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<SEC-DOCUMENT>0001015402-03-002686.txt : 20030708
<SEC-HEADER>0001015402-03-002686.hdr.sgml : 20030708
<ACCEPTANCE-DATETIME>20030708142204
ACCESSION NUMBER:		0001015402-03-002686
CONFORMED SUBMISSION TYPE:	10QSB/A
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20030331
FILED AS OF DATE:		20030708

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			YP NET INC
		CENTRAL INDEX KEY:			0001045742
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER PROGRAMMING SERVICES [7371]
		IRS NUMBER:				850206668
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10QSB/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-24217
		FILM NUMBER:		03778328

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

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

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	RIGL CORP
		DATE OF NAME CHANGE:	19980707

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	RENAISSANCE INTERNATIONAL GROUP LTD
		DATE OF NAME CHANGE:	19980115
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB/A
<SEQUENCE>1
<FILENAME>doc1.txt
<TEXT>
================================================================================


                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                              ____________________
                                AMENDMENT NO. 1
                                       TO
                                   FORM 10-QSB
                              ____________________

(Mark One)
[X]  Quarterly Report Pursuant to Section 13 or 15(d) of
          the Securities Exchange Act of 1934

                  For the quarterly period ended March 31, 2003

[ ]  Transition Report Pursuant to Section 13 or 15(d)
                         of the Securities Exchange Act

        For the transition period from _____________ to _______________
                              ____________________

                         Commission File Number 0-24217
                              ____________________

                                  YP.NET, INC.
        (Exact name of small business issuer as specified in its charter)

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


                         4840 East Jasmine St. Suite 105
                               Mesa, Arizona 85205
                    (Address of principal executive offices)

                                 (480) 654-9646
                           (Issuer's telephone number)

         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     X          No
    -----------       ------------

     The number of shares of the issuer's common equity outstanding as of May 6,
2003  was  42,680,722  shares  of  common  stock,  par  value  $.001.

     Transitional Small Business Disclosure Format (check one):

Yes               No        X
    -----------       ------------


2
<PAGE>
                                  YP.NET, INC.
                           INDEX TO FORM 10-QSB FILING
                     FOR THE QUARTER ENDED MARCH   31, 2003

                                TABLE OF CONTENTS

                                     PART I
FINANCIAL INFORMATION                                                       PAGE

Item 1.  Financial  Statements

               Consolidated Balance Sheet
                    as of March 31, 2003 . . . . . . . . . . . . . . . . . . . 4
               Consolidated Statements of Operations
                    for the Three and Six Month Periods
                    Ended March 31, 2003 and March 31, 2002 . . . . . . . . .  5
               Consolidated  Statements  of  Cash  Flows
                    for the Six Month Periods Ended March 31, 2003 and
                    March 31, 2002 . . . . . . . . . . . . . . . . . . . . . . 6
               Notes to the Consolidated Financial Statements . . . . . . . 8-14

Item 2.  Management's Discussion and Analysis of Financial Condition and
               Results  of  Operations. . . . . . . . . . . . . . . . . . .15-22

Item 3.  Controls  and  Procedures. . . . . . . . . . . . . . . . . . . . . . 23

                                     PART II
                                OTHER INFORMATION

Item  1.  Legal  Proceedings . . . . . . . . . . . . . . . . . . . . . . . .  23
Item  2.  Changes  in  Securities  . . . . . . . . . . . . . . . . . . . . .  23
Item  6.  Exhibits  and  Reports  on  Form  8-K  . . . . . . . . . . . . . .  24


                                   SIGNATURES


CERTIFICATIONS


3
<PAGE>
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


                           UNAUDITED CONSOLIDATED BALANCE SHEET
                                   AS OF MARCH 31, 2003
<S>                                                                                   <C>
ASSETS:

CURRENT ASSETS
   Cash and equivalents                                                               $   839,062
   Accounts receivable, net of allowance for doubtful accounts of $2,531,937            5,663,712
   Prepaid expenses and other current assets                                              267,544
                                                                                      ------------
      Total current assets                                                              6,770,318

ACCOUNTS RECEIVABLE, long term portion, net of allowance
      for doubtful accounts of $259,423                                                   605,307

CUSTOMER ACQUISITION COSTS, net of accumulated amortization of $1,124,052               2,636,887

PROPERTY AND EQUIPMENT, net                                                               632,207

DEPOSITS AND OTHER ASSETS                                                                  98,631

INTELLECTUAL PROPERTY- URL, net of accumulated amortization of $1,667,586               3,398,864

ADVANCES TO AFFILIATES                                                                    743,194
                                                                                      ------------
    TOTAL ASSETS                                                                      $14,885,408
                                                                                      ============

LIABILITIES AND STOCKHOLDERS' EQUITY:

CURRENT LIABILITIES:
   Accounts payable                                                                   $   344,080
   Accrued liabilities                                                                     78,184
   Due to Affiliates                                                                       14,017
   Deferred income taxes                                                                  238,932
   Income taxes payable                                                                 2,059,516
                                                                                      ------------
      Total current liabilities                                                         2,734,729

NOTES PAYABLE - long term portion                                                         115,868

DEFERRED INCOME TAXES                                                                       9,383
                                                                                      ------------

      Total liabilities                                                                 2,859,980
                                                                                      ------------

STOCKHOLDERS' EQUITY:
   Series E convertible preferred stock, $.001 par value, 200,000 shares authorized,
        131,840 issued and outstanding, liquidation preference $39,552                        132
   Common stock, $.001 par value, 50,000,000 shares authorized,
        48,999,340 issued                                                                  48,999
   Paid in capital                                                                      4,745,981
   Treasury stock at cost                                                                (331,818)
   Retained earnings                                                                    7,562,134
                                                                                      ------------
      Total stockholders' equity                                                       12,025,428
                                                                                      ------------

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                        $14,885,408
                                                                                      ============
</TABLE>

       See the accompanying notes to these unaudited financial statements


4
<PAGE>
<TABLE>
<CAPTION>
                                                   YP.NET, INC.
                                  UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                     FOR THE THREE AND SIX MONTH PERIODS  ENDED MARCH  31, 2003 AND MARCH 31, 2002


                                                Three Months         Six Months         Three Months          Six Months
                                                Ended March 31,     Ended March 31,    Ended March 31      Ended March 31,
                                                     2003                2003               2002                2002
                                              ------------------  ------------------  -----------------  ------------------
<S>                                           <C>                 <C>                 <C>                <C>
NET REVENUES                                  $       6,849,044   $      12,590,499   $       2,839,438  $       5,832,839
                                              ------------------  ------------------  -----------------  ------------------

OPERATING EXPENSES:
     Cost of services                                 1,848,966           3,671,116             733,402          1,917,679
     General and administrative expenses              1,666,108           3,042,186           1,030,889          1,888,671
     Sales and marketing expenses                       862,939           1,495,374              85,454            139,333
     Depreciation and amortization                      159,306             298,238             151,721            300,100
                                              ------------------  ------------------  -----------------  ------------------
         Total operating expenses                     4,537,319           8,506,914           2,001,466          4,245,783
                                              ------------------  ------------------  -----------------  ------------------

OPERATING INCOME                                      2,311,725           4,083,585             837,973          1,587,055
                                              ------------------  ------------------  -----------------  ------------------

OTHER (INCOME) AND EXPENSES
     Interest (income) expense                          (12,069)            (12,789)                  -             (5,570)
     Other (income) expense                            (180,980)           (229,886)              9,584             36,994
                                              ------------------  ------------------  -----------------  ------------------

     Total other (income)expense                       (193,049)           (242,675)              9,584             31,424
                                              ------------------  ------------------  -----------------  ------------------

INCOME BEFORE INCOME TAXES                            2,504,774           4,326,260             828,390          1,555,631

INCOME TAX  PROVISION (BENEFIT)                         999,853           1,728,447             208,102            628,287
                                              ------------------  ------------------  -----------------  ------------------

NET INCOME                                    $       1,504,921   $       2,597,813   $         620,288  $         927,344
                                              ==================  ==================  =================  ==================

NET INCOME PER SHARE:
  Basic                                       $            0.03   $            0.06   $            0.01  $            0.02
                                              ==================  ==================  =================  ==================

  Diluted                                     $            0.03   $            0.06   $            0.01  $            0.02
                                              ==================  ==================  =================  ==================

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  Basic                                              43,271,333          42,011,711          43,813,680         43,813,680
                                              ==================  ==================  =================  ==================

  Diluted                                            43,271,333          42,011,711          43,813,680         43,813,680
                                              ==================  ==================  =================  ==================
</TABLE>

       See the accompanying notes to these unaudited financial statements


5
<PAGE>
<TABLE>
<CAPTION>
                                          YP.NET, INC.
                       UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE SIX  MONTH PERIODS ENDED MARCH 31, 2003 AND MARCH  31, 2002

                                                                SIX MONTHS          SIX MONTHS
                                                              ENDED MARCH 31,     ENDED MARCH 31,
CASH FLOWS FROM OPERATING ACTIVITIES:                              2003                2002
                                                            ------------------  ------------------
<S>                                                         <C>                 <C>
  Net income                                                $       2,597,813   $         927,344
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
  Depreciation and amortization                                       298,239             300,099
  Income recognized on forgiveness of debt                            (45,362)                  -
  Deferred income taxes                                               155,175            (226,573)
  Officers & consultants paid common stock                            453,750                   -
  Common stock surrendered                                           (160,979)                  -
  Changes in assets and liabilities:
    Trade and other accounts receivable                            (2,283,431)           (346,037)
    Customer acquisition costs                                     (1,218,660)           (646,428)
    Prepaid and other current assets                                 (113,628)           (153,272)
    Other assets                                                       52,096                   -
    Receivable from affiliate                                        (110,121)                  -
    Accounts payable                                                  148,684             242,277
    Accrued liabilities                                              (105,603)            (36,454)
    Due to affiliates                                                  14,017                   -
    Income taxes payable                                            1,573,273             854,860
    Deferred revenue                                                        -                   -
                                                            ------------------  ------------------
          Net cash  provided by operating activities                1,255,263             915,816
                                                            ------------------  ------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Advances made to affiliates and related parties                    (400,000)            (62,857)
  Acquisition Costs WPI                                                     -             (60,492)
  Purchases of  intellectual property                                  (6,761)            (14,078)
  Purchases of  equipment                                            (469,548)            (69,459)
                                                            ------------------  ------------------
          Net cash (used in)  investing activities                   (876,309)           (206,886)
                                                            ------------------  ------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from debt                                                  147,000                   -
  Principal repayments on notes payable                              (454,000)         (1,051,743)
                                                            ------------------  ------------------
          Net cash (used)/provided by financing activities           (307,000)         (1,051,743)
                                                            ------------------  ------------------

INCREASE IN CASH                                                       71,954            (342,813)

CASH, BEGINNING OF PERIOD                                             767,108             683,847
                                                            ------------------  ------------------

CASH, END OF PERIOD                                         $         839,062   $         341,034
                                                            ==================  ==================
</TABLE>

       See the accompanying notes to these unaudited financial statements


6
<PAGE>
<TABLE>
<CAPTION>
                  Six month        Six month
                period ended     period ended
               March 31, 2003   March 31, 2002
               ---------------  ---------------
<S>            <C>              <C>
Interest Paid  $         9,545  $        61,414
</TABLE>


7
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTH PERIODS ENDED MARCH 31, 2003 AND MARCH 31, 2002

1.   Basis of Presentation

     The accompanying unaudited financial statements represent the consolidated
     financial position of YP.Net, Inc. ("the Company") for the three and six
     month periods ended March 31, 2003, and March 31, 2002, which includes
     results of operations of the Company and Telco Billing, Inc. ("Telco"), its
     wholly owned subsidiary, and statement of cash flows for the six month
     periods ended March 31, 2003 and March 31, 2002. These statements have been
     prepared in accordance with generally accepted accounting principles
     ("GAAP") for interim financial information. Accordingly, they do not
     include all the information and footnotes required by generally accepted
     accounting principles for complete financial statements. In the opinion of
     management, all adjustments to these unaudited financial statements
     necessary for a fair presentation of the results for the interim period
     presented have been made.

2.   Company Organization and Operations

     YP.Net, Inc., a Nevada corporation (the "Company," "we," "us," or "our"),
     is in the business of providing Internet-based yellow page advertising
     space on or through www.Yellow-Page.Net and www.YP.Net .

     The Company's "yellow page" database lists approximately 18 million
     businesses throughout the United States. Our website enables internet users
     to search through these "yellow page" listings and is used by businesses
     and consumers attempting to locate a business and/or service provider in
     response to a user's specific search criteria.

     As our primary source of revenue, we offer "preferred" listings to
     businesses for a monthly fee (generally $17.95). The "preferred" listing
     provides a business with a priority placement listing over non-paying
     listings and is displayed in a bigger and bolder font at the beginning of,
     or in the first section of the user's search results - thus featuring our
     paying customers more prominently to user's of our website. In addition,
     our paying customers get a Mini-Webpage(TM) which includes a 40-word
     description of their business, their hours of operation and other useful
     information, a direct link to the paying customers website, (if they have
     one and it is provided by the advertiser), map, driving directions to the
     paying customers location and more. We market for advertisers of our
     "preferred" listing service ,under the name "Yellow-Page.Net, exclusively
     to businesses through a direct mail solicitation program. The solicitation
     includes a promotional incentive (ie. generally a $3.50 check) which, if
     cashed by the business, automatically signs the business up for the
     Preferred Listing service for an initial twelve month period with automatic
     renewals thereafter. This easy subscription process provides a written
     confirmation (ie. the check) of the subscription by the newly subscribing
     business, which is verified by an independent third party (i.e the paying
     customers depositing bank). To additionally insure the intention of
     sign-up, the Company then mails a written confirmation card to the newly
     subscribing business generally within 30 days from activation. The Company
     also provides a 120-day cancellation period whereby the subscribing
     business may cancel and receive a full refund of any amounts paid to the
     Company.

     Each paying customer is billed monthly for that month's service, the vast


8
<PAGE>
     majority of such monthly billings appear on the subscribing business's
     local phone bill. Management believes this ability to bill the paying
     customer through the paying customers phone bill is a significant
     competitive advantage for the Company as few independent (not owned by a
     telephone company) yellow page companies are authorized to bill directly on
     the phone bill for services rendered.

          The Company uses Simple.Net, Inc. ("SN"), an internet service provider
          beneficially owned by a Director (Deval Johnson) of the Company, to
          provide internet dial-up and other services to its customers (See
          Footnote 9 to the financial statements). SN charges the Company's
          customers $2.50 per month for such internet access.

     We were originally incorporated as a New Mexico company in 1969 and the
     Company was re-incorporated in Nevada in 1996 as Renaissance Center, Inc.
     Our Articles of Incorporation were restated in July 1997 and our name was
     changed to Renaissance International Group, Ltd. Effective July 1998, we
     changed our name to RIGL Corporation. In June 1999, we acquired Telco
     Billing, Inc. ("Telco") and commenced our current operations through this
     entity which is a wholly-owned subsidiary. 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.

     From August through March 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 main source of revenue. Telco is operated as our wholly owned
     subsidiary.

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Cash and Cash Equivalents: This 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 March 31, 2003, cash deposits exceeded
     those insured limits by $ 634,000

     Principles of Consolidation: The consolidated financial statements include
     ---------------------------
     the accounts of the Company and its wholly owned subsidiary, Telco Billing,
     Inc. 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 eighteen months,
     the estimated average period of retention for new customers. The Company
     capitalized costs of $1,358,902 and $2,342,712 during the three and six
     months ended March 31, 2003 respectively. The Company amortized $640,996
     and $1,124,049, respectively, of total capitalized costs during the three
     and six months ended March 31, 2003.

     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 $221,941 and $377,322 for
     the three and six months ended March 31, 2003, respectively.


9
<PAGE>
     Revenue Recognition: The Company's revenue is generated by customer
     -------------------
     subscriptions 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 ("LEC's") 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. Due to the periods of time for
     which adjustments may be reported by the LEC's and the billing companies,
     the Company estimates and accrues for dilution and fees reported subsequent
     to year-end for initial billings related to services provided for periods
     within the fiscal year. Refunds are estimated based upon historical
     experience and are recorded as a reduction in revenue .

     Revenue for billings to certain customers whom are billed directly by the
     Company and not through the LEC's, is recognized based on estimated future
     collections. The Company continuously reviews this estimate for
     reasonableness based on its collection experience.

     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.

     Net Income Per Share: Net income 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.

     Significant estimates made in connection with the accompanying financial
     statements include the estimate of dilution and fees associated with LEC
     billings and the estimated reserve for doubtful accounts receivable.

     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."


10
<PAGE>
4.   ACCOUNTS RECEIVABLE

     The Company provides billing information to third party billing companies
     for the majority of its monthly billings. Billings submitted are "filtered"
     (ie. Delete invalid phone numbers etc.) 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 to the remittances for potentially
     uncollectible accounts. These dilution amounts will vary due to numerous
     factors and the Company may not be certain as to the actual amounts of
     dilution on any specific billing submittal until several months after that
     submittal. The Company estimates the amount of these charges and holdbacks
     based on historical experience and subsequent information received from the
     billing companies. The Company also estimates uncollectible account
     balances and provides an allowance for such estimates. The billing
     companies retain certain holdbacks that may not be collected by the Company
     for a period extending beyond one year. These balances have been classified
     as long-term assets in the accompanying balance sheet.

     The Company experiences significant dilution of its gross billings by the
     billing companies. The Company negotiates collections with the billing
     companies on the basis of the contracted terms and historical experience.
     The Company's cash flow may be affected by holdbacks, fees, and other
     matters which are determined by the LEC's and the billing companies as well
     as by refunds to customers.


5.   INTELLECTUAL PROPERTY

     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. Also, its current
                                           -----------
     customer base relies on the recognition of this term and URL as a basis for
     maintaining the subscriptions to the Company's service. Management believes
     that the current revenue and cash flow generated through use of
     Yellow-page.net supports the carrying of the asset. The Company
     ---------------
     periodically analyzes the carrying value of this asset to determine if
     impairment has occurred. No such impairments were identified during the
     year ended September 30, 2002 or the three months ended March 31, 2003. The
     URL is amortized on an accelerated basis over the twenty-year term of the
     licensing agreement. Amortization expense on the URL was $93,032 and
     $186,440 for the three and six months ended March 31, 2003, respectively.

6.   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.

     During the year ended September 30, 2002, the Company structured certain
     transactions related to its merger with Telco that allowed the Company to
     utilize net operating losses that were previously believed to be
     unavailable or limited under the change of control rules of Internal
     Revenue Code 382. The deferred income tax asset of $1,471,000 related to
     these net operating losses recorded at September 30, 2001, was fully offset
     by a valuation allowance. That valuation allowance was eliminated and
     recognized as a benefit in the year ended September 30, 2002. Due to these
     changes, the Company


11
<PAGE>
     recognized an income tax benefit of $1,614,716 for the year ended September
     30, 2002. At September 30, 2002 the Company has utilized all of its federal
     and state net operating losses.

          Income taxes for three and six months ended March 31, is summarized as
          follows:

<TABLE>
<CAPTION>
                                            Three
                                            Months    Six Months
                                             Ended       Ended
                                           March,31    March 31,
                                           ---------  -----------
                                             2003        2003
                                           ---------  -----------
<S>                                        <C>        <C>
     Current Provision                     $ 888,889  $ 1,576,233
     Deferred (Benefit) Provision            110,964      152,214
                                           ---------  -----------

     Net income tax provision              $ 999,853  $ 1,728,447
                                           =========  ===========
</TABLE>

     At March 31, 2003, deferred income tax assets related to differences in
     book and tax bases of accounts receivable, direct marketing costs and
     intangible assets.

     At March 31, 2003 deferred tax liabilities were comprised of differences in
     book and tax bases of customer acquisition costs and property and equipment
     respectively.


7.   STOCKHOLDERS' EQUITY

Series E Convertible Preferred Stock
- ------------------------------------

     During the year ended September 30, 2002, the Company created a new series
     of equity, the Series E Convertible Preferred Stock. The Company authorized
     200,000, $0.001 par value shares. The shares carry a $0.30 per share
     liquidation preference and accrue dividends at the rate of 5% per annum on
     the liquidation preference per share, payable quarterly from legally
     available funds. If such funds are not available, dividends shall continue
     to accumulate until they can be paid from legally available funds. Holders
     of the preferred shares shall be entitled, after two years from issuance,
     to convert them into common shares on a one-to-one basis together with
     payment of $0.45 per converted share.

     During the year ended September 30, 2002, pursuant to an existing tender
     offer, holders of 131,840 shares of the Company's common stock exchanged
     said shares for an equal number of the Series E Convertible Preferred
     shares, at the then $0.085 market value of the common stock. As of March
     31, 2003, the liquidation preference value of the outstanding Series E
     Convertible Preferred Stock was $39,552, and dividends totaling $1,483 had
     been accrued associated with said shares.

Common  Shares  Received  and  Retired  Under  Legal  Settlements--
- -------------------------------------------------------------------
Treasury  Stock
- ---------------

     During the three months ended March 31, 2003, the Company reacquired
     500,000 shares of its common stock in connection with a settlement with an
     attorney formerly on retainer to the Company. The Company had issued these
     shares to the attorney as consideration for services. The portion of the
     settlement which includes the return of the shares is recorded at the
     market value of the shares at the


12
<PAGE>
     settlement date. The Company recognized an expense on this settlement of
     approximately $90,000. At March 31, 2003, there were 6,318,618 shares of
     stock held in treasury.

8.   NET INCOME PER SHARE

          Net income per share is calculated using the weighted average number
     of shares of common stock outstanding during the three and six months ended
     March 31, 2003, respectively. Preferred stock dividends are subtracted from
     the net income to determine the amount available to common shareholders.
     There were $494 and $989 preferred stock dividends in the three and six
     months ended March 31, 2003, respectively. Warrants to purchase 500,000
     shares of common stock were excluded from the calculation for the three
     months ended March 31, 2003. The exercise price of those warrants was
     greater than the trading value of the common stock and therefore inclusion
     of such would be anti-dilutive. Also excluded from the calculation were
     131,840 shares of Series E Convertible Preferred Stock issued during the
     year ended September 30, 2002, which are considered anti-dilutive due to
     the cash payment required by the holders of the securities at the time of
     conversion. The following presents the computation of basic and diluted
     loss per share from continuing operations for the three and six months
     ended March 31,:

<TABLE>
<CAPTION>
                                               2003                             2003
                                            ----------                       ----------
                                 Three                            Six
                                 Months                           Months
                                 Ended                            Ended
                                March 31,                        March 31,
                                  2003                             2003
                               -----------  ----------  ------  -----------  ----------  ------
                                                         Per                              Per
                                 Income       Shares    Share     Income       Shares    share
                               -----------  ----------  ------  -----------  ----------  ------
<S>                            <C>          <C>         <C>     <C>          <C>         <C>
Net  Income                    $1,504,921                       $2,597,813
Preferred stock dividends            (494)                            (989)

Income available to common
 Stockholders                  $1,504,427                       $2,596,824
                               ===========                      ===========
BASIC EARNINGS PER SHARE:

Income available to common
 stockholders                  $1,504,427   43,271,333  $ 0.03  $2,596,824   42,011,711  $ 0.06
                               ===========              ======  ==========               ======
Effect of dilutive securities

DILUTED EARNINGS PER SHARE     $1,504,427   43,271,333  $ 0.03  $2,596,824    42,011,71  $ 0.06
                               ===========              ======  ==========               ======
</TABLE>


13
<PAGE>
9.   RELATED PARTY TRANSACTIONS

     During the three and six months ended March 31, 2003, the Company conducted
     transactions with entities affiliated with the Company because of
     commonality in members in management or direct or indirect control of the
     affiliate by a member or members of the Company's management. The following
     summarizes those transactions:

<TABLE>
<CAPTION>
                                                                 Three        Six
                                                                 Months      Months
                                                                 Ended       Ended
                                                               March 31,   March 31,
                                                                  2003        2003
           Entity                                                Amount      Amount
           ------                                              ----------  ----------
<S>                                                            <C>         <C>

     Simple.Net, Inc. ("SN")                                   $   80,523     136,626
     Commercial Finance Services d/b/a/ HR Management ("CFS")     162,579     528,630
     Business Executive Services, Inc.                             62,242     110,242
     Advertising Management Specialists, Inc.                     209,837     306,235
     Advanced Internet Marketing                                   71,901     162,331
     DLC Consulting                                                30,000      60,000
     Sunbelt                                                      232,520     604,851
                                                               ----------  ----------
                                                               $  849,602  $1,908,915
                                                               ==========  ==========
</TABLE>

     These entities provide consulting, employee leasing and marketing services
     to the Company. The above amounts represent payments made to these entities
     during the period. CFS sold the payroll processing portion of its business
     during the quarter ended March 31, 2003 and the Company no longer does its
     payroll processing business with CFS.

     In addition to these transactions, the Company also provides customer and
     technical support to Simple.net for a fee. These fees are included in other
     income and amounted to $276,155 for the six months ended March 31, 2003.

     During the six months ended March 31, 2003, the Company advanced $400,000
     to entities ($200,000 to Mathew & Markson and $200,000 to Morris & Miller)
     that are significant shareholders of the Company. In accordance with the
     instructions that the Company received from said shareholders, the Company
     has made payments ($100,000 in the first quarter of Fiscal 2003) to third
     parties (including related parties) on behalf of the stockholders and
     applied those payments as a reduction to the note payable The balance due
     from each of these entities was $447,415 from Mathew & Markson and $206,074
     from Morris & Miller at March 31, 2003.

     During the three month period ended March 31, 2003, the Company's board of
     directors resolved to pay for the costs of defending a civil action filed
     against its CEO and Chairman. The action involves a business that the CEO
     was formerly involved inThe Board action includes any other officers and
     directors that may potentially become involved in this civil action.
     Through March 31, 2003, the Company has paid approximately $151,000 on
     behalf of its CEO relative to this matter. This civil action remains
     unresolved. At this time, the Company cannot estimate what additional costs
     may be incurred to continue covering the costs related to this matter.


14
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

This Quarterly Report contains certain forward-looking statements, including
those regarding the Company and its subsidiaries' expectations, intentions,
strategies and beliefs pertaining to future performance. All statements
contained herein are based upon information available to the Company's
management as of the date hereof, and actual results may vary based upon future
events, both within and without management's control.

YP.Net, Inc., a Nevada corporation (the "Company," "we," "us," or "our"), is in
the business of providing Internet-based yellow page advertising space on or
through www.Yellow-Page.Net and www.YP.Net .

 The Company's  "yellow page" database lists approximately 18 million businesses
throughout the United States.  Our website enables internet users to search
through these "yellow page" listings and is used by businesses and consumers
attempting to locate a business and/or service provider in response to a user's
specific search criteria.

As our primary source of revenue, we offer "preferred" listings to businesses
for a monthly fee (generally $17.95).  The "preferred" listing provides a
business with a priority placement listing over non-paying listings and is
displayed in a bigger and bolder font at the beginning of, or in the first
section of the user's search results - thus featuring our paying customers more
prominently to user's of our website. In addition, our paying customers get a
Mini-Webpage(TM) which includes a 40-word description of their business, their
hours of operation and other useful information, a direct link to the paying
customers website, (if they have one and it is provided by the advertiser), map,
driving directions to the paying customers location and more. As of March 31,,
2003 we have approximately 279,071 "preferred" listing advertisers who have
subscribed for this enhanced advertising service. This represents less than 2%
of the estimated available market for preferred listings. We market for
advertisers of our "preferred" listing service ,under the name "Yellow-Page.Net,
exclusively to businesses through a direct mail solicitation program.  The
solicitation includes a promotional incentive (ie. generally a $3.50 check)
which, if cashed by the business, automatically signs the business up for the
Preferred Listing service for an initial twelve month period with automatic
renewals thereafter. This easy subscription process provides a written
confirmation (ie. the check) of the subscription by the newly subscribing
business, which is verified by an independent third party (ie. the paying
customers depositing bank). To additionally insure the intention of sign-up, the
Company then mails a written confirmation card to the newly subscribing business
generally within 30 days from activation. The Company also provides a 120-day
cancellation period whereby the subscribing business may cancel and receive a
full refund of any amounts paid to the Company.

Recently, the Company has created an outbound calling department whose function
is to proactively obtain the 40-word description to be used in the
Mini-Webpage(TM), as well as other information from each newly subscribing


15
<PAGE>
customer. This effort is expected to provide more information for potential
customers searching our website to help them choose to do business with one of
our Preferred Listing advertisers.

Each paying customer is billed monthly for that month's service, the vast
majority of such monthly billings appear on the subscribing business's local
phone bill.  Management believes this ability to bill the paying customer
through the paying customers phone bill is a significant competitive advantage
for the Company as few independent (not owned by a telephone company) yellow
page companies are authorized to bill directly on the phone bill for services
rendered.

The Company uses Simple.Net, Inc. ("SN"), an internet service provider
beneficially owned by a director (DeVal Johnson) of the Company, to provide
internet dial-up and other services to its customers (See Footnote 9 to the
financial statements). SN charges the Company's customers $2.50 per month for
such internet access.

We were originally incorporated as a New Mexico company in 1969 and the Company
was re-incorporated in Nevada in 1996 as Renaissance Center, Inc. Our Articles
of Incorporation were restated in July 1997 and our name was changed to
Renaissance International Group, Ltd. Effective July 1998, we changed our name
to RIGL Corporation. In June 1999, we acquired Telco Billing, Inc. ("Telco") and
commenced our current operations through this entity which is a wholly-owned
subsidiary. 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.

From August through March 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 main source of
revenue. Telco is operated as our wholly owned subsidiary.

                               GROWTH INITIATIVES

PRIMARY GROWTH STRATEGIES

PREFERRED LISTINGS-We currently derive almost all of our revenue from selling
Preferred Listings for the search results on our website. A Preferred Listing is
displayed at the beginning of search results in response to a user's specific
search query. A Preferred Listing is enhanced on the display of search results
and includes a "Mini-Webpage(TM)" listing where the paying customer can use up
to 40 words to advertise; among other  features.  Our primary growth strategy is
to obtain a significantly greater number of Preferred Listings given the large,
estimated potential available market for such listings. As part of  this
strategy, the Company has re-instituted its marketing program and plans to
regularly solicit its potential customer base of approximately 18 million
businesses through its direct mail solicitation program. As a result of such
program, the Company has increased its customer count from approximately 86,000
at March 31, 2002 to 279,071 at March 31, 2003.

BRANDING-The Company also plans to further embark upon a substantial campaign to
brand its product using the YP.Net and Yellow-Page.Net names. The Company seeks
to become the "internet yellow pages of choice" to businesses and consumers
performing searches.


16
<PAGE>
In addition to its cross marketing and cross placement agreement(s) with other
websites, the Company has signed a contract for advertising relating to Baca
Racing and National Hot Rod Association ("NHRA") events which provides us with
advertising on the Baca Racing vehicles as well as public relations and
advertising as a sponsor of NHRA In addition, we are members of both the Yellow
Pages Integrated Media Association (YPIMA) and the Association of Directory
Publishers (ADP). As further described under "Strategic Alliances", these
organizations are trade associations for yellow page publishers that promote
quality of published content and advertising methods. The Company plans to take
an even more active role in the year ahead. In the future, the Company also
plans to substantially increase its advertising through print, media and fixed
placement advertising in select markets.

RECENT  EVENTS


During the quarter ended March 31, 2003 and prior to this filing, the Company
entered into several contracts relating to its business. The Company signed a
license agreement with Palm, Inc. ("Palm") to become a provider of "yellow page"
and "white page" content on PDA ("personal data assistant") devices using the
Palm operating system. Such content will be provided by the Company to Palm
through a hypertext link from the Palm operating system to the Company's
website. The cost of this agreement was $20,000up-front for two years. This
agreement is renewable for successive two year periods unless either party
elects to terminate the agreement with no less than 60 days notice prior to the
end of the then-current term.

In addition, the Company also signed an agreement with Pike Street Industries
whereby the Company's online "yellow pages" will be added to the list of online
"yellow page" sites on Pike Street Industries, Inc's websites. The cost of this
agreement is $20,000 per month. This agreement may be terminated by either party
at any time with 30 days notice.

The Company also recently signed a contract with Switchboard Incorporated
("Switchboard") Which allows preferred listing customers of YP.Net to be
included in the "Featured Listing" section of Switchboard.com's internet "yellow
pages". This agreement is for one year initially and is renewable unless either
party terminates the agreement. The agreement involves a minimum monthly payment
of $20,000 by the Company for up to 250,000 directory advertisements hosted by
Switchboard. The payment would increase for additional directory advertisements
exceeding 250,000 at the rate of $.08 per directory advertisement per month.
This agreement is renewable for successive one year periods unless either party
elects to terminate the agreement with no less than 30 days notice prior to the
end of the then-current term.

The Company believes each of these agreements will increase the number of page
views for our customers and ,in the case of the Switchboard agreement, also
provides Switchboard's customers the ability to also achieve additional page
views by being listed on the YP.Net-related websites.

During the quarter ended March 31, 2003 and prior to this filing, the Company's
unsecured trade acceptance facility with AcTrade Financial Technologies, Ltd.
was verbally increased to $250,000 from $150,000. Such financings are conducted
through the Company's wholly-owned subsidiary, Telco Billing, Inc., and in
conjunction with the Company's vendors. Also, the Company signed an unsecured
credit facility of $250,000 with Bank of the Southwest on May 2, 2003. The
facility is for one year and interest on borrowings, if any, will be at an
interest rate of 0.5% above the Prime Rate, as defined.

The Company signed a new service agreement with eBillit, Inc. ("eBillit",
formally Integretel), a current provider of billing aggregator services to the
Company. The agreement requires the Company to pay processing fees of 2.75% of
gross dollars deposited with eBillit per month plus other ancillary service
fees. This agreement is for three years and is renewable for successive one year
periods unless either party elects to terminate the agreement with no less than
90 days notice prior to the end of the then-current term.


RESULTS  OF  OPERATIONS

     Revenue for the three month period ended March 31, 2003, was $6,849,044
compared to $2,839,438 for the three month period ended March 31, 2002 an
increase of over 140%. For the six month periods ended March 31, 2003 and 2002,
revenue increased to $12,590,499 from $5,832,839, an increase of over 115%. The
increase in revenue is primarily the result of an increase in preferred listing
customers. Preferred listing customers increased to 279,071 at March 31, 2003
compared to approximately 86,000 preferred listing customers at March 31, 2002,
an increase of over 220%. Compared to the 113,565 preferred listing customers at
September 30, 2002, the beginning of this fiscal year, the number of preferred
listing customer has grown by 145% thus far this fiscal yearThe increase in
preferred listing customers is the result of our direct mail solicitation
marketing efforts.


17
<PAGE>
     Cost of services for the three month periods ended March 31, 2003 and March
31, 2002 were $1,848,966 and $733,402, respectively, an increase of
approximately 150%. Cost of services for the six months ended March 31, 2003 and
2002 were $3,671,116 and $1,917,679, respectively, an increase of approximately
90%. Cost of services is comprised of billing aggregator dilution expenses,
certain direct mailer marketing costs and the amortization of such costs,
allowances for bad debt and our billing costs including billing fees charged by
our billing aggregators. Dilution expenses include customer credits and any
other receivable write-downs. The primary reason our cost of services has
continued to increase is due primarily to the previously mentioned increase in
preferred listing customers as well as increased dilution and billing fees
resulting from our direct solicitation mailing efforts. Cost of services as a
percent of net revenue was approximately 27% for the three months ended March
31, 2003 compared to approximately 26% for the same period in the prior fiscal
year. Cost of services as a percent of net revenue was essentially flat
comparing the three months ended March 31, 2003 with the comparable period in
2002 due the previously mentioned increased dilution and billing fees. These
increased costs were offset by the leveraging of our fixed cost infrastructure
over a larger customer base. For the six months ended March 31, 2003 and 2002,
Cost of services as a percent of net revenue was 29% and 33%, respectively. This
improvement is the result of the leveraging of our fixed infrastructure over a
larger customer base compared to previous years period offset by the
previously-mentioned increased costs relating to dilution and billing fee.

     General and administrative expense for the three month periods ended March
31, 2003 and March 31, 2002 were $1,666,108 and $1,030,889, respectively, an
increase of approximately 62%. For the six months ended March 31, 2003 and 2002,
such expenses were 3,042,186 and 1,888,671, respectively, an increase of
approximately 61%. General and administrative expenses increased due to an
increase in costs and employees relating to our growth in preferred listing
customers, our Quality Assurance and Outbound marketing initiatives as well as
an increase in certain officers compensation relating to employment contracts
with such officers. In addition, during the three month period ended March 31,
2003, the Company's Board of Directors resolved to pay for the costs of
defending a civil action filed against its CEO and Chairman. The action involves
a business that the CEO was formerly involved in. The Company and at least one
officer have received subpoenas in connection with this matter and the Board
believes that it is important to help resolve this matter as soon as possible.
The Board action includes the payment of legal and other fees for any other
officers and directors that may become involved in this civil action. Through
March 31, 2003, the Company has paid $150,930 on behalf of its CEO relative to
this matter. This civil action remains unresolved. At this time, the Company
cannot estimate what additional costs may be incurred to continue covering the
costs related to this matter, but all such costs shall be deemed to be
additional compensation to the CEO. As a percent of net revenue, general and
administrative expenses were 24% for the three months ended March 31, 2003
compared to 36% for the comparable period in 2002. For the six months ended
March 31, 2003, general and administrative expenses as a percent of net revenue
were 24% compared to 32% for the comparable period in 2002. The reduction in
general and administrative expenses as a percent of net revenue is the result of
the leveraging our fixed cost infrastructure over a larger customer base.


