Stock Pledge Agreement shall
     -----------
     have (unless otherwise  provided  elsewhere in this Stock Pledge Agreement)
     the following respective meanings when used herein.

     "Agreement"  shall  mean  this  Stock  Pledge   Agreement,   including  all
     amendments,  modifications and supplements and any exhibits or schedules to
     any of the  foregoing,  as the  same  may be in  effect  at the  time  such
     reference becomes operative.

     "Bankruptcy  Code" shall mean Title 11, United States Code, as amended from
     time to time, and any successor statute thereto.

     "Event of Default" shall have the meaning assigned to such term in the Loan
     Agreement.

     "Pledged  Collateral"  shall  have the  meaning  assigned  to such  term in
     Section 2 hereof.


                                     Page 1
<PAGE>
     "Secured  Indebtedness"  shall mean all liabilities and obligations  under,
     and as  defined  in' the Loan  Agreement,  of  Pledgor  to  Pledgee  or any
     assignees, indorsee or transferee of Pledgee.

     Capitalized terms used herein which are defined in the Loan Agreement shall
have the meanings  assigned to such terms therein,  unless the context otherwise
requires or unless otherwise defined herein.

2.   Pledge.  The  Pledgor  hereby  pledges  to  Pledgee and grants to Pledgee a
     ------
     first priority security interest in the Pledged Shares and the certificates
     representing the Pledged Shares, and all dividends,  cash,  instruments and
     other  property  or  proceeds  from time to time  received,  receivable  or
     otherwise  distributed  in respect of or in exchange  for any or all of the
     Pledged Shares (the "Pledged Collateral").

3.   Security  for  Obligations.  This  Agreement  secures,  and  the  Pledged
     --------------------------
     Collateral is security for the prompt payment in full when due,  whether at
     stated  maturity,  by  acceleration  or otherwise,  and  performance of the
     Secured Indebtedness.

4.   Delivery  of  Pledged  Collateral.  All  certificates  representing  or
     ---------------------------------
     evidencing  the  Pledged  Shares  shall be  delivered  to and held by or on
     behalf of Pledgee pursuant hereto and shall be accompanied by duly executed
     instruments  of transfer or assignment in blank,  all in form and substance
     satisfactory  to  Pledgee.  From and  after the  occurrence  of an Event of
     Default,  Pledgee shall have the right,  at any time in its  discretion and
     without notice to the Pledgor, to transfer to or to register in the name of
     Pledgee  or any of its  nominees  any  or  all of the  Pledged  Shares.  In
     addition, Pledgee shall have the right at any time to exchange certificates
     or instruments  representing or evidencing  Pledged Shares for certificates
     or instruments of smaller or larger denominations.

5.   Representations  and  Warranties.  The Pledgor represents and warrants to
     --------------------------------
     Pledgee  that:

     a.   As of the date hereof,  the Pledgor is, and at the time of delivery of
          the  Pledged  Shares to Pledgee  pursuant to Section 4 hereof will be,
          the sole holder of record and the sole beneficial owner of the Pledged
          Collateral  free and clear of any lien thereon or affecting  the title
          thereto except for the lien created by this Agreement;

     b.   All of the Pledged  Shares have been duly  authorized,  validly issued
          and are fully paid and non-assessable;

     c.   The Pledgor has the right and requisite corporate authority to pledge,
          assign, transfer, deliver, deposit and set over the Pledged Collateral
          to Pledgee as provided herein;


                                     Page 2
<PAGE>
     d.   None of the Pledged Shares has been issued or transferred in violation
          of the securities registration,  securities disclosure or similar laws
          of any  jurisdiction to which such issuance or transfer may be subject
          (except that no  representation is made hereunder as to transfers made
          by Pledgor);

     e.   No consent,  approval,  authorization  or other order of any person or
          entity is required for the execution and delivery of this Agreement or
          the delivery of the Pledged  Collateral to Pledgee as provided  herein
          which has not been obtained;

     f.   The pledge, assignment and delivery of the Pledged Collateral pursuant
          to this  Agreement  will create a valid first  priority  lien on and a
          first priority perfected security interest in the Pledged  Collateral,
          and  the  proceeds  thereof,  securing  the  payment  of  the  Secured
          Indebtedness;

     g.   This Agreement has been duly authorized, executed and delivered by the
          Pledgor and constitutes a legal,  valid and binding  obligation 6f the
          Pledgor   enforceable  in  accordance   with  its  terms,   except  as
          enforceability  may be limited  by  bankruptcy,  insolvency,  or other
          similar laws  affecting  the rights of  creditors  generally or by the
          application of general equity principles; and

     The  representations  and  warranties  set  forth  in  this Section 5 shall
survive  the  execution  and  delivery  of  this  Agreement.

6.   Covenants.  The  Pledgor  covenants  and  agrees that until the Termination
     ---------
     Date:

     a.   Without  the  prior  written  consent  of  Pledgee,  it will not sell,
          assign,  transfer,  pledge, or otherwise encumber any of its rights in
          or to  the  Pledged  Collateral  or  any  unpaid  dividends  or  other
          distributions  or payments with respect thereto or grant a lien in any
          therein except as otherwise permitted by the Loan Agreement;

     b.   The Pledgor will, at its expense,  promptly  execute,  acknowledge and
          deliver all such  instruments and take all such action as Pledgee from
          time to time may request in order to ensure to Pledgee the benefits of
          the liens in and to the Pledged  Collateral  intended to be created by
          this Agreement; and

     c.   The Pledgor  has and will  defend the title to the Pledged  Collateral
          and the liens of Pledgee  thereon  against  the claim of any person or
          entity and will maintain and preserve such liens until the Termination
          Date.

7.   Pledgor's  Rights.  As  long  as  no Default or Event of Default shall have
     -----------------
     occurred and be continuing  and until written  notice shall be given to the
     Pledgor in accordance with Section 8(a) hereof,


                                     Page 3
<PAGE>
     a.   The Pledgor shall have the right,  from time to time, to vote and give
          consents  with respect to the Pledged  Collateral  or any part thereof
          for  all  purposes  not  inconsistent  with  the  provisions  of  this
          Agreement  and the Loan  Agreement;  provided,  however,  that no vote
          shall be cast,  and no consent shall be given or action  taken,  which
          would have the effect of impairing the position or interest of Pledgee
          in respect of the  Pledged  Collateral  or which  would  authorize  or
          effect (except as and to the extent permitted by the Loan Agreement),

          i.   The dissolution or liquidation, in whole or in part, of Pledgor;

          ii.  The  consolidation  or merger of Pledgor with any other person or
               entity;

          iii. The sale,  disposition or encumbrance of all or substantially all
               of the assets of the Pledgor;

          iv.  Any change in the authorized number of shares, the stated capital
               or the authorized share capital of Pledgor, or

          v.   The  alteration of the voting rights with respect to the stock of
               Pledgor;

