SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 9, 2000
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UNITRONIX CORPORATION
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(Exact name of Registrant as specified in its charter)
NEW JERSEY
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(State or other jurisdiction of incorporation or organization)
0-17080 22-2086851
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(Commission File Number) (I.R.S. Employer
Identification No.)
One Newbury Street, Peabody, MA 01960
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (978) 535-3912
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N/A
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Former Address
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UNITRONIX CORPORATI0N
This filing is an amendment to the Form 8-K that was filed on February 24, 2000.
The purpose of this filing is add electronic copies of three exhibits to the
February 24 filing that were originally filed on paper pursuant to a temporary
hardship exemption.
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INDEX TO EXHIBITS
EXHIBIT
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2.1 Operating Agreement, dated September 24, 1999, of Geotronix, LLC and
Amendment Thereto Changing Name of Geotronix, LLC to Interactive
Mining Technologies, LLC
2.2 Purchase and Sale Agreement, dated January 31, 2000, by and between
G.E. Jones Enterprises, Ltd. and EnerSource Mapping, Inc.
20.1 Press Release Announcing Formation of EnerSource Mapping, Inc. and
Acquisition of the Mapping Assets of G.E. Jones Enterprises, Ltd.
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EXHIBIT 2.1
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OPERATING AGREEMENT
OF
GEOTRONIX, LLC
THIS OPERATING AGREEMENT of Geotronix, LLC (the "Company"), a limited
liability company organized pursuant to the South Carolina Limited Liability
Company Act, is executed effective as of September 24, 1999, by and among the
Company and the Persons executing this Agreement as the Members and Managers.
FORMATION OF THE COMPANY
1.01 Formation. The Company was formed on September 24, 1999, upon the filing
with the Secretary of State of the Articles of Organization of the Company. In
consideration of the mutual promises and covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree that the rights and obligations of the
parties and the administration and termination of the Company shall be governed
by this Agreement, the Articles of Organization and the Act.
1.02 Name. The name of the Company is Geotronix, LLC. The Managers may
change the name of the Company from time to time as they deem advisable, pro-
vided appropriate amendments to this Agreement and the Articles of Organization
and necessary filings under the Act are first obtained.
1.03 Registered Office and Registered Agent. The Company's registered office
within the State of South Carolina and its registered agent at such address
shall be as determined from time to time by the Managers.
1.04 Principal Place of Business. The principal place of business of the
Company within the State of South Carolina shall be at such place or places as
the Managers may from time to time deem necessary or advisable.
Purposes and Powers.
(a) The purpose and business of the Company shall be to develop, test,
utilize, market and sell certain application software related to mineral
exploration using a predictive approach, together with any other lawful bus-
iness for which limited liability companies may be organized under the Act. The
first phase of the project to be undertaken will concentrate on volcanogenic
hosted massive sulfide ("VMS") deposits (the software being thus developed is
hereinafter referred to as the "Software Project"). The application software
(including source and object code and associated procedural code and related
textural material, together with the user and technical documentation thereto)
which is to be developed under and as a result of the Software Project shall be
referred to herein as the "Project Results".
(b) The Company shall have any and all powers which are necessary or
desirable to carry out the purposes and business of the Company, to the extent
the same may be legally exercised by limited liability companies under the Act.
1.06 Term. The Company shall continue in existence until the close of the
Company's business on December 31, 2050, as specified in the Company's Articles
of Organization, unless the Company is earlier dissolved and its affairs wound
up in accordance with the provisions of this Agreement or the Act.
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1.07 Nature of Members' Interests. The interests of the Members in the Comp-
any shall be personal property for all purposes. Legal title to all Company
assets, including, without limitation, all Project Results, trademarks, copy-
rights, patents, and other intellectual properties associated with the Software
Project and the Project results, shall be held in the name of the Company.
No Member shall have any right, title or interest in or to any Company property
or the right to partition any Property owned by the Company.
ARTICLE II - DEFINITIONS
2.01 Definitions. The following terms used in this Agreement shall have the
following meanings (unless otherwise expressly provided herein):
"Act" means the South Carolina Limited Liability Company Act, as amended
from time to time.
"Adjusted Capital Account Deficit" means, with respect to any Member, the
deficit balance, if any, in such Member's Capital Account as of the end of the
relevant fiscal year, after giving effect to the following adjustments:
(i) Credit to such Capital Account any amounts to which such Member is
obligated to restore or is deemed to be obligated to restore pursuant to the
penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-
2(i)(5); and
(ii) Debit to such Capital Account the items described in Sections 1.704-
1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6) of the
Treasury Regulations.
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Treasury
Regulations and shall be interpreted consistently therewith.
"Adjusted Capital Contributions" means, as of any day, a Member's Capital
Contributions adjusted as follows:
(i) Increased by the amount of any Company liabilities which, in
connection with Distributions, are assumed by such Member or are secured by any
Company Property distributed to such Member, and
(ii) Reduced by the amount of cash and the Gross Asset Value of any
Company Property distributed to such Member and the amount of any liabilities of
such Member assumed by the Company or which are secured by any property
contributed by such Member to the Company.
In the event a Member transfers all or any portion of such Member's
Membership Interest in accordance with the terms of this Agreement, the
transferee shall succeed to the Adjusted Capital Contribution of the transferor
to the extent it relates to the transferred Membership Interest or portion
thereof.
"Affiliate" of a specified Person means (i) any Person directly or
indirectly controlling, controlled by or under common control with the specified
Person; (ii) any Person owning or controlling ten percent or more of the
outstanding voting securities of the specified Person; (iii) any officer,
director or partner of the specified Person; or (iv) if the specified Person is
an officer, director or partner, any entity for which the specified Person acts
in such capacity.
"Agreement" means this Operating Agreement, as amended from time to time.
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"Articles of Organization" means the Articles of Organization of the
Company filed with the Secretary of State, as amended or restated from time to
time.
"Capital Account" means, with respect to any Member, the capital account
maintained for such Member in accordance with Section 5.05 of this Agreement.
"Capital Contribution" means all contributions of cash or property
(valued for this purpose at initial Gross Asset Value) made by a Member or the
Member's predecessor in interest.
"Capital Transaction" means any transactions undertaken by the Company or
by any entity in which the Company owns an interest, which, were it to generate
proceeds, would produce Company Sales Proceeds or Company Refinancing Proceeds.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time (and any corresponding provisions of succeeding law).
"Company Cash Flow" for any period means the excess, if any, of (A) the
sum of (i) all gross receipts from any source for such period, other than from
Company loans, Capital Transactions and Capital Contributions, and (ii) any
funds released by the Company from previously established reserves, over (B) the
sum of (i) all cash expenses paid by the Company for such period (including any
compensation to the Managers and their Affiliates); (ii) all amounts paid by the
Company in such period on account of the amortization of the principal of any
debts or liabilities of the Company (including loans from any Member);
(iii) capital expenditures of the Company; and (iv) a reasonable reserve for
future expenditures; provided, however, that the amounts referred to in (B) (i),
(ii) and (iii) above shall be taken into account only to the extent not funded
by Capital Contributions, loans or paid out of previously established reserves.
Such term shall also include all other funds deemed available for distribution
and designated as Company Cash Flow by the Managers.
"Company Minimum Gain" means gain as defined in Treasury Regulations
Section 1.704-2(d).
"Company Refinancing Proceeds" means the cash realized from the financing
or refinancing of all or any portion of the Property or other Company assets,
less the retirement of any related mortgage loans and the payment of all
expenses relating to the transaction and a reasonable reserve for future
expenditures.
"Company Sales Proceeds" means the cash realized from the sale, exchange,
condemnation, casualty or other disposition of all or any portion of the
Property or other Company assets, less the retirement of any related mortgage
loans and the payment of all expenses relating to the transaction and a
reasonable reserve for future expenditures as provided by Section 11.03.
"Depreciation" means, for each Fiscal Year, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such Fiscal Year, except that if the Gross Asset Value
of an asset differs from its adjusted basis for federal income tax purposes at
the beginning of such Fiscal Year, Depreciation shall be an amount which bears
the same ratio to such beginning Gross Asset Value as the federal income tax
depreciation, amortization, or other cost recovery deduction for such Fiscal
Year bears to such beginning adjusted tax basis; provided, however, that if the
adjusted basis for federal income tax purposes of an asset at the beginning of
such Fiscal Year is zero, Depreciation shall be determined with reference to
such beginning Gross Asset Value using any reasonable method selected by the
Managers.
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"Disinterested Member" means a Member who is not related (within the
meaning of Section 267(b) of the Code or Section 707(b)(1) of the Code) to
either the Member whose Membership Interest is to be transferred as provided in
Article VIII or the proposed transferee of such Membership Interest.
"Distribution" means any money or other property distributed to a Member
with respect to the Member's Membership Interest, but shall not include any
payment to a Member for materials or services rendered nor any reimbursement to
a Member for expenses permitted in accordance with this Agreement.
"Encumbrance" means any lien, pledge, encumbrance, collateral assignment
or hypothecation.
"Fiscal Year" means an annual accounting period ending December 31 of
each year during the term of the Company, unless otherwise specified by the
Managers.