18
<PAGE>
     Sales and marketing expenses are primarily the costs associated with our
marketing relating to our direct mail solicitations. Sales and marketing
expenses for the three month periods ended March 31, 2003 and March 31, 2002
were $862,939 and $85,454, respectively, an increase of approximately 900%. For
the six months ended March 31, 2003 and 2002, sales and marketing expenses were
$1,495,374 and $139,333, respectively, an increase of almost 1000%. The primary
reason for the increase in sales and marketing is due to the Company fully
re-instituting its marketing solicitation program and the implementation of new
market strategies and modification of direct mail marketing pieces. Such
marketing has resulted in the increase in preferred listing customers cited
previously. We capitalize certain direct marketing expenses and amortize those
costs over an 18 month period based on the customer attrition rates analyzed by
the Company. As a percent of net revenues, sales and marketing expenses were 13%
and 3% for the three month periods ended March 31, 2003 and 2002, respectively.
For the six month periods ended March 31, 2003 and 2002, sales and marketing
expenses as a percent of net revenue were 12% and 2%, respectively. The increase
in sales and marketing expenses as a percent of net revenue results from the
full re-institution of our marketing program.

Depreciation and amortization primarily relates to the amortization of the
Company's intellectual property and depreciation of equipment. Regarding the
Company's intellectual property, the cost of our Yellow-Page.Net URL license was
                                                 ---------------
capitalized at $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
$93,032 and $101,250 for the three month periods ended March 31, 2003 and March
31, 2002, respectively. For the six months ended March 31, 2003 and 2002,
amortization expense on the URL were $186,440 and $202,500, respectively. Annual
amortization expense in future years related to the URL is anticipated to be
approximately $200,000-$300,000. Depreciation and amortization for the three and
six month periods ended March 31, 2003 did not change significantly compared to
the comparable periods in 2002. However, with the significant equipment
purchases relating to the Company's previously- mentioned infrastructure
additions, depreciation expense is expected to increase in future periods.

     Interest income, net of interest expense for the three month periods ended
March 31, 2003 and March 31, 2002, were $12,069 and $-0-, respectively. For the
six month periods ended March 31, 2003 and 2002, interest income increased to
$12,789 from $5,570. The increase in the interest income portion results from
the Company's increased cash position resulting from the Company's increased
profitability. The decrease in the interest expense portion was a result of the
payment of a substantial portion of our debt in Fiscal 2002.

     We recorded other income of $180,980 and other expense of $9,584,
respectively, for the three month periods ended March 31, 2003 and March 31,
2002. The primary component of the increase in other income was an increase in
revenue received from Simple.Net, a related party (See Footnote 9 to the
Financial Statements) for customer and technical services provided by the
Company to Simple.net offset by an expense of $90,000 resulting from a
settlement with an attorney formerly on retainer to the Company (See Footnote 7
to the Financial Statements). For the six months ended March 31, 2003, we
recorded other income of $229,886 compared to other expense of $36,994 for the
comparable period in 2002 as a result of the previously- mentioned items as well
as a gain on the settlement with a former consultant to the Company.


19
<PAGE>
Net income before taxes for the three month periods ended March 31, 2003 and
March 31, 2002 were $2,504,774 and $828,390 , respectively, an increase of over
200%. For the six month periods ended March 31, 2003 and 2002, net income before
taxes were $4,326,260 and $1,555,631, respectively, an increase of approximately
178%.

Net income for the three month periods ended March 31, 2003 and March 31, 2002
were $1,504,921 , or $0.03per diluted share, and $620,288 , or $0.01 per diluted
share, respectively, an increase in net income of over 140%. For the six months
ended March 31, 2003 and 2002, net income was $2,597,813 or $0.06 per diluted
share and $927,344, or $0.02 per diluted share, respectively, an increase in net
income of 180%. In the three and six month periods ended March 31, 2003 compared
to the comparable periods in 2002, net income increased due to the increase in
preferred listing customers cited above with a less than corresponding increase
in the expenses to service such customers due to nature of certain fixed
infrastructure expenses which do not necessarily increase as revenues increase
offset by costs incurred relating to the previously cited infrastructure
additions

LIQUIDITY  AND  CAPITAL  RESOURCES

     Net cash provided by operating activities for the six -month period ended
March 31, 2003, was $1,255,263 compared to $915,816 for the six -month period
ended March 31, 2002. The increase in cash generated from operations is
primarily due to a significant increase in net income and corresponding income
tax payable resulting from an increase in preferred listing customers offset by
an increase in the accounts receivable balance from such growth and funds
expended for mailings related to the Company's marketing efforts.

     We had working capital of $4,035,589 as of March 31, 2003 compared to
$2,376,087 as of March 31, 2002. The increase is due to primarily to increases
in accounts receivable of $2,448,346.

     Cash used in investing activities was $876,309 for the six -month period
ended March 31, 2003. The primary components of cash used represents purchase of
computer equipment (relating to the previously-mentioned infrastructure
additions) and intellectual property of $476,309, as well as net advances to
affiliates of $400,000. Compared to the six -month period ended March 31, 2002,
where cash used of $206,886 consisted of significantly lower purchases of
computer equipment of $69,459 and lower net advances to affiliates of $62,857.

     Cash used by financing activities was $307,000 for the six -month period
ended March 31, 2003, compared to $$1,051,743 for the six -month period ended
March 31, 2002. The cash used represents total payments made to reduce the
principal balances of our outstanding debt reduced by financing of $147,000
under the Company's trade acceptance draft program with AcTrade Financial
Technoligies, Ltd.

     We have repaid almost all of our debt. We believe that we will continue to
generate adequate cash flow from our operations to service our remaining debt.
We have a commitment to provide up to $10,000,000 in loans to each of the M&M's
(Morris & Miller, Ltd. and Matthew & Markson, Ltd.). Those funding commitments
are contingent upon the Company having sufficient cash flow for its operations.
Any amounts advanced to the M&M's are to be repaid to the Company and can be
offset against amounts owed to the M&M's. We do not believe that the M&M's will
make significant requests for funding under this commitment, as such advances
would adversely affect our liquidity since the M&M's are our largest
shareholders.


20
<PAGE>
On September 20, 2002, the Company entered into Executive Consulting Agreements
with Sunbelt Financial Concepts Inc. ("Sunbelt"), Advertising Management and
Consulting Services, Inc. ("AMCS") and Advanced Internet Marketing Inc. ("AIM")
relating to the employment of three executive managers and their respective
staffs. As part of these agreements, a Flex Compensation program was instituted.
Under these agreements, each of Sunbelt, AMCS and AIM may annually draw up to
$220,000, $50,000 and $30,000 respectively subject to sufficient cash on hand at
the Company. The amounts are increased by 10% annually and also contain a Due on
Sale Clause, whereby if there is a change of control of the Company, as defined,
then the respective agreements allows each to receive the greater of 30% of the
amounts due under the respective agreements or 12 months worth of fees. As of
March 31, 2003, all amounts had been drawn except $18,841 remaining for Sunbelt


During the quarter ended March 31, 2003 and prior to this filing, the Company's
unsecured trade acceptance facility with AcTrade Financial Technologies, Ltd.
was increased to $250,000 from $150,000. Such financings are conducted through
the Company's wholly-owned subsidiary, Telco Billing, Inc., and in conjunction
with the Company's vendors. Also, the Company signed an unsecured credit
facility of $250,000 with Bank of the Southwest on May 2, 2003. The facility is
for one year and interest on borrowings, if any, will be an interest rate of
0.5% above the Prime Rate, as defined.


CERTAIN RISK FACTORS
There are numerous factors that affect our business and the results of our
operations. Sources of these factors include general economic and business
conditions, federal and state regulation of our business activities, the level
of demand for our services, the level and intensity of competition in the
electronic yellow page industry and the pricing pressures that may result, our
ability to develop new services based on new or evolving technology and the
market's acceptance of those new services, our ability to timely and effectively
manage periodic product transitions, the services, customer and geographic sales
mix of any particular period, and our ability to continue to improve our
infrastructure (including personnel and technology systems) to keep pace with
the growth in our overall business activities. Our operations can be adversely
affected if we are unable to increase our customer base and revenue through our
direct marketing efforts. We are also subject to intense competition from other
providers of Internet "yellow page" type services, Yahoo and Microsoft, as well
as competition from large telephone companies. Set forth below and elsewhere in
this Form 10-QSB are risks and uncertainties that could cause actual results to
differ materially from the results contemplated by the forward-looking
statements contained in the Annual Report.

GROSS MARGINS MAY DECLINE OVER TIME: We expect that gross margins may be
adversely affected because we have determined that profit margins from the
electronic yellow pages offerings that we have profited from in the past have
fluctuated. We have experienced a decrease in revenue from the LEC from the
effects of the Competitive Local Exchange Carriers (CLEC) that are participating
in providing local telephone services to customers. We have begun to address
this problem and we are implementing data filters to reduce the effects of the
CLEC's. We have also sought other billing methods to reduce the adverse effects
of the CLEC billings. These other billing methods may be cheaper or more
expensive than our current LEC billing and we have not yet determined if they
will be less or more effective. We continue to look for profitable Internet
opportunities; however there are no assurances that we will be successful, and
presently we have no acquisitions in progress.


21
<PAGE>
DEPENDENCE ON KEY PERSONNEL: Our performance is substantially dependant on the
          performance of our executive officers and other key employees and our
          ability to attract, train, retain and motivate high quality personnel,
          especially highly qualified technical and managerial personnel. The
          loss of services of any executive officers or key employees could have
          a material adverse effect on our business, results of operations or
          financial condition. Competition for talented personnel is intense,
          and there is no assurance that we will be able to continue to attract,
          train, retain or motivate other highly qualified technical and
          managerial personnel in the future. Our Chief Executive Officer is
          involved in personal litigation, which may divert his attention from
          the management of the Company During the three month period ended
          March 31, 2003, the Company's Board of Directors resolved to pay for
          the costs of defending a civil action filed against its CEO and
          Chairman. The action involves a business that the CEO was formerly
          involved in. The Company and at least one officer have received
          subpoenas in connection with this matter and the Board believes that
          it is important to help resolve this matter as soon as possible. The
          Board action includes the payment of legal and other fees for any
          other officers and directors that may become involved in this civil
          action. Through March 31, 2003, the Company has paid $150,930 on
          behalf of its CEO relative to this matter. This civil action remains
          unresolved. At this time, the Company cannot estimate what additional
          costs may be incurred to continue covering the costs related to this
          matter, but all such costs shall be deemed to be additional
          compensation to the CEO.


Since our Growth Rate may slow, operating results for a particular quarter are
difficult to predict: We expect that in the future, our net sales may grow at a
slower rate on a quarter-to-quarter basis than experienced in previous periods.
This may be a direct cause of the projected changes to our direct marketing
pieces or regulatory matters discussed below. See "MARKETING," above. As a
consequence, operating results for a particular quarter are extremely difficult
to predict. Our ability to meet financial expectations could be hampered if we
are unable to correct the billing/dilution through the billing aggregators and
CLEC markets seen recently. Additionally, in response to customer demand, we
continue to attempt develop new products to reduce our attrition rates.


REGULATORY ENVIRONMENT. Existing laws and regulations and any future regulation
may have a material adverse effect on our business. These effects could include
substantial liability including fines and criminal penalties, preclusion from
offering certain products or services and the prevention or limitation of
certain marketing practices. As a result of such changes, our ability to
increase our business through Internet usage could also be substantially
limited.


22
<PAGE>
Item  3  -  Controls  and  Procedures
            -------------------------

     As required by Rule 13a-14 under the Exchange Act, within 90 days prior to
the filing date of this report, the Company carried out an evaluation of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. This evaluation was carried on under the supervision and with
the participation of the Company's management, including our Chief Executive
Officer and Principal Accounting Officer. Based upon that evaluation, our Chief
Executive Officer and Principal Accounting Officer concluded that our controls
and procedures are effective. There have been no significant changes in the
Company's internal controls or in other factors that could significantly affect
internal controls subsequent to the date the Company carried out this
evaluation.

     Disclosure controls and procedures are controls and other procedures that
are designed to ensure that information required to be disclosed in the
Company's reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms. Disclosure controls and
procedures include controls and procedures designed to ensure that information
required to be disclosed in Company reports filed under the Exchange Act is
accumulated and communicated to management, including the Company's Chief
Executive Officer and Principal Accounting Officer as appropriate, to allow
timely decisions regarding disclosures.


                           PART  II  -  OTHER  INFORMATION

ITEM  1.  LEGAL  PROCEEDINGS


     We are party to ordinary routine litigation in the course of our
operations. We have also been subject to certain state and federal regulatory
proceedings. See Footnote 7 to the Company's financial statements included
herein. The Company's Chairman and Chief Executive Officer, Mr. Tullo, is a
party defendant in an adversary proceeding ancillary to the Bankruptcy
proceedings under Chapter 11 of American Business Funding, Inc. ("ABF"). See
United States Bankruptcy Court for the District of Arizona, Case
#00-01782-ECF-RJH, and Case #00-00151-RJH American Business Funding Corporation
(ABF) v. Tullo, et. al. The suit alleges that all of the former officers of ABF,
including Mr. Tullo, and others and entities that may have been controlled by
them, made fraudulent conveyances and breached their fiduciary duty to certain
shareholders of ABF.

     Mr. Tullo has answered the complaints against him and has denied all the
allegations and has been vigorously contesting the plaintiffs' claims. Mr. Tullo
and his legal counsel have provided the following information:

     Mr. Tullo alleges that he discovered a scheme of financial improprieties by
his partners and some employees, including misappropriation of funds from ABF.
Further that after Mr. Tullo left his former partners and those appointed by
them continued to raise funds without disclosure and to pay old obligations with
this new money. Mr. Tullo states that it was through his intervention, by
contacting many of the creditors, meeting with the Arizona Attorney General's
Office, and moving for and obtaining the appointment of a Receiver, and later a
court appointed examiner, that the activities stopped. Upon the appointment of
the receiver, the directors appointed by Tullo's former partners authorized ABF
to file for protection under the United States Bankruptcy Code and initiated the
suit referenced above.

     There are several other suits related to ABF and its bankruptcy
proceedings. In all of the cases not filed by the control persons of ABF, Mr.
Tullo is not named as a defendant. The only findings of fact and conclusions of
law that have been rendered in this series of cases is against one of the
directors installed by Tullo's former partners, and that was by the Arizona
Corporation Commission, docket number S-03443A-01-0000 Decision number 64079.

     The Company has conducted a limited investigation of these matters, but is
not in a position to confirm or deny the truth of the various and conflicting
allegations. The litigation does not presently name the Company as a defendant.
The litigation could adversely affect the Company if the litigation diverts Mr.
Tullo's attention from his duties as an officer and director of the Company.
Recently, the parties have engaged in preliminary settlement discussions, some
of which have included the possible payment of cash or equity by the Company.
There can be no assurance that the Company may not be named a defendant in this
action in the future.


ITEM  2.  CHANGES  IN  SECURITIES

     During the six-months ended March 31, 2003, the Company issued an aggregate
of approximately 6,050,000 shares in consideration of executive service
agreements and compensation to an employee.

The Company issued the following shares:

- -    4,000,000 shares (value of $300,000) to Sunbelt Financial Concepts, Inc.
     ("Sunbelt"), for services provided to the Company. Angelo Tullo, the
     Company's CEO and Chairman, is President of Sunbelt;


23
<PAGE>
- -    1,000,000 shares (value of $75,000) to Advertising Management and
     Consulting Services, Inc. ("AMCS") for services rendered to the Company.
     Greg Crane, Company's Vice President of Marketing and a Director, is
     President of AMCS;
- -    1,000,000 shares (value of $75,000) to Advanced Internet Marketing,
     Inc.("AIM") for services rendered to the Company. DeVal Johnson, the
     Company's Secretary and Director is President of AIM;and
- -    50,000 shares (value of $3,750) to David J. Iannini,the Company's CFO, for
     services rendered as such

The restricted shares were issued based upon the average bid and ask prices at
the time of issuance ($0.075) and were issued in reliance on the exemption from
registration provided by Section 4 (2) of the Securities Act.



ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

EXHIBITS

10.24     eBillit,  Inc.  Master  Services  Agreement
10.25     Palm,  Inc.  License  Agreement
10.26     Pike  Street  Industries,  Inc.  Agreement
10.27     Bank  of  the  Southwest  Promissory  Note
10.28     Switchboard  Incorporated  Services  Agreement
10.35     Actrade  TAD  Agreement


REPORTS  ON  FORM  8-K  None


24
<PAGE>
                                   SIGNATURES

     Pursuant  to  the  requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on behalf by the undersigned
thereunto  duly  authorized.

                                    YP.NET,  INC.



Dated:  May  14th,  2003            /s/  Angelo  Tullo
                                    ------------------
                                    Chairman, President, Chief Executive Officer
                                    --------------------------------------------


                                    /s/  David  J.  Iannini
                                    -----------------------
                                    Chief  Financial  Officer
                                    -------------------------


25
<PAGE>
                  CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
                         PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002


     I, Angelo Tullo, certify that:

     1. I have reviewed this quarterly report on Form 10-QSB of YP.Net, Inc.;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

     3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

     4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

          a) designed such disclosure controls and procedures to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this quarterly report is being
     prepared;

          b) evaluated the effectiveness of the registrant's disclosure controls
     and procedures as of a date within 90 days prior to the filing date of this
     quarterly report (the "Evaluation Date"); and

          c) presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

     5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

          a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

          b) any fraud, whether or not material, that involves management or
     other employees who have a significant role in the registrant's internal
     controls; and


26
<PAGE>
     6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Dated:  May 14, 2003           By:  /s/  ANGELO  TULLO
      -----------------           ----------------------------------------------
                                         Angelo  Tullo
                                         Chairman, President and Chief Executive
                                         Officer


27
<PAGE>
                  CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
                         PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002


I, David Iannini, certify that:

     1. I have reviewed this quarterly report on Form 10-QSB of YP.Net, Inc.;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

     3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

     4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

          a) designed such disclosure controls and procedures to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this quarterly report is being
     prepared;

          b) evaluated the effectiveness of the registrant's disclosure controls
     and procedures as of a date within 90 days prior to the filing date of this
     quarterly report (the "Evaluation Date"); and

          c) presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

     5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

          a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

          b) any fraud, whether or not material, that involves management or
     other employees who have a significant role in the registrant's internal
     controls; and


28
<PAGE>
     6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Dated:  May 14, 2003                     By:  /s/  DAVID IANNINI
        ---------------                     --------------------
                                            David Iannini
                                            Chief Financial Officer


29
<PAGE>
<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.24
<SEQUENCE>3
<FILENAME>doc2.txt
<TEXT>
                                                                   EXHIBIT 10.24

                            MASTER SERVICES AGREEMENT

     THIS  MASTER  SERVICES  AGREEMENT  (the  "Agreement"} is entered into as of
August  1,  2002  ("Effective  Date"),  by and between eBillit, Inc., a Delaware
corporation  ("EB1"),  and Telco Billing, Inc., a Nevada corporation ("Client").

     WHEREAS, Client is a provider of certain Internet and/or telecommunications
related  products  and  services;  and

     WHEREAS,  EBI  is engaged in the business of providing validation, billing,
collection  and  related  services  to  the  internet  and  telecommunications
industries;  and

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

     NOW, THEREFORE, the parties hereto agree as follows;

     1.     DEFINITIONS.    Certain terms used herein are defined in the
            ------------
attached Exhibit A and are incorporated herein by reference.

     2.     EBI SERVICES.  EBI  shall  provide  the  following  services (each a
            -------------
"Service  Order")  as more fully described on the referenced Schedules, attached
hereto  and made a part hereof. Service Orders may be added to this Agreement by
execution  of  an  applicable amendment hereto including an amendment to Exhibit
"B" with respect to such added Service Order.

                                                                         Initial
Schedule     Services Order Options                                       Order
- --------     ----------------------                                      ------
    I        Validation/Registration                                      (   )

   II        PhoneBill Services (Telco Billing)                           ( X )

  III        DirectBill Services (Client-Branded Billing)                 (   )

   IV        Credit Card Processing                                       (   )

    V        Automated Clearing House (ACH)                               (   )

   VI        End-User Inquiry (required with Service Option II or III)    ( X )

  VII        Collection Services                                          (   )

 VIII        Customer Management Services                                 (   )

     Throughout the Term of this Agreement, Client shall utilize EBI for any and
all services covered by Service Orders hereunder.

     3.      Term. The term of this Agreement shall be for three (3) years from
             -----
the  Effective  Date  ("Initial  Term"),  and  shall  automatically  renew  for
successive terms of one (1) year (each a "Renewal Term") unless


                                    - CONFIDENTIAL -                      Page 1
<PAGE>
either  party gives the other party ninety (00) days prior written notice of its
desire to not renew at least ninety (90) days prior to the scheduled renewal, or
otherwise  terminates  this Agreement in accordance with Section 12, The Initial
Term  and  any  Renewal Term shall be referred to collectively herein as "Term".

     4.     CLIENT SUBMISSION  AND  EBIEDIT.   Where  applicable  to  a  Service
            -------------------------------
Order,  Client  shall  submit  to  FBI its Billing Transactions in a data format
acceptable  to  EBI.  Upon  receipt  of Client's Billing Transactions, EDI shall
subject  the Billing Transactions to its proprietary edit process (the "EBI Edit
Process"),  which  may  screen the Billing Transactions for, among other things,
compliance  with  EBI's  billing  policies,  billing  coverage,  regulatory
requirements,  syntax  errors  and  other  requirements  as  EEI  may reasonably
determine  from  time  to time. EB! shall provide reasonable notification of any
changes  or  restrictions  in  its  edit criteria. Client shall use commercially
reasonable  efforts  to  screen its Billing Transactions to exclude records that
are  not  likely  to  pass  the  EBI  Edit  Process.  If any of Client's Billing
Transactions  fail  to  satisfy  the criteria of the EBI Edit Process, EBI shall
return  such  Billing  Transactions  to  Client  and  EBI  shall have no further
responsibility  For  any  such  returned  Billing  Transactions.

     5.     SERVICE  FEES.  EBI  shall  be  entitled  to  withhold  from  its
            -------------
disbursements  to  Client, or otherwise invoice Client, the foes and charges set
forth  on  Exhibit  B,  attached  hereto (collectively "Fees"). In the event EBI
invoices Client for its Fees, such invoices shall be due and payable within five
(5) business days of receipt by Client. EBI shall be entitled Co interest on any
past-due  Fees, or other amounts due to EBI, at the rate of 13% per annum or the
maximum  rate  allowable  by  law,  whichever  is  less,  After the first annual
anniversary  of  this  Agreement,  EBI may adjust its Fees with thirty (30) days
prior  written  notice to Client, provided-however, that the aggregate effect of
such  adjustment  shall  not  exceed  ten  percent (10%) in any 12 month period.

     6.      TAXES, Each party shall be responsible for the timely remittance of
             ------
such party's applicable Taxes (if any) to the appropriate taxing authorities, in
no  event  shall either party be responsible for the other party's obligation to
remit such other party's Taxes. Client shall either (initial which applies): (i)
[  __  ]  include, in the face amount of each Billing Transaction, the amount of
any  applicable  Taxes  and  format such Billing Transactions so as to be exempt
from  any  additional  Taxes;  (ii)  [  _  ] provide written instructions to EBI
directing EBI to apply specific Taxes to the Billing Transactions; or (iii) [ X]
                                                                             --
direct  EBI  to  cause  its then-current taxing rates and logic to be applied to
Client's  Billing  Transactions.  In the event that EBI is providing services to
Client  under  a  Phone-Bill Service Order, attached hereto as Schedule II, then
EBI  shall  cause any Taxes collected by a Telco in relation to Client's Billing
Transactions to be remitted to the appropriate taxing authorities. Client agrees
to  indemnify  and  hold  EBI,  its  directors, officers, employees, agents, and
representatives  harmless  from and against any liability or loss resulting from
any  Taxes  including, without limitation, any penalties, interest, additions to
Tax,  Tax surcharges and other Tax-related coats payable or incurred in relation
to  Client's  Services  or  the  Billing  Transactions.

     7.     CLIENT  REPRESENTATIONS  AMD  WARRANTIES.   Client  represents  and
           -----------------------------------------
warrants  to EEI that, throughout the Term of this Agreement, Client shall be in
compliance  with  all  rules,  regulations  and  policies


                                    - CONFIDENTIAL -                      Page 2
<PAGE>
including,  but  not  limited to, federal, state, and local 1093! and regulatory
requirements  and  the billing and collection guidelines contained In Exhibit C,
attached  'hereto,  applicable  to any of Client's Services. This warranty is in
lieu  of  any  other  warranty,  express,  implied  or  statutory.

     8.     EBI's REPRESENTATION AMD WARRANTY.    EBI represents and warrants to
            ----------------------------------
Client  that,  throughout the Term of this Agreement, EBI shall be in compliance
with all rules, regulations and policies including, but not limited to, federal,
state, and local legal and regulatory requirements applicable to the Services to
be  provided hereunder, This warranty is in lieu of any other warranty, express,
implied  or  statutory.

     9.      PROOF  OF COMPLIANCE. Each party agrees to provide written proof of
             ---------------------
its compliance, with respect to its respective obligations under Sections 7 or 8
above,  to  the  other party within five (5) business days of such other party's
written  request.  Each  party  shall  have the right to immediately suspend its
performances  under  this  Agreement,  whether  in  whole  or  in  part, without
liability to the other party in the event that such other party does not provide
satisfactory  written  evidence  of such compliance. Each party agrees to notify
the  other  party  in  writing, as soon as reasonably possible, of any instances
where such party is not in compliance with applicable obligations under Sections
7  and  8.

     10.     LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE LIABLE TO
             ------------------------
THE  OTHER  PARTY  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  SUCH PARTY HAS BEEN ADVISED OR SHOULD BE AWARE OF THE
POSSIBILITY  OF  SUCH  DAMAGES. CLIENT HEREBY ACKNOWLEDGES AND AGREES THAT EBI'S
LIABILITY  WITH  RESPECT  TO THE PERFORMANCE OF ITS SERVICES SHALL BE LIMITED TO
THE  AMOUNT  OF FEES PAID BY CLIENT TO EBI FOR THE SERVICES THAT ARE THE SUBJECT
OF  ANY  CLAIM.

     11.     INDEMNIFICATION.
             ----------------

          (a)     By Client.   Client  hereby  agrees  to indemnify and hold EBI
                  ----------
and  its  directors,  officers,  employees, agents, and representatives harmless
from and against all obligations, liabilities, claims, demands, losses, damages,
costs or expenses, including attorney's fees, arising cut of or relating to: (i)
Client's material breach of any representation, warranty, covenant or obligation
hereunder;  (ii)  Client's Services; or (iii) the Billing Transactions processed
by  EBI  in  accordance  with  the  terms  of  this  Agreement,

          (b)     By EBI.   EBI  hereby  agrees to indemnify and hold Client and
                  ------
its  directors,  officers,  employees, agents, and representatives harmless from
and  against  all  obligations,  liabilities,  claims, demands, losses, damages,
costs  or  expenses,  including  attorney's  fees, arising out of or relating to
EBI's  material  breach  of any representation, warranty, covenant or obligation
hereunder.

          (c)     Enforcement.  In  the event that either party (in this context
                  ------------
on "Indemnified Party") is served as a defendant in any Claim arising out of any
of  the  foregoing,  the Indemnified Party shall promptly provide written notice
thereof  (the  "Claim  Notice")  to  the  ether  party  (in  this  context  the
"Indemnifying  Party").


                                    - CONFIDENTIAL -                      Page 3
<PAGE>
Ten  (10)  business  days  of receipt of the Claim Notice, shall acknowledge, in
writing,  its obligation under this Section 11 and, thereafter, the Indemnifying
Party  shall  control all aspects of the defense of the claim. In the event that
the  Indemnifying  Party  fails  to  provide such written acknowledge within the
specified  timeframe  then,  at  its  option  and  without waiving its rights to
indemnification  hereunder,  the  Indemnified  Party  may defend itself, and the
Indemnifying  Party  shall  pay all reasonable attorney fees, costs and expenses
incurred  by  the  Indemnified  Party  in  such  defense.

     12.     TERMINATION  FOR  DEFAULT.     Either party may terminate  this
             --------------------------
Agreement, effective immediately with 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 five (5) business days of written
notice  of  such  payment  default lo the defaulting party by the non-defaulting
party;  or

          (b)     The  other  party  has  violated  a representation or warranty
contained  in  this  Agreement and such violation remains uncured after five (5)
business days following written notice of such violation from the non-defaulting
party  specifying  the  nature  of  the  violation;  or

          (c)     The  other  party defaults with respect to any other 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 ,ion- defaulting
party;  or

          (d)     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 any
petition  or action is not suspended, stayed or dismissed within sixty (6O) days
after  its  filing  or  appointment,  as  the  case  may  be;  or

          (e)     Either  party  determines,  in its reasonable discretion, that
its  business  image,  reputation or goodwill is being harmed by the services of
the other party and such other party has. not satisfactorily cured the indicated
problem  within  ten  (10) business days of notice thereof from the first party.


     13.     EFFECT OF TERMINATION.  The  parties  agree that the termination of
             ----------------------
this  Agreement  for  any  reason  whatsoever, shall not affect or terminate any
obligation  or  liability  incurred  or  assumed  by  either  party prior to the
effective  date  of termination of this Agreement including, without limitation,
payment  of  amounts  accrued  or  owing  hereunder  and the parties' respective
obligations  regarding  Confidential  Information.

     14.     CONFIDENTIALITY.
            ----------------

          (a)     As used in this Agreement "Confidential Information" of either
party  shall  mean any information including, without limitation, trade secrets,
technical  and  other information relating to the service or business operations
of  g  party  (the  "Disclosing  Party")  that  is disclosed either orally or in
writing to the other Party {the "Receiving Party") and is marked "Confidential",
bears  a  marking  of  like


                                    - CONFIDENTIAL -                      Page 4
<PAGE>
import,  or would, by the application of a reasonable standard, be understood by
the  Disclosing  Party to be of a confidential nature at the time of disclosure.
"Confidential  Information"  shall  expressly include any equipment, hardware or
software 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.

          (c)      Information shall not be doomed Confidential Information, and
Receiving  Party  shall  have no obligation under this provision with respect to
any:

               (i)     Information that now or hereinafter comes into the public
          domain  without  breach  of  this  Agreement;

               (ii)      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;

               (iii)      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;

               (iv)     Information  approved  for  release  by  the  written
          authorization  of  the  Disclosing  Party;  or

               (v)      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 provided, however that reasonable prior written notice is
          given  by  the  Receiving  Party  to  the Disclosing party of any such
          requirement  or  request  sufficient to permit the Disclosing party to
          seek  an  appropriate  protective  order  or  exemption  from  such
          requirement  or  request.

          (d)     All  tangible forms of information, including, but not limited
to  documents,  drawings,  specifications,  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, the Receiving
party  shall return to the Disclosing Party all tangible forms of the Disclosing
Party's  Confidential Information received by Receiving party, together with all
copies  thereof.

     15.      CHOICE  OF  -  LAWAND  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


                                    - CONFIDENTIAL -                      Page 5
<PAGE>
PROCEEDINGS  ARISING IN CONNECTION WITH THIS AGREEMENT AND NOT OTHERWISE SUBJECT
TO  RESOLUTION  BY  ARBITRATION  HEREUIMDER. SHALL BE BROUGHT EXCLUSIVELY IN AND
VENUE SHALL BE PROPER ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY
OF  SANTA  CLARA, STATE OF CALIFORNIA. EACH OF THE 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  W[TH  THIS  SECTION.

     16.     PUBLIC ANNOUNCEMENTS  Neither party, m y use the other party's name
in  any  public,  announcements  or  public  disclosures  nor shall either party
disclose  the  terms Of this Agreement, without the prior written consent of the
other  party,

     17.     NOTICES.  All notices and other communications that are required or
             --------
may  be  given  hereunder shall be in writing and shall be delivered personally,
sent  by  U.S.  mail  with  return receipt requested, by facsimile if receipt is
confirmed  by means other than the facsimile's electronic confirmation, or by an
express  carrier with receipt confirmation. All notices and other communications
shall  be  deemed  given  when  actually  received by a party as evidenced by an
appropriate confirmation. Notice shall be directed to a party at its address set
forth  below  or  such other address as shall be given in writing by such party.

eBillit, Inc.                Telco Billing, Inc.
5883 Rue Ferrari             4840 E Jasmine St. Suite 105
San Jose, CA 95138           Mesa, A2 85205
Attention: General Counsel   Attention: Angelo Tullo
FAX: 408-362-2796            FAX: (480) 654-S727

     18.     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 to the
                  --------------------
other  party,  each party shall appoint an officer or employee representative to
meet,  negotiate in good faith, and attempt to 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  parties'
representatives.  Upon  the  mutual  agreement  of  the  parties, the designated
representatives  may  elect  to  utilize  non-binding mediation Lo assist in the
settlement  of  the  dispute.  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, and which shall not be admissible in any arbitration
or  related  action  absent  the  mutual  written


                                    - CONFIDENTIAL -                      Page 6
<PAGE>
agreement  of  the  parties.  Documents  identified  in,  or  provided with such
communications,  that are not prepared for purposes of the negotiations, are not
so  exempted  and  may,  if otherwise admissible, be admitted as evidence in any
arbitration  or  related  action  hereunder.

          (b)      Arbitration.  if  the negotiations do not resolve the dispute
                   ------------
within  sixty  (60)  calendar  days of the initial written request for a meeting
pursuant  to  Section  13  (a) hereof, the dispute shall be submitted to binding
arbitration  by a single arbitrator pursuant to the Commercial Arbitration rules
of  the  American  Arbitration Association Chen in effect (the "Rules"). A party
may  demand  such arbitration in accordance with the procedures set out in those
Rules.  The  arbitration  hearing  shall be commenced within sixty (6O) calendar
days  of  the elate of the demand for arbitration. The arbitration shall be held
in  San Jose, California. Judgment upon the award rendered by the arbitrator may
be  entered in any court of competent jurisdiction. Each party shall bear Ka own
costs  of  these  procedures.  A  party  seeking  discovery  shall reimburse the
responding  party  the  reasonable costs of production of documents. The parties
shall share equally the fees of the arbitration and the arbitrator.

     19.     GENERAL PROVISIONS.
             -------------------

          (a)     Attorney's  Fees.  In the event of any legal proceeding, other
                  -----------------
than  arbitration,  arising out of or relating to this Agreement, the prevailing
party  thereto  shall  be  entitled  to  reimbursement  from  the  other  of all
reasonable  attorney's  fees  and  costs  incurred  in  connection  therewith.

          (b)     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.

          (c)     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.

          (d)     Assignment.   Either  party  may  assign  this Agreement to an
                  -----------
entity  holding a majority ownership interest in the assigning party or in which
the assigning party holds a majority ownership interest. In addition, Client may
assign,  in  whole or in part, its right to payments hereunder to a third party.
Neither  party  may  otherwise assign any of its rights or obligations hereunder
without the prior written consent of the other party, which consent shall not be
unreasonably  withheld.  All  assignments shall be in writing, duly signed by an
officer  of  the assigning party. This Agreement shall &e binding upon and inure
to  the  benefit  of  the  successors  and  permitted  assigns  of  the parties.

          (e)     Amendments: No Waiver.   Except  as otherwise provided herein,
                  ----------------------
this  Agreement may be amended or modified only by a written instrument executed
and  delivered  by  duly  authorized  representatives  of the parties hereto, No
waiver  of any right hereunder shall be deemed to be a waiver of the same or any
other  right  on  any  other  occasion.

          (f)     Third Party Rights.  The  parties  do not intend to confer any
                  -------------------
benefit hereunder on any person or entity other than the parties hereto.

          (g)     Further Assurances.  The parties agree to do such further acts
                  -------------------
as  may  be reasonably necessary to evidence or confirm the agreements contained
herein  and  the  matters  contemplated  hereby.


                                 - CONFIDENTIAL -                         Page 7
<PAGE>
          (h)      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,  including,  but not limited to, 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  losses,  unusually  severe  weather conditions, inability to secure third
party  products,  services, communication or transportation facilities, Internet
hacking,  viruses  or  similar acts of sabotage, or act of or omission of common
carriers  (each an "Interrupt Event"). Upon the occurrence of an Interrupt Event
that causes either party to be unable to perform its obligations hereunder, such
party shall: (i) immediately notify the other party in writing of such Interrupt
Event and its expected duration; and (ii) take all commercially reasonable steps
to  recommence  performance  of  its obligations hereunder. In the event that an
interrupt  Event  delays  a  party's performance of its obligations by more than
fifteen  (15)  days following notice by such party, such event shall be deemed a
default  hereunder  and  shall  be  subject  to the rights and remedies of these
parties.

          (i)     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.

          (j)     Integration of Agreement,   This  Agreement: together with the
                  -------------------------
Exhibits  and Schedules hereto, contains 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.

          (k)      No Agency. Neither EB! nor Client is an agent, partner, joint
                   ----------
venture,  trustee,  fiduciary  or  legal  representative  of the other party and
neither  EBI  nor  Client  has  authority  to act for or incur any obligation on
behalf of or in the name of the other party other than as expressly set forth in
this  Agreement.

          (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.