     b.
          i.   The Pledgor shall be entitled,  from time to time, to collect and
               receive for its own use all cash dividends paid in respect of the
               Pledged  Shares  to the  extent  not  in  violation  of the  Loan
               Agreement,  other than any and all (A) dividends  paid or payable
               other  than in cash in  respect  of,  and  instruments  and other
               property received, receivable or otherwise distributed in respect
               of, or in exchange for, any Pledged Collateral, (B) dividends and
               other  distributions  paid or  payable  in cash in respect of any
               Pledged  Collateral  in  connection  with a  partial  (except  as
               permitted  in  the  Loan  Agreement)  or  total   liquidation  or
               dissolution,  and (C) cash paid, payable or otherwise distributed
               in  redemption  of, or in exchange  for, any Pledged  Collateral;
               provided,  however,  that until  actually paid all rights to such
               dividends  shall  remain  subject  to the  lien  created  by this
               Agreement; and

          ii.  All dividends (other than such cash dividends as are permitted to
               be paid to the Pledgor in  accordance  with clause (i) above) and
               all other  distributions in respect of any of the Pledged Shares,
               whenever  paid or made,  shall be delivered to Pledgee to hold as
               Pledged  Collateral  and  shall,  if  recovered  by  Pledgor,  be
               received in trust for the benefit of Pledgee,  be segregated from
               the  other  property  or  funds  of  Pledgor,  and  be  forthwith
               delivered to Pledgee as Pledged Collateral in the same form as so
               received (with any necessary endorsement).


                                     Page 4
<PAGE>
8.   Defaults  and  Remedies.
     -----------------------

     a.   Upon the occurrence of an Event ~f Default and during the continuation
          of such Event of Default,  then or at any time after such  declaration
          (provided  that such  declaration  is not  rescinded  by Pledgee)  and
          following  written  notice  to the  Pledgor,  Pledgee  (personally  or
          through an agent) is hereby  authorized and empowered at its election,
          to transfer and register in its name or in the name of its nominee the
          whole or any part of the Pledged  Collateral,  to exercise  the voting
          rights with respect thereto, to collect and receive all cash dividends
          and other  distributions  made  thereon,  to sell in one or more sales
          after seven  days'  notice of the time and place of any public sale or
          of the time after which a private sale is to take place (which  notice
          the  Pledgor  agrees is  commercially  reasonable),  but  without  any
          previous notice or advertisement, the whole or any part of the Pledged
          Collateral and to otherwise act with respect to the Pledged Collateral
          as though Pledgee were the outright owner thereof,  the Pledgor hereby
          irrevocably  constituting  and  appointing  Pledgee  as the  proxy and
          attorney-in-fact of the Pledgor, with full power of substitution to do
          so; provided, however, Pledgee shall not have any duty to exercise any
          such  right or to  preserve  the same and shall not be liable  for any
          failure  to do so or for any delay in doing so. Any sale shall be made
          at a public or private sale at Pledgee's place of business,  or at any
          public building in the City of Vero Beach to be named in the notice of
          sale,  either for cash or upon  credit or for future  delivery at such
          price as Pledgee may deem fair,  and Pledgee may be the  purchaser  of
          the whole or any part of the Pledged  Collateral  so sold and hold the
          same thereafter in its own right free from any claim of the Pledgor or
          any  right of  redemption.  Each  sale  shall  be made to the  highest
          bidder,  but Pledgee  reserves the right to reject any and all bids at
          such sale which, in its discretion, it shall deem inadequate.  Demands
          of performance,  except as otherwise herein specifically provided for,
          notices of sale,  advertisements  and the presence of property at sale
          are  hereby  waived  and any sale  hereunder  may be  conducted  by an
          auctioneer or any officer or agent of Pledgee.

     b.   If, at the original time or times  appointed for the sale of the whole
          or any part of the Pledged  Collateral,  the highest  bid, if there be
          but one  sale,  shall  be  inadequate  to.  discharge  in full all the
          Secured Indebtedness, or if the Pledged Collateral be offered for sale
          in lots, if at any of such sales,  the highest bid for the lot offered
          for  sale  would  indicate  to  Pledgee,   in  its   discretion,   the
          unlikelihood  of the proceeds of the sales of the whole of the Pledged
          Collateral being sufficient to discharge all the Secured Indebtedness,
          Pledgee may, on one or more occasions and in its discretion,  postpone
          any of said  sales by public  announcement  at the time of sale or the
          time or previous  postponement  of sale,  and no other  notice of such
          postponement or  postponements of sale need be given, any other notice
          being hereby waived;  provided,  however,  that any sale or sales made
          after  such  postponement  shall be after  seven  days'  notice to the
          Pledgor.


                                        Page 5
<PAGE>
     c.   In the event of any sale hereunder Pledgee shall,  after deducting all
          costs or expenses of every kind (including  reasonable attorneys' fees
          and disbursements) for care, safekeeping,  collection,  sale, delivery
          or  otherwise,  apply the residue of the  proceeds of such sale to the
          payment  or  reduction,  either  in whole or in part,  of the  Secured
          Indebtedness  in  accordance  with the Loan  Agreement,  returning the
          surplus, if any, to the Pledgor.

     d.   If,  at any  time  when  Pledgee  in its sole  discretion  determines,
          following the  occurrence  and during the  continuance  of an Event of
          Default,  that, in connection with any actual or contemplated exercise
          of its rights (when  permitted under this Section 8) to sell the whole
          or any part of the Pledged  Collateral  hereunder,  it is necessary or
          advisable  to  effect  a  public  registration  of all or  part of the
          Pledged Collateral  pursuant to the Securities Act of 1933, as amended
          (or any  similar  statute  then in effect)  (the  "Act"),  the Pledgor
          shall, in an expeditious manner, cause Pledgor to:

          i.   Prepare and file with the Securities and Exchange Commission (the
               "Commission")  a  registration  statement  with  respect  to  the
               Pledged  Collateral  and use  its  best  efforts  to  cause  such
               registration statement to become and remain effective.

          ii.  Prepare  and  file  with  the  Commission   such  amendments  and
               supplements  to such  registration  statement and the  prospectus
               used in  connection  therewith  as may be  necessary to keep such
               registration   statement   effective   and  to  comply  with  the
               provisions  of  the  Act  with  respect  to  the  sale  or  other
               disposition   of  the   Pledged   Collateral   covered   by  such
               registration  statement  whenever Pledgee shall desire to sell or
               otherwise dispose of the Pledged Collateral.

          iii. Furnish to Pledgee such  numbers of copies of a prospectus  and a
               preliminary  prospectus,  in conformity with the  requirements of
               the Act, and such other documents as Pledgee may request in order
               to facilitate the public sale or other disposition of the Pledged
               Collateral by Pledgee.

          iv.  Use  its  best   efforts  to  register  or  qualify  the  Pledged
               Collateral  covered  by such  registration  statement  under such
               other  securities or blue sky laws of such  jurisdictions  within
               the United  States as Pledgee  shall  request,  and do such other
               reasonable  acts and  things as may be  required  of it to enable
               Pledgee to  consummate  the public sale or other  disposition  in
               such jurisdictions of the Pledged Collateral by Pledgee.


