Document:

Exhibit 10.21

     This Employment Agreement, entered into as of July 1, 2000 by and between
ACCIDENT PREVENTION PLUS, 1NC., a Nevada corporation (the "Company"), and JULIUS
J. VALENTE, JR. (the "Executive").

     In consideration of the following mutual covenants and agreements
hereinafter set forth, the Company and Executive do hereby agree as follows:

     1. Employment - Position and Duties.

     (a) Employment. Commencing as of July 1, 2000, the Company hereby employs
Executive as Chief Financial Officer on the terms and conditions set forth
herein. Executive shall perform such duties and responsibilities as may from
time to time be prescribed by the Board of directors of the Company, provided
that such duties and responsibilities are consistent with executive's position
which will include the overall direction of Comany and for the faithful
discharge of such different or additional duties including, but not limited to,
financial administrative and corporate functions as well as overseeing
operations both domestically and internationally. Executive agrees to perform
faithfuly and filigently the customary duties of said office to the best of
Executive's ability.

     (b) Employment Period. The employment period (the"Employment Period") shall
commence on July 1, 2000 and shall be for an initial term of one(1) year, and
thereafter the Employment period shall be renewed and extended for a period of
up to Five (5) consecutive One(1) year periods based on a majority vote of the
Board of Directors unless earlier terminated by either party by giving not less
than Three (3) months' notice prior to the end of said One(1) year period.

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     2. Compensation. In consideration of the services provided to the Company
by Executive, the Company shall pay to Executive a monthly gross base salary
("Base Salary") of Ten Thousand dollars ($10,000.00), payable in accordance with
the Company's customary payroll practices throughout the Employment Period,
subject to Section 5 hereof. However, for the first Six (6) months of this
Agreement, Executive agrees to defer this salary which will be accrued and
paid on or before December 31, 2000.

     In further consideration of Executive entering into this Agreement, the
Company shall grant to Executive 250,000 shares of common stock on the first day
permitted by applicable SEC regulations.

     Both Executive and the Company agree that at the end of each employment
year, Executive's base salary shall be increased by an amount determined by
multiplying Executives original base salary by the numerator of the Consumer
Price Index (CPI) as of January of each such year. An additional compensation
will occur for meeting specific performance goals as outlined in "Attachment A".

     An annual cash bonus of One percent (1%) of the Net Profit of the Company
as determined by the Board of Directors will be awarded to Executive. An
Employee Stock Option Plan will also be granted to Executive for the purchase of
Company stock warrants as outlined in "Attachment B".

     Executive will receive Twenty (20) paid working days for vacation over and
above the legal holidays recognized by the United States Federal Government as
non-working days for all employees and an additional Five (5) days for sick or
personal leave. For every Five (5) years of employment, Executive will receive
Five (5) additional working days for vacation. All days are non-accruable.

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     3. Benefits. During the Employment Period:

          (a) Fringe Benefits. If requested by the Executive, Executive shall at
all times during the Employment Period be entitled to participate in the
Company's disability, or health, medical or similar plans which are from time to
time in effect and which the Company offers to its employees. All costs
associated with individual medical insurance will be paid by the Company. The
Company shall also provide Executive with corporate credit cards which shall
only be used for Corporation purposes.

          (b) Travel and Entertainment. The Company shall reimburse Executive in
accordance with the Company's normal practice for all reasonable and necessary
expenses incurred by Executive in connection with the business of the Company
including travel and entertainment expenses, upon presentation by Executive of
itemized accounts of such expenditures or such other supporting information as
the Company will require. Additionally, any single expense item in excess of
Five Hundred Dollars ($500) shall be approved by the President of the Company.

          (c) Automobile. If requested by Executive, the Company shall reimburse
Executive for up to Five Hundred Dollars ($500) per month for expenses incurred
by Executive in connection with the purchase, lease and use of an automobile
upon presentation by Executive of such supporting information as the Company
will require. The Company shall reimburse Executive for all costs of insurance
for such automobile upon presentation by Executive of such supporting
information as the Company will require.

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     4. Unnauthorized Disclosure.
        -------------------------

          (a) Non-Competition. During the Employment Period and for a period
of(i) five (5) years thereafter in the case of any termination of the
Executive's employment other than a termination of such employment by the
Company without Cause (as hereinafter defined) or (ii) two (2) years thereafter
in the case of a termination of the Executive's employment by the Company
without Cause (the "Restricted Period"), the Executive shall not, unless
Executive receives the prior written consent of the Company, directly or
indirectly, own an interest in, manage, operate, join, control, lend money or
render financial or other assistance to or participate in or be connected with,
as an officer, employee, partner, stockholder, consultant or otherwise, any
individual partnership, firm, corporation or other business organization or
entity that, at such time, is engaged in any business which is engaged in or
competes with the business of the Company.

          (b) No Interference. During the Restricted Period, the Executive shall
not, whether for his own account or for the account of any other individual,
partnership, firm, corporation or other business organization., intentionally
solicit, endeavor to entice away from the Company, or otherwise interfere with
the relationship of the Company, with any person who is employed by the Company
or any person or entity who is, or was within the then most recent Twenty Four
(24) month period, a customer or client of the Company.

          (c) Secrecy. The Executive recognizes that the services to be
performed by him hereunder are special, unique and extraordinary in that, by
reason of his employment with the Company, he may acquire confidential
information and trade secrets concerning the operation of the Company, the use
or disclosure of which could cause the Company substantial loss and damages

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which could be readily calculated and for which no remedy at law would be
adequate. Accordingly, the Executive covenants and agrees with the Company that
he will not at any time, except in the performance of his obligations to the
Company hereunder or with the prior written. consent of the Company, directly or
indirectly, disclose any secret or confidential information that he may learn
has learned by reason of his association with the Company, or any predccessors
to its business, or use any such information to the detriment of the Company.
The term "confidential information" includes, without limitation, information
not previously disclosed to the public or to the trade by the Company with
respect to the Company's products, manufacturing processes, ficilities and
methods, research and development, trade secrets and other intellectual
property, systems, patents and patent applications, procedures, manuals,
confidential reports, product price lists, customer lists, financial information
(including the revenues, costs or profits associated with any of the Company's
products), business plans, prospects or opportunities.

          (d) Exclusive Property. The Executive confirms that all confidential
information is the exclusive property of the Company. All business records,
papers and documents kept or made by the Executive relating to the business of
the Company shall be and remain the property of the Company during the
Employment Period and at all times thereafter. Upon the termination of his
employment with the Company or upon the request of the Company at any time, the
Executive shall promptly deliver to the Company or upon the request of the
Company at any time, the Executive shall promptly deliver to the Company, and
shall retain no copies of, any written materials, records and documents made by
the Executive or coming into his possession concerning the business or affairs
of the Company other than personal notes or correspondence of the Executive not
containing proprietary information relating to such business or affairs.

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          (e) Inventions. Any invention, improvement or discovery, whether or
not patentable, that related to past or present business of the Company
(including research and evaluation),which the Executive may conceive or make,
either alone or in conjunction with others (1) in the course of his employment
or within Twenty-Four (24) months immediately thereafter, or (ii) which the
Executive made prior to the effective date of his employment with the Company
and which was contributed to the capital of the Company, shall be the sole and
exclusive property of the Company. The Executive will disclose to the Company
each such invention, improvement or discovery and will, whenever requested to do
so by the Company, promptly execute any and all applications, assignments and
other instruments which the Company shall deem necessary in order to apply for
and obtain letters patent of the United States and/or foreign countries for said
invention, improvement or discovery, and in order to assign and convey to the
Company or its order the sole and exclusive right, title and interest in and to
said invention, improvement or discovery.

          (f) Injunctive Relief. The Executive acknowledges that a breach of any
of the covenants contained in this Section 4 may result in material irreparable
injury to the Company for which there is no adequate remedy at law, that it will
not be possible to measure damages for such injuries precisely and that, in the
event of such a breach or threat thereof, any payments remaining under the terms
of this Agreement shall cease and the Company shall be entitled to obtain a
temporary restraining order and/or a preliminary or permanent injunction
restraining the Executive from engaging in activities prohibited by this Section
4. The Executive hereby agrees and consents that such injunctive relief may be

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sought ex parte in any state or federal court of record in the State of New
York, or in the state and county in which such violation may occur or in any
other court having jurisdiction, at the election of the Company. The Executive
agrees to and hereby does submit to in personal jurisdiction before each and
every such court for that purpose.

     5. Termination.

          (a) Death. Executives employment hereunder shall terminate upon the
death of Executive.

          (b) Incapacity. The Company may terminate Executive's employment
hereunder upon Fifteen (15) days' prior notice by giving written Notice of
Termination (as defined below) to Executive in the event of Executive's
incapacity ("incapacity") due to physical or mental illness which prevents the
proper performance of all or substantially all of Executive's duties set forth
herein for a period of Sixty (60) consecutive days. Any question as to the
existence or extent of the incapacity of Executive upon which the Company and
Executive cannot agree shall be determined by a qualified independent physician
selected by the Company and Executive or Executive's representative, as the case
may be. The determination of such physician certified in writing to the Company
and to Executive shall be final and conclusive for all purposes of this
Agreement.

