Document:

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                                                                    Exhibit 10.7

           Flextronics International Manufacturing Services Agreement

                          Final version dated 3/14/01

     This Manufacturing Services Agreement ("Agreement) is entered into this
14th day of March, 2001 by and between mPhase having its place of business at
587 Connecticut Avenue, Norwalk, CT 06854 ("Customer") and Flextronics
International USA, Inc., having its place of business at 2090 Fortune Drive, San
Jose, CA 95131 ("Flextronics").

     Customer has created a market for Customer's Products and is solely
responsible for the sales and marketing of the Products.  Flextronics has
developed processes and practices for manufacturing products for many different
electronic applications and desires to manufacture Customer's Products in
accordance with Customer's specifications.  Customer acknowledges that
Flextronics' expertise is manufacturing work and that Flextronics'
responsibility related to the Customer's Products is limited to this extent.
The parties agree as follows:

1.0  WORK, LICENSE

     Flextronics agrees to use reasonable commercial efforts to perform the
manufacturing work (hereinafter "Work") pursuant to purchase orders or changes
thereto issued by Customer and accepted by Flextronics.  Work shall mean to
procure labor, components, materials, equipment and other supplies and to
manufacture, assemble, and test products (hereinafter "Products") pursuant to
detailed written specifications for each such Product which are provided by
Customer and accepted by Flextronics and to deliver such Products.  For each
Product or revision thereof, written specifications shall include but are not
limited to bill of materials, designs, schematics, assembly drawings, process
documentation, test specifications, current revision number, and approved vendor
list (hereinafter "Specifications") attached hereto as Exhibit 1.0.  Flextronics
manufactures product in accordance to IPC-610 Class II.

     Flextronics is granted by Customer a non-exclusive license during the term
of this Agreement to use Customer's patents, trade secrets and other
intellectual property as necessary to perform Flextronics' obligations under
this Agreement.

2.0  FORECASTS, ORDERS, MATERIAL PROCUREMENT

     2.1  Forecast.  Customer shall provide Flextronics, on a monthly basis, a
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rolling four (4) month Product order forecast.  Customer will designate a single
point of contact for all issues relating to the forecast.  Jan Estranger or
other designee will represent mPhase and the PM (Program Manager ) assigned to
the mPhase contract will represent Flextronics.

     2.2  Purchase Orders.  Customer will issue written purchase orders once per
          ---------------
calendar month that specify all Work to be completed within a minimum three (3)
month-period commencing on the date of the purchase order.  Each purchase order
shall reference this Agreement and the applicable written Specifications as
described in Section 1.0.  Purchase orders shall normally be deemed accepted by
Flextronics, provided however that Flextronics

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may reject any order that represents a significant deviation from Customer's
historical ordering volumes or shipment dates. Flextronics shall notify Customer
of rejection of any purchase order within five (5) working days of receipt of
such order. The purchase order shall contain the assembly number, detailed
description, quantity, and delivery date. Purchase orders that are affected by
an engineering change order will reference the engineering changer order number
and affectivity date.

     Customer may use its standard purchase order form to release items,
quantities, prices, schedules, change notices, specifications, or other notice
provided for hereunder and in accordance with variance constraints identified in
section 3.2.  The parties agree that the terms and conditions contained in this
Agreement shall prevail over any terms and conditions of any purchase order,
acknowledgment form or other instrument.

     2.3  Material Procurement.  Customer's accepted purchase orders will
          --------------------
constitute authorization for Flextronics to procure, using standard and special
as required by the customer, purchasing practices, the labor, components,
materials and supplies necessary for the manufacture of Products ("Inventory")
covered by such purchase orders.

     In addition, Customer authorizes Flextronics to purchase, components,
materials, and supplies: (i) with lead times not to exceed 120 days, but
exceeding the period covered by the accepted purchase orders for the Products to
the extent necessary for the manufacture of additional Product covered by the
Customer's forecast ("Long Lead Time Components") and, (ii) purchased in
quantities above the required amount for purchase orders to achieve price
targets ("Economic Order Inventory"), and (iii) purchased in excess of
requirements for purchase orders because of minimum lot sizes available from
manufacturers ("Minimum Order Inventory").  Together these are called "Special
Inventory".  In no event will special inventory exceed that required to
manufacture amount of product covered by customers' forecast without written
concurrence from the customer.

     The term "lead time" in this Section shall mean the lead time recorded on
Flextronics' MRP system at the time of procurement of Inventory and Special
Inventory or at the time of the cancellation of the purchase order or
termination of this Agreement whichever is greater.

     Flextronics may purchase Long Lead-Time Components sufficient to meet all
deliveries under the purchase orders and Product forecast in effect at the time
the order with the supplier is placed, and may reasonably purchase Minimum Order
Inventory even if greater than the amount necessary to meet purchase orders and
Product forecast.  Economic Order Inventory shall be purchased by Flextronics
only with the prior approval of Customer.

     In addition upon Customer's written request, Flextronics may from time to
time hold Long Lead-Time Components and finished Products in inventory to
increase Customer's souring flexibility.  The components and quantities of all
such inventory and the associated cost will be documented in a separate letter
and signed by both Flextronics and Customer.

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     Customer will be responsible under the conditions provided elsewhere in
this Agreement for all Inventory, including material purchased to date on behalf
of mPhase equal to approximately $2.1M and Special Inventory purchased by
Flextronics under this Section 2.1

     2.4  Preferred Supplier.  Customer shall provide a list of vendors
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currently approved to provide the materials and components specified in the bill
of materials for the Product (the "Approved Vendor List" or "AVL") for those
items designated as source controlled. Flextronics shall purchase from vendors
on a current AVL the materials and components required to manufacture the
product. Flextronics shall seek out additional vendors and add them to the AVL
based on unbiased criteria for acceptance established by the customer.
Flextronics shall seek out competitive bids and document the results. Customer
shall give Flextronics every opportunity to be included on AVL's for materials
and components that Flextronics can supply, and if Flextronics is competitive
with other suppliers with respect to reasonable and unbiased criteria for
acceptance established by Customer, Flextronics shall be included on such AVL's.
If Flextronics is on an AVL and its prices and quality are competitive (
competitive is defined as equal or better quality and equal or lesser price )
with other vendors, Customer will raise no objection to Flextronics souring
materials and components from itself provided that Flextronics has used all
commercial diligence to obtain lowest possible quotes from non-affiliated
suppliers. For purposes of this paragraph only, the term "Flextronics" includes
any companies affiliated with Flextronics. Customer reserves the right to review
all documentation associated with competitive price quotes.

