As filed with the Securities and Exchange Commission on
April 6, 2000
SEC Registration No.___________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS
ISSUERS UNDER SECTION 12(b) or (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
UNICO, INCORPORATED
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(Name of Small Business Issuer in its Charter)
Arizona 86-0205130
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(State or Jurisdiction (IRS Employer Identification
of Incorporation) Number)
6475 Grandview Avenue
Magalia, California 95954
(530) 873-4394
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(Address, including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
Securities to be registered under Section 12(b) of the Act:
None None
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Title of each Class Name of each exchange on which
to be so registered each class is to be registered
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Securities to be registered under Section 12 (g) of the Act:
Common Stock, $0.10 par value
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(Title of Class)
Copies to:
Robert N. Wilkinson, Esq.
60 East South Temple, Suite 2002
Salt Lake City, Utah 84111
(801) 533-9645
Fax (801) 220-0625
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
PART I
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Item 1. Description of business.
General
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Unico, Incorporated was formed as an Arizona corporation on May 27, 1966.
It was incorporated under the name of Red Rock Mining Co., Incorporated. It
was later known as Industries International, Incorporated and I.I.
Incorporated before the name was eventually changed to Unico, Incorporated in
1979. Unico, Incorporated has engaged in various mining activities since its
inception. The names "Unico", "we", "our" and "us" used in this registration
statement refer to Unico, Incorporated.
On March 30, 1992, Unico entered into a Mining Lease and Option to
Purchase agreement with Deer Trail Development Corporation, with headquarters
in Dallas, Texas. Deer Trail Development Corporation is now known as Crown
Mines, L.L.C. This Mining Lease and Option to Purchase is referred to in this
registration statement as the "Deer Trail Lease". The Deer Trail Lease runs
for a period of 10 years, and covers 28 patented claims, 5 patented mill sites
and 171 unpatented claims located approximately 5 miles South of Marysvale,
Utah. It includes mine workings known as the Deer Trail Mine, the PTH Tunnel
and the Carisa and Lucky Boy mines. The property has not been mined since
1981.
During Unico's last 3 fiscal years ended February 29, 2000, Unico has
worked toward reopening the Deer Trail Mine. Unico has acquired the necessary
permits to commence mining activities, provided that the surface disturbance
from the mining activities does not exceed 5 acres for both mine and mill.
Unico plans to seek a permit for large scale mining operations. Since the
mine is located on both patented and unpatented claims, which are located
within a national forest, all permitting is done through both the State of
Utah and the U.S. Forest Service.
During the past 3 fiscal years, Unico has explored the Deer Trail
property, conducted a geological evaluation of the property, repaired old
mining equipment and Unico has upgraded the infrastructure of the mine by
installing pumping equipment, thousands of feet of pipe, and some new mining
track and mining timbers to prepare the way for new mining activities. The
only actual mining activities engaged in by Unico on the property have
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been for testing and evaluation purposes only.
Unico has acquired and moved materials onto the property site for
construction of an 8,000 square foot metal building to house a gold and silver
mill which Unico intends to erect on the property. Unico recently acquired an
ore screening plant which has been erected on the property. Unico recently
acquired an ore floatation plant which it intends to erect on site. Unico
also intends to erect a jaw crusher and ball mill on the property which are
necessary to crush ore.
Unico has also acquired a front end loader and a new air compressor and
other personal property which are necessary for its planned mining operations.
Unico may acquire or build a heavy media separator, which can be used to
process up to 400 tons of low grade ore per day.
Unico expects to commence active mining operations on the property in
approximately June 2000. It plans to commence its initial mining activities
by mining approximately 50 tons per day of massive sulfides. Unico hopes to
increase its mining activities soon after, provided that it can operate the
mine economically, and provided Unico is able to acquire other needed capital.
Unico intends to conduct mining and milling activities on site. Our
initial mining activities will focus on mining, crushing and milling ore into
lead concentrates and zinc concentrates which we will sell to other mining and
mineral companies. We will arrange for the lead concentrates and zinc
concentrates to be shipped to smelters or other locations designated by the
buyers.
Unico believes that there are a wide variety of sources for raw materials
needed in its proposed mining and milling operations, and that it will not be
dependent upon any one or few sources. Unico believes that there are a
variety of mining companies and other mineral companies that are potential
purchasers for the lead concentrates and zinc concentrates which Unico intends
to sell as the end product from its mining and milling operations. Unico does
not believe that it will be dependent on one or a few major customers for
sales of the lead and zinc concentrates.
The lead and zinc concentrates can be transported by either rail or
truck, and there are a variety of trucking companies that are willing and able
to transport zinc and lead concentrates to smelters or other places designated
by purchasers.
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Agreement to sell lead concentrates
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ASARCO Incorporated has offered to purchase lead concentrates from Unico
at the rate of approximately 100 tons per month through July 31, 2000 at its
East Helena, Montana smelter. ASARCO Incorporated drafted a proposed
agreement with Unico for this purpose. ASARCO Incorporated indicated it is
willing to sign the agreement once shipments of lead concentrates begin.
Smelting and Refining
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All of the smelting and refining of ore will be handled by other
companies. Smelters capable of handling the Deer Trail concentrates in the
U.S.A. include ASARCO in East Helena, Montana, for lead, gold and silver, and
Hayden, Arizona, for copper and gold, and Korea Zinc Co. in Sauget, Illinois.
Foreign smelters include the Caminco Lead and Zinc smelters in Trail, British
Columbia, Canada, the Doe Run smelter in Peru and one other smelter in Mexico.
Preliminary discussions with the Kennecott smelter and refining facility in
Magna, Utah for the high quality silver, gold and copper enriched quartz of
the 18 North fault as a silica flux source are in progress.
Dependence on Metal Prices
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Unico's mining activities will be largely dependent on metal prices. The
prices may fluctuate on the world commodity markets and will be beyond the
influence of Unico. A substantial reduction in the price of metals might
impede Unico's ability to economically mine or to raise additional capital.
The Deer Trail Mine Development Agreement
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On October 5, 1998 Unico entered into the Deer Trail Mine Development
Agreement with Guilderbrook, Inc. and Aurora Resources & Mining Corp.
Guilderbrook, Inc. is owned by Gilbert A. Windheim, one of Unico's principal
stockholders. Aurora Resources & Mining Corp. is owned by David F. Poisson
and his wife. Mr. Poisson has been a director and assistant secretary of
Unico since November 1999. The Deer Trail Mine Development Agreement was
entered into at a time when Unico was seriously delinquent in its obligations
under the Deer Trail Lease, and needed assistance with making both delinquent
lease payments and future lease payments. The Deer Trail Mine Development
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Agreement required Guilderbrook, Inc. to provide $60,000 to Unico in order to
pay past due lease payments and to provide $9,000 per month for future lease
payments. In exchange for these payments, Guilderbrook, Inc. is to receive
25% of the net profits from the future mining operations ore sales, including
all ore mined at the Deer Trail Mine.
The Deer Trail Mine Development Agreement obligates Aurora Resources &
Mining Corp. to provide the mine operations management along with the other
necessary additional equipment to begin mining operations at the Deer Trail
Mine. This is to be done with Aurora Resources & Mining Corp.'s financial and
additional capital equipment resources. In consideration for this
contribution, the Deer Trail Mine Development Agreement provided that Aurora
Resources & Mining Corp. was to receive 50% of the net profits from all mined
ore sales from the Deer Trail Mine.
The Deer Trail Mine Development Agreement provided that at a future time
when exercising the existing option under the Deer Trail Lease is appropriate,
Guilderbrook, Inc. is to pay 25% of the option price, Aurora Resources &
Mining Corp. is to pay 50% of the option price and Unico is to pay 25% of the
option price. The total option price is presently $4,000,000. In the event
that the option is exercised under the Deer Trail Lease, the full ownership
interests of the parties and the property, rights and privileges, and any net
smelter returns to be shared between the parties would then be own/shared on
the following basis:
* Unico - 25%
* Guilderbrook, Inc. - 25%
* Aurora Resources & Mining Corp. - 50%.
In the event that the option is exercised, Unico is to continue to be a
leaseholder and operator of the Deer Trail Mine property.
In February 1999, Unico issued 500,000 shares of its common stock to
Aurora Resources & Mining Co. in exchange for a 26% net profits interest under
the Deer Trail Mine Development Agreement. In October 1999, Aurora Resources
& Mining Corp. agreed to return to Unico the remaining 24% right to net
profits under the Deer Trail Mine Development Agreement. As a result, Unico
is now entitled to 75% of any net profits generated under the Deer Trail Mine
Development Agreement, and Guilderbrook, Inc. is entitled to the remaining 25%
of any net profits.
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Gold Forwarding Contracts
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Unico entered into four contracts for the advance payment of gold which
is to be delivered by Unico. The contracts total $166,000. These contracts
are all currently due and outstanding. A lawsuit has been filed against Unico
for breach of contract on the largest of these contracts, in which the
plaintiff are seeking $150,000 plus interest.
Employees
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Unico presently has 1 full time employee and 4 part-time employees.
Unico believes that when it commences mining operations in approximately June
2000, that it will increase its number of employees to approximately 25 full
time employees. In the event the mining operations are successful, additional
employees may be added in the future.
Governmental Regulation
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Mining and/or processing activities on the Deer Trail Mining claims are
subject to numerous permitting and environmental laws and regulations
administered by active federal, state, and local authorities, particularly the
Utah Division of Oil, Gas and Mining. Although Unico believes it already has
permits necessary to commence mining operations on the patented and unpatented
claims, Unico may be required to expand such permitting in order to fully
develop the property. In order to obtain expanded permits, it may be
necessary to gather and analyze baseline data, complete environmental
assessments or environmental impact statements with appropriate steps to
mitigate potential adverse impacts, and modify the proposed plans in order to
accommodate environmental impacts, all of which may take an indeterminate
amount of time to complete.
The mining operations are regulated under the jurisdiction of the Mine
Safety and Health Administration or "MSHA" to some degree to insure safe
operations. Without proper training of personnel and compliance to all MSHA
rules, the mine could be subject to heavy fines and closure. Presently Unico
has no outstanding citations and has complied with MSHA regulations and
maintains a good working relationship with MSHA. The mining operations are
subject to periodic inspections by MSHA which, depending on the outcome of an
inspection, could curtail production until any violations have been cured.
Item 2. Management's discussion and analysis or plan of operation.
Plan of operation
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During the next 12 months, our plan of operation consists of the
following:
- acquire a ball mill at a cost of approximately $30,000;
- pay an additional $55,000 for a heavy media separator and
a grinding circuit recently purchased by Unico;
- hire additional employees needed to commence mining
operations;
- commence mining operations in approximately June 2000;
- raise approximately $100,000 to $150,000 in additional funds.
Accomplishing our 12 month plan of operations is dependent on Unico
raising approximately $100,000 to $150,000 in equity or debt financing during
the next 2 to 3 months. Unico raised $155,000 in February 2000 from the sale
of 1,550,000 shares of Unico common stock. Much of these funds have been
spent acquiring equipment necessary for mining operations. Unico's current
cash will sustain operations only for 2 to 3 additional months if the newly
purchased equipment and the additional equipment which Unico expects to
purchase in the next 2 to 3 months is paid for with cash.
Management's discussion and analysis of financial condition and
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results of operations
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Liquidity and capital resources. Presently our liquid resources are
sufficient to pay the newly purchased equipment and for the additional
equipment we intend to acquire before commencing mining operations in June
2000. However, we are dependent on raising an additional $100,000 to $150,000
to pay for initial mining expenses and successfully implement our 12 month
business plan described above.
Our auditors have issued a "going concern" opinion in note 10 of our
audited financial statements, indicating we do not have
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established revenues sufficient to cover our operating costs and to allow us
to continue as a going concern. If we are successful in raising an additional
$100,000 to $150,000 in equity or debt capital in the next 2 to 3 months, we
believe that Unico will have sufficient funds to complete its planned
equipment purchases, commence mining operations, and meet operating expenses
until income from mining operations should be sufficient to cover operating
expenses.
We intend to seek additional capital from private sales of Unico's common
stock and, if necessary, from loans from our management. Ray Brown has
indicated that he may increase his existing loan balance to Unico by
approximately $50,000 if necessary to sustain operations. In the event income
from mining operations is delayed or is insufficient to cover operating
expenses, then Unico will need to seek additional funds from equity or debt
financing, for which we have no commitments.
Revenue. We have had no revenues from operations during the past two
fiscal years or since our last fiscal year ended February 29, 2000. We do not
anticipate generating any revenues from operations until approximately 2 to 3
months after we commence active mining operations.
Cost of operations. During the last several months Unico has spent
substantial funds on purchasing equipment and preparing the Deer Trail mine
for active mining operations which we intend to commence in June 2000. Unico
has ongoing monthly lease payments on the mine which have been, and are being,
paid by Guilderbrook, Inc., a company owned by a principal stockholder of
Unico. In exchange for the monthly mine lease payments, Guilderbrook, Inc.
will receive 25% of the net profits from mine operations subsequent ore sales.
Employees. Unico has 1 full time employee and 4 part time employees. We
anticipate that we will have approximately 10 full time employees when we
commence mining operations in June 2000, and that the number of employees will
increase to approximately 25 by late summer 2000.
Lease termination; option to purchase. Unico's existing lease agreement
for the Deer Trail mine expires May 31, 2002. We presently have an option to
purchase the mine for $4,000,000. In the event mining operations from the
mine are profitable, Unico will either need to obtain an extension of the
lease agreement or exercise the option to purchase the mine before May 31,
2002. No assurance can be given that the owner of the mine will extend the
lease. Unico presently does not have sufficient funds to
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exercise the option to purchase the mine, and no assurance can be given that
Unico will have sufficient funds to purchase the mine when the lease expires.
Item 3. Description of property.
Deer Trail Lease
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On March 30, 1992, Unico entered into the Deer Trail Lease with Deer
Trail Development Corporation which became effective on June 1, 1992. The
Deer Trail Lease covers 28 patented claims (approximately 525 acres), 5
patented mill sites (25 acres) and 171 unpatented claims (approximately 3,420
acres). The claims include workings known as the Deer Trail Mine, the PTH
Tunnel and the Carisa and Lucky Boy mines. This is an underground mine.
The term of the lease is for a period of 10 years with an initial term of
6 months and continuing as long as the minimum royalty is paid and Unico is in
compliance with the terms of the lease. Unico has agreed to use its best
efforts to mine and remove minerals from the property and has assumed annual
maintenance and tax obligations on the property estimated at approximately
$25,000 per year during the lease. Currently, the minimum royalty payment is
$8,000 per month, and increases to$10,000 per month in July 2000, and is
payable whether or not mining operations are being conducted. Lease
royalty-rentals are equal to 5% of gross receipts received by Unico from sales
of minerals from the lease, less transportation (mine to smelter), assaying,
weighing, treatment and special sampling charges, but not less than the
minimum royalty.
The lease terminates after 10 years on May 31, 2002, upon default by a
party, by mutual agreement or upon exercise of Unico's option to purchase.
Each party has agreed to bear its own costs of environmental, pollution,
aesthetic or legal liability imposed by any governmental or regulatory
authority and attributable to its ownership of claims. Unico has the option
to purchase the claims for $4,000,000 until May 31, 2002. The option price
initially was $1,000,000 from June 1, 1992 until May 31, 1995. It increased
to $2,000,000 from June 1, 1995 until May 31, 1999. It increased to
$4,000,000 on June 1, 1999. The lessor has an option to take a 5% gross
royalty as a carried interest in lieu of the cash option exercise price. This
royalty can be reduced by up to one-half by Unico's paying to one-half of the
cash option exercise price and one-half of the royalty payment.
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The Property
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The Deer Trail claims are located in the Tushar Mountains of East
Central, Utah in the Mount Baldy and Ohio Mining districts. They are located
on Deer Trail Mountain, approximately 5 miles South of Marysvale, Utah and are
accessible by a gravel county road which is in good condition.
The Deer Trail ore body was first discovered by deer hunters in 1878.
The ore body originally cropped out at the surface. It is estimated that
between 1878 and 1917, about 10,000 tons of ore were mined. A small mill was
installed in 1918, and between 1918 and 1923 the mine produced about 138,000
tons of predominately oxidized ore averaging 1.38 opt gold, 11.49 opt silver
and 3.26% lead. Zinc and copper were not recovered. In 1923, mining was
suspended when the workings encountered a fault that cut off the ore, and for
more than 20 years production was limited to drawing stopes and removing
pillars. In 1945, the PTH tunnel was started to explore for the faulted
extension of the Deer Trail ore body. The 3,400 ore body was encountered
unexpectedly by this tunnel and a total of 5,000 tons of ore averaging 2.84%
lead, 0.76% copper, 6.26% zinc, 15.17 opt silver and 0.19 opt gold were
shipped. By 1964, the PTH tunnel had intersected the offset part of the Deer
Trail ore body. From 1964 until 1981 this segment of the ore body produced
over 100,000 tons of unoxidized sulfide ore averaging 5% lead, 0.6% copper,
12% zinc, 15 opt silver, and 0.10 opt gold. The present working face is still
in ore.
The PTH Tunnel penetrates more than 10,000 feet with a developed network
of tunnels, shafts and raises at the 3,400 foot area and at the 8,000 foot
area and was mined extensively for gold and silver for about 20 years. The
timbered and ventilated tunnel includes more than two miles of track for ore
cars accessed through a covered entrance structure.
The mine facilities also include ore cars, battery operated engines, an
engine storage and charging house, a electric power substation, a miner's
locker room, a compressor building, a 1000 gallon underground gasoline storage
tank with gas pump, two front end loaders, three dump trucks and a general
office, lab and core sampling facility. Unico believes water is accessible to
the site.
The Deer Trail mining property was developed by the Deer Trail
Development Corporation, now known as Crown Mines, LLC, and is presently owned
by the same company, located in Dallas, Texas. The property has been leased
out several times since production
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ceased in 1981. There has been little production since then. Several major
mining companies have explored the property. These include Noranda, Phelps
Dodge and Goldfields. One smaller company drilled and analyzed the mill
tailings from the upper Deer Trail Mine area in 1990. The results of the
drilling and other tests were not conclusive, and at present there are no
known proven or probable reserves on the claims. Unico has no agreements or
commitments from smelters to receive ore.
Unico leased the property effective June 1, 1992 and has been actively
re-opening the mine since then. Unico has produced a few small lots of ore
from the stopes in the 8600 area of the PTH tunnel for testing and evaluation
purposes, and has developed several excellent targets within those workings.
Unico is presently developing the gold mineralization of the upper Deer Trail
area which contains the original workings. Plans consist of upgrading the
mine dumps and mineralized stope material by screening and further upgrading
by gravity concentration methods. At the same time Unico plans to gain access
to undeveloped ore bodies within the upper area.
Geological Information
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The Deer Trail mine workings expose westerly dipping sedimentary rocks of
three units: the Toroweap and Queantoweap Formations and the Callville
Limestone. The Deer Trail ore body is in the lower part of the Toroweap
Formation and consists of a nearly continuous group of semiconcordant
replacement bodies flanking a central vein. About half of this ore body is
exposed in the Old Deer Trail mine workings and is oxidized; the other half is
located in the 8600 area workings and consists of unoxidized sulphide ore.
The Queantoweap Formation, which underlies the Toroweap, is a quartzite and
hosts no known mantos. The underlying Callville Limestone contained the 3400
ore body.
The Toroweap Formation exposed in the 8600 area consists of a wide range
of interbedded lithologies, including quartzite, limestone, dolomite, shale,
and chert, which form 50 or more recognizable units ranging in thickness from
a inch to several feet. In contrast, the underlying Queantoweap Sandstone
consists of a fairly uniform medium-grained, well-sorted massive quartzite.
The Calville Limestone in the Deer Trail mine lacks marker beds, and
lithologic facies change rapidly. The rocks are cut by several faults of
unknown displacement. The marked lateral variations in lithology have made it
possible to identify only
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seven correatable stratigraphic assemblages. The upper 240 feet of the
Callville Limestone in the 3400 area consists dominantly of mudstones
containing quartz silt, evaporite nodules, and sponge spicules. Below 240
feet, dolomite containing microfossils and peloids is abundant and evaporites
are absent. In the 8600 area, the Callville has been observed in drill core
and there it contains thick beds of course-grained anhydrite.
The Toroweap Formation in the mine area strikes generally north-south and
dips 20degrees W. The Deer Trail ore body rakes across this inclination with
a bearing of N 70degrees W, so the average plunge of the ore zone into Deer
Trail Mountain is about 18 degrees.
