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                                                                    EXHIBIT 10.7

                              EMPLOYMENT AGREEMENT

This Employment Agreement (this "Agreement") is made as of October 11, 1999 by
Integrated Communication Networks, Inc., a Nevada Corporation (the "Employer")
and Thomas C. Scott, an individual (the "Executive").

                                   WITNESSETH

WHEREAS, the Executive will be serving the Corporation in the capacities of Vice
President of Sales and Marketing and both the Corporation and the Executive
desire to continue their relationship, subject to the terms and conditions
contained herein.

NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements hereinafter set forth, the parties hereto, intending to be legally
bound, agree in the following terms and conditions, which shall be effective
from and after the date hereof:

                                    AGREEMENT

The parties, intending to be legally bound, agree as follows:

1.      DEFINITIONS

For the purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1.

"Agreement" - the Employment Agreement, as amended from time to time.

"Basic Compensation" - Salary and Benefits.

"Benefits" - as defined in Section 3.1(b).

"Board of Directors" - the board of directors of the Employer.

"Confidential Information" - any and all:

        (a)     trade secrets concerning the business and affairs of the
                Employers, data, know-how, graphs, drawings, samples, inventions
                and ideas, customer lists, currents and anticipated customer
                requirements, price lists, market studies, business plans,
                computer software and programs (including object code and source
                code), database technologies, systems, structures, and
                architectures) and related concepts, ideas, designs, methods and
                information), and any other information, however documented,
                that is a trade secret within the meaning of California law; and

        (b)     information concerning the business and affairs of the Employer
                (which includes historical financial statements, financial
                projections and budgets, historical and

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                projected sales, capital spending budgets and plans, the names
                and backgrounds of key personnel and personnel training and
                techniques and materials), however documented; and

        (c)     notes, analysis, compilations, studies, summaries, and other
                material prepared by or for the Employer containing or based, in
                whole or in part, on any information included in the foregoing.

"disability" - as defined in Section 6.2.

"Effective Date" - the date stated in the first paragraph of the Agreement.

"Employment Period" - the term of the Executive's employment under this
Agreement.

"Fiscal Year" - the Employer's fiscal year, as it exists on the Effective Date
or as changed from time to time.

"for cause" - as defined in Section 6.3.

"for good reason" - as defined in Section 6.4.

"Non-Competition Agreement" as defined in Section 8.2.

"person" - any individual, corporation (including and non-profit corporation),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, or governmental body.

"Post-Employment Period" - as defined in Section 8.2.

"Proprietary Items" - as defined in Section 7.2(a)(iv).

"Salary" - as defined in Sections 3.1(a).

2.      EMPLOYMENT TERMS AND DUTIES

2.1.    EMPLOYMENT

The Employer hereby employs the Executive, and the Executive hereby accepts
employment by the Employer, upon the terms and conditions set forth in this
Agreement.

2.2.    TERM

Subject to the provisions of Section 6, the term of the Executive's employment
under this Agreement will be three years, beginning on the Effective Date and
ending on the third anniversary of the Effective Date.

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2.3.    DUTIES

The Executive will have such duties as are assigned or delegated to the
Executive by the Board of Directors or Chief Executive Officer, and will
initially serve as Vice President of Sales and Marketing of the Employer. The
Executive will devote all of his business time, attention, skill, and energy
exclusively to the business of the Employer, will use his best efforts to
promote the success of the Employer's business, and will cooperate fully with
the Board of Directors in the advancement of the best interest of the Employer.

3.      COMPENSATION

3.1.    BASIC COMPENSATION

        (a)     Salary. The Executive will be paid an annual salary of $150,000,
                subject to adjustment as provided below (the "Salary"), which
                will be payable in equal periodic installments according to the
                Employer's customary payroll practices, but no less frequently
                than monthly. The Salary will be reviewed by the Board of
                Directors not less frequently than annually, and may be adjusted
                upward in the sole discretion of the Board of Directors, but in
                no event will the Salary be increased less than five (5%)
                percent per year as long as Employer has positive net income
                from operations.

        (b)     Benefits. The Executive will, during the Employment Period, be
                permitted to participate in such pension, profit sharing, bonus,
                life insurance, hospitalization, major medical, and other
                employee benefit plans of the Employer that may be in effect
                from time to time, to the extent the Executive is eligible under
                the terms of those plans (collectively, the "Benefits").

4.      FACILITIES AND EXPENSES

4.1.    GENERAL

The Employer will pay on behalf of the Executive (or reimburse the Executive
for) reasonable expenses incurred by the Executive at the request of, or on
behalf of, the Employer in the performance of the Executive's duties pursuant to
this Agreement, and in accordance with the Employer's employment policies,
including reasonable expenses incurred by the Executive in attending
conventions, seminars, and other business meetings, in appropriate business,
entertainment activities, and for promotional expenses. The Executive must file
expense reports with respect to such expenses in accordance with the Employer's
policies.

5.      VACATION AND HOLIDAYS

The Executive will be entitled to paid vacation each Fiscal Year in accordance
with the vacation policies of the Employer in effect for its executive officers
from time to time. Vacation must be taken by the Executive at such time or times
as reasonably approved by the Chairman of the Board or Chief Executive Officer.
The Executive will also be entitled to the paid holidays set forth in the
Employer's policies. Vacation days (but not

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holidays or sick days) accrued during any Fiscal Year that are not used by the
Executive during such Fiscal Year may be used in only the Fiscal Year
immediately following the year in which such vacations days were accrued, and
any vacation days not so used in either the year in which they were accrued or
the subsequent year shall expire and be forfeited.

6.      TERMINATION

6.1.    EVENTS OF TERMINATION

The Employment Period and the Executive's Basic Compensation, and any and all
other rights of the Executive under this Agreement of otherwise as an employee
of the Employer will terminate (excepts as otherwise provided in this Section
6).

        (a)     upon death of the Executive;

        (b)     upon the disability of the Executive (as defined in Section 6.2)
                immediately upon notice from wither party to the other;

        (c)     for cause (as defined in Section 6.3), immediately upon notice
                from the Employer to the Executive, or at such later time as
                such notice may specify; or

        (d)     for good reason (as defined in Section 6.4) upon not less than
                thirty days' prior notice from the Executive to the Employer.