3.0  SHIPMENTS, SCHEDULE CHANGE, CANCELLATION

     3.1  Shipments.  All Products delivered pursuant to the terms of this
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Agreement shall be suitably packed for shipment in accordance with Customer's
Specifications, marked for shipment to Customer's destination specified in the
applicable purchase order and delivered to a carrier or forwarding agent.
Shipment will be F.O.B. Flextronics' facility at which time risk of loss and
title will pass to Customer.  All freight, insurance and other shipping
expenses, as well as any special packing expenses not included in the original
price quotation for the Products, will be paid by Customer.

     3.2  Quantity Increases and Shipment Schedule Changes.  For any accepted
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purchase order, Customer may (i) increase the quantity of Products or (ii)
reschedule the quantity of Products and their shipment date as provided in the
table below:

    Maximum Allowable Variance From Purchase Order Quantities/Shipment Dates
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                                   Allowable       Maximum        Maximum
 # of days before Shipment         Quantity       Reschedule     Reschedule
  Date on Purchase Order           Increases       Quantity        Period
  ----------------------           ---------       --------        ------
         15-30                        0%              0            0
         31-60                        10%             5%           30 days
         61-90                        20%             10%          30 days
         91-120                       30%             20%          60 days

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     Any purchase order quantities increased or reschedule pursuant to this
Section may not be subsequently increased or rescheduled without the prior
written approval of Flextronics.  Allowable quantity increases are subject to
material availability.  Flextronics will use reasonable commercial efforts to
meet quantity increases.

     All other changes in quantity or shipment date require Flextronics' prior
written consent and shall be subject to an inventory carrying charge of 3.0% per
month for finished Product, and Inventory and Special Inventory procured to
support the original delivery schedule, EXCEPT THAT, in the event Flextronics
notifies Customer that there is an excess of the Inventory and Special Inventory
necessary to manufacture the Products such that the annual inventory turns of
such inventory is less than twelve (12), then Customer agrees to immediately
purchase such excess inventory from Flextronics upon receipt of the notice.

     If there are extra costs to meet a reschedule or increase in excess of the
above limits, Flextronics will inform Customer for its acceptance and approval
in advance.

     3.3  Cancellation.  Customer may not cancel any portion of Product quantity
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of an accepted purchase order without Flextronics' prior written approval, not
to be unreasonably withheld.  If the parties agree upon a cancellation, Customer
will pay Flextronics for Products, Inventory, and Special Inventory affected by
the cancellation as follows: (i) 100% of the current price for all finished
Products in Flextronics' possession, (ii) 110% of the cost of all Inventory and
Special Inventory in Flextronics' possession and not returnable to the vendor (
as evidenced in writing from the vendor ) or usable for other customers, whether
in raw form or work in process, less the salvage value thereof, (iii) 110% of
the cost of all Inventory and Special Inventory on order and not cancelable (as
evidenced in writing from the vendor ), (iv) any vendor cancellation charges
incurred with respect to Inventory and Special Inventory accepted for
cancellation or return by the vendor, and (v) expenses incurred by Flextronics
related to labor and equipment approved by the customer and specifically put in
place to support Customer's purchase orders and forecasts.  In addition,
Flextronics shall calculate the cost or gain of unwinding any currency hedging
contracts entered into by Flextronics (without customers written approval) to
support a Customer's Product purchase order(s). Should the unwinding result in a
cost to Flextronics, Customer agrees to pay such cost amount to Flextronics net
term (18) days after receipt of an invoice for such amount. Should the unwinding
result in a gain to Flextronics, a credit note will be issued net (10) days
after identification of gain to Customer. All paid for products, materials and
components shall be returned to mPhase.

     The term "cost" in this subsection shall mean the cost represented on the
bill of materials supporting the most current Product price at the time of
cancellation or termination.

     Flextronics will use reasonable commercial efforts to return unused
Inventory and Special Inventory and to cancel pending orders for such inventory,
and to otherwise mitigate the amounts payable by Customer.  Customer shall pay
amounts due under this section within ten (10) days of receipt of an invoice.
Flextronics will ship the Products, Inventory and Special Inventory paid for by
Customer under this section to Customer promptly upon said payment by Customer.
In the event Customer does not pay within ten (10) days, Flextronics will be
entitled

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to dispose of Products, Inventory and Special Inventory in a commercially
reasonable manner and credit to Customer any monies received from third parties.
Flextronics shall then submit an invoice for the balance amount due and Customer
agrees to pay said amount within ten (10) days of its receipt of the invoice.

     If the forecast for any period is less than the previous forecast supplied
over the same period, that amount will be considered canceled and Customer will
be responsible for any Special Inventory purchased or ordered by Flextronics to
support the forecast.

4.0  ENGINEERING CHANGES

     Customer may direct, in writing, that Flextronics incorporate engineering
changes into the product and provide a description of the proposed engineering
change sufficient to permit Flextronics to evaluate its feasibility and cost.
Flextronics' evaluation shall be in writing and shall state the costs and time
of implementation and the impact on the delivery schedule and pricing of the
Product.  Flextronics will not be obligated to proceed with the engineering
change until the parties have agreed upon the changes to the Product's
Specifications, delivery schedule and Product pricing and upon the
implementation costs to be borne by the Customer including, without limitation,
the cost of Inventory on-hand and on-order that becomes obsolete . If customer
directs an engineering change, customer reserves the right to halt production
without penalty until agreement to proceed is reached between Flextronics and
mPhase.

5.0  TOOLING, NON-RECURRING EXPENSES, SOFTWARE

     Flextronics shall provide tooling that is not Product-specific at its
expense.  Customer shall pay for or obtain and consign to Flextronics any
Product specific tooling and other reasonably necessary non-recurring expenses,
to be set forth in Flextronics' quotation.  All software that Customer provides
to Flextronics is and shall remain the property of Customer and is to be used as
set forth in the respective End User License Agreement. Customer grants
Flextronics a license to copy, modify and use such software required to perform
Flextronics' obligations under this Agreement.  All software developed and paid
for by Flextronics to support the process tooling or otherwise shall be and
remain the property of Flextronics.

6.0  PRODUCT ACCEPTANCE AND WARRANTIES

     6.1  Product Acceptance.  The Products delivered by Flextronics will be
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inspected and tested as required by Customer within thirty (30 ) days of
shipment from Flextronics.  If Products are found to be defective in material or
workmanship, Customer has the right to reject such Products during said period.
Products not rejected during said period will be deemed accepted.  Customer may
return defective Products, freight collect, after obtaining a return material
authorization number from Flextronics to be displayed on the shipping container
and completing a failure report.  Rejected Products will be promptly repaired or
replaced, at Flextronics' option, and returned freight pre-paid.  Customer shall
bear all of the risk, and all costs and expenses, associated with Products that
have been returned to Flextronics for which there is no defect found.  If the
Product is source inspected by Customer prior to shipment, Customer will inspect
goods within five (5) days of its request date.