"Gains from Capital Transactions" means the gains realized by the Company
as a result of or upon any sale, exchange, condemnation or other disposition of
capital assets of the Company or any entity in which the Company shall own an
interest (which assets shall include Code Section 1231 assets and all real and
personal property) or as a result of or upon the damage to or destruction of
such capital assets.
"Gross Asset Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by a Member to
the Company shall be the gross fair market value of such asset, as determined by
the contributing Member and the Managers;
(b) The Gross Asset Values of all Company assets shall be adjusted to
equal their respective gross fair market values, as determined by the Managers,
as of the following times: (i) the acquisition of an additional interest in the
Company (other than upon the initial formation of the Company) by any new or
existing Member in exchange for more than a de minimis Capital Contribution;
(ii) the distribution by the Company to a Member of more than a de minimis
amount of Company Property as consideration for an interest in the Company; and
(iii) the liquidation of the Company within the meaning of Treasury Regulations
Section 1.704-1(b)(2)(ii)(g); provided, however, that the adjustments pursuant
to clauses (i) and (ii) above shall be made only if the Managers reasonably
determine that such adjustments are necessary or appropriate to reflect the
relative economic interests of the Members in the Company;
(c) The Gross Asset Value of any Company asset distributed to any Member
shall be adjusted to equal the gross fair market value of such asset on the date
of distribution as determined by the distributee and the Managers, provided
that, if the distributee is a Manager, the determination of the fair market
value of the distributed asset shall be determined by appraisal; and
(d) The Gross Asset Values of Company assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and subsections
(vi) of the definition of Profits and Losses herein; provided, however, that
Gross Asset Values shall not be adjusted pursuant to this subsection (d) hereof
to the extent the Managers determine that an adjustment pursuant to subsection
(b) hereof is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this Section (d).
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If the Gross Asset Value of an asset has been determined or adjusted pursuant to
subsection (a), subsection (b), or subsection (d) hereof, such Gross Asset Value
shall thereafter be adjusted by the Depreciation taken into account with respect
to such asset for purposes of computing Profits, Gains from Capital Transactions
or Losses.
"Majority of Managers" means a combination of Managers constituting more
than fifty percent (50%) of the number of Managers then elected and qualified.
"Majority in Interest" means a combination of any Members who, in the
aggregate, own more than fifty percent of the Membership Interests of all
Members.
"Manager" means each Person executing this Agreement as a Manager, any
other Person that succeeds such Manager or any other Person elected to act as
Manager of the Company as provided in this Agreement. "Managers" refers to
such Persons as a group.
"Member" means each Person designated as a member of the Company on
Schedule I hereto or any other Person admitted as a member of the Company in
accordance with this Agreement or the Act. "Members" refers to such Persons
as a group.
"Membership Interest" means all of a Member's rights in the Company,
including without limitation, the Member's share of the Profits and Losses of
the Company, the right to receive distributions of the Company's assets, any
right to vote and any right to participate in the management of the Company as
provided in the Act and this Agreement.
"Percentage Interest" means the percentage which the Capital
Contributions of a Member to the Company bears to the Capital Contributions of
all Members. The initial Capital Contribution of each Member is set forth
opposite such Member's name on Schedule I hereto.
"Person" means an individual, a trust, an estate, a domestic
corporation, a foreign corporation, a professional corporation, a partnership, a
limited partnership, a limited liability company, a foreign limited liability
company, an unincorporated association or another entity.
"Profits" and "Losses" means, for each Fiscal Year, an amount
equal to the Company's taxable income or loss for such year or period (excluding
Gains from Capital Transactions), determined in accordance with Code Section
703(a) (for this purpose, all items of income, gain, loss or deduction required
to be stated separately pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments:
(i) Any income of the Company that is exempt from federal income tax and
not otherwise taken into account in computing Profits and Losses pursuant to
this definition (excluding Gains from Capital Transactions) shall be added to
such taxable income or loss;
(ii) Any expenditures of the Company described in Code
Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures
pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise
taken into account in computing Profits or Losses shall be subtracted from such
taxable income or loss;
(iii) In the event the Gross Asset Value of any Company asset is adjusted
pursuant to Subsection (b) or (c) of the definition of Gross Asset Value hereof,
the amount of such adjustment shall be taken into account as gain or loss from
the disposition of such asset for purposes of computing Profits or Losses;
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(iv) Gain or loss resulting from any disposition of Company Property with
respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the property disposed
of, notwithstanding that the adjusted tax basis of such property differs from
its Gross Asset Value;
(v) In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such fiscal year or other period,
computed in accordance with the definition of Depreciation set out hereof;
(vi) To the extent an adjustment to the adjusted tax basis of any Company
asset pursuant to Code Section 734(b) or Code Section 743(b) is required
pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken
into account in determining Capital Accounts as a result of a distribution other
than in liquidation of a Member's interest in the Company, the amount of such
adjustment shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis of the asset)
from the disposition of the asset and shall be taken into account for purposes
of computing Profits or Losses;
(vii) Notwithstanding any other provision of this definition of Profits
and Losses, any items which are specially allocated pursuant to Article VI
hereof shall not be taken into account in computing Profits or Losses.
The amounts of the items of Company income, gain, loss or deduction available to
be specially allocated pursuant to Article VI hereof shall be determined by
applying rules analogous to those set forth in Sections (i) through (vii) above.
"Property" means (i) any and all property acquired by the Company, real
and/or personal (including, without limitation, intangible property) and (ii)
any and all of the improvements constructed on any real property.
"Secretary of State" means the Secretary of State of South Carolina.
"Tax Matters Partner" means such Member designated as the "tax matters
partner," as that term is defined in the Code and Treasury Regulation.
"Transfer" means sell, assign, transfer, lease or otherwise
dispose of property, including without limitation an interest in the Company.
"Treasury Regulations" means the Income Tax Regulations and
Temporary Regulations promulgated under the Code, as such regulations may be
amended from time to time (including corresponding provisions of succeeding
regulations).
ARTICLE III - MANAGEMENT OF THE COMPANY
3.01 The Managers. Except as otherwise may be expressly provided in this
Agreement, the Articles of Organization or the Act, all decisions with respect
to the management of the business and affairs of the Company shall be made by
action of a Majority of the Managers taken at a meeting or evidenced by a
written consent executed by a Majority of the Managers. Meetings of the
Managers may be held on such terms and after such notice as the Managers may
establish. The Managers shall have full and complete authority, power and
discretion to manage and control the business of the Company, to make all
decisions regarding those matters and to perform any and all other acts
customary or incident to the management of the Company's business, except those
acts as to which approval by the Members is expressly required by the Articles
of Organization, this Agreement, the Act or other applicable law. The Managers
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may delegate responsibility for the day-to-day management of the Company to any
individual Manager or Person retained by the Managers who shall have and
exercise on behalf of the Company all powers and rights necessary or convenient
to carry out such management responsibilities.
3.02 Limitations on Power and Authority of Managers. Without the consent
of all the Members, the Managers shall have no authority to do any of the
following:
(a) Any act in contravention of this Agreement;
(b) Any act which would make it impossible to carry on the ordinary
business of the Company;
(c) Possess Property of the Company or assign the Company's rights in
specific Property for other than Company purposes; or
(d) Take any action which requires the consent of a designated requisite
majority of Members under Section 4.04 or any other Section of this Agreement,
until such consent has been obtained through a procedure authorized hereunder.
3.03 Compensation and Expenses. The Managers shall not receive any
compensation from the Company for serving as Managers, but the Company will
reimburse Managers for expenses incurred by the Managers in connection with
their service to the Company. Nothing contained in this Section 3.03 is
intended to affect the Percentage Interests of Managers who are also Members or
the amounts that may be payable to the Managers by reason of their respective
Percentage Interests.
3.04 Indemnification of Managers. The Company shall indemnify the
Managers to the fullest extent permitted or required by the Act, as amended from
time to time, and the Company may advance expenses incurred by a Manager upon
the approval of the remaining Managers and the receipt by the Company of the
signed statement of such Manager agreeing to reimburse the Company for such
advance in the event it is ultimately determined that such Manager is not
entitled to be indemnified by the Company against such expenses. The provisions
of this Section 3.04 shall apply also to any Person to whom the Managers have
delegated management authority as provided in Section 3.01, whether or not such
Person is a Manager or Member.
3.05 Limitation on Liability. No Manager of the Company shall be liable
to the Company for monetary damages for an act or omission in such Person's
capacity as a Manager, except as provided in the Act for (i) acts or omissions
which a Manager knew at the time of the acts or omissions were clearly in
conflict with the interests of the Company; (ii) any transaction from which a
Manager derived an improper personal benefit; or (iii) acts or omissions
occurring prior to the date this provision becomes effective. If the Act is
amended to authorize further elimination of or limitations on the liability of
Managers, then the liability of the Managers shall be eliminated or limited to
the fullest extent permitted by the Act as so amended. Any repeal or
modification of this Section shall not adversely affect the right or protection
of a Manager existing at the time of such repeal or modification. The
provisions of this Section 3.05 shall apply also to any Person to whom the
Managers have delegated management authority as provided in Section 3.01,
whether or not such Person is a Manager or Member.
