Exhibit 2.1
CUSTOMER AND ASSET ACQUISITION AND SOFTWARE LICENSING AGREEMENT MADE AND ENTERED
INTO IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ WITH AN EFFECTIVE DATE OF
DECEMBER 7, 2005
BY AND BETWEEN: TELIPHONE INC., a body politic and corporate,
duly incorporated according to law, having a
place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇ herein
represented by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President, duly
authorized as he so declares,
hereinafter referred to as "TELIPHONE"
AND: IPHONIA INC. a body politic and corporate, duly
incorporated according to law, having a place of
business at 5, St-Sulpice, ▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇,
also operating under the trade name "METRONET"
herein represented by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
President, duly authorized as she so declares,
hereinafter referred to as "IPHONIA"
AND: ▇▇▇▇▇▇▇ INC. a body politic and corporate, duly
incorporated according to law, having a place of
business at 5, St-Sulpice, ▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇,
herein represented by ▇▇▇▇▇ ▇▇▇▇▇, President,
duly authorized as he so declares,
hereinafter referred to as "▇▇▇▇▇▇▇"
AND: UNITED AMERICAN CORPORATION. a body politic and
corporate, duly incorporated according to law,
having a place of business at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇, herein
represented by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President and
CEO, duly authorized as he so declares,
hereinafter referred to as "UAC"
Known collectively as "THE PARTIES"
PREAMBLE
WHEREAS TELIPHONE is a provider of Voice-over-Internet-Protocol (VoIP) services
and is currently expanding its client base through direct sales efforts to new
residential and business customers;
WHEREAS IPHONIA is a provider of VoIP, inter-suburban and dial-up long distance
telecommunications services and wishes to transfer its client base and various
telecommunications equipment to TELIPHONE;
WHEREAS ▇▇▇▇▇▇▇ will transfer a full access and full usage license at no charge
for use of the source code and intellectual property of TELICOM's billing
software, currently utilized by TELIPHONE as the basis for its first generation
service billing software.
WHEREAS UAC, as majority owner of TELIPHONE through its majority-owned
subsidiary OSK CAPITAL II Corp., will guarantee the monthly payments required in
this agreement as outlined in section 4.
WHEREAS THE PARTIES wish to set forth their rights and obligations pertaining to
the transfer of IPHONIA's clients and services to TELIPHONE, along with the sale
of various telecommunications equipment and have agreed to transfer the
customers and equipment in conformity with the terms and conditions as provided
herein;
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WHEREFORE THE PARTIES HERETO HAVE AGREED AS FOLLOWS:
1. The Preamble hereinabove stated shall form an integral part of the present
Agreement as if recited herein at length;
2. DEFINITIONS
2.1. ARPU: Average Revenue Per User.
2.2. DID: A unique phone number as depicted by a 10 number sequence that
is used to direct voice traffic throughout the PSTN.
2.3. LNP: Local Number Portability. The process in which a DID is
transferred from one PRI owner to another.
2.4. PRI: Primary Rate Interface, which is a data connection to the PSTN
that can manage 23 simultaneous channels of voice communications at
once.
2.5. PSTN: Public Switched Telephone Network. The global
telecommunications network owned and operated by Tier 1
Telecommunications carriers worldwide who may sell or lease voice
traffic over it to Tier 2 & 3 telecommunications carriers such as
TELIPHONE and IPHONIA.
2.6. VOIP: Voice Over Internet Protocol, the use of the public internet
to transmit voice calls.
3. Transfer of IPHONIA Services to TELIPHONE
3.1. 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.
3.2. TELIPHONE may decide to sell these Services to its existing clients,
or to market them to new clients at the sole discretion of
TELIPHONE.
4. Transfer of IPHONIA Operations to TELIPHONE
4.1. 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.
4.2. 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
4.3. 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.
4.4. 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.
4.4.1. 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:
o 1 x CISCO AS5350, 8-T1 Gateway, market value of
Cdn$15,000, serial #JAE0641055F
o 1 x CISCO PIX 515E Firewall, already in use by
TELIPHONE, market value of Cdn$4,500, serial
#S88807079454.
o 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.
