SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of earliest event reported - March 25, 1998
Tellurian, Inc.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-21645 22-3451918
- --------------------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
300K Route 17 South
Mahwah, New Jersey 07430
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (201) 529-0939
- --------------------------------------------------------------------------------
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Item 5. Other Events
I. On March 2, 1998, Tellurian, Inc. (the "Company" or "Tellurian") had four
members of the Board of Directors. They consisted of Ronald Swallow, Chairman of
the Board, Stuart French, President, Richard Swallow, Secretary and Michael
Hurd, Chief Financial Officer. In order to comply with NASDAQ's requirements of
two independent directors and an audit committee and to maintain an odd number
of directors, Michael Hurd resigned from the Board of Directors and the Company
expanded the number of directors to five. On March 2, 1998, the Board of
Directors adopted the following resolutions:
RESOLVED, that the resignation of Michael Hurd from his capacity as a
director of the Company is hereby accepted effective immediately; and
it was further
RESOLVED, that the number of directors shall be expanded to
five; and it was further
RESOLVED, that James G.H. Lin and Peter D. Colgan are hereby elected
directors to serve in such capacity until their successors are elected
and shall qualify; and it was further
RESOLVED, that an audit committee shall be established and that the
members of the audit committee shall consist of Messers. Lin and
Colgan; and it was further
RESOLVED, that the Audit Committee has the power to (I) select the
independent certified public accountant, (ii) satisfy itself on behalf
of the Board that the external and internal auditing procedures assure
reliable and informative accounting and financial reporting, (iii) have
meetings with management, or with the auditors, or with both management
and auditors, to review the scope of the auditor's examination, audit
reports and the Company's internal auditing procedures and reviews,
(iv) monitor policies established to prohibit unethical, questionable,
or illegal activities by those associated with the Company; and (v)
review the compensation paid to the auditors through annual audit and
non-audit fees and the effect on the independence on the auditors in
relation thereto, and it may exercise the powers and authority of the
Board of Directors to implement changes in connection with the
foregoing or, at its option, may make recommendations to the entire
Board of Directors for its approval.
The Company reported that since 1977, Peter Colgan has been
Senior Vice President of Computer Horizons Corp. Mr. Colgan has 32
years of marketing and information services experience that
includes management, marketing, sales, manufacturing and
consulting. Neither Computer Horizons Corp. nor Mr. Colgan were
affiliated with the Company prior to his joining the Board of
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Directors and that Mr. Colgan has never been an officer or employee of the
Company and any of its affiliates. Since June 1992, Mr. Lin has been President
of Asian International Management, a company that assists domestic businesses to
promote products to Asian countries. Neither Asian International Management nor
Mr. Lin were affiliated with the Company prior to his joining the Board of
Directors and that Mr. Lin has never been an officer or employee of the Company
and any of its affiliates. Messrs. Colgan and Lin do not own any of Tellurian's
securities as of the date hereof and are not related to any of Tellurian's
officers, directors or employees.
II. The Company has entered into various agreements to convert $1,386,249 of
debt into capital stock of the Company and its wholly owned subsidiary,
Cyberport Niagra, Inc. The paragraphs that follow briefly summarize these
agreements:
(a) The Company has an agreement with Interactive Media Concepts, Inc.
pursuant to which Interactive is owed approximately $56,000.On March 23, 1998,
the Company accepted Interactive's offer to convert such indebtedness into
100,000 shares of the Company's Common Stock.
(b) The Company owed $1,295,527 U.S. (equivalent to $1,865,559
Canadian) to certain contractors in Canada for work done on improvements to its
Cyberport facility. These contractors included Newman Bros. Limited, Phoenix
Wood Products Corporation (formerly known as Trigin Management Corporation),
Star Tile Centre Limited, Ecco Electric Limited, DBN Drywall & Acoustics
Limited, Expoplex Incorporated (the "Cyberport Creditors"). On March 26, 1998,
the Cyberport Creditors agreed to convert $601,083 U.S. (equivalent to $865,559
Canadian) into 865,559 Series B Special Shares (also known as Preferred Stock)
of Cyberport Niagra, Inc. The Cyberport creditors also agreed to assign to
Cyberport Niagra's landlord (also known as 1174757 Ontario Inc.) $694,444 U.S.