6.2.    DEFINITION OF DISABILITY

For purpose of Section 6.1, the Executive will be deemed to have a "disability"
if, for physical or mental reasons, the Executive is unable to perform the
Executive's duties under this Agreement for forty-five (45) consecutive days, or
sixty (60) days during any twelve (12) month period, as determined in accordance
with this Section 6.2, or if, in the event the Company maintains a disability
insurance policy covering the Executive the Executive is determined to be
disabled pursuant to the definition of "disability" as set forth in such
disability insurance, such determination to be made by a medical doctor selected
or appointed by such insurance company. The Executive must submit to a
reasonable number of examinations by the medical doctor making the determination
of disability under this Section 6.2, and the Executive hereby authorizes the
disclosure and release to the Employers of such determination and all supporting
medical records. If the Executive is not legally competent, the Executive's
legal guardian or duly authorized attorney-in-fact will act in the Executive's
stead, under this Section 6.2, for the purposes of submitting the Executive to
the examinations, and providing the authorization of disclosure, required under
this Section 6.2.

6.3     DEFINITION OF "FOR CAUSE"

For purposes of Section 6.1, the phrase "for cause" means: (a) the Executive's
breach of this Agreement; (b) the Executive's failure to adhere to any written
Employer policy if the Executive has been given reasonable opportunity to comply
with such policy or cure

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his failure to comply (which reasonable opportunity must be granted during the
ten (10) day period proceeding termination of this Agreement); (c) the
appropriation (or attempted appropriation) of a material business opportunity of
the Employer, including attempting to secure or securing any personal profit in
connection with any transaction entered into on behalf of the Employer; (d) the
misappropriation (or attempted misappropriation) of any of the Employer's funds
or property; or (e) the conviction of, the indictment for (or its procedural
equivalent), or the entering of a guilty plea or plea of no contest with respect
to, a felony, the equivalent thereof, or any other crime with respect to which
disclosure would be required in a registration statement, proxy statement or
annual report pursuant to federal or state securities laws, including, without
limitation, pursuant to Item 401 or 402 of Regulation S-K.

6.4.    DEFINITION OF "FOR GOOD REASON"

For purposes of Section 6.1, the phrase "for good reason" means any of the
following: (a) the Employer's material breach of this Agreement; or (b) the
assignment of the Executive without his consent to a position, responsibilities,
or duties of a materially lesser status or degree of responsibility than his
position, responsibilities, or duties at the Effective Date.

6.5.    TERMINATION PAY

Effective upon the termination of this Agreement, the Employer will be obligated
to pay the Executive (or, in the event of his death, designated beneficiary as
defined below) only such compensation as it is provided in this Section 6.5, and
in lieu of all other amounts and in settlement and complete release of all
claims the Executive may have against the Employer for any amounts due and owing
to Executive under this Agreement. For purposes of this Section 6.5, the
Executive's designated beneficiary will be such individual beneficiary of trust,
located at such address, as the Executive may designate by notice to the
Employer from time to time or, if the Executive fails to give notice to the
Employer of such beneficiary, the Executive's estate. Notwithstanding the
proceeding sentence, the Employer will have no duty, in any circumstances, to
attempt to open an estate on behalf of the Executive, to determine whether any
beneficiary designated by the Executive is alive or to ascertain of any such
beneficiary, to determine the existence of any trust, to determine whether any
person or entity purporting to act as the Executive's personal representative
(or the trustee of a trust established by the Executive) is duly authorized to
act in that capacity, or to locate any beneficiary, personal representative, or
trustee.

        (a)     Termination by the Executive for Good Reason. If the Executive
                terminates this Agreement for good reason, the Employer will pay
                the Executive (i) the Executive's Salary for the remainder, if
                any, of the calendar month in which such termination is
                effective and for six (6) consecutive calendar months
                thereafter.

        (b)     Termination by the Employer for Cause. If the Employer
                terminates the Agreement for cause, the Executive will be
                entitled to receive his Salary only through the date such
                termination is effective, and will not be entitled to any

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                other compensation for the Fiscal Year during which such
                termination occurs or any subsequent Fiscal Year.

        (c)     Termination upon Disability. If this Agreement is terminated by
                with party as a result of the Executive's disability, as
                determined under Section 6.2, the Employer will pay the
                Executive his Salary through the remainder of the calendar month
                during which such termination is effective and for the three (3)
                consecutive months thereafter.

        (d)     Termination upon Death. If this Agreement is terminated because
                of the Executive's death, the Executive will be entitled to
                receive his Salary through the end of the calendar month in
                which his death occurs.

        (e)     Benefits. The Executive's accrual of, or participation in plans
                providing for, the Benefits will cease at the effective date of
                the termination of this Agreement, and the Executive will be
                entitled to accrued Benefits pursuant to such plans only as
                provided in such plans. To the extent permitted by law, the
                Executive will not receive, as part of his termination pay
                pursuant to this Section 6, any payments or other compensation
                for any vacation, holiday, sick leave, or other leave, if any,
                which is accrued but unused on the date the notice of
                termination is given under this Agreement.

7.      NON-DISCLOSURE COVENANT; EMPLOYEE INVENTIONS

7.1.    ACKNOWLEDGEMENTS BY THE EXECUTIVE

The Executive acknowledges the (a) during the Employment Period and as a part of
his employment, the Executive will be afforded access to Confidential
Information; (b) public disclosure of such Confidential Information could have
an adverse effect on the Employer and its business; and (c) the provisions of
this Section 7 are reasonable and necessary to prevent the improper use or
disclosure of Confidential Information.

7.2.    AGREEMENTS OF THE EXECUTIVE

In consideration of the compensation and benefits to be paid or provided to the
Executive by the Employer under this Agreement, the Executive covenants as
follows:

        (a)     Confidentiality.

                (1)     During the following the Employment Period, the
                        Executive will hold in confidence the Confidential
                        Information and will not disclose it to any person
                        except with the specific prior written consent of the
                        Employer or except as otherwise expressly permitted by
                        the terms of this Agreement.

                (2)     Any trade secrets of the Employer will be entitled to
                        all of the protections and benefits under California law
                        and any other applicable law. If any information that
                        the Employer deems to be a trade secret is found by a
                        court of competent jurisdiction not to be a trade secret
                        for purposes of

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                        this Agreement, such information will, nevertheless, be
                        considered Confidential Information for purposes of this
                        Agreement. The Executive hereby waives any requirement
                        that the Employer submits proof of the economic value of
                        any trade secret or posts a bond or other security.

                (3)     None of the foregoing obligations and restrictions
                        applies to any part of the Confidential Information that
                        the Executive demonstrates was or became generally
                        available to the public other than as a result of a
                        disclosure by the Executive.

                (4)     The Executive will not remove from the Employer's
                        premises (except to the extent such removal is for
                        purposes of the performance of the Executive's duties at
                        home or while traveling, or except as otherwise
                        specifically authorized by the Employer) any document,
                        record, notebook, plan, model, component, device, or
                        computer software or code, whether embodied in a disk or
                        in any other form (collectively the "Propriety Items").
                        The Executive recognizes that, as between the Employer
                        and the Executive, all of the Proprietary Items, whether
                        or not developed by the Executive, are the exclusive
                        property of the Employer. Upon termination of this
                        Agreement by wither party, or upon the request of the
                        Employer during the Employment Period, the Executive
                        will return to the Employer all of the Proprietary Items
                        in the Executive's possession or subject to the
                        Executive's control, and the Executive shall not retain
                        any copies, abstracts, sketches, or other physical
                        embodiment of any of the Proprietary Items.

