Letter of intent for joint venture agreement with Venture Agreement Between Teliphone Inc. and Intelco Communication, Inc., dated July 14, 2006

To leverage Intelco’s global distribution channel of pre-paid calling cards and telecommunications services by introducing Teliphone’s VoIP services to their existing and future client base.

To leverage Teliphone’s technology and experience with its initial clients in order to provide Intelco with a proven VoIP product to sell to the global market.

To immediately (within 3-6 months) turn Teliphone’s current operations to cash flow positive by merging operations with Intelco and thereby reducing Teliphone’s required cash outflows over the next 12 months.

Teliphone will provide to Intelco a white label version of its VoIP platform for use by Intelco for promotion of its line of VoIP products without commercial restriction to the global marketplace.

Intelco will pay Teliphone 1$ per month per active subscriber as a software license fee. The minimum amount paid will be based on a ramp-up period as described in item 2.6 below and the maximum will be $12,000 per month. These amounts will remain as an advance from Teliphone for 12 months from the signing of this LOI and will be converted as described in section 6.

Above and beyond the twelve thousandth customer, Teliphone will receive $0.15 per Intelco subscriber per month. In return, Teliphone will ensure that all of the necessary resources within Teliphone’s team and technology is in place in order to meet Intelco’s requirements for modifications of their white label platform.

Intelco’s customers’ traffic will be passed entirely on Intelco’s network (ie. Intelco assumes DID costs, call origination and call termination costs).

Teliphone will invoice any actual variable costs that may be incurred by Teliphone in order to supply service to these customers (ie. E9-1-1 PSAP call services).

The following period will comprise the minimum amounts being charged per subscriber per month for the software license fee as described in item 2.2 above:

Month 1:0$

Month 2:The greater of 1$/subscriber and $1,000

Month 3:The greater of 1$/subscriber and $2,000

Month 4:The greater of 1$/subscriber and $3,500

Month 5 and onwards:The greater of 1$/subscriber and $5,000 *

New technological developments created by Benoit Laliberté (Personal commitment)

Intelco will provide the following services to Teliphone:

Rent. Teliphone will move from its current offices at 1080 Beaver Hall, to Intelco’s offices located at 4150 Ste-Catherine street, Montreal. This is valued at $2,500 per month.

Telecom network fixed costs. Intelco will provide to Teliphone usage of origination and termination of call traffic across its entire network of PRI’s. These are valued at the current market price of $0.007 per minute. The amounts charged will be the greater of the actual charges and $7,000 per month.

Telecom network variable costs. Intelco will invoice any actual variable costs that may be incurred by Teliphone across its network (ie. Monthly DID costs, any additional origination or termination costs that are incurred that are not part of Intelco’s fixed cost operations).

Hosting and co-location services. Intelco will provide the following to Teliphone within its own in-house data center (valued at $2,500 per month):

4 full cabinets for Teliphone’s existing hardware equipment

The necessary bandwidth for Teliphone’s operations (currently 2 MB per month)

60 Amps continuous at 120Volts electrical power supply with back-up UPS.

New hardware will be acquired in September 2006 in order to house both Teliphone’s and Intelco’s VoIP customers. This equipment is estimated to require ½ cabinet of space and will be located within Intelco’s cabinets located at Teleglobe, along with Teliphone’s telecom equipment.

Any amounts forwarded to Teliphone by Intelco will remain as an advance from Intelco for 12 months from the signing of this LOI and will be converted as described in section 6.

3901823 will provide Teliphone a $75,000 a line of credit with the following disbursements:

$25,000 at the signing of this LOI

$25,000 at the installation of Teliphone’s equipment within Intelco’s data center and a notarized and executed lean on the assets as described in 4.3.

$25,000 when Teliphone’s equipment is able to handle the activation of new Intelco’s clients.

The totality of the line of credit must be repaid by Teliphone by December 21, 2006. If any amounts are outstanding at this time, then Teliphone will be considered in default, at which time Teliphone will have 10 days to remit all outstanding amounts back to ###-###-####.