(equivalent to $1,000,000 Canadian)of the Company's indebtedness.
Contemporaneously, 1174757 Ontario Inc. entered into an agreement to convert the
entire debt into 350,000 restricted shares of the Company's Common Stock. The
Company also agreed to pay the landlord $36,111 U.S. ($52,000 Canadian) in rent
arrears and $33,333 U.S. ($48,000 Canadian) in additional security deposit. The
aforesaid agreements conclude various creditor law suits that were initiated
against the Company and its subsidiary demanding payment of the aforementioned
debt.
(c) The following unaudited financial statements (expressed in U.S. dollars with
a conversion ratio of 1.44 Canadian dollars for each U.S. dollar) represent the
Company's income statement for the two months ended February 28, 1998 and the
Company's balance sheet at February 28, 1998. The balance sheet reflects
adjustments for the transactions specified above that took place in March 1998
and a pro forma balance sheet.
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<TABLE>
<CAPTION>
TELLURIAN, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
<S> <C> <C> <C>
ASSETS
FEBRUARY 28, FEBRUARY 28,
1998 Adjustments 1998
----------- ----------- -----------
Unaudited Unaudited Unaudited
CURRENT ASSETS:
Cash and cash equivalents ..................................................... $ 681,888 $ 69,444(6) $ 612,444
Accounts Receivable ........................................................... 8,789 8,789
Inventories ................................................................... 661,917 661,917
Prepaid consulting fees ....................................................... 50,000 80,000 130,000
Prepaid expenses and other current assets ..................................... 3,837 3,837
----------- ----------- -----------
Total current assets ................................................. 1,406,431 149,444 1,416,987
----------- ----------- -----------
PROPERTY AND EQUIPMENT--at cost
less accumulated depreciation ................................................ 2,606,900 2,606,900
----------- -----------
OTHER ASSETS: Security deposits ............................................... 69,799 33,333(6) 103,132
----------- ----------- -----------
Total Assets .................................................. $ 4,083,130 $ 182,777 $ 4,127,019
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable .............................................................. $ 1,664,727 ($ 1,422,360)(2) $ 242,367
Accrued expenses ................................................................ 50,540 50,540
Payroll payable ............................................................... 67,378 67,378
Payroll taxes payable ......................................................... 36,193 36,193
Other accrued liabilities ..................................................... 37,282 37,282
Notes Payable ................................................................. 548,245 548,245
Notes payable--related parties ................................................ 502,736 502,736
Interest payable--related parties ............................................. 363,380 363,380
Deferred currency translation gain ............................................ 29,073 29,073
----------- ----------- -----------
Total current liabilities ............................................. 3,299,554 (1,386,249) 1,877,194
----------- ----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock - $.01 par value
Authorized-25,000,000 shares
Issued and outstanding - 3,628,010 shares ................................. 33,241 4,500 (3) 37,741
Preferred Stock--Subsidiary Corporation ......................................... -- 635,805 (4) 635,805
Additional paid-in capital ................................................. 6,842,182 825,944 (5) 7,668,126
Accumulated deficit ........................................................ (6,091,847) (6,091,847)
----------- ----------- -----------
Total stockholders' equity ........................................ $ 783,576 $ 1,466,249 $ 2,249,825
----------- ----------- -----------
$ 4,083,130 $ 80,000 $ 4,127,019
=========== =========== ===========
</TABLE>
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TELLURIAN, INC AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
TWO MONTHS ENDED
FEBRUARY 28, 1998
REVENUES .......................... $ 12,077
COST OF GOODS SOLD ................ 86,506
-----------
GROSS PROFIT (LOSS) ............... (74,429)
OPERATING EXPENSES:
Research and Development ....... 95,455
Selling ........................ 54,598
General and Administrative ..... 128,593
-----------
278,647
LOSS FROM OPERATIONS .............. (353,076)
OTHER INCOME AND EXPENSES:
Other Income .................... --
Interest Expense ................ (3,700)
Interest Expense--related parties (8,400)
Interest Income ................. 1,233
Deferred Debt Costs ............. --
-----------
(10,867)
NET LOSS .......................... (363,840)
===========
NET LOSS PER COMMON SHARE ......... $ (.12)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING ....... 3,025,000
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NOTES TO CONSOLIDATED BALANCE SHEET
(1) The consulting agreement with Interactive Media Inc. has ten months
remaining at $8,000 per month. Interactive Media accepted 100,000 shares of
Tellurian common stock in full payment of the balance owed to them ($56,000)
plus the remaining payments due under the terms of its consulting contract.