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     6.2  Express Limited Warranty.  Flextronics warrants that the Products will
          ------------------------
have been manufactured in accordance with Customer's applicable Specifications
and will be free from defects in workmanship for a period of twelve (12) months
from the date of shipment.  Materials are warranted to the same extent that the
original manufacturer warrants the materials.  This express limited warranty
does not apply to (a) materials consigned or supplied by Customer to
Flextronics; (b) defects resulting from Customer's Specifications or the design
of the Products; (c) Product that has been abused, damaged, altered or misused
by any person or entity after title passes to Customer.  With respect to first
articles, prototypes, pre-production units, test units or other similar
Products, Flextronics makes no representations or warranties whatsoever.  Not -
withstanding anything else in this Agreement, Flextronics assumes no liability
for or obligation related to the performance, accuracy, specifications, failure
to meet specifications or defects of or due to tooling, designs or instructions
produced or supplied by Customer and Customer shall be liable for costs or
expenses incurred by Flextronics related thereto.  Upon any failure of a Product
to comply with the above warranty, Flextronics' sole obligation, and Customer's
sole remedy, is for Flextronics, at its option, to promptly repair or replace
such unit and return it to Customer freight prepaid.  Customer shall return
Products covered by the warranty freight pre-paid after completing a failure
report and obtaining a return material authorization number from Flextronics to
be displayed on the shipping container.  Customer shall bear all of the risk,
and all costs and expenses, associated with Products that have been returned to
Flextronics for which there is no defect found.  Flextronics accepts liability
for all components unusable as a result of mishandling or negligent
manufacturing practices.  If inventory is lost, damaged, or otherwise not
receiveable by customer while in possession of Flextronics, it will be replaced
at no cost to Customer.

FLEXTRONICS MAKES NO OTHER WARRANTIES OR CONDITIONS ON THE PRODUCTS, EXPRESS,
IMPLIED, STATUTORY, OR IN ANY OTHER PROVISION OF THIS AGREEMENT OR COMMUNICATION
WITH CUSTOMER, AND FLEXTRONICS SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OR
CONDITION OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

7.0  PAYMENT TERMS, ADDITIONAL COSTS AND PRICE CHANGES

     7.1  Price and Payment Terms.  The price and associated delivery schedule
          -----------------------
for Products to be manufactured will be agreed by the parties and will be
indicated on the purchase orders issued by Customer and accepted by Flextronics.
The initial price shall be as set forth on the Price List attached hereto and
incorporated herein.  The price for Products may be reviewed periodically by the
parties.  All prices quoted are exclusive of federal, state and local excise,
sales, use and similar taxes, and any duties, and Customer shall be responsible
for all such items.  Payment for any Products, services or other costs to be
paid by Customer hereunder is due net ten (10) days upon receipt of product from
Flextronics and shall be made in lawful U.S. currency.  Flextronics will, in
good faith, review Customer's creditworthiness periodically and may provide more
favorable terms once it feels it is prudent to do so.  Customer agrees to
provide all necessary financial information required for Flextronics to make a
proper assessment of creditworthiness.  If Customer is late with payments, or
Flextronics has reasonable cause to believe Customer may not be able to pay,
Flextronics may delay shipments or suspend work until

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assurances of payment satisfactory to Flextronics are received. All Legal or
collection agency costs incurred for collecting past due payments from the
Customer will be paid by the Customer.

     7.2  Funds on Deposit.  Customer agrees to place on deposit an amount equal
          ----------------
to $500,000 to secure future production.  This $500,000 will not be used by
Flextronics for any purpose other than: (1) to cover any delay in payment from
agreed to schedules, or (2) cover outstanding exposure in the event of
cancellation of production.  If either party terminates this contract "for any
reason" as set forth in section 8.2 (a) Termination, the $500,000 shall be
returned to Customer after deduction of outstanding invoices, fees, or other
costs associated with this contract.  Flextronics will, in good faith, review
Customer's creditworthiness periodically and may provide more favorable terms
once it feels it is prudent to do so.  Customer agrees to provide all necessary
financial information required for Flextronics to make a proper assessment of
creditworthiness.  Flextronics further acknowledges the receipt of $200,000 from
Customer which shall be applied solely to cover the cost of inventory required
to manufacture the first 1000 ports of the INI assembly.

     7.2.1  Letter of Credit.  To the extent Customer, pursuant either to (1) a
            ----------------
written Purchase Order or (2) written Future Forecast not to exceed 120 days
necessitates (as agreed to by both parties hereto) the purchase of any
additional inventory of components for any portion of the products to be
manufactured by Flextronics , Customer shall provide Flextronics with a letter
of credit covering the purchase price of such inventory on terms and conditions
commercially satisfactory to Flextronics.  The calculation shall be based upon
the forecast provided by Customer pursuant to Section 2.1.  The draw-down
procedures under the LOC shall be determined solely by Flextronics.

     7.3  Additional Costs.  Customer is responsible for (a) any expediting
          ----------------
charges reasonably necessary because of a change in Customers requirements for
which charges are preapproved, (b) any overtime or downtime charges incurred as
a result of delays in the normal production or interruption in the workflow
process and caused by: (1) Customer's change in the Specifications; or (2)
Customer's failure to provide sufficient quantities or a reasonable quality
level of customer supplied materials where applicable to sustain the production
schedule.  Customer caused delays as a result of Customer-supplied materials
will result in a special charge to the Customer of 1.5% of the sales price of
the Product for each month, or part thereof, delayed.

     7.4  Price Changes. The price of Products to Customer may be changed by
          -------------
Flextronics if (a) the market price of fuels, materials, raw materials,
equipment, labor and other production costs, change beyond normal variations in
pricing as demonstrated by Flextronics, and (b) the parties agree to the change.

     7.5  Cost Reductions. Flextronics agrees to seek ways to reduce the cost of
          ---------------
manufacturing Products by methods such as elimination of components, obtaining
alternate sources of materials, redefinition of Specifications, and improved
assembly or test methods.  Upon implementation of such ways that have been
initiated by Flextronics and approved by customer, Flextronics will receive
fifty percent of the demonstrated cost reduction for a period of 12 months.
Flextronics and Customer shall review underlying calculations for cost savings
and

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agree as to their magnitude. Customer will receive one hundred percent of the
demonstrated cost reduction upon implementation of such ways initiated by
Customer. Additional opportunities for cost reductions will be evaluated on a
case by case basis and will be implemented once a mutually agreeable
compensation structure is arranged.

