Customer And Asset Acquisition And Software Licensing Agreement by and between Tliphone Inc, United American Corporation, Iphonia Inc. and Telicom Inc., dated December 7, 2005

TELIPHONE INC., a body politic and corporate, duly incorporated according to law, having a place of business at 1080 Beaver Hall suite 1555, Montreal, Quebec, H2Z 1S8 herein represented by George Metrakos, President, duly authorized as he so declares,

 

hereinafter referred to as “TELIPHONE”

 

hereinafter referred to as “IPHONIA”

 

TELICOME INC. a body politic and corporate, duly incorporated according to law, having a place of business at 5, St-Sulpice, Oka, Quebec, J0N 1E0, herein represented by Serge Doyon, President, duly authorized as he so delcares,

 

hereinafter referred to as "TELICOM"

 

 

hereinafter referred to as “UAC”

The Preamble hereinabove stated shall form an integral part of the present Agreement as if recited herein at length;

ARPU: Average Revenue Per User.

DID:A unique phone number as depicted by a 10 number sequence that is used to direct voice traffic throughout the PSTN.

LNP:Local Number Portability. The process in which a DID is transferred from one PRI owner to another.

PRI:Primary Rate Interface, which is a data connection to the PSTN that can manage 23 simultaneous channels of voice communications at once.

PSTN:Public Switched Telephone Network. The global telecommunications network owned and operated by Tier 1 Telecommunications carriers worldwide who

VOIP:Voice Over Internet Protocol, the use of the public internet to transmit voice calls.

IPHONIA will transfer to TELIPHONE all of its Inter-Suburban, VoIP and Long Distance dial-up services that are required to properly serve clients that are being transferred as part of this agreement.

TELIPHONE may decide to sell these Services to its existing clients, or to market them to new clients at the sole discretion of TELIPHONE.

IPHONIA agrees to transfer to TELIPHONE all active DID’s from its three (3) Telus Montreal PRI’s. A list of active Montreal DID’s can be found in Schedule A.

IPHONIA agrees to transfer to TELIPHONE all active DID’s from its combined Quebec city - Sherbrooke - Ottawa PRI. TELIPHONE will assume the balance of IPHONIA’s contract ending in May 2007 with Group Telecom for this combined PRI. A list of active Quebec City, Sherbrooke and Ottawa DID’s can be found in Schedule B

Considering that IPHONIA’s contract with Telus for the three (3) Montreal PRI’s is due to expire on December 31, 2005, IPHONIA will facilitate the LNP of these DID’s to TELIPHONE’s Montreal network.

In consideration of the added cost that TELIPHONE will incur in upgrading its own Montreal PRI network in order to accommodate the added PRI capacity required, THE PARTIES hereby agree that the equivalent $ value of capacity upgrade required by TELIPHONE to accommodate these IPHONIA Montreal DID’s shall be paid to TELIPHONE in the form of IPHONIA Telecommunications Equipment, described herein.

It is estimated that this will represent Cdn$1,500 per month of additional charges incurred by TELIPHONE and therefore this amount will be placed against the purchase of the following IPHONIA Telecommunications equipment:

1 x CISCO AS5350, 8-T1 Gateway, market value of Cdn$15,000, serial #JAE0641055F

1 x CISCO PIX 515E Firewall, already in use by TELIPHONE, market value of Cdn$4,500, serial # ###-###-####.

1 x CISCO PIX 515E Firewall, market value of Cdn$2,500, serial #806383054

For a total of Cdn$22,000. At Cdn$1,500 per month plus interest expenses, THE PARTIES agree that TELIPHONE will continue to make these payments for 18 months from the signing of this agreement.

IPHONIA agrees to transfer the bank accounts utilized to collect, through direct debit, revenues from IPHONIA clients to be transferred to TELIPHONE.

While the bank accounts and customers will belong to TELIPHONE, IPHONIA will maintain signing authority on the accounts in order to extract a monthly amount, for a period of 24 months from the signing of this contract of Cdn$7,600 representing the client revenues plus an additional Cdn$1,500 representing the payment by TELIPHONE for the equipment purchased as described in section 4.4.1 above, until all of the equipment is paid for. Afterwards, IPHONIA will continue to extract Cdn$7,600 until the end of the 24 month period.