(2) The $1,422,360 includes the following: (a) The $56,000 owed to Interactive
Media discussed in Note 1; (b)$1,295,524 in debt conversions as discussed in the
paragraphs preceding the Balance Sheet; (c) payments of rent arrears of $36,111
to Cyberport's landlord in connection with his conversion of $694,444 into
350,000 shares of the Company's Common Stock; and (d) $34,722 in cancellation of
over accruals. On the Company's books and records, the Company had accrued
$1,330,249 in indebtedness to various contractors who performed work at the
Cyberport Niagara subsidiary, which included $34,722 in over accruals.
(3) A total of 450,000 restricted shares of Tellurian common stock will be
issued pursuant to the agreements with Interactive Media and the Cyberport
creditors at $.01 per share nominal value.
(4) The preferred stock issued by the Cyberport subsidiary is reflected at the
U.S. dollar conversion value.
(5) The net increase to the Additional Paid-In Capital account resulting from
the Interactive Media and Cyberport creditor transactions is $825,944, with
$135,000 stemming from the Interactive transaction and $690,944 (expressed in
U.S. dollars) from the Cyberport creditors transaction.
(6) Represents $36,111 in rent payments and $33,333 of additional security
deposits made to the Cyberport landlord in connection with his conversion of
$694,444 of indebtedness into 350,000 shares of the Company's Common Stock.
Item 7. Exhibits and Financial Statements
(c) Exhibits.
10.0 Agreement dated March 26, 1998 by and among Cyberport
Niagara, Inc., Tellurian, Inc. and 1174757 Ontario, Inc.
10.1 Agreement dated March 26, 1998 by and Cyberport Niagra
Inc., Tellurian, Inc. and the Cyberport creditors.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TELLURIAN, Inc.
-----------------------------------
(Registrant)
Dated: March 26, 1998 /s/Stuart French
-----------------------------------
Stuart French, President
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EXHIBIT 10.0
AGREEMENT
B E T W E E N:
CYBERPORT NIAGARA INC.
a private Ontario Corporation
(hereinafter called "Cyberport")
- and -
TELLURIAN, INC.
a public United States Corporation
(hereinafter called "Tellurian")
- and -
1174757 ONTARIO INC.
a private Ontario Corporation
(hereinafter called "Landlord")
WHEREAS the Landlord has leased to Cyberport pursuant to a written lease
agreement dated February 1, 1997, premises at 5781 Ellen Avenue, Niagara Falls,
Ontario, legally described as set out in Schedule A attached hereto, from which
premises Cyberport is operating a hightech tourist facility;
AND WHEREAS improvements in the amount of $1,865,599.00 were done to the said
premises by tradesmen in order to have the facilities useable by Cyberport;
AND WHEREAS these tradesmen have not been paid for the supply of their services
and materials to these premises and a number of them have registered Claims for
Lien against the title to said premises pursuant to the Construction Lien Act;
AND WHEREAS the tradesmen, Cyberport and 1174757 have agreed to settle all
claims and counterclaims in regards to the supply of services and materials to
the said premises;
NOW WITNESS THAT IN CONSIDERATION of the mutual covenants and agreements herein
and subject to the terms and conditions in this agreement, the parties hereto
covenant and agree as follows:
1. The tradesmen have agreed to assign to the Landlord, concurrently with
the closing of this settlement agreement, $1,000,000.00 worth of the
total amount of $1,865,599.00 presently owed to them for the supply of
services and materials to the Cyberport facility.
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2. The tradesmen have further agreed to provide the law firm of Broderick
and Associates a properly executed Release/Discharge of each of their
respective Claims for Lien, to be held by such law firm in trust
pending the completion of this settlement agreement.