     7.6  Price Reviews. The price of Products to Customer will be reviewed
          -------------
quarterly price changes will occur per section 7.4 of this agreement to include
adjustments for achieving targets.

8.0  TERM AND TERMINATION

     8.1  Term.  The term of this Agreement shall commence on the date hereof
          ----
above and shall continue for one (1) year thereafter until terminated as
provided in Section 8.2 or 10.9. After the expiration of the initial term
hereunder (unless this Agreement has been terminated), this Agreement shall be
automatically renewed for separate but successive one-year terms unless either
party provides written notice to the other prior to the date that is ninety (90)
days prior to the end of any term that it does not intend to renew this
Agreement.

     8.2  Termination. This Agreement may be terminated by either party ; (a)
          -----------
for any reason upon one hundred and twenty ( 120 ) days written notice to the
other party, or (b) if the other party defaults in any payment to the
terminating party and such default continues without a cure for a period of
fifteen (15) days after the delivery of written notice thereof by the
terminating party to the other party, (c) if the other party defaults in the
performance of any other material term or condition of this Agreement and such
default continues unremedied for a period of thirty (30) days after the delivery
of written notice thereof by the terminating party to the other party, or (d)
pursuant to Section 10.9. Customer's sole remedy for the breach of Flextronics
is to terminate this Agreement and to seek direct damages as provided by law
with respect to Products delivered, or to be delivered, prior to the date of
termination.  Termination of this Agreement for any reason shall not affect
amounts due under this Agreement by either party that exist as of the date of
termination.  In the event of termination for any reason whatsoever or
expiration, Customer shall pay all amounts due as set forth in Section 3.3
within ten (10) days of receipt of invoice for said amounts.  Notwithstanding
termination or expiration of this Agreement, Sections 6.2, 8.0, 9.0, and 10.0
shall survive said termination or expiration.

9.0  LIABILITY, LIMITATION

     9.1  Patents, Copyrights, Trade Secrets, Other Proprietary Rights.
          ------------------------------------------------------------
Customer shall defend, indemnify and hold harmless Flextronics from all claims,
costs, damages, judgments and attorney's fees resulting from or arising out of
any alleged and/or actual infringement or other violation of any patents, patent
rights, trademarks, trademark rights, trade names, trade name rights,
copyrights, trade secrets, proprietary rights and processes or other such rights
related to the Products.  Flextronics shall promptly notify Customer in writing
of the initiation of any such claims.  Flextronics shall provide the same
protection to Customer in the event a claim is initiated against Customer
relating to Flextronics' manufacturing process.  Customer shall promptly notify
Flextronics in writing of the initiation of any such claim.

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     THE FOREGOING STATES THE ENTIRE LIABILITY OF THE PARTIES TO EACH OTHER
CONCERNING INFRINGEMENT OF PATENT, COPYRIGHT, TRADE SECRET OR OTHER INTELLECTUAL
PROPERTY RIGHTS.

     9.2  Product Liability. Customer agrees that, if notified promptly in
          -----------------
writing and given sole control of the defense and all related settlement
negotiations, it will defend Flextronics from any claim or action and will hold
Flextronics harmless from any loss, damage or injury, including death, which
arises from any alleged defect of any Products.  Customer shall name Flextronics
as an additional insured under Customer's product liability policies for any
Products.  Flextronics shall provide the same protection to Customer in the
event a claim is initiated against Customer or Flextronics relating to
Flextronics' manufacturing process.  Customer shall promptly notify Flextronics
in writing of the initiation of any such claim.

     9.3  No Other Liability.  IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
          ------------------
OTHER FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OF ANY KIND
OR NATURE ARISING OUT OF THIS AGREEMENT OR THE SALE OF PRODUCTS, WHETHER SUCH
LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT, TORT (INCLUDING THE POSSIBILITY
OF NEGLIGENCE OR STRICT LIABILITY), OR OTHERWISE, EVEN IF THE PARTY HAS BEEN
WARNED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE, AND EVEN IF ANY OF THE
LIMITED REMEDIES IN THIS AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE.

10.0 MISCELLANEOUS

     10.1  Confidentiality.  All written information and data exchanged between
           ---------------
the parties for the purpose of enabling Flextronics to manufacture and deliver
Products under this Agreement that is marked "Confidential" or the like, shall
be deemed to be Confidential Information.  All other information, verbal or
written, identified as confidential shall also be treated as confidential
information.  The party that receives such Confidential Information agrees not
to disclose it directly or indirectly to any third party without the prior
written consent of the disclosing party.  Confidential Information disclosed
pursuant to this Agreement shall be maintained confidential as defined in the
signed non-disclosure agreement between Flextronics and Customer.

     10.2  Entire Agreement.  This Agreement constitutes the entire agreement
           ----------------
between the Parties with respect to the transactions contemplated hereby and
supersedes all prior agreements and understandings between the parties relating
to such transactions.  Customer shall hold the existence and terms of this
Agreement confidential, unless it obtains Flextronics' express written consent
otherwise.  Likewise, Flextronics shall hold the existence and terms of the
Agreement confidential, unless it obtains Customer's express written consent
otherwise.  In all respects, this Agreement shall govern, and any other
documents including, without limitation, preprinted terms and conditions on
Customer's purchase orders shall be of no effect.  This Agreement will be deemed
to have been drafted by both parties.

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     10.3  Amendments.  This Agreement may be amended only by written consent of
           ----------
both parties.

     10.4  Independent Contractor.  Neither party shall, for any purpose, be
           ----------------------
deemed to be an agent of the other party and the relationship between the
parties shall only be that of independent contractors.  Neither party shall have
any right or authority to assume or create any obligations or to make any
representations or warranties on behalf of any other party, whether express or
implied, or to bind the other party in any respect whatsoever.

     10.5  Expenses.  In the event a dispute between the parties hereunder with
           --------
respect to this Agreement must be resolved by litigation or other proceeding or
a party must engage an attorney to enforce its right hereunder, the prevailing
party shall be entitled to receive reimbursement for all associated reasonable
costs and expenses (including, without limitation, attorneys fees) from the
other party.

     10.6  Security Interest.  Until the purchase price and all other charges
           -----------------
payable to Flextronics hereunder have been received in full, Flextronics hereby
retains and Customer hereby grants to Flextronics a security interest in the
Products delivered to Customer and any proceeds therefrom.  Customer agrees to
promptly execute any documents requested by Flextronics to perfect and protect
such security interest.  In the event of a default by Customer, Flextronics may
exercise any or all remedies provided under the Uniform Commercial Code or
similar statutes or laws enacted in the jurisdiction within which Flextronics
seeks to enforce its rights under this Agreement.