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3.06 Liability for Return of Capital Contribution. The Managers shall not
be liable for the return of the Capital Contributions of the Members, and upon
dissolution, the Members shall look solely to the assets of the Company.
ARTICLE IV - RIGHTS AND OBLIGATIONS OF MEMBERS
4.01 Names and Addresses of Member. The names, addresses and Membership
Interests of the Members are as reflected in Schedule I attached and
incorporated by reference, which Schedule shall be as amended by the Company as
of the effectiveness of any transfer or subsequent issuance of any Membership
Interest.
4.02 No Management by Members. The Members in their capacity as Members
shall not take part in the management or control of the business, nor transact
any business for the Company, nor shall they have power to sign for or to bind
the Company.
4.03 Election of Managers. The number of Persons initially serving as
Managers of the Company shall be five (5). The Members hereby elect the
following Persons to serve as Managers, effective as of the effective date of
this Agreement:
Unitronix Group Goldsat Group
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Jack Shaw A. Lewis Moran
Mary L. Ready Robert J. Livingston
Howard Morgan
The Members shall have the power by the action of a Majority in Interest to
elect a Person to serve as a Manager to replace any Manager no longer able to
serve in such capacity due to such Manager's death, resignation or the vote of a
Majority in Interest of the Members to remove such Manager. Notwithstanding
the above, three (3) of the five (5) Managers must be selected from nominees
submitted by Unitronix Corporation, so long as Unitronix Corporation is a
Member; and two (2) Managers must be selected from nominees submitted by Goldsat
Mining, Inc., so long as it is a Member of the Company. If the party given the
responsibility for nominating a perspective Manager shall submit only one
nominee for a Manager slot, either in the initial selection or in the selection
of a replacement, then that nominee shall automatically be elected for that
slot. Except as otherwise stated herein, the vote or consent of a simple
majority of the Managers shall be sufficient to authorize the Managers, or
anyone of them, to take actions on behalf of the Company.
4.04 Action by Members. Any action to be taken by the Members under the
Act or this Agreement may be taken (i) at a meeting of Members held on such
terms, and after such notice as the Managers may establish; provided, however,
that notice of a meeting of Members must be given to all Members entitled to
vote at the meeting at least five (5) days before the date of the meeting or
(ii) by written action of a Majority in Interest of the Members; provided that
actions requiring more than a simple Majority in Interest require the vote or
written consent of the appropriate requisite number of Members. Any action
requiring the consent of all Members under this Agreement, the Act or other
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applicable law taken by written action must be signed by all Members. A Member
may vote in person or by written proxy filed with the Company before or at the
time of the meeting. No notice need be given of action proposed to be taken by
written action, or an approval given by written action, unless specifically
required by this Agreement, the Act or other applicable law. Such written
actions must be kept with the records of the Company.
4.05 Action by Super-Majority of Members. The following actions may not
be taken by the Company, nor by any Manager acting on behalf of the Company,
without first obtaining the consent (pursuant to one of the procedures set forth
in Section 4.04 above) of Members owning at least two-thirds (2/3) of the
Membership Interest of all Members (hereinafter referred to as a "Super-
Majority"):
(a) Amendments to this Agreement.
(b) Commitments for expenditures over $15,000 (CDN) which are not
specifically provided for in the current Annual Budget previously
approved by the Managers.
(c) Appointment or removal of an independent auditor.
(d) Removal of a Manager.
(e) Approval of loans to or from, or any other contractual arrangements
with, Managers and employees of the Company.
(f) Entering into any indebtedness not specifically called for in an
approved Annual Budget.
(g) Subjecting any assets of the Company to any liens, including
mortgages, security interests, pledges, or collateral mortgages, to secure any
indebtedness of the Company or of any other party.
(i) Sale of any assets of the Company, except as may be effected in the
ordinary course of business pursuant to a standing resolution or prior authority
approved or given by a Super-Majority of Members.
4.06 Limited Liability. The Members shall not be required to make any
contribution to the capital of the Company except as set forth in Article V, nor
shall the Members in their capacity as such be bound by, or personally liable
for, any expense, liability or obligation of the Company except to the extent of
their interest in the Company and the obligation to return Distributions made to
them under certain circumstances as required by the Act. The Members shall be
under no obligation to restore a deficit capital account upon the dissolution of
the Company or the liquidation of any of their Membership Interests.
4.07 Bankruptcy or Incapacity of a Member. A Member shall cease to have
any power as a Member or a Manager, any voting rights or rights of approval
hereunder upon death, bankruptcy, insolvency, dissolution, assignment for the
benefit of creditors or legal incapacity; and each Member, its personal
representative, estate or successor upon the occurrence of any such event shall
have only the rights, powers and privileges of a transferee enumerated in
Section 8.04 and shall be liable for all obligations of such Member under this
Agreement. In no event, however, shall a personal representative or successor
become a substitute Member unless the requirements of Section 8.03 are
satisfied.
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ARTICLE V - CAPITAL CONTRIBUTIONS AND LOANS
5.01 Initial Capital Contributions. Contemporaneously with the execution
of this Agreement, the Members have each contributed cash to the Company in the
respective amounts set forth as the initial Capital Contribution opposite their
names on Schedule I attached hereto. The Members named herein shall also make
the following additional Capital Contributions:
(a) Unitronix Corporation has or will venture into an Agreement with MIR
Teledetection, Inc. ("MIR") pursuant to which that company will provide
services and expertise which are essential to the Software Project. Unitronix
Corporation will assign all of its interests under said contract with MIR to the
Company and the Company will assume all of the obligations of Unitronix
thereunder. Unitronix will also provide the funds required to build a model as
specified in a proposal submitted by MIR and reflected in a projected budget
prepared by MIR and attached to this Agreement as Schedule II. As reflected in
said budget, the obligation of Unotronix for services, supplies, and sales taxes
required to build said model, will not exceed $137,000 (CDN). Unitronix will
also provide up to $28,000 (CDN) for salaries and expenses for Phase I of the
project, including the fees to be paid to John Harvey, who will be retained by
the company in connection with the development of the Software Project.
Additionally, Unitronix will provide services from its own employees and
independent contractors to perform the following: (i) project management, (ii)
quality assurance testing, (iii) accounting and office management, (iv)
preliminary market research, (v) periodic financial and project reporting, (vi)
other duties assigned by the Managers. The Members agree and stipulate that the
value of these services over a four (4) month period will be $125,000 (CDN).
Altogether, the obligation of Unitronix for Initial Capital Contributions during
the above-described phase of the Software Project (hereinafter referred to as
"Phase I") will be $280,000 (CDN). Unless Unitronix exercises its early
termination option, as set forth below in Section 5.06, then Unitronix will make
an additional contribution of $470,000 (CDN), to be made at such times and in
such increments as may be called for by the Managers.
(b) As its additional Capital Contribution, Goldsat Mining, Inc. will
assign, deed, and transfer to the Company an undivided 67% interest in certain
real properties identified as the Dalet and Daniel properties, located in the
Dalet and Mazarin Townships in Northwestern Quebec, together will all geological
and engineering studies performed on said properties (subject only to existing
net smelter interest). A legal description of each of these two (2) properties
is attached to this Agreement as Schedule III. This contribution will be
consummated by Goldsat not later than ten (10) days after the execution of this
Agreement by the registering of such transfer in the offices of the Ministere
Des Resources Naturelles (Quebec), and any and all other public records which
may be necessary to complete and to give public notice of such transfer.
Goldsat will also be responsible for maintaining these properties in good
standing at all times throughout the period of the Company's ownership thereof.
Goldsat will also make available to the Company the services of Dr. Marcel
Morin, and shall pay all compensation of Dr. Morin. This contribution will
include all existing maps and data sets for the Dalet, Bathurst and Noranda
properties and will provide property management on the Dalet property. Goldsat
will also fund all costs associated with the preparation of the Dalet property
as a test site and all other costs associated with preparing the property for
the drilling campaign required to test the Software Project. In the event that
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Dr. Morin or any of the materials described above shall be deemed by MIR
Teledetection to be insufficient for Phase I purposes, Goldsat will also fund
the cost of his replacement and any missing maps or datasets needed in Phase I.
(c)The Members have agreed that the total gross value of the additional
Capital Contributions to be made by Goldsat under Section 5.01(b) are valued at
$500,000 (CDN). By separate agreement, the Managers have allocated specific
dollar values to various components of Goldsat's initial Capital Contributions.
5.02 Additional Funds. In the event that the Managers determine at any
time (or from time to time) that additional funds are required by the Company
for or in respect of its business or to pay any of its obligations, expenses,
costs, liabilities or expenditures (including, without limitation, any operating
deficits), then the Managers, subject to approval requirements set forth in
Article IV, may borrow all or part of such additional funds on behalf of the
Company, with interest payable at then-prevailing rates, from one or more of the
Members or from commercial banks, savings and loan associations or other
commercial lending institutions.