          (c) Cause. The Company may terminate Executive's employment contract
hereunder for Cause by giving written Notice of Termination to Executive. For
purposes of this Agreement, the Company shall have "Cause" to terminate
Executive's employment hereunder upon Executive's (i) habitual drunkenness or
willful failure to perform and discharge his material duties and
responsibilities hereunder or any breach by Executive of any material provision

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of Section 4 hereof, or (ii) misconduct that is materially injurious to the
Company, or (iii) conviction of a felony or any crime involving moral turpitude,
or (iv) the Executive's disregard of a direct order of the Board of Directors,
the substance of which order is (x) a proper duty of the Executive pursuant to
this Agreement, (y) permitted by law and (z) otherwise permitted by this
Agreement, which disregard continues for a period of Ten (10) days.

          (d) Notice of Termination. Any termination by the Company pursuant to
subsection (b) or (c) above shall be communicated by written Notice of
Termination to Executive. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific termination
provision of this Agreement relief upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for such termination as
determined by majority vote of the Board of Directors. A date of termination
specified in such Notice of Termination shall not be dated earlier than the date
such Notice is delivered or mailed to Executive.

          (e) Obligation to Pay.

               (i) If Executive's employment shall be terminated by reason of
death, Executive's estate shall be paid by the Company all sums otherwise
payable to Executive through the end of the month in which the Executive's death
occurred. Thereafter the Company shall not have any further obligations under
this Agreement.

               (ii) If the Executive's employment is terminated by reason of
incapacity in accordance with Section 5(b) hereof; Executive or the person
charged with legal responsibility for Executive's estate shall be paid by the
Company all sums otherwise payable to Executive, when and as due, including any
benefits accrued or accruable to Executive, through the date of termination

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specified in the Notice of Termination and the Company shall not have any
further obligation to Executive under this Agreement. The Company will maintain
a Disability insurance Policy on behalf of Executive.

               (iii) If Executive's employment shall be terminated for Cause,
Executive shall be paid the Base Salary, any commission due to Executive and all
benefits pursuant to Section 3 of this Agreement through the date of termination
specified in the Notice of Termination and the Company shall not have any
further obligations to Executive under this Agreement

          (f) Terinination Obligation.

               (i) Upon termination of this Agreement, Executive shall be deemed
to have resigned from all offices and Board of Directors positions then held
with the Company.

               (ii) All of Executive's obligations under Section 4 and 5 and all
of the Company's rights and remedies with respect thereto shall survive
termination of this Agreement.

               (iii) If the Executive leaves the Company with cause, the Company
reserves the might to buy back up to 75% of Executive's stock. The value of this
stock will be determined by the closing bid on the date of termination of
Executive and will be paid over a five year period based on an interest bearing
note provided to Executive. The finding of this "buyback" will be provided by
an insurance policy or other means specifically established for this purpose

     6. Notices.

          For the purpose of this Agreement, notices and all other
communications to either party hereunder provided for in the Agreement shall be

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in writing and shall be periodically delivered in person or mailed by registered
or certified mail or the reasonable substitute (e.g. Federal Express), postage
pi-epaid, or sent by telecopy, addressed, in the case of the Company to:

                         The Company:

                         Accident Prevention Plus, Inc.
                         325 Wireless Boulevard
                         Hauppaug; New York 11778

                         Telephone No: (516) 390-0600
                         Telecopy No.: (516) 265-3351

and in the case of Executive, to the address set forth opposite Executives name
on the signature page hereto; or to such other address as either party shall
designate by giving written notice of such change to the other party.

     7. Waiver. Modification.

          No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is approved by the Board of
Directors and agreed to in writing signed by Executive and such officer as may
be specifically authorized by the Board of Directors. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.

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     8. Validity.

          The invalidity or unenforeeability of any provision or provisions of
this Agreemeni shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

     9. Survival.

          The provisions of this Agreement shall not survive the termination
ofExecutive's employment hereunder, except that the provisions of Section 4
hereof shall survive such termination and shall be binding upon Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees, and except that the provisions of Section 5
hereof relating to payments and termination of Executive's employment hereunder
shall survive such termination and shall be binding upon the Company and its
successors and permitted assigns, and except that other provisions of this
Agreement which specifically or impliedly contemplate their survival of the
termination of this Agreement shall survive and be binding upon the parties,
their representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees and the Company and its successors and
permitted assigns.

     10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

     11. Entire Agreement. This agreement constitutes the full agreement and
understanding of the parties hereto and all prior agreements or understandings
are merged herein. No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.

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     12. Governing Law. This Agreement shall be interpreted under the laws of
the State of New York.

     13. Non-Assignment. This Agreement, and the parties' rights, duties and
obligations under this Agreement, are not transferable, delegable or assignable
by a party hereto without the prior written consent of the other and any
purported assignment shall be void.

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

                                         EXECUTIVE

                                         By  /s/  Julius J. Valente
                                             -----------------------------------

                                         Home Address:  24 Chimney C    Lane
                                                        ------------------------

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

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

                                         ACCIDENT PREVENTION PLUS, INC.

                                         By  /s/
                                             -----------------------------------

                                         Title: CEO

                                         Office Address: 325 Wire1ess Boulevard

                                         Hauppauge, New York 11788

                                       12

<PAGE>

                                  ATTACHMENT A

                         PERFORMANCE GOALS COMPENSATION

a). One Percent (1%) of the Net Profit of the Company as determined by the
Board of Directors

b). Specific performance goal compensation will be decided at a later date not
to exceed a one year period from the signing of this Agreement.

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<PAGE>

                                  ATTACHMENT B

                           EMPLOYEE STOCK OPTION PLAN

a). Executive Will have the right to purchase Warrants that represent Five
Hundred Thousand (500,000) shares of Common Stock at One Dollar and Forty-Five
Cents ($1.45) per share within Five (5) years of the signing of this Agreement.

                                       14Exhibit 10.1
                                                                    ------------

                                                                  EXECUTION COPY
                                                                  --------------

                            MASTER LICENSE AGREEMENT

                                       FOR

                               KMC TELECOM V, INC.

         This Master License  Agreement (the  "Agreement") made this 20th day of
June 2000 by and between Fullnet Communications,  Inc., an Oklahoma corporation,
having an  address at 201 Robert S. Kerr,  Suite 210,  Oklahoma  City,  OK 73102
("Licensor") and KMC Telecom V, Inc., a Delaware corporation,  having an address
at 1545 Route 206, Suite 300, Bedminster NJ 07921 ("Licensee").

                                   WITNESSETH

         WHEREAS,  Licensor has entered into leases with  landlords of premises,
each of whom  has  been  made a party to the  respective  Co-Location  Schedules
(each, a "Co-Location  Schedule",  a form of which is attached hereto as Exhibit
D) and Licensor is a tenant in the premises identified under the leases covering
the leasing of portions of office buildings located at certain sites ("Sites");

         WHEREAS,  Licensee wishes to operate its communications  systems at the
Sites,  and  Licensor is willing to grant to Licensee a license to use a portion
of each Site for such purposes under the terms and conditions contained herein.

         NOW,  THEREFORE,  in consideration of the mutual promises and covenants
hereinafter  contained and for other good and valuable  consideration,  Licensor
and Licensee hereby agree as follows:

1.       Use of Space.  Licensor  hereby  grants to  Licensee a license to use a
         part  of  Licensor's  premises  at  each  Site  (each,  a  "Space")  to
         accommodate  the number of equipment  cabinets or the square footage as
         set forth in the Co-Location Schedules (the "License").  Licensor shall
         designate  the exact  location of the Space,  which  location  shall be
         reasonably  acceptable to the  Licensee.  Licensor will supply power of
         the type and in the  amount  designated  as set forth in Exhibit C. The
         Space  shall be used  solely  for the  installation  and  operation  of
         telecommunications equipment which complies with National Electric Code
         Standards and provides  "telecommunications  services" or  "information
         services" as those terms are defined in the Communications Act of 1934,
         as  amended,  (the  "Equipment")  set  forth in  Exhibit A which may be
         amended by  Licensee at any time and from time to time,  in  connection
         with Licensee's  business.  Licensee covenants and agrees that Licensee
         shall  not use the  Space  for any  other  purposes  whatsoever  unless
         otherwise  specifically  authorized in writing by Licensor.  Licensee's
         use of the Space is to be  conducted  in  accordance  with all security
         procedures  adopted  by  Licensor,  a copy of  which  shall  have  been
         delivered to Licensee,  provided that  Licensor's  security  procedures
         shall not in any way limit Licensee's  access to the Space as set forth
         in Section 3. Licensee  acknowledges  that the other  licensees may use
         parts of the Site (but not the Space) for collocation and other related
         activities,  but Licensee  does not assume any liability for any act or
         omission of such other licensees.  Licensor may, at its option, upon at
         least  fifteen (15) days prior notice to Licensee,  substitute  for the
         Space  other  space at any of the  Sites  set  forth in the  respective
         Co-Location  Schedules,  provided that the  substitute  space  contains
         approximately  an equal  area of space  and has  substantially  similar
         configuration and is otherwise  reasonably  acceptable to Licensee.  In
         addition, the move shall be performed during off peak hours as Licensee
         may  designate  in its  sole  discretion  in  order  to  avoid  service
         interruption  of  Licensee's  business.  Expenses for such move will be
         borne by Licensor.