     10.7  Governing Law, Venue.  This Agreement shall be governed by and
           --------------------
construed under the laws of the State of California, excluding its choice of law
principles.  The parties consent to the exclusive jurisdiction of the state and
Federal courts in Santa Clara County, California.

     10.8  Successors, Assignment.  This Agreements shall be binding upon and
           ----------------------
inure to the benefit of the parties hereto and their respective successors,
assigns and legal representatives.  Neither party shall have the right to assign
or otherwise transfer its rights or obligations under this Agreement except with
the prior written consent of the other party, not to be unreasonably withheld.

     10.9  Force Majeure.  In the event that either party is prevented from
           -------------
performing or is unable to perform any of its obligations under this Agreement
(other than a payment obligation) due to any Act of God, fire, casualty, flood,
earthquake, war, strike, lockout, epidemic, destruction of production
facilities, riot, insurrection, material unavailability, or any other cause
beyond the reasonable control of the party invoking this section, and if such
party shall have used its commercially reasonable efforts to mitigate its
effects, such party shall give prompt written notice to the other party, its
performance shall be excused, and the time for the performance shall be extended
for the period of delay or inability to perform due to such occurrences.
Regardless of the excuse of Force Majeure, if such party is not able to perform
within ninety (90) days after such event, the other party may terminate the
agreement.

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     10.10  Notices.  All notices required or permitted under this Agreement
            -------
will be in writing and will be deemed received (i) when delivered personally;
(ii) when sent by confirmed facsimile; (iii) five (5) days after having been
sent by registered or certified mail, return receipt requested, postage prepaid;
or (iv) one (1) day after deposit with a commercial overnight carrier.  All
communications will be sent to the addresses set forth above or to such other
address as may be designated by a party by giving written notice to the other
party pursuant to his section.

ACCEPTED AND AGREED TO:

CUSTOMER:                         FLEXTRONICS INTERNATIONAL USA, INC.:

___________________________       _________________________________________

By:________________________       By:______________________________________

Title:_____________________       Title:___________________________________

                                      -11-<PAGE>

                                                                    Exhibit 10.8

                                SUPPLY AGREEMENT
                             HART TELEPHONE COMPANY
                             ----------------------

     This Agreement is hereby made effective this 19th day of August, 1998, by
and between mPhase Technologies, Inc., having a place of business at 587
Connecticut Avenue, Norwalk, CT 06854-0960 (hereinafter referred to as
"mPhase"), and Hart Telephone Company, Inc., having a place of business at 196
North Forest Avenue, Hartwell, GA 30643 (hereinafter referred to as "Hart").
mPhase and Hart are hereinafter referred to, individually and collectively, as
the context may require, as a "Party" or the "Parties".

     WHEREAS, mPhase has developed the Traverser DVDDS, a digital video and data
delivery system for the simultaneous transmission of MPEG-2 Digital Video and
Broadband Internet Access over twisted pair copper wire transmitting,
interactively, video signals over fiber/copper hybrid telephone networks
(hereinafter referred to, individually and collectively, as the context may
require, as the "Traverser");

     WHEREAS, Hart is interested in purchasing and installing a prototype
Traverser system on its telephone transmission network to demonstrate and
evaluate the performance thereof, and thereafter to purchase additional products
and services in order to extend the coverage of the Traverser system to
additional subscribers;

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

     1.  Definitions
         -----------
     For purposes of this Agreement, the following words and phrases shall have
the meanings stated below:

         A.  "mPhase Trademarks" shall mean the trademarks and service marks
mPhase, TRAVERSER, u0 XDSL, Intelligent Network Interface or INI, and such other
mark or marks relating to mPhase Proprietary Technology as mPhase shall
establish to identify its products and services relating to a digital subscriber
line business;

         B.  "Related Products and Services" shall mean systems, components, and
software, for transmission and reception over existing twisted-pair copper
analog telephone lines, using certain proprietary technology owned, controlled
by, or licensed to mPhase (see 1., C., below), for digital video programming and
Internet data, and associated services, involved in the operation of a digital
subscriber line business;

         C.  "mPhase Proprietary Technology" shall refer to the technology
owned, controlled by, or licensed to mPhase relating to the design, manufacture,
and use of systems and software which provide digital video and data
communications over copper twisted pair
<PAGE>

telephone networks, including supporting documentation and software relating to
the operation of a digital subscriber line business;

         D. "Related Company" means any company controlling, controlled by
(either directly or indirectly), or under common control with either Party.

     2.  Supply
         ------
         mPhase agrees to supply the Traverser system to Hart in the following
manner:

         A.  Technology Preview Unit, consisting of a point-to-point module
which provides one hundred (100) subscribers residential delivery of up to
sixteen (16) channels for Digital Video and Broadband Internet Access, said
module having the performance specifications and components described in
Exhibit I to this Agreement;
---------

         B.  Version 1.0 of the Traverser, which will provide delivery to one
thousand (1,000) subscribers (inclusive of the initial 100 served by the
Technology Preview Unit) of an operational digital subscriber line service
consisting of up to eighty (80) channels, with supporting functions such as
usage tracking, billing, access control, and expansion, said module having the
performance specifications and components described in Exhibit 2 to this
                                                       ---------
Agreement.

     3.  Delivery
         --------
         A.  The Technology Preview Unit will be delivered to Hart, at the
address indicated above, on or before October 31, 1998.

         B.  The Traverser Version 1.0 DVDDS will be delivered to Hart, at the
address indicated above, on or before June 30, 1999. The Parties understand that
certain components of the Technology Preview Unit are integral to the Traverser
system, but that other components will become obsolete and will be returned to
mPhase after installation of the Traverser system.

     4.  Installation
         ------------

         A.  The above systems shall be installed by mPhase, with the
cooperation of Hart, at central office and customer locations within Hart's
coverage area, to be designated by Hart, the installation of each respective
system to be completed within thirty (30) days after its delivery to Hart.

         B.  Hart shall provide access to its facilities, permission from its
customers, and all network terminals and transmission lines, including satellite
links, needed to interface with the Technology Preview Unit and the Traverser
Version 1.0, and complete the installation thereof. Such facilities and
interface equipment shall be in accordance with the standard facility and
interface specifications provided by mPhase. Hart shall arrange for an
appropriate video

                                      -2-
<PAGE>

feed to enable the testing of the installation and subsequent demonstrations as
required by mPhase. Hart shall provide sufficient staff to support the
installation of the system modules.