  {- Signature page and Exhibits follow. Remainder of page intentionally left
                                    blank. -}


                                    - CONFIDENTIAL -                      Page 8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date set forth above.


eBillit, Inc. (EBI)                    Telco Billing, Inc. (Client)
By:     /s/ Illegible                  By:    /s/ Angelo Tullo, pres.
      ------------------------------        -------------------------
Name:   Illegible                      Name:  Angelo Tullo
      ------------------------------        -------------------------
Title:  CEO                            Title: President
      ------------------------------        -------------------------
Date:   1-2-03                         Date:  12/6/02
      ------------------------------        -------------------------


                                    - CONFIDENTIAL -                      Page 9
<PAGE>
                                  EXHIBIT "A"

                          DEFINITION OF CERTAIN TERMS
                          ---------------------------

The following terms shall have the meaning ascribed thereto throughout this
Agreement and any Exhibits and Schedules attached hereto:


"Account"  shall  mean  a  separate  account  of  Client  under  which  Billing
 -------
               Transactions  and  settlement  funds  are  tracked  and reported.

"Account Number" shall mean the number, assigned by EBI, which is used to
 --------------
               reference  a  particular  Account,

"Adjustment" shall mean a post-billing deduction made to an End-User's bill with
 ----------
               respect  to  Client's  Billing Transactions, usually arising from
               End-User  disputes  regarding  a billed amount Adjustments may be
               initiated by (i) Telcos, where applicable, in accordance with the
               Billing  Contracts, (ii) by Client at its discretion, or (iii) by
               EBI  in  accordance  with  this  Agreement.

"ANI"  shall  mean  Automatic Number Identification, which refers to the network
 ---
               capture  of  a  dialing party's originating telephone number. For
               many  dialed  services,  the  ANI is used as the BTN (see below).

"Billing  Contract"  shall  mean a billing and collection agreement entered into
 -----------------
               between  EBI and a LEG and/or certain third parties that contract
               directly with such LEG. Billing Contracts permit the inclusion of
               approved  types  of  Billing  Transactions  on  the  LEC's  local
               telephone  bill  to business and residential consumers. A current
               list  of  existing  Billing Contracts as of the Effective Date is
               attached  to  Schedule  II  as  Exhibit  ll-A.

"BTN" shall mean a billing telephone number, which identifies the telephone line
 ---
               to  which  a  Billing  Transaction  was  charged  by an End-User.

"Billing Transaction" shall mean an electronic data record evidencing the use by
 -------------------
               an  End-User  of  Client's  Service,  which  includes  relevant
               information  regarding  such  use.

"Client's  Service"  shall  mean  a service provided by a Service Provider which
 -----------------
               gives  rise  to  a Billing Transaction or otherwise results in or
               necessitates  a  service  to  be  performed  by  EBI  hereunder.

"Deposit  Month"  shall  mean  a  particular calendar month within which Billing
 --------------
               Transactions are processed and submitted by EBI to the applicable
               Telcos.

"EBI  Edit  Process"  shall  mean  EBI's  internal edit checks applicable to the
 ------------------
               formatting  and/or  content  of  Billing  Transactions as further
               described  under  Section  4  of  the  Agreement.

"EBI  Reserve"  shall mean an amount withheld, from the amount otherwise owed to
 ------------
               Client  with respect to Billing Transactions, to protect EBI from
               credit  losses  or  otherwise to cover other reserves or offsets,
               other  than  Uncollectibles  imposed  by  a  Telco.

"EBI Systems" shall mean alt of EBI's proprietary systems developed and owned by
 -----------
               EBI  or  licensed  to  EBI,  including  but  not  limited  to any
               software,  processes and procedures related thereto that are used
               by  EBI  in  the  performance  of  its obligations hereunder, EBI
               Systems  shall  also  include  any  improvements,  enhancements,
               customizations, and upgrades thereto whether jointly developed or
               otherwise.  EBI shall own all Intellectual Property Rights in the
               EBI  Systems.

"End-User" shall mean a consumer of Client's Service, including, but not limited
 --------
               to,  an  individual,  corporation  or  other  entity.


                                   - CONFIDENTIAL -                      Page 10
<PAGE>
"End-User Inquiry" shall mean oral or written contact from an End-User regarding
 ----------------
               a  billing  charge  usually as a result of the End-User disputing
               such  charge  or  otherwise  seeking  an  explanation.  End-User
               Inquiries  are either handled by EBI or Client in accordance with
               the  attached  Schedule  VI,  or handled by a Telco in accordance
               with  such  Telco's  inquiry policies and applicable regulations.

"Fees"  shall mean those fees set forth on Exhibit B to the Agreement, which are
 ----
               applicable  to  the  Service  Options  ordered  by  Client

"Intellectual  Property  Rights"  shall  mean  all  forms of proprietary rights,
 ------------------------------
               titles, interests, and ownership relating to patents, copyrights,
               trademarks,  service  marks,  trade  names,  trade dresses, trade
               secrets,  know-how,  mask  works,  moral  rights, and all similar
               rights  of  every  type that may exist now or in the future under
               the  laws  of  any  jurisdiction.

"LEC" shall mean a local exchange carrier within the telecommunications industry
 ---
               that,  among other things, provides dial tone service to business
               and  for  residential  consumers.

"Reject"  shall  mean  any Client Billing Transaction that fails to pass the EBI
 ------
               Edit  Process  as  described  in  paragraph  4(a)  hereof.

"Service Provider" shall mean either Client or Client's customer, as applicable,
 ----------------
               where  such  entity provides services to End-Users giving rise to
               Billing  Transactions,  In the event that Service Provider is not
               Client,  Client is responsible for all actions, inactions, errors
               and  omissions  of  Service  Provider with respect to the Billing
               Transactions.

"Taxes"  shall  mean  all  federal,  state  or  local  sales, use, excise, gross
 -----
               receipts  or  other  taxes or tax-like charges imposed on or with
               respect  to  any  service  or transaction which is the subject of
               this  Agreement,

"Telco"  shall  mean  a  LEC with which EBI, directly or indirectly, maintains a
 -----
               Billing  Contract.  A  current  list  of  such  Telcos  as of the
               Effective  Date  is  attached  to  Schedule  II  as Exhibit lI-A.

"Term", "Initial Term" & "Renewal Term" are each defined in Section 3 of the
 ----    ------------     ------------
               Agreement.


                                   - CONFIDENTIAL -                      Page 11
<PAGE>
                                  EXHIBIT "B"
                                      FEES
                                      ----

The following Fees shall apply:

     1)   PHONEBILL SERVICES (TELCO BILLING)

          a) Initial Account setup (sub-CIC) fee:             N/A

          -    each additional Account:                       $1,500.00 one time

          b)   EBI Processing Fees:

               Gross Dollars Deposited
               -----------------------
               each Month                                     Fee Rate
               ----------                                     --------

               All volume levels                               2.75%

               EBI's  processing  fee  for each Account's Deposit Month shall be
               the  greater  of:  i)  the  gross  dollars  deposited  each month
               multiplied  by the Fee Rate, or ii) $.34 per Billing Transaction,
               or iii) a minimum monthly fee of $10,000 for up to two Account(s)
               and  $5,000  for  each  additional  Account. Notwithstanding item
               iii),  above,  in  the  event that, during any then-current Term,
               Client pays EBI a cumulative processing fee exceeding the product
               of  the  applicable  monthly  minimum  and  the  number of months
               included  in  such Term, then no monthly minimums shall apply for
               the  remainder  of  such Term. For example, if after 12 months of
               the  Initial Term, Client has been utilizing two Accounts and has
               paid to EBI $240,000 in processing fees, then no monthly minimums
               would  apply for the remainder of the Initial Term. This contract
               effective August 2002, but executed in final form 12/6/02 as such
               client  has already met all minimum requirements for the contract
               period.

     2)   END-USER INQUIRY

          a)   Verbal End-User Inquiry                    $ 3.50 each

          b)   Referral (live agent)                      $ 2.00 each

          c)   Transferred or auto-referred               $ 0.11 per minute

                                                          Not to exceed $1.00

          d)   Written End-User Inquiry                   $ 5O.OO each

          e)   Written regulatory complaints              $ 5O.OO each

          f)   Adjustment record processing               $ 0.50 each


                                   - CONFIDENTIAL -                      Page 12
<PAGE>
                                  EXHIBIT "C"

                        BILLING AND COLLECTIONSGUIDELINES
                        ---------------------------------

EBI  has  adopted  the  anti-cramming  consumer  protection  guidelines  of  the
Coalition  to  Ensure  Responsible Billing (CERB). By adopting these guidelines,
EBI is committed to billing standards and practices to ensure a maximum level of
consumer  protection. Client hereby agrees to the following as consideration for
EBI  billing  for  its  services.

1.   COMPANY INFORMATION

     Client shall provide EBI with the following information:

     -    Client's company name, including dba's, and address.

     -    Names of all officers, directors and principals of Client.

     -    Proof of corporate or partnership status.

     -    Copies of certifications as required.

     -    Foreign corporation filings as required,

     -    Any Applicable tariffs upon request,

     -    The names and addresses of any telemarketing companies to be used by
          the Client.

     -    The names and addresses of any third party verification companies to
          be used by the Client.

2.   SCREENING OF PROGRAMS, PRODUCTS AND SERVICES

     Prior to EBI's billing for any Client services, Client shall provide EBI
     with the following information:

     -    A complete set of its marketing materials pursuant to the programs or
          services to be billed by ESI. "

     -    A complete set of its advertisements (print or other media) pursuant
          to the programs or services to be   billed by EBI.

     -    Applicable fulfillment package (which must include cancellation
          information if not included elsewhere and a toll free Client service
          telephone number)

     -    Complete scripts for sales verification, Client shall not change
          scripts or programs without first providing changes to EEI.

     -    Honest, clear, and understandable text phrase for appearance on the
          bill.

     NOTE: EBI will not provide billing for services employing the following
     practices and Client hereby agrees it will not provide Billing Transactions
     to EBI for the following:

     -    Box, sweepstakes, or contest - type entry forms.

     -    Negative option sale offers.

     -    800 pay-per-call

     -    Collect callback

     -    Phantom billing (charging for calls never made or services never
          provided).

     -    Such other programs, products, or services that regulatory agencies,
          EBI or Telcos, where applicable, determine to be deceptive to
          consumers.


                                   - CONFIDENTIAL -                      Page 13
<PAGE>
                                  EXHIBIT "C"

                       BILLING AND COLLECTIONS GUIDELINES
                       ----------------------------------

3.   COMPLIANCE MONITORING

     EBI requires Client to:

     -    Minimize End-User inquiries and complaints it receives.

     -    Minimize End-User complaints to government agencies.

     -    Maintain up-to-date records regarding complaints and inquiries that it
          receives.

     -    Promptly adopt action plans to respond to complaints and inquiries,

     -    Assist and cooperate with investigations of End-User disputes,

     -    Promptly cease billing any recurring charges to an End-user when there
          is a clear indication that such End-User is no longer utilizing
          Client's product or service.

4.   MANDATORY AUTHORIZATION!

     Where  State  or  Federal  agencies  (or  Telcos, Where applicable) require
     consumer  pre-authorization for the services, products or programs provided
     by  Client, Client must employ one of the following forms of authorization.
     Such  authorization must be retained for a period of two (2) years and made
     available  upon  request. Additionally, if State/Federal agencies or Telcos
     amend  their  requirements,  Client  is responsible for its full compliance
     thereto:,

     -    Recorded independent third party verification

     -    Written or electronic letter of authorization (LOA)

     -    Written or electronic sales order

     -    Voice Recording of telephone sales authorization,

     An authorization must legibly include the following to be valid;

     -    The date of authorization.

     -    The telephone number and, where practical, name and address of the
          consumer.

     -    Assurance that the consumer is qualified to authorize billing.

     -    A complete description of the product or service,- A description of
          the applicable charges.

     -    An explicit acknowledgment by the consumer as to how the charges for
          the product or service will appear on his/her bill.

     -    Affirmative acceptance by the consumer of the offer.

     -    A toll-free number that subscribers may call to make inquiries
          concerning the service.

     In addition, authorization verified by an independent third party must
     include;

     -    An initial statement that the purpose of the verifications is to
          confirm the consumer's intention to accept the sales offer.

     -    A statement that the service provider is not affiliated with o LEG,
          where there is no affiliation.

     -    A unique consumer identifier.

     -    A review by third party personnel of the entire verification where the
          verification is automated,

     An Independent third party verifier must meet the following criteria:

     -    It must be completely independent of the service provider and the
          telemarketer,

     -    It must not be owned, managed, controlled or directed by Client or the
          telemarketer.

     -    It must not have any financial incentive in the completion of the
          sale.

     -    It must operate in o location physically separate from the service
          provider and the Telemarketer.


                                   - CONFIDENTIAL -                      Page 14
<PAGE>
                                   EXHIBIT "C"

                       BILLING AND COLLECTIONS GUIDELINES
                       ----------------------------------

5.   HIGH STANDARD BILLING PRACTICES

     Central  to  a  consumer's  right  to ensure that they have not been billed
     inappropriately  is  the  ability  to  understand and read the bill. Client
     shall  use it's best efforts to ensure that the information provided to EBI
     fairly  and  accurately  describes  the service(s) provided to the End-User
     including,  but  not  limited  to:

     -    Identification of the Client providing the services.

     -    Detailed description of products or services.

     -    Detailed identification of the charges.

6.   END-USER SATISFACTION

     As End-Users must be able to easily and quickly address potential billing
     disputes, EBI may provide the End-User or a regulatory agency on request;

     -    The name, address, phone number and fax number of the Client.

     -    The nature of any charge

     -    The method of authorization.

     -    Information as to how an End-User may cancel a service or product.

     In conjunction with the Agreement EBI, or Client, will provide:

     -    A toll-free customer service number.

     -    Dedicated staff to respond to End-Users inquiries,

     -    Full and timely investigation Of any written dispute.

     -    A credit or response to the End-User within 30 days of the End-User's
          dispute.

7.   DISCLOSURE

     Client hereby agrees that EBI may share the following with federal and
     state enforcement agencies:

     -    Identifying information with respect to terminated billing for Client
          programs or services.

     -    A description of specific problems relating to "Slamming" or
          "Cramming" that EBI has encountered, and the steps taken to correct
          such problems.

     -    Summary and detailed data with regard to End-User complaints,
          inquiries and Adjustments.

8.   REIMBURSEMENT TO EBI

     Client acknowledges and agrees to fully reimburse EBI, within ten (10)
     days, any fines or penalties charged EBI by Telcos and/or Stale/Federal
     agencies pursuant to Client's Billing Transactions billed by EBI.

(These guidelines may be amended from time-to-time by EBI providing thirty (30)
days prior written notice. If such changes have a material adverse effect on
                              ----------------------------------------------
Client's ability to market its services. Client may immediatelyterminate this
- -----------------------------------------------------------------------------
Agreement without penalty.)
- --------------------------


                                   - CONFIDENTIAL -                      Page 15
<PAGE>
        SCHEDULE II-Service Order for PhoneBill SERVICES (TELCO BILLING)
        ---------------------------------------------------------------

     This  Service  Order  for  PhoneBill  Services  ("Service  Order") shall be
effective  as  of  the  Effective Date of the Agreement (the "Order Date"). This
Service  Order  may  be  terminated  by  either  party,  as  of  the  end of the
then-current  Term  of  the  Agreement, by providing written notice to the other
party  at  least  90 days prior to the end of such current Term. Otherwise, this
Service  Order  shall  remain  in full force and effect until termination of the
Agreement.

     1.     SERVICE ORDER SUMMARY. This Service Order shall generally include;
            ----------------------
i)  submission  of Client's valid Billing Transactions to Telcos for billing and
collection,  ii)  processing  of  Unbillables, Adjustments and Uncollectables as
such  terms are defined herein, iii) database administration to support End-User
Inquiry, iv) reconciliation and settlement of amounts due to Client with respect
to  the  Billing  Transactions, and v) standard reporting arid tracking for each
Account  established  by  Client.

     2.     TELCO  SUBMISSION.   UMBILLABLES.    EBI  shall submit to the Telcos
            ---------------------------------
those  Billing  Transactions of Client that have passed the EBI Edit Process and
represent  Client  Service that have been pro- approved by EBI and/or the Telcos
where applicable, Telcos may subject Client's Billing Transactions, submitted to
it  by  EBI,  to  its own edit process and either be unable or unwilling to bill
certain  transactions  (each  an  "Unbillable")  even  though  such  Unbillable
transactions  passed  the  EBI  edit  process. Unbillables returned to EBI in an
electronic  format  by the Telco will be returned to Client in a similar format.
EBI  shall  nave  no  further  responsibility  for  such Unbillable transactions
except,  however,  if  Billing  Transactions  are deemed Unbillable due to EBI's
error  or  omission, EBI shall correct and resubmit such Billing Transactions at
no  additional  charge to Client, Unbillables shall be applied to the settlement
of  amounts  due  Client in accordance with the methodology set forth on Exhibit
II-B  attached  hereto.

     3.     INQUIRY SUPPORT, ADJUSTMENTS.  A  separate  service  order  to cover
            -----------------------------
End-User  Inquiry  is  attached to the Agreement as Schedule VI, Notwithstanding
the previous sentence, each Telco reserves the right to perform End-User Inquiry
pursuant  to  the  applicable  Billing Contract, As a result of End-User Inquiry
services or otherwise as initiated by either party or a Telco, EBI shall process
Adjustments,  as  such  term  is  defined  on  Exhibit  A  to the Agreement, and
incorporate the amount of such Adjustments into the settlement of amounts due to
Client  Adjustments initiated by a Telco and reported to EB1 snail De applied to
Client  in  accordance  with  the methodology set forth on Exhibit II-B attached
hereto.

     4.     HOLDBACK, TRUE-UP, UNCOLLECTABLES.  Telcos  may  withhold,  from the
            ----------------------------------
gross  deposited  dollars,  a  reserve amount to cover anticipated write-offs of
uncollectible  End-User  accounts  ("Uncollectable"), which may be realized some
time in the future. EBI shall withhold a similar amount from funds otherwise due
to  Client  (the "Telco Holdback") in order to cover amounts withheld by Telcos.
The  Telco  Holdback  rate  shall  be


                                   - CONFIDENTIAL -                      Page 16
<PAGE>
initially  sot  at  ten  percent  (10%)  of  the gross value of Client's Billing
Transactions.  The  Telco Holdback rate may be modified from time to time by EBI
based  on  a  reasonable analysis of Client's Billing Transactions. From time to
time,  Telcos will conduct a reconciliation of the amounts held back compared to
actual  Uncollectables  realized for a particular period (a "Telco True-Up"} and
may subsequently revise their reserve races as well as collect from or refund to
EBI  any  difference  between the amounts withheld by such Telcos and the actual
Uncollectables. After a Telco performs its Telco True-Up and reports the results
to EBI, EBI will similarly reconcile the Telco Holdback amount with the realized
Uncollectables  pursuant to the methodology contained in Exhibit II-E {each such
reconciliation a "True-Up"). EBI shall include the results of such True-Ups on a
summary  report to Client, True-Up results reflected on the summary report shall
be  incorporated  into  the  settlement  of  amounts  due  to Client, as further
described  in  Section  6,  hereunder.

     5.     OTHER DEDUCTIONS.
            -----------------

          a)     Telco  Fees.   EBI  shall  be  entitled  to  recover  from  or
                 -----------
pass-through  to  Client,  all  Telco-  imposed  processing  and  other  charges
associated with Client's Billing Transactions ("Telco Fees"). The Telco fees are
set  forth  on  Exhibit  II-D  hereto.

          b)     EBI Reserve.   EDI may withhold, from any amounts otherwise due
                 ------------
to Client, an amount necessary to fund the EBI Reserve. The EB! Reserve rate for
each  Account under this Agreement will initially be established at four percent
(4%) of gross value of Client's Billing Transactions, EBI may, in its reasonable
discretion,  adjust the EBI Reserve requirement for any Account, Such adjustment
may  be accomplished by either; (i) adjusting the previously established reserve
percentage  for  such  Account; (ii) adjusting or offsetting the EG! Reserve for
another  Account;  (iii)  invoicing  Client  directly  for  additional  amounts
required;  or  (iv)  reimbursing  Client for excess amounts, if applicable. With
respect  to Client's Billing Transactions, certain Telco's may require a reserve
for  Unbillables  and/or  Adjustments  exceeding  certain  thresholds.  This
requirement  may necessitate an increase in the ebi Reserve. If applicable, this
increase  shall  be  based  on  Client's  actual  Unbillable  and/or  Adjustment
experience over a three (3) month period for the subject Telcos. The adequacy of
this  component  of  the  EBI Reserve shall be reviewed on a quarterly basis and
determined based on Client's actual experience of Unbillables and/or Adjustments
in  the  prior  quarter  for  the  relevant  Telcos.

     6.  SETTLEMENT  OF AMOUMTS DUE. Client Shall be entitled to the gross value
         ---------------------------
of  the  Billing  Transactions  remitted  to  the  Telcos  less  any  applicable
Unbillables, Adjustments, Telco Holdback, excess Uncollectables (pursuant to any
True-ups),  Fees,  Telco  Fees  and  EBI Reserves (the difference being the "Net
Proceeds"). On or before the 60th  day following the end of a Deposit Month, EBI
shall  transfer, by wire to Client's designated bank account, an estimate of the
Net Proceeds relating to such Deposit Month. Within thirty (30) days thereafter,
EBI  shall  reconcile  the  estimated  amount paid to Client with the actual Net
Proceeds for the subject Deposit Month and apply any corrections to a subsequent
payment  event.  All  wire  instructions  from Client to EBI shall be in writing
signed  by  a  duly  authorized  representative of Client. In the event that the


                                   - CONFIDENTIAL -                      Page 17
<PAGE>
calculation  of Net Proceeds yields a negative amount, EBI's reporting to Client
of  such  negative  amount shall be deemed an invoice for same and Client shall,
within fifteen (15) days, reimburse EBI for such negative amount. In addition to
the  Net  Proceeds,  Client  shall be entitled to any excess Telco Holdback from
prior  period  True-ups  and  any  excess  EBI  Reserve  as  set  forth  below:

          (a)  Periodic  EBI  Reserve  Remittance.  No  later than thirteen (13)
               -----------------------------------
months  from  the  end  of  a given Deposit Month ("Roll-Down Month"), EBI shall
apply  fifty  percent  (50%)  of  the  Roll-Down Month's EBI Reserve, by Account
Number,  to  Client's  Account,  At the 181h month from the close of a Roll-Down
Month,  EBI  shall  apply  the  balance of the Roll-Down Month's EBI Reserve, by
Account  Number,  to  Client's  Account.

     7.     REPORTS.
            --------

          (a)     Standard Reporting. EBI  agrees  to  provide Client with EBI's
                  -------------------
standard  reports  identified  in  Exhibit II-C attached hereto and incorporated
herein.  Client  may  request that EBI provide additional reports or a different
formatted report. To the extent EBI can comply with such request with reasonable
effort,  EBI  shall  supply  such reports at an additional charge based upon the
time  and  expense  to  be  mutually  agreed  upon  by  the  parties.

          (b)     Report Review.  Client agrees  that  it  is solely responsible
                  --------------
for  inspecting and reviewing all reports provided by EBI within sixty (6O) days
of  receipt by Client. Client's failure to report any errors; or inconsistencies
with  respect  to such reports within such timeframe shall constitute acceptance
by  Client.

          (c)     Report Detail.   Client  acknowledges  and agrees that (i) the
                  --------------
individual  Telcos  may  not always provide definitive detail to EBI for amounts
the  Telco  deems  to  be  Unbillables, Adjustments, or Uncollectables, (ii) EBI
shall  not  be  held  to  a  higher  standard  of accounting pertaining to Telco
performance  as  that  provided  by  the  individual  Telco,  and  (iii)  EBI's
methodology  contained  in  Exhibit  II-B  associated  with the determination of
Client's  share  of Unbillables, Adjustments or Uncollectables is reasonable and
appropriate  given  the  detail  received  from  the  individual  Telco.

          (d)     Audit.   Upon  30  days prior written notice by Client, but no
                  ------
more  frequently than once during a twelve (12) month' period, Client shall have
access  to EBI's records pertaining to Client's Billing Transactions, including,
but  not  limited  to,  the  information  EBI  receives  from Telcos, The audits
conducted  hereunder  shall  be  at  Client's  solo  cost and expenses provided,
however, it an audit reveals that amounts due to Client were understated by more
than  10% for the period audited, then EBI shall, in addition to promptly paying
to  Client  the  understated  amount,  reimburse  Client  for  all  reasonable
out-of-pocket  audit  costs.  Notwithstanding any of the foregoing, Client shall
have  no right to audit any EBI records pertaining to periods more than eighteen
(18)  months  prior  to  the  date  of  notice  of  such  audit.

     8.     BILLING  APPEARANCE.   Where  3  Telco  provides  the  capability,
            -------------------
Client's Billing Transaction shall appear on such Telco's subscriber bills under
the  name  designated  in  writing  by  Client  for  each  Account  Number.


                                   - CONFIDENTIAL -                      Page 18
<PAGE>
     9.     TELCO CONFEIDENTIALITY  Client  hereby acknowledges and agrees that,
            ----------------------
without  authorization  from  a Telco, Client shall not publish or use the name,
service mark or trademark of any Telco in its advertising, telemarketing, direct
mail  or  other  promotions  or  make  any  misrepresentations  concerning  an
affiliation  with  any Telco with regard to the Billing Transactions or Client's
Services,  in the event of a violation of this section, Client shall pay to EBI,
as liquidated damages, for loss of reputation and business good will, and not as
a  penalty,  $10,000  for  each  such  violation.


  {- End of Schedule II. Exhibits follow. Remainder of page intentionally left
                                    blank - }


                                   - CONFIDENTIAL -                      Page 19
<PAGE>
                                 EXHIBIT "II-A"
<TABLE>
<CAPTION>
                            Telco Billing Contracts
                            -----------------------


<S>                 <C>                  <C>                <C>
Ameritech           - Ohio Bell          NYNEX              - New England Tel
                    - Michigan Bell                         - New York Tel
                    - Indiana Bell
                    - Wisconsin Bell     Pacific Bell       - Pacific Bell
                    - Illinois Bell                         - Nevada Bell


Bell Atlantic       - New Jersey Tel     Southwestern Bell
                    - Bell PA
                    - Diamond State      U.S. West          - Northwest Bell
                    - C&P DC                                - Mountain Bell
                    - C&P MD                                - Pac NW Bell
                    - C&P VA
                    - C&P WVA            Alltel


Bell South                               Cincinnati Bell


GTE                 - GTE North          Illuminet
                    - GTE Florida
                    - GTE South          NECA
                    - GTE South West
                    - GTE California     SNET
                    - GTE West
                    - GTE North West     Sprint United      - United Florida
                    - GTE Hawaii                            - CT & T
                                                            - United Indiana
                                                            - United Midwest


GTE Contel          - GTE North Contel
                    - GTE South Contel
                    - GTE S-W Contel     Telecom Canada
Citizens Telephone
</TABLE>

All 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 EBI 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 docs not indicate or imply that the
name Telcos approve the program(s) contemplated under this Agreement, EBI makes
no promise or guarantee that this information is constant, permanent, all
inclusive and/or final.


                                   - CONFIDENTIAL -                      Page 20
<PAGE>
                                 EXHIBIT "II-B"
                                  TELCO RETURNS
                                  -------------
                    MATCHING PROCESS & ALLOCATION METHODOLOGY
                    -----------------------------------------
Rejects:
- --------

     Full Key:      Bill To Number (BTN)
                    Originating Number Terminating Number Call Date
                    Call Time      (Seconds excluded)
                    Call Duration  (Seconds excluded)

A reject call record that matches a history record based on the above Full Key
is considered an exact match and is returned to the Client with the EBI return
code in position 70-71,

Unbillables:
- ------------

     Full Key:      Bill To Number (BTN)
                    Originating Number Terminating Number Call Date
                    Call Time      (seconds excluded)
                    Call Duration  (seconds excluded)

An unbillable call record that matches a history record based on the above
FullKey is considered matched and is returned to the Client with the EBI return
code in position 70-71.

If the total matched data is less than the unbillable amount charged by the
Telco, a non-specific allocation is applied to the shortfall. The non-specific
allocation methodology is based on each Client's specific unbillable experience
compared to the total specific unbillable amount for each particular Telco.

ADJUSTMENTS 45O1XX:
- -------------------
     PASS # 1-FULL KEY:  BILL TO NUMBER (BTN)
                         Originating Number Terminating Number Call Date
                         Call Time (seconds excluded)
                         Call Duration (seconds excluded)

An  adjustment call record that matches a history record based on the above Full
Key  is  considered matched and is returned to the Client with the original call
record  that  it  matched.

     Pass # 2-Partial Key:    Bill To Number (BTN) - Optional\Required
                              Originating Number   - Optional\Required
                              Terminating Number   - Optional
                              Call Date            - Optional
                              Call Time            - Optional
                              Call Duration        - Optional


                                   - CONFIDENTIAL -                      Page 21
<PAGE>
                                 EXHIBIT "II-B"

                                  TELCO RETURNS
                                  -------------
                    Matching Process & Allocation Methodology
                   ------------------------------------------

An adjustment call record that matches a history record based on matching a
minimum of four (4) keys, which must include one (1) of the Optional\Required
keys in the above Partial Key, is considered matched and is returned to the
Client with the original call record that it matched. The adjustment amount may
not be greater than the history record amount.

     Pass # 3- Matrix Key:    Bill To Number (BTN) - Optional/Required
                              Originating Number   - Optional/Required
                              Terminating Number   - Optional/Required
                              Call Date            - Optional
                              Call Time            - Optional
                              Call Duration        - Optional

An adjustment call record that matches a history record based on matching a
minimum of four (4) keys, which must include one (1) of the Optional/Required
keys in the above Matrix Key is considered matched and is returned lo the Client
with the original call record' that it matched, The adjustment amount may not be
greater than the history record amount.

All BTN's contained in Telco Returns are compared to a BTN split table to
determine if BTN was involved in an area code split. If the BTN was involved in
an area code split, the previous & current NPA is utilized in the matching
process.

All adjustment call records that fail the Full, Partial or Matrix Key matching
process are combined with the 4550XX adjustment records and are matched
utilizing the Bulk Match process,

ADJUSTMENTS 455OXX:
- -------------------
     Bulk Match Key:     Bill To Number (BTN)
                         Call Date
                         CIC

Bulk logic is a one-to-many matching process and utilizes the call date to
                -----------
determine the calls eligible for matching. All call dates equal or older than
                                                          --------------
the Telco taps date are considered eligible. Matching is conducted in LIFO order
up to the value of the adjustment call record. Matched call records are
eliminated from the eligible pool after they have been adjusted to their
original value, This elimination is based on the process run dale regardless of
the number of files (tapes) being processed for a given Telco within a
particular run.

An adjustment call record that matches a history record based on Bulk Match
logic is returned to the Client with the original call record or records that it
matched. Because the Bulk Match logic will allow matching to many records, it
also allows matching to one or more Clients. Therefore, the returned 4550XX
adjustment record may be included in more than one Clients return detail
information.

If the total combined matched data is less than the adjustment amount charged by
the Telco, a non-specific allocation is applied to the shortfall. The
non-specific allocation methodology is based on each Client's specific
adjustment percentage in comparison to the total specific adjustment.


                                   - CONFIDENTIAL -                      Page 22
<PAGE>
                                  EXHIBIT "II-B"
                                  TELCO RETURNS
                                  -------------
                    MATCHING PROCESS & ALLOCATION METHODOLOGY
                    -----------------------------------------

If  the  Telco fails to provide data for the End-User adjustments, and therefore
no  matching  can  be  performed for that particular Telco, EBI will utilize the
following  methodology  to allocate the adjustment amount reflected on the Telco
PAR  statement.  The  non-specific  allocation  methodology  is  based  on  the
understanding  that  when  a  Telco  reports  End-User  adjustments  on  the PAR
statement, those adjustments are generally related to billings from both the PAR
month  and  the  month prior to the PAR month. Therefore, EBI uses each Client's
billing  activity  for  these  two months, coupled with an historical adjustment
percentage  for each Client, as the basis for the allocation of the nun-specific
adjustments.

For  instance,  if  the  Telco  reports  End-User adjustments on the October PAR
statement,  EBI  would  use  June,  July  and  August  to  derive  an historical
adjustment  experience  percentage  by  Client, This would result in a basis for
allocation  applied  to  September  and October billing which would generate the
non-specific  allocation  percentage  for  each  Client  that is utilized in the
reconciliation  of  the  October  PAR.

To  determine the non-specific adjustment allocation percentage for each Client,
EBI  performs  the  following  steps:

     Step 1 - Identify all Clients that deposit to that particular Telco for the
     given  two-month  period.

     Step  2-  Determine  the  actual billings deposited for each Client to that
     particular  Telco  as  the  basis  for  allocation.

     Step  3  -  For  all Clients identified in Step 2, determine the historical
     adjustment  percentage.  This  percentage  is based on the Telcos that have
     provided  each  Client  with  a  50%  or  higher  of  detailed adjustments.

     Step  4  -  Multiply the actual billings amount in Step 2 by the historical
     adjustment  percentage  in  Step  3  for  each  Client.

     Step  5-  Determine each Client's percentage of the sum total of the Step A
     calculation.

     Step  6  -  Allocate  the non-specific adjustment for that particular Telco
     based  on  the  weigh  led  percentages  determined  in  Step  5.

For  example, XYZ Telco has applied $50,000 adjustment amount to the PAR without
supporting data. The Clients who deposited in XYZ Telco would receive allocation
in  the  following  manner:


                                   - CONFIDENTIAL -                      Page 23
<PAGE>
<TABLE>
<CAPTION>
                                 EXHIBIT "II-B"
                                  Telco Returns
                                  -------------
                    Matching Process & Allocation Methodology
                    -----------------------------------------


Step 1      Step 2     X      Step 3       =    Step 4             Step 5              Step 6
- --------  ----------  --- -------------  ----  ---------  ------------------------  ------------
<S>       <C>         <C>  <C>            <C>  <C>        <C>                       <C>
- --------  ----------  --- -------------  ----  ---------  ------------------------  ------------
Client #  Billings-        Historical          Step 2 x         Each Clients'       $ Allocated
          Deposited        Adjust %            Step 3         contribution in        (% in Step
          With XYZ         Telco >50%                        relation to total           5x
          Telco for        supporting                     in Step 4 (% of 123,200)    $ 50,000)
          Sept &           detail for
          October          June, July &
                           August
- --------  ----------  --- -------------  ----  ---------  ------------------------  ------------
111       $   55,000  X              10%    =  $   5,500                     4.46%  $     2,230
- --------  ----------  --- -------------  ----  ---------  ------------------------  ------------
222       $  160,000  X              15%    =  $  24,000                    19.48%  $     9,740
- --------  ----------  --- -------------  ----  ---------  ------------------------  ------------
333       $   35,000  X              22%    =  $   7,700                     6.25%  $     3,125
- --------  ----------  --- -------------  ----  ---------  ------------------------  ------------
445       $  220,000  X              35%       $  77,000                     62.5%  $    31,250
- --------  ----------  --- -------------  ----  ---------  ------------------------  ------------
555         3300,000  X               3%    =  $   9,000                     7.31%  $     3,655
- --------  ----------  --- -------------  ----  =========  ========================  ============
                                               $ 123,200                   100.00%  $    50,000
                                               ---------  ------------------------  ------------
</TABLE>



Uncollectibles 4601XX & 4650XX (Used for True-Ups):
- ---------------------------------------------------

     Write-Off Match Logic:     Bill To Number (BTN)
                                Call Date
                                CIC

Uncountable write-off logic is a one-to-many matching process and utilizes the
write-off date to determine the calls eligible for matching. All call dates
equal or. older than the write-off record date are considered eligible. Matching
is conducted in "last-in-first-out" order up to the value of the write-off
record. Matched call  records eliminated, from the  eligible pool after they
have been adjusted to their original value. This elimination is based on the
process run date regardless of the number of files (tapes) being processed for a
given Telco for a particular run.

A write-off record that matches a history record based on write-off logic is
returned to the Client with the BTN, write-off date and matched amount. The
total of all matched write-offs is referred to as the "Specific Write-Off".

If the total of all Client's Specific Write-Offs is less than the write-off
amount charged by the Telco, a "Non-Specific Write-Off" is applied to each
Client for the shortfall. The Non-Specific Write-Off is based on each Client's
Specific Write-Off in comparison to the total of all Specific Write-Offs. For
example, if a Client's Specific Write-Off is 10% of the total of all Specific
Write-Offs, then they will be allocated a Non-Specific Write-Off of 10% of the
aforementioned shortfall. The Client's Specific Write-off and Non-Specific
Write-Off together make up the Client's "Write-Off Allocation" for a particular
True-Up.

If the Telco fails to provide adequate data for the write-off matching and,
therefore, no matching can be performed for that particular Telco, EBI will
utilize the following methodology to determine the Write-Off Allocation, used to
apply the write-off amount reflected on the Telco PAR statement. Client will
only be responsible for the write-off for customers it billed (BTN's). This
non-specific write-off allocation methodology is based on each Client's
experience of detailed write-offs over a 12 month period, for Telcos that do
provide write-off detail, coupled with each Client's billing activity for the
three months prior to the Telco write-off date.