Any amounts of sales taxes will be collected by TELIPHONE since TELIPHONE is declaring the revenues of the clients.

At the end of the 24 month period, signing authority will be changed to TELIPHONE in which case no further payments will be made to IPHONIA.

IPHONIA agrees to change the name on the account such that IPHONIA clients will see “TELIPHONE INC.” as the debitor of their bank account.

IPHONIA will transfer the remaining balance at the end of each month to TELIPHONE, which represents the taxes and any increases in revenues from the IPHONIA client base.

TELIPHONE will pay IPHONIA any shortfalls from the total amounts owing per month, as described above in section 4.5.

IPHONIA will transfer their active clients (estimated at 750), along with a database of inactive clients (estimated at 3,000) to TELIPHONE for the sole consideration listed in item 4.5.1, representing the average revenues generated by the clients less additional infrastructure costs required to serve them, as mentioned in section 4.4. above.

Upon termination of this agreement, all clients will become the sole property of TELIPHONE, and all revenues associated with them will belong solely to TELIPHONE without any consideration of revenue transfer to IPHONIA.

TELIPHONE reserves the right to “up-sell”, that is to increase the revenues of any of the clients through a targeted sales campaign. IPHONIA will offer whatever

assistance is deemed necessary in order to facilitate this process. Any increases in revenues from the existing client base will belong solely to TELIPHONE. TELIPHONE agrees to provide an e-mail notification within 24 hours of an IPHONIA client being transferred to a TELIPHONE service.

At the end of each month, TELIPHONE will transfer to IPHONIA any amounts received from clients who have transferred from IPHONIA services to TELIPHONE services. The amounts transferred will be equivalent to the amounts of revenues that these clients generated when purchasing IPHONIA services.

TELIPHONE will offer at no additional cost the co-location of IPHONIA equipment in its Montreal data center. The equipment list to be hosted is found in Schedule C. This equipment will be identified as the sole property of IPHONIA and will be labelled as such within TELIPHONE’s co-location facility at PEER 1 Montreal. In addition, a letter, signed by TELIPHONE and IPHONIA will be sent to PEER 1 identifying these items as being property of IPHONIA and not TELIPHONE. Included in this letter, will be the equipment identified in item 4.4.1. Upon receipt of the 18^th month payment from TELIPHONE, and hence this equipment becoming property of TELIPHONE, these items will be newly identified, within the co-location facility and in writing to PEER 1 as belonging to TELIPHONE.

TELIPHONE will provide at no additional cost to IPHONIA, the required bandwidth of Internet traffic for services unrelated to this agreement. It is understood by THE PARTIES that the amount of bandwidth is minimal in comparison to that used by TELIPHONE on a regular basis for its operations. However, should the IPHONIA bandwidth usage become more significant in the future, THE PARTIES agree that IPHONIA will pay TELIPHONE an equivalent market price for its bandwidth requirements.

TELIPHONE will provide to IPHONIA a total of fifteen (15) unlimited world IP calling packages at no charge for personal and business use by IPHONIA and their affiliated companies for a period of ten (10) years upon the signing of this contract. A partial list of DID’s for the services to be offered over is found in Schedule D. It is understood by THE PARTIES that these lines will not consume a significant volume of long distance charges.

TERM. This Agreement shall commence on the date hereinabove and remain in effect for an initial period of two (2) year from the effective date. Upon completion of the two (2) year period, all of IPHONIA Services, Operations and Clients will transfer in full to TELIPHONE. This will constitute the official termination of the agreement.

TERMINATION BY EITHER PARTY. Either party (the “Non-Defaulting Party”) may terminate this Agreement by providing at least thirty (30) days prior written notice to the other party (the “Defaulting Party”) upon the occurrence of any of the following events:

(a)

the Defaulting Party is in default in the performance of any of its obligations under this Agreement or breaches any provision hereof and such default or breach continues after at least ten (10) days following receipt of written notice of such default or breach from the Non-Defaulting Party to the Defaulting Party.