     5.  Maintenance, Training and Support
         ---------------------------------
         mPhase will provide maintenance, training, and support services to Hart
in accordance with the terms and conditions contained in Exhibit 3 to this
                                                         ---------
Agreement.

     6.  License
         -------
         mPhase hereby grants to Hart a non-exclusive license to use the
Traverser within Hart's coverage area in accordance with the license contained
in Exhibit 4 to this Agreement.
   ---------

     7.  Payment
         -------

         Hart shall pay mPhase a total of One Million, Five Hundred Thousand
Dollars ($1,500,000) with respect to the delivery of the Traverser system herein
described, payable as follows:

         A.  $25,000, upon the execution of this Agreement;

         B.  $75,000, upon the delivery of the Technology Preview Unit;

         C.  $75,000, within thirty (30) days after the delivery of the
Technology Preview Unit;

         D.  $100,000, upon the completion of installation and demonstration of
the Technology Preview Unit, which shall be defined as the satisfactory
completion of the trial specified in paragraph 8., below;

         E.  $225,000, within thirty (30) days after the completion of
installation and demonstration of the Technology Preview Unit;

         F.  $500,000, upon the delivery of the Traverser DVDDS Version 1.0.

         G.  $500,000, upon the completion of installation and demonstration of
the Traverser DVDDS Version 1.0.

     8.  Demonstration
         -------------

         A.  mPhase shall, with the cooperation of Hart, conduct performance
trials for the Technology Preview Unit to demonstrate the functioning thereof to
third parties as required by mPhase. Both Parties shall jointly provide the
staff, time, and equipment necessary to

                                      -3-
<PAGE>

successfully perform the trials. The satisfactory completion of the trials shall
be deemed to have occurred upon the determination by mPhase that the Technology
Preview Unit is functioning in accordance with the specifications contained in
Exhibit 1.
---------

         B.  mPhase shall notify Hart upon completion of the trials and provide
a report of the results of the trials. Unless mPhase is notified to the contrary
within fifteen (15) days after such notice, the satisfactory completion of the
installation and demonstration shall be deemed to have been accomplished, and
the remaining payment shall be due and payable.

         C.  In the event that mPhase shall fail to demonstrate the performance
of the Technology Preview Unit, then Hart shall have the right to terminate this
Agreement, in which event all sums theretofore paid by Hart to mPhase shall be
promptly refunded to Hart.

     9.  Risk of Loss and Ownership
         --------------------------

         A.  Risk of loss with respect to the Technology Preview Unit and the
Traverser shall pass to Hart upon delivery, and Hart agrees to obtain
appropriate insurance to insure the Technology Preview Unit and the Traverser,
identifying mPhase as Loss Payee.

         B.  mPhase shall retain a purchase money security interest in the
Technology Preview Unit and the Traverser, respectively, to secure payments due
under this Agreement, and Hart agrees to sign all documents reasonably required
by mPhase in order to perfect said security interest. Hart shall not remove or
obscure any markings placed on the Technology Preview Unit or the Traverser by
mPhase to confirm said security interest.

         C.  Ownership of the delivered Technology Preview Unit and the
Traverser, respectively, shall pass to Hart upon the full payment of the
respective sums indicated in paragraph 7.

     10. Confidentiality of Proprietary Information
         ------------------------------------------

         A.  In order to accomplish the work contemplated under this Agreement,
it may be necessary that mPhase disclose to Hart proprietary information
relating to mPhase Proprietary Technology and Related Products and Services.
Hart agrees that it will not use the information disclosed by mPhase for any
other purpose except as expressly stated herein.

        B.  Hart hereby acknowledges that, as between Hart and mPhase, the
information disclosed by mPhase and any information developed in the course of
work performed under this Agreement, is and shall remain the property of mPhase,
and Hart will maintain any such information in confidence and will not disclose
such information to others without the express prior written consent of mPhase.

         C.  The above restrictions shall not be applicable to: information that
is in the rightful possession of Hart, from an independent source, prior to its
disclosure by mPhase;

                                      -4-
<PAGE>

information that is or becomes a part of the public domain other than by breach
of this agreement; and information which Hart acquires from an independent
source, a lawful right to reproduce, use or disclose.

         D.  mPhase shall own all rights to information, including inventions,
if any, resulting from the work performed by mPhase under this Agreement or
related purchase orders, relating to the structure, use, or operation of the
Traverser DVDDS, and Hart agrees to cooperate with mPhase in the preparation,
signing and filing of patent applications or other documents relating to such
rights. Provided, however, the Parties shall jointly own the rights to
inventions resulting from enhancements to the Traverser system developed by Hart
under this Agreement.

         E.  The Parties hereby agree that the terms and conditions of this
Agreement shall remain confidential, and that any press release relating to the
existence of this Agreement shall be issued only with the prior approval of both
Parties, which shall not be unreasonably withheld.

     11. Termination
         -----------

         A.  Hart may terminate this Agreement upon the failure of the
Technology Preview Unit to perform in accordance with the trial specified in
paragraph 8., above, by giving thirty (30) days written notice to mPhase. Upon
such termination, no further payments shall be required with respect to this
Agreement, and all obligations of the parties shall cease, except to the extent
stated in Paragraph 12.,C., below .

         B.  Expiration or termination of this Agreement shall not affect the
rights and obligations of the parties with respect to the confidentiality of
mPhase Proprietary Technology received under this Agreement, and the provisions
of Paragraph 10 shall survive the termination of this Agreement for a period of
five (5) years thereafter.

         C.  Upon termination of this Agreement in accordance with its terms,
Hart shall, within thirty (30) days thereafter, return the Technology Preview
Unit, including without limitation all proprietary information, software,
equipment, documentation, and copies thereof received from mPhase. Further, upon
such termination, all licenses and rights granted by mPhase shall likewise
terminate, and Hart shall immediately cease all use thereof .

     12.  Warranty
          --------

          A.  mPhase warrants that the Technology Preview Unit and the Traverser
DVDDS supplied to Hart hereunder will meet specifications established by mutual
Agreement of the Parties. Any Traverser DVDDS parts or components sold by mPhase
to Hart pursuant to this Agreement which, under normal operating conditions,
prove defective in material or workmanship within one (1) year from the date of
installation by mPhase, will be repaired or replaced, at the election of
mPhase, free of charge.  This warranty is made in lieu of all other
                         ------------------------------------------

                                      -5-
<PAGE>

warranties, express or implied, including any warranty of merchantability or
----------------------------------------------------------------------------
fitness for a particular purpose.
--------------------------------

         B.  mPhase makes no guarantees, warranties, or representations except
as specifically set forth in this Agreement. mPhase and its employees, officers
and directors shall not be liable for any incidental, indirect, consequential,
special or punitive damages, with respect to the use by Hart of mPhase,
equipment, proprietary information, software, or documentation in accordance
with this Agreement, and Hart shall indemnify and hold harmless mPhase in
respect of any claims or assertions, however arising, in respect thereto.