7.3.    DISPUTES OR CONTROVERSIES

The Executive recognizes that should a dispute or controversy arising from or
relating to this Agreement be submitted for adjudication to any court,
arbitration panel, or other third party, the preservation of the secrecy of
Confidential Information my be jeopardized. All pleadings, documents,
testimonies, and records relating to any such adjudication will be maintained in
secrecy and will be available for inspection for the Employer, the Executive,
and their respective attorneys and experts, who will agree, in advance and in
writing, to receive and maintain all such information in secrecy, except as may
be limited by them in writing.

8.      NON-COMPETITION AND NON-INTERFERENCE

8.1.    ACKNOWLEDGMENT BY THIS EXECUTIVE

The Executive acknowledges that: (a) the services to be performed by him under
this Agreement are of a special, unique, unusual, extraordinary, and
intellectual character; (b) the Employer's business is international in scope
and its products are marketed throughout the United States and internationally;
(c) the Employer competes with other businesses that are or could be located in
any part of the united States or internationally; and (d) the provisions of this
Section 8 are reasonable and necessary to protect the Employer's business.

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8.2.    COVENANTS OF THE EXECUTIVE

In consideration of the acknowledgments by the Executive, and in consideration
of the compensation and benefits to be paid or provided to the Executive by the
Employer, the Executive covenants that he will not, directly or indirectly:

        (a)     During the Employment Period, except in the course of his
                employment hereunder, and during the Post-Employments Period,
                engage or invest in, own, manage, operate, finance, control, or
                participate in the ownership, management, operation, financing,
                or control of, be employed by, associated with, or in any manner
                connected with, lend the Executive's name or any similar name
                to, lend Executive's credit to or ender services or advice to,
                any business whose products or activities of the Employer
                anywhere within the United States or any other jurisdiction in
                which the Employer then conducts business; provided, however,
                that the Executive may purchase or otherwise acquire up to (but
                not more than) four point nine-nine (4.99%) percent of any class
                of securities of any enterprise (but without otherwise
                participating in the activities of such enterprise) if such
                securities are listed on any national or regional securities
                exchange or have been registered under Section 12(g) of the
                Securities Exchange Act of 1934; provided, further, that this
                provision shall not apply to any interest or investment in any
                business owned by Executive as the Effective Date (an "Owned
                Company") as long as (i) any activity associated with, or
                business time of Executive devoted to, such investment does not
                materially interfere with Executive's duties hereunder, (ii) no
                Confidential Information belonging to, or regarding, Employer is
                used by Executive or such business, or disclosed to any
                employee, officer or director of such business, to the benefit
                of such business or the material detriment of Employer, and
                (iii) the nature of the business conducted by such business does
                not materially change from that conducted by such business as of
                the Effective Date which change would cause such business to
                compete more directly and materially with Employee.

        (b)     whether for the Executive's own account or for the account of
                any other person, at any time during the Employment Period and
                the Post-Employment Period, solicit business of the same or
                similar type bring carried on the Employer, from any person
                known by the Executive to be a customer of the Employer, whether
                or not the Executive had personal contact with such person
                during and by reason of the Executive's employment with the
                Employer;

        (c)     whether for the Executive's own account or the account of any
                other person (i) at any time during the Employment Period and
                the Post-Employment Period, solicit, employ, or otherwise engage
                as an employee, independent contractor or otherwise, any person
                who is or was an employee of the Employer at any time during the
                Employment Period or in any manner induce or attempt to induce
                any employee of the Employer to terminate his employment with
                the Employer; or (ii) at any time during the Employment

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                Period and for two (2) years thereafter, interfere with the
                Employer's relationship with any person, including any person
                who at any time during the Employment Period was an employee,
                contractor, supplier, current or prospective customer of the
                Employer;

        (d)     at any time during or after the Employment Period, disparage the
                Employer or any of its shareholders, directors, officers,
                employees or agents; and

        (e)     six (6) months for other subjects not mentioned under Section
                8.2(c) and 8.2(d).

For purposes of this Section 8.2, the term "Post-Employment Period" means the
two-year period beginning on the date of termination of the Executive's
employment with the Employer.

If any covenant in this Section 8.2 is held to be unreasonable, arbitrary, or
against public policy, such covenant will be considered to be divisible with
respect to scope, time, and geographic area, and such lesser scope, time, or
geographic area, or all of them, as a court of competent jurisdiction may
determine to be reasonable, not arbitrary, and not against public policy, will
be effective, binding, and enforceable against the Executive.

The period of time applicable to any covenant in this Section 8.2 will be
extended by the duration of any violation by the Executive of such covenant.

The Executive will, while the covenant under this Section 8.2 is in effect, give
the notice to the Employer, within ten (10) days after accepting any other
employment, of the identity of the Executive's employer. The Employer may notify
the Executive that he is bound by the Agreement and, at the Employer's election,
furnish a copy of this Agreement or relevant portions thereof. Notwithstanding
anything herein to the contrary, the provisions of this Section 8 shall not
apply in the event Executive terminates this Agreement for good reason or if
this Agreement is terminated by Employer for any reason other than good cause.

9.      INDEMNIFICATION AND INSURANCE

9.1.    The Employer shall indemnify and hold harmless, and in any action, suit
        or proceeding, and defend the Executive against all expenses, costs,
        liabilities and losses (including attorneys fees, judgments and fines,
        and amounts paid or to be paid in any settlement) (collectively
        "Indemnified Amounts") reasonably incurred or suffered by the Executive
        in connection with the Executive's service as an Executive of the
        Employer or any affiliate to the full extent permitted by the By-laws of
        the Employer as in effect on the date of this Agreement and the Nevada
        General Corporation Law (or, in the event the Employer is reincorporated
        in a jurisdiction other than Nevada, the general law corporation of such
        jurisdiction (the "GCL"). The defense of Executive pursuant to this
        provision shall be by

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        counsel reasonably satisfactory to Executive, and the fees and expenses
        of such counsel shall be paid by Employer as incurred.

9.2.    A determination that indemnification with respect to any claims by the
        Executive pursuant to this Section 9 is proper shall be made by
        independent legal counsel selected by the Board of Directors of the
        Employer and set forth in a written opinion furnished by such counsel to
        the Board of Directors, the Employer and the Executive. In the event it
        is determined by such counsel that Executive is not entitled to
        indemnification pursuant to this Section 9 (and if contested by
        Executive, such determination is confirmed by the final non-appealable
        order of a court competent jurisdiction), or if a court of competent
        jurisdiction determines in a final non-appealable order that Executive
        is not entitled to indemnification pursuant to this Section 9, Executive
        hereby undertakes that he shall promptly reimburse the Employer for all
        advances of Indemnified Amounts made by the Employer on Executive's
        behalf.