The mantos in the Old Deer Trail mine workings closely followed the axis
of the Deer Trail anticline, a relationship that was used to guide
development. In the 8600 area, however, the mantos and the anticline axis
diverge and the deepest workings are about 1500 feet apart.
The Deer Trail ore body consists of a semicontinuous group of narrow,
elongate strata-bound replacement bodies developed adjacent to a central vein.
The ore body has a sinuous ribbon like shape in plain view and has been mined
for a length of approximately 5,525 feet over a width averaging 32 to 38 feet
and a height averaging about 15 to 30 feet.
A set of cross faults that trends east-northeast and dip steeply to the
north are exposed in the mine workings in the 8600 area. These have an
aggregate stratigraphic throw of about 150 feet, down to the north. One of
these faults is the 18 Drift fault or 18 North fault. These faults are now
occupied by quartz veins as much as 15 feet thick that contain substantial
quantities of lead, zinc, arsenic, silver, gold, copper and molybdennum. The
18 north fault consists of quartz with good values in gold, silver and copper
with very little other metals which could possibly be marketed to smelters as
a flux.
Mine Workings
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The mine workings at the Deer Trail consist of the upper Old Deer Trail
mine workings and the PTH tunnel mine workings. The Old Deer Trail mine
consists of three levels, approximately 100 vertical feet apart. The first
level was first accessed from the surface through the discovery shaft of 1878,
with several adits interconnecting from the surface. The second level or the
No. 2 Tunnel level is accessed through one known tunnel and consists of
several large stopes interconnected with a series of drifts,
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winzes, and raises. The third level or the No. 3 Tunnel level was used as a
haulage tunnel and was the main level of the Old Deer Trail mine. It consists
of drifts and raises all accessed by 18" narrow gauge track. The present
workings are only partially accessible. Many drifts have caved. All three
levels are interconnected allowing for good ventilation.
The PTH Tunnel workings underlie the Old Deer Trail workings by
approximately 450 feet and accessed 4,000 feet to the south. The PTH Tunnel
was started in 1945 to intersect the faulted Deer Trail ore body. It is a
5'x7' tunnel that extends over 10,000 feet into Deer Trail Mountain. Almost
all areas of these workings are accessed by 18" narrow gauge track. The
tunnel trends to the north-northwest paralleling the base of Deer Trail
Mountain. At approximately 3,400 feet the tunnel intersected unexpectedly
mineralization in the Callville Limestone. This mineralization was developed
on the PTH Tunnel level as well as two levels below 100 vertical feet apart.
Bedded mineralization associated with the Wet Fault was produced via a series
of drifts, winzes, stopes and raises. A ventilation/escape shaft was driven
to the surface in this area. The tunnel next encountered mineralization at
approximately 8,600 feet, where the tunnel encountered the continuation of the
Deer Trail ore body. Several thousand feet of drifts was driven to explore
and exploit the deposit. An internal shaft was driven 250 feet to gain access
to the shallowing dipping ore where three more levels were established. Again
several hundred feet of drifts, stopes, raises and winzes were driven to mine
the ore body.
Water was encountered in the 280 winze and pumps were installed in order
to continue mining. Mining was stopped in 1981 due to lack of processing and
smelting facilities. The present face in the 280 area is still in ore. The
width of the face was increasing as well as the value of the ore. A raise to
connect the PTH workings with the Old Deer Trail Mine was started located
approximately where the PTH Tunnel crossed the 18 North fault. It is
presently up 140 feet.
Mineral Resources
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The resources have been outlined above. However, further efforts to
increase the mineable resources of the mine are being explored. Further
drilling to prove up known resources are contemplated as well as ways to mine
more efficiently in order to mine lower grade ores at a profit. One such
method is now under review. The use of a heavy media separator could
significantly increases mineable reserves. The heavy media separator is a
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method whereby low grade material can be upgraded underground for less than
$2.50 per ton. Areas left undeveloped in the mine due to the amount of waste
rock between narrow mineralized beddings might effectively be produced by
using heavy media separator technology.
The Deer Trail deposit is similar to many deposits in Utah, such as
Tintic and Park City, where mine reserves were drilled approximately two years
ahead of production due to the nature of the deposits and the costs involved
in drilling out entire reserves before mining began. It is planed that
reserves in the Deer Trail will be established two to three years ahead of
production. Exploration drilling will be conducted in conjunction with mine
production. Several prospective targets will be drilled from underground as
the workings advance.
To date only two known mineralized horizons have been exploited. Unico
believes the underlying formations contain very favorable horizons for
mineralization. But they have yet to be tested. Unico believes the potential
is excellent that more mineralization will be discovered.
Item 4. Security ownership of certain beneficial owners and management.
The following table describes, as of March 21, 2000, certain information
with respect to the beneficial ownership of our common stock by:
* each person known by us to beneficially own more than 5% of our
common stock,
* each of our officers or directors, and
* all of our officers and directors as a group.
Amount and nature Percentage of
of beneficial ownership common stock
----------------------- --------------
Gilbert A. Windheim 3,400,000 6.76%
Ray C. Brown 4,000,000 7.96%
Kiyoshi Kasai 645,000 1.28%
Kenneth R. Brown -0- 0.00%
David F. Poisson 500,000 1.00%
Walter W. Harpst 500,000 1.00%
C. Wayne Hartle 1,372,000 2.73%
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Each of the officers and directors has sole voting and investment power
over the shares listed in the table as being beneficially owned by him except:
* The amount listed as being beneficially owned by Ray C. Brown
excludes an additional 45,000 shares as to which Mr. Brown
disclaims ownership.
* 22,000 of the shares listed as being beneficially owned by Kiyoshi
Kasai are owned of record by his wife, Fumiko Kasai
* 150,000 of the shares listed as being beneficially owned by
Kiyoshi Kasai are owned of record by the Kasai Family Trust.
Kiyoshi Kasai is the trustee of the Kasai Family Trust, and has
sole voting and investment power over the shares held by the
Trust. The beneficiaries of the Kasai Family Trust are Kiyoshi
Kasai, his wife and their children.
* All 500,000 shares listed as being beneficially owned by David F.
Poisson are owned of record by Aurora Resources and Mining Co., a
privately held company owned by Mr. Poisson and his wife. Mr.
Poisson is president of Aurora Resources and Mining Co., and he
has sole voting and investment power over these shares.
* Of the shares listed as being beneficially owned by Gilbert A.
Windheim, 1,900,000 shares are held of record by Mr. Windheim,
500,000 shares are reportedly held by Mr. Windheim through stock
brokerage accounts in his name, and the remaining 1,000,000 shares
are subject to an option granted by Unico on August 28, 1997. The
option is exercisable by Mr. Windheim in whole or in part at any
time prior to August 28, 2002 at the exercise price of $0.10 per
share.
There are no warrants or options outstanding which are exercisable by any of
our officers and directors.
Item 5. Directors, executive officers, promoters and control persons.
The names and ages of all directors and executive officers of Unico and
all persons nominated or chosen to become directors and officers appear in the
table below:
14
<PAGE>
Name Age Position with Unico
- ---------------------- --- ---------------------------------
Ray C. Brown 77 President and chairman of board of
directors
Kiyoshi Kasai 81 Vice president and director
Kenneth R. Brown 42 Vice president, chief operating
officer and director
David F. Poisson 49 Assistant secretary and director
Walter W. Harpst 82 Treasurer and director
C. Wayne Hartle 62 Secretary and director
Ray C. Brown has been the president and director of Unico since 1983. He
is presently semi-retired. Mr. Brown served as the chairman of the board of
directors of Energy and Corrosion Research Corporation from 1979 to 1982. He
also served as president and as a director of Ecotech Corporation from 1971 to
1983. Mr. Brown served as president and as a director of Wasatch Mineral and
Construction Company from 1963 to 1971. He served as president and as a
director of Courtesy Finance Corporation from 1958 to 1963. Prior to 1958,
Mr. Brown served in various capacities with other financial institutions. Mr.
Brown attended the University of Utah majoring in banking and finance. Ray C.
Brown is the father of Kenneth R. Brown.
Kiyoshi Kasai has served as vice president and as a director of Unico
since 1987. Mr. Kasai is presently semi-retired. For over 35 years prior to
1987, Mr. Kasai worked as an engineer for various companies including Hughes
Helicopter, Litton Systems, Inc., Hoffman Electronics Corporation, RCA Service
Company, Convair Astronautics and other companies. Mr. Kasai attended U.C.
Berkeley and the Illinois Institute of Technology.
Kenneth R. Brown has served as a vice president, chief operating officer
and as a director of Unico since November, 1999. Kenneth R. Brown is
currently working as a broadcast engineer for E! Entertainment Television, and
is responsible for technical management of digital/analog broadcast equipment.
He has held this position since December, 1997. From 1994 until December
1997, Mr. Brown worked as a customer services manager for Utah Scientific. He
was formally trained in electronic technology at Utah Technical College. He
also has an associate degree in computer programing from Chapman University of
Edwards, California. Kenneth R. Brown is the son of Ray C. Brown.
15
<PAGE>
David F. Poisson has been an assistant secretary and director of Unico
since November, 1999. He is presently a project manager for Gibson
Construction of Nevada, a position which he has held since June, 1998. At
Gibson Construction, Mr. Poisson is responsible for the construction progress
and profitability of managing multiple projects contracted for that company.
From approximately February 1996 until June 1998, Mr. Poisson was a partner
and general manager of Aurora Iron Creations Company, an architectural iron
work company. From 1992 until late 1995, Mr. Poisson was vice president of
North Star Trading Company. He has had previous experience in various
construction related companies. He was previously involved with a family
owned coal mine in the Anthrasite Region of Pennsylvania. Mr. Poisson is
familiar with the initial start up of the Deer Trail Mine.
Walter W. Harpst has been treasurer of Unico since November 1999. Prior
to that he served as an assistant secretary of Unico since 1983. Mr. Harpst
has served as a director of Unico from 1983. Mr. Harpst is presently
semi-retired. He previously owned and operated a night club and golf course
in Palm Springs, California, and worked for over 40 years in the entertainment
industry as a musician, master of ceremonies and booking agent.
C. Wayne Hartle has served as the secretary and as a director of Unico
since 1990. Mr. Hartle owns and operates Wayne's Service Center, an
automobile repair and service business in Salt Lake City, Utah. Mr. Hartle is
the former chief financial officer of Energy and Corrosion Research Company
from 1979 to 1981. Mr. Hartle received a degree from Henagers Business
College in Salt Lake City, Utah.
Item 6. Executive compensation.
The following table describes compensation paid to Ray C. Brown as
Unico's chief executive officer as well as annual compensation of $100,000 or
more paid to any executive officer or director of Unico for services rendered
to Unico for the years ended February 28, 1998 and 1999 and February 29, 2000:
Year ended
February
Name and principal position 28 or 29 Salary Bonus
- --------------------------- ---------- ------ -----
Ray C. Brown
President and director 2000 $-0- $-0-
1999 $-0- $-0-
1998 $-0- $-0-
16
<PAGE>
Ray C. Brown was not paid any cash compensation during the years ended
February 28, 1998, 1999 and February 29, 2000. Mr. Brown has received the use
of an automobile owned by Unico during the last three fiscal years.
No officer or director of Unico has received total compensation of
$100,000 or more during any of the last three fiscal years of Unico. None of
our officers or directors has received any stock awards, options or warrants
to purchase any shares of Unico common stock during any of the past three
fiscal years.
Stock option plan
- ------------------
Unico has not adopted any stock option plan at this time. We reserve the
right to adopt a broad stock plan for officers, directors, employees and
consultants in the future.
Retirement plan
- ---------------
Unico has not adopted any retirement plan at this time. However, we may
establish a retirement plan for officers, directors and employees in the
future.
Health insurance plan
- ---------------------
Unico presently offers no health insurance benefit plans to its officers,
directors or employees. We reserve the right to offer health insurance
coverage in the future.
Item 7. Certain relationships and related transactions.
Since March 1, 1998, Unico has entered into the following significant
related party transactions:
1. Unico has received advances from three related parties; Wayne Hartle,
Ray C. Brown and Mr. Brown's mother-in-law, Maxine Worthen. Most of these
were entered into prior to March 1, 1998, but are still outstanding. However,
the amount owing to Ray C. Brown has been increased and reduced from time to
time as additional advances are made or as the balance is paid down. As of
December 31, 1999, Unico owed the amounts described below to the following
related parties:
* $603,322 to Ray C. Brown.
17
<PAGE>
* $ 61,245 to Wayne Hartle.
* $ 5,000 to Maxine Worthen.
Unico has imputed accrued interest on the advances at 10% per annum. The
advances are non-interest bearing and are due upon demand.
2. Prior to March 1, 1998, Unico advanced $29,100 to Richard Laga who
was then a director of Unico. The advance is non-interest bearing and is due
upon demand.
3. On February 1, 1999, Unico issued 4,000,000 shares to Ray C. Brown
in exchange for which Mr. Brown reduced the amount Unico owes him by $400,000.
Item 8. Description of securities.
Common stock
- -------------
Unico has authorized 100,000,000 shares of common stock, $.10 par value
per share, of which 50,266,712 shares of common stock are issued and
outstanding as of March 15, 2000. All presently outstanding shares of common
stock are validly issued, fully paid and non-assessable. The holders of
common stock do not and will not have any preemptive or other subscription
rights to subscribe for or purchase any additional securities issued by Unico
common stock nor will they have any redemption or conversion rights. Holders
of our common stock are entitled to one vote per share for each share of Unico
common stock owned of record by them. Unico does not have cumulative voting
rights.
The holders of Unico common stock are entitled to receive dividends,
when, as and if declared by the board of directors out of funds legally
available for payment of dividends. It is highly unlikely that dividends will
be paid by Unico in the foreseeable future on its common stock.
The holders of Unico common stock are entitled to receive on liquidation
of Unico, a pro rata distribution of the assets of Unico, subject to rights of
creditors and holders of any preferred stock then outstanding. At this time
there is no preferred stock authorized, issued or outstanding.
Shares eligible for future sale
- -------------------------------
18
<PAGE>
Unico has 50,266,712 shares of common stock outstanding as of March 15,
2000. Even though stock certificates representing approximately 28,045,294 of
these shares bear a restricted legend, Unico estimates that all of its
outstanding shares of common stock, except approximately 2,635,000 shares, are
available for resale under rule 144. In general, under rule 144 a person who
has satisfied a one year holding period, under certain circumstances, may sell
within any three-month period a number of shares which does not exceed the
greater of one percent of the then outstanding shares of that class of
securities or the average weekly trading volume in such shares during the four
calendar weeks prior to such sale. Rule 144 also permits, under certain
circumstances, the sale of shares without any quality or other limitation by a
person who is not an affiliate of Unico and who has satisfied a two year
holding period. Any sales of a substantial amount of Unico common stock in
the open market, under rule 144 or otherwise, could have a significant adverse
effect on the market price of Unico's common.
-----------------------------------------------------------------
PART II
-----------------------------------------------------------------
Item 1. Market price of and dividends on Unico's common equity and other
shareholder matters.
Market information
- --------------------
Our common stock is traded in the over-the-counter market and quoted on
the NASD's OTC bulletin board under the ticker symbol "UNCN". The shares are
thinly traded and a limited market presently exists for the shares. The
following table describes, for the respective periods indicated, the prices of
Unico common stock in the over-the-counter market, based on inter-dealer bid
prices, without retail mark-up, mark-down or commissions and may not
necessarily represent actual transactions. The quotations have been provided
by market makers in common stock and/or the National Quotation Bureau.
Quarter ended High bid Low bid
- ------------------------- -------------- ---------------
May 31, 1998 $.04 $.03
August 31, 1998 $.04 $.02
November 30, 1998 $.03 $.02
February 28, 1999 $.03 $.025
May 31, 1999 $.045 $.0275
August 31, 1999 $.04 $.03
19
<PAGE>
November 30, 1999 $.07 $.03
February 29, 2000 $.20 $.04
Number of Stockholders
- ----------------------
As of March 21, 2000 there were approximately 506 stockholders of record.
Because many of the shares are held in broker or street name, Unico believes
that it has significantly more than 506 beneficial stockholders.
Dividend information
- --------------------
We have not paid any dividends during the last two fiscal years or since
then. We currently intend to retain any earnings to finance the development
and expansion of our operations and do not anticipate paying cash dividends or
making any other distributions on our shares of common stock in the
foreseeable future. Our future dividend policy will be determined by our
board of directors on the basis of various factors, including our results of
operations, financial condition, business opportunities and capital
requirements.
Under Arizona state corporate law, no dividends may be paid if, after
giving effect to the dividends, either: (a) Unico would not be able to pay
its debts as they become due in the usual course of business; or (b) Unico's
total assets would be less than the sum of its total liabilities plus, unless
Unico's articles of incorporation provide otherwise, the amount that would be
needed, if Unico were to be dissolved at the time of the distribution, to
satisfy the preferential rights on dissolution of shareholders whose
preferential rights are superior to those receiving the dividend.
Item 2. Legal proceedings.
Except as described below, Unico is not:
* a party to any material pending legal proceedings;
* its property is not subject to any material pending legal
proceedings; and
* to the best of Unico's knowledge, no governmental authority or
other party has threatened or is contemplating the filing of any
material legal proceedings against Unico.
20
<PAGE>
1. On August 8, 1996, The Allen Ball and Connie Ball Living Trust
filed a lawsuit against Unico in the Third Judicial District Court in and for
Salt Lake County, State of Utah (Case No. 960905503) in which the trust sought
to collect approximately $286,000 plus accrued interest on a promissory note
from Unico. In September 1996 Unico filed its answer to the complaint
alleging that the promissory note had been paid in full through the issuance
of 151,512 shares of Unico common stock. Unico denies any liability. This
case has been inactive for approximately three years.
2. On February 9, 2000, a case was filed against Unico by Bill L.
Means, Sherman Milliner and Mary C. Milliner. The case was filed in Superior
Court, Maricopa County, State of Arizona (Case No. CV2000-002588). The
plaintiffs in this case are seeking $150,000 plus interest as the result of an
alleged breach of contract by Unico. The parties are presently in settlement
negotiations. In the event the settlement negotiations fail, Unico intends to
defend the lawsuit vigorously.
Item 3. Changes in and disagreements with accountants.
During our two most recent fiscal years ended February 29, 2000, or any
later interim period, Unico has not had a principal independent accountant or
an independent accountant on whom the principal independent accountant
expressed reliance in its report, resign, decline to stand for re-election, or
be dismissed.
Item 4. Recent sales of unregistered securities.
During the past three fiscal years ended February 29, 2000, Unico made
the following sales of securities which were not registered under the
Securities Act of 1933:
21
<PAGE>
Date Recipient No. of Shares Consideration Valuation
- ----- ---------- ------------- -------------- ----------
04/09/97 150,000 Debt $ 15,000
04/09/97 600,000 Services 60,000
05/09/97 Dan Suggs 30,000 Equipment 3,000
05/09/97 Joseph F. Gabriel 40,000 Cash 4,000
05/09/97 Joseph F. Gabriel 310,000 Services 31,000
08/28/97 Gilbert Windheim 900,000 Cash 90,000
08/28/97 Gilbert Windheim 100,000 Debt 10,000
08/28/97 Joseph F. Gabriel 150,000 Debt 15,000
11/03/97 Rell Frederick 30,000 Equipment 3,000
11/03/97 Joseph F. Gabriel 800,000 Cash 80,000
12/22/97 Dan Shuput 250,000 Services 25,000
12/22/97 Joseph F. Gabriel 250,000 Services 25,000
12/22/97 Curtis Coe 350,000 Services 60,000
04/06/98 Donald Patton 600,000 Debt 60,000
04/06/98 Eileen Suggs 400,000 Debt 40,000
02/01/99 Ray Brown 4,000,000 Debt 400,000
02/01/99 Aurora Resources 500,000 26% interest- 50,000
& Mining Co. Deer Trail Mine
Development
Agreement
02/01/99 Eben Loewenthal 250,000 Services 25,000
06/18/99 Richard & Leslie Kennedy 60,000 Services 6,000
06/18/99 Guy Price 60,000 Services 6,000
06/18/99 Rell Frederick 60,000 Services 6,000
06/18/99 Gilbert Windheim 400,000 Cash 40,000
10/22/99 Gilbert Windheim 500,000 Cash 50,000
02/14/00 David J. Capraro 1,550,000 Cash 155,000
* In addition to the share issuances described above, Unico
also issued warrants or options to:
- Gilbert A. Windheim - option to purchase up to 1,000,000
shares at $0.10 per share on or before 08/28/02
- David J. Capraro - option to purchase up to 1,550,000 shares
at $0.10 per share on or before 02/14/02.