     13.  mPhase Customer Demonstrations
          ------------------------------

     For a period of one (1) year after the successful trial of the Technology
Preview Unit supplied under this Agreement, mPhase shall have the right, upon
reasonable notice, to use the Hart Traverser DVDDS to demonstrate its
functioning to potential customers.  Such demonstrations shall be scheduled
during Hart's normal business hours with the consent of Hart, which consent
shall not be unreasonably withheld.

     14.  Compliance
          ----------

     Hart assumes the responsibility for compliance with all current laws or
regulations relating to the delivery of Related Products and Services in the
operation of a digital subscriber line business and agrees to indemnify and hold
mPhase harmless from any damages arising out of a failure to comply with such
laws or regulations. mPhase agrees to cooperate with Hart as reasonably
requested to accomplish such compliance.

     15.  Miscellaneous
          -------------

          A.  It is agreed by both Parties that this Agreement contains the
entire understanding between the Parties with respect to the subject matter
hereof, and that this Agreement supersedes and replaces any and all prior and
contemporaneous understandings or representations of the parties, written, oral,
or otherwise, with respect to the Technology Preview Unit or the Traverser
DVDDS.

          B.  It is further agreed that no modification to this Agreement shall
be binding on either Party unless such modification is in writing, referring
specifically to this Agreement, and signed by the individuals executing this
Agreement or their respective successors.

          C.  Except as stated herein, nothing in this Agreement shall be
construed as granting any right or license to Hart to use mPhase Trademarks or
mPhase Proprietary Technology, including without limitation equipment,
proprietary information, software, or documentation, or as granting any right or
license under any present or future patent.

                                      -6-
<PAGE>

          D.  All notices or communications which either Party may desire, or be
required, to give to the other, shall be in writing and shall be deemed to have
been made if and when mailed by registered or certified mail, to the address
specified in the introduction to this Agreement or such other address as shall
have been designated by the respective Party in writing for such purpose.

          E.  The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Georgia. In the event
that any of the provisions contained in this Agreement shall for any reason be
held unenforceable in any respect, such unenforceability shall not affect the
remaining provisions of this Agreement.

          F.  Hart acknowledges that mPhase shall suffer irreparable injury in
the event Hart breaches any of its obligations (other than the payment of the
sums called for under Paragraph 7) under this Agreement with respect to mPhase
Proprietary Technology. Hart agrees that, in addition to all other remedies to
which mPhase may be entitled at law or in equity, mPhase shall be entitled to
seek any remedy in equity, including an injunction permanently restraining Hart
from breaching or further breaching such obligations. Hart agrees that it will
not oppose the seeking of such remedy on the basis that there exists an adequate
remedy at law for damages.

           G.  The rights and obligations of the Parties under this Agreement
shall not be assigned or delegated by either Party without the prior written
consent of the other, except that mPhase may assign its rights and obligations
under this Agreement to an entity controlling, controlled by, or under common
control with mPhase or to a successor to substantially all of the business of
mPhase to which this Agreement relates.

    In acceptance of the foregoing provisions, the parties have executed this
Agreement by the signatures of their duly authorized representatives set forth
below.

mPhase Technologies, Inc.            Hart Telephone Company, Inc.

By                                   By
   ---------------------------------    ---------------------------------

Title                                Title
      ------------------------------       ------------------------------

                                      -7-
<PAGE>

                                   Exhibit 1

                           Performance Specification
                            Technology Preview Unit

     The mPhase/TM/ Technology Preview Units are to consist of one pair of
mPhase Traverser modems. Each pair is defined as a Central Office (CO) element
and an Intelligent Network Interface (INI) element.

     Each Technology Preview unit shall have the ability to deliver up to 16
channels of MPEG-2 digital video and up to 1 Mbps of Internet access (via
10baseT Ethernet) over twisted pair without disrupting normal telephone service.
The Technology Preview Units shall operate at service distances of up to 9,000
feet of 24 AWG wire.

     The Central Office (CO) Technology Preview element shall be configured as
either individually enclosed rack-mountable units or rack-mounted cards.  The
Low Pass Filter (LPS) shall be configured as either individual units or rack-
mounted cards.  The CO element of the Technology Preview shall also contain two
(2) DS-3 interface connections.

     The INI Technology Preview element shall contain a remote control circuit,
an MPEG-2 decoder circuit both an S-video connection and a channel 3 or 4 RF
modulated output for television connection, an RJ-45 style 10baseT Ethernet port
connection and an RJ-11 style Low Pass Filter circuit for traditional telephone
service.

     See attached block diagrams.
<PAGE>

                                   Exhibit 2

                           Performance Specifications
               Digital Video and Data Delivery System version 1.0

     The mPhase Traverser Digital/TM/ Video and Data Delivery System (DVDDS)
version 1.0 consists of common equipment located at both the Central Office (CO)
and the Programming and Control Center, equipment at the CO to support each
subscriber, and an Intelligent Network Interface (INI) at the customer premise
location.

     The DVDDS version 1.0 shall be capable of delivering up to 80 channels of
MPEG-2 encoded digital video and up to 1 Mbps Internet access (via 10baseT
Ethernet) over twisted pair without disrupting traditional telephone service.
The DVDDS version 1.0 shall operate at a service distance of up to 10,000 feet
over 24 AWG wire.

     The common equipment provided by mPhase as the DVDDS version 1.0 consists
of a Video Control Shelf, a System Management Workstation, System Management
Software, a Video Network Interface Shelf, a Video Distribution Shelf, a Central
Office Master workstation, and Central Office Master software modules.  This
equipment is located either at the Programming and Control Center and/or the
serving Central Office and is not related to the number of subscribers being
served.

     Subscriber-related equipment located at each serving Central Office
consists of an Access Shelf and a Low Pass Filter Shelf.  Each Access Shelf card
and each Low Pass Filter Shelf card shall serve four subscribers.

     The INI DVDDS version 1.0 element shall contain a remote control circuit,
an MPEG-2 decoder circuit, both an S-video connection and a channel 3 or 4 RF
modulated output for television connection, an RJ-45 style 10baseT Ethernet port
connection, and an RJ-11 style Low Pass Filter circuit for traditional telephone
service.