In the event that Teliphone does not reimburse the full outstanding amount to ###-###-#### by December 31, 2006, Intelco will receive ownership of Teliphone’s current assets (cash, pre-paid deposits and accounts receivable), capital assets (property, plant and equipment) and intellectual property in order for Intelco’s VoIP program to continue under ###-###-####’s ownership. A first level lien on the assets will be notarized and signed after signing of this LOI.

Teliphone agrees to sign over the $56,000 of receivables pertaining to its 2004 and 2005 research and development tax credits which it estimates to receive by October 1, 2006 to ###-###-#### in order to guarantee a major part of these disbursements. Teliphone will forward any cash received from this funding directly to ###-###-#### upon receipt.

Benoit Laliberté agrees to provide to Teliphone an additional $30,000 for use by Teliphone in order to cover any additional cash flow requirements by Teliphone as required during the transition phase. The following disbursements will be taken on Benoit Laliberté’s credit card:

$15,000 in July 2006

$15,000 in August 2006

Based on the values of in-kind contributions that will be made over the next 12 months, Teliphone will have an outstanding advance from Intelco when both advances are netted.

The netted $ value will be converted to options exercisable into Class A voting shares of the common stock of Teliphone. The valuation that will be used is $1,000,000, which means that each $10,000 of netted investment in Teliphone will be equal to 1%. It is estimated that the net advance will be $75,000, or options on 7.5%. These shares will be in the name of Intelco.

Subsequent to this conversion, both Teliphone and Intelco will commence to invoice each other for their respective services being offered, with payments due within 30 days upon receipt of invoice.

OSK currently holds 104 class A common voting shares, representing all of the outstanding shares of Teliphone.

Teliphone will issue from treasury an additional 35 class A voting shares to ###-###-####. The resulting ownership will be OSK 74.8% and ###-###-####, 25.2%.

In consideration of this new minor position, Intelco will be awarded one seat on Teliphone’s Board of Directors. The newly appointed board member will be provided full access to Teliphone’s financial reporting information as required.

Intelco will gain a ‘first right of refusal’ in the event that an offer to purchase Teliphone is made in the future or on the issuance of any new shares.

Teliphone will assign its Telecommunications Services Agreement Kore Wireless Canada Inc. to Intelco pending assignment and re-negotiation of terms by Kore Wireless Canada Inc.

Teliphone will immediately enter into discussions with its long term debt holders to restructure its long term debt and advances (particularly from its Parent Company OSK Capital II Corp and affiliated company ###-###-#### Canada Inc. / United American Corporation).

Teliphone

Software license

$1.00 / subscriber / month

Advance from Teliphone

Network (variable) ⁽¹⁾

At cost

Net 30 days upon presentation of invoice

Network (fixed) ⁽²⁾

At cost

Advance from Teliphone

Intelco

Rent

$2,500 per month

Advance from Intelco

Network (variable) ⁽³⁾

At cost

Net 30 days upon presentation of invoice

Network (fixed) ⁽⁴⁾

At cost

Advance from Intelco

Co-location services

$2,500 per month

Advance from Intelco

These represent any incremental costs that Teliphone must incur in order to house Intelco’s clients, such as E9-1-1 PSAP services or DID’s on any of Teliphone’s PRI’s that Intelco does not have, such as Gatineau, Hull, Pont-Viau, Chomedy, Granby or St-Hyacinthe.

These represent any costs incurred by Teliphone for passing traffic on Teliphone’s PRI’s for Intelco, such as per minute origination and termination costs (current price of $0.007 per minute). PRI’s include Granby, St-Hyacinthe, Chomedy/Pont-Viau or Gatineau/Hull.

These represent DID costs incurred by Intelco for Teliphone’s customers over Intelco’s Montreal, Toronto, Quebec City or any other of their US or Canadian PRI’s.

These represent any costs incurred by Intelco for passing Teliphone traffic on Intelco’s PRI’s including Montreal, Toronto, Quebec City or any other of their US or Canadian PRI’s (current price of $0.007 per minute).