All of the shares described above in the table were sold directly by Unico,
and no underwriters were involved in the transactions. Unico relied on
section 4(2) of the Securities Act of 1933 in making each sale of securities.
No advertising or general
22
<PAGE>
solicitation was employed in offering the shares. Each purchaser received
disclosure information concerning Unico. Each purchaser also had the
opportunity to investigate Unico and ask questions of its president and board
of directors. The securities were offered for investment purposes only and
not for the purpose of resale or distribution, and, in each instance, the
transfer of the shares was appropriately restricted by Unico.
Item 5. Indemnification of directors and officers.
The only statutes, charter provisions, by-laws, contracts or other
arrangements under which any controlling person, director or officer of Unico
is insured or indemnified in any manner against any liability which he may
incur in that capacity, are as follows:
A. Section 10-202 B. and sections 10-850 through 10-858 of the Arizona
Revised Statutes offer limitation of liability protection for officers and
directors and/or indemnification protection of officers, directors, employees
and agents of Unico, and provide as follows:
Section 10-202. Articles of incorporation and certificate of disclosure;
violation; classification.
B. The articles of incorporation may set forth:
1. A provision eliminating or limiting the liability of a director to
the corporation or its shareholders for money damages for any action taken or
any failure to take any action as a director, except liability for any of the
following:
(a) The amount of a financial benefit received by a director to
which the director is not entitled.
(b) An intentional infliction of harm on the corporation or the
shareholders.
(c) A violation of Section 10-833.
(d) An intentional violation of criminal law.
2. A provision permitting or making obligatory indemnification of a
director for liability, as defined in Section 10-850, to any person for any
action taken, or any failure to take any action, as a director, except
liability for any of the exceptions described in paragraph 1, subdivisions
(a), (b), (c) and (d) of this subsection.
23
<PAGE>
3. Any other provision, not inconsistent with law.
Section 10-850. Definitions
In this article, unless the context otherwise requires:
1. "Corporation" includes any domestic or foreign predecessor entity of
a corporation in a merger or other transaction in which the predecessor's
existence ceased on consummation of the transaction.
2. "Director" means an individual who is or was a director of a
corporation or an individual who, while a director of a corporation, is or was
serving at the corporation's request as a director, officer, partner, trustee,
employee or agent of another foreign or domestic corporation, partnership,
joint venture, trust, employee benefit plan or other entity. A director is
considered to be serving an employee benefit plan at the corporation's request
if the director's duties to the corporation also impose duties on or otherwise
involve services by the director to the plan or to participants in or
beneficiaries of the plan. Director includes the estate or personal
representative of a director.
3. "Expenses" includes attorney fees and all other costs reasonably
related to a proceeding.
4. "Liability" means the obligation to pay a judgment, settlement,
penalty or fine, including an excise tax assessed with respect to an employee
benefit plan, or reasonable expenses incurred with respect to a proceeding and
includes obligations and expenses that have not yet been paid by the
indemnified person but that they have been or may be incurred.
5. "Officer" means an individual who is or was an officer of a
corporation or an individual who, while an officer of a corporation, is or was
serving at the corporation's request as a director, officer, partner, trustee,
employee or agent of another foreign or domestic corporation, partnership,
joint venture, trust, employee benefit plan or other entity. An officer is
considered to be serving an employee benefit plan at the corporation's request
if the officer's duties to the corporation also impose duties on or otherwise
involve services by the officer to the plan or to participants in or
beneficiaries of the plan. Officer includes the estate or personal
representative of an officer.
6. "Official capacity" means, if used with respect to a
24
<PAGE>
director, the office of director in a corporation and, if used, with respect
to an officer as contemplated in Section 10-856, the office in a corporation
held by the officer. Official capacity does not include service for any other
foreign or domestic corporation or any partnership, joint venture, trust,
employee benefit plan or other entity.
7. "Outside director" means a director who, when serving as a director,
was not an officer, employee or holder of more than five percent of the
outstanding shares of any class of stock of the corporation or of any
affiliate of the corporation.
8. "Party" includes an individual who was, is or is threatened to be
made a named defendant or respondent in a proceeding.
9. "Proceeding" means any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative and
whether formal or informal.
Section 10-851. Authority to indemnify
A. Except as provided in subsection D of this section and in Section 10-854,
a corporation may indemnify an individual made a party to a proceeding because
either:
1. The individual is or was a director against liability incurred in the
proceeding if all of the following conditions exist:
(a) The individual's conduct was in good faith.
(b) The individual reasonably believed:
(i) In the case of conduct in an official capacity with the
corporation, that the conduct was in its best interests.
(ii) In all other cases, that the conduct was at least not
opposed to its best interests.
(c) In the case of any criminal proceedings, the individual had no
reasonable cause to believe the conduct was unlawful.
2. The director engaged in conduct for which broader indemnification has
been made permissible or obligatory under a provision of the articles of
incorporation pursuant to Section 10-202,
25
<PAGE>
subsection b, paragraph 2.
B. A director's conduct with respect to an employee benefit plan for a
purpose the director reasonably believed to be in the interests of the
participants in and beneficiaries of the plan is conduct that satisfies the
requirement of subsection A, paragraph 2, subdivision (a) of this section.
C. The termination of a proceeding by judgment, order, settlement or
conviction or on a plea of no contest or its equivalent is not of itself
determinative that the director did not meet the standard of conduct described
in this section.
D. A corporation may not indemnify a director under this section either:
1. In connection with a proceeding by or in the right of the corporation
in which the director was adjudged liable to the corporation.
2. In connection with any other proceeding charging improper financial
benefit to the director, whether or not involving action in the director's
official capacity, in which the director was adjudged liable on the basis that
financial benefit was improperly received by the director.
E. Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation is limited to reasonable
expenses incurred in connection with the proceeding.
Section 10-852. Mandatory indemnification
A. Unless limited by its articles of incorporation, a corporation shall
indemnify a director who was the prevailing party, on the merits or otherwise,
in the defense of any proceeding to which the director was a party because the
director is or was a director of the corporation against reasonable expenses
incurred by the director in connection with the proceeding.
B. Unless limited by its articles of incorporation, Section 10-851,
subsection D or subsection C of this section, a corporation shall indemnify an
outside director against liability. Unless limited by its articles of
incorporation or subsection C of this section, a corporation shall pay an
outside director's expenses in advance of a final disposition of a proceeding,
if the director furnishes the corporation with a written affirmation of
26
<PAGE>
the director's good faith belief that the director has met the standard of
conduct described in Section 10-851, subsection A and the director furnishes
the corporation with a written undertaking executed personally, or on the
director's behalf, to repay the advance if it is ultimately determined that
the director did not meet the standard of conduct. The undertaking required
by this subsection is an unlimited general obligation of the director but need
not be secured and shall be accepted without reference to the director's
financial ability to make repayment.
C. A corporation shall not provide the indemnification or advancement of
expenses described in subsection B of this section if a court of competent
jurisdiction has determined before payment that the outside director failed to
meet the standards described in Section 10-851, subsection A, and a court of
competent jurisdiction does not otherwise authorize payment under Section
10-854. A corporation shall not delay payment of indemnification or expenses
under subsection B of this section for more than sixty days after a request is
made unless ordered to do so by a court of competent jurisdiction.
Section 10-853. Advance for expenses
A. A corporation may pay for or reimburse the reasonable expenses incurred by
a director who is a party to a proceeding in advance of final disposition of
the proceeding if both of the following conditions exist:
1. The director furnishes the corporation with a written affirmation of
the director's good faith belief that the director has met the standard of
conduct described in Sections 10-851 or that the proceeding involves conduct
for which liability has been eliminated under a provision of the articles of
incorporation pursuant to Section 10-202, subsection B, paragraph 1.
2. The director furnishes the corporation with a written undertaking,
executed personally or on the director's behalf, to repay the advance if the
director is not entitled to mandatory indemnification under Sections 10-852
and it is ultimately determined under Sections 10-854 or 10-855 that the
director did not meet the standard of conduct.
B. The undertaking required in subsection A, paragraph 2 of this section is
an unlimited general obligation of the director but need not be secured and
may be accepted without reference to financial ability to make repayment.
C. Authorizations of payments under this section shall be made
27
<PAGE>
in a manner consistent with Sections 10-830 or 10-842.
D. This section does not apply to advancement of expenses to or for the
benefit of an outside director. Advances to outside directors shall be made
pursuant to Section 10-852.
Section 10-854. Court order indemnification.
Unless a corporation's articles of incorporation provide otherwise, a
director of the corporation who is a party to a proceeding may apply for
indemnification or an advance for expenses to the court conducting the
proceeding or to another court of competent jurisdiction. On receipt of an
application, the court after giving any notice the court considers necessary
may order indemnification or advance for expenses if it determines either:
1. The director is entitled to mandatory indemnification under Section
10-852, in which case the court shall also order the corporation to pay the
director's reasonable expenses incurred to obtain court order indemnification.
2. The director is fairly and reasonably entitled to indemnification in
view of all of the relevant circumstances, whether or not the director met the
standard of conduct set forth in Section 10-851 or was adjudged liable as
described in Section 10-851, subsection D, but if the director was adjudged
liable under Section 10-851, subsection D, indemnification is limited to
reasonable expenses incurred.
Section 10-855. Determination and authorization of indemnification
A. A corporation may not indemnify a director under Section 10-851 unless
authorized in the specific case after a determination has been made that
indemnification of the director is permissible in the circumstances because
the director has met the standard of conduct set forth in Section 10-851.
B. The determination shall be made either:
1. By the board of directors by a majority vote of the directors not at
the time parties to the proceeding.
2. By special legal counsel:
(a) Selected by majority vote of the disinterested directors.
28
<PAGE>
(b) if there are no disinterested directors, selected by majority
vote of the board.
3. By the shareholders, but shares owned by or voted under the control
of directors who are at the time parties to the proceeding shall not be voted
on the determination.
C. Neither special legal counsel nor any shareholder has any liability
whatsoever for a determination made pursuant to this section. In voting
pursuant to subsection B of this section, directors shall discharge their duty
in accordance with Section 10-830.
D. Authorization of indemnification and evaluation as to reasonableness of
expenses shall be made in the same manner as the determination that
indemnification is permissible, except that if the determination is made by
special legal counsel, authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under subsection B,
paragraph 2 of this section to select counsel.
Section 10-856. Indemnification of officers
A. A corporation may indemnify and advance expenses under this article to an
officer of the corporation who is a party to a proceeding because the
individual is or was an officer of the corporation as follows:
1. To the same extent as a director.
2. If the individual is an officer but not a director, to the further
extent as may be provided by the articles of incorporation, the bylaws, a
resolution of the board of directors, or contract except for:
(a) Liability in connection with a proceeding by or in the right of
the corporation other than for reasonable expenses incurred in connection with
the proceeding.
(b) Liability arising out of conduct that constitutes:
(i) Receipt by the officer of a financial benefit to which the
officer is not entitled.
(ii) An intentional infliction of harm on the corporation or
the shareholders.
(iii) An intentional violation of criminal law.
29
<PAGE>
B. Subsection A, paragraph 2 of this section applies to an officer who is also
a director if the basis on which the officer is made a party to the proceeding
is an act or omission solely as an officer.
C. An officer of a corporation who is not a director is entitled to mandatory
indemnification under Section 10-852, subsection A and may apply to a court
under Section 10-854 for indemnification or an advance for expenses, in each
case to the same extent to which a director is entitled to indemnification or
advance for expenses under those sections.
Section 10.857. Insurance
A corporation may purchase and maintain insurance, including
retrospectively rated and self-insured programs, on behalf of an individual
who is or was a director or officer of the corporation or who, while a
director or officer of the corporation, is or was serving at the request of
the corporation as a director, officer, partner, trustee, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust,
employee benefit plan or other entity, against liability asserted against or
incurred by the individual in that capacity or arising from the individual's
status as a director or officer, whether or not the corporation would have
power to indemnify or advance expenses to the individual against the same
liability under this article.
Section 10-858. Application of article
A. A provision that treats a corporation's indemnification of or advance for
expenses to directors and that is contained in its articles of incorporation,
its bylaws, a resolution of its shareholders or board of directors or a
contract or otherwise is valid only if and to the extent the provision is
consistent with this article. If articles of incorporation limit
indemnification or advances for expanses, indemnification and advances for
expenses are valid only to the extent consistent with the articles.
B. This articles does not limited a corporation's power to pay or reimburse
expenses incurred by a director in connection with the director's appearance
as a witness in a proceeding at the time when the director has not been made a
named defendant or respondent to the proceeding.
C. This article does not limit a corporation's power to indemnify, advance
expenses or maintain insurance on behalf of an employee or agent.
30
<PAGE>
B. Article IX of Unico's articles of incorporation provides for
indemnification of the officers, directors and stockholders of Unico. It
provides as follows:
ARTICLE IX
EXEMPTION OF PRIVATE PROPERTY
AND INDEMNIFICATION OF DIRECTORS
The private property of the incorporators, stockholders, directors and
officers of the corporation shall be forever exempt from its debts and
obligations; and no share of stock of any class shall ever be subject to
assessment or levy of any kind or character. The corporation shall indemnify
its officers, directors and stockholders from all liability of any type or
sort whatever, as may exist as a direct or indirect result of their status or
actions as such officer, director or stockholder, except as may arise due to
the gross negligence or willfull misconduct of any such person.
C. Unico has no provision in its by-laws which gives indemnification
rights to its officers, directors or controlling persons to protect against
liabilities that may arise against them in those capacities.
D. Unico has no directors and officers insurance or any other type of
insurance that insures its officers, directors or controlling persons against
liabilities that may arise against them in those capacities.
31
<PAGE>
-----------------------------------------------------------------
PART F/S - Financial statements
-----------------------------------------------------------------
UNICO, INC. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999 and February 28, 1999
<PAGE> 32
C O N T E N T S
Independent Auditors' Report............................... 3
Consolidated Balance Sheets.................................4
Consolidated Statements of Operations...................... 6
Consolidated Statements of Stockholders' Equity (Deficit)...7
Consolidated Statements of Cash Flows...................... 8
Notes to the Consolidated Financial Statements..............9
<PAGE> 33
JONES, JENSEN & COMPANY, LLC
Certified Public Accountants and Consultants
50 South Main Street, Suite 1450
Salt Lake City, Utah 84144
Telephone (801) 328-4408
Facsimile (801) 328-4461
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Unico, Inc. and Subsidiary
Magalia, California
We have audited the accompanying consolidated balance sheet of Unico, Inc. and
Subsidiary as of February 28, 1999 and the related consolidated statements of
operations, stockholders' equity (deficit), and cash flows for the years ended
February 28, 1999 and 1998. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects the financial position of Unico, Inc.
and Subsidiary as of February 28, 1999 and the results of their operations and
their cash flows for the years ended February 28, 1999 and 1998 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 10 to the
financial statements, the Company has not established revenues to cover its
operating costs, which raises substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also
described in Note 10. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/s/ Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
June 21, 1999
<PAGE> 34
UNICO, INC. AND SUBSIDIARY
Consolidated Balance Sheets
ASSETS
-------
December 31, February 28,
1999 1999
-------------- -------------
(Unaudited)
CURRENT ASSETS
Cash $ 86,837 $ 81,642
Taxes receivable 433 433
-------------- -------------
Total Current Assets 87,270 82,075
-------------- -------------
PROPERTY AND EQUIPMENT
Property and equipment - net (Note 4) 177,636 204,408
-------------- -------------
Total Property and Equipment 177,636 204,408
-------------- -------------
OTHER ASSETS
Advances to related parties (Note 8) 29,100 29,100
Refundable deposit 500 500
-------------- -------------
Total Other Assets 29,600 29,600
-------------- -------------
TOTAL ASSETS $ 294,506 $ 316,083
============== =============
<PAGE> 35
The accompanying notes are an integral part of these
consolidated financial statements.
4
UNICO, INC. AND SUBSIDIARY
Consolidated Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
--------------------------------------------
December 31, February 28,
1999 1999
-------------- -------------
(Unaudited)
CURRENT LIABILITIES
Accounts payable $ 36,084 $ 39,834
Accrued expenses 23,410 38,410
Advances from related parties (Note 7) 680,067 662,949
Notes payable (Note 5) 604,870 604,870
Accrued interest payable 472,779 377,036
Gold contracts payable (Note 6) 215,927 215,927
-------------- -------------
Total Current Liabilities 2,033,137 1,939,026
-------------- -------------
COMMITMENTS AND CONTINGENCIES (Note 11)
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, 100,000,000 shares authorized
at $0.10 par value; 48,677,712 and 47,597,712
shares issued and outstanding, respectively 4,867,771 4,759,771
Additional paid-in capital 170,052 170,052
Stock subscription receivable (100,000) (100,000)
Accumulated deficit (6,676,454) (6,452,766)
-------------- -------------
Total Stockholders' Equity (Deficit) (1,738,631) (1,622,943)
-------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 294,506 $ 316,083
============== =============
The accompanying notes are an integral part of
consolidated these financial statements.
5
<PAGE> 36
UNICO, INC. AND SUBSIDIARY
Consolidated Statements of Operations
<TABLE>
<CAPTION>
For the For the
Ten Months Ended Years Ended
December 31, February 28,
-------------------------- -------------------------
1999 1998 1999 1998
------------- ------------ ------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
REVENUES
Sales $ - $ - $ - $ -
------------- ------------ ------------ ------------
Total Revenues - - - -
------------- ------------ ------------ ------------
EXPENSES
General and administrative 99,449 186,541 245,693 348,872
Depreciation and amortization 30,272 23,328 28,238 31,505
------------- ------------ ------------ ------------
Total Expenses 129,721 209,869 273,931 380,377
------------- ------------ ------------ ------------
Loss from Operations (129,721) (209,869) (273,931) (380,377)
------------- ------------ ------------ ------------
OTHER INCOME (EXPENSES)
Investment income 1,776 817 817 3,165
Interest expense (95,743) (123,518) (145,257) (170,096)
Decline in value of assets - (109,310) (109,310) (142,500)
------------- ------------ ------------ ------------
Total Other Income (Expenses) (93,967) (232,011) (253,750) (309,431)
------------- ------------ ------------ ------------
LOSS BEFORE EXTRAORDINARY ITEMS (223,688) (441,880) (527,681) (689,808)
------------- ------------ ------------ ------------
EXTRAORDINARY ITEMS
Settlement of debt - - - 19,000
------------- ------------ ------------ ------------
Total Income from Extraordinary Items - - - 19,000
------------- ------------ ------------ ------------
NET LOSS $ (223,688) $ (441,880) $ (527,681) $ (670,808)
============= ============ ============ ============
BASIC LOSS PER SHARE
Net loss before extraordinary items $ (0.00) $ (0.01) $ (0.01) $ (0.02)
Extraordinary items - - - 0.00
------------- ------------ ------------ ------------
BASIC LOSS PER SHARE $ (0.00) $ (0.01) $ (0.01) $ (0.02)
============= ============ ============ ============
The accompanying notes are an integral part of these
consolidated financial statements.
6
</TABLE>
<PAGE> 37
<TABLE>
<CAPTION>
UNICO, INC. AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity (Deficit)
Common Stock Additional Stock
--------------------------- Paid-in Subscription Accumulated
Shares Amount Capital Receivable Deficit
------------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Balance, February 28, 1997 36,887,712 $ 3,688,771 $ 170,052 $ - $(5,254,277)
Common stock issued for
services rendered 1,760,000 176,000 - - -
Common stock issued for cash 1,740,000 174,000 - - -
Common stock issued in
payment of debt 400,000 40,000 - - -
Common stock issued for
acquisition of fixed assets 60,000 6,000 - - -
Stock subscription receivable 1,000,000 100,000 - (100,000) -
Net loss for the year ended
February 28, 1998 - - - - (670,808)
------------- ------------- ------------ ------------ ------------
Balance, February 28, 1998 41,847,712 4,184,771 170,052 (100,000) (5,925,085)
Common stock issued in
payment of debt 5,000,000 500,000 - - -
Common stock issued for
investment in mining properties 500,000 50,000 - - -
Common stock issued for
services rendered 250,000 25,000 - - -
Net loss for the year ended
February 28, 1999 - - - - (527,681)
------------- ------------- ------------ ------------ ------------
Balance, February 28, 1999 47,597,712 4,759,771 170,052 (100,000) (6,452,766)
Common stock issued for
services rendered (unaudited) 180,000 18,000 - - -
Common stock issued for
cash (unaudited) 900,000 90,000 - - -
Net loss for the ten months
ended December 31, 1999 (unaudited) - - - - (223,688)
------------- ------------- ------------ ------------ ------------
Balance, December 31, 1999
(unaudited) 48,677,712 $ 4,867,771 $ 170,052 $ (100,000) $(6,676,454)
============= ============= ============ ============ ============
The accompanying notes are an integral part of these
consolidated financial statements.