5.03 Mandatory Capital Calls. If the Managers determine that additional
funds are required for the purposes set forth in Section 5.02 of this Agreement
and that all or any portion of such additional funds should be contributed to
the Company as supplemental Capital Contributions (over and above the initial
and additional Capital Contributions called for under Section 5.01), a Majority
of Managers may require that the Members make supplemental Capital Contributions
(hereinafter referred to as "Capital Calls"). All Capital Calls shall be
required in amounts which are as proportionate to the respective Interests of
the Members as set forth on Schedule I (or as such Schedule may be subsequently
amended). In the event that any Member shall fail to make all or any portion of
a Capital Call, then the non-defaulting Member or Members may contribute all or
any part of the deficit amounts. The default by a Member in its obligation to
make any Capital Call shall result in a reduction in the Membership Interest of
such defaulting Member and a corresponding increase in the Membership Interests
of those Members who contribute their required share of the Capital Call. The
Membership Interests of a defaulting Member shall be reduced by one (1%) percent
for each $50,000 (CDN) which such Member failed to make; and each such
percentage point shall be reallocated among the Members who complied with their
obligations, prorata according to the relative Membership Interest of those
Members. Moreover, if any other Member shall make up the deficit created by the
defaulting Member, then such contributing Member shall receive an additional one
(1%) percent of the defaulting Member's Membership Interest for each $50,000
(CDN) so contributed. In the event the Membership Interests of any defaulting
Member shall be reduced by as much as ten (10%) percent (for instance, from
fifty (50%) percent to forty (40%) percent), then that Capital Member will lose
its power to control the selection of one Manager (as described in Section
4.03), and shall immediately select which Manager must resign as a consequence
of such reduction. In the event the total Membership Interest of either of the
Members which have such power shall be reduced to ten (10%) percent or less by
reason of the reductions described above, then that Member shall no longer have
the power to designate any Manager. In that event, the Manager or Managers
previously nominated by such Capital Member shall be deemed to have resigned and
the other Member having such appointive powers shall select a replacement.
Page 11
5.04 No Interest on Capital Contributions. No interest shall be paid on
any contribution to the capital of the Company. In the event the Managers shall
agree to accept a loan from any Member, then such loan shall bear interest at
the rate of Wall Street Journal Prime plus 2%; and the Managers shall have the
option of securing such loan with mortgages, security interests, or pledges of
all or any selected assets of the Company.
5.05 Capital Accounts. A Capital Account shall be established for each
Member and shall be credited with each Member's initial and any additional
Capital Contributions. Except as specifically stated herein, all contributions
of property to the Company by a Member shall be valued and credited to the
Member's Capital Account at such property's Gross Asset Value on the date of
contribution. All distributions of property to a Member by the Company shall be
valued and debited against such Member's Capital Account at such property's
Gross Asset Value on the date of distribution. Each Member's Capital Account
shall at all times be determined and maintained pursuant to the principles of
this Section 5.05 and Treasury Regulations Section 1.704-1(b)(2)(iv). Each
Member's Capital Account shall be increased in accordance with such Regulations
by:
(i) The amount of Profits allocated to the Member pursuant to this
Agreement;
(ii) The amount of all Gains From Capital Transactions allocated to the
Member pursuant to this Agreement; and
(iii) The amount of any Company liabilities assumed by the Member or which
are secured by any Company Property distributed to such Member.
Each Member's capital account shall be decreased in accordance with such
Regulations by:
(i) The amount of Losses allocated to the Member pursuant to this
Agreement;
(ii) The amount of Company Cash Flow distributed to the Member pursuant to
this Agreement;
(iii) The amount of Company Sales Proceeds and Company Refinancing
Proceeds distributed to the Member pursuant to this Agreement; and
(iv) The amount of any liabilities of the Member assumed by the Company or
which are secured by any property contributed by such Member to the Company.
In addition, each Member's Capital Account shall be subject to such other
adjustments as may be required in order to comply with the capital account
maintenance requirements of Section 704(b) of the Code.
In the event that the Managers shall determine that it is prudent to modify
the manner in which the Capital Accounts, or any debits or credits thereto
(including, without limitation, debits or credits relating to liabilities that
are secured by contributed or distributed property or that are assumed by the
Company or the Members), are computed in order to comply with such Treasury
Regulations, the Managers may make such modification, provided that it is not
likely to have a material effect on the amounts distributable to any Member upon
dissolution of the Company. The Managers also shall (i) make any adjustments
that are necessary or appropriate to maintain equality between the Capital
Accounts of the Members and the amount of Company capital reflected on the
Company's balance sheet, as computed for book purposes, in accordance with
Treasury Regulations Section 1.704-1(b)(2)(iv)(g) and (ii) make any appropriate
Page 12
modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Treasury Regulations Section 704-1(b).
5.06 Early Termination of the Project. Upon the completion of Phase I of
the Project, Unitronix shall have the exclusive right to elect to discontinue
its involvement in the Project. This option is exercisable if it is determined
by an independent VMS expert, selected from a list of three Persons previously
approved by all Members and attached hereto as Schedule IV, that the Project
will not produce a software product which is unique and commercially feasible.
In order to exercise the option, Unitronix must provide written notice to all
other Members of its decision not later than ten (10) business days after
receipt of such independent evaluation. If Unitronix elects to terminate its
involvement as stated above, then Goldsat shall have the right to acquire
Unitronix' Membership Interest for an amount equal to Unitronix' Capital
Contributions to the Company through the date of such election, together with
any documented costs paid by Unitronix in connection with its involvement in the
Company through said date. If Goldsat elects to exercise its option to acquire
Unitronix Membership Interest, it must communicate such decision, and pay the
full price thereof, within ten (10) business days of notification by Unitronix
of its election to terminate. Unless Goldsat elects to purchase Unitronix
Interest and pays full price thereof as provided above, then all Project Results
developed in Phase I of the Project will be transferred by the Company to
Unitronix or its designee. In that event, (i) the Company will transfer back to
Goldsat the interest in the Dalet and Daniel properties previously transferred
to the Company in accordance with this Agreement; and (ii) in addition to the
Project Results, Unitronix will receive from the Company all intellectual
properties, licenses, patents, software, personal property, and all other assets
and properties of the Company of all types, with the exception of the interests
in the Dalet and Daniel Properties.
If Unitronix does not exercise its option to terminate at the end of Phase
I, then Unitronix and Goldsat will proceed diligently to effect a merger, or
similar amalgamation, into a single entity. To that end, the Managers shall
retain the services of an investment banker to determine the value of Unitronix
and of Goldsat and to make recommendations as to the terms of such a merger or
amalgamation, as soon as possible after the expiration of Unitronixs' option to
terminate.
ARTICLE VI - ALLOCATIONS, ELECTIONS AND REPORTS
6.01 Profits and Losses.
(a) Except as otherwise provided herein, Profits and Losses of the Company
and all items of tax credit and tax preference shall be allocated among the
Members in accordance with their respective Percentage Interests. In the event
the Percentage Interests vary during any Fiscal Year, Profits and Losses and all
items of tax credit and tax preference for such Fiscal Year shall be allocated
among the Members on a daily basis in accordance with their varying Percentage
Interests during the Fiscal Year.
(b) Losses allocated pursuant to this Section 6.01 shall not exceed the
maximum amount of Losses that can be so allocated without causing any Member to
have an Adjusted Capital Account Deficit at the end of any Fiscal Year. In the
event some but not all of the Members would have Adjusted Capital Account
Page 13
Deficits as a consequence of an allocation of Losses pursuant to this
Section 6.01, the limitation set forth in this Section 6.01 shall be applied on
a Member by Member basis so as to allocate the maximum possible Losses to each
Member under Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations.
6.02 Allocations Between Transferor and Transferee. In the event of the
transfer of all or any part of a Member's Membership Interest (in accordance
with the provisions of this Agreement) at any time other than at the end of a
Fiscal Year, or the admission of a new Member (in accordance with the terms of
this Agreement), the transferring Member or new Member's share of the Company's
income, gain, loss, deductions and credits, as computed both for accounting
purposes and for federal income tax purposes, shall be allocated between the
transferor Member and the transferee Member, or the new Member and the other
Members, as the case may be, in the same ratio as the number of days in such
Fiscal Year before and after the date of the transfer or admission; provided,
however, that if there has been a sale or other disposition of the assets of the
Company (or any part thereof) during such Fiscal Year, then upon the mutual
agreement of all the Members (excluding the new Member and the transferring
Member), the Company shall treat the periods before and after the date of the
transfer or admission as separate Fiscal Years and allocate the Company's net
income, gain, net loss, deductions and credits for each of such deemed separate
Fiscal Years. Notwithstanding the foregoing, the Company's "allocable cash
basis items," as that term is used in Section 706(d)(2)(B) of the Code, shall
be allocated as required by Section 706(d)(2) of the Code and the Treasury
Regulations thereunder.