                                      Page 6
<PAGE>
          v.   Furnish,  at the request of  Pledgee,  on the date that shares of
               the Pledged Collateral are delivered to the underwriters for sale
               pursuant to such  registration  or, if the  security is not being
               sold  through  underwriters,  on the date  that the  registration
               statement  with respect to such shares of the Pledged  Collateral
               becomes  effective,  (A) an  opinion,  dated  such  date,  of the
               independent counsel representing such registrant for the purposes
               of such registration,  addressed to the underwriters, if any, and
               in the event the  Pledged  Collateral  is not being sold  through
               underwriters,  then to Pledgee,  stating  that such  registration
               statement has become  effective under the Act and that (1) to the
               best  knowledge of such  counsel,  no stop order  suspending  the
               effectiveness thereof has been issued and no proceedings for that
               purpose have been  instituted or are pending or threatened  under
               the Act, (2) the registration statement,  the related prospectus,
               and each amendment or supplement there,  comply as to form in all
               material  respects  with  the  requirements  of the  act  and the
               applicable  rules and  regulations of the  Commission  thereunder
               (except that such counsel need express no opinion as to financial
               statements  or other  financial  or  statistical  data  contained
               therein),  (3) such  counsel has no reason to believe that either
               the registration statement or the prospectus, or any amendment or
               supplement  thereto,  contains any untrue statement of a material
               fact or omits a material  fact  required to be stated  therein or
               necessary to make the statements therein not misleading,  (4) the
               descriptions in the registration statement or the prospectus,  or
               any  amendment or  supplement  thereto,  of all legal matters and
               contracts and other legal  documents or instruments  are accurate
               and fairly present the information  required to be shown, and (5)
               such  counsel  does  not  know  of  any  legal  or   governmental
               proceedings,  pending or threatened,  required to be described in
               the  registration  statement or  prospectus,  or any amendment or
               supplement thereto,  which are not described as required,  nor of
               any contracts or documents or instruments of a character required
               to be described in the registration  statement or prospectus,  or
               any amendment or supplement  thereto,  or to be filed as exhibits
               to the  registration  statement which are not described and filed
               or incorporated by reference as required; and (B) a letter, dated
               such date, from the independent  certified public  accountants of
               such registrant,  addressed to the  underwriters,  if any, and in
               the event  the  Pledged  Collateral  is not  being  sold  through
               underwriters,  then to Pledgee, stating that they are independent
               certified  public  accountants  within the meaning of the Act and
               that,  in  the  opinion  of  such   accountants,   the  financial
               statements and other financial data of such  registrant  included
               in the registration statement or the prospectus, or any amendment
               or supplement thereto, comply as to form in all material respects
               with the  applicable  accounting  requirements  of the  Act.  The
               opinion of counsel  referred  to above shall  additionally  cover
               such other legal  matters  with  respect to the  registration  in
               respect of which  such  opinion  is being  given as  Pledgee  may
               reasonably  request.  The  letter  referred  to  above  from  the
               independent certified public accountants shall additionally cover


                                     Page 7
<PAGE>
               such other  financial  matters  (including  information as to the
               period  ending not more than five (5) Business  Days prior to the
               date of such letter) with respect to the  registration in respect
               of which such  letter is being  given as Pledgee  may  reasonably
               request.

          vi.  Otherwise  use its best  efforts  to comply  with all  applicable
               rules and  regulations of the  Commission,  and make available to
               its security holders, as soon as reasonably practicable,  but not
               later than 18 months after the effective date of the registration
               statement,  an earnings statement covering the period of at least
               12 months beginning with the first full month after the effective
               date of such  registration  statement,  which earnings  statement
               shall satisfy the provisions of Section 11(a) of the Act.

     e.   All  expenses   incurred  in  complying   with  Section  8(d)  hereof,
          including,  without  limitation,  all  registration  and  filing  fees
          (including   all  expenses   incident  to  filing  with  the  National
          Association of Securities Dealers,  Inc.), printing expenses, fees and
          disbursements of counsel for the registrant,  the fees and expenses of
          counsel for  Pledgee,  expenses of the  independent  certified  public
          accountants  (including any special audits  incident to or required by
          any such  registration)  and expenses of complying with the securities
          or blue sky laws of any  jurisdictions,  shall be paid by the Pledgor,
          except  that the  Pledgor  shall not be liable  for any  discounts  or
          commissions to any underwriter or any fees of disbursements of counsel
          for any underwriter in respect of the securities sold by Pledgee.

     f.   If, at any time when Pledgee shall  determine to exercise its right to
          sell the whole or any part of the Pledged Collateral  hereunder,  such
          Pledged  Collateral  or the part thereof to be sold shall not, for any
          reason  whatsoever,  be effectively  registered under the Act, Pledgee
          may, in its  discretion  (subject only to applicable  requirements  of
          law), sell such Pledged  Collateral or part thereof by private sale in
          such manner and under such circumstances as Pledgee may deem necessary
          or advisable, but subject to the other requirements of this Section 8,
          and shall not be required to effect such  registration or to cause the
          same to be effected. Without limiting the generality of the foregoing,
          in any such event  Pledgee in its  discretion  (a) may, in  accordance
          with  applicable  securities  laws,  proceed to make such private sale
          notwithstanding  that a  registration  statement  for the  purpose  of
          registering such Pledged  Collateral or part thereof could be or shall
          have been filed under said Act (or similar statute),  (B) may approach
          and negotiate  with a single  possible  purchaser to effect such sale,
          and (c) may restrict such sale to a purchaser  who will  represent and
          agree that such  purchaser  is  purchasing  for its own  account,  for
          investment  and not  with a view to the  distribution  or sale of such
          Pledged  Collateral or part thereof.  In addition to a private sale as
          provided  above in this  Section 8, if any of the  Pledged  Collateral
          shall not be freely  distributable to the public without  registration
          under the Act (or similar  statute) at the time of any  proposed  sale
          pursuant  to this  Section 8, then  Pledgee  shall not be  required to


                                     Page 8
<PAGE>
          effect such  registration or cause the same to be effected but, in its
          discretion  (subject  only to  applicable  requirements  of law),  may
          require  that any sale  hereunder  (including  a sale at  auction)  be
          conducted   subject   to   restrictions   (i)  as  to  the   financial
          sophistication and ability of any person or entity permitted to bid or
          purchase  at any such  sale,  (ii) as to the  content of legends to be
          placed upon any certificates  representing the Pledged Collateral sold
          in such sale, including restrictions on future transfer thereof, (iii)
          as to the  representations  required to be made by each Person bidding
          or  purchasing  at such sale  relating  to that  person's  or entity's
          access to financial information about the Pledgor and such person's or
          entity's  intentions  as to the holding of the Pledged  Collateral  so
          sold for investment,  for its own account,  and not with a view to the
          distribution  thereof,  and (iv) as to such  other  matters as Pledgee
          may, in its  discretion,  deem  necessary or appropriate in order that
          such sale (notwithstanding any failure so to register) may be effected
          in compliance  with the Code and other laws affecting the  enforcement
          of creditors'  tights and the Act and all applicable  state securities
          laws.