                                   - CONFIDENTIAL -                      Page 24
<PAGE>
                                 EXHIBIT "II-B"
                                  Telco Returns
                                  -------------
                    Matching Process & Allocation Methodology
                    -----------------------------------------

To determine the non-specific write-off allocation percentage for each Client,
EBI performs the following steps:

     Step 1 - Identify all Clients that deposited to that particular Telco for
     the applicable months.

     Step 2- Identify each Client's deposited dollars to that particular Telco
     for the applicable month:.

     Step 3 - For ail Clients identified in Step 1, determine each Client's
     historical write-off percentage based on the various Telcos that have
     provided each Client with 50% or greater of actual write-off detail over a
     12 month period.

     Step 4- Multiply the deposit amount in Step 1 by the write-off percentage
     in

     Step 3 For each Client.

     Step 5 - Determine each Client's percentage of the sum total of the Step 4
     calculation.

     Step 6 -Allocate the non-specific write-off amount for the Telco based on
     the weighted percentage:-. determined in Step 5.

For example, XYZ Telco has applied 350,000 write-off amount to the PAR statement
without  supporting detail. The Clients who deposited in XYZ Telco for this time
period  would  receive  allocation  of  the  550,000  in  the  following manner:


<TABLE>
<CAPTION>
Step 1      Step 2     X     Step 3      =    Step 4             Step 5              Step 6
- --------  ----------  --- ------------- ---- ---------  ------------------------  ------------
<S>       <C>         <C>  <C>          <C>  <C>        <C>                       <C>

Client #  Actual           Historical        Step 2 x         Each Clients'       $ Allocated
          Billing          Write-Off %       Step 3          contribution in       (% in Step
          Deposited        Telco >50%                      relation to total            5x
          In XYZ           supporting                   in Step 4 (% of 123,200)  $    50,000)
          Telco            detail
- --------  ----------  --- ------------- ---- ---------  ------------------------  ------------
111       $   55,000  X            10%    =  $   5,500                     4.46%  $     2,230
- --------  ----------  --- ------------- ---- ---------  ------------------------  ------------
222       $  160,000  X            15%    =  $  24,000                    19.48%  $     9,740
- --------  ----------  --- ------------- ---- ---------  ------------------------  ------------

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

- --------  ----------  --- ------------- ---- ---------  ------------------------  ------------
333       $   35,000  X            22%    =  $   7,700                     6.25%  $     3,125
- --------  ----------  --- ------------- ---- ---------  ------------------------  ------------

- --------  ----------  --- ------------- ---- ---------  ------------------------  ------------
445       $  220,000  X            35%       $  77,000                     62.5%  $    31,250
- --------  ----------  --- ------------- ---- ---------  ------------------------  ------------
555         3300,000  X             3%    =  $   9,000                     7.31%  $     3,655
- --------  ----------  --- ------------- ---- ---------  ------------------------  ------------
                                             $ 123,200                   100.00%  $    50,000
                                                        ------------------------  ------------
</TABLE>

True-Up Procedure:

Once Clients Write-Off Allocation has been determined, it is compared to the
Telco Holdback reserved for (he period being trued-up, and the difference, if
any, is reported on a True-Up Summary report. A positive difference (i.e. Telco
Holdback was greater than the Write-Off Allocation) will be remitted to Client,
while 3 negative difference (i.e. Telco Holdback was less than the Write-Off
Allocation) will be paid by Client.


                                   - CONFIDENTIAL -                      Page 25
<PAGE>
<TABLE>
<CAPTION>
                                 EXHIBIT "II-C"
                    DELIVERY Schedule of Reports & Data Files
                    -----------------------------------------

          The following reports and data files are available via FTP:

Report/Data File                          Day Available
- ----------------                          -------------
<S>                                       <C>
Confirmation Report                       Within 24 hours of Client posting
Call Acceptance Transmittal Data File     Friday and/or Tuesday by 5:00pm PST
Edit Reject Data File                     Friday and/or Tuesday by 5:00pm PST

IGT Inquiry Services Data Files           Monday After 5:OQpm PST
IGT Cancellation Request Data Files       Monday thru Friday (if applicable) by 5:00pm PST

Telco Unbillable Data Files               Friday After 5:00pm PST
Telco Adjustment Data Files               Friday After 5:00pm PST
Credit Unbill Data File                   Thursday After 5:00pm PST

Telco Uncollectable Data Files            Friday by 5:00pm PST

Payment Summary Data File                 Thursday After 5:00 PST
Payment Unbill Data File                  Thursday After 5:00 PST
Payment Recourse\Holdback Data File       Thursday After 5:00 PST



The Following reports are available on
- --------------------------------------
the online web directory
- ------------------------

Deposit
- -------
Call Acceptance Summary                   Friday and/or Tuesday by 5:00pm PST
Special Message Summary                   Friday and/or Tuesday by 5:00pm PST


Chargeback                                Monday After 5:00pm PST
- ----------
Integretel Adjustment Summary             Monday After 5:00pm PST
Integratel inquiry Comments               Monday After 5:00pm PST
LEG Adjustment Summary                    Monday After 5;00pm PST
LEG Unbills Summary                       Monday After 5:00pm PST
LEG Write Off Summary                     Monday After 5:00pm PST
LEG Recovery Summary


Settlement                                Wednesday After 5:00pm PST
- ----------
Monthly Performance Status Report         Wednesday After 5:00pm PST
Settlement Statement Report               Wednesday After 5:00pm PST
Settlement Status Report                  Wednesday After 5:00pm PST
Settlement Status Excef Spreadsheet       Wednesday After 5:00pm PST
Payment Summary Report                    Wednesday After 5:00pm PST
Payment Summary Excel Spreadsheet         Wednesday After 5:00pm PST
Unbiil Report                             Wednesday After 5:00prn PST
Unbiil Excel Spreadsheet                  Wednesday After 5:00pm PST
Recourse\Holdback Report                  Wednesday After 5:00pm PST
Recourse\Holdback Excel Spreadsheet       Wednesday After 5:00pm PST
True-Up Summary Reports                   Wednesday After 5:00pm PST
Telco Returns Detail Listing Spreadsheet  Wednesday After 5:00pm PST
Detail Reconciliation Report              Wednesday After 5:00pm PST
True up Summary (Actual) Report
</TABLE>


                                   - CONFIDENTIAL -                      Page 26
<PAGE>
<TABLE>
<CAPTION>
                                                       EXHIBIT "II-D"
                                                        Telco Fees
                                                        ----------

                                                       Interstate  Interstate  Bulk 4250   SSM 010118  Pay/Call 010116   End-User
Telco Group        SID     Telco Name     Bill Render   Per Msg.    Per Msg.    Per MSg.    Per Msg.       Per Msg.       Adjust
<S>                <C>   <C>              <C>          <C>         <C>         <C>         <C>         <C>               <C>
Ameritch           9321  Ohio Bell             0.4879      0.0535      0.0535     0.1070       0.1070           0.2996       9.63
                   9323  Michigan Bell         0.4560       0.050       0.050      0.100        0.100           0.2800       9.00
                   9325  Indiana Bell          0.4560       0.050       0.050      0.100        0.100           0.2800       9.00
                   9327  Wisconsin Bell        0.4560       0.050       0.050      0.100        0.100           0.2800       9.00
                   9329  Illinois Bell         0.4560       0.050       0.050      0.100        0.100           0.2800       9.00
Verizon            9102  New Eng Tel           1.1100       0.020       0.020     0.1350       0.1350           0.2500      15.00
                   9104  New York Tel          1.1100       0.020       0.020     0.1350       0.1350           0.2500      15.00
                   9205  New Jersey Tel        1.1100       0.020       0.020     0.1350       0.1350           0.2500      15.00
                   9208  Bell Penn.            1.1100      0.0200      0.0200     0.1350       0.1350           0.2500      15.00
                   9210  Diamond State         1.1100      0.0200      0.0200     0.1350       0.1350           0.2500      15.00
                   9211  C&P DC                1.1100      0.0200      0.0200     0.1350       0.1350           0.2500      15.00
                   9212  C&P MD                1.1100      0.0200      0.0200     0.1350       0.1350           0.2500      15.00
                   9213  C&P VA                1.1100      0.0200      0.0200     0.1350       0.1350           0.2500      15.00
                   9214  C&P WVA               1.1100      0.0200      0.0200     0.1350       0.1350           0.2500      15.00
Bell South         9417  Bell South            0.5170      0.0390      0.0390   .079+2.5%      0.0390         .079+2.5%      6.40
GTE Companies       169  GTE North             0.9100      0.0200      0.0200      0.135        0.135           0.2500      15.00
                    328  GTE Florida           0.9100      0.0200      0.0200     0.1350       0.1350           0.2500      15.00
                    479  GTE South             0.9100      0.0200      0.0200     0.1350       0.1350           0.2500      15.00
                   2080  GTE S-West            0.9100      0.0200      0.0200     0.1350       0.1350           0.2500      15.00
                   2319  GTE California        0.9100      0.0200      0.0200     0.1350       0.1350           0.2500      15.00
                   2320  GTE West              0.9100      0.0200      0.0200     0.1350       0.1350           0.2500      15.00
                   2416  GTE N-West            0.9100      0.0200      0.0200     0.1350       0.1350           0.2500      15.00
                   3100  GTE Hawaii            0.9100      0.0200      0.0200     0.1350       0.1350           0.2500      15.00
GTE Contel          170  GTE N-Contel          0.9100      0.0200      0.0200     0.1350       0.1350           0.2500      15.00
                    480  GTE S-Contel          0.9100      0.0200      0.0200     0.1350       0.1350           0.2500      15.00
                   2081  GTE SW Contel         0.9100      0.0200      0.0200     0.1350       0.1350           0.2500      15.00
Citizens Tel       2308  Citizens Tel               -       .1275       .1275      .3775        .1275           0.3775          -
Pacific Bell       9740  Pacific Bell           .3632      0.0300                                               0.2800       9.00
Nevada Bell        9742  Nevada Bell           0.4632      0.0300                                               0.6500       9.00
Southwestern Bell  9533  S-West Bell           0.4132      0.0300      0.0300     0.2800       0.3000           0.2500       9.00

U.S. West          9631  North West Bell       1.4500      0.0000      0.0000     0.0000       0.0000           0.0000      1.250
                   9636  Mountain Bell         1.4500      0.0000      0.0000     0.0000       0.0000           0.0000      1.250
                   9638  PAC N-W Bell          1.4500      0.0000      0.0000     0.0000       0.0000           0.0000      1.250
Antel              9995  Alltel                0.6890      0.0925      0.0925     0.0925       0.0925           0.0975          -
Cincinnati Bell    9348  Cincinnati Bell       0.7300      0.3300      0.3300     0.3300       0.3300           0.0330      15.00
Illuminet          9999  Illuminet                  -       0.800       0.800      0.800        0.800            0.800          -
NECA               9996  NECA                       -       0.550       0.550      0.550        0.550            0.550          -
SNET               9147  SNET                  0.5533      0.1174      0.1174     0.1174       0.1174           0.2968          -
Sprint United       341  United Florida        0.4100       0.200       0.200      0.200        0.200            0.200       2.00
                    470  Carolina AT&T         0.4100       0.200       0.200      0.200        0.200            0.200       2.00
                    832  United Indiana        0.4100       0.200       0.200      0.200        0.200            0.200       2.00
                   9993  United Midwest        0.4100       0.200       0.200      0.200        0.200            0.200       2.00
Telcom Canada      8050  Telcom Canada              -       0.560       0.560      0.560        0.560            0.560          -
</TABLE>

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
consisten, permanent, all inclusive and/or final and is subject to change
without notice.

The US West End-User Adjustment Fee is based on each line item adjusted


                                   - CONFIDENTIAL -                      Page 27
<PAGE>
                SCHEDULE VI - SERVICE Order for END-USER INQUIRY
                ------------------------------------------------

          This Service Order for End-User Inquiry ("Service Order") shall be
effective as of the Effective Date of the Agreement ("Order Date") and shall
remain in full force and effect as long as there is in effect a valid service
order for either PhoneBill or DirectBill services.

          1.     SERVICE ORDER SUMMARY. This Service Order shall generally
                 ----------------------
include: i) Referral or transfer of End-User inquiries to Client, ii) Handling
by EBI of End-User Inquiries under certain circumstances in accordance with
Inquiry Guidelines and Inquiry Standards, each as defined herein.
          2.     CLIENT-HANDLED INQUIRIES. Client may elect, by written notice
                 -------------------------
to EBI, to provide Us own End-User Inquiry support provided, however, that
Client is able to continually meet the performance requirements set forth on
Exhibit Vl-A (the "Inquiry Standards"), attached hereto. EBI shall refer or
transfer End-User Inquiries to Client based on mutually agreeable procedures.
Notwithstanding the previous sentence, in the event that an End-User refuses to
be referred or transferred to Client or otherwise initiates a subsequent Inquiry
and expresses dissatisfaction with Clients handling of such End-User's original
Inquiry, than EGI may handle such subsequent Inquiry in accordance with the
Inquiry Guidelines. If EBI determines, in its reasonable discretion, that
Client's End-User Inquiry support is unsatisfactory, EBI may elect to provide
End-User Inquiry support immediately upon written notice to Client.

          3.     EHANDLED INQUIRIES. in the event Client has not elected to
                 -------------------
handle End-User Inquiries or if otherwise Client has been unable to meet the
performance requirements set forth above, then EBI shall handle End-User
Inquiries in accordance with its standard procedures or otherwise as mutually
agreed to by the parties (the "Inquiry Guidelines"). Client agrees to cooperate
with EBI with respect to End-User Inquiries including, without limitation,
providing originating numbers, locations, applicable rate tables, and detailed
written and/or electronic End-User authorizations, such as letters of agency, as
requested by EBI. EBI and Client shall establish a contact within each
organization for the purpose of resolving End-User Inquiries. When subscription
authorization is required, Client shall provide EBI with a toll-free number
and/or a data file to access End-User subscription information.

               (a)     Adjustments. EBI shall use reasonable efforts to sustain
                       ------------
billing charges in accordance with the inquiry Guidelines. However, EBI shall
not be required hereunder to commence any litigation or take any other form of
action to enforce collection of bills rendered to End-Users except as expressly
provided in an applicable service order between the parties.

               (b)     Regulatory Complaints. EBI shall respond to any
                       ----------------------
regulatory complaints made by End-Users and forwarded to EBI by a regulatory
agency and shall provide a copy of such response to Client upon request.

  {- End of Schedule VI. Exhibits follow. Remainder of page intentionally left
                                    blank. -}


                                   - CONFIDENTIAL -                      Page 28
<PAGE>
                                 EXHIBIT "VI-A"
                                INQUIRY STANDARDS
                                -----------------

End-User inquiry shall be performed by Client or EBI (each in this context a
"Provider") in accordance with the following Inquiry Standards:

1.   Provider shall maintain a toll-free telephone number through which
     End-User's initiate inquiries. Where practical, such number shall be
     prominently displayed on the End-User's bill.

2.   Provider shall answer 80% of all End-User Inquiries, with a live Client
     service agent, within 90 seconds.

3.   Provider shall have adequate Client service staff available to support
     End-User Inquiries between the hours of 8:00 am and 5:00 pm for all time
     zones where End-Users reside.

4.   Provider shall not allow calls to be routed to a voicemail! function during
     required service hours (live agent must answer all calls).

5.   Provider shall maintain a call abandon rate less than or equal to 5% of
     inbound calls.

6.   Provider shall respond to written End-User Inquiries, in writing, within 15
     days of receipt.


                                   - CONFIDENTIAL -                      Page 29
<PAGE>
IN  WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of the
Effective  Date  set  forth  above.


EBILIT, INC. (EBI)                           TELCO BILLING, INC. (CLIENT)

By:       Joe  Lymon                         By:           Angelo  Tullo
       --------------------                            ---------------------
Name:     Joe  Lymon                         Name:         Angelo  Tullo
       --------------------                            ---------------------
Title:       CEO                             Title:          PRESIDENT
       --------------------                            ---------------------
Date:       1-2-03                           Date:            12/6/02
       --------------------                            ---------------------




                                   - CONFIDENTIAL -                      Page 30
<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.25
<SEQUENCE>4
<FILENAME>doc3.txt
<TEXT>
PALM  CONFIDENTIAL                                                EXHIBIT  10.25
                                LICENSE AGREEMENT
                                -----------------

This  LICENSE AGREEMENT (the "Agreement") is entered into by and between YP Net,
Inc.,  a Nevada corporation with its principal place of business located at 4840
East Jasmine Street, Suite 110, Mesa, Arizona, 85205 ("Company") and Palm, Inc.,
a  Delaware  corporation,  with  a  place of business located at 400 N. McCarthy
Blvd.,  Milpitas,  CA 95035 ("Palm"). The effective date of this Agreement shall
be  February  01,  2003  (the  "Effective  Date").

1.   DEFINITIONS.  For  purposes  of  this  Agreement, the following terms shall
     ------------
have  the  following  meanings:

     1.1     Company  Content  means  any  and all content and software owned or
             ----------------
licensed  by  Company  that  is  accessible  on  the  Company  Site.

     1.2     Company Link means a hypertext link to the Company Site, as further
             ------------
described  on  Exhibit  A, facilitating the provision of the Company Services to
               ----------
End  Users  via  a  Palm  Device.

     1.3     Company Marks means the Company trademarks and the associated logos
             -------------
set  forth  on  Exhibit  B.
                ----------

     1.4     Company  Services  means  the services described on Exhibit C which
             -----------------
will  be  provided  to  End  Users  through  the Company Site including, without
limitation,  the  delivery  of  the  Company  Content.

     1.5     Company  Site  means the World Wide Web site located at the Company
             -------------
URL  which  is  customized to be accessible via a Palm Device and which features
the  Company  Services.

     1.6     Company URL means the universal resource locator, or the unique
             -----------
text address  of  the  Company  Site,  set  forth  on  Exhibit  A.
                                                       ----------

     1.7     Confidential  Information  means all nonpublic information, whether
             -------------------------
in  oral,  written  or  other  tangible  form  that  the  party  disclosing  the
information  (the "Disclosing Party") designates as being confidential or which,
under  the  circumstances  surrounding  disclosure,  the  receiving  party  (the
"Recipient")  knows  or  has  reason  to know should be treated as confidential,
including  without  limitation,  the  terms  and  conditions  of this Agreement.
Notwithstanding  the  foregoing,  Confidential  Information  does  not  include
information that: (i) is or becomes generally available to the public other than
(a)  as  a result of a disclosure by the Recipient or its employees or any other
person  who  directly  or indirectly receives such information from Recipient or
its  employees,  or  (b)  in  violation  of  a confidentiality obligation to the
Disclosing  Party  known  to  the Recipient; (ii) is or becomes available to the
Recipient  on  a  non-confidential  basis  from  a  source  which is entitled to
disclose  it  to the Recipient; or (iii) was developed by employees or agents of
the  Recipient  independently  of  and  without  reference  to  any  information
communicated  to  the  Recipient  by  the  Disclosing  Party.

     1.8     Intentionally  left  blank.

     1.9     End  User  means  a person who accesses the Company Site via a Palm
             ---------
Device.

     1.10     Intellectual  Property  Rights means copyrights, trademark rights,
              ------------------------------
patent rights, trade secrets, moral rights, right of publicity, authors' rights,
contract  and  licensing  rights,  goodwill  and all other intellectual property
rights  as  may exists now and/or hereafter come into existence and all renewals
and extensions thereof, regardless of whether such rights arise under the law of
the  United  States  or  any  other  state,  country  or  jurisdiction.

     1.11     Palm  Device  means  any  device, including, without limitation, a
              ------------
handheld  computing  device,  incorporating  the  Palm  operating  system.

     1.12     Palm  Mark  means  the  Palm trademark and the associated logo set
              ----------
forth  on  Exhibit  B.
           ----------

     1.13     Palm  Sites  means  the  World Wide Web sites which are co-branded
              -----------
with  the  Palm  Mark,  and  any  successor  sites  thereto.

     1.14     Intentionally  left  blank.

     1.15     Product     means  the  Palm  software  described  on  Exhibit  D.
              -------                                                ----------

     1.16     Third  Party Content means content, including, without limitation,
              --------------------
third party trademarks, and software which may be licensed from third parties by
Palm  and  made  available  to  End  Users.

     1.17     User  Data  means  personally  identifiable  information collected
              ----------
and/or  stores by Palm, if any, which is provided to Company by End Users in the
course  of End Users' use of the Company Services via Palm Devices, and includes
without  limitation,  any  usage statistics derived from a particular End User's
use  of  the  Company Site, including, without limitation, identity, credit card
information,  information  and  such  user's behavior with respect to use of the
Company  Services.

2.   LICENSE  GRANTS  AND  DEVELOPMENT.
     ---------------------------------

     2.1     Company  Link.  Company  grants  to  Palm  a  non-exclusive,
non-transferable,  worldwide,  fully  paid-up and royalty-free license, with the
right  to  sublicense,  to  publicly  display,  use,  reproduce  and  distribute
(directly  or  indirectly,  through  multiple  levels of distribution, including
without  limitation,  as  incorporated  within  the Product) the Company Link to
facilitate  the  provision  of  the Company Services to End Users. Company shall
deliver  the  hyperlink  component  of  the  Company  Link to Palm no later than
February  7,  2003.  Company  shall  deliver  the  graphic icon component of the
Company  link  to  Palm  no  later  than  February  14,  2003.

     2.2     Intentionally  left  blank.

     2.3     Company Link. Company acknowledges and agrees that Palm is under no
             ------------
obligation  to  promote  the  Company  Site,  the Company Content or the Company
Services,  or  to  distribute,  sublicense  or  otherwise  make the Company link
available  to  End  Users  or  to  other  third  parties, in the event that Palm
determines,  in its reasonable discretion, that the Company Content, the Company
Link  or  the Company Site: (i) suffers from material performance problems; (ii)
results  or  could  result  in  any transmission of material in violation of any
foreign,  international,  federal,  state  or local law or regulation, including
without  limitation,  material  which encourages conduct that would constitute a
criminal offense or otherwise violate any such law or regulation; (iii) violates
the  copyright,  trade secrets or other proprietary rights of any third party in
any  jurisdiction;  (iv) in any way violates or infringes upon any third party's
privacy  right,  right of publicity, or any other right of any person or entity;


                                        1
<PAGE>
PALM  CONFIDENTIAL

(v)  is  otherwise  unsuitable  for  inclusion  in  a  particular version of the
Product,  including, without limitation, a co-branded product or private labeled
version;  or  (vi)  is  unlawful, harmful, abusive, hateful, offensive, obscene,
threatening,  libelous  or  defamatory, or contains material which may contain a
computer  virus,  cancelbot,  Trojan  horse, work or other harmful or disruptive
component.

     2.4     License  to Provide End User Access. Company grants to Palm and its
             -----------------------------------
sublicenses  a  non-exclusive,  non-transferable,  worldwide,  fully paid-up and
royalty-free  license to provide access to the Company Component and the Company
Services  on  the  Company  Site  via  the  Company  Link  to  End  Users.

     2.5     Intentionally  Left  Blank.

     2.6     Non-exclusivity.  Either  party  shall have the right to enter into
             ---------------
contractual  agreements  with  other providers of content, products and services
similar  to  those  of  the other party hereto, in each party's sole discretion.

     2.7     Reservation  of Rights. Each party reserves all rights no otherwise
             ----------------------
granted  in  this  Section2  (License  Grants  and Development). Nothing in this
Agreement  shall  be  construed to grant Palm any rights in and to Company Link,
except  as  specifically  provided  in  Section  2.1  (Company  Link).

3.   Ownership
     ---------

     3.1     Ownership  by  Company.  As between Company and Palm, Company shall
             ----------------------
own  all  right, title and interest, including all Intellectual Property Rights,
in  and  to  the  Company URL, the Company Link, the Company Site (excluding the
Palm  Mark)  and  the  Company  Services.

     3.2     Ownership  by  Palm.  As  between  Company  and  Palm,  Palm or its
             -------------------
suppliers  shall  own  all right, title and interest, including all Intellectual
Property  Rights,  in  and  to the Palm Sites (excluding the Company Marks), the
Palm  mark,  the  Palm  Devices, the Product (excluding the Company Link and the
Company Marks) and the Third Party Content.  Company acknowledges that Palm owns
exclusive rights in a family of trademarks that includes, among others, the Palm
Mark.  Company will not use "Palm" as part of any of Company's product, service,
top-level  or second-level domain name or institution names and will not take or
authorize  any action inconsistent with Palm's exclusive trademark rights during
the  term  of  this Agreement or thereafter.  Company agrees that the use of the
Palm  Mark  by  Company  shall inure to the benefit of and be on behalf of Palm.
Company acknowledges that Company's utilization of the Palm Mark will not create
any right, title or interest in such Palm Mark in Company. Company shall use the
Palm Mark so that each Palm Mark creates a separate and distinct impression from
any  other  trademark  that may be used or affixed to materials bearing the Palm
Mark  or  used  in  connection  with  services  provided  under  the  Palm Mark.

4.   OBLIGATIONS  OF  THE  PARTIES.
     -----------------------------

     4.1     Implementation.  The  Company  Site  will  be made available to End
             --------------
Users  on  a  date  to  be  mutually agreed upon in writing by the parties.  The
Company  Site will be hosted on Company's servers or on the servers of Company's
Internet  service  provider.  Once  made  available  to End Users, Company shall
ensure  that  the  Company  Services  remain  available through the Company Site
throughout the Term. At all times during the Term, Company shall ensure that the
Company  Content  is  at least as up-to-date as any similar content displayed on
all  other  sites  of  Company  on  the  World  Wide  Web.

     4.2     Use  and  Ownership  of  User  Data.
             -----------------------------------

            (a)   Collection  of  User  Data.  Company  acknowledges  that  the
                  --------------------------
provision  of  wireless  services  to  enable  End  Users  to access the Company
Services  using  a  Palm Device results in the access by Palm of User Data. Palm
agrees  that  it  shall not disclose User Data to third parties in a manner such
that  the  User Data is identifiable as belonging to a particular End User. Palm
shall  be entitles, however, to use and disclose User Data in the aggregate in a
manner  that does not associate the aggregate data with any individual End User.
Notwithstanding  anything  to the contrary contained herein, Palm agrees that it
will  not  collect, use or disclose any User Date in violation of any applicable
law  or  regulation,  or  in  violation  of  Palm's then-current privacy policy.

            (b)   Ownership  of  User  Data.  Palm acknowledges and agrees that,
                  -------------------------
subject to Section 4.2(a) (Collection of User Data), User Data shall be owned by
Company.  Company  acknowledges and agrees that all user data collected from End
Users  (other  than  the  User  Data)  with  respect to wireless use of the Palm
Devices  shall  be  owned  by  Palm.

     4.3     Service Level Agreement.  Company shall use commercially reasonable
             -----------------------
efforts  to maintain the Company Site and provide Company Services in accordance
with  the  service  level  agreement  objectives  set  forth  on  Exhibit  E.
                                                                  ----------

     4.4     Company  URL.  Company agrees to provide advance notification of at
             ------------
least three (3) weeks to Palm of any upcoming or intended changes to the Company
URL.  Company  further  agrees  that in the even of a change to the Company URL,
Company will put in place a site redirect from the former Company URL to the new
Company  URL  to  avoid  any  potential  impact  to  the  Subscriber.

     4.5     Advertising  Guidelines.  Company shall ensure that any advertising
             -----------------------
or  promotions  displayed  on  the Company Site will comply with the advertising
guidelines  set  forth  on  Exhibit  F.
                            ----------

     4.6     Support.  Company  will  provide  to  Palm  reasonable  levels  of
             -------
technical support during business hours via telephone and email. During business
hours,  Company  shall  notify  Palm  via  telephone  within one (1) hour of any
conditions which significantly impair or prevent; (a) Company from providing the
Company  Services to End Users; or (b) End Users from accessing the Company Site
("Services  Impairment").  During  non-business hours, Company shall notify Palm
via  telephone  or  email  within two (2) hours of any Service Impairment.  Palm
acknowledges  and agrees that Company is not responsible for downtime on Company
servers  due  to  technical  problems relating to the Internet or experienced by
Internet service providers.  In the event that any individual Service Impairment
continues  for  longer  than  four  (4) hours, Company shall use best efforts to
resolve  the  Service  Impairment  immediately and will promptly notify Palm via
telephone  or  email  when  the  problem  has  been  resolved.

5.   REPRESENTATIONS  AND  WARRANTIES
     --------------------------------

     5.1  Company's  Warranties  and  Representations.  Company  warrants  and
          -------------------------------------------
represents  that:

          (a)  Company  possesses  full  power  and authority to enter into this
Agreement  to  fulfill  its  obligations  hereunder;  and


                                        2
<PAGE>
          (b)  The  performance  of the terms of this Agreement and of Company's
obligations  hereunder  shall not breach any separate agreement by which Company
is  bound.

     5.2  Palm's  Warranties  and  Representations.  Palm  warrants  and
          ----------------------------------------
represents  that:

          (a)  Palm  possesses  full  power  and  authority  to  enter into this
Agreement  and  to  fulfill  its  obligations  hereunder;  and

PALM  CONFIDENTIAL

             (b)  The performance of the terms of this Agreement and of Palm's
obligations  hereunder  shall not breach and separate agreement by which Palm is
bound.

     5.3     Warranty  Disclaimer.  EXCEPT  AS  EXPRESSLY  SET  FORTH  IN  THIS
             --------------------
AGREEMENT,  COMPANY  PROVIDES  ALL  SERVICES  PERFORMEDF  BY  COMPANY UNDER THIS
AGREEMENT  "AS  IS".  TO  THE EXTENT PERMITTED BY THIRD PARTY SUPPLIERS, COMPANY
WILL  PASS  THROUGH  TO PALM ANY WARRANTIES AND INDEMNIFICATION PROVIDED BY SUCH
THIRD  PARTY  SUPPLIERS  TO  COMPANY.  EXCEPT  AS  EXORESSLY  SET  FORTH IN THIS
AGREEMENT,  PALM  AND  ITS  SUPPLIERS  MAKE  NO  WARRANTIES  WITH  RESECT TO THE
PERFORMANCE  OF  THE PRODUCT, THE PALM SITES AND/OR THE PALM DEVICES, EXPRESS OR
IMPLIED.  PALM  AND  ITS  SUPPLIERS  EXPRESSLY  DISCLAIM  ANY  AND  ALL  OTHER
WARRANTIES, WHETHER STATUTORY, EXPRESS, OR IMPLIED, INCLUDING BUT NOT LIMITED TO
THE  IMPLIED  WARRANTIES  OF  NON-INFRINGEMENT  OF  THIRD PARTY RIGHTS UNDER THE
UNIFORM  COMMERCIAL  CODE, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

6.   TRADEMARK  LICENSE.
     ------------------

     6.1  Company  License.
          ----------------

          (a)  During  the Term (as described in Section 9.1 (Term) below), Palm
grants  to Company a non-exclusive, worldwide, royalty-free and non-transferable
license  to  use  the  Palm  Mark on the Company Site and in connection with the
promotion  of  the  Company  Services accessible via Palm Devices.  This license
does  not  include  the  right  to sublicense the use of the Palm Mark.  Company
shall  be in compliance with Palm's trademark guidelines as updated from time to
time  and  as currently set forth in Palm's Trademark Policy Guidelines provided
to  Company  promptly  following  the  execution  of  this  Agreement.

          (b)  Company  agrees  that  the nature and quality of any materials or
services  supplied  by Company bearing the Palm Mark shall be of high quality in
the  Internet  industry.  Palm  shall have the right to approve Company's use of
the  Palm  Mark.  Prior to Company's using the Palm Mark, Company shall submit a
written  request  for approval of such use to Palm.  Palm shall not unreasonably
withhold  its  consent  to  any  use by the Company.  If Palm does not object in
writing,  specifying the reasons for objection, within ten (10) business days of
receipt  of such request, Palm shall be deemed to have approved the request (the
"Palm  Approval  Process").  Company may submit revised requests for approval of
any  use  to  which  Palm objected, which shall be governed by the Palm Approval
Process.  Company agrees to cooperate with Palm in facilitating Palm's oversight
of  Company's  use  of the Palm Mark.  Palm shall have the right to receive free
samples  of  all  advertising and promotional materials on which such trademarks
are  used.  Company  shall  comply  with  all  requests from Palm to correct any
improper  uses  of  the  Palm


                                        5
<PAGE>

Mark.  Unless  otherwise  instructed  by  Palm, Company will use a legend on the
Company  Site  and  all  printed  materials  and  products bearing the Palm Mark
similar  to  the  following:  "Palm  is  a  trademark  of  Palm,  Inc.".

     6.2  Palm  License.
          -------------

          (a)  During  the  Term,  Company  grants  to  Palm  a  non-exclusive,
worldwide  and  royalty-free  license,  with the right to sublicense, to use the
Company  Marks  in  connection  with  the use, display, marketing, promotion and
distribution  of  the Product, the Palm Devices and the Company Link pursuant to
Sections  2.1  (Company  Link)  and  Exhibit G. Palm shall be in compliance with
                                     ---------
Company's trademark guidelines as updated from time to time and as currently set
forth  in  Company's  Trademark  Policy  Guidelines  provided  to  Palm promptly
following  the  execution  of  this  Agreement.

          (b)  Company shall have the right to approve Palm's use of the Company
Marks.  Prior  to  Palm's  using  the Company Marks, Palm shall submit a written
request  for  approval  of  such use to Company.  Company shall not unreasonably
withhold its consent to any use by Palm.  If Company does not object in writing,
specifying  the  reasons for objection, within ten (10) business days of receipt
of  such  request,  Company  shall  be  deemed to have approved the request (the
"Company  Approval  Process").  Palm may submit revised requests for approval of
any  use  to  which  Company  objected,  which  shall be governed by the Company
Approval  Process.  Palm  agrees  to  cooperate  with  Company  in  facilitating
Company's  oversight  of  Palm's use of the Company's Marks.  Company shall have
the  right  to receive free samples of all advertising and promotional materials
on  which  such  trademarks  are used.  Palm shall comply with all requests from
Company  to  correct  any  improper  uses  of  the  Company  Marks.

7.   CONFIDENTIALITY.  During  the  Term,  the  Disclosing  Party  may  provide
     ---------------
Confidential  Information  to  the  Recipient.  The  Recipient  shall  hold  the
Confidential  Information  in  confidence,  provided  that  the  Confidential
Information  may  be  disclosed  to  such  of the Recipient's or the recipient's
parent  companies' or subsidiaries' employees, contractors or advisors, who have
a  need  to know for the purpose of fulfilling the Recipient's obligations under
this  Agreement.  The  Recipient  shall  advise  any  such  individuals that the
Confidential  Information is confidential and that be receiving such information
such individuals are agreeing to be bound by the terms of this Section 7 and are
agreeing  not  to  use  such  information  for  any purpose other than described
herein.  Without  the  Disclosing  Party's  prior written consent, the Recipient
shall  not,  and shall direct such individuals not to, disclose the Confidential
Information in whole or in part, except to the extent compelled by law,  a court
or  other  governmental  body  (including,  without  limitation,  the  rules and
regulations  of the Securities and Exchange Commission relating to the filing of
exhibits  to  filings  required  under  the  Securities Exchange Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended); provided, however,
such  Recipient  shall  provide  prompt  prior  written  notice  thereof to such
Disclosing  Party  to enable such Disclosing Party to seek a protective order or
otherwise  prevent  such disclosure. The Recipient shall employ reasonable steps
to  protect  the  Confidential  Information  from  unauthorized  or  inadvertent
disclosure  or  use,  including,  without limitation, the steps that it takes to
protect  its  own  information that is considers trade secret.  Either party may
disclose information concerning this Agreement and the transactions contemplated
hereby, including providing a copy of this Agreement: (i) in connection with the
due  diligence  review  of  a party potential business partners or investors, or
investment bankers, to such persons and to their employees, agents attorneys and
auditors,  (ii) in connection with quarterly and annual financial or tax audits,
to  the  party's  public  accounting  firm,  and  (iii)  in  connection  with


                                        3
<PAGE>
PALM  CONFIDENTIAL

obtaining  legal  advice regarding this Agreement or any related matters, to the
party's  outside  legal  advisors.

8.   INDEMNIFICATION.
     ---------------

     8.1  Company  Indemnification.  Subject  to  the  provisions  of  this
          ------------------------
paragraph,  Company  will  indemnify,  defend  and  hold  harmless  Palm and its
officers,  directors,  employees and agents (the "Palm Indemnification Parties")
from  and  against  any  and  all  losses,  liabilities,  obligations, costs and
expenses  (including,  without limitations, reasonable attorney's fees) incurred
in  connection  with  any suit, claim or action by any third party alleging that
the  Company URL, the Company Link, the Company Marks, the Company  Content, the
Company Services and/or the Company Site (other than the Palm Mark) infringe any
Intellectual  Property  Right of any third party or any claim of damages brought
or  sought  against  Palm  by  any  of  Company's advertisers in connection with
advertising  on  the  Company  Site.  The  obligations  of  this  paragraph  are
contingent  on Palm: (i) giving Company prompt written notice of any such claim;
(ii) allowing Company to control the defense and related settlement negotiations
(but  Company  shall  not enter into any agreement which results in liability to
the  Palm  Indemnified  Parties  without their prior written consent); and (iii)
providing  reasonable  cooperation, at Company's expense, in the defense and all
related settlement negotiations. Company may, at its sole option, elect to limit
its  obligations  under  this  Section  8.1  by  terminating this Agreement upon
fifteen  (15)  days  written  notice  to  Palm;  provided,  however,  that  such
termination  shall  not  affecting  indemnity  obligations  arising  prior  to
termination.  THE  RIGHTS GRANTED TO PALM UNDER THIS SECTION 8.1 SHALL BE PALM'S
SOLE  AND  EXCLUSIVE  REMEDY  AGAINST COMPANY FOR ANY ALLEGED INFRNGEMENT OF ANY
INTELLECTUAL  PROPERTY  RIGHTS  OF ANY KIND ARISING OUT OF THE SUBJECT MATTER OF
THIS  AGREEMENT.