6.03 Gains from Capital Transactions. Gains from Capital Transactions
during any Fiscal Year shall be allocated as follows:
(a) First, to those Members whose Capital Accounts immediately prior to
the Capital Transaction were negative, in an amount sufficient to increase the
Capital Accounts to zero, but in the event sufficient gain is not recognized to
do so, then among them pro rata in proportion to their negative Capital
Accounts;
(b) Second, to the Members in an amount equal to the difference between
the Company Sales Proceeds to be distributed to each of the Members as provided
in Section 7.03 and the Capital Accounts of each respective Member as adjusted
(if necessary) by paragraph (a) above, but in the event sufficient gain is not
recognized to do so, then among the Members in an amount which, when credited to
the Capital Accounts of the Members, results in the Members' Capital Accounts'
bearing the same ratio to one another as the ratio of the distribution of
Company Sales Proceeds to each of the Members, as provided in Section 7.03; and
thereafter
(c) Any remaining gain shall be allocated among the Members in accordance
with their respective Percentage Interests as of the date of the Capital
Transaction giving rise to the gain.
Page 14
6.04 Contributed Property. In accordance with Code Section 704(c) and the
Treasury Regulations thereunder, income, gain, loss and deduction with respect
to any property contributed to the capital of the Company shall, solely for tax
purposes, be allocated among the Members so as to take account of any variation
between the adjusted basis of such property to the Company for federal income
tax purposes and its initial Gross Asset Value at the time of contribution.
In the event the Gross Asset Value of any Company asset is adjusted
pursuant to Section 2.01 hereof, subsequent allocations of income, gain, loss
and deduction with respect to such asset shall take account of any variation
between the adjusted basis of such asset for federal income tax purposes and its
Gross Asset Value in the same manner as under Code Section 704(c) and the
Treasury Regulations thereunder.
Any elections or other decisions relating to such allocations shall be made
by the Managers in any manner that reasonably reflects the purpose and intention
of this Agreement. Allocations pursuant to this Section 6.04 are solely for
purposes of federal, state and local taxes and shall not affect, or in any way
be taken into account in computing, any Member's Capital Account or share of
Profits, Losses, other items or Distributions pursuant to any provision of this
Agreement.
6.05 Minimum Gain Chargeback. If there is a net decrease in Company
Minimum Gain during any Fiscal Year, each Member shall be specially allocated
items of Company income and gain for such year (and, if necessary, subsequent
years) in an amount equal to such Member's share of the net decrease in Company
Minimum Gain, determined in accordance with Treasury Regulation Section 1.704-
2(g). Allocations pursuant to the previous sentence shall be made in proportion
to the respective amounts required to be allocated to each Member pursuant
thereto. The items to be so allocated shall be determined in accordance with
Treasury Regulations Sections 1.704-2(f) and 1.704-2(j)(2). This Section 6.05
is intended to comply with the minimum gain chargeback requirement in Treasury
Regulation 1.704-2(f) and shall be interpreted consistently therewith.
6.06. Qualified Income Offset. If any Member unexpectedly receives an
adjustment, allocation or distribution as described in Treasury Regulations
Section 1.704-1(b)(2)(ii)(d)(4) through (6) which causes or increases a deficit
capital account balance in such Member's Capital Account (as determined in
accordance with such Regulations) items of Company income and gain shall be
specially allocated to each such Member in an amount and manner sufficient to
eliminate, to the extent required by the Treasury Regulations, the Adjusted
Capital Account Deficit of such Member as quickly as possible, provided that an
allocation pursuant to this Section 6.06 shall be made if and only to the extent
that such Member would have an Adjusted Capital Account Deficit after all other
allocations provided for in this Article VI have been tentatively made as if
this Section 6.06 were not in the Agreement. This provision is intended to be a
"qualified income offset," as defined in Treasury Regulation Section 1.704-
1(b)(2)(ii)(d), such Regulations being specifically incorporated herein by
reference.
Page 15
6.07 Gross Income Allocation. In the event any Member has a deficit
Capital Account at the end of any Company Fiscal Year which is in excess of the
sum of (i) the amount such Member is obligated to restore and (ii) the amount
such Member is deemed to be obligated to restore pursuant to the penultimate
sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each
such Member shall be specially allocated items of Company income and gain in the
amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 6.07 shall be made if and only to the extent that such
Member would have a deficit Capital Account in excess of such sum after all
other allocations provided for in this Article VI have been tentatively made as
if this Section 6.07 and Section 6.06 hereof were not in this Agreement.
6.08 Section 754 Adjustment. To the extent an adjustment to the adjusted
tax basis of any Company asset pursuant to Code Section 734(b) or Code Section
743(b) is required, pursuant to Treasury Regulations Section 1.704-
1(b)(2)(iv)(m)(2) or Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be
taken into account in determining Capital Accounts as the result of a
distribution to a Member in complete liquidation of such Member's interest in
the Company, the amount of such adjustment to the Capital Accounts shall be
treated as an item of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases such basis) and such gain or loss shall be
specially allocated to the Members in accordance with their interests in the
Company in the event that Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2)
applies, or to the Members to whom such distribution was made in the event that
Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.
6.09 Curative Allocations. The allocations set forth above in this
Article VI hereof (the "Regulatory Allocations") are intended to comply with
certain requirements of the Treasury Regulations. It is the intent of the
Members that, to the extent possible, all Regulatory Allocations shall be offset
either with other Regulatory Allocations or with special allocations of other
items of Company income, gain, loss or deduction pursuant to this Section 6.09.
Therefore, notwithstanding any other provision of this Article VI (other than
the Regulatory Allocations), the Managers shall make such offsetting special
allocations of Company income, gain, loss or deduction in whatever manner they
determine appropriate so that, after such offsetting allocations are made, each
Member's Capital Account balance is, to the extent possible, equal to the
Capital Account balance such Member would have had if the Regulatory Allocations
were not part of the Agreement and all Company items were allocated pursuant to
Sections 6.01(a).
6.10 Compliance with Treasury Regulations. The above provisions of this
Article VI notwithstanding, it is specifically understood that the Managers may,
without the consent of any Members, make such elections, tax allocations and
adjustments as the Managers deem necessary or appropriate to maintain to the
greatest extent possible the validity of the tax allocations set forth in this
Agreement, particularly with regard to Treasury Regulations under Code Section
704(b).
Page 16
ARTICLE VII - DISTRIBUTIONS
7.01 Company Cash Flow. The Company Cash Flow for each Fiscal Year, to
the extent available, shall be distributed to the Members at such times as are
determined by the Managers in accordance with the Members' respective Percentage
Interests. Notwithstanding the above, Goldsat shall receive a preferential
payment of $100,000 (CDN) from actual cash proceeds received from the production
net profits from the Dalet and/or Daniel Properties; provided that prior to
receiving any such preferential distribution Goldsat shall have acquired and
transferred to the Company the 1% net smelter royalty on the Dalet and Daniel
Properties currently held by Devmin, Inc.
7.02 Company Refinancing Proceeds. Company Refinancing Proceeds, to the
extent the Managers shall deem advisable, shall be distributed to the Members
within thirty (30) days of the Capital Transaction giving rise to such proceeds,
or earlier in the discretion of the Managers, in accordance with the Members'
respective Percentage Interests.
7.03 Company Sales Proceeds. Company Sales Proceeds, to the extent the
Managers shall deem advisable, shall be distributed to the Members within thirty
(30) days of the Capital Transaction giving rise to such proceeds, or earlier in
the discretion of the Managers, in accordance with the Members' respective
Percentage Interests.
7.04 Distributions in Liquidation. Upon liquidation of the Company,
all of the Company's Property shall be sold as provided in Section 10.02 and
Profits and Losses allocated accordingly. Proceeds from the liquidation of the
Company shall be distributed in accordance with the provisions of Section 10.02
7.05 Limitation Upon Distributions. No Distribution shall be declared and paid
if payment of such Distribution would cause the Company to violate any
limitation on distributions provided in the Act.
ARTICLE VIII - TRANSFER OF INTERESTS AND ADMISSION OF MEMBERS
8.01 Restrictions on Transfer. Without the prior written consent of a
Majority in Interest of the Disinterested Members (which consent may be given or
withheld in their sole discretion), no Member may voluntarily or involuntarily
Transfer, or create or suffer to exist any Encumbrance against, all or any part
of such Member's record or beneficial interest in the Company. No Person may be
admitted to the Company as a Member without the prior written consent of a
Super-Majority of Members. Except for withdrawals in connection with a Transfer
of a Membership Interest permitted by this Agreement, no Member may withdraw
from the Company without the consent of the Majority in Interest of the
Disinterested Members.
8.02 Conditions Precedent to Transfers. Any purported Transfer or
Encumbrance otherwise complying with Section 8.01 will be ineffective until the
transferor and transferee of the interest furnish to the Company the instruments
and assurances the Managers may request, including without limitation, if
requested, an opinion of counsel satisfactory to the Company that the interest
in the Company being Transferred or Encumbered has been registered or is exempt
Page 17
from registration under the Securities Act of 1933, as amended (the "Securities
Act"), and applicable state securities laws. No Transfer or Encumbrance will
be effective if it would result in the "termination" of the Company under
Section 708 of the Code unless all of the Managers give their prior written
consent to the Transfer or Encumbrance.
8.03 Substituted Members. No assignee or transferee of a Membership
Interest
shall be admitted as a substituted Member of the Company unless, in addition to
compliance with the conditions set forth in Section 8.02, all of the following
conditions are satisfied:
(a) The assignee or transferee has executed and delivered all documents
deemed appropriate by the Managers to reflect such Person's admission to the
Company and agreement to be bound by this Agreement;
(b) A Majority in Interest of the Disinterested Members shall have
consented in writing to such substitution, the granting or denial of which shall
be in the sole discretion of such Disinterested Members; and
(c) If requested by the Managers, payment has been made to the Company of
all costs and expenses of admitting such transferee or assignee as a substituted
Member.