9.3.    The rights conferred by this Section 9 shall not be exclusive of any
        other right, which the Executive may have or hereafter acquire under
        applicable law, any provision of the Employers organizational documents
        or a vote of stockholders or the Board of Directors. This Section 9
        shall not be deemed to affect any rights to subrogation, which may exist
        in any policy of director or officers liability insurance.

9.4.    The Executive shall provide notice to the Employer in writing promptly
        (and in any event within fifteen (15) business days) of the institution
        of any action, suit of proceeding which is or may be subject to this
        Section 9, provided that Executive's failure to so advise the Employer
        shall not affect the indemnification provided for herein, except to the
        extent such failure has a material and adverse effect on the Employer's
        ability to defend such action, suit of proceeding.

9.5.    The Executive shall be covered by insurance, to the same extent as to
        other senior executives and directors of the Employer are covered by
        insurance, with respect to (a) directors and officer's liability, (b)
        errors and omissions, and (c) general liability insurance.

10.     GENERAL PROVISIONS

10.1    INJUNCTIVE RELIEF AND ADDITIONAL REMEDY

The Executive acknowledges that the injury that would be suffered by the
Employer as a result of a breach of the provisions of this Agreement (including
any provision of Section 7 and 8) would be irreparable and that an award of
monetary damages to the Employer for such a breach would be inadequate remedy.
Consequently, the Employer will have the right, in addition to any other rights
it may have, to obtain injunctive relief to restrain any breach or threatened
breach or otherwise to specifically enforce any provision of this Agreement, and
the Employer will not be obligated to post bond or other security in seeking
such relief. Without limiting the Employer's rights under this Section 10 or any
other remedies of the Employer, if the Executive breaches any of the

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provisions of Section 7 and 8, the Employer will have the right to cease making
any payments otherwise due to the Executive under this Agreement.

10.2    COVENANTS OF SECTIONS 7 AND 8 ARE ESSENTIAL AND INDEPENDENT COVENANTS

The covenants by the Executive in Sections 7 and 8 are essential of this
Agreement, and without the Executive's agreement to comply with such covenants.
The Employer and Executive have independently consulted their respective counsel
and have been advised in all respects concerning the reasonableness and
propriety of such covenants, with specific regard to the nature of the business
conducted by the Employer.

The Executive's covenants in Sections 7 and 8 are independent covenants and the
existence of any claim by the Executive against the Employer under this
Agreement or otherwise, will not excuse the Executive's breach of any covenant
in Section 7 or 8. If the Executive's employment hereunder expires or is
terminated, this Agreement will continue in full force and effect as is
necessary to appropriate to enforce the covenants and agreements of this
Executive in Sections 7 and 8.

10.3.   OFFSET

The Employer will be entitled to offset against any and all amounts owing to the
Executive under this Agreement the amount of any and all undisputed claims or
claims reduced to final judgment that the Employer may have against the
Executive under the Non-Competition Agreement.

10.4.   REPRESENTATION AND WARRANTIES BY THE EXECUTIVE

The Executive represents and warrants to the Employer that the execution and
delivery by the Executive of this Agreement do not, and the performance by the
Executive of the Executive's obligations hereunder will not, with or without the
giving of notice or the passage of time, or both: (a) violate any judgment,
writ, injunction, or order of any court, arbitrator, or governmental agency
applicable to the Executive; or (b) conflict with, result in the breach of any
provisions of or the termination of, or constitute a default under, any
agreement to which the Executive is a party or by which the Executive is or may
be bound.

10.5.   OBLIGATIONS CONTINGENT ON PERFORMANCE

The obligations of the Employer hereunder, including its obligation to pay the
compensation provided for herein, are contingent upon the Executive's
performance of the Executive's obligations hereunder.

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10.6.   WAIVER

The rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure not any delay by either party in exercising any
right, power, or privilege under this Agreement will operate as a waiver of such
right, power, and no single or partial exercise of any such right, power, or
privilege or the exercise of any other right, power of privilege. To the maximum
extent permitted by applicable law, (a) no claim or right arising out of this
Agreement can be discharged by one party, in whole or in part, by a waiver or
renunciation of the claim or right unless in writing signed by the other party;
(b) no waiver that may be given by a party will be applicable except in the
specific instance for which it is given; and (c) no notice to or demand on one
party will be deemed to be a waiver of any obligation of such party or of the
right of the party giving such notice or demand to take further action without
notice or demand as provided in this Agreement.

10.7.   BINDING EFFECT; DELEGATION OF DUTIES PROHIBITED

This Agreement shall inure to the benefit of, and shall be binding upon, the
parties hereto and their respective successors, assigns, heirs, and legal
representatives, including any entity with which the Employer may merge or
consolidate or to which all or substantially all of its assets may be
transferred. The duties and covenants of the Executive under this Agreement,
being personal, may not be delegated.

10.8.   NOTICES

All notices, consents, waivers, and other communications under this Agreement
must be in writing and will be deemed to have been duly given when (a) delivered
by hand (with written confirmation or receipt), (b) sent by facsimile (with
written confirmation of receipt), provided that a copy is mailed by registered
mail, return receipt requested, or (c) when received by the addressee, if sent
by a nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and facsimile numbers set forth below (or
to such other addresses and facsimile numbers as a party may designate by notice
to the other parties):

        If to the Employer:

        Integrated Communication Networks, Inc.
        27061 Aliso Creek Road
        Suite 100
        Aliso Viejo, California 92656
        Telephone: (949) 349-1770
        Facsimile:   (949) 349-1730

        If the Executive:

        Mr. Thomas C. Scott
        2619 Briar Patch Lane
        Flower Mound, Texas 75022

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        Telephone: ______________________

        Facsimile: _______________________

10.9.   ENTIRE AGREEMENT; AMENDMENTS

This Agreement, and the documents executed in connection Agreement, contain the
entire agreement between the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings, oral or written, between
the parties hereto with respect to the subject matter hereof. This Agreement may
not be amended orally, but only by an agreement in writing signed by the parties
hereto.

10.10.  GOVERNING LAW

This Agreement will be governed by the laws of the State of California without
regard to conflicts of laws principles.

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date above first written above.

INTEGRATED COMMUNICATION NETWORKS, INC.