     8.2  Palm  Indemnification.  Subject  to  the provisions of this paragraph,
          ---------------------
Palm  will  indemnify,  defend  and  hold  harmless  Company  and  its officers,
directors, employees and agents (the "Company Indemnification Parties") from and
against  any  and  all  losses,  liabilities,  obligations,  costs  and expenses
(including,  without  limitations,  reasonable  attorney's  fees)  incurred  in
connection  with  any suit, claim or action by any third party alleging that the
Product  (other  than  the  Company  Link,  the  Company  Marks  and Third Party
Content),  the  Palm  Site  (other  than  the  Company Marks and the Third Party
Content),  the  Palm  Mark infringe any Intellectual Property Right of any third
party.  The  obligations of this paragraph are contingent on Company: (i) giving
Palm  prompt written notice of any such claim; (ii) allowing Palm to control the
defense  and  related settlement negotiations (but Palm shall not enter into any
agreement  which results in liability to the Company Indemnified Parties without
their  prior  written  consent);  and (iii) providing reasonable cooperation, at
Palm's  expense,  in  the  defense and all related settlement negotiations. Palm
may,  at  its sole option, elect to limit its obligations under this Section 8.1
by  terminating this Agreement upon fifteen (15) days written notice to Company;
provided,  however,  that  such  termination  shall  not  affecting  indemnity
obligations  arising prior to termination. THE RIGHTS GRANTED TO PALM UNDER THIS
SECTION  8.2  SHALL  BE COMPANY'S SOLE AND EXCLUSIVE REMEDY AGAINST PALM FOR ANY
ALLEGED  INFRNGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF ANY KIND ARISING OUT
OF  THE  SUBJECT  MATTER  OF  THIS  AGREEMENT.

9.   TERM  AND  TERMINATION.
     ----------------------

     9.1  Term.  This  Agreement  will  commence  on  the  Effective  Date  and,
          ----
unless  sooner  terminates  as  provided below, shall continue until twenty-four
(24)  months  following  the Effective Date (the "Initial Term"). This Agreement
shall  automatically  renew for successive two (2) year periods (each a "Renewal
Term") unless either party gives written notice to the other party of its intent
not  to  renew  the  Term  no later than sixty (60) days prior to the end of the
then-current term. For each Renewal Term, Company shall be obligated to pay Palm
the  Co-Marketing  Fees  (defined  below)  as  set  forth  in Exhibit G.
                                                              ---------

     9.2  Termination  for  Cause.  Either  party  may  terminate this Agreement
          -----------------------
upon  written  notice of a material branch by the other party as provided below,
subject  to  thirty  (30) day cure period.  If the breaching party has failed to
cure the breach within thirty (30) days after the receipt by the breaching party
of  written  notice  of  such  breach, the non-breaching party may give a second
notice  to  the  breaching  party  terminating  the  Agreement.

     9.3  Return  of  Property.  Upon  the  termination  or  expiration  of this
          --------------------
Agreement, a party shall immediately deliver to the other party upon its written
request  all  copies  of Confidential Information or other materials then in its
possession  owned solely by such other party, including without limitation sales
and  marketing  materials  provided  to  Palm  by  the  Company.

     9.4  Effect  of  Termination.  Upon  termination  or  expiration  of  this
          -----------------------
Agreement:  (a)  Palm  and  its  sublicenses shall have the right to continue to
manufacture,  market,  reproduce  and  distribute  all  existing versions of the
Products  that  include  the  Company Link as of the date of such termination or
expiration  and  to  fulfill  any purchase orders or contractual obligations for
such  Products  existing on the date of such termination or expiration; (b) Palm
and  its  sublicenses  shall  have  a  commercially reasonable period of time to
remove  the  Company  Link  from  and  Product  following  such  termination  or
expiration  of  this  Agreement; and (c) Company shall also promptly cease using
and  cancel  or  allow to expire any URL or related alias that includes the word
"Palm"  which  has  been registered or used (directly or indirectly) by Company,
including  without  limitation in connection with the Company Site. For purposes
of  this  Agreement,  any version of the Product which is a beta, gold master or
commercial release on the date of such expiration or termination shall be deemed
to  be  an  existing  version  of  the  Product on such date.  The expiration or
termination  of  this  Agreement  shall  not affect the validity of any End User
license agreements applicable to Products (or other use by End Users) within the
scope  of  this  Section  9.4.  Company  agrees  to support the Company Services
through  the  Company  Site  for  sixty  (60)  days  following the expiration or
termination  of  this  Agreement,  except  as  otherwise  provided  in  Section
2.4(Company  Link).").

10.  MARKETING  SUPPORT.  The  parties  agree  that  they  will use commercially
     ------------------
reasonable  efforts  to  engage  in joint efforts to promote the Product and the
Company  Services as mutually agreed upon in advance and in writing.  Each party
agrees  to  perform  those  co-marketing obligations set forth on Exhibit G. The
parties  shall  mutually  agree  on  the substance and timing of a press release
within  30  days regarding this Agreement and the parties' relationship. Neither
Palm  or  Company  shall  make any other public announcement, except as they may
mutually agree in advance and in writing, as to the existence and details of the
matters  set  forth  in  this  Agreement  (other than to employees, consultants,
shareholders  or  a  required  by such parties' disclosure obligations under the
securities  laws  or  regulations  of  the  United States or any state thereof).

11.  CO-MARKETING  FEES.
     ------------------

     11.1     Fees.  Palm's  marketing  obligations  as  set  forth on Exhibit G
              ----                                                     ---------
shall  be  subject  to  Company's  payment of the co-marketing fees set forth on
Exhibit  G  ("Co-Marketing  fees")  according to the schedule set forth therein.
- ----------
Unless  stated  otherwise  in


                                        4
<PAGE>
PALM  CONFIDENTIAL

Exhibit G, the Co-Marketing Fees shall be due in full thirty (30) days from the
- ---------
date  of  invoice.  Any  amounts  which  are not paid when due hereunder will be
subject to an interest rate of one and one-half percent (1.5%) per month, or the
maximum  rate  permitted  by  law, whichever is less.  Payments shall be sent to
Palm  at  the address set forth at the beginning of this Agreement or such other
address  as  Palm  may  designated  in  writing.

     11.2 Taxes.  Company  shall  pay  all  sales,  use,  excise and other taxes
          -----
which  may  be  levied  upon  either  party  in  connection with this Agreement,
excluding  taxes  based  on  Palm's  net  income.

12.  LIMITATION  OF  LIABILITY
     -------------------------

     12.1 Consequential  Damages  Waiver.  EXCEPT  IN  THE  EVENT OF A BREACH OF
          ------------------------------
THE  CONFIDENTIALITY  OBLIGATIONS  OR CLAIM MADE FOR INDEMNIFACTION, IN NO EVENT
SHALL  EITHER  PARTY  BE  LIABLE  TO  THE  OTHER  PARTY  FOR  ANY  INCIDENTAL,
CONSEQUENTIAL, SPECIAL, OR INDIRECT DAMAGES ARISING OUT OF THIS AGREEMENT OR ITS
TERMINATION,  WHETHER  LIABILIY  IS  ASSERTED  IN  CONTRACT  OR  TORT (INCLUDING
NEGLIGENCE  AND STRICT PRODUCT LIABILITY) AND IRRESPECTIVE OF WHETHER SUCH APRTY
HAS  BEEN  ADVISED  OF  THE  POSSIBILITY  OF  ANY  SUCH  LOSS  OR  DAMAGE.

     12.2 Limitation of Liability.  IN NO EVENT SHALL PLAM'S TOTAL LIABILITY
          -----------------------
UNDER  THIS  AGREEMENT  EXCEED  THE  AMOUNTS  PAID  TO  PALM  HEREUNDER.

     12.3 Allocation  of  Risk.  Company  and  Palm agree that the foregoing
          --------------------
Section  12.1 and 12.2 on limitation of liability and the Sections 5.1, 5.2, and
5.3 above on warranties and warranty disclaimer fairly allocate the risks in the
Agreement between the parties and that the limitations specified in this Section
12  shall  apply  notwithstanding  any  failure of the essential purpose of this
Agreement  or  any  limited  remedy  hereunder.

13.  GENERAL.
     -------

     13.1  No  Partnership or  Joint  Venture.  Company and Palm are independent
           -----------------------------------
contractors  and  neither  party  is  the  legal  representative,  agent,  joint
venturer, partner, franchisor, franchisee or employee of the other party for any
purpose  whatsoever.  Neither  party  has  any  right  or authority to assume or
create  any obligations of any kind or to make any representation or warranty on
behalf  of  the  other  party,  whether express or implied, or to bind the other
party  in  any  respect  whatsoever.

     13.2  Notice  and  Service.  All  notices  or  requests,  including
           --------------------
communications and statements which are required or permitted under the terms of
this  Agreement,  shall  be  in  writing  and  shall  be  sent  by facsimile, or
nationally  recognized  commercial  overnight  courier.  Notices  shall be deems
received  upon  receipt  of  written  confirmation  of transmission when sent by
facsimile,  or  signing  for  receipt  of delivery if sent by overnight courier.
Notices  shall  be  sent  to  the  parties  a  the  following  addresses:

For  Company:     YP.net,  Inc.
                  4840  E.  Jasmine  #110
                  Mesa,  AZ  85205
                  Fax:  602-532-7813
                  Attention:  Greg  Cane

with a copy to:   Lewis & Rocca, LLP
                  40  N.  Central  Ave.
                  Phoenix,  AZ  85004
                  Attention:  Randy  Papetti
                              --------------

For  Palm:        Palm,  Inc.
                  10  New  England  Business  Center  Drive
                  Suite  102,  Andover,  MA  01810
                  Fax:  978-975-3201

                  Attention:  Sasha  Norkin

with a copy to:   Palm, Inc.
                  Solutions  group  400  N.  McCarthy  Blvd.
                  Milpitas,  CA  95035
                  Attention:  General  Counsel

     13.3  Captions  and  Counterparts.  All  indices, titles, subject headings,
           ---------------------------
section  titles  and  similar items contained in this Agreement are provided for
the  purpose  of  reference  and  convenience  only  and  are not intended to be
inclusive,  definitive  or  to  affect  the  meaning,  content  or scope of this
Agreement.  This  Agreement  may  be executed in any number of counterparts, and
each  executed  counterpart  shall have the same force and effect as an original
instrument.

     13.4  Assignments.  Neither  party  shall assign, voluntarily, by operation
           -----------
of  law,  or  otherwise,  any rights or delegate any duties under this Agreement
(other  than  the  right  to  receive  payments) without the other party's prior
written  consent,  except  that  either  party  may,  without  the other party's
consent,  assign  all  or any part of its rights and duties under this Agreement
pursuant  to a corporate reorganization, or to any entity with whom either party
merges,  either  party  acquires  or is acquired by or to whom with either party
sells  all  or  substantially all of its assets to which this Agreement relates.
Subject  to  the foregoing, this Agreement will bind and inure to the benefit of
the  parties  and  their  respective  successors  and  permitted  assigns.

     13.5  Survival.  Upon  any termination or expiration of this Agreement, the
           --------
following  Sections shall remain in full force and effect: 1, 2.7, 4.2, 5, 7, 8,
9.3,  9.4,  11,  12  and  13.

     13.6  Governing  Law and Jurisdiction.  This Agreement shall be governed by
           -------------------------------
and  construed  under  the laws of California without regard to conflict of laws
principals.  The  parties  agree  and acknowledge that his Agreement is made and
entered  into  in  Santa  Clara,  California.  The  parties hereby submit to the
jurisdiction  of,  and  waive  any  venue  objections against, the United States
District  Court for the Northern District of California, San Jose Branch and the
Superior and Municipal Courts of the State of California, Santa Clara County, in
any  litigation  arising  out  of  the  Agreement.

     13.7  Force  Majeure.  Neither party shall be liable for any loss or damage
           --------------
or  be  deemed  to  be  in  breach  of  this  Agreement  to  the extent that the
performance  of  such  party's  obligations or attempts to cure any breach under
this Agreement are delayed or prevented as a result of any event or circumstance
beyond  its reasonable control, including without limitation, war, invasion, act
of  foreign  enemy, hostilities, civil war or rebellion (whether war be declared
or  not),  or  act  of  God.


                                       5
<PAGE>
PALM  CONFIDENTIAL

     13.8  Waivers;  Modification.  No  failure  or  delay  by  either  party in
           ----------------------
exercising  any  right, power, or remedy under this Agreement shall operate as a
waiver  of  any  such  right, power or remedy.  No waiver or modification of any
provision  of  this Agreement shall be effective unless in writing and signed by
both  parties.  Any  waiver  by  either party or any provision of this Agreement
shall not be construed as a waiver of any other provision of this Agreement, nor
shall  such  waiver  operate  as  or  be construed as a waiver of such provision
respecting  any  future  event  or  circumstance.

     13.9  Severability.  In  the  even  any  provision  of  this  Agreement (or
           ------------
portion  thereof)  is  determined  by  a  court  of competent jurisdiction to be
invalid,  illegal, or otherwise unenforceable, such provision shall be deemed to
have  been  deleted  from  this Agreement, while the remainder of this Agreement
shall  remain  in  full  force  and  effect  according  to  its  terms.

     13.10  Construction.  This  Agreement  reflects  the wording negotiated and
            ------------
accepted  by  the parties and no rule of construction shall apply against either
party.

     13.11  Language.  This  Agreement  is  proposed and executed in the English
            --------
language  only  and  any  translation  of this Agreement into any other language
shall  have  no  effect.  All  proceedings  related  to  this Agreement shall be
conducted  in  the  English  language.

     13.12  Entire  Agreement.  This  Agreement  (together  with  the  Exhibits
            -----------------
hereto)  constitutes  the entire agreement and understanding between the parties
hereto  with  respect  to  the  subject matter hereof and supersedes any and all
other agreements, written or oral, that the parties heretofore may have had with
respect  to  the  subject  matter  herein.


     IN  WITNESS  WHEREOF,  the  parties hereto have caused this Agreement to be
duly  executed.

YP.NET,  INC.:

BY:  /s/ Joseph Johnson
   ---------------------------------
Name:  Joseph  Johnson
    --------------------------------

Title:  Agent
      ------------------------------

PALM,  INC.

BY: /s/ Sasha Norkin
   ---------------------------------
Name:  SASHA  NORKIN
    --------------------------------

Title: Director  of  Business  Development
      -----------------------------------


                                       6
<PAGE>
                                    EXHIBIT A
                                    ---------

                                  Company Link
                                  ------------

Company  shall  provide  Palm  with  the  following  URL for the Company Link as
follows:

                                    Company  URL
                                    ------------
                                    to be provided by Company by February 07,
                                    2003

Palm  shall  have the right to approve in advance and in writing the appearance,
size  and  content  of  the  Company  Link, and any changes Company males to the
Company  Link.






                                                                               7
<PAGE>
                                    EXHIBIT B
                                    ---------

                                  Company Marks
                                  -------------

                                [GRAPHIC OMITTED]

                                     YP.net

                                [GRAPHIC OMITTED]

                                 YELLOW-PAGE.NET
                             Making It Easy For You





                                    Palm Mark
                                    ---------

                                  THIS SITE IS
                               Palm wirelessready.
                                [GRAPHIC OMITTED]


                                                                               8
<PAGE>
                                    EXHIBIT C
                                    ---------

                                Company Services
                                ----------------

YP.Net will Provide PDA web site with Yellow and White pages functionality. With
approval  from Palm, YP.Net may update, improve, enhance and add to it's list of
services  from  time  to  time.






                                                                               9
<PAGE>
                                    EXHIBIT D
                                    ---------

                                     Product
                                     -------

Any  Palm portal software released by Palm, and all versions thereof, including,
without  limitation,  all  versions  which  may  be  Palm-branded, co-branded or
private-labeled.






                                                                              10
<PAGE>
                                    EXHIBIT E
                                    ---------

                       Service Level Agreement Objectives
                       ----------------------------------

1.     Company will not exceed a Downtime for more than one-tenth of one percent
(0.1%)  over  a rolling thirty (30) day period. "Downtime" is defined as any one
(1)  minute  period during which the Company Services processes no user queries.

2.     Company  will provide ninety-nine and nine-tenths percent (99.9%) Service
Availability  o over a rolling thirty (30) day period, as measured and monitored
from  Company's facilities.  "Service Availability" is defined as the successful
processing  by  the Company Services of user queries received by Company from an
End  User.  Service  Availability  does not include Downtime or due to technical
problems  relating to the Internet or experienced by Internet service providers.

3.     Company  will  not exceed an average Server Latency of eight-tenths (0.8)
of  a second over any twenty-four (24) hour period.  "Server Latency" is defined
as the time period between the time: (a) when Company receives a user query from
an  End  User;  and  (b) when Company has successfully processed the user query.
Server  Latency  does  not  include any time associated with transmission of the
user  query  from  Palm  to  Company:

4.     Company  will not exceed an average Network Latency of four hundred (400)
milliseconds  over  any  twenty-four (24) hour period, excluding any Downtime or
due  to  technical  problems relating to the Internet or experienced by Internet
service  providers.  "Network  Latency"  is defined as the round-trip time of an
ICMP  ping  packet  between  Palm's  servers  and  the  servers  at  Company.

5.     If  Palm  reasonably  believes that Company is out of compliance with the
applicable  requirements  for the Company Services as defined on this Exhibit E,
                                                                      ---------
Palm  may  request a monthly report from Company (no more than once per calendar
quarter)  directed specifically to the parameter believed to have been violated.
If  Palm  reasonably  determines  that Company has failed to meet the applicable
requirement,  Palm  may  provide  a  written  notice  to Company identifying the
failure.  If  Company  has not cured such failure within fifteen (15) days after
receipt  of  such  written  notice,  Palm shall have the right to terminate this
Agreement,  or  any and all of its marketing obligations as set forth on Exhibit
                                                                         -------
G,  immediately  upon  written  notice  to  Company.
- -
6.     The  provisions  of  this  Exhibit  E shall not be construed to limit the
                                  ----------
liability  of  the  breaching  party in any way or limit the non-breaching party
from  pursuing  any  remedies  at  law  or  in  equity.


                                                                              11
<PAGE>
                                    EXHIBIT F
                                    ---------

                             Advertising Guidelines
                             ----------------------

The  purpose of these advertising guidelines is to ensure the End Users that all
advertising  accessible to the End Users is delivered in a manner to provide the
best  possible  user  experience.

1.     Company  shall  not  display  any  advertising  on  the  Company  Site:

(a)          advertises  or  promotes  adult or pornographic products, services,
web  sites,  or  web  clipping  applications:

(b)          contains  content  which  is  unlawful,  harmful, abusive, hateful,
offensive,  obscene,  threatening,  libelous  or  defamatory;

(c)          advertises  or  promotes any illegal; products, firearms or tobacco
products.

2.     If  Palm  reasonably  determines  that  an advertisement displayed on the
Company  Site  violates the terms of Paragraph 1 above, Company shall remove the
End  User's  access  to  such advertisement displayed on the Company Site within
twenty-four  (24)  hours  of  the earlier of (a) Company first becoming aware of
such advertisement, or (b) receipt by Company of written notice from Palm of the
existence  of  such  advertisement.


                                                                              12
<PAGE>
                                    EXHIBIT G
                                    ---------

                            Co-Marketing Obligations
                            ------------------------

A.   Co-Marketing  Fees.
     ------------------

     Co-Marketing  Fees  for  Initial  Term:  Twenty Thousand Dollars ($20,000).

     For  the  Initial  Term, Palm will invoice YP.net $20,000 upon execution of
     the  Agreement  and  payment will be due within thirty (30) days. For terms
     following  the Initial Term, the Co-Marketing Fees shall be payable to Palm
     and  Palm  will  invoice YP.net for payment on the anniversary of the term.
     Payment  will  be  due  thirty  (30) days following receipt of the invoice.

Palm  Obligations.
- -----------------

1.     Placement  on  the  Product:  Palm will put the test for the Company Link
       ---------------------------
(and  if  Palm  decides  in  its  sole  discretion to include a graphic icons, a
graphic icon of Company's will be displayed) on the Product in any position from
1  to  5  on  the  palm  portal  page, or compatible, at Palm's sole discretion.

2.     Palm  Endorsements  on  the  Company  Site:

          Company  may  use  the  Palm  Mark  on the Company Site to promote the
Product  or  the Company Services, subject to the trademark license set forth in
Section  6  of  this  Agreement.

C.     Company  Obligations.
       --------------------

     1.   Internet  Promotion:  YP.Net  will  place  a  graphical link to Palm's
          -------------------
          website on its www.yp.net Homepage for the Term of this Agreement. The
          graphic  will  be  no more than 50 pixels by 50 pixels and appear upon
          first  load  in  the browser when the yp.net Homepage is launched. The
          graphic  and  url  link  will  be  provided  by  Palm.

2.     Banner  Ad:  YP.Net  will  feature  a 280 x 80 Palm Banner Ad in rotation
       ----------
throughout  the  www.yp.net site. The banner ad will part of a rotating group of
no  more  than  9  other  ads. The Pam Banner Ad will appear above the fold upon
first load in the browser without scrolling when the yp.net page is launched and
viewed  at  an  800x600  pixel resolution. YP.net will serve at least twenty-two
(22)  million  impressions of the Palm Banner Ad during each year of the Term of
this  Agreement.  The  Palm  Banner Ad and url ink will be provided by Palm.  In
the  event  of any deficiency in impressions, Company shall pay to Palm 50 cents
for each thousand ads not served. YP.net shall provide Palm with a report within
thirty  (30)  days  of  each year of the Term showing ad impressions served, any
deficiency  therein,  and  of there is a deficiency, shall remit payment to Palm
within  30  days  of  the  report.


                                                                              13
<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.26
<SEQUENCE>5
<FILENAME>doc4.txt
<TEXT>
                                                                   EXHIBIT 10.26
[GRAPHIC OMITTED] PIKE  STREET

                                 INSERTION ORDER
- --------------------------------------------------------------------------------


Date:  May 12, 2003

Company  Name:     Pike  Street  Industries,  Inc.

URL:               yellow.com,  whiteyellowpages.com,  isleuth.com

Address:           11101  NE  8th  St.,  Suite  206

                   Bellevue,  WA  98004

Contact  Name:     Edward  Yim                    Email: Edward@pikestreet.com

Phone  Number:     425-450-0555                   Fax  Number: 425-696-0333

ADVERTISER  NAME:  YP.NET,  INC.

Address:           840  E.  Jasmine  Street

                   Suite  105

                   Mesa,  AZ  85205

Contact  Name:     Joseph  Johnson                Email: jjohnson@yp.net

Phone  Number:     (480)  325-4301                Fax  Number:

CAMPAIGN  INFORMATION

Campaign  Name:             YP.net

Projected  Start  Date:     March  27th, 2003     Projected  End  Date:  none

[ ]  Until  budget  is  exhausted     [X]  Open  Order

DESCRIPTION  OF  INVENTORY  TO  BE  ADVERTISED:

YP.net provides online yellow pages listings for business in the US. YP.net will
be  added  to  the  list of online yellow pages on Pike Street Industries, Inc's
websites  allowing  Pike  Street's  visitors  to  search on YP.net's yellow page
listings.
- --------------------------------------------------------------------------------


<PAGE>
PAYMENT  INFORMATION

Payments  should  be  made  to:

Pike  Street  Industries,  Inc.
11101  NE  8th  St.
Suite  206
Bellevue,  WA  98004

Budget     $20,000.00  per  month     Clicks:  400,000     Net  CPCV:     $.05

Terms:     Due  before  advertising  beings.  All  payments  made in US dollars.

Conditions:     Either  Party can terminate this agreement with thirty (30) days
written  notice  for  any  reason.



REPORTING  INFORMATION

Report  to,  if  Different  from  Above:

Report  Frequency:  [ ]  monthly     [ ]  bi-weekly     [X]  weekly



AUTHORIZATION:

Pike  Industries,  Inc.              YP.net,  Inc.

BY:                                  BY:

/s/  Edward  Yim                     /s/  Joseph  Johnson
- --------------------------------------------------------------------------------

Name:  Edward  Yim                   Name:  Joseph  Johnson
- --------------------------------------------------------------------------------

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

Date:  May  12,  2003                Date:  May  12,  2003
- --------------------------------------------------------------------------------


<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.27
<SEQUENCE>6
<FILENAME>doc5.txt
<TEXT>
                                                                   EXHIBIT 10.27

                                 PROMISSORY NOTE

<TABLE>
<CAPTION>
<C>          <C>         <C>         <C>       <C>        <C>      <S>      <C>
 Principal   Loan Date    Maturity   Loan No.  Call/Coll  Account  Officer  Initials
$250,000.00  05-02-2003  05-02-2004   51326                         BAC
- -----------  ----------  ----------  --------  ---------  -------  -------  --------
</TABLE>

  References in the shaded area are for Lender's use only and do not limit the
         applicability of this document to any particular loan or item.

Any item above containing "***" has been omitted due to test length limitations.
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S>        <C>                                  <C>
Borrower:  YP.Net, Inc.                         Lender: Bank of the Southwest
           4840 East Jasmine Street Suite #105          7910 South Kyrene Road, Suite 108
           Mesa, AZ 85202                               Tempe, AZ 85284
</TABLE>
================================================================================

Principal Amount: $250,000.00  Initial Rate: 4.750%  Date of Note: May 2, 2003


PROMISE  TO  PAY.  YP.Net,  Inc.  ("Borrower")  promises  to  pay to Bank of the
Southwest ("Lender"), or order, in lawful money of the United States of America,
the  principal  amount  of  Two  Hundred  Fifty  Thousand  &  00/100  Dollars
($250,000.00)  or  so  much as may be outstanding, together with Interest on the
unpaid  outstanding  principal  balance  of  each  advance.  Interest  shall  be
calculated  from  the  date  of  each  advance  until repayment of each advance.

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal
plus  all accrued unpaid interest on May 2, 2004. In addition, Borrower will pay
regular  monthly  payments of all accrued unpaid Interest due as of each payment
date, beginning June 2, 2003, with all subsequent interest payments to be due on
the  same  day  of each month after that. Unless otherwise agreed or required by
applicable  law, payments will be applied first to accrued unpaid interest, then
to  principal,  and any remaining amount to any unpaid collection costs and late
charges.  The annual Interest rate for this Note is computed on a 365/360 basis;
that  is,  by  applying the ratio of the annual Interest rate over a year of 360
days,  multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. Borrower will pay Lender at
Lender's  address  shown above or at such other place as Lender may designate in
writing.

VARIABLE INTEREST RATE. The Interest rate on this Note is subject to change from
time  to time based on changes in an independent index which is the highest base
rate  on corporate loans posted by at least 75% of the nation's 30 largest banks
that  The  Wall  Street  Journal  publishes as the Prime Rate (the "Index"). The
Index  is not necessarily the lowest rate charged by Lender on its loans. If the
Index  becomes  unavailable during the term of this loan. Lender may designate a
substitute index after notice to Borrower. Lender will tell Borrower the current
Index rate upon Borrower's request, the interest rate change will not occur more
often  than  each  day. Borrower understands that Lender may make loans based on
other  rates as well. The Index currently is 4.250% per annum. The Interest rate
to off applied to the unpaid principal balance of this Note will be at a rate of
0.500  percentage  points over the Index, resulting in an initial rate of 4.750%
per annum, NOTICE: Under no circumstances will the interest rate on this Note be
more  than  the  maximum  rate  allowed  by  applicable  law.

EFFECTIVE  RATE.  Borrower  agrees  to an effective rate of interest that is the
rate  specified  in  this Note plus any additional rate resulting from any other
charges  in  the  nature  of interest paid or to be paid in connection with this
Note.

PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed
earlier  than  it is due. Early payments will not, unless agreed to by Lender in
writing,  relieve Borrower of Borrower's obligation to continue to make payments
of  accrued  unpaid  interest.  Rather, early payments will reduce the principal
balance  due. Borrower agrees not to send Lender payments marked "paid in full",
"without  recourse",  or  similar  language.  If  Borrower sends such a payment,
Lender  may accept it without losing any of Lender's rights under this Note, and
Borrower  will  remain  obligated  to pay any further amount owed to Lender. All
written communications concerning disputed amounts, including any check or other
payment instrument that indicates that the payment constitutes "payment in full"
of  the  amount owed or that is tendered with other conditions or limitations or
as  full  satisfaction of a disputed amount must be mailed or delivered to: Bank
of  the  Southwest,  7910  South  Kyrene  Road,  Suite  106,  Tempe,  AZ  85284.
LATE  CHARGE.  If  a  payment  is 11 days or more late, Borrower will be charged
5.000%  of  the  regularly  scheduled  payment  or $25.00, whichever is greater.

INTEREST  AFTER  DEFAULT.  Upon  default,  including  failure  to pay upon final
maturity.  Lender,  at  its  option,  may,  if  permitted  under applicable law,
Increase the variable interest rate on this Note to 6.500 percentage points over
the  Index,  The  interest  rate  will riot exceed the maximum rate permitted by
applicable  law.

DEFAULT. Each of the following shall constitute an event of default ("Event of
Default") under this Note:

     Payment  Default,  Borrower  fails  to make any payment when due under this
     Note:

     Other Defaults. Borrower fails to comply with or to perform any other term,
     obligation,  covenant  or condition contained in this Note or in any of the
     related  documents  or  to  comply with or to perform any term, obligation,
     covenant  or  condition contained in any other agreement between Lender and
     Borrower.

     Default  in  Favor of Third Parties. Borrower or any Grantor defaults under
     any  loan,  extension  of  credit,  security  agreement,  purchase or sales
     agreement, or any other agreement, in favor of any other creditor or person
     that may materially affect any of Borrower's property or Borrower's ability
     to repay this Note or perform Borrower's obligations under this Note or any
     of  the  related  Documents.

     False  Statements.  Any  warranty,  representation  or  statement  made  or
     furnished  to Lender by Borrower or on Borrower's behalf under this Note or
     the  related  documents  is  false  or  misleading in any material respect,
     either  now or at the time made or furnished or becomes false or misleading
     at  any  time  thereafter,

     Insolvency.  The  dissolution  or  termination of Borrower's existence as a
     going  business,  the insolvency of Borrower, the appointment of a receiver
     for  any  part  of  Borrower's  property, any assignment for the benefit of
     creditors,  any  type  of  creditor  workout,  or  the  commencement of any
     proceeding  under any bankruptcy or Insolvency laws by or against Borrower.

     Creditor  or  Forfeiture  Proceedings.  Commencement  of  foreclosure  or
     forfeiture  proceedings,  whether  by  judicial  proceeding,  self-help,
     repossession  or  any  other  method, by any creditor of Borrower or by any
     governmental agency against any collateral securing the loan. This includes
     a  garnishment  of  any of Borrower's accounts, including deposit accounts,
     with  Lender.  However, this Event of Default shall not apply if there is a
     good  faith dispute by Borrower as to the validity or reasonableness of the
     claim  which  is  the basis of the creditor or forfeiture proceeding and If
     Borrower  gives  Lender  written  notice  of  the  creditor  or  forfeiture
     proceeding  and  deposits  with  Lender  monies  or  a  surety bond for the
     creditor  or  forfeiture  proceeding, In an amount determined by Lender, in
     its  sole discretion, as being an adequate reserve or bond for the dispute.

     Events Affecting Guarantor. Any of the preceding events occurs with respect
     to  any  guarantor,  endorser, surety, or accommodation party of any of the
     indebtedness  or  any  guarantor,  endorser, surety, or accommodation party
     dies  or  becomes  incompetent,  or revokes or disputes the validity of, or
     liability  under,  any guaranty of the indebtedness evidenced by this Note.


     Change  in  Ownership.  N/A


<PAGE>
     A  material  adverse  change  occurs  in Borrower's financial condition, or
     Lender  believes  the  prospect  of  payment or Performance of this Note is
     impaired.

     Insecurity.  Lender  in  good  faith  believes  itself  insecure.

LENDER'S  RIGHTS.  Upon  default, Lender may declare the entire unpaid principal
balance  on  this Note and all accrued unpaid interest immediately due, and then
Borrower  will  pay  that  amount.

ATTORNEYS'  FEES;  EXPENSES. Lender may hire or pay someone else to help collect
this  Note  if Borrower does not pay. Borrower will pay Lender that amount. This
includes,  subject  to any limits under applicable law, Lender's attorneys' fees
and  Lender's  legal  expenses,  whether  or  not  there is a lawsuit, including
attorneys'  fees,  expenses  for  bankruptcy  proceedings  (including efforts to
modify  or  vacate  any  automatic  stay  or  injunction), and appeals. However,
Borrower  will  only  pay  attorneys'  fees of an attorney not lender's salaried
employee,  to  whom  the  matter  is  referred  after Borrower's default. If not
prohibited  by  applicable  law.  Borrower  also  will  pay  any court costs, in
addition  to  all  other  sums  provided  by  law.

GOVERNING  LAW.  This  Note  will  be  governed  by,  construed  and enforced in
accordance  with federal law and the laws of the State of Arizona. This Note has
been  accepted  by  Lender  in  the  State  of  Arizona.

CHOICE OF VENUE. If there is a lawsuit, Borrower agreed upon Lender's request to
submit  to  the jurisdiction of the courts of Maricopa County, State of Arizona.

DISHONORED  ITEM  FEE.  Borrower  will pay a fee to Lender of $25.00 if Borrower
makes  a  payment  on Borrower's loan and the check or preauthorized charge with
which  Borrower  pays  is  later  dishonored.

RIGHT  OF  SETOFF.  To the extent permitted by applicable law. Lender reserves a
right  of  setoff  in  all  Borrower's  accounts  with Lender (whether checking,
savings,  or  some  other  account).  This  includes all accounts Borrower holds
jointly  with  someone  else  and  all accounts Borrower may open in the future.
However,  this does not Include any IRA or Keogh accounts, or any trust accounts
for  which setoff would be prohibited by law. 8orrower authorizes Lender, to the
extent  permitted  by  applicable Jaw, to charge or setoff all sums owing on the
debt  against  any  and  all  such  accounts.

COLLATERAL. This loan is unsecured.

LINE  OF  CREDIT. This Note evidences a revolving line of credit. Advances under
this  Note  may  be  requested  either  orally  or  in writing by Borrower or as
provided  in  this paragraph. All oral requests shall be confirmed in writing on
the  day  of  the  request,  on  forms  acceptable to Lender. AH communications,
instructions,  or  directions  by  telephone  or  otherwise  to Lender are to be
directed  to  Lender's  office  shown above. The following persons currently are
authorized  to  request advances and authorize payments under the line of credit
until  Lender  receives  from Borrower, at Lender's address shown above, written
notice of revocation of their authority: Angela Tullo, Chairman/President/CEO of
YP.Net.  Inc.; and David J. Iannini. Chief Financial Officer, Borrower agrees to
be  liable for all sums either; (A) advanced in accordance with the instructions
of  an  authorized  person  or  (B)  credited to any of Borrower's accounts with
Lender.  The  unpaid  principal  balance  owing  on this Note at any time may be
evidenced by endorsement on this Note or by Lender's internal records, including
daily computer print-outs. Lender will have no obligation to advance funds under
this  Note  if:  (A)  Borrower or any guarantor is in default under the terms of
this  Note  or  any  agreement  that  Borrower or any guarantor has with Lender,
including  any  agreement  made in connection with the signing of this Note; (B)
Borrower  or  any  guarantor  ceases  doing  business  or  is insolvent; (C) any
guarantor  seeks,  claims  or otherwise attempts to limit, modify or revoke such
guarantor's  guarantee  of this Note or any other loan with Lender; (D) Borrower
has  applied  funds provided pursuant to this Note for purposes other than those
authorized  by  Lender;  or  (E)  Lender in good faith believes itself insecure.

ARBITRATION,  Borrower  and  Lender  agree  that  all  disputes,  claims  find
controversies  between  them  whether  Individual,  joint,  or  class in nature,
arising  from  this Note or otherwise. Including without limitation contract and
tort  disputes,  shall  be  arbitrated  pursuant  to  the  Rules of the American
Arbitration  Association  in effect at the time the claim is filed, upon request
of  either party. No act to take or dispose of any collateral securing this Note
shall constitute a waiver of this arbitration agreement or be prohibited by this
arbitration  agreement.  This includes, without limitation, obtaining injunctive
relief or a temporary restraining order; invoking a power of sale under any deed
of  trust  or  mortgage;  obtaining  a  writ  of  attachment  or imposition of a
receiver;  or  exercising  any  rights  relating to personal property. Including
taking  or  disposing of such property with or without judicial process pursuant
to  Article  3  of  the  Uniform  Commercial  Code.  Any  disputes,  claims,  or
controversies  concerning  the  lawfulness  or  reasonableness  of  any  act, or
exercise  of  any right, concerning any collateral securing this Note, including
any  claim to rescind, reform, or otherwise modify any agreement relating to the
collateral  securing  this Note, shall also be arbitrated, provided however that
no arbitrator shall have the right or the power to enjoin or restrain any act of
any  party. Judgment upon any award rendered by any arbitrator may be entered in
any  court  having  Jurisdiction.  Nothing in this Note shall preclude any party
from  seeking  equitable  relief  from  a  court  of competent jurisdiction. The
statute  of  limitations,  estoppel, waiver, laches, and similar doctrines which
would  otherwise  be  applicable  in  an  action  brought  by  a  party shall be
applicable in any arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of an action for these purposes. The
Fedora!  Arbitration  Act  shall  apply to the construction, interpretation, and
enforcement  of  this  arbitration  provision.