3. The tradesmen have further agreed to provide to the law firm of
Broderick and Associates a properly executed Consent to Dismissal of
each of their respective Court Actions commenced regarding this matter,
to be held by such law firm in trust pending the completion of this
settlement agreement.
4. The Landlord hereby agrees to subscribe for 350,000 restricted common
stock in Tellurian and has agreed to assign to Tellurian the
$1,000,000.00 in debt assigned to it by the tradesmen as described
above as consideration for payment of said stock subscription.
Tellurian hereby agrees to accept such assignment of debt as valid
consideration for the payment of the subscription for said stock.
5. The parties acknowledge that the Tellurian stock is "restricted"
meaning that the stock may not be sold or otherwise transferred for a
period of one year from the date of issuance in accordance with
securities laws unless the securities have been registered for resale
pursuant to the Securities Act of 19933, as amended or an exemption
from registration is available to permit such transfer.
6. The parties agree that the rent for the premises is currently in
arrears. In consideration of Cyberport paying to the Landlord on the
closing of this settlement agreement the sum of $100,000.00 ($52,000.00
to be applied against the rental arrears and $48,000.00 as security for
future rents), the Landlord agrees that:
a) the rent for the months of March, April and May, 1998,
shall be deferred until the months of July, August and
September, 1998,
b) Cyberport shall pay the normal rental amount as provided
for in the lease for the month of June, 1998,
c) Cyberport shall pay twice the said normal rental amount for
the months of July, August and September, 1998, and
d) on September 30, 1998 or as soon as practical thereafter (but
no later than October 31, 1998), Cyberport and the Landlord
will conduct an accounting review of the lease
situation/arrears and make whatever adjustments are necessary
as between the parties.
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7. Tellurian is the currently the holder of a Security Agreement
representing a first charge on the assets of Cyberport,
including a number of P-51 Simulators. Tellurian agrees to
grant to the Landlord until December 31, 1999, as additional
security for future rents of Cyberport, an assignment of its
Security Agreement to the extent of eight P-51 Simulators, said
pieces of equipment having the serial numbers as listed on
Schedule B attached hereto.
8. Tellurian hereby further agrees to provide the Landlord with an option
to acquire 100,000 additional restricted common stock in Tellurian,
having the same restriction as set out above, said option having the
following terms and conditions:
a) the exercise of the option must take place between 12 noon
April 1, 1998 and 12 noon September 30, 1998,
b) the subscription price is $1.75 US per share, and
c) the said subscription price and a letter to Tellurian
notifying Tellurian of the exercising of said option must be
received by Tellurian prior to the expiry of the option as set
out herein.
9. Time is of the essence of this agreement.
10. This agreement supersedes and takes the place of any and all prior
agreements entered into by the parties. It is agreed that there is no
representation, warranty, collateral agreement or condition affecting
this agreement except as expressed in it.
11. No change or modification of this agreement shall be valid unless it be
in writing and signed by each party hereto.
12. This agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario, Canada.
13. This agreement shall enure to the benefit of and be binding upon the
respective successors and assigns of the parties hereto.
14. For the convenience of the parties hereto, this Agreement may be
executed in one or more counterparts, and transmitted by facsimile
transmission, each of which shall be deemed to be an original for all
purposes and shall constitute one agreement, binding on all parties.
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15. In order to be binding this agreement must be signed by all parties,
and each party having a copy of the other's signature evidenced on the
agreement, on or before March 25, 1998 at 4 pm, otherwise it shall be
null and void.
16. This settlement shall be effective on March 26, 1998 at which time all
monies and documents described herein shall be exchanged by the
parties.
IN RECOGNITION OF THE ABOVE, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date set out beside
their respective signatures.
CYBERPORT NIAGARA INC.
Per:
Date: March 26, 1998 /s/ David Turner
---------------------------------------
Name/Title: David Turner/Secretary
I have the authority to bind the
Corporation
TELLURIAN, INC.