     g.   The Pledgor  acknowledges that  notwithstanding the legal availability
          of a private  sale or a sale  subject  to the  restrictions  described
          above in  paragraph  (f),  Pledgee  may, in its  discretion,  elect to
          register  any or all  the  Pledged  Collateral  under  the Act (or any
          applicable  state  securities  law)  in  accordance  with  its  rights
          hereunder. The Pledgor, however, recognizes that Pledgee may be unable
          to effect a public sale of any or all the Pledged  Collateral  and may
          be  compelled  to resort to one or more  private  sales  thereof.  The
          Pledgor  also  acknowledges  that any such  private sale may result in
          prices and other terms less  favorable to the seller than if such sale
          were a public sale and,  notwithstanding  such  circumstances,  agrees
          that any such  private  sale  shall be  deemed  to have been made in a
          commercially  reasonable manner.  Pledgee shall be under no obligation
          to delay a sale of any of the  Pledged  Collateral  for the  period of
          time  necessary to permit the  registrant to register such  securities
          for public sale under the Act, or under  applicable  state  securities
          laws, even if the Pledgor would agree to do so.

     h.   The  Pledgor  agrees  that  following  the  occurrence  and during the
          continuance  of an Event  of  Default  it will not at any time  plead,
          claim  or  take  the  benefit  of  any  appraisal,   valuation,  stay,
          extension,  moratorium or redemption  law now or hereafter in force in
          order to prevent or delay the  enforcement of this  Agreement,  or the
          absolute  sale of the whole or any part of the Pledged  Collateral  or
          the possession thereof by any purchaser at any sale hereunder, and the
          Pledgor  waives the benefit of all such laws to the extent it lawfully
          may do so. The  Pledgor  agrees  that it will not  interfere  with any
          right,  power and remedy of Pledgee  provided for in this Agreement or
          now or  hereafter  existing  at  law or in  equity  or by  statute  or
          otherwise,  or the exercise or beginning of the exercise by Pledgee of
          any one or more of such  rights,  powers or  remedies.  No  failure or
          delay on the part of  Pledgee to  exercise  any such  right,  power or


                                     Page 9
<PAGE>
          remedy and no notice or demand which may be given to or  made upon the
          Pledgor by Pledgee  with respect to any such remedies shall operate as
          a waiver thereof,  or limit or impair  Pledgee's  right  to  take  any
          action or to  exercise  any  power or remedy hereunder, without notice
          or demand,  or  prejudice  its  tights as against  the  Pledgor in any
          respect.

     i.   The  Pledgor  further  agrees  that a breach  of any of the  covenants
          contained in this Section 8 will cause irreparable  injury to Pledgee,
          that  Pledgee has no adequate  remedy at law in respect of such breach
          and, as a consequence,  agrees that each and every covenant  contained
          in this  Section  8 shall  be  specifically  enforceable  against  the
          Pledgor,  and the Pledgor  hereby  waives and agrees not to assert any
          defenses against an action for specific  performance of such covenants
          except for a defense that the Secured Indebtedness is not then due and
          payable in accordance  with the agreements and  instruments  governing
          and evidencing such obligations.  The Pledgor further acknowledges the
          impossibility  of  ascertaining  the amount of damages  which would be
          suffered  by  Pledgee  by reason of a breach of any of such  covenants
          and,  consequently,  agrees that, if Pledgee shall sue for damages for
          breach, it shall pay, as liquidated  damages and not as a penalty,  an
          amount equal to the lesser of (i) the value of the Pledged  Collateral
          on the date Pledgee shall demand  compliance  with this Section 8. and
          (ii) the amount required to pay in full the  obligations  described in
          paragraphs (a) and (b) of Section 9 below on such date.

9.   Application  of  Proceeds. Any cash held by Pledgee as Pledged Collateral
     -------------------------
     and all cash  proceeds  received  by  Pledgee  in  respect  of any sale of,
     liquidation  of, or other  realization  upon all or any part of the Pledged
     Collateral shall be applied by Pledgee as follows:

     a.   First,  to the  payment  of the  costs  and  expenses  of  such  sale,
          including  reasonable  compensation  to  Pledgee  and  its  agent  and
          counsel,  and all expenses,  liabilities and advances made or incurred
          by Pledgee in connection therewith; and

     b.   Next,  to the payment of the Secured  Indebtedness,  all in accordance
          with the terms and provisions of the Loan Agreement, and

     c.   Finally,  after  payment in full of all Secured  Indebtedness,  to the
          payment to the Pledgor, or its successors or assigns, or to whomsoever
          may be  lawfully  entitled  to  receive  the  same  or as a  court  of
          competent  jurisdiction may direct, of any surplus then remaining from
          such proceeds.

10.  Waiver. No delay on the part of Pledgee in exercising any power of sale,
     ------
     lien, option or other right hereunder, and no notice or demand which may be
     given to or made upon the Pledgor by Pledgee  with  respect to any power of
     sale,  lien,  option or other right  hereunder,  shall  constitute a waiver
     thereof~  or limit or  impair  Pledgee's  right  to take any  action  or to
     exercise any power of sale,  lien,  option,  or any other right  hereunder,
     without  notice or demand,  or  prejudice  Pledgee's  rights as against the
     Pledgor in any respect.


                                     Page 10
<PAGE>
11.  Assignment.  Pledgee  may  assign,  indorse  or  transfer  any  instrument
     ----------
     evidencing all or any part of the Secured  Indebtedness as provided in, and
     in accordance  with, the Loan  Agreement and the holder of such  instrument
     shall be entitled to the benefits of this Agreement.

12.  Termination.  Immediately  following  the  payment  of  all  Secured
     -----------
     Indebtedness,  Pledgee shall deliver to the Pledgor the Pledged  Collateral
     at the time subject to this  Agreement  and all  instruments  of assignment
     executed in connection  therewith,  free and clear of the liens hereof and,
     except as  otherwise  provided  herein,  all of the  Pledgor's  obligations
     hereunder shall at such time terminate.

13.  Lien  Absolute.  All  rights  of  Pledgee hereunder, and all obligations of
     --------------
     the Pledgor hereunder, shall be absolute and unconditional irrespective of:

     a.   Any lack of validity or  enforceability  of the Loan  Agreement or any
          other  agreement  or  instrument  governing  or  evidencing  any other
          Secured Indebtedness;

     b.   Any change in the time, manner or place of payment of, or in any other
          term of,  all or any part of the  Secured  Indebtedness,  or any other
          amendment or waiver of or any consent to any  departure  from the Loan
          Agreement or any other agreement or instrument governing or evidencing
          any other Secured Indebtedness;

     c.   Any exchange,  release or non-perfection  of any other collateral,  or
          any release or amendment or waiver of or consent to departure from any
          guaranty, for all or any of the Secured Indebtedness; or

     d.   Any other  circumstance  which might  otherwise  constitute  a defense
          available to, or a discharge of, the Pledgor.

14.  Release.  The  Pledgor consents and agrees that Pledgee may at any time,
     --------

     or from time to time,  in its  discretion  (a) renew,  extend or change the
     time or payment, and/or the manner, place or terms of payment of all or any
     part of the Secured Indebtedness and (b) exchange, release and/or surrender
     all or any of the Pledged Collateral, or any part(s) thereof, by whomsoever
     deposited,  which is now or may  hereafter be held by Pledgee in connection
     with all or any of the  Secured  Indebtedness;  all in such manner and upon
     such terms as Pledgee may deem  proper,  and  without  notice to or further
     assent from the Pledgor,  it being hereby  agreed that the Pledgor shall be
     and remain bound upon this Agreement,  irrespective of the existence, value
     or condition of any of the Pledged Collateral, and notwithstanding any such
     change, exchange,  settlement,  compromise,  surrender, release, renewal or
     extension,  and notwithstanding  also that the Secured Indebtedness may, at
     any time(s) exceed the aggregate  principal amount thereof set forth in the
     Loan  Agreement.  The Pledgor  hereby  waives  notice of acceptance of this
     Agreement, and also presentment,  demand, protest and notice of dishonor of
     any and all of the Secured Indebtedness,  and promptness in commencing suit
     against any party hereto or liable  hereon,  and in giving any notice to or
     of making  any  claim or  demand  hereunder  upon the  Pledgor.  Not act or
     omission of any kind on Pledgee's  part shall in any event affect or impair
     this Agreement.