8.04 Rights of Transferee. Unless admitted to the Company in accordance
with Section 8.03, the transferee of a Membership Interest or a part thereof
shall not be entitled to any of the rights, powers or privileges of its
predecessor in interest, except that such transferee shall be entitled to
receive and be credited or debited with its proportionate share of Profits,
Losses, Gains from Capital Transactions, Company Cash Flow, Company Sales
Proceeds, Company Refinancing Proceeds and Distributions in liquidation.
ARTICLE IX - BUY-SELL
9.01 Buy-Sell. Each of the following events shall constitute a "Buy-Sell
Event" under this Agreement:
(a) The death, declaration of legal incompetence or dissolution and
winding-up of a Member;
(b) A judicial determination of the insolvency of any Member;
(c) Any filing of a petition or suit under the bankruptcy laws by or
against a Member that is not dismissed within sixty (60) days;
(d) Any purported voluntary or involuntary Transfer or Encumbrance of all
or any part of a Member's Membership Interest in a manner not expressly
permitted by this Agreement;
(e) Any material breach of this Agreement by a Member which is not cured
within ten (10) days after written notice of such breach is given to the Member
by the Company;
(f) Any instance in which the spouse of a Member commences against a
Member, or a Member is named in, a Domestic Proceeding; or
(g) Any withdrawal by a Member from the Company other than as may be
expressly permitted by this Agreement.
Page 18
9.02 Buy-Sell Notice. Upon the occurrence of a Buy-Sell Event, the Member
to whom such event has occurred (the "Withdrawing Member"), or its executor,
administrator or other legal representative in the event of death or declaration
of legal incompetency, shall give notice of the Buy-Sell Event (the "Buy-Sell
Notice") to the other Members within ten (10) days after its occurrence. If
the Withdrawing Member fails to give the Buy-Sell Notice, any other Member
(other than a Withdrawing Member) may give the notice at any time thereafter and
by so doing commence the buy-sell procedure provided for in this Article IX.
9.03 Member's Purchase Option. Upon the occurrence of a Buy-Sell Event,
each of the Members, except the Withdrawing Member and any other Withdrawing
Member, shall have an option to purchase (the "Purchase Option") the
Withdrawing Member's Membership Interest at Closing on the terms and conditions
set forth in this Article IX. This right will be allocated among the Members
who elect to purchase (the "Purchasing Members") in the proportion they
mutually agree upon, or, in the absence of agreement, in the ratio that each of
the Purchasing Member's Percentage Interest bears to the aggregate Percentage
Interests of all Purchasing Members. The Purchasing Members must give notice of
their election to exercise their Purchase Option to the Withdrawing Member and
all other Members within thirty (30) days following delivery of the Buy-Sell
Notice.
9.04 Assignment of Purchase Option. If at the occurrence of a Buy-Sell
Event, there exist only two (2) then-current Members (including the Withdrawing
Member), the Member that is not withdrawing shall have the option during the
thirty (30) day period set forth in Section 9.03 to assign all or part of its
Purchase Option to any Person other than the Withdrawing Member (the "Purchase
Option Assignee") by notifying the Withdrawing Member and the Company of such
assignment in writing. After delivery of such notice, the Purchase Option
Assignee shall have the option to purchase the Withdrawing Member's Membership
Interest (to the extent so assigned) on the same terms and conditions as would
apply to the Member from which the Purchase Option was assigned; provided,
however, that the Purchase Option Assignee shall not have the rights of
assignment set forth in this Section 9.04. Notwithstanding any other provision
of Article VIII or this Article IX, any Purchase Option Assignee which exercises
its Purchase Option, as provided herein, (i) shall only have those rights as
specified in Section 8.04 above, (ii) shall not be admitted as a substitute
Member without full compliance with Section 8.03 and (iii) shall be subject to
the Buy-Sell restrictions imposed under this Article IX. In the event the
Purchase Option Assignee does not exercise the Purchase Option, the Purchase
Option Assignee shall have no further rights under this Agreement.
9.05 Agreement on Valuation. Unless otherwise agreed in writing by the
purchaser(s) and seller within sixty (60) days of the receipt of a Buy-Sell
Notice, the purchase price for the Withdrawing Member's Membership Interest
shall be determined by a single appraisal of the value of the Withdrawing
Member's Membership Interest, as of the date the Buy-Sell Event occurred, made
by an appraiser agreed upon by the purchaser(s) and seller, which appraisal
shall be final. If the parties cannot agree on a single appraiser, the purchase
price shall be determined by three appraisers, one selected by the purchaser(s),
Page 19
one selected by the seller and the third selected by the two appraisers. The
value determined as of the date of the Buy-Sell Event by a majority of the
appraisers will be final. The costs of appraisal shall be borne equally between
the purchaser(s) as a group and the seller. The purchase price to be paid for
the Withdrawing Member's Membership Interest will be reduced by the amount of
any distributions made by the Company to the Withdrawing Member from the date
the Buy-Sell Event occurred with respect to the Withdrawing Member to the
Closing.
9.06 Closing. The closing (the "Closing") of the purchase of any
Membership Interest pursuant to this Article IX shall take place on the date
agreed upon by the purchaser(s) and seller, but not later than ninety (90) days
after the delivery of the Buy-Sell Notice. The purchase price for each
Membership Interest being purchased will be payable in full in cash at Closing.
Upon payment of the purchase price, the Member selling its Membership Interest
shall execute and deliver such assignments and other instruments as may be
reasonably necessary to evidence and carry out the transfer of its Membership
Interest to the purchaser(s). In connection with the sale of any Membership
Interest under this Article IX, unless otherwise agreed by the purchaser(s) and
seller, the purchaser(s) will assume the seller's allocable portion of Company
obligations to the extent related to the transferred interest as well as the
seller's individual obligations to the extent related to the transferred
interest, other than income tax liabilities of the seller. Notwithstanding any
other provision of Article VIII or this Article IX, any transferee, assignee or
purchaser of a Member's interest, as provided herein, shall only have those
rights as specified in Section 8.04 above, and shall not be admitted as a
substitute Member without full compliance with Section 8.03.
ARTICLE X - DISSOLUTION AND LIQUIDATION OF THE COMPANY
10.01 Dissolution Events. The Company will be dissolved upon the
happening of any of the following events:
(a) All or substantially all of the assets of the Company are sold,
exchanged or otherwise transferred (unless the Managers notify the Members that
they have elected to continue the business of the Company, in which event the
Company will continue until the Managers give notice that they elect to dissolve
the Company);
(b) All Members sign a document stating their election to dissolve the
Company;
(c) The entry of a final judgment, order or decree of a court of competent
jurisdiction adjudicating the Company to be bankrupt and the expiration without
appeal of the period, if any, allowed by applicable law in which to appeal;
(d) The expiration of the term of the Company as set forth in Section
1.06; or
(e) The entry of a decree of judicial dissolution or the issuance of a
certificate for administrative dissolution under the Act.
10.02 Liquidation. Upon the happening of any of the events specified in
Section 10.01, the Managers, or any liquidating trustee elected by the Members,
will commence as promptly as practicable to wind up the Company's affairs unless
the Managers or the liquidating trustee (either, the "Liquidator") determines
that an immediate liquidation of Company assets would cause undue loss to the
Page 20
Company, in which event the liquidation may be deferred for a time determined by
the Liquidator to be appropriate. Assets of the Company may be liquidated or
distributed in kind, as the Liquidator determines to be appropriate. The
Members will continue to share Company Cash Flow, Profits and Losses during the
period of liquidation in the manner set forth in Articles VI and VII. The
proceeds from liquidation of the Company, including repayment of any debts of
Members to the Company, and any Company assets that are not sold in connection
with the liquidation will be applied in the following order of priority:
(a) To payment of the debts and satisfaction of the other obligations of
the Company, including without limitation debts and obligations to Members;
(b) To the establishment of any reserves deemed appropriate by the
Liquidator for any liabilities or obligations of the Company, which reserves
will be held for the purpose of paying liabilities or obligations and, at the
expiration of a period the Liquidator deems appropriate, will be distributed in
the manner provided in Section 10.02(c) and (d) below; and thereafter
(c) To the payment to each Member who has made a Capital Contribution in
the form of cash paid directly to the Company, the full amount of all such cash
Capital Contributions; each Member to rank pari passu in accordance with the
total amounts of their respective cash Capital Contributions;
(d) To the payment to the Members of the positive balances in their
respective Capital Accounts as of the date of dissolution, pro rata, in
proportion to the positive balances in those Capital Accounts after giving
effect to all allocations under Article VI and all distributions under Article
VII for all prior periods, including the period during which the process of
liquidation occurs.
10.03 Articles of Dissolution. Upon the dissolution and commencement of
the winding up of the Company, the Managers shall cause Articles of Dissolution
to be executed on behalf of the Company and filed with the Secretary of State,
and the Managers shall execute, acknowledge and file any and all other
instruments necessary or appropriate to reflect the dissolution of the Company.