<PAGE>

2.       Prohibited Uses. Licensee shall not at any time use or allow any person
         to use the  Space  or do or  permit  anything  to be done or kept in or
         about the Space that:  (a)  violates  any  certificate  of occupancy in
         force  for such  Site,  provided  a copy of such  certificate  has been
         delivered  to  Licensee;  (b) causes or is likely to cause  damage to a
         Site or the Space, any equipment,  facilities or other systems therein;
         (c)  constitutes  a  material  violation  of any  applicable  law;  (d)
         violates a  requirement  or condition of the  standard  fire  insurance
         policy  issued for office or data  processing  buildings  at such Site,
         provided a copy of such policy has been  delivered to Licensee;  or (e)
         materially interferes with or disrupts the use or occupancy of any area
         of a Site, other than a Space, by other lessees, licensees or occupants
         of such other areas.

3.       Services  Provided.  Licensor shall provide the support  (collectively,
         the "Services") for the Licensee's  Equipment installed in the Space as
         set forth below:

         a.       Installation  Support.   Installation  support  ("Installation
                  Services")  including necessary power connections,  floor tile
                  cutouts or ceiling conduit, equipment and terminal connections
                  as  detailed  in the  Installation  Support  Work  Description
                  attached hereto as Exhibit B;

         b.       Conditioned   Environment.    Conditioned   environment   with
                  controlled  access for  operation  on shared,  no-wall  basis,
                  including  adequate UPS backed  electricity,  generator backed
                  electricity,   or  building  standard   commercial  power  and
                  computer air conditioning as described in Exhibit C;

         c.       Security.  High-level security at the Space,  twenty-four (24)
                  hours a day,  seven (7) days a week,  three  hundred and sixty
                  five  (365)  days per year at each  Site  which  will  protect
                  Licensee's   Equipment,   critical   systems,   services   and
                  information resources;

         d.       Fire  Suppression.  Fire  suppression  equipment and services,
                  twenty-four  (24)  hours a day,  seven (7) days a week,  three
                  hundred and sixty five (365) days per year, which will protect
                  Licensee's   Equipment,   critical   systems,   services   and
                  information resources;

<PAGE>

         e.       Access to Space.  Licensee and its designated  representatives
                  shall have access to the Space  twenty-four  (24) hours a day,
                  seven (7) days a week, three hundred and sixty five (365) days
                  per year; and

         f.       Any Additional  Services.  Any additional  services other than
                  the  Services set forth  herein  provided  that the fees to be
                  paid for such  additional  services  shall be mutually  agreed
                  upon by Licensor and Licensee  pursuant to a written amendment
                  of this Agreement.

         Licensee  acknowledges  that  Licensor may  temporarily  interrupt  the
Services as  necessary  for the reasons of mandate by  applicable  law,  utility
stoppage  beyond its control,  or inspection and repair  required to operate and
maintain the plumbing,  mechanical and electrical systems of the Site.  Licensor
shall  provide  a fifteen  (15) day prior  written  notice  to  Licensee  of any
scheduled inspections and repairs.  Licensor agrees to minimize any interruption
of Services.

4.       Licensor Representations and Covenants.

         a.       Organization;  Powers.  (i)  Licensor  is a  corporation  duly
                  organized,  validly  existing and in good  standing  under the
                  laws of its  jurisdiction of organization  and is qualified or
                  licensed to conduct  business in the jurisdiction in which its
                  principal  place of  business  is located  and in every  other
                  jurisdiction where such qualification is necessary,  including
                  but  not  limited  to  the  jurisdictions  set  forth  in  the
                  Co-Location  Schedules;   (ii)  Licensor  has  the  power  and
                  authority to carry on its business as now conducted; and (iii)
                  Licensor  has the power and  authority  to execute and deliver
                  this  Agreement,  the  Co-Location  Schedules  and  any  other
                  documents  to which it is a party,  and will have the power to
                  execute and deliver any other  instruments  to be delivered by
                  it subsequent to the date hereof.

         b.       Corporate   Authorizations.   The   execution,   delivery  and
                  performance of this Agreement,  the Co-Location  Schedules and
                  any other documents to which Licensor is a party:

                  i.       have  been duly  authorized  by  Licensor's  Board of
                           Directors or managers and, if  necessary,  Licensor's
                           shareholders;

                  ii.      do not violate (1) any law  applicable  to  Licensor;
                           (2) Licensor's  Certificate of Incorporation or other
                           organization  documents,  as the case may be;  or (3)
                           any   applicable   order   of  any   court  or  other
                           governmental agency;

                  iii.     do not or will not conflict with,  result in a breach
                           of or constitute (with due notice or lapse of time or
                           both) a default  under leases or any other  agreement
                           to which Licensor is or may become a party;

<PAGE>

                  iv.      do not violate or conflict with the respective leases
                           which  Licensor   entered  into  with  the  landlords
                           identified  in  the  Co-Location   Schedules,   which
                           landlords have granted Licensor express authority and
                           permission   to  enter  into  this   Agreement,   the
                           Co-Location  Schedules and any other  agreement  with
                           Licensee;

                  v.       constitute  legal,  valid and binding  obligations of
                           Licensor,  enforceable against Licensor in accordance
                           with their terms.

         c.       Quiet  Enjoyment.  Licensor  covenants that, if and so long as
                  Licensee  shall fully and  faithfully  perform and comply with
                  the provisions set forth under this Agreement,  Licensee shall
                  and may peaceably  and quietly have,  hold and enjoy the Space
                  for the  Term,  free  from  interference  from  Licensor,  its
                  successors,  assigns and transferees and any other third party
                  claiming by or through  Licensor.  Licensor further  covenants
                  that it will use its best  efforts  to  obtain a  covenant  of
                  quiet enjoyment for Licensee from each landlord of each Site.

         d.       Notice of Default. Licensor covenants to provide a copy of all
                  notices  delivered to Licensor from any landlord relating to a
                  possible or actual  default or threat to remove  Licensor from
                  any Site under Licensor's lease with such landlord immediately
                  upon receipt thereof (the "Lease Default Notice").

5.       Equipment   Installation  and  Removal.   Licensee  shall  install  the
         Equipment  in the  space.  Within  60  days  after  the  expiration  or
         termination  of the License for the Space,  Licensee,  at its  expense,
         shall remove from the Space, all of Licensee's  property,  and Licensee
         shall  repair  any damage to the Space or the Site  resulting  from the
         installation or removal of Licensee's property.

6.       Term. The term of the License with respect to each Space shall commence
         on the day Licensee first installs Equipment in that Space, as notified
         in  writing by  Licensee  to  Licensor  (the  "Commencement  Date") and
         terminate on the date specified in the respective  Co-Location Schedule
         (the  "Expiration  Date"),  unless earlier  terminated  pursuant to the
         terms of this  Agreement  (the  "Term").  On or after the  Commencement
         Date,  Licensor  shall  execute a Memorandum  of License  Commencement,
         which shall specify the  Commencement  Date. The failure by Licensor or
         Licensee  to execute a  Memorandum  of License  Commencement  shall not
         affect  the  occurrence  of the  Commencement  Date.  The  term of this
         Agreement  shall commence on the date hereof and terminate on the later
         to occur of (i) January 31, 2004 or (ii) the latest  Expiration Date of
         the Co-Location Schedule(s) then in effect.

7.       License Fees. Licensee shall pay to Licensor the License Fees set forth
         on Section 4 of each  Co-Location  Schedule  as  consideration  for the
         License  granted and all Services  provided to Licensee.  All recurring
         License  Fees are  payable  monthly in advance on the first day of each
         month during the Term with respect to such Co-Location Schedule. In the
         event  the  Commencement  Date is not the  first  day of a  month,  the
         License  Fee shall be pro rated for such month.  Nonrecurring  fees are
         due and payable 30 (thirty)  days after receipt of invoice by Licensee.
         In  addition  to any fees  specified  herein,  Licensee  shall  also be
         responsible for the payment of sales and/or use taxes, if any,  imposed
         by any governmental  authority or agency in connection with the license
         granted hereunder or Services  performed  hereunder.  In the event that
         Licensee  fails to pay the  License  Fees set  forth in this  Section 7
         within ten (10) days after such payment is due, then Licensee shall pay
         Licensor a late  charge  equal to 1% per month as an agreed  liquidated
         amount  and  as  compensation  for  Licensor's   additional  reasonable
         administrative expense relating to such late payment.