                                     Page 11
<PAGE>
15.  Indemnification.  The  Pledgor  agrees  to  indemnify  and  hold  Pledgee
     ---------------
     harmless  from and  against  any taxes,  liabilities,  claims and  damages,
     including reasonable attorney's fees and disbursements,  and other expenses
     incurred  or arising by reason of the taking or the  failure to take action
     by Pledgee,  in good faith,  in respect of any  transaction  effected under
     this  Agreement  or in  connection  with  the  lien  provided  for  herein,
     including,  without  limitation,  any taxes payable in connection  with the
     delivery  or  registration  of any of the  Pledged  Collateral  as provided
     herein.  Whether or not the  transactions  contemplated  by this  Agreement
     shall  be   consummated,   the  Pledgor   agrees  to  pay  to  Pledgee  all
     out-of-pocket costs and expenses incurred in connection with this Agreement
     and all reasonable fees expenses and disbursements,  including registration
     costs  under  the Act (or  similar  statute)  and  the  reasonable  fees of
     Pledgee's  agents  or  representatives,  incurred  in  connection  with the
     execution and delivery of this Agreement and the  performance by Pledgee of
     the  provisions  of this  Agreement  and of any  transactions  effected  in
     connection with this  Agreement.  The obligations of the Pledgor under this
     Section 15 shall survive until payment and discharge in full of the Loan.

16.  Reinstatement.  This  Agreement  shall  remain in full force and effect and
     -------------
     continue  to be  effective  should any  petition be filed by or against the
     Pledgor  for  liquidation  or  reorganization,  should the  Pledgor  become
     insolvent  or make an  assignment  for the benefit of creditors or should a
     receiver or trustee be  appointed  for all or any  significant  part of the
     Pledgor's assets,  and shall continue to be effective or be reinstated,  as
     the case may be, if at any time  payment  and  performance  of the  Secured
     Indebtedness,  or  any  part  thereof,  is,  pursuant  to  applicable  law,
     rescinded or reduced in amount,  or must  otherwise be restored or returned
     by  any  obligee  of  the  Secured  Indebtedness,  whether  as a  "voidable
     preference,"  "fraudulent  conveyance,"  or  otherwise,  all as though such
     payment or performance had not been made. In the event that any payment, or
     any part thereof, is rescinded,  reduced, restored or returned, the Secured
     Indebtedness  shall be  reinstated  and deemed  reduced only by such amount
     paid and not so rescinded, reduced, restored or returned.

17.  Miscellaneous.
     -------------

     a.   The  Pledgor   agrees  to  promptly   reimburse   Pledgee  for  actual
          out-of-pocket  expenses,  including,  without  limitation,  reasonable
          counsel   fees,   incurred   by   Pledgee  in   connection   with  the
          administration and enforcement of this Agreement.

     b.   Neither Pledgee nor any of its officers, directors,  employees, agents
          or counsel shall be liable for any action lawfully taken or omitted to
          be taken by it or them hereunder or in connection herewith, except for
          its or their own gross negligence or willful misconduct.


                                     Page 12
<PAGE>
     c.   This  Agreement  shall be binding upon the Pledgor and its  successors
          and assigns, and shall inure to the benefit of, and be enforceable by,
          Pledgee and its successors, and assigns, and shall be governed by, and
          construed and enforced in accordance with, the internal laws in effect
          in the State of Arizona  without giving effect to principles of choice
          of law, and none of the terms or provisions  of this  Agreement may be
          waived, altered, modified or amended except in writing duly signed for
          and on behalf of Pledgee and the Pledgor.

18.  Severability.  If  for  any  reason  any provision or provisions hereof are
     ------------
     determined  to be invalid and contrary to any existing or future law,  such
     invalidity  shall not impair the  operation of or affect those  portions of
     this Agreement which are valid.

19.  Notices.  Except  as  otherwise  provided  herein,  whenever it is provided
     -------
     herein that any notice, demand, request, consent, approval,  declaration or
     other  communication  shall or may be given to or served upon either of the
     parties by the other,  or whenever either of the parties desires to give or
     serve upon the other  communication  with 1~espect to this Agreement,  each
     such  notice,  demand  request,  consent,  approval,  declaration  or other
     communication  shall be in writing and either  shall be delivered in person
     with receipt  acknowledged or sent by registered or certified mail,  return
     receipt requested, postage prepaid, addressed as follows:

     a.   If to Pledgee, at:

          Joseph  and  Helen  Van  Sickle
          664  Ocean  Road
          Vero  Beach,  Florida  32963

          With  copies  to:

          Collins,  Brown,  Caldwell,  Barkett  &  Garavaglia
          756  Beachland  Blvd.
          Vero  Beach,  Florida  32963
          Attention:     George  G.  Collins,  Jr.,  Esq.
          Fax:     (561)  234-5213

     b.   If to Pledgor, at:

          RIGL  Corporation
          4840  E.  Jasmine  Street,  Suite  105
          Mesa,  Arizona  85205
          Attention:     William  D.  O'Neal,  Esq.
          Fax:     (480)  654-9727

          Or at such other  address  as may be  substituted  by notice  given as
          herein provided.


                                     Page 13
<PAGE>
          The giving of any notice  required  hereunder may be waived in writing
          by the party  entitled to receive such notice.  Every notice,  demand,
          request,  consent,   approval,   declaration  or  other  communication
          hereunder  shall be deemed  to have  been duly  given or served on the
          date on which  personally  delivered,  with receipt  acknowledged,  or
          three (3)  Business  Days after the same shall have been  deposited in
          the United States mail.  Failure or delay in delivering  copies of any
          notice,  demand,  request,  consent,  approval,  declaration  or other
          communication to the persons  designated above to receive copies shall
          in no way adversely affect the  effectiveness of such notice,  demand,
          request, consent, approval, declaration or other communication.

20.  Section  Titles.  The Section titles contained in this Agreement are and
     ---------------
     shall be without substantive meaning or content, of any kind whatsoever and
     are not a part of the agreement between the parties hereto.

21.  Counterparts.  This  Agreement  may  be  executed  in  any  number  of
     ------------
     counterparts,  which shall,  collectively  and  separately,  constitute one
     agreement.

     IN WITNESS  WHEREOF,  the patties  hereto  have  caused  this Stock  Pledge
Agreement to be duly executed as of the date first written above.