7
</TABLE>
<PAGE> 38
<TABLE>
<CAPTION>
UNICO, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
For the For the
Ten Months Ended Years Ended
December 31, February 28,
-------------------------- -------------------------
1999 1998 1999 1998
------------- ------------ ------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (223,688) $ (441,880) $ (527,681) $ (670,808)
Adjustments to reconcile net los to net cash
(used) by operating activities:
Stock issued for services 18,000 - 25,000 176,000
Settlement of debt - - - 19,000
Decline in value of assets - 154,000 109,310 142,500
Depreciation 30,272 23,327 28,238 31,505
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable and
related receivables - 169 219 (28,882)
(Increase) decrease in other assets - 49 - (500)
Increase in accounts payable and other
liabilities 76,993 178,258 209,979 196,762
------------- ------------ ------------ ------------
Net Cash (Used) by Operating Activities (98,423) (86,077) (154,935) (134,423)
------------- ------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash reserved for mining rights - - 94,690 -
Purchase of fixed assets (3,500) (4,000) (4,000) (16,100)
------------- ------------ ------------ ------------
Net Cash Provided (Used) by Investing
Activities (3,500) (4,000) 90,690 (16,100)
------------- ------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in notes payable - 58,079 - -
Increase in advances from related parties 19,250 68,587 83,744 -
Payments on advances from related parties (2,132) - - -
Issuance of stock for cash 90,000 - - 174,000
------------- ------------ ------------ ------------
Net Cash Provided by Financing Activities 107,118 126,666 83,744 174,000
------------- ------------ ------------ ------------
NET INCREASE IN CASH 5,195 36,589 19,499 23,477
CASH AT BEGINNING OF PERIOD 81,642 62,143 62,143 38,666
------------- ------------ ------------ ------------
CASH AT END OF PERIOD $ 86,837 $ 98,732 $ 81,642 $ 62,143
============= ============ ============ ============
CASH PAID DURING THE PERIOD FOR:
Interest $ - $ - $ - $ -
Income taxes $ - $ - $ - $ -
NON-CASH FINANCING ACTIVITIES
Issuance of stock for services $ 18,000 $ - $ 25,000 $ 176,000
Issuance of stock for mining properties $ - $ - $ 50,000 $ 6,000
Issuance of stock for debt $ - $ 100,000 $ 500,000 $ 40,000
The accompanying notes are an integral part of these
consolidated financial statements.
8
</TABLE>
<PAGE> 39
UNICO, INC. AND SUBSIDIARY
Notes to the Consolidated Financial Statements
December 31, 1999 and February 28, 1999
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Unico, Inc. (The Company) was organized under the laws of the State of Arizona
on May 27, 1966 under the name of I.I. Incorporated. The name was later
changed to Industries International, Incorporated, then Red Rock Mining Co.,
Inc. and finally Unico, Inc. The Company was incorporated for the purpose of
exploring and, if warranted, developing unpatented lode mining claims. The
Company is presently maintaining the claims through sampling, tunnel cleaning,
timbering, drill site preparation and drilling and other evaluation activities
while seeking financing for further exploration and development. The claims
are located in the Fishlake National Forest and title to the claims is held in
the name of the Company. To date, there has been no material production from
the claims and there are no known, proven or probable reserves.
HydroClear, Ltd., the Company's wholly-owned subsidiary, was organized for the
purpose of marketing water purification units used for purifying swimming pool
or cooling tower water by eliminating bacteria and algae without the use of
chlorine or bromine.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a February 28, year end.
b. Basic Loss Per Share
The computation of basic loss per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements.
For the For the
Ten Months Ended Years Ended
December 31, February 28,
1999 1998 1999 1998
----------- ----------- ----------- -----------
(Unaudited) (Unaudited)
Numerator:
Loss before extraordinary
items $ (223,688) $ (441,880) $ (527,681) $ (670,808)
Settlement of debt $ - $ - $ - $ 19,000
----------- ----------- ----------- -----------
Denominator (weighted
average number of
shares outstanding) 47,597,712 43,160,212 44,279,212 42,243,545
----------- ----------- ----------- -----------
Loss per share
Net loss before
extraordinary items $ (0.00) $ (0.01) $ (0.01) $ (0.02)
Settlement of debt $ - $ - $ - $ 0.00
----------- ----------- ----------- -----------
$ (0.00) $ (0.01) $ (0.01) $ (0.02)
Dilutive earnings per share is not presented due to their being no possibly
dilutive items.
9
<PAGE> 40
UNICO, INC. AND SUBSIDIARY
Notes to the Consolidated Financial Statements
December 31, 1999 and February 28, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
c. Provision for Taxes
At December 31, 1999, the Company had net operating loss carryforwards of
approximately $6,700,000 that may be offset against future taxable income
through 2019. No tax benefit has been reported in the financial statements,
because the Company believes there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax benefits of
the net operating loss carryforwards are offset by a valuation allowance of
the same amount.
d. Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
e. Principles of Consolidation
The consolidated financial statements include those of Unico, Inc. (The
Company) and its wholly-owned subsidiary, HydroClear, Ltd.
All significant intercompany accounts and transactions have been eliminated.
f. Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
g. Recoverability of Asset Costs
The Company assesses on an annual basis the recoverability of its investment
in mining rights. Any decline in value is recorded when recognized. Any sale
of assets is charged to asset costs until the cost has been recovered in full.
h. Unaudited Financial Statements
The accompanying unaudited financial statements include all of the adjustments
which, in the opinion of management, are necessary for a fair presentation.
Such adjustments are of a normal recurring nature.
i. Revenue Recognition Policy
The Company currently has no source of revenues. Revenue recognition policies
will be determined when principal operations begin.
10
<PAGE> 41
UNICO, INC. AND SUBSIDIARY
Notes to the Consolidated Financial Statements
December 31, 1999 and February 28, 1999
NOTE 3 - MINING CLAIMS AND LEASES
The Company received four Quit Claim Deeds, all dated August 5, 1986, from an
unrelated corporation for thirty-two (32) unpatented mining claims located in
Piute County, Utah. The mine was obtained in exchange for the issuance of two
million seven hundred thousand (2,700,000) shares of Company's common stock.
No cost basis has been ascribed to the mine.
On March 30, 1992 the Company entered into a ten-year Mining Lease-Option to
Purchase, to be effective June 1, 1992, of twenty-seven (27) patented claims
comprising 505.3 acres, six (6) patented mill sites with 30 acres and one
hundred thirty six (136) unpatented claims encompassing 2,720 acres located
near Marysvale, Utah. Required lease royalty-rentals are five percent (5%) of
gross receipts from mineral sales less certain specified operating costs but
not less than, initially, four thousand dollars ($4,000) per month. The
minimum monthly royalty increased by two thousand dollars ($2,000) in July
1994, and will increase again in July 1997 and July 2000. The option purchase
price is two million dollars ($2,000,000) until May 31, 1999, and four million
dollars ($4,000,000) until May 31, 2002, the end of the lease-purchase
agreement.
NOTE 4 - PROPERTY AND EQUIPMENT
Property and equipment are made up of furniture, fixtures and computer
equipment which are recorded at cost. Major additions and improvements are
capitalized and minor repairs are expensed when incurred.
Depreciation of property and equipment is determined using the straight-line
method over the expected useful lives of the assets as follows:
Description Useful Lives
------------- ------------
Automobiles 4 years
Lab equipment 10 years
Mining equipment 12 years
Fixed assets at December 31, 1999 and February 28, 1999 consisted of the
following:
December 31, February 28,
1999 1998
------------- ------------
(Unaudited)
Automobiles $ 39,048 $ 39,048
Mining equipment 320,600 317,100
Lab equipment 800 800
------------- ------------
Total fixed assets 360,448 356,948
Less accumulated depreciation (182,812) (152,540)
------------- ------------
Net Fixed Assets $ 177,636 $ 204,408
============= ============
Depreciation expense for the ten months ended December 31, 1999 and for the
year ended February 28, 1999 was $30,272 and $28,238, respectively.
11
<PAGE> 42
UNICO,NC. AND SUBSIDIARY
Notes to the Consolidated Financial Statements
December 31, 1999 and February 28, 1999
NOTE 5 - NOTES PAYABLE
Joint Venture
- -------------
The Company entered into a joint venture agreement with a limited partnership,
to finance, own and operate a mining operation and processing facility to be
built near Marysvale, Utah. The claims described in Note 3, above, were the
properties to be exploited. In exchange for a $25,000 capital contribution
and the claims mentioned, the Company received a twenty-five percent (25%)
interest in the ownership, profits, gains, losses, deductions and credits
derived from the Joint Venture.
However, in response to litigation initiated by the Company, a proposed
settlement terminating the Joint Venture was signed on June 30, 1994.
Provisions included the return of all mine interests, all improvements
thereto, the benefit of all payments, engineering, etc. and a fluorite
contract to the Company. According to the terms of the note, the Company is
obligated to pay $250,000 plus $36,000 plus interest at an annual rate of nine
percent (9%) in thirty-six (36) equal payments beginning in October 1994. The
Company issued 151,512 shares of its common stock as payment in full for the
$286,000. A lawsuit was filed against the Company in August 1996 to collect
the note. The Company filed its answer alleging it had satisfied the note by
issuing 151,512 shares of its common stock. The lawsuit has been inactive for
3 years. Additionally, the Company could be obligated to pay approximately
$580,000 from one-fourth of the net profit from future mine operations.
Operating/Management Agreement
- ------------------------------
The Company had contracted with SLC Environmental, LLC (SLC) to manage and
operate all of its mines, mining property and mining claims. In return for
SLC's services, the Company was to pay all costs incurred by SLC in operating
and managing the mines. Additionally, the Company was to pay SLC 15% of the
net profit, after taxes, from the operation and management of all projects
managed or operated by SLC. The Company has terminated the services of SLC as
of August, 1996.
NOTE 6 - GOLD DELIVERY CONTRACTS
On April 12, 1995, the Company entered into an agreement to deliver 36,364
ounces of gold at a price of $275 per ounce in exchange for an advance of up
to $10,000,000. Gold valued at an estimated $215,927, based upon the advances
received, was payable at December 31, 1999 and February 28, 1999. The Company
will be required to deliver 50% of its gold production on a monthly basis
until the full contract is met.
The Company entered into four contracts for the advance payment of gold which
is to be delivered by the Company according to the terms of the agreements.
The contracts which total to $166,000 allow the Company to collect $141,000,
net of commissions. The contracts call for the Company to deliver gold, in
increments of not less than one troy ounce, beginning six months from the
various purchase dates. These contracts are all currently due and
outstanding. The amount due under these contracts was calculated by the
ounces due under these contracts at the February 28, 1997 spot rate as
published in the Wall Street Journal.
12
<PAGE> 43
UNICO, INC. AND SUBSIDIARY
Notes to the Consolidated Financial Statements
December 31, 1999 and February 28, 1999
NOTE 7 - ADVANCES FROM RELATED PARTIES
The Company has advances from related parties at December 31, 1999 and
February 28, 1999 in the amounts of $680,067 and $662,949, respectively. The
advances are non-interest bearing and are due on demand. The Company has
imputed and accrued interest on the advances at 10% per annum. Interest
expense associated with these advances for the ten months ended December 31,
1999 and the year ended February 28, 1999 was $72,590 and $87,107,
respectively.
NOTE 8 - ADVANCES TO RELATED PARTIES
From time to time, the Company has advanced funds to entities owned by related
parties. The advances are non-interest bearing and due upon demand. The
balance due at December 31, 1999 and February 29, 1999 was $29,100.
NOTE 9 - DECLINE IN VALUE OF ASSETS
The Company issued 4,000,000 restricted common shares at $0.10 per share for
mining assets and an operating agreement for the Gold Button Mine located in
Wagoner, Arizona. The Company is not presently operating the mine due to an
order from the U.S. Forest Service regarding fire danger.
Due to the inability of the mine to produce revenues and the lack of
substantive evidence as to its net realizable value, the book value of the
operating agreement has been reduced to zero.
NOTE 10 - GOING CONCERN
The Company's consolidated financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. The Company has incurred losses from its inception
through December 31, 1999. It has not established revenues sufficient to
cover its operating costs and to allow it to continue as a going concern.
Management believes that the Company will soon be able to generate revenues
from its gold production sufficient to cover its operating costs. Currently
management has committed to cover all operating and other costs until
sufficient revenues are generated.
NOTE 11 - COMMITMENTS AND CONTINGENCIES
Litigation
- ----------
On August 8, 1996 the Allen Ball and Connie Ball Living Trust filed suit
against the Company. The suit is for the $286,000 and accrued interest as
summarized in Note 5. The Company has engaged counsel to defend itself in the
action.
In an action filed by the Mine Safety and Health Administration (MSHA) the
Company was assessed certain penalties as a result of citations issued by
MSHA. During January 2000, the Company settled with MSHA and is required to
pay penalties totaling $22,000. The penalties are to be paid in eight
installments of $2,750 beginning May 1, 2000 and continuing every six months.
13
<PAGE> 44
UNICO, INC. AND SUBSIDIARY
Notes to the Consolidated Financial Statements
December 31, 1999 and February 28, 1999
NOTE 11 - COMMITMENTS AND CONTINGENCIES (Continued)
On February 9, 2000, a case was filed in Superior Court, Maricopa County,
Arizona against the Company. The Plaintiffs are seeking $150,000 plus
interest as a result of an alleged breach of contract by the Company. The
parties are in settlement negotiations. In the event the settlement
negotiations fail, the Company intends to defend the lawsuit vigorously.
Commitments
- -----------
On October 5, 1998 the Company entered into a development agreement with
Guilderbrook, Inc. (NY Closely Held Corp.) whereby Guilderbrook, Inc. will
jointly provide necessary financial and management resources to retain the
Deer Trail Mine lease and to provide necessary equipment to put the mine into
productive operation. For this Guilderbrook, Inc. would receive 25% of the
net profits from the mine operations subsequent ore sales.
14
<PAGE> 45
- -----------------------------------------------------------------
PART III
- -----------------------------------------------------------------
Item 1. Index to exhibits.
Exhibit no. Description of exhibits
---------- -----------------------------------
3.1 Articles of incorporation
3.2 Amendment to articles of incorporation, dated
November 8, 1967
3.3 Amendment to articles of incorporation, dated
December 6, 1972
3.4 Amendment to articles of incorporation, dated
May 29, 1973
3.5 Amendment to articles of incorporation, dated
December 1, 1979
3.6 Amendment to articles of incorporation, dated
May 12, 1992
3.7 Amendment to articles of incorporation, dated
November __, 1999
3.8 By-laws
3.9 Board of directors' resolution amending Unico's
by-laws, dated April 1, 1992
10.1 Mining Lease and Option to Purchase dated March
20, 1992
10.2 Deer Trail Mine Development Agreement dated
October 5, 1998
10.3 Proposed ASARCO Incorporated agreement
27.1 Financial data schedule
Item 2. Description of exhibits.
Exhibit no. Description of exhibits Page no.
- ---------- -------------------------------- --------
3.1 Articles of incorporation
3.2 Amendment to articles of incorporation,
dated November 8, 1967
3.3 Amendment to articles of incorporation,
dated December 6, 1972
3.4 Amendment to articles of incorporation,
dated May 29, 1973
3.5 Amendment to articles of incorporation,
dated December 1, 1979
3.6 Amendment to articles of incorporation,
dated May 12, 1992
3.7 Amendment to articles of incorporation,
dated November __, 1999
3.8 By-laws
3.9 Board of directors' resolution amending
Unico's by-laws, dated April 1, 1992
10.1 Mining Lease and Option to Purchase
dated March 20, 1992
10.2 Deer Trail Mine Development Agreement
dated October 5, 1998
10.3 Proposed ASARCO Incorporated agreement
27.1 Financial data schedule
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
UNICO, INCORPORATED
Date: March 31, 2000 By: /s/ Ray C. Brown
-------------------------
Ray C. Brown
President
EXHIBIT 3.1
<Stamped: DKT 9872
PAGE 639
Dock 068 Page 313>
ARTICLES OF INCORPORATION
of
RED ROCK MINING CO., INCORPORATED
Know all men by these presents: That we, the undersigned, having
associated ourselves together for the purpose of forming a corporation under
and by virtue of the laws of the State of Arizona, hereby adopt the following
Articles of Incorporation:
ARTICLE I. Name. The name of this corporation is Red Rock Mining Co.,
Incorporated, and this corporation is organized under the laws of the State of
Arizona.
ARTICLE II. Principal Place of Business. The principal place of business
of this corporation is Nogales, Santa Cruz County, Arizona, but the
corporation may have such other offices or places of business within or
without the State of Arizona and anyplace in the world as may from time to
time be established by the Board of Directors of the corporation.
ARTICLE III. General Nature of Business (Objects and Purposes). The
general nature of the business and the objects and purposes for which this
corporation is established shall be
(a) To purchase, locate, lease, or otherwise acquire, mines, mining
claims, mining rights, and lands and any interest therein, and explore, work,
exercise, develop, and turn to account the same; to quarry, mine, smelt,
refine, dress, amalgamate, and prepare for market, ore metal and mineral
substances of all kinds, and to carry on any other operations or business
which may seem necessary, convenient, or incidental to any of the objects of
the company; to buy, sell, manufacture, and deal in minerals, plants,
machinery, implements, conveniences, provisions, and things capable of being
used in connection with the mining or other operations of this corporation, or
required by workmen and others employed by the company; to construct, carry
out, maintain, improve, manage, work, control, and superintend, any roads,
ways, railways, bridges, reservoirs, watercourses, aqueducts, wharves,
furnaces, mills, crushing works, hydraulic works, factories, warehouses, and
other works and conveniences which may seem necessary, convenient, or
incidental to any object of the company and to contribute to subsidize, or
otherwise aid or take part in any such operations.
(b) To engage in any business venture of any kind, whether by direct
action through this corporation or by contract with other corporations,
partnerships or persons in which the Board of Directors in its sole and
absolute discretion deems will be advantageous to this corporation.
(c) To acquire by purchase or lease, or otherwise, lands, interests
in lands and any and all kinds of real and personal property, and to own,
hold, improve, develop, manage, sell or otherwise dispose of same.
(d) To buy, sell, manufacture, distribute and generally deal in all
classes of goods, wares, merchandise and articles of trade and personal
property, and to carry on and conduct business in the United States, or
elsewhere, as factors, agents, commission merchants, dealers or merchants to
buy, sell, distribute or deal, at wholesale, merchandise, goods, wares,
products, personal property and commodities of any sort, kind or description.
(e) To do any and all things herein set forth as objects, purposes,
powers or otherwise, either alone or in conjunction with others.
(f) To have one or more offices and conduct business in any state,
territory, district of the United States or foreign country.
(g) To invest in, or purchase, or otherwise acquire stock of other
corporations, to form subsidiary corporations, to form and enter into
partnerships, limited partnerships or joint ventures with other corporations,
partnerships or persons.
(h) To mortgage, sell, lease or otherwise dispose of, or enter into
any contracts in connection with any lands, or interests in lands, and in
buildings or other structures and any stores, shops, rooms, or parts of any
buildings, or other improvements at any time owned or held by the corporation.
(i) To make, enter into, perform and carry out contracts of every
kind for any lawful purpose, without limit as to amount, with any person,
firm, association, corporation, government or governmental agency,
instrumentality, branch or subdivision.
(j) To act as agent, trustee, broker or in any other fiduciary
capacity.
(k) To borrow money and to issue bonds, debentures, notes, contracts
and other evidence of indebtedness or obligation, and from time to time for
any lawful purpose to mortgage, pledge and otherwise charge any or all of its
properties, property rights, privileges and assets to secure the payment
thereof. The objects and purposes hereinabove enumerated shall be construed
both as objects and as objects and powers of the corporation, but shall not be
deemed to be exclusive, and it is hereby expressly declared that all lawful
powers granted by the laws of the State of Arizona, or any state in which this
corporation may transact business or be licensed, not inconsistent herewith,
are hereby included and this corporation is specifically given the right to do
any and all the things herein set forth to the extent as natural persons might
or could do.