____________________________
By

David J. Chadwick
President/CEO

EXECUTIVE:

____________________________
Thomas C. Scott

                                    13 of 13<PAGE>   1
                                                                   EXHIBIT 10.8
                             MASTER LEASE AGREEMENT

                                                                        No.  A
                                                                           -----

     This Master Lease Agreement (the "MLA") is entered into by and between
Lucent Technologies, Inc. InterNetworking Systems ("Lessor"), having its
principal place of business at 1701 Harbor Bay Parkway, Alameda, CA 94502 and
PhoneXchange, Inc. ("Lessee"), having its principal place of business at 4685
MacArthur Court, #300, Newport Beach, CA 92660.

1.   LEASE AGREEMENT. Lessor agrees to lease to Lessee, and Lessee agrees to
lease from Lessor, the equipment (the "Equipment") referenced in each of the
Schedules (the "Schedule" or "Schedules") which incorporate this MLA therein
(the "Lease"). So long as no Event of Default has occurred or is continuing,
Lessor agrees to lease to Lessee the groups of Equipment described on each
Schedule, subject to the following conditions, which Lessor in its sole
discretion may elect to waive with respect to a Schedule: (i) that in no event
shall Lessor be obligated to lease Equipment to Lessee hereunder where the
aggregate purchase of all Equipment leased to Lessee hereunder would exceed TEN
MILLION DOLLARS ($10,000,000); (ii) the Equipment leased hereunder shall only be
Equipment manufactured by either Ascend Communications, Inc or Lucent
Technologies noting that the equipment from the latter are only eligible after
the completed merger between Ascend Communication and Lucent Technologies; (iii)
that THREE MILLION DOLLARS ($3,000,000) hereunder will be available to the
Lessee for Equipment leases upon execution; (iv) that the remaining SEVEN
MILLION DOLLARS ($7,000,000) hereunder will be available to the Lessee for
Equipment leases upon Lessee providing Lessor with ONE of the following: (a)
verification that a minimum of Five Million Dollars ($5,000,000) in new equity
has been raised prior to September 30, 1999; or (b) verification that Lessee has
demonstrated cash flow (EBITDA) coverage of potential lease payments hereunder
of at lease 1.25X as measured on a rolling three month average; (v) that the
lease amount shall exclude freight, installation, maintenance, professional
services and taxes; and (vi) no new leases shall be issued after June 30, 2000.

2.   TERM. Each Lease shall be effective upon the execution of the MLA and the
related Schedule by the Lessor and the Lessee. The lease term (the "Lease Term")
of the Equipment referenced in each of the Schedules shall commence on the rent
commencement date specified in each Schedule (the "Rent Commencement Date"). The
Rent Commencement Date shall be the date 30 days from the date that the
Equipment is shipped by the supplier (the "Ship Date") as evidenced by a
shipping document provided by the supplier related to the Equipment (the
"Shipping Document"). Lessor will provide Lessee with a copy of the Shipping
Document evidencing the Ship Date.

3.   RENT. The rent (the "Rent") for the Equipment referenced in any Schedule
shall be as stated in such Schedule and shall be payable according to the
provisions of such Schedule. If any amount payable under a Schedule is not
received by Lessor within 10 days of the due date, Lessee agrees to pay an
Overdue Charge, as defined herein, with respect to such amount.

4.   SELECTION AND ASSIGNMENT. Lessee will select the type, quantity and
Supplier (subject to above) of each item of Equipment designated in a Schedule,
and Lessee hereby assigns to Lessor all of its right, title and interest in and
to the related equipment purchase agreement, a copy of which has been provided
to Lessor by Lessee (the "Agreement"). The Agreement may be amended with the
consent of Lessor. Any such assignment with respect to Equipment shall become
binding upon Lessor when Lessor and Lessee have entered into a Lease with
respect to such Equipment and as of the Rent Commencement Date referenced in
such Lease. Upon such an assignment becoming effective, Lessor shall be
obligated to purchase the Equipment from the Supplier in accordance with the
provisions of the Agreement. It is expressly agreed that Lessee shall at all
times remain liable to Supplier under the Agreement to perform all duties and
obligations of Lessee thereunder, except for the obligation to purchase the
Equipment to the extent expressly assumed by the Lessor hereunder, and that the
Lessee shall be entitled to the same rights of the purchaser of the Equipment
under the Agreement, except such right, title and interest in the Equipment
retained exclusively by the Lessor as owner of the Equipment. Lessor shall have
no liability for a Supplier's failure to meet the terms and conditions of the
Agreement.

5.   DELIVERY AND INSTALLATION. Lessee shall be responsible for payment of all
transportation, packing, installation, testing and other charges associated with
the delivery, installation or use of any Equipment which are not included in the
Agreement with respect to such Equipment.

6.   WARRANTIES. LESSOR MAKES NO REPRESENTATIONS OR WARRANTY OF ANY KIND,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE EQUIPMENT, ITS MERCHANTABILITY,
OR ITS FITNESS FOR A PARTICULAR PURPOSE. LESSOR SHALL NOT BE LIABLE TO LESSEE OR
ANY OTHER PERSON FOR DIRECT, INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES ARISING FROM LESSEE'S USE OF THE EQUIPMENT, OR FOR DAMAGES BASED ON
STRICT OR ABSOLUTE TORT LIABILITY OR LESSOR'S PASSIVE NEGLIGENCE. LESSEE HEREBY
ACKNOWLEDGES THAT ANY MANUFACTURER'S OR SUPPLIER'S WARRANTIES WITH RESPECT TO
THE EQUIPMENT ARE FOR THE BENEFIT OF BOTH LESSOR AND LESSEE. NOTWITHSTANDING THE
FOREGOING, LESSEE'S OBLIGATIONS TO PAY EACH RENT PAYMENT DUE, OR OTHERWISE
PERFORM ITS OBLIGATIONS, UNDER THIS LEASE ARE ABSOLUTE AND UNCONDITIONAL.

7.   TITLE TO AND LOCATION OF EQUIPMENT. Lessor shall retain title to each item
of Equipment. Lessee, at its expense, shall protect Lessor's title and keep the
Equipment free from all claims, liens, encumbrances and legal processes. The
Equipment is personal property and is not to be regarded as part of the real
estate on which it may be situated. If requested by Lessor, Lessee will, at
Lessee's expense, furnish a landlord or mortgagee waiver with respect to the
Equipment. The Equipment shall not be removed from the location specified in the
Schedule without the written consent of Lessor. Lessee shall, upon Lessor's
request, affix and maintain plates, tags or other identifying labels, showing
Lessor's ownership of the Equipment in a prominent position on the Equipment.

8.   USE OF EQUIPMENT, INSPECTION AND REPORTS. The use of the Equipment by
Lessee shall conform with all applicable laws, insurance policies, and
warranties of the manufacturer or Supplier of the Equipment. Lessor shall have
the right to inspect the Equipment at the premises where the Equipment is
located. Lessee shall notify Lessor promptly of any claims, liens, encumbrances
or legal processes with respect to the Equipment.