<PAGE>

8.       Power.  Charges for power are set forth in Exhibit C. Licensor will, at
         Licensee's  request,  provide a DC power plant  capable of operating on
         batteries for not less than 4 four hours.  Licensor will, at Licensee's
         request,  provide  generator back up power. In addition,  Licensor will
         build a DC plant to accommodate the Licensee's consumption needs for DC
         power.

9.       Security Deposit. Simultaneously with the execution of each Co-Location
         Schedule,  Licensee will deposit with Licensor the security deposit set
         forth in Section 5 of such Co-Location  Schedule ("Security  Deposit").
         Each  Security  Deposit shall bear interest and shall be deposited in a
         segregated   interest  bearing  account  at  a  financial   institution
         disclosed  to  Licensee  and  shall be  security  for the  payment  and
         performance  by Licensee of all of Licensee's  obligations,  covenants,
         conditions  and  agreements   under  this   Agreement.   Promptly  upon
         expiration or  termination  of the Term (or any renewals and extensions
         thereof),  and in no event later than 75 days after the  expiration  or
         termination of the Term, Licensor shall,  (provided the Licensee is not
         in default  under the terms  hereof)  return such  security  deposit to
         Licensee   with  accrued   interest,   less  any   reasonable   amounts
         appropriated  and  properly  documented  by  Licensor  to make  good on
         Licensee's obligations hereunder.

10.      Insurance.  At its expense,  Licensor  shall maintain in full force and
         effect at all times while it has any  obligations  remaining under this
         Agreement,  policies of insurance  written as primary  coverage and not
         contributing  with or in excess of any  coverage  Licensee  may  carry.
         These  policies  will be issued by an  insurance  carrier with a Best's
         rating of at least A X which afford the following:

         a.       All-Risk Property Insurance to insure physical loss or damage,
                  at  replacement   value,  to  the  Space.   Licensor  will  be
                  responsible for insuring its own personal property,  machinery
                  and equipment.

         b.       Commercial General Liability Insurance, including coverage for
                  Bodily   Injury,   Property   Damage,   Personal   Injury  and
                  Contractual  Liability  in an amount not less than  $1,000,000
                  per  occurrence  with an annual  aggregate  of  $2,000,000.  A
                  claims made policy is not permitted.

         c.       Workers'  Compensation  Insurance  in  Statutory  amounts  and
                  Employer's  Liability  Insurance  in an  amount  not less than
                  $500,000 per occurrence.

<PAGE>

         At its expense, Licensee shall maintain in full force and effect at all
         times  while it has any  obligations  remaining  under this  Agreement,
         policies of insurance  written as primary coverage and not contributing
         with or in excess of any coverage  Licensor may carry.  These  policies
         will be issued by an insurance carrier with a Best's rating of at least
         A X which afford the following:

         a.       All-Risk Property Insurance to insure physical loss or damage,
                  at replacement value, to the Equipment.

         b.       Commercial General Liability Insurance, including coverage for
                  Bodily   Injury,   Property   Damage,   Personal   Injury  and
                  Contractual  Liability  in an amount not less than  $1,000,000
                  per  occurrence  with an annual  aggregate  of  $2,000,000.  A
                  claims made policy is not permitted.

         c.       Workers'  Compensation  Insurance  in  Statutory  amounts  and
                  Employer's  Liability  Insurance  in an  amount  not less than
                  $500,00 per occurrence.

         Certificates  of Insurance,  evidencing the above coverages with limits
         not less than those specified above, shall be delivered to Licensor and
         Licensee upon execution of this Agreement and annually thereafter. Such
         Certificates of Insurance,  with the exception of Workers' Compensation
         Insurance, will confirm that each policy listed above has been endorsed
         to name KMC Telecom V, Inc., Licensor,  their respective  subsidiaries,
         affiliates, directors, officers, agents, assigns, financing parties and
         employees as additional insured.

         All  Certificates of Insurance  shall  expressly  provide that not less
         than (30) days prior  written  notice be given to Licensee in the event
         of a material alteration to or cancellation of the coverage's evidenced
         by such  certificates  with no  disclaimer.  The  limits  of  insurance
         required  shall not  limit  Licensor  and  Licensee's  liability  under
         Section 11. Failure by Licensee to receive or request such Certificates
         does not represent a waiver of the requirements for insurance  coverage
         noted above.

11       Indemnity.  Licensee shall, subject to Section 12 below, indemnify  and
     hold  harmless  Licensor  against  all  claims,  suits,  expenses,  losses,
     liabilities  or  damages  resulting  from any  breach  by  Licensee  of any
     material  provision  of this  Agreement  or from any  gross  negligence  or
     willful  misconduct  of  Licensee.  Licensor  shall,  subject to Section 12
     below,  indemnify and hold  harmless  Licensee  against all claims,  suits,
     expenses,  losses,  liabilities  or  damages  resulting  from any breach by
     Licensor of any  material  provision  of this  Agreement  or from any gross
     negligence or willful misconduct of Licensor.

12       Limitation  of  Liability.  Notwithstanding  Section 11  above,  in  no
     event shall either party be liable for incidental,  consequential, indirect
     damages,  lost profits, lost information or any damages to the other or any
     of such  party's  customers'  business or  property  caused by any error in
     judgment  of, or any action  taken or omitted by, the other  party,  or any
     interruption  of the  Services,  unless  such  error,  action,  omission or
     interruption  constitutes  or  results  from  gross  negligence  or willful
     misconduct  of the other  party.  Neither  party  shall be  liable  for any
     claims, suits, expenses, losses, liabilities or damages caused by the other
     party's failure to perform its  obligations  under this Agreement or by its
     failure to fulfill  its  obligations  under  this  Agreement  due to causes
     beyond  its  control,   including,   but  not  limited  to:  acts  of  God,
     interruption of power or other utilities, interruption of transportation or
     communication  services,  acts of civil  or  military  authority,  national
     emergencies, or strike.

<PAGE>

13       Confidentiality.   Each  party,  for  itself,  its  agents,   employees
     and  representatives  agrees that it will not divulge any  confidential  or
     proprietary  information  as  identified  below which it receives  from the
     other party,  except as may be required in the  performance of the Services
     or the implementation of the project with respect to which the Services are
     rendered;  provided,  however, that no liability shall arise hereunder as a
     result  of  the  dissemination  of any  information  which  (i)  was in the
     possession  or control of one party prior to the date of disclosure to that
     party by the other  party  hereunder,  or (ii) was in the public  domain or
     enters the public domain through no improper act by the party to which such
     information  was disclosed or any of that party's  agents or employees,  or
     (iii) was rightfully given to a party by a source  independent of the other
     party, and provided further, that each party shall be permitted to disclose
     any  information to the extent  required by applicable law or  governmental
     authorities.   Any  information  received  by  Licensor  from  Licensee  in
     connection with Licensee or Licensor's  performance of Services to Licensee
     under this Agreement shall be deemed confidential  information hereunder as
     well as any information  Licensee may receive concerning any third party in
     the Space shall be deemed confidential information hereunder. Any report or
     other  document   prepared  by  Licensor  in  connection   with  Licensor's
     performance of the Services to Licensee shall be deemed to be  confidential
     information hereunder.

14       Binding  Agreement;  Assignment.  This Agreement  shall be binding upon
     and  inure to the  benefit  of the  parties  hereto  and  their  respective
     successors  and  assigns,  except that  Licensee  shall not be permitted to
     assign this  Agreement or any  interest  herein  without the prior  written
     consent of Licensor,  which  consent  shall not be  unreasonably  withheld.
     Licensee  will  remain  fully  liable  for the  payment of fees and for the
     performance  of all the other  obligations  of Licensee  contained  in this
     Agreement.  The  consent by Licensor  to any  assignment  shall not relieve
     Licensee of the  obligation to obtain the consent of Licensor to any future
     assignment. Notwithstanding the foregoing, Licensor acknowledges and agrees
     that Licensee may assign or collaterally  assign,  in whole or in part, its
     rights,  interests and obligations  hereunder without  limitation to any of
     its  affiliates,  any party  providing  financing to the Licensee,  and any
     successors  and  assigns  of  the  foregoing  without  the  consent  of the
     Licensor.  Licensee will provide  Licensor  with notice of any  assignment.
     Licensor  agrees  that the  holder of any  security  interest  shall not be
     prevented or impeded by Licensor from enforcing such security  interest and
     Licensor  shall not  terminate  any License or this  Agreement  without the
     prior written consent of the assignee.  Licensor shall execute all consents
     to  assignment  and/or  acknowledgements  of any  security  interest as are
     requested   by   Licensee   to  give   effect   to  the   foregoing.   Such
     acknowledgements  may  contain  an  agreement  to allow the  holder of such
     security  interest to cure defaults by Licensee  under this Agreement and a
     consent to allow the assignment to the successors-in-interest of the holder
     of such security interest.