Per:
Date: March 26, 1998 /s/ Michael Hurd
---------------------------------------
Name/Title: Michael Hurd/Vice-President
I have the authority to bind the
Corporation
1174757 ONTARIO INC.
Per:
Date: March 26, 1998 /s/ Ashak Merani
---------------------------------------
Name/Title: Ashak Merani/President
I have the authority to bind the
Corporation
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SCHEDULE "A"
P-51 Simulators:
Serial No. Red No. 1
Serial No. Red No. 2
Serial No. Red No. 3
Serial No. Red No. 4
Serial No. Red No. 5
Serial No. Red No. 6
Serial No. Red No. 7
Serial No. Red No. 8
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SCHEDULE "B"
P-51 Simulators:
Serial No. Red No. 1
Serial No. Red No. 2
Serial No. Red No. 3
Serial No. Red No. 4
Serial No. Red No. 5
Serial No. Red No. 6
Serial No. Red No. 7
Serial No. Red No. 8
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EXHIBIT 10.1
AGREEMENT
B E T W E E N:
CYBERPORT NIAGARA INC.
a private Ontario Corporation
(hereinafter called "Cyberport")
- and -
TELLURIAN, INC.
a public Delaware (USA) Corporation
(hereinafter called "Tellurian")
- and -
NEWMAN BROS. LIMITED
PHOENIX WOOD PRODUCTS CORPORATION (formerly
known as Trigin Management Corporation)
STAR TILE CENTRE LIMITED
ECCO ELECTRIC LIMITED
DBN DRYWALL & ACOUSTICS LIMITED
EXPOPLEX INCORPORATED
(hereinafter collectively called
the "Claimants")
WHEREAS the Claimants are presently owed $1,865,559.00 (plus any additional
amount that may be shown to be owed on closing for Goods and Services Tax) for
the supply of services and materials to the Cyberport facility at 5781 Ellen
Avenue, Niagara Falls, Ontario, legally described as set out in Schedule "A"
attached hereto, said facility being owned by 1174757 Ontario Inc. and leased to
Cyberport Niagara Inc.;
AND WHEREAS a number of the Claimants have registered Claims for Lien against
the title to said premises pursuant to the Construction Lien Act;
AND WHEREAS the Claimants, Cyberport and 1174757 have agreed to settle all
claims and counterclaims in regards to the supply of services and materials to
the said premises;
NOW WITNESS THAT IN CONSIDERATION of the mutual covenants and agreements herein
and subject to the terms and conditions in this agreement, the parties hereto
covenant and agree as follows:
1. The Claimants hereby agree to assign, concurrently with the closing of
this settlement agreement, to 1174757, $1,000,000.00 worth of the total
amount of $1,865,559.00 presently owed to them for the supply of
services and materials to the Cyberport facility.
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2. The Claimants hereby further agree to provide the law firm of Broderick
and Associates a properly executed Release/Discharge of each of their
respective Claims for Lien, to be held by such law firm in trust
pending the completion of this settlement agreement.
3. The Claimants hereby further agree to provide to the law firm of
Broderick and Associates a properly executed Consent to an Order for
dismissal of each of their respective Court Actions commenced regarding
this matter, without costs, discharging their respective Claims for
Lien and vacating their respective Certificates of Action, to be held
by such law firm in trust pending the completion of this settlement
agreement.
4. Newman Bros. Limited hereby acknowledges that Unistrut Canada
Limited and PRW Excavating Contractors Ltd. are subcontractors
of Newman Bros. Limited and each have registered a Claim for
Lien and Certificate of Action against the premises and each
have refused to join in this agreement. Accordingly, Newman
Bros. Limited hereby agrees to bring, at its cost, immediately
upon the closing of this settlement, an application pursuant to
the Construction Lien Act to obtain a Court Order vacating from
the title to the premises the said Claims for Lien and
Certificates of Action of these two subcontractors. Newman
Bros. Limited shall also provide Cyberport, 1174757 and the
mortgagees of the premises with an indemnity with respect to the
claim/action commenced by the two said subcontractors.
5. The Claimants hereby further agree to provide to the law firm of
Broderick and Associates a property executed Release of
Cyberport, Tellurian and 1174757 Ontario Inc. of all claims
against their companies by the Claimants in relation to the
supply of services and materials to the Cyberport facility, save
and except any claim resulting from the terms of this Agreement
and any agreement entered into by the Claimants and 1174757
Ontario Inc. in regards to this matter said Release to be held
by said law firm in trust pending the completion of this
settlement agreement.