9.   FURTHER ASSURANCES. Lessee shall execute and deliver to Lessor such
instruments as Lessor deems necessary for the confirmation of this Lease and
Lessor's rights hereunder. Lessor is authorized to file financing statements
signed only by the Lessor in accordance with the Uniform Commercial Code, or
financing statements signed by Lessor as Lessee's attorney-in-fact. Any such
filing with respect to the Equipment leased pursuant to a true lease shall not
be deemed evidence of any intent to create a security interest under the Uniform
Commercial Code.

10.   MAINTENANCE AND REPAIRS. Lessee shall, at its expense, maintain each item
of Equipment in good condition, normal wear and tear excepted. Lessee shall not
make any addition, alteration, or attachment to the Equipment without Lessor's
prior written consent. Lessee shall make no repair, addition, alteration or
attachment to the Equipment which interferes with the normal operation or
maintenance thereof, creates a safety hazard, or might result in the creation of
a mechanic's or materialman's lien.

11.  LESSOR'S PERFORMANCE OF LESSEE'S OBLIGATIONS. If Lessee fails to perform
any of its obligations under a Lease, Lessor may perform any act or make any
payment which Lessor deems necessary for the maintenance and preservation of the
Equipment subject thereto and Lessor's title thereto. All sums so paid by Lessor
(together with all related Overdue Charges), and reasonable attorneys' fees
incurred by Lessor in connection therewith, shall be additional rent payable to
Lessor on demand. The performance of any such act or the making of any such
payment by Lessor shall not be deemed a waiver or release of any obligation or
default on the part of Lessee.

12.  INDEMNIFICATION. Lessee assumes liability for, and hereby agrees to
indemnify, protect and hold harmless, Lessor, and its agents, employees,
officers, directors, partners and successors and assigns, from and against, all
liabilities, obligations, losses, damages, injuries, claims, demands, penalties,
actions, costs and expenses, including, without limitation, reasonable
attorneys' fees, of whatever kind and nature, in contract or in tort, arising
out of the use, condition, operation, ownership, selection, delivery, leasing or
return of any item of Equipment, regardless of when, how and by whom operated,
or any failure on the part of Lessee to perform or comply with any of its
obligations under a Lease, excluding, however, any of the foregoing which result
from the gross negligence or willful misconduct of Lessor. Such indemnities and
assumptions of liabilities and obligations shall continue in full force and
effect, notwithstanding the expiration or other termination of such Lease.
Nothing contained in any Lease shall authorize Lessee to operate the Equipment
subject thereto so as to incur or impose any liability on, or obligation for or
on behalf of, Lessor.

13.  NO OFF-SET. All Rents shall be paid by Lessee irrespective of any off-set,
counterclaim, recoupment, defense or other right which Lessee may have against
Lessor, the manufacturer or Supplier of the Equipment or any other party.

14.  ASSIGNMENT BY LESSEE. Lessee shall not, without Lessor's prior written
consent, (a) sell, assign, transfer, pledge, hypothecate, or otherwise dispose
of, encumber or suffer to exist a lien upon or against, any of the Equipment or
any Lease or any interest therein, by operation of law or otherwise, or (b)
sublease or lend any of the Equipment or permit any of the Equipment to be used
by anyone other than Lessee.

15.  ASSIGNMENT BY LESSOR. Lessor may assign, sell or encumber its interest in
any of the Equipment and any Lease. Upon Lessor's written consent, Lessee shall
pay directly to the assignee of any such interest all Rent and other sums due
under an assigned Lease. THE RIGHTS OF ANY SUCH ASSIGNEE SHALL NOT BE SUBJECT TO
ANY ABATEMENT, DEDUCTION, OFF-SET, COUNTERCLAIM, RECOUPMENT, DEFENSE OR OTHER
RIGHT WHICH LESSEE MAY HAVE AGAINST LESSOR OR ANY OTHER PERSON OR ENTITY.
Notwithstanding the foregoing, any such assignment (a) shall be subject to
Lessee's right to possess and use the Equipment subject to a Lease so long as
Lessee is not in default thereunder, and (b) shall not release any of Lessor's
obligations hereunder.

16.  RETURN OF EQUIPMENT. Unless Lessee has exercised its option, if any, to
renew a lease or purchase the Equipment subject thereto, upon expiration of the
then current Lease Term of such Lease, Lessee shall, at its expense, cause such
Equipment to be removed, disassembled, and placed in the same condition as when
delivered to Lessee (reasonable wear and tear excepted) and properly crate such
Equipment for shipment and deliver it to a common carrier designated by Lessor.
Lessee will ship such Equipment, F.O.B. destination, to any address specified in
writing by Lessor within the continental United States. All additions,
attachments, alterations and repairs made or placed upon any of the Equipment
shall become part of such Equipment and shall be the property of Lessor.
<PAGE>   2
17.  EVENTS OF DEFAULT. The occurrence of any of the following shall be deemed
to constitute an Event of Default hereunder: (a) Lessee fails to pay Rent, any
other amount it is obligated to pay under a Lease or any other amount it is
obligated to pay to Lessor and does not cure such failure within 10 days of such
amount becoming due; (b) Lessee fails to perform or observe any obligation or
covenant to be performed or observed by Lessee hereunder or under any Schedule,
including, without limitation, supplying all requested documentation, and does
not cure such failure within 10 days of receiving written notice from Lessor;
(c) the occurrence and continuance of any default under any other lease or
agreement for borrowed money made between Ascend Communications, Inc. or its
affiliates or successors, and the Lessee; (d) any warranty, representation or
statement made or furnished to Lessor by or on behalf of Lessee is proven to
have been false in any material respect when made or furnished; (e) the
attempted sale or encumbrance by Lessee of the Equipment, or the making of any
levy, seizure or attachment thereof or thereon; or (f) the dissolution,
termination of existence, discontinuance of business, insolvency, or appointment
of a receiver of any part of the property of Lessee, assignment by Lessee for
the benefit of creditors, the commencement of proceedings under any bankruptcy,
reorganization or arrangement laws by or against Lessee, or any other act of
bankruptcy on the part of Lessee.

18.  REMEDIES OF LESSOR. At any time after the occurrence of any Event of
Default, Lessor may exercise one or more of the following remedies: (a) Lessor
may terminate any or all of the Leases with respect to any or all items of
Equipment subject, thereto; (b) Lessor may recover from Lessee all Rent and
other amounts then due and to become due under any or all of the Leases; (c)
Lessor may take possession of any or all items of Equipment, wherever the same
may be located, without demand or notice, without any court order or other
process of law and without liability to Lessee for any damages occassioned by
such taking of possession, and any such taking of possession shall not
constitute a termination of any Lease; (d) Lessor may demand that Lessee return
any or all items of Equipment to Lessor in accordance with Paragraph 16; and (e)
Lessor may pursue any other remedy available at law or in equity, including,
without limitation, seeking damages, specific performance or an injunction.