SUCCESSOR  INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon  Borrower's  heirs  personal  representatives,  successors and assigns, and
shall  inure,  to  the  benefit  of  Lender  and  Its  successors  and  assigns,

NOTIFY  US  OF  INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES.
Please  notify us if we report any inaccurate information about your accounts to
a  consumer  reporting  agency.  Your  written  notice  describing  the specific
inaccuracies  should  be  sent  to  us  at  the  following  address: Bank of the
Southwest  7910  South  Kyrene  Road,  Suite  108  Tempe,  AZ  85234

GENERAL  PROVISIONS.  Lender  may  delay or forgo enforcing any of its rights or
remedies  under this Note without losing them. Borrower and any other person who
signs,  guarantees  or  endorses  this Note, to the extent allowed by law, waive
presentment,  demand for payment, and notice of dishonor. Upon any change in the
terms  of  this Note, and unless otherwise expressly stated in writing, no party
who  signs  this  Mote,  whether  as  maker,  guarantor,  accommodation maker or
endorser,  shall  be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan or release
any party or guarantor or collateral; or Impair, fall to realize upon or perfect
Lander's  security  interest In the collateral; and take any other action deemed
necessary by Lender without the consent of or notice to anyone. All such parties
also  agree that Lender may modify this loan without the consent of or notice to
anyone  other than the party with whom the modification is made. The obligations
under  this  Note  are  joint  and  several.


<PAGE>

                                PROMISSORY NOTE
Loan  No: 51326                   (Continued)                            Page 3
================================================================================

PRIOR  TO  SIGNING THIS NOTE. BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS  NOTE,  INCLUDING THE VARIABLE INTEREST RATE PROVISIONS, BORROWER AGREES TO
THE  TERMS  OF  THE  NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
BORROWER:

YP.NET, INC.

By: /s/ Angelo Tullo, pres.
   --------------------------------------------------
   Angelo Tullo, Chairman/President/CEO of YP.Net,
   Inc.

===============================================================================


<PAGE>

                CORPORATE RESOLUTION TO BORROW / GRANT COLLATERAL

<TABLE>
<CAPTION>
<C>          <C>         <C>         <C>       <C>        <C>      <S>      <C>
 Principal   Loan Date    Maturity   Loan No.  Call/Coll  Account  Officer  Initials
$250,000.00  05-02-2003  05-02-2004   51326                          BAC
- -----------  ----------  ----------  --------  ---------  -------  -------  --------
</TABLE>

  References in the shaded area are for Lender's use only and do not limit the
         applicability of this document to any particular loan or item.

Any item above containing "***" has been omitted due to test length limitations.
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S>        <C>                                  <C>
Borrower:  YP.Net, Inc.                         Lender: Bank of the Southwest
           4840 East Jasmine Street Suite #105          7910 South Kyrene Road, Suite 108
           Mesa, AZ 85202                               Tempe, AZ 85284
</TABLE>
================================================================================
I, THE UNDERSIGNED, DO HEREBY CERTIFY THAT:

THE CORPORATION'S EXISTENCE. The complete and correct name of the Corporation is
YP.Net,  Inc. ("Corporation"). The Corporation is a corporation for profit which
is,  and  at  all  times shall be, duly organized, validly existing, and in good
standing under and by virtue of the laws of the State of Nevada. The Corporation
is  duly  authorized  to  transact  business  in  all  other states in which the
Corporation  is  doing  business,  having  obtained  all  necessary  filings,
governmental  licenses  and approvals for each state in which the Corporation is
doing  business.  Specifically,  the  Corporation is, and at all times shall be,
duly qualified as a foreign corporation in all states in which the failure to so
qualify  would  have  a  material  adverse  effect  on its business or financial
condition.  The  Corporation  has  the  full  power  and  authority  to  own its
properties  and  to  transact  the  business in which it is presently engaged or
presently  proposes  to engage. The Corporation maintains an office at 4840 East
Jasmine Street Suite #105, Mesa, AZ 85202. Unless the Corporation has designated
otherwise  in  writing,  the  principal  office  is  the  office  at  which  the
Corporation  keeps  its  books  and  records. The Corporation will notify Lender
prior  to  any change in the location of the Corporation's state of organization
or  any  change  in  the Corporation's name. The Corporation shall do all things
necessary to preserve and to keep in full force and effect its existence, rights
and  privileges,  and  shall  comply  with  all  regulations, rules, ordinances,
statutes, orders and decrees of any governmental or quasi-governmental authority
or  court  applicable  to  the  Corporation  and  the  Corporation's  business
activities.

RESOLUTIONS ADOPTED. At a meeting of the Directors of the Corporation, or if the
Corporation  is  a  close  corporation  having  no  Board of Directors then at a
meeting  of the Corporation's shareholders, duly called and held on May 2, 2004,
at  which a quorum was present and voting, or by other duly authorized action in
lieu  of  a  meeting, the resolutions sat forth in this Resolution were adopted.

OFFICER The following named parson is an officer of YP.Net, Inc.:


NAMES                 TITLES          AUTHORIZED       ACTUAL SIGNATURES
- ------------  ----------------------  ----------  ----------------------------
Angelo Tullo  Chairman/President/CEO     Y        X /s/ Angelo Tullo, chairman
                                                 ----------------------------

ACTIONS  AUTHORIZED.  The  authorized  person  listed  above  may enter into any
agreements  of  any  nature  with  Lender,  and  those  agreements will bind the
Corporation.  Specifically,  but  without  limitation,  the authorized person is
authorized, empowered, and directed to do the following for and on behalf of the
Corporation:

     Borrow Money. To borrow, as a cosigner or otherwise, from time to time from
     Lender,  on  such  terms  as may be agreed upon between the Corporation and
     Lender,  such  sum  or  sums  of  money as in his or her judgment should be
     borrowed,  without  limitation.

     Execute  Notes.  To  execute  and  deliver to Lender the promissory note or
     notes,  or  other  evidence  of the Corporation's credit accommodations, on
     Lender's  forms,  at  such  rates  of  interest and on such terms as may be
     agreed  upon,  evidencing  the  sums  of  money  so  borrowed or any of the
     Corporation's  indebtedness  to  Lender, and also to execute and deliver to
     Lender  one  or  more  renewals,  extensions,  modifications, refinancings,
     consolidations,  or substitutions for one or more of the notes, any portion
     of  the  notes,  or  any  other  evidence  of  credit  accommodations.

     Grant  Security.  To  mortgage, pledge, transfer, endorser, hypothecate, or
     otherwise  encumber  and  deliver  to  Lender any property now or hereafter
     belonging  to  the Corporation or in which the Corporation now or hereafter
     may  have  an  Interest, Including without limitation all real property and
     all  personal  property  (tangible  or  Intangible)  of the Corporation, as
     security for the payment of any loans or credit accommodations so obtained,
     any  promissory  notes  so  executed  (including  any  amendments  to  or
     modifications,  renewals,  and extensions of such promissory notes), or any
     other  or  further  Indebtedness  of  the Corporation to Lender at any time
     owing,  however  the same may be evidenced. Such property may be mortgaged,
     pledged, transferred, endorsed, hypothecated or encumbered at the time such
     loans  are  obtained or such indebtedness is incurred, or at any other time
     or  times,  and  may  be  either  in addition to or in lieu of any property
     theretofore  mortgaged,  pledged,  transferred,  endorsed,  hypothecated or
     encumbered.

     Execute  Security  Documents. To execute and deliver to Lender the forms of
     mortgage,  deed  of  trust,  pledge agreement, hypothecation agreement, and
     other security agreements and financing statements which Lender may require
     and  which  shall  evidence  the terms and conditions under and pursuant to
     which  such  liens and encumbrances, or any of them, are given; and also to
     execute  and  deliver  to Lender any other written instruments, any chattel
     paper,  or  any  other  collateral, of any kind or nature, which Lender may
     deem  necessary or proper in connection with or pertaining to the giving of
     the  liens  and  encumbrances.  Deposit  Accounts.  To  open  one  or  more
     depository  accounts  in  the  Corporation's  name and sign and deliver all
     documents  or  items  required  to  fulfill  the  conditions of all banking
     business,  including  without  limitation the initiation of wire transfers,
     until  authority  is revoked by action of the Corporation on written notice
     to  Lender.

     Negotiate  Items.  To  draw,  endorse, and discount with Lender all drafts,
     trade  acceptances,  promissory  notes,  or other evidences of indebtedness
     payable  to or belonging to the Corporation or in which the Corporation may
     have  an interest, and either to receive cash for the same or to cause such
     proceeds  to  be  credited  to the Corporation's account with Lender, or to
     cause such other disposition of the proceeds derived therefrom as he or she
     may  deem  advisable.

     Further  Acts.  In  the case of lines of credit, to designate additional or
     alternate  individuals  as  being authorized to request advances under Such
     lines,  and  in all cases, to do and perform such other acts and things, to
     pay  any  and  all  fees  and  costs, and to execute and deliver such other
     documents  and  agreements,  including  agreements  requiring disputes with
     Lender  to be submitted to binding arbitration for final resolution, as the
     officer may in his or her discretion deem reasonably necessary or proper in
     order  to  carry  into  effect  the  provisions  of  this  Resolution.

ASSUMED  BUSINESS  NAMES. The Corporation has filed or recorded all documents or
filings  required  by  law  relating  to  all assumed business names used by the
Corporation.  Excluding the name of the Corporation, the following is a complete
list  of  all  assumed business names under which the Corporation does business:
None.

NOTICES  TO  LENDER.  The  Corporation will promptly notify Lender in writing at
Lender's  address  shown  above (or such other addresses as Louder may designate
from time to time) prior to any (A) change in the Corporation's name; (B) change
in  the  Corporation's  assumed


<PAGE>

                CORPORATE RESOLUTION TO BORROW / GRANT COLLATERAL
LOAN NO: 51326                     (CONTINUED)                            PAGE 2
================================================================================

business  name(s);  (C)  change in the management of the Corporation; (D) change
in-the  authorized  signer(s);  (E) change in the Corporation's principal office
address;  (F)  change in the Corporation's state of organization; (G) conversion
of  the Corporation to a new or different type of business entity; or (H) change
in  any  other  aspect of the Corporation that directly or indirectly relates to
any  agreements  between  the  Corporation  and  Lender.  No  change  in  the
Corporation's  name or state of organization will take effect until after Lender
has  received  notice

CERTIFICATION  CONCERNING  OFFICERS  AND RESOLUTIONS. The officer named above is
duly  elected, appointed, or employed by or for the Corporation, as the case may
be,  and  occupies  the  position  set opposite his or her respective name. This
Resolution  now  stands  of  record  on the books of the Corporation, is in full
force and effect, and has not been modified or revoked in any manner whatsoever.

NO CORPORATE SEAL. The Corporation has no corporate seal, and therefore, no seal
is  affixed  to  this  Resolution.

CONTINUING VALIDITY. Any and all acts authorized pursuant to this Resolution and
performed  prior  to  the  passage  of  this  Resolution are hereby ratified and
approved.  This  Resolution  shall be continuing, shall remain in full force and
effect  and  Lender  may rely on it until written notice of its revocation shall
have  been  delivered  to and received by Lender $t Lender's address shown above
(or  such  addresses as Lender may designate from time to time). Any such notice
not  affect  any of the Corporation's agreements or commitments In effect at the
time  notice  is  given.

IN TESTIMONY WHEREOF, I HAVE HEREUNDER

I  have  read  all  the  provision;  of  this  Resolution  and  on behalf of the
Corporation  certify  that  all  statements  and  representations  made  in this
Resolution  are  true  and  correct.  Resolution to Borrow / Grant Collateral is
dated  May  2,  2004.


                             CERTIFIES TO AND ATTESTED BY:


                             X   /s/ Angelo Tullo, chairman
                                 ------------------------------------
                                 ANGELO TULLO, CHAIRMAN/PRESIDENT/CEO

NOTE:  if  the  officer  signing  this Resolution is designated by the foregoing
document  as  one of the officers authorized to act on the Corporation's behalf.
It  is  advised  to  have  this Resolution signed by at least one non-authorized
officer  of  the  Corporation.

================================================================================


<PAGE>
                             BUSINESS LOAN AGREEMENT
<TABLE>
<CAPTION>
<C>          <C>         <C>         <C>       <C>        <C>      <S>      <C>
 Principal   Loan Date    Maturity   Loan No.  Call/Coll  Account  Officer  Initials
$250,000.00  05-02-2003  05-02-2004   51326                          BAC
- -----------  ----------  ----------  --------  ---------  -------  -------  --------
</TABLE>

  References in the shaded area are for Lender's use only and do not limit the
         applicability of this document to any particular loan or item.

Any item above containing "***" has been omitted due to test length limitations.
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S>        <C>                                  <C>
Borrower:  YP.Net, Inc.                         Lender: Bank of the Southwest
           4840 East Jasmine Street Suite #105          7910 South Kyrene Road, Suite 108
           Mesa, AZ 85202                               Tempe, AZ 85284
</TABLE>
================================================================================

THIS  BUSINESS  LOAN  AGREEMENT DATED MAY 2, 2003, IS MADE FIND EXECUTED BETWEEN
VP.NET,  INC. ("BORROWER") AND BANK OF THE SOUTHWEST ("LENDER") ON THE FOLLOWING
TERMS AND CONDITIONS. BORROWER HAS RECEIVED PRIOR COMMERCIAL BANS FROM LENDER OR
HAS  APPLIED  TO  LENDER  FOR  A  COMMERCIAL  BAN  OR  LOANS  OR OTHER FINANCIAL
ACCOMMODATIONS,  INCLUDING  THOSE  WHICH  MAY  BE  DESCRIBED  ON  ANY EXHIBIT OR
SCHEDULE  ATTACHED  TO  THIS AGREEMENT ("LOAN"). BORROWER UNDERSTANDS AND AGREES
THAT:  (A)  IN GRANTING, RENEWING, OR EXTENDING ANY LOAN, LENDER IS RELYING UPON
BORROWER'S  REPRESENTATIONS,  WARRANTIES,,  AND  AGREEMENTS AS SET FORTH IN THIS
AGREEMENT; (B) THE GRANTING, RENEWING, OR EXTENDING OF ANY LOAN BY LENDER AT ALL
TIMES  SHALL  BE  SUBJECT  TO LENDER'S SOLE JUDGMENT AND DISCRETION; AND (C) ALL
SUCH  LOANS  SHALL  BE  AND  REMAIN  SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT.

TERM.  This Agreement shall be effective as of May 2,2003, and shall continue in
full  force  and  effect  until such time as all of Borrower's Loans in favor of
Lender  have  been paid in full, including principal, interest, costs, expenses,
attorneys'  fees,  and  other  fees  and  charges,  or  until  May  2,  2004.

CONDITIONS  PRECEDENT  TO  EACH ADVANCE. Lender's obligation to make the initial
Advance and each subsequent Advance under this Agreement shall be subject to the
fulfillment  to Lender's satisfaction of all of the conditions set forth in this
Agreement  and  in  the  Related  Documents.

     Loan  Documents.  Borrower  shall provide to Lander the following documents
     for the Loan; (1) the Note; (21 together with all such Related Documents as
     Lender  may require for the Loan; all in form and substance satisfactory to
     Lender  and  Lender's  counsel.

     Borrower's  Authorization.  Borrower  shall  have  provided  in  form  and
     substance  satisfactory  to  Lender  properly  certified  resolutions, duly
     authorizing  the execution and delivery of this Agreement, the Note and the
     Related  Documents,  in  addition,  Borrower shall have provided such other
     resolutions,  authorizations,  documents  and  instruments as Lender or Its
     counsel,  may  require.

     Payment  of Fees and Expenses. Borrower shall have paid to Lender all fees,
     charges,  and other expenses which are then due and payable as specified in
     this  Agreement  or  any  Related  Document.

     Representations  and  Warranties.  The  representations  and warranties set
     forth  in  this Agreement, in the Related Documents, and in any document or
     certificate  delivered to Lender under this Agreement are true and correct.

     No  Event  of  Default.  There shall not exist at the time of any Advance a
     condition  which  would constitute an Event of Default under this Agreement
     or  under  any  Related  Document.

REPRESENTATIONS  AND  WARRANTIES. Borrower represents and warrants to Lender, as
of  the  date  of  this  Agreement,  as of the date of each disbursement of loan
proceeds,  as of the date of any renewal, extension or modification of any Loan,
and  at  all  times  any  indebtedness  exists:

     Organization.  Borrower  is  a  corporation for profit which is, and at all
     times  shall  be,  duly  organized,  validly existing, and in good standing
     under  and  by  virtue of the laws of the State of Nevada. Borrower is duly
     authorized  to  transact  business  in Borrower maintains an office at 4640
     East  Jasmine  Street  Suite  #105,  Mesa,  AZ  85202.  Unless Borrower has
     designated  otherwise  in  writing,  the  principal office is the office at
     which Borrower keeps its books and records including its records concerning
     the  Collateral.  Borrower  will  notify  Lender prior to any change in the
     location  of  Borrower's  state of organization or any change in Borrower's
     name.

     Assumed  Business  Names.  Borrower  has filed or recorded all documents or
     filings  required  by  law  relating  to all assumed business names used by
     Borrower.  Excluding the name of Borrower, the following is a complete list
     of  all  assumed  business  names under which Borrower does business: None.

     Authorization.  Borrower's  execution,  delivery,  and  performance of this
     Agreement  and  all  the Related Documents have been duly authorized by all
     necessary  action  by  Borrower  and  do  not  conflict  with,  result in a
     violation of, or constitute a default under (1) any provision of Borrower's
     articles  of  incorporation or organization, or bylaws, or any agreement or
     other  instrument  binding  upon  Borrower  or  (2)  any  law, governmental
     regulation,  court decree, or order applicable to Borrower or to Borrower's
     properties,

     Properties.  Except  as  contemplated  by  this  Agreement or as previously
     disclosed in Borrower's financial statements or in writing to Lender and as
     accepted  by  Lender,  and  except  for  property  tax  liens for taxes not
     presently  due  and  payable,  Sorrower1  owns and has good title to all of
     Borrower's  properties  free and clear of all liens and security interests,
     and  has  not  executed  any  security  documents  or  financing statements
     relating  to  such  properties.  All of Borrower's properties are titled in
     Borrower's  legal  name,  and  Borrower  has  not used or filed a financing
     statement  under  any  other  name  for  at  least the last five (5) years.

AFFIRMATIVE COVENANTS.  Borrower covenants and agrees with Lender that, so long
as this Agreement remains in effect, Borrower will:

     Notices  of Claims and Litigation. Promptly inform Lender in writing of (1)
     all material adverse changes in Borrower's financial condition, and (2) all
     existing  and  all  threatened  litigation,  claims,  investigations,
     administrative  proceedings  or  similar  actions affecting Borrower or any
     Guarantor which could materially affect the financial condition of Borrower
     or  the  financial  condition  of  any  Guarantor.

     Financial  Records.  Maintain  its  books  and  records  in accordance with
     accounting  principles acceptable to Lender, applied on a consistent basis,
     and  permit  Lender to Examine and audit Borrower's books and record at all
     reasonable  times.

     Financial  Statements.  Furnish  Lander  with  the  following:

          Additional  Requirements.
          1.   Submission  of annual report 30 days prior to renewal,
          2.   Copy  of  quarterly  filings to the SEC including all financials.

     All financial reports required to be provided under this Agreement shall be
     prepared  in  accordance  with  GAAP,  applied  on  3 consistent basis, and
     certified  by  Borrower  as  being  true  and  correct.

     Loan  Proceeds.  Use  all  Loan  proceeds  solely  for  Borrower's business
     operations,  unless  specifically  consented  to  the contrary by Lender in
     writing.

     Taxes,  Changes  and  Liens.  Pay  and  discharge  when  due  all  of  its
     indebtedness and obligations, including without limitation all assessments,


<PAGE>

                            BUSINESS LOAN AGREEMENT
LOAN NO: 51326                   (CONTINUED)                              PAGE 2
================================================================================

     taxes,  governmental  charges,  levies and liens, of every kind and nature,
     imposed  upon  Borrower or its properties, income, or profits, prior to the
     date  on  which  penalties  would  attach,  and  all lawful claims that, if
     unpaid,  might  become  a lion or charge upon any of Borrower's properties,
     income,  or  profits,  Performance. Perform and comply, in a timely manner,
     with  all terms, conditions, and provisions set forth in this Agreement, in
     the  Related Documents, and in all other instruments and agreements between
     Borrower and Lender. Borrower shall notify Lender immediately in writing of
     any  default  in  connection  with  any  agreement.

     Operations.  Maintain executive end management personnel with substantially
     the  same  qualifications  and  experience  as  the  present  executive and
     management  personnel;  provide  written  notice to Lender of any change in
     executive  and  management  personnel;  conduct  its  business affairs in a
     reasonable  and  prudent  manner.

     Compliance  with  Governmental  Requirements.  Comply  with  oil  laws,
     ordinances,  and  regulations,  now  or  hereafter  in  effect,  of  all
     governmental  authorities  applicable  to  the  conduct  of  Borrower's
     properties,  businesses  and operations, and to the use or occupancy of the
     Collateral,  including  without limitation, the Americans With Disabilities
     Act.  Borrower  may  contest  in  good  faith  any  such law, ordinance, or
     regulation  and  withhold  compliance  during  any  proceeding,  including
     appropriate  appeals,  so  long  as Borrower has notified Lender in writing
     prior  to  doing  so  and  so  long  as, in Lender's sole opinion. Lender's
     interests  in  the  Collateral  are  not  jeopardized.  Lender  may require
     Borrower  to  post  adequate  security  or  a  surety  bond,  reasonably
     satisfactory  to  Lender,  to  protect  Lender's  interest.

     Inspection.  Permit employees or agents of Lender at any reasonable time to
     inspect  any  and all Collateral for the Loan of Loans and Borrower's other
     properties  and to examine or audit Borrower's books, accounts, and records
     end  to  make  copies  and  memoranda  of  Borrower's  books, accounts, and
     records.  If  Borrower  now  or at any time hereafter maintains any records
     (including  without  limitation  computer  generated  records  and computer
     software  programs for the generation of such records) in the possession of
     a  third party, Borrower, upon request of Lender, shall notify such party w
     permit  Lender  free  access to such records at all reasonable times and to
     provide Lender with copies of any records it may request, all at Borrower's
     expense.

LENDER'S  EXPENDITURES.  If  any  action  or  proceeding is commenced that would
materially  affect  Lender's  interest in the Collateral or If Borrower falls to
comply  with any provision of this Agreement or any Related Documents, including
but  not  limited to Borrower's failure to discharge or pay when due any amounts
Borrower  is  required  to  discharge or pay under this Agreement or any Belated
Documents,  Lender on Borrower's behalf may (but shall not be obligated to) take
any  action that Lender deems appropriate, to the extent permitted by applicable
law  on  any  Collateral  and  paying  all  costs  for insuring, maintaining and
preserving  any Collateral. All such expenditures incurred or paid by Lender for
such  purposes  will  then bear interest at the rate charged under the Note from
the  date  incurred  or paid by Lender to the date of repayment by Borrower. All
such  expenses  will  become a part of the indebtedness and, at Lender's option,
will  (A)  be  payable on demand; (B) be added to the balance of the Note and be
apportioned  among  and  be  payable with any installment payments to become due
during  either  (1)  the  term  of  any  applicable insurance policy; or (2) the
remaining term of the Note; or (C) be treated as a balloon payment which will be
due  and  payable  at  the  Note's  maturity.

NEGATIVE  COVENANTS.  Borrower  covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:

     Indebtedness  and  Liens.  (1) Except for trade debt incurred in the normal
     course  of  business  and  indebtedness  to  Lender  contemplated  by  this
     Agreement,  create,  incur  or  assume  indebtedness  for  borrowed  money,
     including  capital  leases,  (2)  sell, transfer, mortgage, assign, pledge,
     lease,  grant  a security Interest in, or encumber any of Borrower's assets
     (except  as  allowed  as Permitted Liens), or (3) sell with recourse any of
     Borrower's  accounts,  except  to  Lender.

     Continuity  of  Operation.  (1)  Engage  in  any  business  activities
     substantially  different than those in which Borrower is presently engaged,
     (2)  cease  operations,  liquidate, merge, transfer, acquire or consolidate
     with  any  other  entity,  change  its  name,  dissolve or transfer or sell
     Collateral out of the ordinary course of business, or (3) pay any dividends
     on  Borrower's  stock (other than dividends payable in its stock, provided,
     however that notwithstanding the foregoing, but only so long as no Event of
     Default  has occurred and is continuing or would result from the payment of
     dividends,  if  Borrower is a "Subchapter S Corporation" (as defined in the
     Internal  Revenue Code of 1986 as amended), Borrower may pay cash dividends
     on  its stock to its shareholders from time to time in amounts necessary to
     enable  the  shareholders to pay income taxes and make estimated income tax
     payments  to  satisfy  their  liabilities under federal and state law which
     arise  solely  from  their  status  as  Shareholders  of  a  Subchapter  S
     Corporation  because  of  their  ownership of shares of Borrower's stock or
     purchase  or  retire any of Borrower's outstanding shares or alter or amend
     Borrower's  capital  structure.

     Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or
     assets,  (2)  purchase,  create  or  acquire  any  interest  in  any  other
     enterprise  or  entity,  or (3) incur any obligation as surety or guarantor
     other  than  in  the  ordinary  course  of  business.

CESSATION  OF  ADVANCES.  If  Lender has made any commitment to make any Loan to
Borrower,  whether  under  this  Agreement  or under any other agreement, Lender
shall  nave no obligation to make Loan advances or to disburse Loan proceeds if;
(A) Borrower or any guarantor is in default under the terms of this Agreement or
any other agreement that Borrower or any guarantor has with Lender; (B) Borrower
or  any  guarantor  dies,  becomes  incompetent  or  becomes  insolvent, files a
petition  in  bankruptcy  or similar proceedings, or Is adjudged a bankrupt; (C)
there occurs a material adverse change in Borrower's financial condition, in the
financial condition of any guarantor, or In the value of any collateral securing
any  Loan;  or  (D)  any guarantor seeks, claims or otherwise attempts to limit,
modify  or  revoke  such guarantor's guaranty of the Loan or any other loan with
Lender;  or (E) Lender in good faith deems itself insecure, even though no Event
of  Default  shall  have  occurred,

RIGHT  OF  SETOFF.  To the extent permitted by applicable law, Lender reserves a
right  of  setoff  in  all  Borrower's  accounts  with Lender (whether checking,
savings,  or  some  other  account).  This  includes all accounts Borrower holds
jointly  with  someone  else  and  alt accounts Borrower may open in the future.
However,  this does not include any IRA or Keogh accounts, or any trust accounts
for  which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent  permitted  by  applicable law, to charge or setoff all sums owing on the
debt  against  any  and  all  such  accounts.

DEFAULT.  Each of the following shall constitute an Event of Default under this
Agreement:

     Payment  Default.  Borrower  fails  to  make any payment when due under the
     Loan.

     Other  Default.  Borrower  fails to comply with any other term, obligation,
     covenant  or condition contained in this Agreement or in any of the Related
     Documents.

     Default  In  Favor  of  Third  Parties.  Borrower  defaults under any loan,
     extension  of  credit,  security agreement, purchase or sales agreement, or
     any  other  agreement,  in  favor  of any other creditor or person that may
     materially affect any of Borrower's property or Borrower's ability to repay
     the  Loans  or  perform  Borrower's obligations under this Agreement or any
     related  document.

     False  Statements.  Any  representation  or  statement  made by Borrower to
     Lender  is  false  in  any  material  respect.

INSOLVENCY,  The  dissolution  or termination OF Borrower's EXISTENCE as a going
business, the insolvency of Borrower, the appointment of a receiver for any part
of Borrower's property, any assignment for the benefit of creditors, any type of
creditor  workout,  or  the


<PAGE>

                            BUSINESS LOAN AGREEMENT
LOAN NO: 51326                   (CONTINUED)                              PAGE 3
================================================================================

     commencement  of  any proceeding under any bankruptcy or insolvency laws by
     or  against  Borrower.

     Creditor  or  Forfeiture  Proceedings.  Commencement  of  foreclosure  or
     forfeiture  proceedings,  whether  by  judicial  proceeding,  self-help,
     repossession  or  any  other  method, by any creditor of Borrower or by any
     governmental  agency  against  any  collateral  securing  the  Loan.

     Events Affecting Guarantor. Any of the preceding events occurs with respect
     to  any  Guarantor  of  any  of  the  Indebtedness or any Guarantor dies or
     becomes  incompetent,  or revokes or disputes the validity of, or liability
     under,  any  Guaranty  of  the  Indebtedness.

     Change in Ownership. Any change in ownership of twenty-five percent (25) or
     more  of  the  common  stock  of  Borrower. Insecurity, Lender i good faith
     believes  itself  insecure.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise  provided  in this Agreement or the Related Documents, all commitments
and  obligations  of  Lender  under  this  Agreement  immediately will terminate
[Including "any obligation to make further Loan Advances or disbursements), and,
at  Lender's  option,  all Indebtedness immediately will become due and payable,
nil without notice of any kind to Borrower, except that, in the case of an Event
of  Default  of  the  type  described in the "Insolvency" subsection above, such
acceleration shall be automatic and not optional. In addition, Lander shall have
all  the  rights  and remedies provided in the Related Documents or available at
law, in equity, or otherwise. Except as may be prohibited by applicable law, all
of  Lender's  rights  and  remedies  shall  be  cumulative  and may be exercised
singularly  or  concurrently.  Election by Lender to pursue any remedy shall not
exclude  pursuit of any other remedy, and an election to make expenditures or to
take  action  to  perform  an obligation of Borrower or of any Grantor shall not
affect  Lender's  right  to  declare  default  and  to  exercise  its rights and
remedies.

ARBITRATION.  BORROWER  AND  LENDER  AGREE  THAT  ALL  DISPUTES,  CLAIMS  AND
CONTROVERSIES  BETWEEN  THEM  WHETHER  INDIVIDUAL,  JOINT,  OR  CLASS IN NATURE,
ARISING  FROM THIS AGREEMENT OR OTHERWISE, INCLUDING WITHOUT LIMITATION CONTRACT
AND  TORT  DISPUTES,  SHALL  BE ARBITRATED PURSUANT TO THE RULES OF THE AMERICAN
ARBITRATION  ASSOCIATION  IN EFFECT AT THE TIME THE CLAIM IS FILED, UPON REQUEST
OF  EITHER PARTY. NO ACT TO TAKE OR DISPOSE OF ANY COLLATERAL SHALL CONSTITUTE A
WAIVER  OF  THIS  ARBITRATION  AGREEMENT  OR  BE  PROHIBITED BY THIS ARBITRATION
AGREEMENT.  THIS  INCLUDES, WITHOUT LIMITATION, OBTAINING INJUNCTIVE RELIEF OR A
TEMPORARY RESTRAINING ORDER; INVOKING A POWER OF SALE UNDER ANY DEED OF TRUST OR
MORTGAGE;  OBTAINING  A  WRIT  OF  ATTACHMENT  OR  IMPOSITION  OF A RECEIVER; OR
EXORCISING  ANY  RIGHT*  RELATING  TO  PERSONAL  PROPERTY,  INCLUDING  TAKING OR
DISPOSING  OF SUCH PROPERTY WITH OR WITHOUT JUDICIAL PROCESS PURSUANT TO ARTICLE
9  OF  THE  UNIFORM  COMMERCIAL  CODE.  ANY  DISPUTES,  CLAIMS, OR CONTROVERSIES
CONCERNING  THE  LAWFULNESS  OR  REASONABLENESS  OF  ANY ACT, OR EXERCISE OF ANY
RIGHT,  CONCERNING  ANY  COLLATERAL,  INCLUDING ANY CLAIM TO RESCIND, REFORM, OR
OTHERWISE  MODIFY  ANY  AGREEMENT  RELATING  TO  THE  COLLATERAL,  SHALL ALSO BE
ARBITRATED,  PROVIDED  HOWEVER  THAT  NO  ARBITRATOR SHALL HAVE THE RIGHT OR THE
POWER  TO  ENJOIN  OR  RESTRAIN  ANY  ACT  OF ANY PARTY. JUDGMENT UPON ANY AWARD
RENDERED  BY  ANY  ARBITRATOR  MAY  BE ENTERED IN ANY COURT HAVING JURISDICTION.
NOTHING IN THIS AGREEMENT SHALL PRECLUDE ANY PARTY FROM SEEKING EQUITABLE RELIEF
FROM  A  COURT  OF COMPETENT JURISDICTION. THE STATUTE OF LIMITATIONS, ESTOPPEL,
WAIVER,  LACHES, AND SIMILAR DOCTRINES WHICH WOULD OTHERWISE BE APPLICABLE IN AN
ACTION BROUGHT BY A PARTY SHALL BE APPLICABLE IN ANY ARBITRATION PROCEEDING, AND
THE  COMMENCEMENT  OF AN ARBITRATION PROCEEDING SHALL BE DEEMED THE COMMENCEMENT
OF  AN ACTION FOR THESE PURPOSES. THE FEDERAL ARBITRATION ACT SHALL APPLY TO THE
CONSTRUCTION,  INTERPRETATION,  AND  ENFORCEMENT  OF THIS ARBITRATION PROVISION.

DEFINITIONS.  The following capitalized words and terms shall have the following
meanings  when  used  in  this  Agreement.  Unless  specifically  stated  to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the  plural,  and  the  plural  shall  include  the singular, as the context may
require.  Words and terms not otherwise defined in this Agreement shall have the
meanings  attributed  to  such  terms in the Uniform Commercial Code. Accounting
words  end terms not otherwise defined in this Agreement shall have the meanings
assigned  to them in accordance with generally accepted accounting principles as
in  effect  on  the  date  of  this  Agreement:

     Advance.  The word "Advance" means a disbursement of Loan funds made, or to
     be  made,  to  Borrower  or  on  Borrower's  behalf  on a line of credit or
     multiple  advance  basis  under the terms and conditions of this Agreement.

     Agreement. The word "Agreement" means this Business Loan Agreement, as this
     Business  Loan  Agreement  may  be  amended  or modified from time to time,
     together  with  all  exhibits  and schedules attached to this Business Loan
     Agreement  from  time  to  time.

     Borrower. The word "Borrower" means YP.Net, Inc., and all other persons and
     entities  signing  the  Note  in  whatever  capacity.

     Collateral.  The word "Collateral" means all property and assets granted as
     collateral  security for a Loan, whether real or personal property, whether
     granted  directly  or indirectly, whether granted now or In the future, and
     whether  granted  in  the form of a security interest, mortgage, collateral
     mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage,
     collateral chattel mortgage, chattel trust, factor's lien, equipment trust,
     conditional  sale,  trust  receipt,  lien,  charge, lien or title retention
     contract,  lease or consignment intended as a security device, or any other
     security  or lien interest whatsoever, whether created by law, contract, or
     otherwise.  Event  of Default. The words "Event of Default" mean any of the
     events  of  default  set  forth in this Agreement In the default section of
     this  Agreement.

     GAAP.  The  word  "GAAP"  means  generally  accepted accounting principles.

     Grantor.  The  word "Grantor" means each and all of the persons or entities
     granting  a  Security  Interest  in  any Collatoral for the Loan, including
     without  limitation  all  Borrowers  granting  such  g  Security  Interest.
     Guarantor.  The  word  "Guarantor"  means  any  guarantor,  surety,  or
     accommodation  party  of  any  or  all  of  the  Loan.

     Guaranty.  The word "Guaranty" means the guaranty from Guarantor to Lender,
     including  without  limitation  a  guaranty  of  all  or  part of the Note.
     Indebtedness.  The  word "Indebtedness" means the indebtedness evidenced by
     the  Note  or  Related  Documents,  including  all  principal  and interest
     together  with  all  other  indebtedness  and  costs and expenses for which
     Borrower  is  responsible  under this Agreement or under any of the Related
     Documents.  Lender.  The  word  "Lender"  means  Bank of the Southwest, its
     successors  and  assigns.

     Loan.  The  word "Loan" means any and all bans and financial accommodations
     from  Lender  to  Borrower  whether  now or hereafter existing, and however
     evidenced,  Including  without  limitation  those  loans  and  financial
     accommodations  described  herein  or  described on any exhibit or schedule
     attached  to  this  Agreement  from  time  to  time.

     Note.  The  word  "Note"  means  the  Mote  executed by YP.Net, Inc. In the
     principal  amount  of  $350,000.00  dated  May  2,  2003, together with all
     renewals  of,  extensions  of,  modifications  of,  refinancings  of,
     consolidations  of,  and  substitutions  for  the note or credit agreement.