6. The Claimants hereby further agree to subscribe for $865,559.00
worth of Series "B" Special Shares in Cyberport at $1.00 per
share and shall assign $865,559.00 worth of debt owed to them by
Cyberport, being the balance of the monies owed to them for the
supply of services and materials to the Cyberport facility, and
Cyberport shall accept such assignment as payment in full for
the shares so subscribed for. The parties acknowledge that the
subscription amount may increase due to any Goods and Services
Tax that may be found owing on closing, such adjustment to be at
the same rate of 1 share for each $1.00 owed. All references
hereinafter to the 865,559 said shares shall be amended
accordingly, in the event that this subscription amount
increases as provided for herein.
7. The Series "B" Special Shares to be issued shall have the following
rights, privileges, restrictions and conditions:
a) they shall be limited to 865,559 in number,
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b) they shall have a subscription price of $1.00 per share,
c) they shall have a preferred 12% annual cumulative cash
dividend, payable quarterly, with the first payment due
June 30, 1998,
d) in the event of liquidation, dissolution or winding up of
Cyberport, the holder of each share shall be entitled to
receive the subscription price for each share held together
with all unpaid dividends declared thereon, said payment to be
in priority to all other issued shares in Cyberport,
e) Cyberport shall have the right to redeem any or all of said
shares at any time prior to October 10, 1998 at a redemption
price equal to 110% of the subscription price. The payment of
such redemption price shall include payment of any accrued and
unpaid dividend payment that may be outstanding at the time of
such redemption,
f) they shall be non-voting shares.
8. In the event that Cyberport has not redeemed all of said Series
"B" Special Share on or prior to October 10, 1998, then the
Claimants shall have the right until December 31, 1998 after
which time if not exercised such right shall expire, and
Tellurian shall honour such right, to have their Cyberport
Series "B" Special Shares exchanged for common stock in
Tellurian at the conversion rate of 2.28 Series "B" Special
Shares in Cyberport for each common stock in Tellurian. Any
such exchange by the Claimants shall include the rights to any
accrued and unpaid dividends owing on the Cyberport stock at the
time of said exchange.
9. All parties recognize that the Tellurian common stock described in
paragraph 5 herein is "restricted" stock, meaning that the stock may
not be sold or otherwise transferred within one year of issuance and
then only in accordance with securities laws unless the securities have
been registered for resale pursuant to the Securities Act of 1933
(USA), as amended or an exemption from registration is available to
permit such transfer.
10. Cyberport hereby represents and warrants that:
a) at present time that the issued capital of Cyberport
consists of 1,000 common shares only,
b) that at the time that the 865,559 Series "B" Special Shares as
described above are issued in accordance with this agreement
the said 1,000 common shares will be the only issued shares in
the capital of Cyberport,
c) that until such time as all of the said Series "B" Special
Shares are either redeemed by Cyberport or are exchanged by
the Claimants for stock in Tellurian, Cyberport will not
create or issue any further new shares having any priority to
the Series "B" Special Shares and will not issue any further
Series "B" Special Shares,
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d) that Tellurian is the sole shareholder of Cyberport,
e) that Stuart French, David Turner and Michael Turner are the
current directors of Cyberport,
f) that Michael Hurd is the President, Stuart French is the
Vice President and David Turner is the Secretary of
Cyberport,
g) that David Turner is authorized on behalf of Cyberport to
execute this agreement and that it shall be a binding
obligation of Cyberport,
h) A solicitor's opinion regarding the validity of Cyberport's
actions herein will be provided on closing,
i) a Certificate of Incumbency will be provided on closing,
and
j) the Board of Directors of Cyberport shall be increased from
three to five and the Claimants shall be entitled to appoint
two persons to the Board to hold office until such time as all
of the Series "B" Special Shares held by the Claimants have
been redeemed or are exchanged for stock in Tellurian. The two
nominated directors by the Claimants shall be Canadian
residents.