Upon repossession or return of any item of the Equipment, Lessor shall sell,
lease or otherwise dispose of such item in a commercially reasonable manner,
with or without notice and on public or private bid, and apply the net proceeds
thereof (after deducting the estimated fair market value of such item at the
expiration of the term of the applicable Lease, in the case of a sale, or the
rents due for any period beyond the scheduled expiration of such Lease, in the
case of any subsequent lease of such item, and all expenses, including, without
limitation, reasonable attorneys' fees, incurred in connection therewith)
towards the Rent and other amounts due under such Lease, with any excess net
proceeds to be retained by Lessor.

Each of the remedies under this Lease shall be cumulative, and not exclusive,
and in addition to any other remedy referred to herein or otherwise available to
Lessor in law or in equity. Any repossession or subsequent sale or lease by
Lessor of any item of Equipment shall not bar an action for a deficiency as
herein provided, and the bringing of an action or the entry of judgment against
Lessee shall not bar Lessor's right to repossess any or all items of Equipment.

19.  CREDIT AND FINANCIAL INFORMATION. Within 90 days of the close of each of
Lessee's fiscal years, Lessee shall deliver to Lessor a copy of Lessee's annual
report, if any, and an audited balance sheet and profit and loss statement with
respect to such year. Within 30 days after the end of each of Lessee's fiscal
months, Lessee shall deliver to Lessor a balance sheet and profit and loss
statement for such month and, if requested, any other additional information
regarding historical or projected operating performance reasonably requested by
Lessor, all of which shall be certified by an officer of Lessee.

20.  INSURANCE. As of the date that risk of loss for the Equipment passes from
the Supplier to the Lessee under the terms of the Agreement, Lessee shall obtain
and maintain through the end of the Lease Term of each Lease (and any renewal or
extension thereof), at its own expense, property damage and personal liability
insurance and insurance against loss or damage to the Equipment, including,
without limitation, loss by fire (with extended coverage), theft and such other
risks of loss as are customarily insured against with respect to the types of
Equipment leased hereunder and by the types of businesses in which such
Equipment will be used by Lessee. Such insurance shall be in such amounts, with
such deductibles, in such form and with such insurers as shall be satisfactory
to Lessor; provided, however, that the amount of the insurance against loss or
damage to the Equipment shall not be less than the greater of the replacement
value of the Equipment, from time to time, or the original purchase price of the
Equipment. Each insurance policy shall name Lessee as an insured and Lessor as
an additional insured or loss payee, and shall contain a clause requiring the
insurer to give Lessor at least 30 days prior written notice of any alteration
in the terms of such policy or of the cancellation thereof. Lessee shall furnish
to Lessor a certificate of insurance or other evidence satisfactory to Lessor
that such insurance coverage is in effect; provided, however, that Lessor shall
be under no duty either to ascertain the existence of or to examine such
insurance policy or to advise Lessee in the event such insurance coverage shall
not comply with the requirements hereof. Lessee shall give Lessor prompt notice
of any damage to, or loss of, any of the Equipment, or any part thereof, or any
personal injury or property damage occasioned by the use of any of the
Equipment.

21.  TAXES. Lessee hereby assumes liability for, and shall pay when due, and, on
a net after-tax basis, shall indemnify, protect and  hold harmless Lessor
against all fees, taxes and governmental charges (including, without limitation,
interest and penalties) of any nature imposed on or in any way relating to
Lessor, Lessee, any item of Equipment or any Lease, except state and local taxes
on or measured by Lessor's net income (other than any such tax which is in
substitution for or relieves Lessee from the payment of taxes it would otherwise
be obligated to pay or reimburse to Lessor as herein provided) and federal taxes
on Lessor's net income. Lessee shall, at its expense, file when due with the
appropriate authorities any and all tax and similar returns, and reports
required to be filed with respect thereto, for which it has indemnified Lessor
hereunder or, if requested by Lessor, notify Lessor of all such requirements and
furnish Lessor with all information required for Lessor to effect such filings.
Any fees, taxes or other charges paid by Lessor upon failure of Lessee to make
such payments shall, at Lessor's option, become immediately due from Lessee to
Lessor and shall be subject to the Overdue Charge from the date paid by Lessor
until the date reimbursed by Lessee.

22.  SEVERABILITY. If any provision of any Lease is held to be invalid by a
court of competent jurisdiction, such invalidity shall not affect the other
provisions of such Lease or any provision of any other Lease.

23.  NOTICES. All notices hereunder shall be in writing and shall be deemed
given when sent by certified mail, postage prepaid, return receipt requested,
addressed to the party to which it is being sent at its address set forth herein
or to such other address as such party may designate in writing to the other
party.

24.  AMENDMENTS, WAIVERS AND EXTENSIONS. This MLA and each Schedule constitute
the entire agreement between Lessor and Lessee with respect to the lease of the
Equipment subject to such Schedule, and supersede all previous communications,
understandings, and agreements, whether oral or written, between the parties
with respect to such subject matter. No provision of any Lease may be changed,
waived, amended or terminated except by a written agreement, specifying such
change, waiver, amendment or termination, signed by both Lessee and Lessor,
except that Lessor may insert, on the appropriate schedule, the serial number of
Equipment, after delivery of such Equipment, and the Rent Commencement Date for
the Equipment. No waiver by Lessor of any Event of Default shall be construed as
a waiver of any future Event of Default or any other Event of Default. At the
expiration of the Lease Term with respect to a Lease, upon notice given by
Lessee at least ninety (90) days prior thereto, (a) such Lease shall be renewed
or the Equipment subject thereto shall be purchased under the terms and
conditions set forth herein for a term and rent amount or purchase price, as the
case may be, to be agreed upon, or (b) if no such agreement is reached prior to
the expiration of such Lease Term or such notice specifies that Lessee intends
to return the Equipment, then Lessee shall return the Equipment to Lessor in the
manner prescribed in Paragraph 16 of this MLA. In the absence of Lessor's timely
receipt of the notice contemplated by the preceding sentence, the Lease shall be
automatically extended, on a month-to-month basis, until terminated (upon the by
either party given at least ninety (90) days prior to the end of the month on
which the termination is be effective) or until renewed or the Equipment subject
thereto is purchased by agreement of the parties. Unless otherwise agreed,
Lessee shall continue to pay Rent for each month following such Lease Term until
the Equipment subject to such Lease is returned pursuant to Paragraph 16 of this
MLA.