<PAGE>

15       Mutual  Cooperation.  Licensee  shall  cooperate   with   Licensor   in
     connection  with  Licensor's  performance of the Services.  Licensee shall,
     with reasonable promptness,  provide all information reasonably required by
     Licensor for its  performance  of the Services,  and shall make  designated
     representatives available for regular consultation at such times and places
     as  Licensor  shall  reasonably  request.  Licensor  shall  cooperate  with
     Licensee in connection  with  Licensee's use of the Space.  Licensor shall,
     with reasonable promptness,  provide all information reasonably required by
     Licensee   for  its  use  of  the   Space,   and  shall   make   designated
     representatives available for regular consultation at such times and places
     as Licensee shall reasonably request.

16       No Agency  Relationship  Implied. It  is  acknowledged  and  agreed  by
     Licensee  that  Licensor  performs  the  Services  hereunder  solely  as an
     independent contractor and that no joint venture, partnership,  employment,
     agency or other relationship is intended,  accomplished or embodied in this
     Agreement.  Licensor shall have the sole and exclusive  right to supervise,
     manage, control and direct its performance of this Agreement.

17       Default by Licensor.  In the event Licensor fails to  perform or comply
     with any provision of this Agreement  within twenty (20) days of Licensee's
     written  notice to  Licensor  of its  failure to perform or comply with any
     other provision of this  Agreement,  Licensee may terminate the License for
     the subject Space for which  nonperformance  or noncompliance has occurred.
     If Licensor is unable to cure within the prescribed  twenty (20) days or if
     the  nonperformance  or  noncompliance  is of a nature that cannot be cured
     within  twenty (20) days,  Licensor  shall so notify  Licensee and Licensee
     shall give Licensor a reasonable amount of time to cure such nonperformance
     or  noncompliance.  If Licensor fails to cure within a reasonable amount of
     time,  Licensee may terminate the License for the  applicable  Space.  Upon
     receipt of a Lease Default Notice which Licensee  reasonably  believes will
     result  in a  termination  of  Licensor's  lease  within  thirty  (30) days
     thereafter,  Licensee may  immediately  notify Licensor of its intention to
     terminate  the  License  for the Space  covered  by such  notice and unless
     Licensor  provides  evidence in support of the lease continuing beyond such
     30 day period  within  five (5) days  after  receipt  of such  notice,  the
     Licensee may immediately  terminate the License with respect to such Space.
     Licensor  shall in any event remain fully liable for damages as provided by
     law and or all costs and  expenses  incurred  by Licensee on account of any
     default, including reasonable attorneys' fees, subject to the limitation of
     liability  set forth in Section 12.  Licensor's  obligation to pay all fees
     and charges that have been accrued  shall  survive any  termination  of any
     License.

18       Default by Licensee.  In the event  Licensee  fails to  pay  monthly or
     other  fees  required  to be paid  hereunder  within  fifteen  (15) days of
     Licensor's  written  notice to  Licensee of its failure to pay when due and
     demand for the  immediate  payment  thereof,  Licensor  may  terminate  the
     License  for the  subject  Space for which fees have not been paid.  In the
     event Licensee fails to perform or comply with any other  provision of this
     Agreement within twenty (20) days of Licensor's  written notice to Licensee
     of its  failure  to  perform  or comply  with any other  provision  of this
     Agreement,  Licensor may  terminate  the License for the subject  Space for
     which  nonperformance or noncompliance has occurred.  If Licensee is unable
     to cure within the prescribed twenty (20) days or if the  nonperformance or
     noncompliance  is of a nature that cannot be cured within twenty (20) days,
     Licensee  shall so notify  Licensor  and  Licensor  shall  give  Licensee a
     reasonable amount of time to cure such nonperformance or noncompliance.  If
     Licensee  fails to cure within a  reasonable  amount of time,  Licensor may
     terminate the License for the applicable Space. Licensee shall in any event
     remain  fully  liable for  damages as  provided by law and or all costs and
     expenses  incurred  by  Licensor  on  account  of such  default,  including
     reasonable  attorneys'  fees,  subject to the  limitation  on liability set
     forth in Section 12. Licensee's obligation to pay all fees and charges that
     have been accrued shall survive any  termination of any License.  Upon such
     termination  of any License  pursuant to this  Section 18,  Licensee  shall
     remain  fully liable for all License Fees under such License from such date
     of termination  through the Expiration  Date of the relevant  License.  All
     such amounts shall become immediately due and payable.

<PAGE>

19   Notices.  All  notices,  reports,  requests or other  communications  given
     pursuant to this Agreement shall be made in writing,  shall be delivered by
     hand delivery,  overnight  courier  service or fax, shall be deemed to have
     been duly given when  delivered,  and shall be  addressed  as follows or to
     such other  location as either party shall  designate via certified  return
     receipt notification:

         To Licensee:

                           KMC Telecom V, Inc.
                           1545 Route 206
                           Suite 300
                           Bedminster, NJ  07921
                           Attn:  Alan M. Epstein, Esq.
                           Telephone:       (908) 470-2100
                           Fax:             (908) 470-8776

         With a copy to:

                           Scott Stinson
                           KMC Contract Manager
                           4250 International Boulevard
                           Suite B
                           Norcross, Georgia 30093
                           Tel: (678) 206-9551
                           Fax: (678) 206-9596

         To Licensor:

                           Wallace L. Walcher
                           Fullnet Communications, Inc.
                           201 Robert S. Kerr
                           Suite 210
                           Oklahoma City, OK  73102
                           Tel.:  (405) 232-0958
                           Fax:  (405) 236-8201

<PAGE>

20       Governing  Law. This  Agreement  shall be governed by the laws  of  the
     State of New York,  without regard to any conflict of laws  principles that
     would require applying another State's laws.

21       Jurisdiction  and Venue.  Each of the parties  hereto hereby submits to
     the  nonexclusive  jurisdiction of the United States District Court for the
     Southern  District of New York and of any New York State  Court  sitting in
     New York City for the  purposes  of all legal  proceedings  relating to the
     execution,  validity or enforcement of this Agreement.  Each of the parties
     hereto hereby  irrevocably  waives, to the fullest extent permitted by law,
     any objection which it may now or hereafter have to the laying of the venue
     of any such proceeding  brought in such a court and any claim that any such
     proceeding  brought  in such a court has been  brought  in an  inconvenient
     forum.EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY  WAIVES, TO THE FULLEST
     EXTENT  PERMITTED  BY LAW,  ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
     PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

22       Entire  Agreement.  The  Agreement  constitutes  the  entire  agreement
     between  Licensor and Licensee with respect to the use of the Space and the
     Services, and may be modified only by a written instrument signed by a duly
     authorized officer on behalf of each party. Any representation or statement
     not  contained  in this  Agreement  shall not be binding  upon  Licensor or
     Licensee.

<PAGE>

     IN WITNESS  WHEREOF,  an authorized  representative  of each of the parties
hereof have executed this Agreement on the day and year first written above.

FULLNET COMMUNICATIONS INC.

By:   /s/ Wallace L. Walcher
    ------------------------------
    Name: Wallace L. Walcher
    Title: Chief Operating Officer

KMC TELECOM V, INC.,

a Delaware corporation

By:
    ------------------------------
    Name:
    Title:

<PAGE>

                               LIST OF ATTACHMENTS
                               -------------------

Schedule 1 - Sites

Exhibit A - Licensee's Equipment List

Exhibit B - Installation Support Work

Exhibit C - Miscellaneous and Support Charges

Exhibit D - Form of Co-Location Schedule

<PAGE>

                                   SCHEDULE 1
                                   ----------

                                     SITES
                                     -----

201 Robert S. Kerr, Suite 210, Oklahoma City, OK 73102

<PAGE>

                                    EXHIBIT A
                                    ---------

                                 EQUIPMENT LIST
                                 --------------

Licensee's Name:   KMC TELECOM V, INC.

By (signature):

Name:

Title:

City/Site  Cabinet ID  Equipment  Power    Heat (BTU)  Size      Weight
                       ID         (Kva)               (HxWxD)   (pounds)

Equipment at the sole discretion of KMC Telecom V, Inc.

<PAGE>

                                    EXHIBIT B
                                    ---------

                            INSTALLATION SUPPORT WORK
                            -------------------------

Licensor will provide the following Installation Services:

1.   Site Preparation

     1.1. Licensor will provide circuit  convenience outlets within the vicinity
          of Licensee's Space, including for Licensee's use of test equipment.

     1.2. Licensor will supply overhead cable ladders in proximity to Licensee's
          cabinets for the running of communication circuits.

     1.3. Licensor will supply  Licensee's cage with adequate amps of DC power A
          and B feed (s) and UPS  backed  AC power to be  terminated  on a power
          distribution   frame,  with  specifications  to  be  provided  in  the
          Co-Location Schedule.