                                                   PLEDGOR:

                                                   RIGL  CORPORATION,  a  Nevada
                                                   corporation




                                                   PLEDGEE:

                                                   /s/  Joseph  Van  Sickle
                                                   -----------------------------
                                                   Joseph  Van  Sickle



                                                   /s/  Helen  Van  Sickle
                                                   -----------------------------
                                                   Helen  Van  Sickle


                                    Page 14
<PAGE>
                                   SCHEDULE  1
                            TO STOCK PLEDGE AGREEMENT

Attached  to  and forming a part of that certain Stock Pledge Agreement dated as
of May 25 1999, by and between RIGL CORPORATION as Pledgor and JOSEPH and HELEN
       --
VAN  SICKLE  as  Pledgee.


          Stock  Issuer:               RIGL  Corporation

          Common  Stock                Class  of  Stock:

          Stock Certificate No.:       2481

          No.  of  Shares:             2.5  Million


                                   Page 15
<PAGE>
                                 PROMISSORY NOTE

PRINCIPAL  SUM:        $2,000,000                           DATE: May 25, 1999

INTEREST:              8%

DUE AND PAYABLE:       November 22, 1999 (180 days)

     FOR  VALUE RECEIVED, the undersigned RIGL CORPORATION, a Nevada corporation
("Make?'),  promises  to  pay  to  the  order  of  JOSEPH  and  HELEN VAN SICKLE
("Holder")  whose  address  is  664 Ocean Road, Vero Beach, Florida 32963, or at
such  other  place  as  the  Holder  hereof  may  from time to time designate in
writing,  the  principal  sum  of TWO MILLION DOLLARS ($2,000,000) plus interest
calculated  at a rate of Eight Percent (8%) annually from the date hereof on the
principal  balance  from  time  to  time  outstanding  as  hereinafter provided:
principal,  interest and other sums payable hereunder to be paid in lawful money
of  the  United  States  of America in monthly installments equal to that amount
charged  to Holders' account at Soloman Smith Barney commencing July 1, 1999 and
upon  the  first  day of each month thereafter for the following four (4) months
with the remaining outstanding balance plus accrued interest to be paid no later
than  180  days  from  date  of this Note. As additional consideration, upon the
execution  of  this  Note,  Maker  shall  deliver to Holder 1,000,000 restricted
common shares of RIGL Corporation validly issued, fully paid and non-accessible,
evidenced  by  a  certificate(s)  in  the  name  of  Holder  or  their designee.

     The  term  Holder  shall refer to the original Holder and upon transfer, to
any  and  all  subsequent  holders  of  this  Note.

     Maker agrees to an effective date of interest that is the rate stated above
plus  and  additional  rate  of interest resulting from any other charges in the
nature  of  interest  paid or to be paid in connection with this Note. All fees,
charges,  goods  and things in action or any other sums or things of value other
that  the  interest  resulting  from  the  Stated  Interest Rate and the Default
Interest  rate,  as  applicable,  paid  or  payable  by Maker (collectively, the
"Additional  Sums"),  whether  pursuant  to  this Note, or any other document or
instrument  in any way pertaining to this lending transaction, or otherwise with
respect  to  this lending transaction, shall, for the purpose of any laws of the
State  of  Arizona  that  may limit the maximum amount of interest to be charged
with  respect  to this lending transaction, be payable by Maker as, and shall be
deemed  to  be, additional interest, and for such purposes only, the agreed upon
and  "contracted  for  rate  of  interest"  of this lending transaction shall be
deemed  to  be increased by the rate of interest resulting from Additional Sums.
Maker  understands  and believes that this lending transaction complies with the
usury laws of the State of Arizona; however, if any interest or other charges in
connection  with  this  lending  transaction  are  ever determined to exceed the
maximum  amount  permitted  by  law,  then  Maker  agrees that (a) the amount of
interest  or  charges  payable  pursuant  to  this  lending transaction shall be
reduced  to  the  maximum  amount  permitted  by  law  and (b) any excess amount
previously collected from Maker in connection with this lending transaction that
exceeded  the  maximum  amount  permitted  by law,  will be credited against the
principal  balance  then  outstanding  hereunder.  If  the outstanding principal
balance hereunder has been paid in full, the excess amount paid will be refunded
to  Maker.


                                                                     Page l of 3
<PAGE>
     All  payments  on  this  Note  shall be applied first to the payment of any
costs,  fees  or  other  charges  incurred  in  connection with the indebtedness
evidenced  hereby,  next  to  the  payment  of  accrued interest and then to the
reduction  of  the  principal  balance.

     Time  is  of  the essence of this Note. At the option of Holder, (i) Holder
may declare the entire unpaid principal balance, all accrued and unpaid interest
and  all  other  amounts  payable  hereunder immediately due and payable without
notice  upon  the  failure  to  pay  any sum due and owing hereunder as provided
herein  if  such failure continues for five (5) days after the due date; or (ii)
Holder  may  require  Maker  to  pay interest on the late payment at the Default
Interest  rate  (as  defined  below) from the date the payment becomes due until
Maker  pays  in  full  all  accrued  and  unpaid  interest  due under this Note.

     Maker  shall  bear  all costs and expenses resulting from any check made by
Maker  for  payment  hereunder which is returned "NSF", wherein the late payment
provisions  set  forth  above  shall apply until all charges, accrued and unpaid
interest  due  and  owing  under  this Note are paid in full, plus an additional
TWENTY  AND  NO/100THS  DOLLARS  ($20.00).

     After  maturity, including maturity upon acceleration, the unpaid principal
balance, all accrued and unpaid interest and all other amounts payable hereunder
shall  bear  interest  the  rate  of TWENTY PERCENT (20%) (the "Default Interest
Rate").  Maker shall pay all costs and expenses, including reasonable attorney's
fees  and  court  costs, incurred in the collection or enforcement of all or any
part  of  this  Note.  Such  court costs and attorney's fees shall be set by the
court  and  not  by  jury, shall be included in any judgment obtained by Holder.

     Maker shall have the option to prepay this Note, in full or in part, at any
time  without  penalty.

     Failure  of  Holder to exercise any option hereunder shall not constitute a
waiver  of the right to exercise the same in the event of any subsequent default
or  in  the event of continuance of any existing default after demand for strict
performance.

     Maker,  sureties,  guarantors and endorsers hereof: (a) agree to be jointly
and  severally  bound,  (b)  severally  waive  any  homestead or exemption right
against  said  debt,  (c)  severally  waive  demand,  diligence, presentment for
payment,  protest and demand, and notice of extension, dishonor, protest, demand
and  nonpayment  of Note, (d) consent that Holder may extend the time of payment
or  otherwise  modify  the terms of payment of any part or the whole of the debt
evidence  by  this  Note,  at  the  request of any other person primarily liable
hereon,  and  such  consent  shall  not  alter nor diminish the liability of any
person,  and  (e)  agree that Holder may setoff at any time any sums or property
owed  to  any  of  them  by  Maker.


                                                                     Page 2 of 3
<PAGE>
     All  notices  required  or  permitted in connection with this Note shall be
given  at  the  address  set  forth  above.

     The  Note  is  secured  by  a  Security  Agreement  of  even date herewith.

     This Note shall be construed according to the laws of the State of Arizona.

     IN  WITNESS  WHEREOF,  this  Note  has  been  executed as of the date first
written  above.