ARTICLE IV. Capital Stock. The authorized capital stock of the
corporation shall be $100,000.00, divided into 1,000 shares of common stock of
a par value of $100.00 per share. All stock shall be paid for at such times
as the Board of Directors may from time to time determine, but at all events
prior to issuance thereof. All or any portion of the capital stock may be
issued in payment for real or personal, corporeal or incorporeal property,
services or any other right recognized at law or thing of value, and when so
issued shall be and become fully paid and non-assessable, the same as if paid
for in cash. The Board of Directors shall be the sole judge of value of any
property, right or thing acquired by the corporation in exchange for capital
stock. No stockholder shall have pre-emptive rights as to any stock now or
hereafter authorized to be issued, but the issuance of stock shall be at the
sole discretion of the Board of Directors.
ARTICLE V. Incorporators. The names, residence, and post office
addressed of the incorporators are as follows:
Harry P. Mathieson, 3042 No. Federal Highway,
Fort Lauderdale, Florida.
Frank R. Cheatham,
Hazel L. Cheatham,
ARTICLE VI. Time of Commencement. The time of commencement of this
corporation shall be the day these articles are filed and recorded and the
termination thereof shall be 25 years thereafter, with the privilege of
successive renewal as provided by law so as to achieve perpetual succession.
ARTICLE VII. Conduct of Affairs. The affairs of this corporation shall
be conducted by a Board of Directors and such officers as the said directors
may from time to time appoint. The number of directors shall be designated by
the Bylaws and such number shall not be smaller than two nor greater than
seven. The directors need not be stockholders. The following named persons
shall constitute the first Board of Directors:
Harry P. Mathieson
Frank R. Cheatham
Thereafter the Board shall be elected at the regular annual meeting of the
stockholders which shall be held at Nogales, Arizona, or at such other place
within the State of Arizona as shall be determined by the Board of Directors,
on the second Monday of January of each year, commencing with the year 1967,
unless said day be a legal holiday, in which event the annual meeting of the
stockholders shall be held on the next succeeding business day.
ARTICLE VIII. Indebtedness. The highest amount of indebtedness or
liability, direct or contingent, to which the corporation is to at any time
subject itself is two-thirds of the authorized capital of this corporation or
any greater sum which may hereafter be permitted or provided by law.
ARTICLE IX. Exemption of Private Property. Private property of the
incorporators, stockholders, directors and officers of the corporation shall
be forever exempt from its debts and obligations, and no share of stock of any
class shall ever be subject to assessment or levy of any kind or character.
ARTICLE X. Statutory Agent. E. Leigh Larson, whose address is 513 Morley
Avenue, Nogales, Arizona, a bona fide resident of the State of Arizona for the
period of three years immediately preceding the date hereof, is hereby
appointed the agent of the corporation, upon whom all notices and processes,
including service of summons may be served, and the service upon such agent
shall be lawful personal service on the corporation. This appointment may be
revoked at any time by the filing of the appointment of another agent such as
provided by law.
IN WITNESS WHEREOF, we, the undersigned, have hereunto set our hands this
16th day of May, 1966.
/s/ Harry P. Mathieson
---------------------------
/s/ Frank R. Cheatham
---------------------------
/s/ Hazel L. Cheatham
---------------------------
STATE OF ARIZONA )
: ss.
COUNTY OF SANTA CRUZ )
On this the 16th day of May, 1966, before me the undersigned Notary
Public, personally appeared Harry P. Mathieson, known to me (or satisfactorily
proven) to be the person whose name is signed to the foregoing instrument, and
acknowledged that he executed the same for the purposes therein contained.
WITNESS my hand and official seal.
/s/ Laura De La Orsa
---------------------------
Notary Public
My commission expires:
December 9, 1969
- ------------------------
STATE OF ARIZONA )
: ss.
COUNTY OF SANTA CRUZ )
On this the 16th day of May, 1966, before me the undersigned Notary
Public, personally appeared Frank P. Cheatham and Hazel L. Cheatham, known to
me (or satisfactorily proven) to be the person whose name is signed to the
foregoing instrument, and acknowledged that they executed the same for the
purposes therein contained.
WITNESS my hand and official seal.
/s/ Laura De La Orsa
-----------------------------
Notary Public
My commission expires:
December 9, 1969
- -----------------------
<PAGE>
STATE OF ARIZONA
Corporation Commission
<Seal of The Arizona
Corporation Commission
appears here>
To all Whom These Presents shall Come, Greetings:
I, George S. Livermore, Secretary of the Arizona Corporation Commission,
do hereby certify that the annexed is a true and complete copy of the ARTICLES
OF INCORPORATION of RED ROCK MINING CO., INCORPORATED
which was filed in the office of the Arizona Corporation Commission on the
27th day of May, 1966, as provided by law.
IN WITNESS WHEREOF, I have hereunto set may hand and affixed the official
seal of the Arizona Corporation Commission, at the Capital, in the City of
Phoenix, this 27 day of May, A.D. 1966.
/s/ George S. Livermore
- -----------------------
Secretary
EXHIBIT 3.2
<Stamped: DOCK 087
page 669>
A CERTIFICATE OF AMENDMENT OF ARTICLES
OF INCORPORATION OF RED ROCK MINING CO.,
INCORPORATED
KNOW ALL MEN BY THESE PRESENTS:
HARRY P. MATHIESON, President, and Hazel L. Cheatham, Secretary, of the
above named corporation certify that:
The above named corporation was organized under the laws of the State of
Arizona on the 27th day of May, 1966.
The above named corporation upon the proposal of its board of directors
by resolution duly adopted by said board of directors setting forth the
proposed amendment and directing that it be submitted to a vote of the
shareholders entitled to vote in respect thereof at a designated meeting of
such shareholders and upon the adoption thereof by the shareholders at the
meeting as provided by law and as hereinafter more specifically set out, does
now hereby by Harry P. Mathieson, President, and Hazel L. Cheatham, Secretary,
execute and acknowledge that Article IV of the Articles of Incorporation is
amended to read as follows:
ARTICLE IV. Capital Stock. The authorized capital stock of the
corporation shall be One Million and No One-Hundredths Dollars ($1,000,000.00)
divided into One Million (1,000,000) shares of common stock of a par value of
One and No One-Hundredths Dollars ($1.00) per share. All stock shall be paid
for at such times as the Board of Directors may from time to time determine,
but at all events prior to the issuance thereof. All or any portion of the
capital stock may be issued in payment for real or personal, corporeal or
incorporeal property, services or any other right recognized at law or thing
of value, and when so issued shall be and become fully paid and nonassessable,
the same as if paid for in cash. The Board of Directors shall be the sole
judge of value of any property, right or thing acquired by the corporation in
exchange for capital stock. No stockholder shall have pre-emptive rights as to
any stock now or hereafter authorized to be issued, but the issuance of stock
shall be at the sole discretion of the Board of Directors.
The Board of Directors of the corporation, at a duly called meeting of
said board held on July 25, 1967, at Fort Lauderdale, Florida adopted said
resolution of articles of amendment of the articles of incorporation and
submitted the proposed amendment to a vote of the shareholders entitled to
vote thereon at a Special Meeting held on the 25th, day of July, 1967, at Fort
Lauderdale, Florida.
At the shareholders' meeting the shareholders entitled to vote in respect
of said amendment to the articles of incorporation, upon the call and notice
required by law, did adopt the above amendment by the affirmative vote of the
holders of at least a majority of the outstanding shares entitled to vote
thereon.
IN WITNESS WHEREOF, this certification is made by the corporation which
has caused the same to be executed by its President and attested by its
Secretary, who has also affixed the corporate seal hereto this 8th day of
November 1967.
/s/ Harry P. Mathieson
-------------------------
HARRY P. MATHIESON,
President
ATTEST:
/s/ Hazel L. Cheatham
- ------------------------
HAZEL L. CHEATHAM,
Secretary
STATE OF FLORIDA )
: ss.
COUNTY OF BROWARD )
On this, the 6th day of November, 1967, before me, the undersigned
officer, personally appeared HARRY P. MATHIESON who acknowledges himself to be
the President of Red Rock Mining Co., Incorporated, an Arizona Corporation,
and as such officer being authorized so to do, executed the foregoing
instrument for the purposes therein contained, by signing the name of the
corporation by himself as such officer.
In witness whereof, I hereunto set my hand and official seal.
/s/ illegible
-------------------
Notary Public
My Commission Expires:
November 15, 1971
- ----------------------
STATE OF ARIZONA )
: ss.
COUNTY OF SANTA CRUZ )
On this, the 8th day of November, 1967, before me, the undersigned
officer, personally appeared HAZEL L. CHEATHAM who acknowledges herself to be
the Secretary of Red Rock Mining Co., Incorporated, an Arizona Corporation,
and as such officer being authorized so to do, executed the
foregoing instrument for the purposes therein contained, by signing the name
of the corporation by herself as such officer.
In witness whereof, I hereunto set my hand and official sea1.
/s/ illegible
-----------------
Notary Public
My Commission Expires:
November 9, 1969
- ---------------------
<PAGE>
<Stamped: DOCK 087 PAGE 668>
STATE OF ARIZONA
Corporation Commission
<Seal of The Arizona
Corporation Commission
appears here>
To all Whom These Presents shall Come, Greetings:
I, George S. Livermore, Secretary of the Arizona Corporation Commission,
do hereby certify that the annexed is a true and complete copy of the
AMENDMENT to the ARTICLES OF INCORPORATION of
RED ROCK MINING CO., INCORPORATED
which was filed in the office of the Arizona Corporation Commission on the
16th day of November, 1967, as provided by law.
IN WITNESS WHEREOF, I have hereunto set may hand and affixed the official
seal of the Arizona Corporation Commission, at the Capital, in the City of
Phoenix, this 17 day of January, A.D. 1968.
/s/ George S. Livermore
- -----------------------
Secretary
<Stamped DKT 9872 PAGE 630>
EXHIBIT 3.3
CERTIFICATE OF CORPORATE RESOLUTION
AMENDING THE ARTICLES OF INCORPORATION OF
RED ROCK MINING CO., INCORPORATED
KNOW ALL MEN BY THESE PRESENTS:
- -------------------------------
That at a Special Meeting of the Stockholders of RED ROCK MINING CO.,
INCORPORATED, called and held at 1245 South Seventh Street, Phoenix, Arizona,
on the 20th day of November, 1972, at the hour of 9:00 o'clock, a.m., and call
of meeting having been duly waived, in writing, by Stockholders holding all of
the issued and outstanding shares of stock of the Corporation, the following
Articles of the Articles of Incorporation were, by affirmative vote of all the
issued and outstanding stock of the said Corporation, amended to read as
follows:
"ARTICLE I. The name of this Corporation shall be Industries
International, Incorporated."
"ARTICLE IV. The authorized capital stock of this Corporation shall
consist of ten million shares of common stock, $0.10 [PAR VALUE], said stock
to be paid for at such time and in such manner the Board of Directors may
designate. Such stock shall be issued as fully paid and shall be forever non-
assessable. The Judgment of the Board of Directors as to the value of the
property taken, or services rendered in exchange for stock, shall be
conclusive in the absence of fraud. No stockholder shall have pre-emptive
rights as to any stock now or hereinafter authorized to be issued, but the
issuance of stock shall be in the sole discretion of the Board of Directors."
IN WITNESS WHEREOF, said Corporation has caused this Certificate of
Amendment to the Articles of Incorporation to be executed by its President and
its Corporate Seal to be affixed and attested by its Secretary this 6th day of
December, 1972.
RED ROCK MINING CO., INCORPORATED
By: /s/ Ronald Matusek
------------------------------
Ronald Matusek, President
ATTEST:
By: /s/ Richard Steinke
--------------------------
Richard Steinke, Secretary
STATE OF ARIZONA )
: ss.
COUNTY OF PIMA )
On this 6th day of December, 1972, before me, the undersigned Notary
Public, personally appeared Ronald Matusek and Richard Steinke, President and
Secretary respectively, being duly authorized thereon to, and executed the
foregoing instrument for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the
day and year first above written.
/s/ illegible
---------------------
Notary Public
My Commission Expires:
7-11-74
- -----------------
<PAGE>
<Stamped: DKT 9872 Page 629>
STATE OF ARIZONA
Corporation Commission
<Seal of The Arizona
Corporation Commission
appears here>
To all Whom These Presents shall Come, Greetings:
I, George M. Dempsey, Secretary of the Arizona Corporation Commission, do
hereby certify that the annexed is a true and complete copy of the AMENDMENT
to the ARTICLES OF INCORPORATION of RED ROCK MINING CO., INCORPORATED changing
the name to
INDUSTRIES INTERNATIONAL, INCORPORATED
which was filed in the office of the Arizona Corporation Commission on the 7th
day of December, 1972, as provided by law.
IN WITNESS WHEREOF, I have hereunto set may hand and affixed the official
seal of the Arizona Corporation Commission, at the Capital, in the City of
Phoenix, this 7 day of December, A.D. 1972.
/s/ George M. Dempsey
- -----------------------
Secretary
<PAGE>
<Stamped
ARIZONA CORPORATION COMMISSION
Incorporation Division
FILED
DEC 7 1972
At 2:00 PM
Ronald Matusek
Address: 2924 Bloomfield
Phoenix Arizona 85029
By: Kay A. rogers, Secretary
George M. Dempsey>
STATE OF ARIZONA ) No. 16472
:ss
County of Maricopa )
I hereby certify that the within instrument was filed and recorded at
the request of Ronald Matusek, Dec 11 1972 in Docket 9872 on page 629-632.
Witness my had and official seal the day and year aforesaid.
/s/ <signature illegible>, County Recorder
--------------------------------------
Deputy Recorder
EXHIBIT 3.4
CERTIFICATE OF CORPORATE RESOLUTION
AMENDING THE ARTICLES OF INCORPORATION OF
INDUSTRIES INTERNATIONAL, INCORPORATED
KNOW ALL MEN BY THESE PRESENTS:
- -------------------------------
That at a Special Meeting of the Stockholders of Industries
International Incorporated, called and held at 4225 W. Glendale Avenue, Suite
#117, Phoenix, Arizona, on the 28th day of May, 1973, at the hour of 9:00
o'clock, a.m., and call of meeting have been duly waived, in writing, by
Stockholders holding all of the issued and outstanding shares of stock of the
Corporation, the following Articles of the Articles of Incorporation were, by
affirmative vote of all of the issued and outstanding stock of the said
Corporation, amended to read as follows:
"ARTICLE I. The name of this Corporation shall be I.I. Incorporated."
IN WITNESS WHEREOF, said Corporation has caused this Certificate of
Amendment to the Articles of Incorporation to be executed by its President and
its Corporate Seal to be affixed and attested by its Secretary this 29th day
of May, 1973.
INDUSTRIES INTERNATIONAL, INCORPORATED
By: /s/ Richard A. Steinke, President
---------------------------------
Richard A. Steinke, President
ATTEST:
By: /s/ Ronald C. Matusek
---------------------
Ronald C. Matusek, Secretary
STATE OF ARIZONA )
: ss.
COUNTY OF MARICOPA )
On this 29th day of May, 1973, before me the undersigned Notary Public,
personally appeared Richard A. Steinke and Ronald C. Matusek, President and
Secretary respectively, being duly authorized thereon to, and executed the
foregoing instrument for the purposes therein contained.
IN WITNESS WHEREOF, I have hereunder set my hand and official seal the
day and year first above written.
/s/ illegible
---------------------
Notary Public
My Commission Expires:
10-19-75
<PAGE>
STATE OF ARIZONA
Corporation Commission
<Seal of The Arizona
Corporation Commission
appears here>
To all Whom These Presents shall Come, Greetings:
I, George M. Dempsey, Secretary of the of Arizona Corporation Commission,
do hereby certify that the annexed is a true and complete copy of the
AMENDMENT to the ARTICLES OF INCORPORATION of INDUSTRIES INTERNATIONAL,
INCORPORATED of changing the name to
I. I. , INCORPORATED
which was filed in the office of the Arizona Corporation Commission on the
29th day of May, 1973, as provided by law.
IN WITNESS WHEREOF, I have hereunto set may hand and affixed the official
seal of the Arizona Corporation Commission, at the Capital, in the City of
Phoenix, this 29th day of May, A.D. 1973.
/s/ George M. Dempsey
- -----------------------
Secretary
<PAGE>
<Stamped
ARIZONA CORPORATION COMMISSION
Incorporation Division
FILED
MAY 29 1973
At 9:35 A.M.
INDUSTRIES INTERNATIONAL INCORPORATED
Address: 4225 W Glendale Ave.Suite 117
Phoenix Arizona 85021
By: Trudy Kringel, Secretary
George M. Dempsey>
STATE OF ARIZONA )
:ss
County of Maricopa )
I hereby certify that the within instrument was filed and recorded at
the request of Industries International Inc., May 29, 1973, 9 -50, in docket
10155 on page 998-1000. Witness my had and official seal the day and year
aforesaid.
/s/ <signature illegible>, County Recorder
--------------------------------------
Deputy Recorder
EXHIBIT 3.5
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
I. I. INCORPORATED
Pursuant to A.R.S. Section 10-0-59, 61, Arizona Business Corporations
Act, the undersigned corporation adopts the following Articles of Amendment to
its Articles of Incorporation:
1. Article I of the Articles of Incorporation of I. I. Incorporated is
repealed in its entirety, and the following Article I substituted therefore as
if it had been part of the original Articles of Incorporation:
ARTICLE I
NAME
The name of this corporation is UNICO, INCORPORATED.
2. Article VI of the Articles of Incorporation of I. I. Incorporated is
repealed in its entirety and the following Article VI substituted therefore as
if it had been part of the original Articles of Incorporation:
ARTICLE VI
TIME OF COMMENCEMENT
The time of commencement of this corporation is the day the original
Articles of Incorporation were filed. The period of its existence shall be
perpetual.
3. Article VII of the Articles of Incorporation of I. I. Incorporated
is repealed in its entirety, and the following Article VII substituted
therefore as if it had been part of the original Articles of Incorporation:
ARTICLE VII
CONDUCT OF AFFAIRS
The affairs of this corporation shall be conducted by a board of
directors and such officers as said board may from time to time appoint. The
number of directors shall be designated by the by-laws and such number shall
not be less than two (2) nor more than seven (7). The directors need not be
stockholders. The board of directors shall be elected at the annual meeting of
stockholders which shall be held at least once each year at such time and at
such place as shall be designated by the board of directors.
4. Article VIII of the Articles of Incorporation of I. I. Incorporated
is repealed in its entirety, and the fo1lowing Article VIII substituted
therefore as if it had been part of the original Articles of Incorporation:
ARTICLE VIII
INDEBTEDNESS
The amount of indebtedness the corporation shall be entitled to incur
shall be subject only to such limitations as shall be imposed by law.
5. Article IX of the Articles of Incorporation of I. I. Incorporated is
repealed in its entirety, and the following Article IX substituted therefore
as if it had been part of the original Articles of Incorporation:
ARTICLE IX
EXEMPTION OF PRIVATE PROPERTY
AND INDEMNIFICATION OF DIRECTORS
The private property of the incorporators, stockholders, directors and
officers of the corporation shall be forever exempt from its debts and
obligations; and no share of stock of any class shall ever be subject to
assessment or levy of any kind or character. The corporation shall indemnify
its officers, directors and stockholders from all liability of any type or
sort whatever, as may exist as a direct or indirect result of their status or
actions as such officer, director or stockholder, except as may arise due to
the gross negligence or willful misconduct of any such person.
The foregoing amendments to the Articles of Incorporation were duly and
regularly adopted by the stockholders of the corporation at a special meeting
held on October 22, 1979, pursuant to call and notice. On October 22, 1979,
there were 5,202,069 shares of the corporation outstanding. Each such share
was entitled to equal voting rights to all other outstanding shares. There
were present at the meeting, in person or by proxy, the holders of 3,334,350
shares, constituting a majority quorum of outstanding shares. As to each of
the foregoing amendments, there were 3,334,350 shares voted in favor of the
adoption thereof, and no shares voted against adoption thereof.
Dated this 1st day of December, 1979.
I. I. INCORPORATED
/s/ Walter L. Fitzpatrick
---------------------------
President
/s/ Paul F. Mosher
---------------------------
Asst. Secretary
STATE OF ARIZONA )
: ss.
COUNTY OF ARIZONA )
I, Harry Hall, a Notary Public, do hereby certify that on the 1 day of
Dec, 1979, personally appeared before me Walter Fitzpatrick and Paul Mosher,
who, being first duly sworn, declared that they are the President and
Secretary, respectively, of I. I. Incorporated, and that they signed the
foregoing document as President and Secretary thereof, and that the statements
contained therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 1 day
of Dec., 1979.