2.   Equipment

     2.1. Licensee is responsible for all Equipment installation.

     2.2. Licensee will provide cabinets at its own expense.

     2.3. Licensee to install cabinets at its own expense.

<PAGE>

                                    EXHIBIT C
                                    ---------

                        MISCELLANEOUS AND SUPPORT CHARGES
                        ---------------------------------

1.   Licensor  will  supply  technical  support  using the Hands,  Eyes and Ears
     approach. This approach will consist of the following:

     1.1. Reporting  of the  visual  status  of  lights,  switches  and  printed
          outputs.

     1.2. Re-setting of Equipment,  cycle power,  review connectors for physical
          integrity.

     1.3. Reporting to the Licensee any Equipment alarms.

     1.4. Swapping of cards and/or plug-ins under Licensee supervision.

     1.5. At Licensee's request, Licensor will provide cabling support.

2.   Licensor shall provide fire detection,  alarm and suppression equipment and
     services at all times to protect Licensee's equipment in the Space.

3.   Licensor  will  charge  on an  hourly  basis for  additional  services  not
     included in the Services; the actual rate will vary according to location.

     3.1. Minimum charge of 1 hour, at the following rates:

     3.2. Normal business hours: $95/hr

     3.3. Nights and weekends: $135/hr

4.   If the hands,  eyes and ears  approach  does not remedy the  problems,  the
     Licensee  may  bring  in  Sub-Contractors  to  perform  additional  support
     services:

     4.1. At the Licensee's request,  Licensor may provide a list of recommended
          Sub-Contractors for each Site.

     4.2. Where the Licensee  directs Licensor to bring in an outside vendor for
          Equipment repair or reconfiguration: 1) this expense will generally be
          billed  directly to the Licensee by the vendor or 2) where Licensor is
          the billed entity it will charge actual cost plus 25%.

5.   Flat Fee Power Charges - specifications to be provided by Licensee:

     5.1. Non-UPS  backed  power is  charged  at 100% x $12 x per amp of circuit
          capacity.

     5.2. UPS AC backed  power is  charged  at 100 % x $25 x per amp of  circuit
          capacity.

     5.3. DC power is charged at 100% x $20 x per amp of circuit capacity.

<PAGE>

     5.4. Rate  Increases:  In the  event  that  power  rates  charged  Licensor
          increase  more than 5% above  current  levels,  Licensor  reserves the
          right to increase the rate proportionately.

6.   Cable/Cross Connection Fees:

     6.1. Direct Connection Fees:

          6.1.1. Cable charges are the responsibility of the Licensee and may be
               directly  negotiated  with the  carrier  concerned.  Within  each
               Licensor facility, the following cross connection fees apply:

          6.1.2. To Carriers: Currently no charge

          6.1.3. To other Licensees:    $30 per month

     6.2. Cross-Connect Fees. Within each Licensor facility, the following cross
          connection fees apply:

          6.2.1. Install fee per DS1:   $25

          6.2.2. Install fee per DS3:   $75

          6.2.3. Install fee per OCX:   $250

          6.2.4. DS1 monthly charge:    $40

          6.2.5. DS3 monthly charge:    $80

          6.2.6. OCX monthly charge:    $125

<PAGE>

                                    EXHIBIT D
                                    ---------

                          FORM OF CO-LOCATION SCHEDULE

        Site Name: 201 Robert S. Kerr, Suite 210, Oklahoma City, OK 73102

         THIS CO-LOCATION  SCHEDULE (the "Co-Location  Schedule") dated June 20,
2000,  shall be  attached to and become a part of the MASTER  LICENSE  AGREEMENT
dated June 20, 2000 by and between KMC Telecom V, Inc.,  as Licensee and Fullnet
Communications Inc., as Licensor ("Licensor") ("Master License Agreement").

                                   WITNESSETH:

         WHEREAS,  Licensor has entered into the Master  License  Agreement with
KMC Telecom V, Inc., a Delaware corporation; and

         WHEREAS,  Licensor has entered into a lease with BOK Plaza  Associates,
LLC covering the leasing of 201 Robert S. Kerr,  Suite 210,  Oklahoma  City,  OK
73102; and

         WHEREAS,  Licensee  wishes to  operate  its  Equipment  located  at the
Licensor's  premises in 201 Robert S. Kerr,  Suite 210,  Oklahoma City, OK 73102
and  Licensor  is willing to grant to Licensee a license to use a portion of the
Licensor  premises for such purposes  under the terms and  conditions  contained
herein.

         NOW,  THEREFORE,  in consideration of the mutual promises and covenants
hereinafter  contained and for other good and valuable  consideration,  Licensor
and Licensee hereby agree as follows:

         1.       Defined Terms. Capitalized terms used herein but not otherwise
                  defined herein shall have the meanings ascribed thereto in the
                  Master License Agreement.

         2.       Term.  The term of this License (the "Term") shall commence on
                  the Commencement date and terminate on January 31, 2004.

         3.       Space.  Licensee shall use a part of Licensor's  premises (the
                  "Space") to accommodate five hundred square feet (500 sq. ft.)
                  of caged space at $45/square foot.  Licensor will supply power
                  of the type and  designated in Exhibit B of the Master License
                  Agreement  and in the  following  amounts:  DC Power:  A and B
                  feeds each, 1000 amps; AC Power: 80 amps.

         4.       License  Fees.  Licensee  shall pay to Licensor the  following
                  fees (License Fees) in accordance with Section 7 of the Master
                  License  Agreement:  (i) commencing on the  Commencement  Date
                  $44,500.00  per month for the Space and the  Services  (except
                  the Installation Services) which includes 100% of the usage of
                  the type of power,  as  provided  in  Exhibit B of the  Master
                  License Agreement; and (ii) upon initiation of installation of
                  Equipment,  a one time payment of $32,700.00 for  Installation
                  Services  as  provided  in  Exhibit  B of the  Master  License
                  Agreement.

<PAGE>

         5.       Security  Deposit.  Simultaneously  with the  execution of the
                  License,  Licensee  will  deposit  with  Licensor  the  sum of
                  $44,500.00 to be held as Security  Deposit in accordance  with
                  Section 9 of the Master License Agreement.

         6.       Subordination/Conflict.  This  Co-Location  Schedule is in all
                  respects   subject  to  and   subordinate  to  the  terms  and
                  conditions of the Master  License  Agreement.  In the event of
                  inconsistency  between any terms of this Co-Location  Schedule
                  and any terms of the Master  License  Agreement,  the terms of
                  the Master License Agreement shall control.

<PAGE>

         IN WITNESS WHEREOF,  the parties hereto have duly executed this License
as of the day and year first above written.

                                     By:      ______________________________
                                     Name:
                                     Title:

                                     KMC TELECOM V, INC.,
                                     a Delaware corporation

                                     By:      ______________________________
                                     Name:    Wallace L. Walcher
                                     Title:   Chief Operating Officer

                                     Fullnet Communications, Inc.,
                                     an Oklahoma corporation

The foregoing is acknowledged and consented to:
BOK Plaza Associates, LLC

------------------------------------
Name:
Title:

<PAGE>

                                                                  EXECUTION COPY
                                                                  --------------

                      ACKNOWLEDGMENT AND CONSENT AGREEMENT

                  ACKNOWLEDGMENT  AND  CONSENT  AGREEMENT  (this  ("Agreement"),
dated as of June 20, 2000, by and among Fullnet Communications, Inc. an Oklahoma
Corporation (the "Licensor"),  KMC TELECOM V, INC., a Delaware  corporation (the
"Licensee"), and [TELECOM V INVESTOR TRUST 2000-A], a [ ] (the "Lessor").

                  WHEREAS, the Licensee has entered into certain agreements with
the Lessor (the "Financing  Documents") pursuant to which the Lessor and certain
other  financing  parties  have  agreed  to  provide  lease  financing  for  the
acquisition of certain equipment (the "Equipment") to be used by the Licensee to
provide media gateway services (the "Services");

                  WHEREAS,  in connection  with the performance of the Services,
the Licensee and the Licensor  have entered into the Master  License  Agreement,
dated as of June 20, 2000 (the "Master  License  Agreement"),  pursuant to which
the  Licensor  has  granted  the  Licensee a license to use a portion of certain
premises leased by it to accommodate a portion of the Equipment;

                  WHEREAS,  in order to secure the Licensee's  obligations under
the Financing  Documents,  the Licensee has agreed  irrevocably  to transfer and
assign for security  purposes,  and grant a first priority security interest in,
all of its right,  title and interest in, to and under (among other  things) the
Master License Agreement to the Lessor,  pursuant to a security agreement (dated
on or about the date hereof)  between the Licensee and the Lessor (the "Security
Agreement"); and

                  WHEREAS,  it is a condition  precedent to the  consummation of
the lease financing  under the Financing  Documents that the Licensor shall have
executed and delivered this Agreement.