11. Tellurian hereby represents and warrants:
a) the only issued and authorized stock in the company is
common stock, all of which have the same rights and
privileges and are the same stock described in this
agreement,
b) that Stuart French, Richard Swallow, Ronald Swallow, James
Lin and Peter Colgan are the current directors of
Tellurian,
c) that Stuart French is the President, Ronald Swallow is
Vice-President, Michael Hurd is Vice-President and Richard
Swallow is Secretary of Tellurian,
d) that Michael Hurd is authorized on behalf of Tellurian to
execute this agreement and that it shall be binding
obligation of Tellurian,
e) a Certificate of Incumbency will be provided on closing,
and
f) an attorney's opinion regarding the validity of Tellurian's
actions herein shall be provided on closing.
12. Time is of the essence of this agreement.
13. This agreement supersedes and takes the place of any and all
prior agreements entered into by the parties. It is agreed that
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<PAGE>
there is no representation, warranty, collateral agreement or condition
affecting this agreement except as expressed in it.
14. No change or modification of this agreement shall be valid unless it be
in writing and signed by each party hereto.
15. This agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario, Canada.
16. This agreement shall enure to the benefit of and be binding upon the
respective heirs, executors, administrators, successors and assigns of
the parties hereto.
17. For the convenience of the parties hereto, this Agreement may be
executed in one or more counterparts, and transmitted by facsimile
transmission, each of which shall be deemed to be an original for all
purposes and shall constitute one agreement, binding on all parties.
18. In order to be binding, this agreement must be signed by all parties,
and Broderick and Associates (on behalf of the Claimants) and
Blackadder, Green, Marion, Halinda and Wood (on behalf of Cyberport and
Tellurian) each having a facsimile copy evidencing each party's
signature, on or before March 26, 1998 at 10 am, otherwise this
agreement shall be null and void.
19. This settlement shall be effected on March 26, 1998 at which time all
documents described herein shall be exchanged by the parties. At such
closing the Claimants are also to receive from 1174757 all documents
and security agreed upon as between those parties with respect to the
Claimants assignment of $1,000,000.00 of their debt to 1174757.
20. The Claimants all agree that all of the shares to be issued to them
pursuant to this agreement contained in one share certificate and shall
be engrossed in favour of "Phoenix Wood Products Corporation in Trust
and Newman Bros. Limited in Trust".
IN RECOGNITION OF THE ABOVE, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date set out beside
their respective signatures.
CYBERPORT NIAGARA INC.
Per:
Date:March 26, 1998 /s/ David Turner
---------------------------------------
Name/Title: David Turner/Secretary
I have the authority to bind the
Corporation
5
<PAGE>
TELLURIAN, INC.
Per:
Date: March 26, 1998 /s/ Michael Hurd
---------------------------------------
Name/Title: Michael Hurd/Vice President
I have the authority to bind the
Corporation
NEWMAN BROS. LIMITED
Per:
Date: March 26, 1998 /s/ David Bennett
---------------------------------------
Name/Title:David Bennett/President
I have the authority to bind the
Corporation
PHOENIX WOOD PRODUCTS CORPORATION
Per:
Date: March 26, 1998 /s/ William Diggan
---------------------------------------
Name/Title:William Diggan/President
I have the authority to bind the
Corporation
STAR TILE CENTRE LIMITED
Per:
Date: March 26, 1998 /s/ Hans Haltjes
---------------------------------------
Name/Title:Hans Haltjes/President
I have the authority to bind the
Corporation
ECCO ELECTRIC LIMITED
Per:
Date: March 26, 1998 /s/ William Heelis
---------------------------------------
Name/Title:William Heelis/
Authorized Solicitor
I have the authority to bind the
Corporation
6
<PAGE>
DBN DRYWALL & ACOUSTICS LIMITED
Per:
Date: March 26, 1998 /s/ Ron Grossi
---------------------------------------
Name/Title: Ron Grossi, President
I have the authority to bind the
Corporation
EXPOPLEX INCORPORATED
Per:
Date: March 26, 1998 /s/ William Diggan
---------------------------------------
Name/Title:William Diggan/Assignee of
Expoplex Incorporated
I have the authority to bind the
Corporation
7
<PAGE>