                                    MAKER:

                                    RIGL  CORPORATION
                                    4840  E.  Jasmine  Street,  Suite  105
                                    Mesa,  Arizona  85205

                                    By:  /s/  Kevin Jones
                                       ------------------------------------
                                       Kevin Jones, President


                                                                     Page 3 of 3
<PAGE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.12
<SEQUENCE>11
<FILENAME>0011.txt
<TEXT>

                        MODIFICATIONS TO PROMISSORY NOTE

This  Modification to Promissory Note (this "Modification") is entered into this
3rd  day of September 1999 BY and between RIGL CORPORATION, a Nevada corporation
("Maker")  and  MATHEW  &  MARKSON,  LTD.,  an  Antigua  corporation ("Holder").

                                    RECITALS

A.   Maker and Holder entered into that certain  Promissory Note, dated June 15,
     1999 in the  principle  amount of  $2,000,000,  due and payable on July 15,
     1999.

B.   The parties hereto desire to modify the Promissory Note to provide that the
     principal  outstanding  balance  shall be due and  payable in full no later
     than January 15, 2000.

C.   In consideration of the and other valuable  consideration,  the receipt and
     sentiency  of which is hereby  acknowledged,  the parties  hereto  agree as
     follows:

                                    AGREEMENT

1.   The  date of  payment  of the  principal  sum of  $2,000,000  pursuant  the
     Promissory Note is hereby extended to January 15, 2000.

2.   Maker  waives the notice of default  provision  pursuant to the  Promissory
     Note,  and said Note  shall be deemed  to be in  default  if not paid on or
     before January 15,2000 with no grace period allowed.

3.   Holder  shall be paid an extension fee of two hundred  thousand  dollars
     (S200,000) if cash or cash  equivalents on September  8,1999 and any sum in
     arrears at maturity shall draw twenty percent (20%) interest from and after
     September 8, 1999.

4.   Holder  shall be paid 85  percent  of net cash flow  after  payment  of any
     ordinary and  necessary  business  expenses,  flat in excess of the average
     business  expense  indicated  on  Maker's  financial   statements  kept  it
     accordance  with  generally  accept  accounting  principles,  for the  past
     quarter.

5.   Equity  raised by  company  shall be applied  first to pay the  outstanding
     balance of the Promissory Note at the time such equity is received.

6.   Debt or  convertible  debt that is raised by company shall be applied first
     to pay the outstanding  balance of the Promissory Note. Debt that is raised
     through  Fremont  Financial  shall  be  excluded  from  this  agreement  in
     accordance with the agreement with Fremont Financial.

7.   Holder shall be paid a minimum of one hundred thousand  dollars  ($100,000)
     per month,  due and payable at the 28b of each month  commencing  September
     28,  1999,  and all such  payments  shall  first be  credited  against  any
     interest  owned by Maker to Holder,  and than against the principal sum due


<PAGE>
     on said  Promissory  Note,  but no such payments  shall extend the maturity
     data of said  Promissory  Note, and default notice shall be required to be
     given by Holder before declaring a default.

8.   Expenditures  for  marketing  for  the  company's  products  and  services,
     excluding  expenses  for direct  mail  marketing  be  approved by Pamela Jo
     Thompson, which approval shall not be unreasonably withheld until such time
     that balance of the Promissory Note paid in full

9.   Any payments not paid on or before the dates due shall alma. a default,  no
     notice of default shall be required or period avowed.

10.  Except as other-wise set for this Modification, the terms of the Promissory
     Note shall remain in force end effect.

     IN WITNESS WHEREOF,  this  Modification has been executed of the date first
     written above

                                       RIGL CORPORATION, a Nevada corporation

                                       By:  /s/  Kevin L. Jones
                                          ----------------------------------
                                                 Kevin L. Jones

                                       Its:  President
                                           ---------------------------------

                                       MATHEW & MARKSON, LTD., an Antigua
                                       Corporation

               {seal}                  By:  /s/  Ilse F. Cooper
                                          ----------------------------------

                                       Antigua Management & Trust Ltd
                                       -------------------------------------

                                       Its:  Corporate Director
                                           ---------------------------------


<PAGE>
                                 PROMISSORY NOTE

PRINCIPAL SUM:                  $ 2,000,000                  DATE:  June 15,1999

INTEREST:                       0%

DEFAULT INTEREST  RATE:         20%

DUE AND PAYABLE:                July  15,  1999

FOR  VALUE  RECEIVED,  the  undersigned  RJGL  CORPORATION, a Nevada corporation
(Maker),  promises  to  pay  to  the  order  of MATHEW & MARKSON, LTD. a Antigua
corporation (Holder), with registered offices at Woods Centre, Friars Hill Road,
P.O.  Box  1407,  St.  John's,  Antigua,  W.I.,  net  M&M's Antigua or other M&M
appointed bank account(s) or at such place as the Holder hereof may from time to
time designate in writing, the principal sum of TWO MILLION DOLLARS ($2,000,000)
without  interest  except upon default, to be paid in lawful money of the United
States  of America to Holder on or before July 15, 1999. This Note is secured by
a  Stock  Pledge  Agreement  of  even  date  herewith.

     The  term  Holder  shall refer to the original Holder and upon transfer, to
any  and  all  subsequent  holders  of  this  Note.

     All  payments  on  this  Note  shall be applied first to the payment of any
costs,  fees  or  other  charges  incurred  in  connection with the indebtedness
evidenced  hereby,  next  to  the  payment  of  accrued interest and then to the
reduction  of  the  principal  balance.

     Time  is  of  the essence of this Note. At the option of Holder, (i) Holder
may declare the entire unpaid principal balance, all accrued and unpaid interest
and  all  other  amounts  payable  hereunder immediately due and payable without
notice  upon  the  failure  to  pay  any sum due and owing hereunder as provided
herein  if  such failure continues for five (5) days after the due date; or (ii)
Holder  may  require  Maker  to  pay interest on the late payment at the Default
Interest  rate  (as  defined  below) from the date the payment becomes due until
Maker  pays  in  full  all  accrued  and  unpaid  interest  due under this Note.

     Maker  shall  bear  all costs and expenses resulting from any check made by
Maker  for  payment  hereunder which is returned "NSF", wherein the late payment
provisions  set  forth  above  shall apply until all charges, accrued and unpaid
interest  due  and  owing  under  this Note are paid in full, plus an additional
TWENTY  AND  NO/100THS  DOLLARS  ($20.00).

     After  maturity, including maturity upon acceleration, the unpaid principal
balance, all accrued and unpaid interest and all other amounts payable hereunder
shall bear interest at the rate of TWENTY PERCENT (20%) per annum, (the "Default
Interest  Rate").  Maker  shall pay all costs and expenses, including reasonable
attorneys  fees  and court costs and all other reasonable costs, incurred in the
collection  or enforcement of all or any part of this Note. Such court costs and


                                                                     Page 1 of 2
<PAGE>
attorneys  fees  shall be set by the court and not by jury, shall be included in
any  judgment  obtained  by  Holder.

     Maker shall have the option to prepay this Note, in full or in part, at any
time  without  penalty.

     Failure  of  Holder to exercise any option hereunder shall not constitute a
waiver  of the right to exercise the same in the event of any subsequent default
or  in  the event of continuance of any existing default after demand for strict
performance.