                  NOW,  THEREFORE,  in  consideration  of the  foregoing and for
other good and  valuable  consideration,  the receipt and  adequacy of which are
hereby acknowledged, the parties hereby agree as follows:

                  1. Definitions; Interpretation. Capitalized terms used in this
Agreement without definition shall have the respective meanings ascribed thereto
in the Master License Agreement. In this Agreement, unless the context expressly
indicates otherwise,  terms defined in the singular shall have the same meanings
when  used  in the  plural  and  vice  versa;  references  to any  law  (whether
statutory,  administrative or otherwise) shall include all provisions  amending,
replacing,  succeeding or  supplementing  such law;  references to agreements or
other contractual  instruments  shall include all amendments,  modifications and
supplements  thereto;  and  references to persons or entities shall include such
person's or entity's successors and assigns.

<PAGE>

                  2. Undertakings Relating to the Financing. The Licensor hereby
acknowledges and agrees for the benefit of the Lessor that:

                  (a) Consent to Assignment.  The Licensor  irrevocably consents
         to the transfer and assignment for security  purposes of the Licensee's
         right,  title and interest in, and rights and  obligations  under,  the
         Master  License  Agreement  to the  Lessor  pursuant  to  the  Security
         Agreement.

                  (b) Cure  Rights.  Upon  receipt  by the  Licensor  of written
         notice  from the Lessor that an event of default  has  occurred  and is
         continuing under the Financing Documents,  the Lessor shall be entitled
         to exercise any and all rights of the Licensee under the Master License
         Agreement in accordance  with its terms.  Until such time as the Lessor
         seeks to exercise  remedies under the Security  Agreement in respect of
         the Master  License  Agreement  and gives  written  notice as  provided
         herein,  the Licensor shall continue to deal directly with the Licensee
         with  respect  to its  obligations  to the  Licensee  under each of the
         Master  License  Agreement.  Upon  receipt of written  notice  from the
         Lessor that an event of default has  occurred and is  continuing  under
         the Financing Documents and that the Lessor is exercising rights of the
         Licensee  under the Master License  Agreement,  the Licensor shall deal
         exclusively  and  directly  with  the  Lessor  or  its  designee(s)  or
         assignee(s), as the case may be, and not the Licensee.

                  The Licensor will not,  without the prior  written  consent of
         the Lessor,  exercise any of its rights set forth in the Master License
         Agreement to cancel or terminate,  or suspend  performance  under,  the
         Master License  Agreement due to the Licensee's breach of or failure to
         perform any of its obligations under the Master License Agreement:

                           (1) with  respect  to a payment  default,  unless the
                  Licensor  shall have  delivered  to the Lessor  prior  written
                  notice declaring its intention to terminate the Master License
                  Agreement  as a result of a payment  default  beyond  the cure
                  period provided in Section 18 of the Master License  Agreement
                  and  specifying the payment  default giving rise thereto,  and
                  before  exercising  any of its  rights set forth in the Master
                  License  Agreement  shall have  permitted  the Lessor or their
                  designee(s)  or  assignee(s)  an additional  cure period of 30
                  days in which either (x) to cure any such  payment  default or
                  (y) to  assume  liability  for the  Master  License  Agreement
                  pursuant to Section 2(c) below; and

                           (2) with respect to any breach or default, other than
                  a payment default, unless the Licensor shall have delivered to
                  the Lessor prior written notice of its intent to exercise such
                  right,  specifying  the nature of the breach or default giving
                  rise to such right and before exercising any of its rights set
                  forth in the Master License Agreement shall have permitted the
                  Lessor or their  designee(s) or assignee(s) an additional cure
                  period of 60 days in which either (x) to cure any such default
                  by remedying  such breach or event or performing or causing to
                  be  performed  the  obligation  in  default  or (y) to  assume
                  liability for the Master License Agreement pursuant to Section
                  2(c) below;

<PAGE>

                  The cure periods set forth in this  Agreement  shall in no way
         limit the Licensor's  rights to interest on overdue amounts at the rate
         and time provided for in the Master License Agreement,  rights to claim
         compensation  for  Licensee  events  of  default  or rights to cure any
         failure of the Licensee and seek reimbursement therefor.

                  Except  as  otherwise  expressly  provided  pursuant  to  this
         Section  2, no  curing  of or  attempt  to cure  any of the  Licensee's
         defaults  under the Master License  Agreement  shall be construed as an
         assumption by the Lessor of any obligations of the Licensee.

                  (c)  Replacement of Current  Licensee by Direct  Assumption of
         Liabilities.  The Lessor or its designee(s) or assignee(s) may elect by
         written  notice  delivered to the Licensor to assume  liability for the
         Licensee's  obligations under the Master License  Agreement;  provided,
         however,  that the Lessor or its designee(s) or assignee(s) shall agree
         to cure any existing  payment default,  and non-payment  defaults which
         are  capable of cure by a party other than the  Licensee,  in each case
         within the time periods set forth in  subsection  (b) above.  Except as
         set forth in the preceding sentence, the Lessor shall not be liable for
         the  performance  or observance of any of the  obligations or duties of
         the Licensee under the Master License Agreement,  and the assignment of
         the Master License  Agreement by the Licensee to the Lessor pursuant to
         the Security Agreement shall not give rise to any duties or obligations
         whatsoever  on the part of the  Lessor  owing to the  Licensor.  In the
         event that the Lessor  assumes  or is liable  under the Master  License
         Agreement,  liability in respect of any and all obligations of any such
         person or entity under the Master  License  Agreement  shall be limited
         solely to such person's or entity's  interest in the Equipment  (and no
         officer, director,  employee,  shareholder,  affiliate or agent thereof
         shall have any liability with respect thereto). In the event that there
         are multiple  designees or assignees of the Lessor,  then each designee
         or assignee  shall be jointly and severally  liable for the  Licensee's
         obligations under said Master License Agreement.

                  Upon the exercise by the Lessor of any of the  remedies  under
         the Security Agreement in respect of the Master License Agreement,  the
         Lessor may assign its rights and interests and the rights and interests
         of the  Licensee  under the Master  License  Agreement to any person or
         entity  pursuant  to a form  of  assignment  and  assumption  agreement
         reasonably satisfactory to the Licensor, if such person or entity shall
         assume  liability for all past and future  obligations  of the Licensee
         under  the  Master  License   Agreement.   Upon  such   assignment  and
         assumption,  the Lessor shall be relieved of all obligations  under the
         Master License Agreement assumed pursuant to the preceding paragraph.

                  (d) Changes to Master  License  Agreement.  The Licensor  will
         not, without the prior written consent of the Lessor:

                  (i)  consent to or accept  any  cancellation,  termination  or
                  suspension of the Master License Agreement by the Licensee;

<PAGE>

                  (ii) amend,  supplement  or otherwise  modify any provision of
                  the  Master  License  Agreement  (as in  effect  on  the  date
                  hereof); or

                  (iii)  sell,  assign,  delegate  or  otherwise  dispose of (by
                  operation of law or otherwise) any part of its interest in the
                  Master License Agreement.

                  (e) Replacement of Master License Agreement in Bankruptcy.  In
         the event  that (i) the  Master  License  Agreement  is  rejected  by a
         trustee,  liquidator,  debtor-in-possession or similar person or entity
         in any  bankruptcy,  insolvency  or similar  proceeding  involving  the
         Licensee,  or (ii) the Master  License  Agreement  is  terminated  as a
         result of any bankruptcy,  insolvency or similar  proceeding  involving
         the  Licensee   and,  if  within  90  days  after  such   rejection  or
         termination,  the Lessor or its  designee(s)  or  assignee(s)  shall so
         request,  the  Licensor  will execute and deliver to the Lessor or such
         designee(s) or assignee(s) a new Master License  Agreement  which shall
         be for the  balance of the  remaining  term under the  original  Master
         License Agreement before giving effect to such rejection or termination
         and shall contain the same conditions,  agreements,  terms,  provisions
         and  limitations as the original Master License  Agreement  (except for
         any  requirements  which have been  fulfilled  by the  Licensee and the
         Licensor  prior to such  rejection or  termination);  provided that the
         Lessor or such  designee(s)  or  assignee(s)  (i) shall  have cured any
         existing payment default, and non-payment defaults which are capable of
         cure by a party other than the Licensee, in each case within the 90 day
         time period set forth above, and (ii) shall execute and deliver the new
         Master  License  Agreement.  References in this Agreement to an "Master
         License  Agreement"  shall be  deemed  also to refer to the new  Master
         License Agreement in replacement thereof.

                  (f)  Liabilities  Limited  to  Master  License  Agreement.  In
         connection  with any cure pursuant to this Section 2 of the  Licensee's
         default(s)  under  the  Master  License  Agreement  or  any  assumption
         pursuant to this Section 2 by any person of the Licensee's  liabilities
         thereunder,  only those  obligations and liabilities  arising expressly
         under the Master  License  Agreement  shall be  required to be cured or
         assumed, as the case may be.