25.  CONSTRUCTION. This MLA shall be governed by and construed in accordance
with the internal laws, but not with the choice of laws provisions, of the State
of California. The titles of the sections of this MLA are for convenience only
and shall not define or limit any of the terms or provisions hereof. Time is of
the essence in each of the provisions hereof.

26.  PARTIES. This MLA shall be binding upon, and inure to the benefit of, the
permitted assigns, representatives and successors of the Lessor and Lessee. If
there is more than one Lessee named in this MLA, the liability of each shall be
joint and several.

27.  COUNTERPARTS. Each Lease may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall constitute
but one and the same instrument.

28.  OVERDUE CHARGE. Overdue Charge shall mean an amount equal to 2% per month
of any payment under a Lease which is past due, including, without limitation,
any amounts not included in any payment of Rent hereunder, or the highest charge
permitted by law, whichever is lower.

The person executing this MLA on behalf of Lessee hereby certifies that he or
she has read, and is duly authorized to execute, this MLA.

Accepted by:                            LESSEE: PhoneXchange, Inc.

By: /s/ ANNETTE SEVERIEUS               BY: /s/ DAVID J. CHADWICK
   ---------------------------------       ---------------------------------

NAME: Annette Severieus                 NAME: David J. Chadwick
     -------------------------------         -------------------------------
                                                      Print

TITLE: Assistant Treasurer              TITLE: President
      ------------------------------          ------------------------------

DATE: July 30, 1999                     DATE: July 30, 1999
     -------------------------------         -------------------------------
<PAGE>   3
                                                            LEASE SCHEDULE NO. 1

This Schedule and its supplements incorporate by this reference the terms and
conditions of the Master Lease Agreement, Number ______, between Ascend Credit
Corporation (Lessor) and PhoneXchange, Inc. (Lessee).

 1.  SUPPLIER:                ASCEND COMMUNICATIONS, INC.

 2.  LOCATION OF EQUIPMENT:   SEE ATTACHED

 3.  EQUIPMENT VALUE: $__________________ (exclusive of sales and/or use taxes).

 4A. LEASE TERM: The Lease Term of the Equipment described in this Schedule
     shall begin on the Rent Commencement Date referenced below in Paragraph 6
     and its expiration date shall be 33 months after such Rent Commencement
     Date.

 5.  RENT: SEE ATTACHED SCHEDULE (NOTE: Rent shall be reflected in a payment
     schedule to be attached to each specific Lease Schedule. The first XXXXX
     payments shall be equal to $XXXX, and the final thirty three (33) payments
     shall be based upon a lease factor of XXXX based on the initial purchase
     price of the Equipment described in the applicable Lease Schedule with the
     first such payment due on the Rent Commencement Date).

 6.  RENT COMMENCEMENT DATE: ___________________________________.

 7.  PURCHASE OPTION: Lessee shall have the option to purchase the Equipment
     for its fair market value for continued use ("FMV"), on the expiration of
     this Lease or any renewal term, provided Lessee is not in default of any
     of its obligations under this Lease on such expiration date. This purchase
     option may only be exercised by Lessee's written notice to Lessor not
     earlier than 180 days, nor later than 90 days, prior to the end of the
     Lease Term or any renewal term. The purchase price for such Equipment
     shall be payable upon the expiration date of such term. FMV shall be equal
     to the value of the Equipment installed and in use, with consideration
     given to the age, condition, utility and replacement costs for Equipment.
     In the event that Lessor and Lessee are unable to agree upon the purchase
     price for the Equipment, such purchase price will be determined by an
     independent appraiser to be selected by Lessor. Lessee shall be
     responsible for all applicable sales and/or use taxes on the Equipment.
     Upon exercise of this purchase option and payment of the purchase price,
     Lessor shall execute and deliver to Lessee such documents as Lessee may
     reasonably request in order to vest in Lessee all right, title and
     interest in the Equipment.

 8.  RENEWAL OPTION: Lessee shall have the option to renew this Lease, on the
     expiration date of this Lease or any renewal term, for the fair market
     rental for the continued use of the Equipment ("FMR") and on such other
     terms as may be agreed upon by Lessor and Lessee prior to such expiration
     date, provided Lessee is not in default of any of its obligations under
     this lease on such expiration date. This renewal option may only be
     exercised by Lessee's written notice to Lessor not earlier than 180 days,
     nor later than 90 days, prior to the end of the Lease Term or any renewal
     term. FMR shall be equal to the value of the monthly rental of the
     Equipment installed and in use, with consideration given to the age,
     condition, utility and replacement costs for the Equipment, for the renewal
     term.

 9.  TAX BENEFITS: Lessee understands that Lessor intends to claim the "Tax
     Benefits", consisting of the maximum Modified Accelerated Cost Recovery
     System deductions for the minimum useful life applicable to each item of
     Equipment, as provided by Sections 168(b) and (c) of the Internal Revenue
     Code of 1986, and analogous benefits under state law, with respect to the
     Equipment. Lessee represents and warrants that: (i) Lessee has not been,
     is not now, and during the term of this Lease will not become, and will
     not allow the Equipment to be used by or leased to, a tax-exempt entity or
     government agency; and (ii) Lessee is not now, and during the term of this
     Lease will not become, a public utility. Without limitation by the
     proceeding sentence, Lessee agrees not to take any action, fail to take any
     action, or misstate any fact which may result in any loss to Lessor of the
     Tax Benefits.

     Lessee agrees to pay promptly to Lessor an amount which will fully
     compensate Lessor, on an after-tax basis, for any loss of the Tax Benefits,
     plus interest, penalties and additions to tax, any loss in time value of
     the Tax Benefits, and any taxes imposed on any such compensation payment,
     resulting from Lessee's acts, omissions or misstatements, including,
     without limitation, with respect to the representations and warranties in
     the preceding paragraph. A loss of Tax Benefits occurs at the earliest of:
     (i) the happening of any event causing the loss; (ii) payment by Lessor of
     any additional tax resulting from the loss; or (iii) any adjustment to the
     tax return of Lessor. Lessor's right to recovery of a loss of Tax Benefits
     shall survive the expiration or termination of this Lease.

10.  DESCRIPTION OF EQUIPMENT: See Schedule A which is attached hereto and made
     a part hereof by this reference.

The person executing this Schedule on behalf of Lessee hereby certifies that he
     or she has read, and is duly authorized to execute, this Schedule.

Accepted by:
Ascend Credit Corporation               LESSEE: PhoneXchange, Inc.
                                                 Draft
BY: _______________________________     BY: ____________________________________

NAME: _____________________________     NAME: __________________________________
               Print                                      Print

TITLE: ____________________________     TITLE: _________________________________

DATE: _____________________________     DATE: __________________________________

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