/s/ Harry Hall
-----------------------
NOTARY PUBLIC residing at:
My Commission Expires:
July 18-80
- ----------------
<PAGE>
<A.C.C. - INCORPORATING DIV.
RECEIVED
DEC 3 1979
DOCUMENTS ARE SUBJECT
TO REVIEW BEFORE FILING>
<069090-7
ARIZONA CORPORATION COMMISSION
INCORPORATING DIVISION
FILED
DEC 4 1979
AT 8:55 A.M. at request of
Walter L Fitzpatrick
Address: 350 W. Maryland Ave.
Phoenix Az 85013
by Frances Haag
GC Anderson Jr Secretary>
EXHIBIT 3.6
<Stamped:
AZ CORPORATION COMMISSION
FOR THE STATE OF ARIZONA
FILED
JUN 3 4 19 P.M. '92
069090-7>
ARTICLES OF AMENDMENT
to the
ARTICLES OF INCORPORATION
of
UNICO, INCORPORATED
Pursuant to the provisions of the Arizona Code, the undersigned
corporation adopts the following Articles of Amendment to its Articles of
Incorporation:
FIRST: The name of the corporation is Unico, Incorporated.
SECOND: Article IV of the Articles of Incorporation is amended in its
entirety in the manner prescribed by the Arizona Code so as to read as
follows:
ARTICLE IV. The authorized capital stock of this corporation
shall consist of fifty million shares of common stock, $0.10
par value, said stock to be paid for at such time and in such
manner as the Board of Directors may designate. Such stock
shall be issued as fully paid and shall be forever non- assessable.
The Judgment of the Board of Directors as to the value of the
property taken, or services rendered in exchange for stock,
shall be conclusive in the absence of fraud. No stockholder
shall have pre-emptive rights as to any stock now or hereinafter
authorized to be issued, but the issuance of stock shall be in
the sole discretion of the Board of Directors.
THIRD: The foregoing amendment was adopted by the vote of the
shareholders on May 10, 1992.
FOURTH: The number of shares of the Corporation outstanding at the time
of such adoption was 9,195,OOO; and the number of shares entitled to vote
thereon was 9,195,000. The only class of shares outstanding was Common Stock,
$.10 par value.
FIFTH: The number of shares voted for such amendment was 6,026,435; and
the number of shares voted against such amendment was 4,900. Three hundred
shares abstained.
SIXTH: The foregoing amendment does not effect an exchange,
reclassification or cancellation of shares.
SEVENTH. The amount of stated capital after the amendment is $919,500.
Dated this 12th day of May, 1992
UNICO, INCORPORATED
By /s/ Ray C. Brown
-----------------------------
Its President
and /s/ C. Wayne Hartle
-----------------------------
Its Secretary
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
I, Scott R. Jenkins, Notary Public, do hereby certify that on this
12th , day of May, 1992 personally appeared before me Ray C. Brown who being
by me first duly sworn, declared that he is the President of Unico,
Incorporated, that he signed the foregoing document as President of the
Corporation, and that the statements therein contained are true.
By /s/ Scott R. Jenkins
- ---------------------------
Notary Public
Residing at: SLC, UT
--------------
My Commission Expires:
8-7-92
- -------------------
<PAGE>
EXHIBIT 3.7
<Stamped:
AZ CORPORATION COMMISSION
FOR THE STATE OF ARIZONA
FILED
1999 NOV 9 A 9:04
<signature illegible>
11-9-99
0069090-7>
ARTICLES OF AMENDMENT
to the
ARTICLES OF INCORPORATION
of
UNICO, INCORPORATED
Pursuant to the provisions of the Arizona Code, the undersigned
corporation adopts the following Articles of Amendment to its Articles of
Incorporation:
FIRST: The name of the corporation is Unico, Incorporated
SECOND: Article IV of the Articles of Incorporation is amended in its
entirety in the manner prescribed by the Arizona Code so as to read as
follows:
ARTICLE IV. The authorized capital stock of this corporation
shall consist of one hundred million shares of common stock,
$0.10 par value, said stock to be paid for at such time and
in such manner as the Board of Directors may designate. Such
stock shall be issued as fully paid and shall be forever non-
assessable. The Judgment of the Board of Directors as to the
value of the property taken, or services rendered in exchange
for stock shall be conclusive in the absence of fraud. No
stockholder shall have pre-emptive rights as to any stock now
or hereinafter authorized to be issued, but the issuance of
stock shall be at the sole discretion of the Board of Directors.
THIRD: The foregoing amendment was adopted by the vote of the
shareholders on November 4, 1999.
FOURTH. The number of shares of the Corporation outstanding at the time
of such adoption was 48,177,712; and the number of shares entitled to vote
thereon was 48,177,712. The only class of shares outstanding was Common Stock,
$.10 par value.
FIFTH: The number of shares voted for such amendment was 27,448,107. and
the number of shares voted against such amendment was -0-. One thousand three
hundred fifty shares abstained.
SIXTH: The foregoing amendment does not effect an exchange,
reclassification or Cancellation of shares.
EXHIBIT 3.8
BY-LAWS
RED ROCK MINING CO., INCORPORATED
Article I. Offices
The principal office of the corporation in the State of Arizona shall be
located in the City of Nogales, County of Santa Cruz. The corporation may
havo such other offices, either within or without the State of Arizona, as the
Board of Directors may designate or as the business of the corporation may
require from time to time.
Article II. Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders shall
be held on the second Monday in the month of January of each year, beginning
with the year 1967, at the hour of 10:00 o'clock A. M., for the purpose of
electing directors and for the transaction of such other business as may come
before the meeting. If the day fixed for the annual meeting shall be a legal
holiday, such meeting shall be held on the next succeeding business day. If
the election of directors shall not be held on the day designated herein for
any annual meeting of the shareholders, or at any adjournment thereof, the
board of directors shall cause the election to be held at a special meeting of
the shareholders as soon thereafter as conveniently may be.
Section 2. Special Meetings. Special meetings of the shareholders, for
any purpose or purposes, may be called by the president or by the board of
directors, and shall be called by the president at the request of the holders
of not less than one-fifth of all the outstanding shares of the corporation
entitled to vote at the meeting.
Section 3. Place of Meeting. The board of directors may designate any
place, either within or without the State of Arizona, as the place of meeting
for any annual meeting or for any special meeting called by the board of
directors.
Section 4. Notice of Meeting. Written or printed notice stating the
place, day and hour of the meeting and, in case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not
less than ten nor more than forty days before the date of the meeting, either
personally or by mail, by or at the direction of the president, or the
secretary, or the officer or persons calling the meeting, to each shareholder
of record entitled to vote at such meeting. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail, addressesd to
the shareholder as it appears on the stock transfer books of the corporation,
with postage thereon prepaid.
Section 5. Closing of Transfer Books or Fixing of Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of the shareholders or any adjournment thereof, or shareholders
entitled to receive payment of any dividend, or in order to make a
determination of shareholders for any other proper purpose, the board of
directors of the corporation may provide that the stock transfer books shall
be closed for a stated period but not to exceed, in any case, thirty (30)
days. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of the
shareholders, such books shall be closed for at least ten days immediately
preceding such meeting. In lieu of closing the stock transfer books, the
board of directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more than
thirty days and, in case of a meeting of shareholders, not less than ten (10)
days prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If the stock transfer books
are not closed and no record date is fixed for the determination of
shareholders entitled to notice of or to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the board of directors declaring such dividend is adopted, as
the case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof except where the
determination has been made through the closing of stock transfer books and
the stated period of closing has expired.
Section 6. Voting Lists. The officer or agent having charge of the stock
transfer books for shares of the corporation shall make, at least ten (10)
days before each meeting of the shareholders, a complete list of the
shareholders entitled to vote at such meeting, or any adjournment thereof,
arranged in alphabetical order, with the address of, and the number of shares
held by, each, which list, for a period of ten (10) days prior to such
meeting, shall be kept on file at the registered office of the corporation and
shall be subject to inspection by any shareholder at any time during usual
business hours. Such list shall also be produced and kept open at the time
and place of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting. The original stock transfer
book shall be prima facie evidence as to who are the shareholders entitled to
examine such list or transfer books or to vote at any meeting of shareholders.
Section 7. Quorum. A majority of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. If less than a majority of
the outstanding shares are represented at a meeting, a majority of the shares
so represented may adjourn the meeting from time to time without further
notice. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted
at the meting as originally notified. The shareholders present at a duly
organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
Section 8. Proxies. At all meetings of shareholders, a shareholder may
vote by proxy executed in writing by the shareholder or by his duly authorized
attorney in fact. Such proxy shall be filed with the secretary of the
corporation before or at the time of the meeting. No proxy shall be valid
after two (2) months from the date of its execution, unless otherwise provided
in the proxy.
Section 9. Voting of Shares. Subject to the provisions of Section 11 of
this Article II, each outstanding share entitled to vote shall be entitled to
one vote upon each matter submitted to a vote at a meeting of shareholders.
Section 10. Voting of Shares by Certain Holders. Shares standing in the
name of another corporation may be voted by such officer, agent, or proxy as
the bylaws of such corporation may prescribe, or, in the absence of such
provision, as the board of directors of such corporation may determine.
Shares held by an administrator, executor, guardian, or conservator may be
voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee,
and thereafter the pledgee shall be entitled to vote the shares so
transferred.
Shares of its own stock belonging to the corporation or held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
Section 11. Cumulative Voting. At each election for directors every
shareholder entitled to vote at such election shall have the right to vote, in
person or by proxy, the number of shares owned by him for as many persons as
there are directors to be elected and for whose election he has a right to
vote, or to cumulate his votes by giving one candidate as many votes as the
number of such directors multiplied by the number of shares shall equal, or by
distributing such votes on the same principle among any number of candidates.
Section 12. Informal Action by Shareholders. Any action required to be
taken at a meeting of the shareholders, at any other action which may be taken
at a meeting of the shareholders, may be taken without a meeting if a consent
in writing, setting forth the action so taken, shall be signed by all of the
shareholders entitled to vote with respect to the subject matter thereof.
Article III. Board of Directors
Section 1. General Powers. The business and affairs of the corporation
shall be managed by its board of directors.
Section 2. Number, Tenure, and Qualifications. The number of directors of
the corporation shall be four (4). Each director shall hold office until the
next annual meeting of shareholders and until his successor shall have been
elected and qualified. Directors need not be residents of the State of
Arizona or shareholders of the corporation.
Section 3. Regular Meetings. A regular meeting of the board of directors
shall be held without other notice than this bylaw immediately after, and at
the same place as, the annual meeting of shareholders. The board of directors
may provide, by resolution, the time and place, either within or without the
State of Arizona, for the holding of additional regular meetings without other
notice than such resolution.
Section 4. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the president or any two directors. The
person or persons authorized to call special meetings of the board of
directors may fix any place, either within or without the State of Arizona, as
the place for holding any special meeting of the board of directors called by
them.
Section 5. Notice. Notice of any special meeting shall be given at least
two days previously thereto by written notice delivered personally or mailed
to each director at his business address, or by telegram. If mailed, such
notice shall be deemed to be delivered when deposited in the United States
mail so addressed, with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company. Any director may waive notice of any
meeting. The attendance of a director at a meeting shall constitute a waiver
of notice at such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the board
of directors need be specified in the notice or waiver of notice of such
meeting.
Section 6. Quorum. A majority of the number of directors fixed by Section
2 of this Article III shall constitute a quorum for the transaction of
business at any meeting of the board of directors, but if less than such
majority is present at a meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice.
Section 7. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the
board of directors.
Section 8. Vacancies. Any vacancy occurring in the board of directors may
be filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the board of directors. A director elected to
fill a vacancy shall be elected for the unexpired term of his predecessor in
office. Any directorship to be filled by reason of an increase in the number
of directors shall be filled by election at an annual meeting or at a special
meeting of shareholders called for that purpose.
Section 9. Compensation. By resolution of the board of directors, the
directors may be paid their expenses, if any, of attendance at each meeting of
the board of directors, and may be paid a fixed sum for attendance at each
meeting of the board of directors or a stated salary as director. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
Section 10. Presumption of Assent. A director of the corporation who is
present at a meeting of the board of directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action with the person acting
as the secretary of the meeting before the adjournment thereof or shall
forward such dissent by registered mail to the secretary of the corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a director who voted in favor of such action.
Article IV. Officers
Section 1. Number. The officers of the corporation shall be a president,
one or more vice presidents (the number thereof to be determined by the board
of directors), a secretary, and a treasurer, each of whom shall be elected by
the board of directors. Such other officers and assistant officers as may be
deemed necessary may be elected or appointed by the board of directors. Any
two or more offices may be held by the same person, except the offices of
president and secretary.
Section 2. Election and Term of Office. The officers of the corporation
to be elected by the board of directors shall be elected annually by the board
of directors at the first meeting of the board of directors held after each
annual meeting of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his successor shall
have been duly elected and shall have qualified or until his death or until he
shall resign or shall have been removed in the manner hereinafter provided.
Section 3. Removal. Any officer or agent elected or appointed by the
board of directors may be removed by the Board of Directors whenever in its
judgment the best interests of the corporation would be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of the
person so removed.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term.
Section 5. President. The president shall be the principal executive
officer of the corporation, and subject to the control of the board of
directors, shall in general supervise and control all of the business and
affairs of the corporation. He shall, when present, preside at all meetings
of the shareholders and of the board of directors. He may sign, with the
secretary or any other proper officer of the corporation thereunto authorized
by the board of directors, certificates for shares of the corporation, any
deeds, mortgages, bonds, contracts, or other instruments which the board of
directors has authorized to be executed, except in cases where the signing and
execution thereof shall be expressly delegated by the board of directors or by
these bylaws to some other officer or agent of the corporation, or shall be
required by law to be otherwise signed or executed; and in general shall
perform all duties incident to the office of president and such other duties
as may be prescribed by the board of directors from time to time.
Section 6. The Vice Presidents. In the absence of the president or in the
event of his death, or inability or refusal to act, the vice president (or in
the event there be more than one vice president, the vice presidents in the
order designated at the time of their election, or in the absence of any
designation, then in the order of their election) shall perform the duties of
the president, and when so acting, shall have all the powers of and be subject
to all the restrictions upon the president. Any vice president may sign, with
the secretary or an assistant secretary, certificates for shares of the
corporation, and shall perform such other duties as from time to time may be
assigned to him by the president or the board of directors.
Section 7. The Secretary. The secretary shall: (a) keep the minutes of
the shareholders' meetings and of the board of directors' meetings in one or
more books provided for that purpose; (b) see that all notices are duly given
in accordance with the provisions of these bylaws as required by law; (c) be
custodian of the corporate records and of the seal of the corporation and see
that the seal of the corporation is affixed to all documents, the execution of
which on behalf of the corporation under its seal, is duly authorized; (d)
keep a register of the post office address of each shareholder which shall be
furnished to the secretary by such shareholder; (e) sign with the president,
or a vice president, certificates for shares of the corporation, the issuance
of which shall have been authorized by resolution of the board of directors;
(f) have general charge of the stock transfer books of the corporation; (g) in
general perform all duties incident to the office of secretary and such other
duties as from time to time may be assigned to him by the president or by the
board of directors.
Section 8. The Treasurer. If required by the board of directors, the
treasurer shall give a bond for the faithful discharge of his duties in such
sum and with such surety or sureties as the board of directors shall
determine. He shall: (a) have charge and custody of and be responsible for
all funds and securities of the corporation; receive and give receipts for
moneys due and payable to the corporation from any source whatsoever, and
deposit all such moneys in the name of the corporation in such banks, trust
companies, or other depositories as shall be selected in accordance with the
provisions of the Article V of these bylaws; and (b) in general perform all
the duties incident to the office of treasurer and such other duties as from
time to time may be assigned to him by the president or by the board of
directors.
Section 9. Assistant Secretaries and Assistant Treasurers. The assistant
secretaries, when authorized by the board of directors, may sign with the
president or a vice-president certificates for shares of the corporation the
issuance of which shall have been authorized by a resolution of the board of
directors. The assistant treasurers shall respectively, if required by the
board of directors, give bonds for the faithful discharge of their duties in
such sums and with such sureties as the board of directors shall determine.
The assistant secretaries and assistant treasurers, in general, shall perform
such duties as shall be assigned to them by the secretary or the treasurer,
respectively, or by the president or the board of directors.
Section 10. Salaries. The salaries of the officers shall be fixed from
time to time by the board of directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
corporation.
Article V. Contracts, Loans, Checks and Deposits
Section 1. Contracts. The board of directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the corporation, and such
authority may be general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name
unless authorized by a resolution of the board of directors. Such authority
may be general or confined to specific instances.
Section 3. Checks, Drafts, et. All checks, drafts, or other orders for
the payment of money, notes, or other evidences of indebtedness issued in the
name of the corporation shall be signed by such officer or officers, agent or
agents of the corporation and in such manner as shall from time to time be
determined by resolution of the board of directors.
Section 4. Deposits. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies, or other depositories as the board of directors may
select.
Article VI. Certificates for Shares and Their Transfer
Section 1. Certificates for Shares. Certificates representing shares of
the corporation shall be in such form as shall be determined by the board of
directors. Such certificates shall be signed by the president or a vice
president and by the secretary or an assistant secretary. All certificates
for shares shall be consecutively numbered or otherwise identified. The name
and address of the person to whom the shares rerepresented thereby are issued,
with the number of shares and date of issue, shall be entered on the stock
transfer books of the corporation. All certificates surrendered to the
corporation for transfer shall be canceled and no new certificate shall be
issued until the former certificate for a like number of shares shall have
been surrendered and canceled, except that in case of a lost, destroyed, or
mutilated certificate a new one may be issued therefor upon such terms and
indemnity to the corporation as the board of directors may prescribe.
Section 2. Transfer of Shares. Transfer of shares of the corporation
shall be made only on the stock transfer books of the corporation by the
holder of record thereof or by his legal representative, who shall furnish
proper evidence of authority to transfer, or by his attorney thereunder
authorized by power of attorney duly executed and filed with the secretary of
the corporation, and on surrender for cancellation of the certificate for such
shares. The person in whose name shares stand on the books of the corporation
shall be deemed by the corporation to be the owner thereof for all purposes.
Article VII. Fiscal Year
The fiscal year of the corporation shall begin on the first day of January
and end on the thirty-first day of December in each year.
Article VIII. Dividends
The board of directors may from time to time declare, and the corporation
may pay, dividends on its outstanding shares in the manner and upon the terms
and conditions provided by law and its articles of incorporation.
Article IX. Seal
The board of directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation
and the state of incorporation and the words, "Corporate Seal."
Article X. Waiver of Notice
Whenever any notice is required to be given to any shareholder or director
of the corporation under the provisions of these bylaws or under the
provisions of the articles of incorporation or under the provisions of the
Laws of the State of Arizona, a waiver thereof in writing, signed by the
person or persons entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such notice.
Article XI. Amendments
These bylaws may be altered, amended, or repealed and new bylaws may be
adopted by the board of directors at any regular or special meeting of the
board of directors.
EXHIBIT 3.9
Resolutions of the Board of Directors
Unico, Incorporated
As Of April 1, 1992
The undersigned, being all of the Directors of Unico, Incorporated, an
Arizona corporation, acting without a meeting, unanimously consent to and
agree to the following resolutions:
RESOLVED that the Bylaw found in Article II, Section 9 be amended in its
entirety so as to read as follows:
Section 9. Voting of Shares. Each outstanding share entitled to vote
shall be entitled to one vote upon each matter submitted to a vote at
a meeting of shareholders.
RESOLVED FURTHER, that the Bylaw found in Article II, Section 11 is hereby
deleted and repealed in its entirety.
RESOLVED FURTHER, that this resolution may be executed in several copies,
all of which taken together shall be the original and that the officers of the
corporation are authorized to carry out the intents and purposes of the
foregoing resolutions.
The undersigned hereby waive notice of meeting and consent to the
transaction of the foregoing business.
/s/ Ray Brown
--------------------
Ray Brown
/s/ Kiyoshi Kasai
--------------------
Kiyoshi Kasai
/s/ C. Wayne Hartle
--------------------
C. Wayne Hartle
/s/ Walter Harpst
Walter Harpst
EXHIBIT 10.1
MINING LEASE AND OPTION T0 PURCHASE
Lease made March 30, 1992, between Deer Trail Development Corporation, a
Utah corporation ("Deer Trail") of 12900 Preston Road, Suite 1112, Dallas,
Texas 75230, as Lessor and Unico, Incorporated, an Arizona corporation
("Unico") of P .0. Box 777, Magalia, California 95954, as Lessee.