     Permitted  Liens.  The  words "Permitted Liens" mean (1) liens and security
     interests  securing  Indebtedness owed by Borrower to Lender; (2) liens for
     taxes,  assessments,  or  similar  charges  either  not  yet  due  or being
     contested in good faith; (3) liens of materialmen, mechanics, warehousemen,
     or carriers, or other like liens arising in the ordinary course of business
     and  securing  obligations which are not yet delinquent. (4) purchase money
     liens or purchase money security interests upon or in any property acquired
     or  held  by  Borrower  in  the


<PAGE>

                            BUSINESS LOAN AGREEMENT
LOAN NO: 51326                   (CONTINUED)                              PAGE 4
================================================================================

     ordinary course of business to secure indebtedness outstanding on this date
     of  this  Agreement or permitted to be incurred under the paragraph of this
     Agreement titled "Indebtedness and Liens"; (5) liens and security interests
     which,  as of the date of this Agreement have been disclosed W and approved
     by  the Lender in writing; and |6| those liens and security Interests which
     in the aggregate constitute an immaterial and insignificant monetary amount
     with  reaped  to  the  net  value  of  Borrower's  assets.

     Related Documents. The words "Related Documents" mean all promissory notes,
     credit  agreements,  loan agreements, environmental agreements, guaranties,
     security  agreements, mortgages, deeds of trust, security deeds, collateral
     mortgages, and all other instruments, agreements and documents, whether now
     or  hereafter  existing,  executed  in  connection  with  the  Loan.

BORROWER  ACKNOWLEDGES  HAVING  READ  ALL  THE  PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT  AND  BORROWER  AGREES  TO  ITS TERMS, THIS BUSINESS LOAN AGREEMENT IS
DATED  MAY  2,  2003.

BORROWER:

YP.NET, INC.

BY: /s/ Angelo Tullo, chairman
   ------------------------------------------------
   ANGELO TULLO, CHAIRMAN/PRESIDENT/CEO OF YP.NET,
   INC.


BANK OF THE SOUTHWEST

BY: /s/
   -----------------------------------------------
   AUTHORIZED SIGNER

================================================================================


<PAGE>
                     DUSBURSEMENT REQUEST AND AUTHORIZATION

<TABLE>
<CAPTION>
<C>          <C>         <C>         <C>       <C>        <C>      <S>      <C>
 Principal   Loan Date    Maturity   Loan No.  Call/Coll  Account  Officer  Initials
$250,000.00  05-02-2003  05-02-2004   51326                          BAC
- -----------  ----------  ----------  --------  ---------  -------  -------  --------
</TABLE>

  References in the shaded area are for Lender's use only and do not limit the
         applicability of this document to any particular loan or item.

Any item above containing "***" has been omitted due to test length limitations.
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S>        <C>                                  <C>
Borrower:  YP.Net, Inc.                         Lender: Bank of the Southwest
           4840 East Jasmine Street Suite #105          7910 South Kyrene Road, Suite 108
           Mesa, AZ 85202                               Tempe, AZ 85284
</TABLE>
================================================================================


LOAN  TYPE. This is a Variable Rate Nondisclosable Revolving Line of Credit Loan
to a Corporation for $250,000,00 due on May 2, 2004, The reference rate (highest
base  rate  on  corporate loans posted by at least 75% of the nation's 30 latest
banks  that  The  Wall  Street  Journal  publishes  as the Prime Rate, currently
4.250%) is added to the margin of 0.500%, resulting in an initial rate of 4.750.

PRIMARY PURPOSE OF LOAN.  The primary purpose of this loan is for:

     [ ]  Personal,  Family,  of  Household  Purposes or Personal Investment.

     [X] Business (Including Real Estate Investment).

SPECIFIC PURPOSE. The specific purpose of this loan is:  Working capital.

DISSURSEMENT INSTRUCTIONS.   Borrower understands that no loan proceeds will be
disbursed until all of Lender's conditions for making the loan have been
satisfied.  Please disburse the loan proceeds of $250,000.00 as follows:

               Undisbursed  Funds:                    $249,750.00
               Other  Disbursements:                      $250.00
                    $250.00  Documentation  Fee
                    Due  Lender  From Loan Proceeds
                                                   ------------------
               Note Principal:                        $250,000.00

CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges:

               Prepaid Finance Charges Paid In Cash:        $0.00
               Other Charges Paid In Cash:                $250.00
                  $ 250.00 Documentation Fee
                                                   ------------------
               Total Charges Paid in Cash:                $250.00

FINANCIAL  CONDITION  BV  SIGNING  THIS  AUTHORIZATION,  BORROWER REPRESENTS AND
WARRANTS  TO  LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION
AS  DISCLOSED  IN  BORROWER'S  MOST  RECENT  FINANCIAL STATEMENT TO LENDER. THIS
AUTHORIZATION  IS  DATED  MAY  2,  2003.


YP.NET, INC.

BY: /s/ Angelo Tullo, chairman
   ------------------------------------------------
   ANGELO TULLO, CHAIRMAN/PRESIDENT/CEO OF YP.NET,
   INC.

================================================================================


<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.28
<SEQUENCE>7
<FILENAME>doc6.txt
<TEXT>
                                                                   EXHIBIT 10.28

                         SWITCHBOARD SERVICES AGREEMENT
                         ------------------------------


THIS SWITCHBOARD SERVICES AGREEMENT (the "Agreement) is made and entered into as
of this 1stday of April, 2003 (the "Effective Date") by and between Switchboard
        ---
Incorporated, a Delaware corporation having its principal place of business at
120 Flanders Road, Westboro, MA 01581 ("Switchboard"), and YP.Net, Inc. a Nevada
corporation having its principal place of business at 4840 E. Jasmine #110,
Mesa, Arizona 85205 ("YP.Net").

WHEREAS, Switchboard operates an online, interactive yellow pages directory
service (the "Switchboard Yellow Pages Services," as further defined herein)
accessible via the Internet at www.switchboard.com, as such web site may be
                               -------------------
modified during the Term of this Agreement, or any successor site thereto as may
be designated by Switchboard and approved by YP.Net from time to time; which
approval shall not be unreasonably withheld (the "Switchboard Site"); and

WHEREAS, through the Switchboard Site and other means, Switchboard offers to
merchants a variety of Internet advertising services ("Directory Ads," as
further defined herein); and

WHEREAS,  YP.Net owns and operates an online yellow pages directory service
accessible via the Internet at www.yp.net (and accessible through other
                               ----------
forwarded urls including www.Yellow-Page.Net) as such web site may be modified
                         -------------------
during the Term of this Agreement or any successor site thereto as may be
designated by YP.Net and approved by Switchboard from time to time, which
approval shall not be unreasonably withheld (the"YP.Net Site"); and

WHEREAS, through the YP.Net Site and other means, YP.Net offers to its merchant
customers ("YP.Net Merchants," as further defined herein) certain Internet
advertising services; and

WHEREAS, YP.Net desires to market, promote, offer, provide and/or sell to YP.Net
Merchants the Directory Ads, as provided herein; and

WHEREAS, Switchboard desires to expand its base of Directory Ad subscribers
through this Agreement, pursuant to which YP.Net may market, promote, provide,
offer and sell the Switchboard Directory Ads to YP.Net's merchant customers
through sales efforts by YP.Net's sales force, through YP.Net's telemarketing
efforts and through other means as described herein;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Switchboard and YP.Net agree as follows:


<PAGE>
1.0  TERMS  AND  CONDITIONS

     The terms and conditions set forth in the following Schedules (and the
     Exhibits thereto) are attached hereto and incorporated herein by reference,
     and shall govern the provision of such Switchboard Directory Ads:

     SCHEDULE A     SWITCHBOARD DIRECTORY ADS
     SCHEDULE B     GENERAL TERMS AND CONDITIONS

IN WITNESS WHEREOF, Switchboard and YP.Net have caused this Agreement to be
executed by their duly authorized representatives as of the Effective Date.

SWITCHBOARD INCORPORATED          YP.NET DIRECTORIES, INC.


By:  /s/  Mark Canon                By:  /s/  Debra Johnson
    ----------------------------       ----------------------------

Name:  Mark Canon                   Name:  Debra Johnson
    ----------------------------         ----------------------------

Title:  VP Business Development     Title:  V.P. corp image
      ----------------------------        ----------------------------

<PAGE>
                                   SCHEDULE A
                                   ----------
                            SWITCHBOARD DIRECTORY ADS
                            -------------------------


1.0  DEFINITIONS

"Directory Ad" shall mean an advertisement to be sold and or provided by YP.Net
- --------------
to YP.Net Merchants hereunder, for display in the "Featured Listing" section
(sometimes referred to as "Local Advertiser" section) or comparable area of the
Switchboard Yellow Pages Service displayed in all cases before the "All
Businesses", or Free Listing Section; which may be hyperlinked to a web site of
a YP.Net Merchant; which shall be searchable by such criteria as category and
geographic locations, and by business attributes that are provided; with
placement in one (1) Yellow Pages category; and shall appear when the respective
YP.Net Merchant's location is within the city or town specified in the User
query.  Directory Ads shall appear when the respective advertiser's listing
results is shown within the category search, proximity search and business name
search, if applicable, in the Switchboard Yellow Pages Service.  Additional
functions and features, including size of Directory Ads and quantity of enhanced
data attributes displayed in the ads shall be subject to Switchboard's
determination and subject to such modifications to such advertisements as
Switchboard may implement from time to time, but shall be no less than other
Directory Ads in the same section.  Directory Ads sold and or placed by YP.Net
pursuant to this Agreement shall be distributed and displayed through the
Switchboard Site, and also through such Switchboard Affiliated Sites that
display enhanced directory content as may be determined by Switchboard.
Directory ads shall appear in the form of a business Featured Listing, including
business name, business address, business telephone number, and optional
Directory elements such as web site address, e-mail address, toll free numbers,
fax number, one (1) line of promotional text to appear under the business name,
hours of operation, Enhanced Data, and may include a link to a "mini Web Page"
service hosted by YP.net, with placement in the Featured Listing section of the
Yellow Pages results screen, substantially as depicted in the screen shot
attached hereto as EXHIBIT "A".

"Directory Ad Management Tool" shall mean Switchboard's proprietary online Order
- ------------------------------
insertion tool to which YP.Net will be granted access for the purpose of
creating and managing Directory Ads hereunder, and YP.Net's use of which shall
be solely pursuant to the terms and conditions of Switchboard's or its
licensor's standard terms of use for such Tool.

"Order" shall mean a YP.Net Merchant's order to obtain a Switchboard Directory
- -------
Ad that is generated pursuant to YP.Net's Marketing Efforts established
hereunder.

"Switchboard Affiliated Sites" shall mean third party web sites linking to and
- ------------------------------
displaying content from the Switchboard Site through private label, co-branded,
or sub-branded interfaces or otherwise pursuant to written agreements with
Switchboard.


<PAGE>
businesses and other entities located in the United States, such as names,
addresses, telephone numbers, and advertisements, as such service may be
modified from time to time during the Term.

"YP.Net Merchant" shall mean merchant customers of YP.Net, to which YP.Net may
- -----------------
market, promote, provide, offer and or sell Switchboard Directory Ads as
provided herein; however YP.Net may not intentionally market, promote, provide,
offer or sell to YP.Net merchants that are also existing Switchboard Directory
Ad customers.

"YP.Net Merchant Content" shall mean such trademarks, trade names, service
- -------------------------
marks, logos, advertising collateral and other content or materials provided by
YP.Net or their Merchants for the creation of Directory Ads hereunder.

2.0  PROMOTION  AND  SALE  OF  SWITCHBOARD  DIRECTORY  ADS

2.1  Right to Market and Sell Directory Ads. During the Term, YP.Net shall
     --------------------------------------
     have the non-exclusive, non-assignable (except as provided in Section 11.1
     of SCHEDULE B attached hereto) right to independently solicit, enter into
     agreements with and or provide YP.Net Merchants which result in such YP.Net
     Merchants receiving the benefit of the YP.Net purchased Directory Ads from
     Switchboard. YP.Net shall not misrepresent to any YP.Net Merchant the
     operation and functions of the Directory Ads. Notwithstanding the
     foregoing, Switchboard shall reframe itself, and its contractors, agents,
     represents and other third parties engaged for that purpose from
     intentionally soliciting orders from YP.Net Merchants, for Directory Ads.

2.2  Marketing Effort. Throughout the Term, YP.Net shall use commercially
     ----------------
     reasonable efforts to market, promote, offer and sell the Directory Ads
     though the YP.Net Site, YP.Net's sales force, telemarketing efforts, direct
     mail and/or such other methods as the parties may mutually agree upon form
     time to time during the Term (the "Marketing Efforts"). In no event,
     however, shall YP.Net knowingly market, promote, provide, offer sell
     Directory Ads to existing Switchboard Directory Ad customers. In the event
     that it is discovered that YP.Net has placed an Order that involves an
     existing Switchboard Directory Ad customer, such Order shall be cancelled
     and removed immediately.

2.3  Miscellaneous. Switchboard shall provide YP.Net with such technical
     -------------
     specifications, documentation and such other information and assistance as
     may be reasonable necessary to assist YP.Net with the Marketing Effort,
     including necessary and sufficient documentation for YP.Net to accurately
     represent to each YP.Net Merchant the operation and functions of the
     Switchboard Directory Ads as required by Section 2.1, above.

3.0  ORDERS FOR SWITCHBOARD DIRECTORY ADS; GENERAL


<PAGE>
3.1  Advertising Content Policy. All orders for Switchboard Directory Ad
     --------------------------
     Orders generated by YP.Net are subject to acceptance by Switchboard.
     Switchboard reserves the right, in its reasonable discretion, to reject any
     Order that is, or contains a link to any content that is, offensive,
     defamatory, indecent, obscene, trade libelous, threatening or harassing,
     harmful to minors, child pornographic or that contains illegal content as
     defined by applicable federal, state, county and local laws, or that may
     violate Switchboard's Content Policy, as the same may be modified or
     updated by Switchboard from time to time, the current version of which is
     set forth in EXHIBIT B attached hereto.

     Switchboard shall notify YP.Net of any Order so rejected within five (5)
     business days of such rejection. YP.Net shall have the option to remedy the
     rejected Order with a substitute Order that complies with the standards set
     forth in this Section 3.1. Any substitute Orders placed by YP.Net shall be
     subject to further review by Switchboard as provided in this Section 3.1.

3.2  Customer Support. Through the use of the Directory Ad Management Tool
     ----------------
     or such other means as YP. Net may determine, YP.Net shall be responsible
     for handling and responding to all YP.Net Merchant inquiries relating to
     Orders for Directory Ads sold pursuant to this Agreement.

3.3  Payment of Invoices. Switchboard invoices for Orders shall be paid by
     -------------------
     YP.Net within thirty (30) days of the date of invoice. Invoices not paid
     within such period shall be subject to a late payment charge of 1.5% per
     month (or the maximum rate permitted by law, whichever is lower) on the
     outstanding balances thereof, accruing from the due date. Payment of a late
     payment charge by YP.Net shall not affect any other remedy available to
     Switchboard. In the event an invoice by Switchboard to YP.Net remains
     unpaid, in whole or in part, for a period of sixty (60) days past its due
     date, Switchboard may, at its option and in addition to any right or remedy
     available to Switchboard under this Agreement, cancel any or all unpaid
     Orders submitted by YP.Net.

3.4  Taxes. Any pricing for Orders provided herein may not include any
     -----
     applicable sales or use taxes that may be levied thereon. If applicable,
     the invoicing and collecting party shall, in addition to the payments
     required hereunder, pay all sales, use, transfer or other taxes, whether
     federal, state or local, however designated, which are levied or imposed on
     an Order, excluding however designated, which are levied or imposed on an
     Order, excluding however, income taxes on profits which may be levied
     against the other party. The invoicing and collecting party shall be
     responsible for providing, in a timely manner, all reasonable documentation
     in the nature of exemption certificates or otherwise, necessary to allow
     the other party to refrain from collections such as sales tax, that it
     would otherwise be obligated to make.

4.0  ORDERS FOR DIRECTORY ADS


<PAGE>
4.1  Directory Ad Pricing. YP.Net shall be responsible for and shall have
     --------------------
     sole discretion in determining the prices to be charged to YP.Net Merchants
     from time to time for Orders for Directory Ads placed hereunder (the
     "Directory Ad Pricing").

4.2  Contracts with YP.Net Merchants. YP.Net shall be solely responsible for
     -------------------------------
     having each YP.Net Merchant execute any necessary written agreement (or an
     enforceable equivalent) permitting the placement of a Directory Ad Order
     hereunder which, when executed, shall be a contract between YP.Net and the
     respective YP.Net Merchant. YP.Net hereby grants to Switchboard (and all
     Directory Ad agreements between YP.Net and YP.Net Merchants shall include)
     a worldwide, non-exclusive license and right to copy, display, transmit,
     and publish the Directory Ads, including all YP.Net Merchant Content,
     submitted to Switchboard hereunder, for display to users of the Switchboard
     Site and the Switchboard Affiliated Sites. The following provisions shall
     apply to all Directory Ad Orders:

     SWITCHBOARD'S SOLE OBLIGATION TO YP.NET OR TO YP.NET MERCHANTS WITH RESPECT
     TO ANY ERROR OR OMISSION RELATING TO THE ACCEPTANCE OF ANY ORDER AND
     PUBLICATION OF ANY CONTENT THEREING SPECIFIED, INCLUDING THE PROVISION OF
     ANY REPORT OR CATEGORY LISTINGS, SHALL BE THE CORRECTION OF SUCH ERROR OR
     OMISSION.

     SWITCHBOARD RESERVES THE RIGHT TO REFUSE OR TO CANCEL PUBLICATION OF THE
     CONTENT OF ANY ORDER FOR DEFAULT BY YP.NET UNDER YP.NET'S AGREEMENT WITH
     SWITCHBOARD.

4.3  Insertion and Submission of Orders. Directory Ad Orders shall be
     ----------------------------------
     inserted and/or submitted by YP.Net directly through the use of the
     Directory Ad Management Tool or by the transfer of such listing data and
     elements to Switchboard, also through the Directory Ad Management Tool, in
     a database format outlined in the Merchant Management Tool User's Guide,
     for batch Directory Ad insertion and or removal at yp.net discretion.
     YP.Net shall be solely responsible for correcting any Directory Ads which
     are excepted (that is, do not match exactly with Switchboard listing
     information for the same merchant) during the initial database load and any
     subsequent loadings.

4.4  Placement and Hosting of Directory Ads. YP.Net shall ensure that each
     --------------------------------------
     Directory Ad is correctly placed within the applicable Yellow Pages
     category. If, in Switchboards; reasonable judgment, a Directory Ad is not
     correctly placed YP.Net shall, upon notice form Switchboard, replace such
     Directory Ad to the correct category or categories. Switchboard shall
     maintain and control the Switchboard Yellow Pages Service. All Directory
     Ads placed hereunder shall be hosted on Switchboard's servers.


<PAGE>
4.5  Directory Ad Management Tool License, Training and Support. Switchboard
     -----------------------------------------------------------
     will provide YP.Net with a single session of telephone training or on-line
     training on the use of the Directory Ad Management Tool, no to exceed
     training for two (2) individuals or four (4) total hours of training each
     year during the Term of this Agreement, or for such additional number of
     people and with such other scheduling at Switchboard may agree upon in its
     reasonable discretion. To assist YP.Net with any questions on the use of
     the Directory Ad Management Tool, Switchboard will provide support, via
     e-mail, as outlined in the Merchant Management Tool User's Guide.
     Switchboard hereby grants to the YP.Net a non-exclusive, royalty free,
     object code only license to use the Directory Ad Management Tool solely for
     the purposes of this Agreement and solely pursuant to Switchboard's or its
     licensor's terms of use for the Tool.

4.6  Merchant Invoices and Collection. YP.Net shall be solely responsible
     ---------------------------------
     for invoicing and collecting all Directory Ad Pricing from YP.Net Merchants
     with respect to Orders hereunder.

4.7  Directory Ad Hosting Fees. Commencing as of the Effective Date, YP.Net
     --------------------------
     shall pay Switchboard a guaranteed monthly fee of twenty thousand dollars
     ($20,000) for up to 250,000 Directory Ad Orders in place, and additional
     fees for any additional Directory Ad Orders (the "Directory Ad Hosting
     Fees"), as follows:

<TABLE>
<CAPTION>
NUMBER OF DIRECTROY ADS                           DIRECTORY AD HOSTING FEE
- --------------------------------------  --------------------------------------------
HOSTED DURING THE MONTH
- --------------------------------------
<S>                                     <C>

                                        YP.Net shall pay a guaranteed minimum
                                        monthly Hosting Fee of $20,000, whether
                                        all 250,000 Directory Ads are used or not.
                                        Such guaranteed minimum Hosting Fee
                                        shall be invoiced by Switchboard as the fist
Between 0 and 250,000 Directory Ads     day of each month.


                                        An additional Hosting Fee of $0.08 per
                                        Directory Ad per month.  Such additional
                                        Hosting Fees shall be invoiced by
                                        Switchboard in the month following the
For additional Directory Ads in excess  month in which such additional Hosting
Of 250,000                              Fees are accrued.
</TABLE>


<PAGE>
     Such  Directory  Ad Hosting Fees shall apply to each Directory Ad as of the
     date  of its creation as provided herein until its deletion. Such Directory
     Hosing  Ad  Fees shall be due and payable as provided in Section 3.3 above,
     Each  invoice  shall  be  categorized  by  YP.Net  Merchant.

4.8  Directory Ad Terms. Each Directory Ad place hereunder and outstanding
     -------------------
     at the time of the expiration or termination of this Agreement shall be
     removed and deleted from the Switchboard Yellow Pages Service of the
     Switchboard Site and Switchboard Affiliated Sites at the time of such
     expiration or termination.


<PAGE>
                                   SCHEDULE B
                                   ----------
                          GENERAL TERMS AND CONDITIONS
                          ----------------------------

1.0  DEFINITIONS

"Term" shall have the meaning set forth in Section 9.0 hereof.
 ----

Capitalized terms not defined in this Schedule B but used herein shall have the
meaning ascribed to them elsewhere within this Agreement.

2.0  EXCLUSIVITY

2.1  No Exclusivity Provided by Switchboard. YP.Net acknowledges and agrees
     ---------------------------------------
     that Switchboard may contract with-other marketing representatives or any
     third party with respect to the marketing, promoting, offering or selling
     of any of the Switchboard Directory Ads or services similar thereto,
     including without limitation competitors of YP.Net. In the case of a
     dispute YP.Net and other third party sellers of Switchboard Directory Ads
     involving overlapping or conflicting Orders with respect to the same
     merchant, the first Order submitted to and received by Switchboard shall be
     deemed the sole Order. Switchboard reserves the right to implement new
     sales channels using different terms and conditions, offer new and
     different products, subject to the terms of this Agreement, as Switchboard
     may deem necessary.

3.0  INTELLECTUAL PROPERTY

3.1  Technology. YP.Net acknowledges and agrees that Switchboard or its
     ----------
     licensors own all right, title, and interest in and to all patents,
     copyright, trademarks, trade secrets and other intellectual property rights
     in the Switchboard Site, the Switchboard Yellow Pages Serviced, and the
     Switchboard Directory Ads (excluding YP.Net Merchant Content), the
     Directory Ad Management Tool, and any software provided to YP.Net in
     connection with this Agreement. YP.Net shall take no action inconsistent
     with such ownership and shall not attempt to register any intellectual
     property described above in any jurisdiction. Similarly, Switchboard
     acknowledges and agrees that YP.Net or its licensors own all right, title,
     and interest in and to all patents, copyright, trademarks, trade secrets
     and other intellectual property rights in the Yp.Net Site. Switchboard
     shall take no action inconsistent with such ownership and shall not attempt
     to register any intellectual property described above in any jurisdiction.

3.2  Trademarks. Each party hereby grants to the other, for the terms of this
     ----------
     Agreement, a non-exclusive, royalty-free license to use any trademarks or
     logos provided to the other party, subject to the respective owner's prior
     approval and revisions in each instance, only for the purposes permitted by
     this Agreement and further subject to the respective owner's right to
     control the quality of any service


<PAGE>
offered under its trademark or logo, such that the service meets the standards
the public has come to associate with such party's trademarks and logos.
Neither party, by virtue of this Agreement, shall obtain or claim any right,
title, or interest in or to the other party's name, trademarks, service marks or
logos, except the right of use as specified herein, and the parties hereby
acknowledge and agree that all such use shall inure to the benefit of the
respective owner.

3.3  Proprietary Notices. Neither party shall alter or remove any printed or
     --------------------
     on-screen copyright, trademark, or other proprietary or legal notices place
     by the other party in its web site or as other wise provide herein.

3.4  Ownership and Use of User Data. As between the parties, Switchboard
     -------------------------------
     shall be the sole and exclusive owner of all right, title and interest in
     any and all data compiled or obtained by either party in connection with
     the User's use of the Switchboard Site, the Switchboard Affiliated Sites
     and the Switchboard Yellow Pages Services as provided herein.

3.5  YP.Net Merchant Data. Each party will treat merchant data (that is,
     --------------------
     information given by YP.Net Merchants in connection with placing Orders)
     provided by the other party or jointly collected ("YP.Net Merchant Data")
     strictly in accordance with all applicable laws, their respective terms of
     use and privacy policies and with the same level of confidence that it
     treats its own merchant data. As between the parties, YP.Net Merchant Data
     and marketing methods, whether collected by YP.Net or Switchboard pursuant
     to the terms of this Agreement. Nothing in this Section 3.5 shall obligate
     either party to track, maintain or compile information that is not
     customarily tracked by such party in the ordinary course of its business.

4.0  PUBLICITY

     Each party shall have the right to create and publish its own press release
     announcing the execution of this Agreement and the relationship between the
     parties established hereunder, subject to the prior written approval of the
     other party, which approval shall not be unreasonably withheld. The parties
     may, but shall not have the obligation to, create and publish a joint press
     release announcing the execution of this Agreement and the relationship
     between the parties. Each party shall have the right to publish any such
     initial press releases, or portions thereof, in trade publications,
     magazines and other publications of its choice. The parties agree that
     thereafter, except as otherwise mutually agreed, or as required by law,
     neither party shall make any written public statement, including without
     limitation in marketing materials or press releases, using the other
     party's trade name or trademarks or referring to this Agreement or the
     relationship created hereunder, without the prior approval of the other
     party, which approval shall not be unreasonably withheld. Switchboard and
     YP.Net will not disclose the material terms of this Agreement in any
     circumstance, unless


<PAGE>
     required by law. This provision shall not limit or prevent YP.Net from
     using or disclosing non-confidential information, such as the distribution
     that YP.Net Merchants will receive as a result of a purchasing Switchboard
     Directory Ads.

5.0  DISCLAIMER OF WARRANTIES

     NEITHER PARTY MAKES ANY REPRESENTATIONS, WARRANTIES, OR GUARANTEES OF ANY
     KIND AS TO ANY MATTER, EITHER EXPRESS OR IMPLIED, WHICH ARE NOT EXPRESSLY
     MADE IN THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, THE IMPLIED
     WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

6.0  CONFIDENTIALITY

6.1  Confidential Information. Notwithstanding any non-disclosure or
     ------------------------
     confidentiality agreement signed by the parties with respect to any initial
     discussions prior to the Effective Date, Switchboard and YP.Net each agrees
     and acknowledges that in order to further the performance of this
     Agreement, they may be required to disclose to each other certain
     confidential information, including but not limited to information
     concerning either party's online services and web sites, technology,
     software, tools, business, or plans and methods, financial information
     other confidential information, all of which shall be deemed "Confidential
     Information" for the purposes of this Section if, with the respect to such
     information disclosed in tangible form, it is marked "Confidential" or its
     equivalent, and, with respect to such information disclosed orally, it is
     identified as confidential at the time of disclosure. Marketing methods
     used by YP.Net in connection with the Marketing Efforts, and the results of
     the Marketing Efforts, as well as Merchant Data as provided in Section 3.5,
     above, shall be deemed the Confidential Information of YP.Net.

6.2  Protection of Confidential Information. During the term of this
     ---------------------------------------
     Agreement and for a period of two years after the expiration or termination
     thereof, the receiving party agrees to protect the confidentiality of the
     disclosing party's Confidential Information with at least the same degree
     of care that it utilize with respect to its own similar proprietary
     information, but in no even less than a reasonable standard of care,
     including without limitation agreeing:

     a.   Not to disclose or otherwise permit any other person or entity access
          to, in any manner, the Confidential Information, or any part thereof
          in any form whatsoever, except such disclosure or access shall be
          permitted to (i) an employee of the receiving party (or wholly owned
          or wholly owing affiliated entity of the receiving party) requiring
          access to the Confidential Information in the course of his or her
          employment in connection with this


<PAGE>
          Agreement and who has signed an agreement obligating the employee to
          maintain the confidentiality of the confidential information of third
          parties in the receiving party's possession; or (ii) a director, legal
          advisor, or financial advisor of the recipient party hereunder,
          provided that such parties are bound to maintain the confidentiality
          of such information and provided further that they are permitted to
          use such Confidential Information only for the purposes of carrying
          out their fiduciary or other advisory responsibilities on behalf of
          the pry hereto from which it received such Confidential Information;

     b.   To notify the disclosing party promptly and in writing of the
          circumstances surrounding any suspected possession, use or knowledge
          of the Confidential Information or any part thereof at any location or
          by any person or entity other that those authorized by this Agreement;
          and

     c.   Not to use the Confidential Information for any purpose other than as
          explicitly set forth herein.

6.3  Exceptions. Nothing in this Section 6.0 shall restrict the receiving
     ----------
     party with respect to information or data, whether or not identical or
     similar to that contained in the Confidential Information, if such
     information or data: (a) was rightfully possessed by the receiving party
     before it was received from the disclosing party: (b) is independently
     developed by the receiving party without reference to the disclosing
     party's information or data: (c) is subsequently furnished to the receiving
     party by a third party not under any obligation of confidentiality with
     respect to such information or data, and without restrictions on use or
     disclosure: or (d) is or becomes public or available to the general public
     otherwise than through any act or default of the receiving party. Each
     party reserves to itself its proprietary marketing method rights.

7.0  INDEMNIFICATION

7.1  Indemnification by Switchboard. Switchboard shall indemnify, defend,
     -------------------------------
     and hold YP.Net harmless from and against any and all losses, expensed,
     damages, liabilities, taxes, penalties, assessments, judgments, and costs
     (including reasonable attorneys' fees) (collectively, "Liabilities")
     arising out of any third party claims, actions or proceedings brought
     against YP.Net so far as same are based upon (i) a claim that all or any
     portion of or content within the Switchboard Site, the Switchboard Yellow
     Pages Services, the Directory Ads (excluding any YP.Net Merchant Content),
     the Directory Ad Management Tool, or any software provided by Switchboard
     to YP.net hereunder (in each case, in the form provided by Switchboard)
     infringes any U.S. patent, copyright, trade secret, trademark or other
     intellectual property right, or any other personal or property right, or
     (ii) a material breach by Switchboard of this Agreement; provided that
     YP.Net provides Switchboard with prompt written notice of any
     ------
     claims and reasonable assistance and sole authority to defend or settle
     such claims. Switchboard shall have no


<PAGE>
     obligation pursuant to this Section 7.1 to the extent that such Liabilities
     arise out of the material breach, gross negligence or willful misconduct of
     YP.Net. If any portion of or content within the Switchboard Site, the
     Switchboard Yellow Pages Serviced, the Directory Ads (excluding any YP.Net
     Merchant Content), the Directory Ad Management Tool, or any software
     provided hereunder is, or in Switchboard's reasonable opinion is likely to
     become, the subject of an injunction preventing its use as contemplated
     herein, Switchboard may, at its option, (1) procure for YP.Net the right to
     continue using such software or services; (2) replace or modify such
     software or services so that it becomes non-infringing; or, if the remedies
     in (1) or (2) are not reasonably available to Switchboard despite
     Switchboard's commercially reasonable efforts, terminate YP.Net's right to
     use such software or services. This Section 7.1 set forth Switchboard's
     sole liability and YP.Net's and the sole remedy with respect to any claims
     of intellectual property infringement relating to this Agreement.

7.2  Indemnification by YP.Net. YP.Net shall indemnify, defend, and hold
     -------------------------
     Switchboard harmless from and against any and all losses, expenses,
     damages, liabilities, taxes, penalties, assessments, judgments, and costs
     (including reasonable attorneys' fees) (collectively, "Liabilities")
     arising out of any third party claims, actions or proceedings brought
     against Switchboard so far as same are based upon (i) a claim that all or
     any portion of or content within the YP.Net Site or the YP.Net Merchant
     Content (in each case, in the form provided by YP.Net) infringes any U.S.
     patent, copyright, trade secret, trademark or other intellectual property
     right, or any other personal or property right, (ii) a material breach by
     YP.Net of this Agreement; provided that Switchboard
                                             -------------
     provides YP.Net with prompt written notice of any claims and reasonable
     assistance and sole authority to defend or settle such claims. YP.Net shall
     have no obligation pursuant to this Section 7.2 to the extent that such
     Liabilities arise out of the material breach, gross negligence or willful
     misconduct of Switchboard. This Section sets forth YP.Net's sole liability
     and Switchboard's sole remedy with respect to claims of intellectual
     property infringement relating to this Agreement.

8.0  LIMITATION OF LIABILITY

     EXCEPT AS PROVIDED IN SECTION 6.0 (CONFIDENTIALITY) AND IN SECTION 7.0
     (INDEMNIFICATION), IN NO EVENT SHALL EITHER PARTY HEREUNDER BE LIABLE TO
     THE OTHER, OR TO ANY PARTY CLAIMING THROUGH SUCH OTHER PARTY, FOR ANY
     CONSEQUENTIAL, INCIDENTAL, SPECIAL, OR INDIRECT DAMAGES, OR FOR ANY LOSS O
     PROFITS OR SALES OR LOSS OF OR DAMAGE TO DATA, REGARDLESS OF THE FORM OF
     ACTION, WHETHER IN CONTRACT, TORT, OR OTHERWISE, EVEN IF A PARTY HAS BEEN
     ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR LOSS.


<PAGE>
     EXCEPT AS PROVIDED IN SECTION 6.0 (CONFIDENTIALITY) AND SECTION 7.0
     (INDEMNIFICATION), AND EXCEPT WITH RESPECT TO AMOUNTS OWED TO THE OTHER
     PARTY UNDER THE REVENUE SHARING PROVISIONS CONTAINED HEREIN, THE MAXIMUM
     LIABILITY OF EITHER PARTY HEREUNDER SHALL BE THE GREATER OF FIFTY THOUSAND
     DOLLARS ($50,000) OR THE AGGREGATE AMOUNT RECEIVED BY SWITCHBOARD PURSUANT
     TO THIS AGREEMENT IN THE TWELVE (12) MONTH PERIOD PRIOR TO THE DATE UPON
     WHICH THE CAUSE OF ACTION AROSE.

9.0  TERM AND TERMINATION

9.1  Term; Renewal. This Agreement shall commence as of the Effective Date
     -------------
     and shall remain in full force and effect for an initial period of one (1)
     year (the "Initial Term") unless earlier terminated as provided herein.
     After the Initial Term, this Agreement shall renew for successive one (1)
     year periods (each a "Renewal Term"), unless either party provides notice
     of termination to the other party no later than thirty (30) days prior to
     the expiration of the then current Term. The Initial Term and any and all
     Renewal Terms shall be collectively referred to herein as the "Term."

9.2  Termination. This Agreement may be terminated prior to the expiration
     -----------
     of its term:

     a.   By either party in the event the other party materially breaches this
          Agreement and the breaching party fails to cure such breach within
          thirty (30) days of written notice of such breach from the
          non-breaching party; or

     b    By either party immediately in the event any assignment is made by the
          other party for the benefit of creditors, or if a receiver, trustee in
          bankruptcy or similar officer shall be appointed to take charge of any
          or all of the other party's property, or if the other party files a
          voluntary petition under federal bankruptcy laws or similar state
          statutes or such a petition is filed against the other party and is
          not dismissed within ninety (90) days.

9.3  Return of Confidential and Proprietary Materials. In the event of
     ------------------------------------------------
     termination of this Agreement, each party shall immediately either (a)
     destroy and certify the same, or (b) return to the other party, all of the
     disclosing party's confidential or proprietary materials provided
     hereunder.

9.4  Fulfillment of Orders. Each Directory Ad placed hereunder and
     ---------------------
     outstanding at the time of such expiration or termination shall be removed
     and deleted from the Switchboard Yellow Pages Service of the Switchboard
     Site and Switchboard Affiliated Sites at the time of such expiration or
     termination.


<PAGE>
10.0 NOTICES

     Any notice or communication from one party to the other shall be in writing
     and either personally delivered or sent (a) via certified mail, postage
     prepaid and return receipt requested, (b) via overnight carrier with a
     national reputation which tracks receipt, or (c) via facsimile with
     confirmation sent via one of the other allowable means, in each case,
     addressed to such other party at the address specified below or such other
     address as either party may from time to time designate in writing to the
     other party. All notices shall be effective upon receipt.

     If to Switchboard:  Switchboard Incorporated
                         120 Flanders Road
                         Westboro, Massachusetts 01581
                         Fax: (508) 898-8222
                         Attn: President

     With a copy to:     Switchboard Incorporated
                         120 Flanders Road
                         Westboro, Massachusetts 01581
                         Fax: (508) 898-8222
                         Attn: General Counsel

     If to YP.Net:       YP.Net, Inc.
                         4840 E. Jasmine #110
                         Mesa, AZ 58205
                         Fax: 480-860-0800 &
                         Fax: 602-532-7813
                         Attn: Greg Crane

     With a copy to:     Law Offices of Lewis & Rocca, LLP
                         40 N. Central Ave.
                         Phoenix, AZ 85004
                         Fax: 602-734-3865
                         Attn: Randy Papetti

11.0 GENERAL PROVISIONS

11.1 Assignment. This Agreement and the rights and responsibilities
     ----------
     hereunder may not be assigned or otherwise transferred, in whole or in
     part, by either party without the prior written consent of the other, which
     shall not be unreasonably withheld, except that either party may assign
     this Agreement in its entirety to an entity purchasing all or substantially
     all of the equity or assets of such party.