(b)

the conviction in any court of competent jurisdiction of either party or any employee, shareholder, director or officer of either party for any crime or violation of law if, such conviction is likely to adversely affect the operation or business of the other party or tend to be harmful to the goodwill or reputation of the other party.

(c)

Any conduct or practice by either party, its directors, officers, employees or shareholders, which is injurious to the goodwill or reputation of the other party.

(d)

Either party commits, participates or acquiesces in any fraudulent or improper actions in regards to this agreement;

However unlikely, in the event the TELIPHONE becomes insolvent and can no longer actively serve IPHONIA’s clients, IPHONIA retains the right to terminate this contract and to reclaim its former clients and services from TELIPHONE in order to continue to offer services to them.

"Confidential Information" means any business and technical information disclosed by either party to the other party, either directly or indirectly, in writing, orally or by inspection of tangible objects (including without limitation concepts, designs, documents, prototypes or samples), which is designated as "Confidential," "Proprietary" or some similar designation or is disclosed under circumstances which

 indicate its confidential nature. Confidential Information may also include third party confidential information. Confidential Information will not include any information which

Non-use and Nondisclosure. Each party agrees not to use any Confidential Information of the other party for any purpose except to perform its obligations or exercise its rights under this Agreement. Each party agrees not to disclose any Confidential Information of the other party to third parties or to such party's employees, except to those employees or consultants of the receiving party who are required to have the information. Nothing in this Section precludes either party from disclosing the other party’s Confidential Information as required by law or a legal process.

Maintenance of Confidentiality. Each party agrees that it will take reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of the Confidential Information of the other party. Without limiting the foregoing, each party will take at least those measures that it takes to protect its own most highly confidential information and will ensure that its employees and independent contractors who have access to Confidential Information of the other party have signed a non-use and non-disclosure agreement in content similar to the provisions hereof. Each party will reproduce the other party's proprietary rights notices on any such approved copies, in the same manner in which such notices were set forth in or on the original.

This agreement shall ensure to the benefit of and be binding upon the parties hereto, and their respective heirs, legatees, executors, legal representatives, successors and assigns.

This Agreement contains the entire agreement among the parties with respect to the transactions contemplated herein, and supersedes all prior negotiations, agreements and undertakings.

This Agreement may be executed in two or more counterparts each of which shall be deemed an original and all of which together shall constitute one and the same Agreement. Faxed signatures of the parties shall be valid and binding, however, the parties hereto agree to provide the original of their signature to this Agreement to each of the other parties thereafter.

All notices in connection with this Agreement shall be in writing and either hand-delivered or mailed by registered or certified mail and shall be sent to all of the parties hereto.  Any such notice shall be deemed to have been received on the earlier of the date of the hand-delivery or on the fifth (5th) business day following the date indicated on the proof of mailing.  The respective addresses for such notices are:

This Agreement shall be construed in accordance with the laws of the Province of Quebec and Canada.

This Agreement may be amended only by written agreement duly executed by all parties hereto.

The parties shall furnish and deliver from time to time such documents, and writings as may reasonably be required as necessary or desirable to complete this Agreement and to give effect to its provisions.

The parties agree to do and cause to be done such acts, deeds, documents and/or corporate proceedings as maybe necessary or desirable to complete this Agreement, and to give effect to its provisions.

The parties hereto have requested that the present Agreement be drafted in the English language. Les parties déclarent qu’ils ont requis que la présente entente soit rédigée dans la langue anglaise.

 per:

 

 per:

 

 

 /s/ Geroge Metrakos

 

 2005-12-13

 Date  

 

 2005-12-12
 Date

 TELICOM INC.

 UNITED AMERICAN CORPORATION

 per:

 

 per:

 

 

 /s/ Serge Doyon

 

 /s/ Simon Lamarche

 

 2005-12-12

 

 2005-12-13
 Date