HEREAS Deer Trail is the owner of certain mining claims more fully
described below (the "Claims") and desires to lease the Claims to Unico; and
WHEREAS Deer Trail has taken all necessary board action and no
shareholder action is necessary to approve the lease of the Claims to Unico;
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Property Leased and Purchase Option. In consideration of the
royalties, covenants and agreements hereinafter expressed to be paid, kept and
performed by Unico, Deer Trail hereby leases to Unico the following premises
near Marysvale, Utah, County of Piute, consisting of patented and unpatented
mining claims and mill sites:
See attached Exhibit A
The leased premises includes within its bounds, but is not limited to, those
workings commonly known as the "Deer Trail Mine", the "PTH tunnel" and
premises, the "Carisa and Lucky Boy mines" and the "deep target"
molybdenum-copper prospect potential believed by Phelps Dodge and the U.S.
Geological Service to exist, to the extent that the "deep target" lies beneath
the claim groups described on Exhibit A. In the event Lessor acquires a group
of approximately 33 claims adjoining the Claims described on Exhibit A, which
claims where formerly owned by Joe Burns, Lessor grants to Lessee an option
during the term of this lease to acquire said claims for Lessor's acquisition
costs or staking costs for said claims and reimbursement to Lessor of its
minimum annual assessment costs expended to maintain the claims from the time
of acquisition to the time of exercise of the option.
As additional consideration for the payment of the advance royalty,
royalties and other commitments of Lessee found herein, Lessor hereby grants
to Lessee an option to purchase all of the Claims and mill sites as described
herein and on Exhibit A attached hereto including all dumps, equipment and
personal property contained therein, commencing with the Effective Date of
this Lease and for the following periods and prices:
From 6/1/92 to 5/31/95 $1,000,000 total
From 6/1/95 to 5/31/99 $2,000,000 total
From 6/1/99 to 5/31/02 $4,000,000 total
Upon exercise of the purchase option and payment therefor in cash or certified
funds, Lessor agrees to convey good and marketable title to the above
described leased premises to Lessee free and clear of any liens, encumbrances,
overriding royalties, carried interests (including but not limited to that of
Phelps Dodge) or other interests, except such as may have arisen on account of
Lessee's operation and lease of the premises. Upon exercise of the Purchase
Option and payment therefor by Lessee, this Lease Agreement and all rights of
either party thereto shall be extinguished and Lessee shall become the fee
title owner of the above described Leased Premises.
Lessee shall give Lessor 30 days advance written notice of its intention
to exercise the purchase option, which notice shall be received by Lessor
during the period for which the option price applies. (For instance, notice
delivered to Lessor by Lessee on May 31, 1995 shall entitle Lessee to purchase
the Claims for $1,000,000, though payment need not be made until the Lessor's
option described below has been exercised or expired). Upon receipt of
Lessee's notice of purchase, Lessor may at its option for 30 days, elect to
retain a carried interest of 5% of net smelter returns from the Claims in
perpetuity in lieu of the cash payment offered by Lessee for the Claims.
Losses and profits allocable to said carried working interest shall be
computed in the same manner as the 5% royalty referred to in paragraph 3
below. Lessor shall advise Lessee in writing by the 30th day after receipt of
Lessee's purchase notice of its intent to take the carried interest in lieu of
the cash payment. If Lessee has not received notice of election by Lessor by
the thirtieth day, then it shall pay the applicable purchase price by the
sixtieth day after the delivery of its original purchase notice and Lessor
shall transfer fee title ownership of the Claims to Lessee. Should Lessee for
any reason be unable to pay the purchase price, then the Mining Lease-Option
to Purchase shall continue in full force and effect subject to its terms. In
the event Lessor gives notice of its election to take the 5% carried interest,
Lessee may within 30 days thereafter, at its sole option, and upon notice to
Lessor, elect to reduce the carried interest by up to 50 percent. In such
case, Lessee shall pay that portion of the applicable purchase price which
corresponds to the percentage by which the carried royalty interest is
reduced. For example, if under the $1,000,000 purchase price, Lessor elects
to take the 5% carried interest in lieu of the cash price, then Lessee, at its
option, may reduce the carried interest to as low as 2 1/2% and pay up to
$500,000 cash purchase price for the reduction. As an additional example, if
the cash purchase price were $2,000,000 and the Lessor elected the 5% carried
interest in lieu of the cash payment, then Lessee could reduce the carried
interest to as low as 2 1/2% by paying up to $1,000,000.
Lessor agrees to furnish Lessee with copies of (or at its option to make
available for copying by Lessee) all maps, drawings, reports and any available
mine history, showing the location of drill holes, drifts driven, stockpiles,
blocked out reserves, probable and or possible reserve estimates, assays,
assay reports, development and other data, as is reasonably available to
Lessor. Lessee agrees to return any and all such information to Lessor as
soon as copied or within 30 days. Lessor shall furnish Lessee copies of
drilling reports on the property at the time of signing of this Lease, which
shall be returned to Lessor as provided above. At any termination of this
lease, Lessee agrees to furnish any similar data or information as to its
development of the Claims to Lessor on the same basis. Lessee agrees to accept
the property "as is" and to indemnify and hold Lessor harmless for any damages
incurred by Lessor arising out of damage to property or person of the
employees or agents of Lessee, or any other person (other than the Lessor and
those acting in Lessor's behalf) where such damage arises on account of or in
connection with the use, operation or development of the property by Lessee.
Lessee agrees to have in effect at the Effective Date and during the term of
this lease a public liability insurance policy in a reasonable amount, being
at least $1,000,000 per occurrence insuring against liability for damage to
person or property which may arise from operation of the Lease.
Lessor agrees, warrants and represents that its board of directors has
taken all action necessary to enter into this Mining Lease-Option to Purchase
Agreement and that shareholder approval of this Mining Lease-Option to
Purchase Agreement is not necessary. Lessor further agrees, warrants and
represents that neither the execution of this document nor the exercise of the
purchase option by Lessee would result in the disposition of all or
substantially all of the assets of Lessor so as to require shareholder
approval under Utah law. Further, Lessor agrees, warrants and represents that
in the event any shareholder of Lessor threatens to contest or contests, by
court action or otherwise, the grant or validity of the Lease or the grant,
validity or exercise of the purchase option thereunder, in any manner that it
will indemnify and hold harmless Lessee from any and all damages, costs and
attorneys fees it may suffer as a result of such contest and Lessor and I.N.
Fehr, individually each agree to use their best efforts to obtain (and I.N.
Fehr agrees to vote all stock he owns or controls in favor of) any shareholder
approval or consent which may be determined to be required and in such event,
Lessor and I.N. FEHR agree to recommend in writing approval of the Mining
Lease-Option to Purchase to the shareholders of Deer Trail. Lessor further
agrees to provide a legal opinion or such further assurances as Lessee may
require during the term of this lease as to the agreements, representations
and warranties contained in this paragraph.
2. Term; Assignment. Unico shall hold the leased premises for the purpose
of mining all kinds of minerals and ores for a period of six months from June
1, 1992 (the "Effective Date" ) and so long thereafter (but not to exceed 10
years maximum from the Effective Date) as the minimum royalty payments are
being made, unless the lease is sooner terminated under any provision
contained herein. Each party, with the prior written consent of the other,
which consent shall not be unreasonably withheld, shall have the power to
assign or sublet this lease or any interest hereunder. Notwithstanding the
Effective Date, Unico shall have reasonable access to the premises prior to
the Effective Date to prepare work plans and complete preliminary
preparations.
3. Duties of Lessee; Royalty. Unico agrees to perform all work in a
thorough and workmanlike manner, to keep underground workings securely
timbered, drained, and clear of loose rock and rubbish, to properly dispose of
loose rock outside the mine, to assume payment of utility costs and taxes on
the Claims estimated to be approximately $25,000 per year plus any increase
due to Lessee's operations and normal cost increases over time, (such costs
and taxes for the year this lease is signed shall be prorated between the
parties as of the Effective Date: such utility costs are primarily to maintain
and operate the water pumps and ventilating fans in the PTH tunnel): to keep
accurate accounts, to render necessary statements to Deer Trail showing the
amount and character of production, and to pay to Deer Trail, or its
designated agent, as rental for the leased Claims, a five percent (5%) royalty
upon all ore taken and sold from the premises. Royalty payments shall be based
on the gross receipts received by Unico from sales of the mineral in the ore
taken from the leased premises, less the actual cost of transportation from
the mine to the receiving plant or smelter, and less any assaying, weighing,
treatment and special sampling charges. Payments of royalty by Unico shall be
made to Deer Trail at the above address, or its designated agent or bank by
the 15th of the month next succeeding the calendar month during which Unico
shall have received payment for such shipment. In addition to the royalty
payments to be made, Unico agrees that if it moves and/or sells approximately
200 tons of marketable ore which has been broken out and is presently located
in the ore bins at the 8,000 foot area of the PTH tunnel, that it will pay the
net mill receipts from said 200 tons to Lessor, less Unico's cost of moving
and shipping said ore. Lessor agrees that it has no objection to Lessee's
employing the services of its employee Rell Frederick on a part time basis to
assist in maintenance of the Claims.
4. Minimum Royalty. Unico shall pay a minimum royalty of $4,000 per
month to Deer Trail, regardless of the amount of actual production from the
lease during a given month. A six month advance minimum royalty of $24,000
shall be paid upon signing of this lease for the first six months of the lease
commencing with the Effective Date. The six month advance royalty shall
guarantee a minimum lease term of six months from the Effective Date. The
minimum royalty shall increase to $6,000 per month commencing in July, 1994,
$8,000 per month commencing in July, 1997 and $10,000 per month commencing in
July, 2000.
5. Rate of production. Unico agrees to use its best efforts to mine and
remove mineral ores from the leased premises beginning upon the Effective Date
or as soon thereafter as is feasible, as rapidly and in such quantities each
month as reasonably can be done, unavoidable delays, shortages of fuel and
labor, market conditions, adverse weather and other conditions beyond the
control of Unico to be taken into consideration as well as reasonable start-up
time. A copy of Lessee's initial work plan is attached hereto as Exhibit A.
6. Right of Access. Deer Trail or its designated representative, shall
have the right, upon reasonable notice, to enter upon the leased premises to
inspect the same or take samples therefrom, and Lessee will render to Lessor
reasonable assistance in its power in so doing.
7. Taxes and Assessments. Unico agrees to pay when due all taxes and
assessments levied against the demised premises on account of the production
of ore under this lease. All assessment work shall be performed and affidavits
of labor recorded by Lessee in due time as may be required by law. To the
extent that Lessee's operating expenditures on the premises exceed the minimum
required to qualify for assessment work on the unpatented claims included in
the leased premises, the excess may be reported by Lessor to qualify as
assessment work on its contiguous unpatented claims as permitted by law.
8. Default by Lessee. Unico agrees that in case of its failure in any
substantial respect to keep and fulfill any one or more of the covenants or
agreements herein or its failure to pay the minimum monthly royalty, it shall
then be lawful for Lessor to declare this lease ended. Upon any default by
Lessee, Lessor shall give Lessee written notice of such default and Lessee
shall have thirty days (30 days) thereafter to correct such default. In the
event of uncorrected default, (and also upon termination of this lease) Lessee
agrees to surrender and deliver the Lessor quiet and peaceable possession of
the leased premises. Upon termination of this lease, for any reason, Lessee
shall have a period of 120 days in which to remove any and all of its own
mining equipment being used in operating the leased premises or transporting
ore from such operations.
9. Successors and Assigns. All covenants and agreements contained herein
shall extend to and be binding upon the heirs, legal representatives,
successors, and assigns of the parties.
10. Termination. Lessee may, at any time, surrender and terminate this
lease upon giving to lessor sixty (60) days notice in writing and paying all
royalties owing through the effective date of termination. The parties may
also terminate this lease by mutual agreement. This Lease shall terminate 10
years from the Effective Date or upon execution of the Purchase Option and
payment of the purchase price by Lessee. Lessor may terminate this lease as
described in paragraph 8 above or otherwise as permitted by law.
11. Mining Equipment. Unico shall be entitled to use Deer Trail's on
site equipment, consisting of air pumps, ore cars, electrical stations,
compressors, duct works, fans, trams, rails, hoists, excavating equipment and
other equipment in the mine or located on the mining claims comprising the
leased premises and shall upon termination of the lease, return such equipment
to Deer Trail in as good a condition as received, reasonable wear and tear
excepted. Unico shall conduct all maintenance and repair of such equipment
during the term of the lease. Unico agrees not to remove such on site
equipment from the leased premises.
12. Compliance with Laws. All operations of Lessee shall be conducted so
as to comply with the laws of the State of Utah and with all rules,
regulations and requirements of federal authorities and Lessee agrees to
indemnify and hold harmless Lessor for any obligations, liens or similar
liabilities arising as a result of the operations of Lessee and constituting a
lien or obligation against the premises. The parties understand and agree that
the mine is an underground mine and that no significant reclamation of the
mine site is anticipated following normal mining procedures on the Claims.
Lessor is not aware of any notice of non-compliance from any governmental
agency regarding the property, except as described on Exhibit B, which Exhibit
and the agreement contained therein is incorporated herein by reference. Each
party to this lease shall be responsible for any environmental, pollution or
aesthetic requirements or liability legitimately made or assessed by a
governmental entity attributable to each partys' respective period of
occupancy and operation of the Claims. To the extent permitted by law, Lessee
shall be entitled to any depletion allowance on the property as a result of
its mining activities.
13. Entire Agreement; Governing Law. This lease contains the entire
agreement between the parties hereto and any amendments thereto shall be in
writing. This lease shall be governed and construed under the laws of the
State of Utah.
EXECUTED as of the date first above written.
LESSEE: LESSOR:
UNICO, INCORPORATED DEER TRAIL DEVELOPMENT CORPORATION
/s/ Ray Brown /s/ I.N. Fehr
- ----------------------- ---------------------------
Ray Brown, President I.N. Fehr, President
As to the agreements, representations and warranties in the last paragraph of
paragraph one of this agreement:
/s/ I.N. Fehr
----------------------------
I.N. Fehr, individually and as
an authorized officer of Lessor
State of California )
: ss.
County of Butte )
Personally appeared before me, Ray Brown, this 1st day of April, 1992,
who declared to me that he is the President of Unico, Incorporated and
acknowledged to me that he executed the foregoing lease on behalf of said
corporation by authority of a resolution of its board of directors or bylaws.
/s/ Marcella D. Sutcliffe
- ---------------------------
NOTARY PUBLIC
Commission Expires: 1-29-93
Residing At:
State of Texas )
: ss.
County of Dallas )
Personally appeared before me, I.N. Fehr, this 30 day of March, 1992, who
declared to me that he is the President of Deer Trail Development Corporation
and acknowledged to me that he executed the foregoing lease on behalf of said
corporation by authority of a resolution of its board of directors or bylaws.
/s/ Jo Ann Turner
- --------------------
NOTARY PUBLIC
Commission Expires: 7-12-94
Residing At:
State of Texas )
: ss.
County of Dallas )
Personally appeared before me, I.N. Fehr, this 30 day of March, 1992, who
acknowledged to me that he executed the foregoing lease as to the last
paragraph of paragraph one in his individual capacity.
/s/ Jo Ann Turner
- ---------------------
NOTARY PUBLIC
Commission Expires: 7-12-94
Residing At:
LEASE MADE 3-30-92, BETWEEN DEER TRAIL DEVELOPMENT CORPORATION, AS LESSOR AND
UNICO, INCORPORATED, AS LESSEE
EXHIBIT A
Work Plan: The parties agree that the purpose of the Lease is to develop and
prove the geologic potential of the Claims; Lessee agrees each year, by the
Effective Date, to provide Lessor with a copy of its Work Plan with that
objective for the ensuing Lease year, which Work Plan shall be delivered to
Lessor for information purposes. The content of the Work Plan shall not
require the consent of the Lessor but shall be in compliance with the terms of
this Lease. The Description of claims leased consists of three pages attached
hereto.
<PAGE>
WHEN RECORDED MAIL TO:
Unico, Incorporated
c/o Ray C. Brown
P.O. Box 777
Magalia, CA 95954
NOTICE OF INTEREST
Notice is hereby given that Unico, Incorporated, an Arizona corporation,
claims an interest in the real property described on Exhibit A attached
hereto, located in Piute County, Utah. Said interest is evidenced by that
certain MINING LEASE AND OPTION TO PURCHASE dated March 30, 1992 wherein Deer
Trail Development corporation is Lessor and Unico, Incorporated is Lessee.
The property description attached hereto is a corrected description of the
property subject to the aforementioned MINING LEASE AND OPTION TO PURCHASE.
Dated the 18th day of June, 1992
Unico, Incorporated
/s/ Ray C. Brown
--------------------
Ray C. Brown, President
STATE OF CALIFORNIA )
:ss.
COUNTY OF BUTTE )
On the 18th day of June, 1992 personally appeared before me Ray C. Brown,
who being by me duly sworn, did say that he is the President of Unico,
Incorporated and that he signed the foregoing notice of interest on behalf of
the corporation by authority of its board of directors or bylaws and
acknowledged to me that said corporation executed the same.
/s/ Marcella D. Sutcliffe
---------------------------
Notary Public
Commission Expires:
Residing in:
<PAGE>
UNPATENTED MINING CLAIMS - DEER TRAIL DEVELOPMENT CORP.
------------------------------------------------------
Name Book Page BLM Serial No.
- ---- ----- ----- --------------
Apex Lode D 78 UMC 95578
Athenia D 423 UMC 95580
Buster No. 1-3 G 460-461 UMC 95586-95588
Buster No. 4-9 M 129-133 UMC 95689-95594
Caledonia Lode D 588 UMC 95596
Cinnabar Lode D 684 UMC 95599
Cliff No. 1-8 Lode D 371-374 UMC 95600-95607
Columbine Lode D 586 UMC 95608
Crest Lode D 452 UMC 95610
Deer Trail No. 11 A 135 UMC 95612
Deer Trail No. 12-19 A 142-145 UMC 95613-95620
Deer Trail No. 21-29 24 114-120 UMC 95621-95629
Deer Trail No. 31 L 599 UMC 95630
Deer Trail No. 32 24 122-123 UMC 95631
Deer Trail No. 39-42 B 99-101 UMC 95632-95635
Deer Trail No. 43-45 B 245-247 UMC 95636-95638
Deer Trail No. 46-47 B 245-246 UMC 95639-95640
Deer Trail No. 48 B 270 UMC 95641
Deer Trail No. 49-54 B 322-324 UMC 95642-95647
Deer Trail No. 55-71 G 227-237 UMC 95648-95664
Deer Trail No. 72 G 447 UMC 95665
Deer Trail Extension C 250 UMC 95666
Deer Trail Extension 1-11 C 250-254 UMC 95667-95677
Falcon Lode D 584 UMC 95682
Fire Fly Lode D 584 UMC 95682
Golden Eagle Lode D 563 UMC 95693
Gorge Lode D 453 UMC 95697
Grand View Lode D 423 UMC 95698
Jonquil Lode D 587 UMC 95705
Kiester D 586 UMC 95706
La Cigale D 587 UMC 95707
Linda Place Mining Claim N 125 UMC 95709
Lower Contract D 450 UMC 95714
Monster #3-9 B 123-126 UMC 95719-95725
Mountain Chief Amended D 589 UMC 95726
Mountain Chief 1-2 M 128-129 UMC 95727-95728
Old Channel Lode M 81 UMC 95747
Old Channel Lode #1 M 81 UMC 95748
Pluto Fraction N 273 UMC 95741
Porcupine Lode D 588 UMC 95742
Pyrite Lode D 585 UMC 95729
Portal Lode D 453 UMC 95749
Portal Lode 1-2 M 82-83 UMC 95750-95751
<PAGE>
Red Knoll Lode D 453 UMC 95731
Santa Maria D 464 UMC 95735
Snow Shoe Lode D 583 UMC 95760
Sylvia Placer Mining Claim N 126 UMC 95763
Siver Wedge D 422 UMC 95737
Slope No. 1-3 Lode D 450-451 UMC 95754
Slope No. 4 M 83 UMC 95755
Slope No. 5-6 M 127 UMC 95756-95757
Tamarac Lode D 585 UMC 95764
The Reef Lode D 588 UMC 95732
Topaz Lode D 587 UMC 95768
Tomahawk Lode D 583 UMC 95767
Victory Lode D 586 UMC 95771
White Flint Lode D 423 UMC 95776
Wild Cat Lode D 585 UMC 95768
Woodland Lode D 451 UMC 95769
Hidden Treasure D 589 UMC 95701
<PAGE>
PATENTED MINING CLAIMS DEER TRAIL DEVELOPMENT CORP.