ARTICLE XI - MISCELLANEOUS
11.01 Other Activities of Members and Managers. Subject to the
restrictions set forth in Section 11.04, any Member and its Affiliates and the
Managers and their Affiliates may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
including, but not limited to, ventures which are similar in nature to the
business of the Company.
11.02 Records. The records of the Company will be maintained at the
Company's principal place of business, or at such other place selected by the
Managers, provided that the Company keep at its principal place of business the
records required by the Act to be maintained there. Appropriate records in
reasonable detail will be maintained to reflect income tax information for the
Members. Each Member, at such Member's expense, may inspect and make copies of
the records maintained by the Company and may require an audit of the books of
account maintained by the Company to be conducted by independent accountants for
the Company.
Page 21
Following the end of each fiscal year (which will be the calendar year),
the Managers shall have financial statements prepared and distributed to the
Members. Such financial statements shall show the results of the operations of
the Company for the previous year, and shall include a balance sheet and an
income and expense statement, together with other information customarily shown
on financial statements of similar entities prepared in accordance with
generally accepted accounting principles. Such financial statements shall be
audited by a firm of certified public accountants or chartered accountants
approved by the Managers. The Managers shall also cause such certified public
accountants to prepare tax returns required under applicable tax laws and to
distribute said tax returns, or K-1 Statements (or similar statements required
by tax laws of such jurisdictions) to the Members not later than April 1 of each
year.
11.03 Reserves. The Managers may cause the Company to create reasonable
reserve accounts to be used exclusively to fund Company operating deficits and
for any other valid Company purpose. The Managers shall in their sole
discretion determine the amount of payments to such reserve accounts.
11.04 Prohibition Against Certain Acts. Nothing herein contained shall
be construed to constitute any Member as a partner of the other, and each Member
shall be free to engage in, conduct, or participate in any other business or
activity whatsoever, other than those which are part of the Project and those
which would involve the infringement of the intellectual property rights of
other Members or the misapplication of Project Results. No Member or Manager
shall be entitled to utilize any opportunity, asset, or advantage developed or
owned by the Company for its own individual benefit. Each Member agrees that
the Project Results will be owned by the Company and that all intellectual
properties developed and acquired by the Company shall be confidential
information of the Company, developed by the Company at substantial cost and
expense. No Member or Manager shall be entitled to utilize such Project Results
or other assets or properties for its own benefit without the specific written
consent of all Members. The Company retains the exclusive right to modify,
prepare derivative works from, copy, merge, transcribe, translate or license the
Project Results. All trademarks, copyrights, and patents associated with the
application software and other components of the Project Results shall belong to
the Company.
11.05 Annual Budgets. Prior to January 1, 2000, the Managers shall
develop and publish an Annual Budget for calendar year 2000. The Annual Budget
shall be deemed official when approved by a Majority in Interest of the Members.
Thereafter, the Managers shall be entitled to spend monies of the Company, and
take other actions involving the Company's funds, which are consistent with the
Annual Budget. The Managers shall develop and propose to the Members, not later
than October 31st of each year, a proposed Annual Budget for the following year.
In the event any proposed budget shall not be approved by a Majority in Interest
prior to the beginning of the next calendar year, then the Annual Budget for the
previous calendar year shall be the official Annual Budget for such subsequent
calendar year.
Page 22
11.06 Notices. The Managers will notify the Members of any change in the
name, principal or registered office or registered agent of the Company. Any
notice or other communication required by this Agreement must be in writing.
Notices and other communications will be deemed to have been given when
delivered by hand or dispatched by means of electronic facsimile transmission or
nationally recognized air courier, or on the third business day after being
deposited in the United States mail, postage prepaid. In each case, notice
hereunder shall be addressed to the Member to whom the notice is intended to be
given at such Member's address set forth on Schedule I to this Agreement or, in
the case of the Company, to its principal place of business. A Member may
change its notice address by notice in writing to the Company and to each other
Member given in accordance with this Section 11.06.
11.07 Amendments. No provision of this Agreement or the Articles of
Organization may be amended, nor will any waiver of any term of this Agreement
be effective, unless in writing and signed by a Super-Majority in Interest of
the Members; provided, however, that any provision of this Agreement requiring
the consent, approval or action of more than a Majority in Interest of the
Members (or any provision of the Articles of Organization effecting any such
provision of this Agreement) may only be amended or waived by a written action
signed by all Managers and by Members holding the required percentage of
Membership Interests.
11.08 Additional Documents. Each party hereto agrees to execute and
acknowledge all documents and writings which the Managers may deem necessary or
expedient in the creation of the Company and the achievement of its purposes,
including but not limited to Articles of Organization and any amendments or
cancellation thereof.
11.09 Representations of Members. Each Member represents and warrants to
the Company and every other Member that such it (i) is fully aware of, and is
capable of bearing, the risks relating to an investment in the Company; (ii)
understands that its interest in the Company has not been registered under the
Securities Act or the securities law of any jurisdiction in reliance upon
exemptions contained in those laws; and (iii) has acquired its interest in the
Company for its own account, with the intention of holding the interest for
investment and without any intention of participating directly or indirectly in
any redistribution or resale of any portion of the interest in violation of the
Securities Act or any applicable law.
11.10 Survival of Rights. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties, their
successors and assigns.
11.11 Interpretation and Governing Law. When the context in which words
are used in this Agreement indicates that such is the intent, words in the
singular number shall include the plural and vice versa. The masculine gender
shall include the feminine and neuter. The Article and Section headings or
titles shall not define, limit, extend or interpret the scope of this Agreement
or any particular Article or Section. This Agreement shall be governed and
construed in accordance with the laws of the State of South Carolina without
giving effect to the conflicts of laws provisions thereof.
Page 23
11.12 Severability. If any provision, sentence, phrase or word of this
Agreement or the application thereof to any person or circumstance shall be held
invalid, the remainder of this Agreement, or the application of such provision,
sentence, phrase or word to persons or circumstances, other than those as to
which it is held invalid, shall not be affected thereby.
11.13 Agreement in Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed an original, and all of
which shall constitute one and the same instrument. In addition, this Agreement
may contain more than one counterpart of the signature pages and this Agreement
may be executed by the affixing of the signatures of each of the Members to one
of such counterpart signature pages; all of such signature pages shall be read
as though one, and they shall have the same force and effect as though all of
the signers had signed a single signature page.
11.14 Tax Matters Partner. For purposes of this Agreement, the Managers
shall designate one Member as the Tax Matters Partner as required by the Code
and Treasury Regulations.
11.15 Creditors Not Benefited. Nothing in this Agreement is intended to
benefit any creditor of the Company or of any Member. No creditor of the
Company or of any Member will be entitled to require the Managers to solicit or
accept any loan or additional capital contribution for the Company or to enforce
any right which the Company or any Member may have against a Member, whether
arising under this Agreement or otherwise.
(Signatures Begin on Following Page)
Page 24
IN WITNESS WHEREOF, the undersigned, being all of the Managers and Members
of the Company, have caused this Agreement to be duly adopted by the Company and
do hereby assume and agree to be bound by and to perform all of the terms and
provisions set forth in this Agreement.
MEMBERS:
UNITRONIX CORPORATION
By: /s/Jack E. Shaw
Title: Chairman
GOLDSAT MINING, INC.
By: /s/Robert J. Livingston
Title: President & Chief Executive Officer
MANAGERS:
/s/Howard Morgan
c/o Rennaissance Technology
800 3rd Avenue
New York, NY 10022
/s/Mary L. Ready
c/o Unitronix Corporation
One Newbury St. 3rd Floor
Peabody, MA 01960-3830
/s/Jack E. Shaw
Shaw Resources
2320 East North Street Suite GG
Greenville, SC 29607
/s/A. Lewis Moran
273 Pointe Aux Anglais
St. Placide, Que J0V 2B0
/s/Robert J. Livingston
c/o Goldstat Mining Inc.
724 11th Ave. S.W. Ste. 200
Calgary, AB T2R 0E4
Page 25
SCHEDULE I
Names and Addresses Initial Capital
of Members Contribution Membership Interest
- -------------------- ------------- --------------------
Unitronix Corporation $600.00 60%
1 Newbury St.
Peabody Office Bldg 3rd Floor
Peabody MA 01960
Goldsat Mining, Inc. $400.00 40%
724 11th Ave. S. W. Suite 200
Calgary AB T2R 0E4
TOTALS $1,000.00 100%
AMENDMENT NO.1 TO OPERATING AGREEMENT
This Amendment No. 1 to Operating Agreement is entered into as of the 8th day
of December, 1999, by and among Geotronix, LLC (the "Company") and Unitronix
Corporation ("Unitronix") and GoldSat Mining, Inc. ("GoldSat")
R E C I T A L S:
WHEREAS, the Company was formed as a South Carolina limited liability
company on September 24, 1999; and
WHEREAS, Unitronix and GoldSat are the members of the Company; and
WHEREAS, Unitronix and GoldSat and the managers of the Company are parties
to that certain Operating Agreement dated as of September 24, 1999 (the
"Operating Agreement"); and
WHEREAS, the Company has resolved by separate written action to amend the
articles of organization of the Company to change the name of the Company to
Interactive Mining Technologies, LLC; and
WHEREAS, the Company has caused such Amended Articles of Organization of
the Company reflecting the change of the Company's name to Interactive Mining
Technologies, LLC to be filed with the South Carolina Secretary of State; and
WHEREAS, the undersigned have the authority to enter into this Amendment
pursuant to Section 4.05 of the Operating Agreement.