     Maker,  sureties,  guarantors and endorsers hereof: (a) agree to be jointly
and  severally  bound,  (b)  severally  waive  any  homestead or exemption right
against  said  debt,  (c)  severally  Waive  demand,  diligence, presentment for
payment,  protest and demand, and notice of extension, dishonor, protest, demand
and  nonpayment  of Note, (d) consent that Holder may extend the time of payment
or  otherwise  modify  the terms of payment of any part or the whole of the debt
evidence  by  this  Note,  at  the  request  of any other person unwarily liable
hereon,  and  such  consent  shall  not  alter nor diminish the liability of any
person,  and  (e)  agree that Holder may setoff at any time any sums or property
owed  to  any  of  them  by  Maker.

     All  notices  required  or  permitted in connection with this Note shall be
given  at  the  address  set  forth  herein.

     The Note  is  secured  by  a  Security  Agreement  of  even date  herewith.

     This Note shall be construed according to the laws of the State of Arizona.

     IN WITNESS WHEREOF, this Note has been executed as of the date first
     written above.

                                    MAKER:

                                    RIGL  CORPORATION
                                    4840  E.  Jasmine  Street,  Suite  105
                                    Mesa,  Arizona.85205



                                    By:  /s/  Kevin Jones
                                       -----------------------------
                                              Kevin Jones, President


                                                                     Page 2 of 2
<PAGE>
                                PAYMENT AGREEMENT

All  patties  acknowledge  that  YP.Net,  Inc.  (Formerly know as RIGL) could be
declared  in default if Mathew & Markson LTD. ("M&M") exercised its rights under
the Modification Agreement dated September 03, 1999 between the parties. YP.Net,
Inc.  has  made  no payments pursuant to either agreement of either principal or
interest  since  the September, 1999 payment. M&M has not and is not waiving any
of  its  rights  under  the  September  03,  1999  agreement.

In  order  to induce M&M to enter into negotiations with YP.Net, Inc. to either;
continue  to  delay the declaration of default or to further extend the time for
payment,  YP.Net,  Inc. will tender to M&M the sum of $50,000.00 as a good faith
fee.  M&M  will credit this sum to the outstanding interest due M&M from YP.Net,
Inc.

In  addition,  YP.Net,  Inc  will  continue  to make weekly payments to M&M on a
weekly  basis  until advised otherwise by M&M.  YP.Net, inc.  will be allowed to
pay  its  minimum  obligations  to the Van Sickles first and then Finova Capital
Corp.  under the terms of the agreements between the patties.  Then YP.Net, Inc.
will  maintain  a  cash  reserve  or  availability under its loan agreement with
Finova  sufficient  to  fund  2  weeks  worth  of expenses.  All regular monthly
budgetary  expenses will then be paid.  The balance will then be paid to M&M.  A
representative  of  M&M  will  have  the  final authority to approve all regular
monthly budgetary expenses until M&M is paid in full or more formal arrangements
are  agreed  to  between the parties.  It is understood between the parties that
M&M's  willingness to accept this good faith payment and or weekly payments does
not in any way limit M&M's rights to declare a default or the ability to enforce
strict  compliance  with the tennis and conditions of the original agreement and
the  modification  agreement  dated  September  03,  1999.

The  parties understand that this payment agreement is a temporary agreement and
does  not in anyway modify any agreements between M&M and YP.Net, Inc., nor does
it  change any obligations of YP.Net, inc. to M&M. YP.Net, Inc. is encouraged to
find alternative sources of capital to pay off its obligation herein with prompt
dispatch.  It  is  agreed  between  M&M  and  YP.Net,  Inc  as  herein  above:

YP.NET,  Inc.

BY:  /s/  Angelo Tullo, Chairman      Date:  4/26/2000
   ------------------------------          ------------------------------
          Angelo Tullo, Chairman

Mathew  &  Markson,  LTD         {seal}



BY:  /s/  Ilse  Cooper                Date:  4/26/2000
   ----------------------------            ------------------------------
     Ilse Cooper,  AMT/Director


<PAGE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-11
<SEQUENCE>12
<FILENAME>0012.txt
<TEXT>

<TABLE>
<CAPTION>
                                  YP.NET, INC.
                        COMPUTATION OF EARNINGS PER SHARE
                                   Exhibit 11



                                                  SEPTEMBER 30, 1999
<S>                                              <C>
BASIC EARNINGS PER SHARE:

Common shares outstanding, beginning of period            39,156,853

Effects of reverse merger:
   Reverse Merger Adjustment                             (16,933,096)
                                                 --------------------

Weighted average number of common shares                  22,223,757
                                                 ====================
   outstanding

Net Income                                       $     (4,363,867.00)
                                                 ====================

Earnings Per Share                               $             (0.20)
                                                 ====================


DILUTED EARNINGS PER SHARE: (NOTE 1)

Common shares outstanding, beginning of period            39,156,853


Effects of reverse merger:
   Reverse Merger Adjustment                             (16,933,069)

Weighted average number of common shares and
   common equivalent shares outstanding                   22,223,784
                                                 ====================

Net Income                                       $     (4,363,687.00)
                                                 ====================

Earnings Per Share                               $             (0.20)
                                                 ====================
</TABLE>


<PAGE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>13
<FILENAME>0013.txt
<TEXT>

XXXXXXXXXXXXXXXXXXXXXXXX       Do Not Have     XXXXXXXXXXXXXXXXXXXXXXX
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>14
<FILENAME>0014.txt
<TEXT>

<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
YP.Net,  Inc.  10-KSB  Year  end  September  30,  1999
</LEGEND>
<MULTIPLIER>     1

<S>                                     <C>
<PERIOD-TYPE>                           12-MOS
<FISCAL-YEAR-END>                       SEP-30-1999
<PERIOD-START>                          OCT-01-1998
<PERIOD-END>                            SEP-30-1999
<CASH>                                     255,323
<SECURITIES>                                     0
<RECEIVABLES>                            1,157,189
<ALLOWANCES>                               206,012
<INVENTORY>                                      0
<CURRENT-ASSETS>                         2,023,404
<PP&E>                                     628,367
<DEPRECIATION>                             192,469
<TOTAL-ASSETS>                           7,447,173
<CURRENT-LIABILITIES>                    5,896,412
<BONDS>                                          0
<PREFERRED-MANDATORY>                            0
<PREFERRED>                                  1,700
<COMMON>                                    39,157
<OTHER-SE>                               4,892,538
<TOTAL-LIABILITY-AND-EQUITY>             7,447,173
<SALES>                                  8,572,185
<TOTAL-REVENUES>                         8,572,185
<CGS>                                    4,760,026
<TOTAL-COSTS>                                    0
<OTHER-EXPENSES>                         5,638,105
<LOSS-PROVISION>                                 0
<INTEREST-EXPENSE>                         410,319
<INCOME-PRETAX>                         (2,230,864)
<INCOME-TAX>                               240,119
<INCOME-CONTINUING>                     (2,470,983)
<DISCONTINUED>                          (1,892,704)
<EXTRAORDINARY>                                  0
<CHANGES>                                        0
<NET-INCOME>                            (4,363,687)
<EPS-BASIC>                                (.200)
<EPS-DILUTED>                                (.200)


</TABLE>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