                  3.       Miscellaneous.

                  (a) No  failure  or  delay on the  part of the  Licensor,  the
Licensee  or the  Lessor or any agent or  designee  of any of the  foregoing  to
exercise,  and no course  of  dealing  with  respect  to,  any  right,  power or
privilege hereunder shall operate as a waiver thereof,  and no single or partial
exercise of any right, power or privilege  hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.

                  (b)  The  remedies  of  the  Lessor,  its  designee(s)  and/or
assignee(s) and the Licensor provided herein are cumulative and not exclusive of
any remedies provided by law.

<PAGE>

                  (c)   Any   notice,   request,   proposal   for   changes   or
correspondence  required or  permitted  under the terms and  conditions  of this
Agreement shall be in writing and (i) delivered personally,  (ii) transmitted by
facsimile and either (x) recipient  acknowledges receipt to sender or (y) sender
is able to deliver to recipient a transmission confirmation, or (iii) sent by an
internationally  recognized  overnight  mail or courier  service,  with delivery
receipt requested, to the following addresses:

                  If to Licensee:           KMC Telecom V, Inc
                                            1545 Route 206
                                            Suite 300
                                            Bedminster, NJ 07921
                                            Attn:    Alan M. Epstein, Esq.
                                            Tel.:    (908) 470-2100
                                            Fax:     (908) 470-8776

                  With copy to:             Scott Stinson
                                            KMC Contract Manager
                                            4250 International Blvd.
                                            Suite B
                                            Norcross, Georgia 30093
                                            Tel: (678) 206-9551
                                            Fax: (678) 206-9596

                  If to Licensor:           Wallace L. Walcher
                                            Fullnet Communications, Inc.
                                            201 Robert S. Kerr
                                            Suite 210
                                            Oklahoma City, OK  73102
                                            Tel.:  (405) 232-0958
                                            Fax:  (405) 236-8201

                  If to Lessor:             [Telecom V Investor Trust 2000-A]
                                            [address]
                                            Attn:    ___________
                                            Tel:     ___________
                                            Fax:     ___________

                  All  notices  shall be deemed to have been duly  given or made
when delivered, or, in the case of telecopy notice, when received.

                  (d) This Agreement may be amended,  waived or modified only by
an instrument in writing signed by the Licensor and the Lessor. Any waiver shall
be effective only for the specified purpose for which it is given.

<PAGE>

                  (e)  This   Agreement   may  be  executed  in  any  number  of
counterparts, all of which when taken together shall constitute one and the same
instrument  and any of the parties  hereto may execute this Agreement by signing
any such counterpart.

                  (f) If any provision hereof is invalid or unenforceable in any
jurisdiction,  then,  to the  fullest  extent  permitted  by law,  (i) the other
provisions  hereof shall  remain in full force and effect in such  jurisdiction,
(ii)  the  invalidity  or  unenforceability  of  any  provision  hereof  in  any
jurisdiction  shall not affect the validity or  enforceability of such provision
in any other  jurisdiction,  and (iii) to the  extent  practicable,  invalid  or
unenforceable  provisions  shall be replaced by valid and enforceable  solutions
having the same economic effect on the parties as was intended by the invalid or
unenforceable provisions.

                  (g) Headings  appearing herein are used solely for convenience
and are not  intended  to affect the  interpretation  of any  provision  of this
Agreement.

                  (h) The  agreements  of the parties  hereto are solely for the
benefit of the Licensor, the Licensee, the Lessor, and shall be binding upon and
inure to the benefit of the respective  permitted successors and assigns of each
of the  foregoing  parties.  No other person or entity (other than the foregoing
parties, including their respective permitted successors and assigns) shall have
any rights hereunder.

                  (i) This  Agreement  shall be governed  by, and  construed  in
accordance with the law of the State of New York.

                  (j)  Each  of  the  parties   hereto  hereby  submits  to  the
nonexclusive  jurisdiction  of the United States District Court for the Southern
District  of New York and of any New York State  Court  sitting in New York City
for the purposes of all legal proceedings relating to the execution, validity or
enforcement of this  Agreement.  Each of the parties  hereto hereby  irrevocably
waives,  to the fullest extent  permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such  proceeding  brought in
such a court and any claim that any such proceeding  brought in such a court has
been brought in an inconvenient forum.

                  (k) EACH OF THE PARTIES HERETO HEREBY  IRREVOCABLY  WAIVES, TO
THE FULLEST  EXTENT  PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

<PAGE>

                  IN  WITNESS  WHEREOF,  the  undersigned  by its  officer  duly
authorized has caused this Agreement to be duly executed and delivered as of the
date first written above.

                                      FULLNET COMMUNICATIONS, INC.

                                      By____________________________________
                                           Name: Wallace L. Walcher
                                           Title: Chief Operating Officer

                                      KMC TELECOM V, INC.

                                      By____________________________________
                                           Name:
                                           Title:

                                      [TELECOM V INVESTOR TRUST 2000-A]

                                      By____________________________________
                                           Name:
                                           Title:

<PAGE>

                              CO-LOCATION SCHEDULE

        Site Name: 201 Robert S. Kerr, Suite 210, Oklahoma City, OK 73102

         THIS CO-LOCATION  SCHEDULE (the "Co-Location  Schedule") dated June 20,
2000,  shall be  attached to and become a part of the MASTER  LICENSE  AGREEMENT
dated June 20, 2000 by and between KMC Telecom V, Inc.,  as Licensee and Fullnet
Communications Inc., as Licensor ("Licensor") ("Master License Agreement").

                                   WITNESSETH:

         WHEREAS,  Licensor has entered into the Master  License  Agreement with
KMC Telecom V, Inc., a Delaware corporation; and

         WHEREAS,  Licensor has entered into a lease with BOK Plaza  Associates,
LLC covering the leasing of 201 Robert S. Kerr,  Suite 210,  Oklahoma  City,  OK
73102; and

         WHEREAS,  Licensee  wishes to  operate  its  Equipment  located  at the
Licensor's  premises in 201 Robert S. Kerr,  Suite 210,  Oklahoma City, OK 73102
and  Licensor  is willing to grant to Licensee a license to use a portion of the
Licensor  premises for such purposes  under the terms and  conditions  contained
herein.

         NOW,  THEREFORE,  in consideration of the mutual promises and covenants
hereinafter  contained and for other good and valuable  consideration,  Licensor
and Licensee hereby agree as follows:

         7.       Defined Terms. Capitalized terms used herein but not otherwise
                  defined herein shall have the meanings ascribed thereto in the
                  Master License Agreement.

         8.       Term.  The term of this License (the "Term") shall commence on
                  the Commencement date and terminate on January 31, 2004.

         9.       Space.  Licensee shall use a part of Licensor's  premises (the
                  "Space") to accommodate five hundred square feet (500 sq. ft.)
                  of caged space at $45/square foot.  Licensor will supply power
                  of the type and  designated in Exhibit B of the Master License
                  Agreement  and in the  following  amounts:  DC Power:  A and B
                  feeds each, 1000 amps; AC Power: 80 amps.

         10.      License  Fees.  Licensee  shall pay to Licensor the  following
                  fees (License Fees) in accordance with Section 7 of the Master
                  License  Agreement:  (i) commencing on the  Commencement  Date
                  $44,500.00  per month for the Space and the  Services  (except
                  the Installation Services) which includes 100% of the usage of
                  the type of power,  as  provided  in  Exhibit B of the  Master
                  License Agreement; and (ii) upon initiation of installation of
                  Equipment,  a one time payment of $32,700.00 for  Installation
                  Services  as  provided  in  Exhibit  B of the  Master  License
                  Agreement.

<PAGE>

         11.      Security  Deposit.  Simultaneously  with the  execution of the
                  License,  Licensee  will  deposit  with  Licensor  the  sum of
                  $44,500.00 to be held as Security  Deposit in accordance  with
                  Section 9 of the Master License Agreement.

         12.      Subordination/Conflict.  This  Co-Location  Schedule is in all
                  respects   subject  to  and   subordinate  to  the  terms  and
                  conditions of the Master  License  Agreement.  In the event of
                  inconsistency  between any terms of this Co-Location  Schedule
                  and any terms of the Master  License  Agreement,  the terms of
                  the Master License Agreement shall control.

<PAGE>

         IN WITNESS WHEREOF,  the parties hereto have duly executed this License
as of the day and year first above written.

                                      By:    ______________________________
                                      Name:
                                      Title:

                                      KMC TELECOM V, INC.,
                                      a Delaware corporation

                                      By:    ______________________________
                                      Name:  Wallace L. Walcher
                                      Title: Chief Operating Officer

                                      Fullnet Communications, Inc.,

                                      an Oklahoma corporation

The foregoing is acknowledged and consented to:
BOK Plaza Associates, LLC

------------------------------------
Name:
Title:

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