----------------------------------------------------
Name Recorded Book Page
- ------- -------- ----- ----
Cliff, #41 04/23/1892 102 423
Deer Trail #1, #6365A 03/03/1919 274 139
Deer Trail #2, #6365A 03/03/1919 274 139
Deer Trail #3, #6353A 03/03/1919 274 139
Deer Trail #4 Lode, 6396 03/03/1919 274 411
Deer Trail #5, #6403A 04/22/1919 275 31
Deer Trail #7, #6403A 04/22/1919 275 31
Deer Trail #8-9-10-20-38 02/05/1925 288 177
#6V36
Deer Trail #30-33-34-35-36-37 08/29/1923 285 443
#6717
Deer Trail Fraction #37 #6720 09/23/1924 286 453
Deer Trail #42A (Pat "A" 04/23/1892 93 157
only)
Deer Trail Mill Site 42B
Dewitt & Ferguson #52A 05/11/1896 166 277
Dewitt & Ferguson Mill Site #52B
Green Eyed Monster 43A 04/23/1892 93 181
(Pat "A" only)
Monster Apex #5972 04/28/1910 259 495
Monster Apex #2, #5972 04/28/1910 259 495
Pluto #46 06/02/1896 106 382
Sphinx #6397 06/20/1919 274 425
Deer Trail #1 Millsite 6365 B 03/03/1919 274 139
Deer Trail #2 Millsite 6365 B 03/03/1919 274 139
Deer Trail #3 Millsite 6365BB 03/03/1919 274 139
Deer Trail #5 Millsite 6365 B 04/22/1919 275 31
Deer Trail #6 6403 A 04/22/1919 275 31
<PAGE>
UNPATENTED MINING CLAIMS - DEER TRAIL DEVELOPMENT CORP.
Exhibit B
Deer Trail Development Corporation has been contacted by the U.S. Forest
Service which has informally requested that Deer Trail remove the dump
material on the property or trade certain lands owned by Deer Trail in another
area for patented claim rights to the lands underlying the dumps. Deer Trail
is presently considering its response to the Forest Service's proposal and the
Forest Service has not set a fixed deadline for compliance or resolution of
the matter. Deer Trail believes that removal of the dump material will not be
an issue while the mine is being operated. Should the Forest Service renew the
issue during the term of the Mining Lease-Option to Purchase, Deer Trail
agrees to work in good faith with the U.S. Forest Service to reach an
agreement to resolve the matter, whether by land exchange or otherwise, at its
own expense, so long as Unico continues to operate the property.
EXHIBIT 10.2
Deer Trail Mine
Development Agreement
October 5, 1998
Parties to the Agreement:
Ray Brown, President
UNICO (AZ Corp - OTC Traded)
P. 0 Box 777
Magalia, Ca 95954
Tel/Fax. (530) 873-4394
Gilbert Windheim, President
3 Washington Square, Suite 1-D
Guilderbrook, Inc. (NY Closely Held Corp.)
Larchmont, NY 10538
Tel/Fax (914) 834-O171
David Poisson, President
Aurora Resources & Mining Corp (NV Closely Held Corp.)
848 N. Rainbow B1vd., #315
Las Vegas, NV 89107
Tel: (702) 365-7690
Fax: (702) 365-7725
The parties above have discussed and agreed to jointly provide the
necessary financial and management resources to retain Deer Trail mine,
Marysvale, Utah, as a leasee, and provide project management with additional
necessary mining equipment to put the mine into productive operation for
galena and gold ore. The immediate objective is to make the mine operational
so cash flow from galena and gold will take place within the next 60 days.
The parties above agree:
A. UNICO has made a significant investment in obtaining mine permits and
physical repair to the Deer Trail PTH tunnel in order to access the viable
minerals contained in the mine. UNICO is the leasee of the claims. The
leasor is Crown Mining Co. of Dallas, Texas. The leasor has given written
contractual notice to the leasee, UNICO, to pay back lease payments or abandon
the mine. This notice has a deadline of early October 1998. UNICO is without
any financial resources at this time and cannot financially correct the lease
default notice at this time.
B. Guilderbrook, Inc. management is knowledgeable about the details of the
Deer Trail Mine resources and the financial circumstances that subject the
mine to possible loss. Guilderbrook, Inc. has therefore, agreed that:
1. They will provide $60,000 USD in cash to UNICO to correct the past
due lease deficiency; and $9,000 USD per month for future lease payments. For
this, Guilderbrook, Inc. will receive twenty-five percent (25%) of the net
profits from the mine operations subsequent ore sales. This includes all ore
mined at the Deer Trail Mine.
2. At a time in the future when buying out the leasor's mine rights
is appropriate, Guilderbrook, Inc. will also put up the twenty-five percent
(25%) of the buyout capital to buy out the lease. After this purchase of the
mine from the leasor, the net profit plus the five percent (5%) net- smelter-
return would be also shared by Guilderbrook, Inc. on a twenty-five percent
(25%) basis. UNICO will share on a twenty-five percent (25%) basis and Aurora
Resources & Mining Corp on a fifty percent (50%) basis.
C. Aurora Resources & Mining Corp., David Poisson, President, has agreed to
provide the mine operations management along with other necessary additional
equipment to begin mining operations at the Deer Trail Mine. This would be
done with Aurora's financial and additiona1 capital equipment resources. As a
result, this would entitle Aurora Resources & Mining Corp a fifty percent
(50%) net profit from all mined ore sales.
This aurora investment or mining activity would not be started until
such time as UNICO and Guilderbrook, Inc financially re-establish the
mine lease for UNICO with the leasor, Crown Mining Co.
At a future time, buy out of the current leasor's right to the mine will
require Aurora to contribute fifty percent (5O%) of the buy-out amount.
This is for the approximate 33 patented and approximate 137 unpatented
Deer Trail mining rights claims. Similarly, UNICO will contribute
twenty- five percent (25%) and Guilderbrook, Inc. will contribute
twenty-five percent (25%) of the claims purchase price.
D. Option to purchase mining leases from Crown Mining Co.
1. On exercise of the option, each of the three parties, UNICO,
Guilderbrook, Inc. and Aurora Resources & Mining Corp., will have full
ownership in their percentage of the property, rights and privileges
unencumbered equally.
2. Following lease buy out from Crown Mining Co. the additional net-
smelter-return would also be shared on the basis of:
UNICO twenty-five percent (25%)
Guilderbrook, Inc. twenty-five percent (25%)
Aurora Resources fifty percent (50%)
3. UNICO will continue to be the leaseholder and operator.
Therefore, all parties above are in accord as to one another's
responsibilities and commitments under this Agreement, and set forth their
true signatures below under witness. All parties agree that faxed copies of
this Agreement with signatures are legally binding.
/s/ Ray Brown 10/9/98 /s/ Dana Burgess 10/9/98
- -------------------- --------- ------------------------ --------
Ray Brown, President Date Witness Date
Unico
/s/ Gilbert Windheim 10/9/98 /s/ Joan Bobley Kimche 10/9/98
- --------------------- --------- ------------------------ ---------
Gilbert Windheim, Date Witness Date
President,
Guilderbrook, Inc.
/s/ David F. Poisson 10/8/98 /s/ Dana Burgess 10/8/98
- --------------------- ------- ------------------------- ---------
David F. Poisson, Date Witness Date
President
Aurora Resources and Mining Corp.
EXHIBIT 10.3
AGREEMENT NO. L99026
UNICO INC.
AND
ASARCO Incorporated
LEAD CONCENTRATES
DATED: JUNE 1, 1999
<PAGE>
AGREEMENT NO. L99026
UNICO INC., 848 N. Rainbow Blvd., #315, Las Vegas NV 89107, hereinafter called
"UNICO." agrees to sell and deliver . . . . . .
AND
ASARCO Incorporated, 180 Maiden Lane, New York, NY 10038, hereinafter called
"ASARCO," agrees to buy . . . . . . . .
1. PRODUCT
-------
Product shall be lead concentrates produced from the Deer Trail Mine owned by
UNICO.
2. QUALITY & ANALYSIS
------------------
The product shall be of substantially the following analysis:
Pb: 55 - 65% Fe: 3-5% CaO: 0.2%
Cu: 1 - 3% Sb: <0.1% S: 18- 22%
Cd: <0.1% Ag: 40- 80 opst Zn: 5-10%
As: <0.10% Au: 0.02- 0.1 opst Hg: <10 ppm
Bi: <0.10% Al2O3: 1- 2%
Si02: 3-5% MgO: 0.2%
ASARCO reserves the right to discontinue receipt of product and/or return
product at the shipper's expense in the event that the product differs
substantially from the analysis contained herein.
3. QUANTITY
--------
The quantity shall be approximately 1200 dry short tons per year to be shipped
at a rate of 100 tons per month.
4. DURATION
---------
The period of this agreement shall commence with product delivered on or after
August 1, 1999 and shall continue through and including July 31, 2000.
However, this agreement can be canceled by ASARCO on no less than sixty (60)
days written notice.
5. DELIVERY
---------
Freight prepaid F.O.B. truck at ASARCO's East Helena,
<PAGE> 1
UNICO, INC. AGREEMENT NO. L99026
______________________________________________________________________________
Montana plant. The delivery is to be scheduled by appointment, details of
which will be mutua1ly arranged with East Helena via fax or telephone through
Mr. Tim Thennis at (406) 227-7151 or (406) 227-8897. Truck receiving hours are
presently from 8:00 a.m. to 2:00 p.m., Monday through Friday, major holidays
excepted.
6. SHIPMENT
--------
Material to be shipped in bulk in trucks.
7. TITLE & RISKS
-------------
Title and all risks of loss shall pass to ASARCO upon delivery of product.
8. DATE OF DELIVERY
----------------
The date of delivery of product is the date the last truck of each lot arrives
at East Helena.
9. PRICE
-----
The purchase price of the product is the sum of the payments less the sum of
the deductions specified below.
PAYMENTS
---------
10. SILVER
------
Deduct 1.0 troy ounce per short dry ton of product from the silver assay and
pay for 95% of the remaining silver content at the London Spot quotation for
refined silver, as published in Platt's Metals Week, averaged for the
Quotational Period, less a deduction of $0.43 per troy ounce of payable
silver.
11. GOLD
----
Deduct 0.02 troy ounces per ton and pay for 95% of the remaining gold
content at the daily London Final Gold quotation, as published in Platt's
Metals Week, averaged for the Quotational Period, less a deduction of $10.00
per payable troy ounce.
12. LEAD
----
Deduct 1.5 unit and pay for 95% of the lead content at the average of the four
LME quotations for refined lead, as officially quoted by the London Metal
Exchange and published in Platt's Metals Week (currently LME CASH and LME
THR-MO), averaged for the quotational
<PAGE> 2
UNICO, INC. AGREEMENT NO. L99026
______________________________________________________________________________
period. Notwithstanding the foregoing, the maximum quotation for lead payment
above shall be the London Metal Exchange Settlement quotation (currently LME
SETTLEMENT), as published in Platt's Metals Week, averaged for the quotational
period.
13. QUOTATIONAL PERIOD
-------------------
The quotational period for silver, gold and lead shall be the fourth calendar
month following the month of arrival at ASARCO's East Helena, Montana smelter.
No payment or accountability will be made for any metal or content except as
above specified. From the total of the above, make the following:
DEDUCTIONS
----------
13. TREATMENT DEDUCTION
-------------------
The base treatment deduction shall be $220.00 per dry short ton of
product basis a lead price of $0.25 per pound. Increase the base treatment
charge by $3.00 per dry short ton for each $0.01 per pound the lead price is
above $0.25 per pound, fractions in proportion.
14. ADDITIONAL DEDUCTIONS
---------------------
The deductions specified above are for product free of deleterious impurities.
Product delivered containing such impurities shall be subject to additional
deductions in accordance with the schedule below:
Antimony: Deduct $35.00 per ton for each 1% that the antimony assay
exceeds 0.5%, fractions in proportion.
Bismuth: Deduct $100.00 per ton for each 1% that the bismuth assay
exceeds 0.01%, fractions in proportion.
If product should contain any deleterious impurities which, in ASARCO'S
sole judgment, preclude economic treatment of the product, then ASARCO may
terminate this contract unless mutual agreement is reached as to appropriate
deduction for such impurities.
15. WEIGHING, SAMPLING AND ASSAYING
-------------------------------
Weighing, sampling and determination of moisture (at which UNICO or UNICO's
representative may be present)
<PAGE> 3
UNICO, INC. AGREEMENT NO. L99026
______________________________________________________________________________
as done by ASARCO according to ASARCO's standard practice, will be accepted as
final. The absence of UNICO or UNICO's representative shall be deemed a waiver
of this right in each instance. After sampling, and receipt by ASARCO, the
product may be placed in process, commingled or otherwise disposed of by
ASARCO. The dry pulp sample of each lot to be used for determination of metal
content shall be divided into not less than four equal parts; one to be
retained by ASARCO, one to be forwarded to UNICO, one to be retained for
umpire purposes, and one to be held in reserve. Each party shall assay its
part and the assay results shall be exchanged. When the difference between the
assays of ASARCO and UNICO is within the splitting limits designated below,
the exact mean of the assays shall be the settlement assay. When the
difference between the assays of ASARCO and UNICO is greater than the
splitting limits specified, an umpire shall be selected in rotation from the
list designated below, whose assay shall be the settlement assay if within the
limits of the assays of the two parties; and, if not, the assay of the party
nearer to the umpire shall be the settlement assay. The cost of the umpire
shall be borne by the party whose assay is furthest from the umpire assay;
and, in the event the umpire assay is the exact mean of the assays of the
parties, then the cost shall be borne equally by both parties. In case of
UNICO's failure to submit assays within sixty (60) days from the date samples
are available to UNICO, ASARCO's assay shall govern. The splitting limits and
the umpire assayers shown below shall be subject to change by mutual
agreement. Silver assays are to be determined by commercial fire assay method,
unadjusted for slag loss and cupel absorption and the umpire assayers will be
informed by ASARCO.
Splitting limits
- -----------------
Ag: 0.5 troy oz./ton Au: 0.02 troy oz./ton
Pb: 0.5% Bi: 0.1%
Sb: 0.1%
Umpire Assayers
- -----------------
K.C. Haight Chris Christopherson, Inc.
P.O. Box 960 P.O. Box 302
Kellogg, Idaho 83837 Kellogg, Idaho 83837
<PAGE> 4
UNICO, INC. AGREEMENT NO. L99026
______________________________________________________________________________
16. SETTLEMENT
----------
ASARCO shall make a 70% provisional payment to UNICO on the tenth (10th)
business day of the calendar month following the first calendar month after
delivery. Final settlement when all information is known.
17. FORCE MAJEURE
--------------
Prevention or delay in the performance hereof caused by cessation,
interruption or curtailment of operations at ASARCO's plant designated to
receive the product covered by the Agreement for any reason or at the UNICO's
Mine for failure of ore supply or other operating requirements or for any
other reason, or, without regard to the foregoing enumeration, any disabling
causes beyond the control of either party, caused by act of nature, strike,
fire, flood, traffic interruption, delay in transportation, war insurrection
or mob violence, requirement or regulation of government, or any other cause
which cannot be overcome by means normally employed in performance of this
agreement, shall entitle the party affected to suspend this agreement. Party
immediately affected by such cause shall give prompt written notice to the
other party of such cause and shall also give written notice to the other
party when the cause ceases to have effect. A suspension of performance
pursuant to this agreement shall not have the effect of abrogating the
agreement, but immediately upon the termination of the cause of disability,
this agreement shall again come into full force and effect. Any suspension
under this clause shall not operate to extend this agreement beyond the
expiration date as determined under Clause 4. DURATION. The product
affected by such suspension shall be excluded from this agreement. ASARCO
shall not be obliged to process such product at any time and Unico shall be
free to dispose elsewhere of such product not shipped during the entire period
of such suspension.
18. DEFINITIONS
------------
A ton means a dry short ton or 2,000 dry pounds avoirdupois.
A unit means a 1% of a ton or 20 pounds.
A calendar month means a named month in the calendar.
A business day means a named day in the calendar,
<PAGE> 5
UNICO, INC. AGREEMENT NO. L99026
______________________________________________________________________________
Saturdays, Sundays, and major holidays excepted.
A lot means 100 dry short tons.
19. TAXES
-----
The terms of this agreement are based on the taxes and other governmental
charges to which ASARCO is subject as of August 1, 1999. All income taxes
assessed ASARCO shall be excluded from this clause. Any substantial tax
increases, new tax or governmental charges of nature not existing as of August
1, 1999 imposed on the activity of ASARCO hereunder, shall be subject to
negotiation between the parties to determine if any proportionate part of such
tax or charges should be for the account of UNICO.
20. DIVERSION
---------
ASARCO may at its sole option sell or divert the product to another person and
plant and subject to the other provisions of this clause, any increase or
decrease in freight as against delivery as provided herein shall be for
ASARCO'S account. UNICO shall have the obligation to comply with ASARCO's
diversion instructions including but not limited to shipping instructions in
accordance with applicable freight tariffs governing such diversion. Any
additional costs incurred by reason of UNICO'S failure to comply with said
instructions and freight tariffs shall be for UNICO's account. In case of such
diversion, weighing and sampling shall be performed at the receiving plant and
date of delivery of product shall be the date of arrival of the last truck of
each lot at the receiving plant. All other provisions of the agreement shall
apply in all other respects as if no diversion had occurred. Notwithstanding
the foregoing, ASARCO shall in no case, including an event of force majeure at
plant designated to receive product, be under any obligation to divert the
product.
In the pricing of product or any metal contained therein, if one or more
suspensions of quotations occur for any cause resulting in the absence of the
quotation for more than three (3) days during the quotational period specified
in this agreement, then the beginning or said period (or the balance thereof
if suspension begins during the period) shall be deferred a number of
quotational days equal to the number of quotational
<PAGE> 6
UNICO, INC. AGREEMENT NO. L99026
______________________________________________________________________________
days occurring during the entire time of suspension, whether before, during or
after said quotational period. When the normal number of quotations for the
period specified in this agreement have been thus obtained, such quotations
shall be averaged for pricing. One or more suspensions of quotations
aggregating three (3) days or less during a quotational period shall be
disregarded and the remaining quotations shall be averaged for pricing. In
case any firm or publication whose quotations are the basis for pricing any
metal under this agreement shall go out of business, cease publication, or
discontinue the quotations, then the quotations by such other firm or
publication, as the parties shall agree upon shall be used.
22. NOTICES
-------
All notices, requests and other communications hereunder shall be in writing
and shall be deemed to have been duly given or made when sent by first-class
mail, postage prepaid, addressed:
If to ASARCO: ASARCO Incorporated
180 Maiden Lane
New York, New York 10038
Attention: Director, Raw Materials
Telephone: 212- 510-2215
Telecopy: 212- 510-2054
Copy to: ASARCO Incorporated
East Helena Plant
Box 1230
East Helena, MT 59635
Attention: Manager
Telephone: 406-227-7100
Telecopy: 406-227-8897
And if to UNICO: Unico Inc.
848 N. Rainbow Blvd., #315
Las Vegas, NV 89107
Attention: Mr. David F. Poisson
Telephone: 702-309-8200
Telefax: 702-309-8201
or in each case, at other such address as may be hereafter or has been
designated most recently in
<PAGE> 7
UNICO, INC. AGREEMENT NO. L99026
______________________________________________________________________________
writing by the addressee to the addressor.
Any notice given hereunder may be given by telefax and confirmed by mail in
due course in which case such notice shall be deemed given or served when sent
in telegraphic form.
23. SUCCESSION
----------
This Agreement shall bind and inure to the benefit of the parties hereto,
their legal representatives, successors and assigns. This agreement shall not
be assignable by either party hereto without the written consent of the other.
Such consent shall not be unreasonably withheld.
24. WAIVER
-------
Waiver of any breach of any provision hereof shall not be deemed to be a
waiver of any other provision hereof or of any subsequent breach of such
provision.
This Agreement shall take effect as a contract made in accordance with the
governed by the laws of the State of New York and shall come into full force
and effect as of August 1, 1999.
UNICO INC. ASARCO Incorporated
By /s/ Ray Brown
----------------------- ------------------------------
Vice President, Commercial
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