4.5. IPHONIA agrees to transfer the bank accounts utilized to collect,
through direct debit, revenues from IPHONIA clients to be
transferred to TELIPHONE.
4.5.1. 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.
4.5.2. Any amounts of sales taxes will be collected by TELIPHONE
since TELIPHONE is declaring the revenues of the clients.
4.5.3. 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.
4.5.4. IPHONIA agrees to change the name on the account such that
IPHONIA clients will see "TELIPHONE INC." as the debitor of
their bank account.
4.6. 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.
4.7. TELIPHONE will pay IPHONIA any shortfalls from the total amounts
owing per month, as described above in section 4.5.
5. Transfer of IPHONIA Clients to TELIPHONE
5.1. 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.
5.2. 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.
5.3. 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.
5.4. 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.
6. Additional Services Provided by TELIPHONE to IPHONIA
6.1. 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 18th 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.
6.2. 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.
6.3. 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.
7. NON-COMPETITION CLAUSE
IPHONIA agrees, for a full five (5) years after the signing of this agreement
(see TERM AND TERMINATION), to not enter into direct or indirect competition
with TELIPHONE as it pertains to VoIP services, inter-suburban and dial-up long
distance telecommunications services.
8. PUBLIC DISCLOSURE
TELIPHONE reserves the right to publicly announce the acquisition as it deems
necessary to meet SEC disclosure norms as a public company. TELIPHONE also
reserves the right to disclose the transaction in the form of a public press
release. All releases will require prior approval of IPHONIA prior to being
distributed.
9. TERM AND TERMINATION
9.1. 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.
9.2. 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;
9.3. 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.
10. CONFIDENTIALITY.
10.1. "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
(i) was publicly known and made generally available in the public
domain prior to the time of disclosure by the disclosing party;
(ii) becomes publicly known and made generally available after
disclosure by the disclosing party to the receiving party through no
action or inaction of the receiving party;
(iii) is already in the possession of the receiving party at the
time of disclosure by the disclosing party as shown by the receiving
party's files and records immediately prior to the time of
disclosure;
(iv) is obtained by the receiving party from a third party without a
breach of such third party's obligations of confidentiality; or
(v) is independently developed by the receiving party without use of
or reference to the disclosing party's Confidential Information, as
shown by documents and other competent evidence in the receiving
party's possession.
10.2. 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.
10.3. 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.
11. GENERAL AND CONCLUDING PROVISIONS
11.1. 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.
11.2. This Agreement contains the entire agreement among the parties with
respect to the transactions contemplated herein, and supersedes all
prior negotiations, agreements and undertakings.
11.3. 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.
11.4. 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:
Teliphone Inc
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇
Iphonia Inc.
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▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
United American Corp
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇
▇▇▇▇▇▇▇ Inc.
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Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇
11.5. This Agreement shall be construed in accordance with the laws of the
Province of Quebec and Canada.
11.6. This Agreement may be amended only by written agreement duly
executed by all parties hereto.
11.7. 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.
11.8. 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.
11.9. The parties hereto have requested that the present Agreement be
drafted in the English language. Les parties declarent qu'ils ont
requis que la presente entente soit redigee dans la langue anglaise.
WHEREFORE THE PARTIES HERETO HAVE SIGNED WITH DATE EFFECTIVE ON THE DATE AND
PLACE FIRST MENTIONED HEREINABOVE.
TELIPHONE INC IPHONIA INC
per: per:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, President
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Date Date
▇▇▇▇▇▇▇ INC. UNITED AMERICAN CORPORATION
per: per:
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▇▇▇▇▇ ▇▇▇▇▇, President ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President & CEO
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Date Date
SCHEDULE A
List of Active IPHONIA Montreal DID's
SCHEDULE B
List of Active Quebec City, Sherbrooke and Ottawa DID's
SCHEDULE C
Amount of Co-Location Space to be Offered at No Charge by TELIPHONE to IPHONIA
SCHEDULE D
List of DID's that TELIPHONE will Provide Unlimited US & Canada VoIP Services at
no charge to IPHONIA
