| 1.   | Whereas                Teliphone Inc., (Teliphone) a company incorporated under the laws                of                Canada is in the business of telecommunications which a specialty                in Voice                over Internet Protocol (VolP), |
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| 2.   | And                Whereas Podar Enterprises (Podar) of Mumbai, India and through its                subsidiary, Podar Infotech Ltd. poses business and technical skills                to                develop and market products and services currently available and                yet to be                developed by Teliphone. |
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| 3.   | The                parties have agreed to co-operatively develop and exploit markets                for the                current Teliphone product line and products yet to be developed in                territories identified in this agreement under terms and conditions                described here in general terms and to be further established in                a more                comprehensive agreement to be developed within 45 days of execution                of                this agreement. The parties further agree to seek and develop                opportunities in information and communication                technologies. |
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| 4.   | Teliphone                hereby grants exclusive marketing and distribution rights for Teliphone                products and services to Podar for the following                territories: |
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|   | IndiaChinaSri                    LankaUnited                    Arab EmiratesRussia |
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|   | under                    terms and conditions set forth in this agreement, Podar and Teliphone                     may                    from time to time, add territories to this agreement. In order                    to maintain                     its                    exclusivity, Podar will be required to meet performance targets                    by                    territory  as                    set forth by this agreement. Where performance targets have not                    been                     established                    here, Podar will have 6 months year from the date of this  agreement                    to assess market conditions in the territories and provide  Teliphone                    with a proposal for the development of the                    territory. |
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| 5.   | Podar                and its related companies by its part, agrees to work exclusively                with                Teliphone for the development of voice over Internet protocol in                the                territories covered in this agreement and agrees not to share any                information or skills acquired through its relation with Teliphone                with                any third party. Furthermore, Podar agrees not to compete with Teliphone                during the life of this agreement and for 2 years subsequent to any                termination of this agreement. |
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| 6.   | Responsibilities                of the Parties: |
|----------------|-------------------------------------------------|

|   | a. Telephone                will be responsible for” |
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| i.   | Access                to all available Teliphone products and services for sale to the                defined                territories, |
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| ii.   | Access                to the Teliphone technical network including VolP services from its                Montreal server and/or other servers/locations yet to be                established, |
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| iii.   | Voice                termination services whether through Teliphone products or other                companies                Podar may identify that require voice                termination, |
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| iv.   | Maintenance                of a voice and quality of service necessary to maintain customer                satisfaction with such quality of service standards to be developed                by the                parties within one month of the execution of this                agreement, |
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| v.   | Technical                support between Podar technicians and                Teliphone, |
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| vi.   | If                required, a web-based ecommerce                system, |
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| vii.   | Access                to a Podar “back-office” on the Teliphone web site which will provide                Podar with real-time information on its activations and                traffic, |
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| viii.   | Access                to all related software necessary for provisioning VolP telephones                or                VolP-related hardware, |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| ix.   | Technical                training of Podar personnel in the Teliphone facility in                Montreal, |
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| x.   | Providing                Podar with its experience and knowledge in the area of market development                as well as all marketing materials. |
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|   | b.                Podar will be responsible for: |
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| i.   | Meeting                sales targets by territory as defined by this                agreement, |
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| ii.   | Developing                and implementing a marketing plan for its territories including                appropriate sales and distribution                channels, |
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| iii.   | Local                technical and after sales support, |
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| iv.   | Purchase                of its own inventory, |
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| v.   | Collection                of subscription, long distance and other revenue from its                subscribers, |
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| vi.   | Timely                remittance of agreed fees to                Teliphone, |
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| vii.   | Meeting                all local regulatory requirements by                territory, |
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|   | c.                 Both Parties will be responsible                for: |
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| i.   | Cooperating                for technical integration of any non-Teliphone                technology, |
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| ii.   | Working                diligently towards the successful development of the objects of this                agreement. |
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| 7.   | The                sales target set for India will be 4,000 activations within 12 months                of                execution of this agreement. |
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| 8.   | Costs                and Distribution of Revenues |
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|   | Podar                agrees to pay Teliphone a base cost of US$10 per active subscriber                per                 month                for the basic Teliphone service which consists of access to the                 Teliphone                network, all basic Teliphone services (i.e. as offered by Teliphone                 as                part of its basic services) and one telephone number. Podar further                agrees                 to                pay Teliphone 15% of the gross profit to its subscribers. Ancillary                 Teliphone                products such as additional telephone numbers per subscriber,  unlimited                North American access, long distance profits, etc. will be covered                 under                a separate agreement. |
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| 9.   | Life                of the agreement |
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|   | This                  agreement will be valid for a period of 5 years from the date of                   execution.                  Either Party may terminate this agreement with 60 days written                   notice                  should the other party be in default of its responsibilities as                  identified                  in  the                  agreement. |
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