     See attached block diagrams.
<PAGE>

                                   Exhibit 3

                       Maintenance, Training, and Support
                              Terms and Conditions

     1.   Basic Services
          --------------

     Upon the completion of the installation of the Traverser DVDDS pursuant to
the Supply Agreement, and for a period of ninety (90) days thereafter, mPhase
will provide Hart with the following basic services and support:

          A.  mPhase will provide to Hart all upgrades to the software used in
the Traverser DVDDS installed and licensed by mPhase under the Supply Agreement.

          B.  mPhase will provide on-call technical assistance to resolve
operating problems with the Traverser DVDDS. This Hotline assistance will be
available from 8:00 am to 5:00 pm, EST, Monday through Friday, and may be
conducted by:

               1)  Verbal telephone consultation;

               2)  On-line remote diagnostics; or

               3)  On-site visitation.

          C.  mPhase will use its best efforts to correct Traverser DVDDS
problems if the Traverser DVDDS performance materially deviates from published
specifications.

          D. Hart shall maintain the Traverser DVDDS installation environment
in accordance with the specifications provided by mPhase.

     2.   Training
          --------

     Pursuant to a mutually agreed-upon schedule, mPhase shall provide up to one
(1) day of training on the use and operation of the software for the benefit of
Hart's representatives, in a single session at a location to be agreed.  Such
training shall be at a cost to Hart of $1,000, plus mPhase's out-of-pocket
expenses.  Any additional training requested by Hart shall be provided at
mPhase's standard rates then in effect.

     3.   Additional Services
          -------------------
     mPhase is capable of providing Hart with additional support services that
are beyond the scope of the basic services described in the previous section.
<PAGE>

         A.  On-call technical assistance outside normal working hours
(8:00 AM - 5:00 PM).

         B.  Training assistance beyond that which is provided in the License
Agreement.

     4.   Fees and Charges
          ----------------

          A.  Basic Services:

          B.  Additional Services:

     Additional support services may be provided on a fixed price contact basis,
or on a time and materials basis.  Charges for these services will be based on
mPhase's then-current rate schedule.

     5.   Out-of-Pocket Expenses
          ----------------------

     In all cases, Hart shall further pay for reasonable and necessary out-of-
pocket travel and lodging expenses, tape charges, and on-line telephone charges
incurred by mPhase in providing the above services.

     6.   Termination
          -----------

     Either Party to this Agreement may terminate the maintenance, training, and
support services of mPhase by giving thirty (30) days' written notice to the
other Party prior to annual renewal.  If Hart elects to terminate this Agreement
and then at a later date decides to reinstate same, Hart will be charged a one-
time fee equal to the sum of the monthly charges that were not paid during the
period of time the Agreement was not in force.

     7.   License
          -------

     Upgrades, revised documents, and information supplied to Hart under this
Agreement shall be deemed part of the Traverser DVDDS and subject to all of the
terms and conditions of the Supply Agreement.  NO ADDITIONAL WARRANTES SHALL BE
                                               --------------------------------
IMPLIED BY THIS AGREEMENT.
-------------------------

     The Parties hereby confirm their acceptance of the foregoing terms and
conditions by the signatures of their duly authorized representatives set forth
below.

mPhase Technologies, Inc.          Hart Telephone Company, Inc.

By                                 By
  ----------------------------        ------------------------------------

Title                              Title

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

                                   Exhibit 4

                                Software License
                              Terms and Conditions

1.  License Grant
    -------------

     mPhase hereby grants to Hart the nonexclusive, nontransferable right and
license to use the Traverser DVDDS Software only in association with Technology
Preview Unit and Traverser DVDDS which are the subject of the Supply Agreement
between mPhase and Hart dated August 18, 1998 (the "Designated Traverser
DVDDS"), and only for the specific purposes set forth in the Agreement.  The
license does not include any right to sublicense any of the rights granted
             ---
hereunder, or to allow others to use the Licensed Software, nor does it include
the right to transfer the Licensed Software to any system other than the
Designated Traverser DVDDS.

     A.  The Software and Documentation are collectively referred to in this
Agreement as the "Traverser DVDDS Software".

     B.  The Traverser DVDDS Software licensed to Hart under this Agreement will
not include source code, and Hart agrees that it will not reverse engineer, de-
compile, or disassemble said Traverser DVDDS Software, nor modify it in any way.

2.  Term
    ----

    This License shall be in effect during the duration of Hart's utilization of
the Designated Traverser DVDDS pursuant to the Supply Agreement

 3. Proprietary Property
    --------------------

    A. Hart acknowledges that the Traverser DVDDS Software and all rights
therein are the property of mPhase and agrees that it will not utilize the
Traverser DVDDS Software in any manner or for any purpose except in accordance
with this Agreement. In addition, Hart agrees that it will not disclose any of
the information contained in the Traverser DVDDS Software to others without the
prior express written consent of mPhase.

    B.  Hart shall have the right to make one copy in machine-readable form of
the Traverser DVDDS Software for back-up purposes only, and agrees that it will
make no other copies without the prior express written consent of mPhase.

<PAGE>

4.  Delivery and Installation
    -------------------------

    mPhase will deliver one (1) copy of the Traverser DVDDS Software to Hart in
accordance with the Supply Agreement.  Upon Hart's request, mPhase will assist
Hart in the installation of the Traverser DVDDS Software as part of the
installation of the Technology Preview Unit.

5.  Disclaimer
    ----------

    mPhase specifically DISCLAIMS ALL WARRANTIES RELATING TO TRAVERSER DVDDS
                         ----------------------------------------------------
SOFTWARE, INCLUDING THOSE IMPLIED BY LAW AS TO THE MERCHANTABILITY AND FITNESS
------------------------------------------------------------------------------
FOR A PARTICULAR PURPOSE.  Hart agrees that mPhase shall not be liable under any
------------------------
claim for any damage arising out of the use of the Traverser DVDDS Software by
          ---
Hart, and that Hart shall indemnify and hold mPhase harmless from any such
damage.

6.  Enforcement
    -----------

    Hart acknowledges that mPhase will be irreparably damaged if the provisions
of this Agreement are breached.

7.  Termination
    -----------

    mPhase shall have the right to terminate this Agreement immediately in the
event of default or breach of the provisions of this Agreement by Hart.
Provided, however, the obligations contained in Paragraph 3 shall continue after
such termination.  Upon termination, Hart agrees to cease all use of the
Traverser DVDDS Software and to return, destroy, or otherwise dispose of the
Traverser DVDDS Software in accordance with the instructions of mPhase.

     The Parties hereby confirm their acceptance of the foregoing terms and
conditions by the signatures of their duly authorized representatives set forth
below.

mPhase Technologies, Inc.        Hart Telephone Company, Inc.

By                               By
  --------------------------       ---------------------------------

Title                            Title
      ----------------------           -----------------------------

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