11.2 Force Majeure. Except for the obligation to pay all charges when due
     -------------
     and owing hereunder, either party shall be excused from performance
     hereunder if its


<PAGE>
     performance is prevented by acts or events beyond the party's reasonable
     control including, but not limited to, acts of God, strikes or other labor
     unrest, failures of any telecommunications service provider, power failure,
     civil or military emergencies, or acts of legislative, judicial, executive,
     or administrative authorities.

11.3 Waiver. The waiver by either party of a breach or default of any
     ------
     provision of this Agreement by the other party shall not be construed as a
     waiver of any succeeding breach of the same or any other provision, nor
     shall any delay or omission on the part of either party to exercise or
     avail itself of any right, power or privilege that it has, or may have
     hereunder, operate as a waiver of any right, power, or privilege by such
     party

11.4 Governing Law. This Agreement shall be construed and enforced in
     -------------
     accordance with the laws, excluding the conflict of laws provision, of the
     Commonwealth of Massachusetts.

11.5 Independent Contractors. This Agreement is not intended, nor should
     -----------------------
     anything herein be construed, to create the relationship of partners, joint
     ventures, principal and agent, employer and employee, or any other
     fiduciary relationship between Switchboard and YP.Net. The relationship of
     the parties hereto shall be that of independent contractors.

11.6 Entire Agreement; Amendment. This Agreement, including all Exhibits
     ---------------------------
     hereto which are hereby incorporated by reference, represents the entire
     Agreement between Switchboard and the YP.Net with regard to the subject
     matter hereof, and any prior agreement, understanding, representation, or
     past dealings between the parties with respect to the matters covered
     hereunder, whether such prior activity had been in writing or expressed
     verbally. This Agreement may be amended only by a written document signed
     by authorized representatives of both parties.

11.7 Compliance with Laws. Each party shall be responsible for compliance,
     --------------------
     at its own expense, with all laws, statutes, regulations, rules,
     ordinances, and orders of any judicial authority or governmental body,
     department or agency, which apply to or result from its rights or
     obligations under this Agreement.

11.8 Severability. If any provision of the Agreement is held to be invalid
     ------------
     or unenforceable by any court or tribunal of competent jurisdiction, the
     remaining provisions of this Agreement shall continue in full force and
     effect.

11.9 Headings. Captions and headings contained in this Agreement have been
     --------
     included for ease of reference only and shall not be considered in
     interpreting or construing this Agreement.


<PAGE>
11.10 Audit Rights. Each party obligated to make payments hereunder shall keep,
      ------------
     during the Term of this Agreement and for one (1) year thereafter, proper
     records and books of account relating to the computation of such payments.
     No more frequently than once every six (6) months, the party receiving
     payment, at its own cost and expense and through an independent, competent
     auditor who signs a nondisclosure agreement reasonably acceptable to the
     party subject to the inspection, may inspect such records for the sole
     purpose of verifying reports. Any such inspection will be conducted in a
     manner that does not unreasonably interfere with the inspected party's
     business activities. The inspected party shall immediately make any over
     due payments disclosed by such audit. If such overdue payments are more
     than ten percent (10%) of the amount already paid for the particular time
     period in question, then the inspected party shall also pay for the expense
     of the auditor.

11.11 Survival. Upon the expiration or termination of this Agreement for any
      --------
     reason, the following provisions shall survive: PREAMBLE Section 1.0 (TERMS
     AND CONDITIONS); SCHEDULE A, Section 1.0 (DEFINITIONS) and Section 4.8
     (Directory Ad Terms); SCHEDULE B, Section 1.0 (DEFINITIONS), Section 2.0
     (EXCLUSIVITY), Section 3.0 (INTELLECTUAL PROPERTY), Section 4.0
     (PUBLICITY), Section 5.0 (DISCLAMIMER OF WARRANTIES), Section 6.0
     (CONFIDENTIALITY), Section 7.0 (INDEMNIFICATION), Section 8.0 (LIMITATION
     OF LIABILITY) Section 9.3 (Return of Confidential and Proprietary Materials
     and Removal of Links), Section 9.4 (Fulfillment of Orders), Section 10
     (NOTICES) and Section 11.0 (GENERAL PROVISIONS).


<PAGE>
                                    EXHIBIT A
                                    ---------
                             DIRECTORY AD SCEEN SHOT
                             -----------------------

                                [GRAPHIC OMITTED]






<PAGE>
                                    EXHIBIT B
                                    ---------
                           SWITCHBOARD CONTENT POLICY
                           --------------------------

1.   Switchboard reserves the right to reject any Directory Ad Order, or to
     remove, or to require that YP.Net remove, any Directory Ad placed by YP.Net
     hereunder or any YP.Net Merchant Content which, contains, or contains links
     to, content which Switchboard reasonable deems:

     (a)  Is patently offensive, including without limitation, bigotry, racism,
          discrimination, hatred or profanity; is pornographic, obscene, or
          sexually explicit; is disparaging defamatory or libelous, results in
          an invasion of privacy; promotes gambling (including lotteries);
          promotes or provides instructional information about illegal
          activities or physical harm or injury to any group, individual,
          institution or property; or infringes on a proprietary interest of any
          third party, including without limitation, any copyright, trademark,
          domain registration right, trade secret or paten right; or may violate
          any federal, state, county, and municipal laws, regulation,
          governmental agency orders, and court orders;

     (b)  States or implies an endorsement of the advertiser's products or
          Services by Switchboard or any third party associated with
          Switchboard.

2.   In the event that Switchboard or a third party notifies YP.Net that a
     Directory Ad sold by or on behalf of YP.Net hereunder is the subject of
     complaints or concerns (e.g., from visitors to the Switchboard Site or any
     Switchboard Affiliated Sites) regarding the content of such Directory Ad or
     any material linked through such Directory Ad, YP.Net will use reasonable
     efforts to respond, or cause its merchant customer to respond in good faith
     to such complaints or concerns.

3.   YP.Net acknowledges and agrees that, in certain local markets, Switchboard
     may be required pursuant to contracts with third parties to reject or
     remove Directory Ads and other forms of adverting promoting the following
     types of products or services; cigarettes; hard liquor; massage parlors;
     abortion clinics; firearms and ammunition; and head shops.


<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.35
<SEQUENCE>8
<FILENAME>doc8.txt
<TEXT>
                                                                   EXHIBIT 10.35

Trade  Acceptance  DRAFT  PROGRAM
Buyer  Acknowledgment

(Buyer) YP.Net, Inc.
- ----------------------------------------------
(Address) 4840 E. Jasmine Street, Ste. 110
- ----------------------------------------------
(Address). Mesa, _AZ 85205
- ----------------------------------------------
Federal ID Number:   850506668
                   ---------------------------
Name and Title of Person(s) Authorized
to Sign on Behalf of Buyer:                        Angelo Tullo, President
                                              ----------------------------------

BUYER  IN  ITS BUSINESS PURCHASES PRODUCTS, GOODS AND/OR SERVICES AND/OR BORROWS
MONEY  IN  CONNECTION  WITH  EITHER  :A  COMMERCIAL  OR  FINANCIAL  TRANSACTIONS
(COLLECTIVELY  REFERRED  TO  AS  THE "MERCHANDISE") FROM COMMERCIAL PROVIDERS OF
SUCH MERCHANDISE (HEREAFTER "SUPPLIERS"). BUYER HAS BEEN INTRODUCED TO THE TRADE
ACCEPTANCE  DRAFT  PROGRAM  (THE "TAD PROGRAM") OFFERED BY ACTRADE CAPITAL, INC.
("ACTRADE").

SIGNING THIS ACKNOWLEDGMENT FORM IMPOSES NO OBLIGATION UPON BUYER TO USE THE TAD
PROGRAM  AT  ANY TIME. BY SIGNING THIS ACKNOWLEDGMENT FORM, BUYER CONFIRMS THAT,
IF IT ELECTS TO USE THE TAD PROGRAM IN THE FUTURE, THEN BUYER, BY ISSUING ONE OR
MORE  TADS  (AS DEFINED BELOW) PREPARED IN CONNECTION WITH TRANSACTIONS WITH ITS
COMMERCIAL  SUPPLIERS,  AND  IN CONSIDERATION OF ACTRADE'S PURCHASE THEREOF FROM
SUCH  COMMERCIAL  SUPPLIERS,  CONFIRMS  ITS AGREEMENT THAT THE FOLLOWING GENERAL
TERMS  SHALL  APPLY:

1.   THE  TAD:  Actrade  has  developed  and  administers  the  patented  "Trade
     Acceptance  Draft"  (TAD) Program and has developed and recently introduced
     the Electronic Trade Acceptance Draft (E-TAD) Program which is, in essence,
     the  electronic,  on-line version of the original TAD Program. For purposes
     of  this  Agreement  all  references  to  "TAD" shall include both TADs and
     E-TADs  and  "TAD Program" shall include both the TAD Program and the E-TAD
     Program.  A  TAD  is  a  draft  prepared in connection with a commercial or
     financial  transaction  on  the  account  of the Buyer, which is issued and
     signed  by  the  Buyer  as payment for Merchandise. By issuing a TAD, Buyer
     hereby  agrees  to pay such TAD at a designated bank when it becomes due. A
     TAD  identifies  a specific amount due on a specific date in the future, as
     agreed to by Buyer, and is payable from a specific, designated bank account
     of  Buyer,  A  TAD  is  an instrument evidencing Buyer's obligation to make
     payment  for  Merchandise under the Uniform Commercial Code of the Stale of
     New  York  and  on  its  due  date serves as a pre-authorized payment draft
     against  the  designated account in exactly the same fashion as an ordinary
     check;

2.   FULL  PERFORMANCE: By Buyer's participation in Actrade's TAD Program, Buyer
     agrees  that  Actrade,  and  any  subsequent  holders of TADs, may deem the
     Merchandise  for  which it has paid by issuing any TAD or TADs to have been
     received  as  ordered,duly  inspected,  if  appropriate,  and  found  the
     Merchandise to be acceptable and Actrade may rely upon delivery of the TADs
     as  evidence  of  full  performance  by  Supplier;

3.   NO  CINNERCUAK DISPUTE: Buyer has no, and will not in the future claim any,
     commercial dispute, defense, claim or offset which would cause or permit it
     to  refuse  payment  of  a  TAD when presented for payment on the due date.
     Nothing  herein  shall  limit  or otherwise adversely affect Buyer's rights
     against  its  Supplier;

4.   AVAILABLE  FUNDS:  On  the  due  date of any TAD, Buyer will have available
     funds on deposit in the bank account at the bank designated by the Buyer to
     permit  payment  of  such  TAD  when  presented  (the  "Paying  Bank");

5.   NEGOTIABILITY:  The  TADs  are  negotiable  instruments  as  defined in the
     Uniform  Commercial  Code of the State of New York, and in particular under
     Sections 3-104 and 3-409 thereof, and can be transferred by the endorsement
     of  Seller  or  any  subsequent  holder  of  the  TAD;

6.   PAYING  BANK: If Buyer changes the account designated for TAD payment, such
     change  must  be  made on at least 10 days prior written notice to Actrade;

7.   DEFAULT: If Buyer defaults in the payment of any of the TAD(s) purchased by
     Actrade:
     a)   ACCELERATION  OF DUE DATE: Actrade may accelerate the due dates of all
          other TADs it has purchased from the Supplier which received such TADs
          from  Buyer  so  that  payment  on  all such TADs shall be due 10 days
          following  the  acceleration  date.
     b)   DEFAULT  CHARGES:  Buyer agrees that the face amount of each TAD which
          is  not paid for any reason on the due date thereof (including without
          limitation, a due date accelerated pursuant to Paragraph 7a shall bear
          interest  at  the rate of 1.5% per month from the due date of such TAD
          through and including the date of payment. Buyer agrees to pay Actrade
          such interest together with the face amount of such TAD and any actual
          charges  incurred  by  Actrade in collecting defaulted TADs, including
          bank  charges,  return  fees  and  legal  fees.
     c)   NO FURTHER BUSINESS WITH SELLER: Upon a default in payment of any TAD,
          Buyer  shall  immediately  relinquish its' right to purchase, order or
          request  any  further  Merchandise  from  the  Supplier  to  which the
          defaulted TAD was delivered. At Actrade's request, such Supplier shall
          cease  to  make  any  further sales of Merchandise to Buyer until such
          time  as  all defaulted TADs have been paid in full, together with all
          applicable  default  fees  and  charges  due  to  Actrade;

8.   PAYMENT  AUTHORIZATION:  Actrade  (including any party to whom She TADs are
     sold, assigned, pledged or otherwise transferred) is authorized by Buyer to
     add  to  the  TADs  required  or  appropriate  endorsements,  signatures or
     encoding  of  bank  routing  and  payment  information to permit payment of
     amounts  due  to  Actrade on the due dates by debit from Buyer's account at
     the  specified  Paying  Bank;


<PAGE>
9.   AUTHORIZED  SIGNATURE: Buyer shall ensure that all TADs are signed and that
     the signatures on TADs shall be of persons authorized as a signatory on the
     designated account at the Paying Bank and authorized to execute instruments
     such  as  TADs;

10.  VALID  CORPORATE  OBLIGATION:  Buyer confirms, warrants and represents that
     the  terms,  conditions and provisions herein with respect to Buyers use of
     'TADs  and its participation in (he TAD Program, have been duly approved by
     all  necessary  corporate  action  on  the  part  of  Buyer  and  that this
     acknowledgement  and  each  of  the  TADs  issued by the Buyer shall be the
     valid,  legal  and  binding  obligation  of  Buyer  and  that  all required
     corporate action has been duly taken as required by Buyers charter, by-laws
     or any applicable provisions of law in connection with this acknowledgement
     and  the  TADs  to  be  issued  in  conjunction  herewith;

11.  ARBITRATION:  At  the  sole  discretion of Actrade, any and all disputes or
     claims  arising  out  of  or relating to this Agreement or the relationship
     between  Buyer  and  Actrade,  including any dispute or claim based upon or
     arising from an alleged tort, may be submitted to arbitration in accordance
     with  the  provisions of the rules of the American Arbitration Association,
     to  be  decided  by three (3) arbitrators appointed in accordance with such
     rules.  If  Actrade so elects, the site of such arbitration hearing and all
     proceedings  in  connection therewith shall be New York City, New York, am!
     Actrade  and  Buyer  each  irrevocably  and  unconditionally submit to said
     jurisdiction  and  venue  its New York City. New York. Any such arbitration
     award  shall  be  final  and  binding  upon  both parties concerned and any
     judgment  upon  the  award rendered by the arbitrator may be entered in any
     court  having jurisdiction thereof. Any remedy that would be available from
     a  court  of  law  or  equity, and permitted under this Agreement, shall be
     available  from the arbitrator. Actrade and Buyer agree that this Agreement
     involves interstate commerce and that all arbitration proceedings conducted
     hereunder  shall  he  governed  by  the  Federal  Arbitration Act, 9 U.S.C.
     Sec.Sec.  1.  et  seq.  Actrade  and Buyer hereby expressly agree that this
     paragraph  constitutes  a  valid agreement to arbitrate. The court in which
     any  judgment  upon  the  award  is  entered, whether a confirming court, a
     domesticating  court  and/or an appellate court, shall award all attorneys'
     fees  incurred  by  Actrade  in  connection  with  the proceedings therein.

12.  APPLICABLE LAW, VENUE, JURISDICTION AND SERVICE NF PROCESS. The laws of the
     State  of  New  York  shall  govern  this  Agreement as well as any and all
     disputes arising between Buyer and Actrade. Further, without any limitation
     to  the  foregoing,  Buyer  hereby  confirms its understanding that all TAD
     transactions,  the  TAD  program  and the use of TADs: (i) are specifically
     subject  to  the  provisions of the Uniform Commercial Code of the Stale of
     New  York  and  (ii) that the laws of the State of New York will govern any
     and all disputes concerning electronic signatures. Should Actrade elect not
     to  submit  any  dispute  hereunder  to  arbitration,  Buyer  agrees  and
     irrevocably  submits to the exclusive Jurisdiction of (i) the Supreme Court
     of  the  State  of  New  York,  New  York County and (ii) the United States
     District  Court  for  the Southern District of New York for the purposes of
     any  dispute  arising  out  of  this Agreement or arising between Buyer and
     Actrade  (whether  based upon contract, tort or any other legal principle),
     Buyer irrevocably and unconditionally waives any OBJECTION to the laying of
     Venue of any dispute arising out of this Agreement or arising between Buyer
     and  Actrade  (whether  based  upon  contract,  tort  or  any  other  legal
     principle)  in  (i)  the  Supreme  Court of the State of New York, New York
     County  or  (ii) the United States District Court for the Southern District
     of  New  York.  Buyer further irrevocably unconditionally waives and agrees
     not  to  plead  or  claim  in  any such court that any such action, suit or
     proceeding brought in said court has been brought in an inconvenient forum.
     Furthermore,  Buyer  consents to the service of process in any suit, action
     "or  proceeding  by means of either service upon the Secretary of the State
     of  New  York  hereby  designated  as  Agent  for  service of process or by
     certified  limit,  return  receipt  requested.  addressed  to  Buyer at the
     address  first  above  written, or such other address as the Buyer may from
     time  to  time  designate  in  writing.

13.  DISCLOSURE.  Actrade  is  hereby authorized to release financial statements
     and  related  information  PERTAINING to Buyer for the purpose of assessing
     security  on  Actrade's  behalf;

14.  ASSIGNMENT.  Buyer  agrees  that  it shall not assign this Acknowledgement.
     Buyer  agrees  that  Actrade may assign all of its rights, remedies, powers
     and  privileges  hereunder;

15.  WAIVER  AND  INTEGRATION: This acknowledgment contains the entire agreement
     of  the  parties,  and  supersedes  all  prior  ones.  Specifically,  Buyer
     acknowledges-  that  in signing this agreement, Buyer is not relying on any
     previous  representations  made  by  Actrade  or its representatives. Buyer
     further  acknowledges  that this agreement may only he changed by a written
     agreement  signed  by  the  party  against  whom enforcement of any waiver,
     change,  modification,  extension,  or  discharge  is  sought. Further, you
     confirm  that the headings used in this Letter arc solely for reference and
     our  convenience am! do no! change the meaning of any provision hereof; and

16.  AFFIRMATION  OF  FINANCIAL  STATEMENTS:  Buyer  confirms that all financial
     statements  prepared,  whether  internally or externally, for the Buyer and
     submitted to Actrade are true and accurate representations of the financial
     condition  of  the Buyer in accordance with standard accounting principles.

Company:   YP.Net, Inc.           Paying Bank:       Bank Of America
        ---------------------                 ----------------------------------

Signature:  /s/ Angelo Tullo      Account/ABA Number:  004671574864/122101706
          -------------------                        ---------------------------

Print Name:     Angelo Tullo                      ["Official Seal"]
           ------------------                     Margaret M. Molter
                                                 Notary Public-Arizona
Title:     President                                Maricopa County
      -----------------------               My Commission Expires 9/22/2003

Sworn To Before Me this      13th    day of       August      2002
                         ----------          ---------------     -

Notary:  Margaret M. Molter
       ------------------------


<PAGE>
TRADE ACCEPTANCE DRAFT PROGRAM
Supplier Letter of Understanding

                                                           August 13      , 2002
                                                --------------------------     -

(SUPPLIER COMPANY NAME)    Telco Billing, Inc.
- ----------------------------------------------

(ADDRESS)    4840 E. Jasmine Street, Ste. 110
- ----------------------------------------------

(ADDRESS)    Mesa, AZ 85205
- ----------------------------------------------

Actrade  Capital,  Inc.  ("Actrade")  has developed and administers the patented
"Trade Acceptance Draft" (TAD) Program and has developed and recently introduced
the  Electronic Trade Acceptance Draft (E-TAD) Program which is, in essence, the
electronic,  on-line  version  of the original TAD Program. For purposes of this
Agreement  all  references  to "TAD" shall include both TADs and E-TADs and "TAD
Program"  shall  include both the TAD Program and the E-TAD Program. This Letter
of Understanding is intended to set forth the terms and conditions applicable to
all  transactions  between  us  under  Actrade's  TAD  Program:

1.   PURCHASE  OF TAD. Under any of the available options under the TAD Program,
     Actrade  may  buy  a  Trade Acceptance Draft ("TAD") which you receive from
     your  customers  in  payment  for  goods  and/or  services.

2.   NO  OBLIGATION  ON  EITHER PARTY. You are not obligated to sell any TAD you
     receive,  nor  is  Actrade  obligated  to buy any TAD you offer to sell. In
     connection  with each sale of TADs proposed by you, Actrade will notify you
     of the terms upon which it will buy any TAD from you. The terms under which
     a  TAD will be purchased will be set out in writing in the Bill of Sale for
     each  purchase  transaction.  You  may  either accept the terms offered, or
     reject  them  for  any  reason  at  all.

3.   FULL  PAYMENT  UPON  SALE OF TAD. in general, Actrade will pay you the full
     face  amount  of each TAD purchased by it, less Actrade's fees, charges and
     agreed  upon  discounts.  However,  in some cases the amount of the initial
     payment  may  be less depending upon Actrade's evaluation of your customer,
     the  industry  in  which  you  and  your  customers operate, the product or
     service  sold  and  any  other  factor  that  would have a bearing upon the
     evaluation  of  the transaction. In all cases where you require the precise
     purchase  terms  in  advance  you  must  follow  the  procedure  for  the
     pre-approval  of  your  customers  by  Actrade  (see  Paragraph  8  below).

4.   NATURE  OF  TAD OFFERED. Any TAD offered for sale to Actrade must have been
     duly issued and delivered to you by your customer as payment for the actual
     sale  of  goods  and/or services, in a bona fide contemporaneous commercial
     transaction  entered  into  between  you and your customer. You acknowledge
     that  any TADs offered for sale to Actrade do not represent sales to any of
     your  subsidiaries,  parent  company or affiliates or any of your employees
     without  prior  written  approval  by  an  officer  of Actrade. Yon further
     acknowledge  that  TADs  offered  for sale are of proper and legal form and
     have not been altered in any way (other than being endorsed by you pursuant
     to  Paragraph  16  below)  by  you.

5.   ALL  RIGHTS SOLD WITH TAD. Your sale of any TAD to Actrade is made together
     with  all  proceeds thereof, security and guarantees therefore, all of your
     rights  to  the goods or property which were paid for with such TAD and all
     your  rights  to payment for the goods or services represented by such TAD,
     so  that  Actrade  will have all of the rights of an unpaid supplier of the
     goods  or  services, the sale of which gave rise to such TAD if such TAD is
     dishonored.

6.   TADS NOT PURCHASED BY ACTRADE. Where you have submitted TADs to Actrade for
     purchase and Actrade declines to purchase such TADs, you have the option of
     requesting  Actrade,  for  a nominal charge, to prepare the TADs for direct
     deposit  in  your bank account on the due date. In such a case Actrade will
     grant  you  a  limited  waiver from its patented TAD process for those TADs
     only.

7.   NON-RECOURSE  PURCHASE OF TADS; CONDITIONS WHICH RESULT IN RECOURSE TO YOU.
     The  purchase  of  any  TAD  from  you  is without recourse in the event of
     non-payment of such TAD UNLESS (i) such TAD is not paid when due because of
     an  act  of  fraud  by you in connection with the generation or sale of the
     defaulted  TAD;  OR  (ii)  the non-payment was the result of any commercial
     dispute,  claim  of  offset  or  claimed  counterclaim  against you by your
     customer;  OR  (iii) you violate the provisions of either Paragraph 4 or 11
     hereof.  However,  in the event of a commercial dispute, claim of offset or
     claimed counterclaim against you, Actrade agrees that it will have recourse
     against  you  ONLY  in  the  event  that  a court of competent jurisdiction
     determines  that  Actrade cannot collect the amount of the defaulted TAD(s)
     or  any portion of such amounts from the applicable Buyer by reason of such
     dispute.

8.   CUSTOMER  PRE-APPROVAL.
     A.   CUSTOMER  PRE-APPROVAL.  If  you  desire  pre-approval of the purchase
          terms  for  a  specific customer, you must submit to Actrade the names
          and  required credit information concerning such customer(s) from whom
          you intend to receive TADs. If approved, Actrade will provide you with
          a  written  statement  for  each  approved  customer  (a  "Qualified
          Customer") detailing the amount of credit available for such Qualified
          Customer  (i.e. total face amount of TADs from each Qualified Customer
          which  Actrade  will  purchase),


<PAGE>
          and any other limitation or conditions affecting the purchase price or
          payment  terms  with  respect  to  such  Qualified  Customer.
     B.   WRITTEN STATEMENT REQUIRED. The written statement provided in the case
          of  a  customer  pre-approval must be signed by an authorized and duly
          appointed officer of Actrade before it is valid. Absent such a written
          statement,  Actrade  will  only  he bound by the purchase terms as set
          forth  in  the  Bill  of  Sale for the transaction, which must also be
          signed by an officer of Actrade to he valid, of which yon will only be
          advised  after  Actrade  receives  the  TADs.
     C.   TERMINATION  OR  MODIFICATION OF APPROVAL. Actrade may in its sole and
          arbitrary discretion terminate or modify the approval of any Qualified
          Customer  at  any  time  in  the  event  of  an  adverse change in the
          financial  condition  of  such Qualified Customer or if such Qualified
          Customer  has  defaulted  in  the  payment  of  any  TADs  when  due.

9.   ACTRADE'S RIQHT WITH RESPECT TO DEFAULTED TADS. As owner of any TAD sold by
     you to Actrade, Actrade shall have the right to bring suit, in your name or
     its  own,  and  generally,  will have all other rights which you would have
     with  respect  to  said  TAD  and  the  transaction,  including,  without
     limitation. the right to (i) accelerate or extend the time of payment; (ii)
     settle,  compromise  or  release (in whole or in part) any amount owing, or
     (iii)  where  applicable,  to file, in your name or its own, a lien against
     the property where the services were performed or for which the goods sold.
     Actrade  agrees  it  has no right as against you for any difference owed or
     amount  remaining  on  the  defaulted TADs, unless pursuant to Paragraph 7.

10.  CHARGES  WHERE ACTRADE HAS RECOURSE. In the case where the circumstances of
     a  default  in  payment  of  any  TAD were such that the credits proleclion
     ohlained,  if any, did not fully compensate Actrade fnr any loss related to
     the  Default  of a TAD as to which you were subject to recourse pursuant to
     Paragraph  7  above  or  if  no  such credit protection was obtained, which
     notice  shall  be  given  to yon prior to Actrade's purchase of theTAD, yon
     shall  he obligated to pay to Actrade (i) the face amount of the applicable
     Defaulted  TAD, plus (ii) interest on that amount at the prime lending rate
     as  established  by  Citibank,  N.A. in Mew York City from the original due
     date  of the Defaulted TAD to the date Actrade receives payment of the face
     amount  of  such  Defaulted  TAD,  plus  (iii) when: applicable. all out of
     pocket  costs for collection of the TAD including, but not limited to, bank
     charges,  reasonable  attorney's  fees,  and  the  like.  Upon  making such
     payment,  the Defaulted TAD will be returned to you as if it had never been
     purchased  by  Actrade.

11.  NO  FURTHER  BUSINESS  WITH  CUSTOMER  WHILE  DEFAULT  EXISTS. At Actrade's
     request,  you shall cense to make any further sales of goods or services to
     any customer who defaulted in the payment of any TAD until such time as all
     defaulted  TADs  issued  by  such customer have been paid in full, together
     with  all  applicable default fees and charges due to Actrade. Your failure
     to comply with this requirement will result in Actrade having full recourse
     against  you  for  the  amount owed by your customer upon any TAD issued by
     such  customer,  including,  but  not  limited  to,  the  TAD  face amount,
     interest,  fees  and  reasonable  attorney's  fees  for  collection.

12.  RIGHT OF OFFSET. Actrade has the right to offset against any amounts due to
     you  any  amounts  you  owe  to  Actrade.

13.  Changes  to Program Terms and Conditions. Actrade may from time to time, in
     its  sole  discretion,  make  changes or additions in the general terms and
     conditions  applicable  to  its  TAD  Program or to any TAD Program option,
     including  the  discontinuance  or  addition  of  any  options or services.
     However,  Actrade  confirms that any such changes wilt not affect the terms
     or conditions applicable 10 any transaction where TADs have been purchased.
     You  agree  that  should  you  utilize  the  TAD  Program  alter the stated
     effective  date  of any change; to the terms and conditions, such use shall
     constitute  your  acceptance  of  the  new or changed terms and conditions,

l4.  TRADE  NAMES  AND  STYLES.  You  have  advised that you customarily use the
     following  trade  name  and  style:
     "  Yellow-Page.Net     ,  a  division  of YP.Net, Inc.   ." By signing (bis
     -----------------------                  ----------------
     Agreement  below  you  authorized  Actradc  to  accept and deposit TADs and
     checks  issued to you under the trade name and style herein and pursuant to
     any  future  agreement between you and Actrade relating to trade acceptance
     drafts.

15.  AUTHORITY  TO  ADD  ENDORSEMENT.  With  respect  to any TADs sold by you to
     Actradc,  or  any checks received in connect ion with such purchased TADs )
     you  hereby  (i)  agree  to properly endorse such TAD(s) or check(s) to the
     order  of  Actrade and (ii) grant to Actrade the right and authority to add
     your  endorsement  to  such  purchased TADs (if you fail to do so) whenever
     required  in  order  to  effect  the  sale,  pledge,  assignment, transfer,
     presentment  and/or  collection  thereof,

16.  ARBITRATION:  At  the  sole  discretion of Actrade, all disputes and claims
     arising  in  connection  with  the  relationship  between  you  and Actrade
     (whether  relating  to Actrade's TAD Program or otherwise) may be submitted
     to  arbitration  for  resolution  in  accordance with the provisions of the
     rules  of the American Arbitration Association, by three arbiters appointed
     in  accordance  with  such  rules.  If  Actrade so elects, the site of such
     arbitration  shall  he  New York City, New York and the parties hereto each
     submit  to  such  jurisdiction.  Any  award  of  the  American  Arbitration
     Association  shall  be  final  and  binding  upon  both  parties concerned.

17.  APPLICABLE  LAW, VENUE, JURISDICTION AND SERVICE OF PROCESS. You agree that
     the  laws  of  the  State  of New York shall govern this Agreement, and any
     between us. Further you confirm your understanding that the TAD Program and
     the  use  of  TADs is specifically subject to the provisions of the Uniform
     Commercial  Code, of the State of New York, and in particular that the Laws
     of the State of New York will govern the legal effect and enforceability of
     electronic  signatures  affixed  to  any  document  pertaining  to  a  TAD
     transaction.  Should  Actrade  not elect to submit any dispute hereunder to
     arbitration,  you  agree that any legal action or proceeding arising out of
     or  relating  to  this  Agreement  or  the relationship between us shall be
     instituted  solely  in the courts of the State of New York, within the City
     and County of New York, or of the United States of America for the Southern
     District  of  New  York  at  New York City, New York and the parties hereby
     submit  to  the  jurisdiction  of  each  such  court  in any such action or
     proceeding.  You consent to the service of process in any such legal action
     or proceeding by means of either service upon the Secretary of the State of
     New  York  hereby  designated  as  Agent  for  service  of  process  or


<PAGE>
     by  certified  mail,  return  receipt  requested,  addressed  to you at the
     address  first above written, or such other address as you may from time to
     time  designate in writing. You also waive your right to a trial by jury of
     any  disputes  arising  from  your  relationship  with  Actrade.

18.  VALID  CORPORATE  OBLIGATION.  By  executing  this  Agreement  below  where
     indicated,  you  also  confirm,  warrant  and  represent  that  the  terms,
     conditions  and  provisions set forth herein have been duly approved by all
     necessary action on the part of the Supplier and that this Agreement is the
     valid,  legal and binding agreement and obligation of the Supplier and that
     all required and necessary corporate action has been duly taken as required
     by  your  corporate  charter,  by-laws and all applicable provisions of the
     laws  of  the  jurisdiction  of  your incorporation in connection with this
     Agreement  and  the  transactions  contemplated  hereunder.

19.  SAVING  CLAUSE.  If  any provision of this Agreement in any way contravenes
     the  laws  of any state or jurisdiction, such provision shall be deemed not
     to  be a part hereof in (hat jurisdiction, and you agree to remain bound by
     all  remaining provisions. If any portion of this Agreement shall be deemed
     to  be illegal or violative of public policy, it is agreed that it shall be
     interpreted to be legally binding and enforceable to the maximum reasonable
     extent  allowed  by  law.

20.  ASSIGNMENT.  You  agree that you shall not assign this Agreement. You agree
     that  Actrade may assign all of its rights, remedies, powers and privileges
     hereunder.

21.  WAIVER  AND  INTEGRATION. This acknowledgment contains the entire agreement
     of  the  parties,  and  supersedes  all  prior  ones.  Specifically,  you
     acknowledge  that  in  signing  this  agreement, you are not relying on any
     previous  representations  made  by  Actrade  or  its  representatives. You
     further  acknowledge  that  this agreement may only be changed by a written
     agreement  signed  by  the  party  against  whom enforcement of any waiver,
     change,  modification,  extension,  or  discharge  is  sought. Further, you
     confirm  that the headings used in this Letter are solely for reference and
     our  convenience  and  do  not  change the meaning of any provision hereof.

Please  note  that  this  Agreement is not binding upon Actrade unless and until
executed  by  an  officer of Actrade where indicated below. Further, you confirm
your  understanding  that  the  headings  used  in this Agreement arc solely for
reference  and  our  convenience  and do not change the meaning of any provision
hereof.

Very truly yours,
- ------------------------------
Actrade Representative

ABOVE TERMS AND CONDITIONS ACCEPTED:
Telco Billing, Inc.                                    88-0391858
- ------------------------------------        ------------------------------------
"SUPPLIER"

By:        /s/ DeVal Johnson                        (480)  860-0011
   ---------------------------------        ------------------------------------
     Name:     DeVal Johnson
     Title:    Director

This Agreement has been confirmed
by Actrade Capital, Inc. by:
                              ----------------------------------
                                Signature of officer of Actrade


<PAGE>
                             SECRETARY'S CERTIFICATE

I,  DeVal  Johnson.   being  duly constituted Secretary of       Yp.Net,  Inc.
    ----------------                                       ---------------------
corporation duly organized and existing under and by virtue of the laws of
Arizona (hereafter the "Corporation"), do hereby certify that the following
- -------
individuals of the Corporation are hereby authorized to execute and deliver all
of the documents, instruments, Trade Acceptance Drafts ["TAD(TM)"] and
agreements to be executed and delivered by the Corporation in connection with
Actrade Capital, Inc.'s TAD Program (collectively the "Transaction Documents")
and bind the Corporation thereto and that their true and lawful signature appear
below adjacent to their name:

Name             Postion            Signature
- ----             -------            ---------

Angelo Tullo     President          /s/ Angelo Tullo
- ---------------  -----------------  -----------------

DeVal Johnson    Secretary          /s/ DeVal Johnson
- ---------------  -----------------  -----------------


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

I further confirm that all parties set forth above as authorized signatories arc
authorized signatories on the bank account designated by the Corporation for
payment of TADs.

Furthermore, should any of the above parties no longer be authorized signatories
for the Corporation, prior written notice by certified mail, return receipt
requested, must be given to an officer of Actrade Capital, Inc. ("Actrade")
notifying them of the change and designating a new authorized signatory. It is
understood that Actrade shall not be liable for the Corporation's failure to
give such notice.

Dated:  August 13      , 2002
        ---------------     -

                                              /s/ DeVal Johnson, Secretary
(Corporate Seal)                           ---------------------------------


<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>9
<FILENAME>doc7.txt
<TEXT>
                                                                    Exhibit 99.1

                            CERTIFICATION PURSUANT TO

                             18 U.S.C. SECTION 1350,
- --------------------------------------------------------------------------------

                             AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARABANES-OXLEY ACT OF 2002

     In connection with the Quarterly Report of YP.Net, Inc. (the "Company") on
Form 10-QSB for the three months ended December 31, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Angelo
Tullo, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C.
section 906 of the Sarbanes-Oxley Act of 2002, that:

     (1)  The Report fully complies with the requirements of section 13(a) or
          15(d) of the Securities and Exchange Act of 1934; and

     (2)  The information contained in the Report fairly presents, in all
          material respects, the financial condition and result of operations of
          the Company.



                                 /s/ ANGELO TULLO
                                 -----------------
                                 Angelo Tullo
                                 Chairman, President and Chief Executive Officer
                                 May 14, 2003


<PAGE>
                            CERTIFICATION PURSUANT TO

                             18 U.S.C. SECTION 1350,
- --------------------------------------------------------------------------------

                             AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARABANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of YP.Net, Inc. (the "Company") on Form
10-QSB for the three months ended December 31, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, David Iannini,
Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section
906 of the Sarbanes-Oxley Act of 2002, that:

     (3)  The Report fully complies with the requirements of section 13(a) or
          15(d) of the Securities and Exchange Act of 1934; and

     (4)  The information contained in the Report fairly presents, in all
          material respects, the financial condition and result of operations of
          the Company.



                                 /s/  DAVID IANNINI
                                 ------------------

                                 David Iannini
                                 Chief Financial Officer
                                 May 14, 2003


<PAGE>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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