NOW, THEREFORE, the Company and Unitronix and GoldSat agree as follows:
1. Article 1, Section 1.02 of the Operating Agreement is hereby amended by
deleting the first sentence thereof and replacing it with the following new
first sentence:
"The name of the Company is Interactive Mining Technologies, LLC.
2. Any reference in the Operating Agreement to Geotronix, LLC is hereby
amended to replace such reference with Interactive Mining Technologies, LLC.
IN WITNESS HEREOF, the parties have signed and sealed this Amendment No. 1
to Operating Agreement as of the 8th day of December , 1999.
FOR THE COMPANY:
GEOTRONIX, LLC
By: /s/Jack E. Shaw
Its: Manager
CONSENTED TO:
FOR UNITRONIX CORPORATION:
UNITRONIX CORPORATION
By: /s/Jack E. Shaw
Its: Chairman
FOR GOLDSAT MINING, INC.:
GOLDSAT MINING, INC.
By: /s/Robert Livingston
Its: President
Page 26
EXHIBIT 2.2
-----------
PURCHASE AND SALE AGREEMENT
---------------------------
THIS AGREEMENT made effective as of the 31st day of January, 2000.
BETWEEN:
G.E. JONES ENTERPRISES LTD.,
a body corporate, registered under
the laws of the Province of Alberta
(hereinafter the "Vendor")
- and -
ENERSOURCE MAPPING INC.
a body corporate, duly incorporated under
the laws of the Province of Alberta
(hereinafter the "Purchaser.")
WHEREAS the Vendor has agreed to sell to the Purchaser and the Purchaser has
agreed to purchase all of the assets of the Vendor including those set out in
Schedule "A" hereto attached;
AND WHEREAS the Purchaser has completed financial and operational due diligence
of the business and assets of the Vendor to the satisfaction of the Purchaser;
NOW THEREFORE in consideration of the premises, mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1-INTERPRETATION
1.1 Definitions
-----------
In this Agreement, unless there is something in the subject matter or context
inconsistent therewith,
"Act" means the Business Corporations Act (Alberta) as in effect on the date
hereof;
"Affiliate" has that meaning assigned to it in the Act;
"Agreement" means this agreement including all schedules and exhibits to this
agreement and includes any and every agreement made at any time (whether past,
present or future) which amends or supplements or restates any agreement which
is, or is included in, this Agreement;
"Closing Date" means January 31, 2000 or such other date as the Vendor and the
Purchaser may mutually determine;
"Government Charges" means all taxes (including, without limitation, income,
capital gains, sales, excise, capital real property, and goods and services
taxes), rates, levies, assessments, reassessments, and any other charges
together with all penalties, interest, fines with respect thereto, payable to
any federal, provincial, municipal, local or other government or governmental
agency, authority, board, bureau or commission;
"Purchased Assets" means all of the property and assets of the Vendor including
those assets set out in Schedule "A" attached hereto;
"Purchase Price" has the meaning set out in section 2.1;
1.2 Currency
--------
Unless otherwise indicated, all dollar amounts referred to in this Agreement are
expressed in Canadian funds.
ARTICLE 2 - PURCHASE AND SALE
-----------------
2.1 Purchase Price
---------------
Subject to the terms and conditions hereof, the Vendor hereby agrees to sell,
assign, transfer, convey and set over to the Purchaser and the Purchaser hereby
agrees to purchase from the Vendor, as at the Closing Date, the Purchased Assets
for the aggregate sum of One Hundred Seventy Five Thousand ($175,000) Dollars
(the "Purchase Price")
2.2 Form of Consideration
---------------------
The Purchase Price of $175,000 for the Purchased Assets shall be paid or
otherwise satisfied by the Purchaser as follows:
a) a release provided by Goldsat Mining Inc., an Affiliate of the
Purchaser, to the Vendor and Glen Jones (a shareholder of the Vendor)
releasing them from their obligations to repay the aggregate sum of
Thirty Five Thousand ($35,000) Dollars to Goldsat Mining Inc. as
evidenced by three promissory notes dated November 30, 1999, December
2, 1999 and January 7, 2000;
b) the payment by the Purchaser of approximately $37,024.97 to the
Canada Customs and Revenue Agency on behalf of the Vendor, and the
payment by the Purchaser of approximately $10,158.30 to the CIBC on
behalf of the Vendor;
c) the issuance of $85,000 in common stock of Unitronix Corporation, an
Affiliate of the Purchaser, to the Vendor or its nominee, such common
stock to be issued at a price per security of thirty seven and
one-half (37.5) cents ($U.S.); and
d) the remaining portion of the Purchase Price payable, if any, to be
held by the Purchaser for the purposes set out in section 2.7.
2.3 Acknowledgement by the Vendor
-----------------------------
The Vendor understands and acknowledges that the common stock of Unitronix
Corporation referred to in section 2.2(c) herein are not registered with the
Securities and Exchange Commission under the U.S. Securities Act of 1933, as
amended, and is subject to Rule 144 of the Securities and Exchange Commission
Regulations. Unitronix will undertake to include the aforementioned common
stock with its next registration statement filing with the Securities and
Exchange Commission.
2.4 Allocation of Purchase Price
----------------------------
The Purchase Price shall be allocated among the Purchased Assets in the manner
as set forth in Schedule "B" attached hereto. The Vendor and the Purchaser
shall file their respective tax returns prepared in accordance with such
allocation.
2.5 Conveyance
----------
On the Closing Date, the Vendor shall execute and deliver to the Purchaser the
required general conveyance of the Purchased Assets, where appropriate,
sufficient when registered to cause the Purchaser to be registered as owner
thereof, free of all liens, charges, mortgages and third party claims.
2.6 Excise Tax Act
--------------
The Purchaser and the Vendor shall elect jointly under subsection 167(1) of the
Excise Tax Act (Canada), in the form prescribed for the purposes of that
subsection, in respect of the sale and transfer of the Purchased Assets
hereunder, and the Vendor shall file such election in its GST return for its
reporting period that includes the Closing Date.
2.7 Certain Liabilities of the Vendor
---------------------------------
It is agreed and acknowledged by the Vendor and the Purchaser that the Purchaser
will hold the Vendor harmless against the liabilities of the Vendor set out in
Schedule "C" attached hereto, that the Purchaser has full authority to
negotiate with each respective creditor representative of those liabilities, and
that the Purchaser is entitled to apply the balance of the Purchase Price
calculated in section 2.2 (d) towards the satisfaction of one or more of such
liabilities.
ARTICLE 3 - VENDOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS
--------------------------------------------------
3.1 Representations, Warranties and Covenants
-----------------------------------------
The Vendor hereby covenants, represents and warrants to the Purchaser as
follows:
a) the Vendor is a corporation incorporated under the provisions of the
Act and is a valid and subsisting corporation in good standing
thereunder;
b) there are no contracts, options, rights in equity or in law or
otherwise, binding upon, or which at any time in the future may be
capable of becoming binding upon the Vendor to sell, transfer,
hypothecate or alienate the Purchased Assets, other than pursuant to
the terms of this Agreement;
c) the Vendor is not a non-resident person as that expression is used
in the Income Tax Act (Canada);
d) the Vendor is the registered and beneficial owner of each item
included in the Purchased Assets with good and marketable title
thereto, free and clear of any and all liens, charges, mortgages,
security interests, adverse claims, pledges, encumbrances, Govern-
mental Charges, trusts, demands whatsoever, except those claims
representative of the liabilities owed to the Canada Customs and
Revenue Agency and the CIBC;
e) the Vendor has good right, full power and absolute authority to
bargain, sell , transfer, assign and otherwise dispose of its
interest in and to the Purchased Assets for the purposes and in the
manner herein provided for, according to the true intent and meaning
of this Agreement;
f) no suit, action or other proceeding is pending or threatened before
any court or governmental agency, except for the proceeding of the
Canada Customs and Revenue Agency, which might result in impairment
or loss of the Vendor's title to the Purchased Assets and the Vendor
hereby indemnifies and agrees to hold harmless the Purchaser against
any loss or cost arising out of any such claim;
g) there is not any impediment, legal or otherwise, to the ability of
the Vendor to sell to the Purchaser the Purchased Assets or any item
included therein in accordance with the provisions of this
Agreement;
h) any monies collected from accounts receivable(whether invoiced or
not) on or prior to the Closing Date and any monies collected
subsequent to the Closing Date by the Vendor from accounts
receivable (whether invoiced or not) will be forwarded to the
Purchaser;
i) there are no liabilities, contingent or otherwise, of the Vendor of
any kind whatsoever, and there is no basis for assertion against
the Vendor of any liabilities of any kind, other than those
liabilities disclosed in Schedule "C"; and
j) this Agreement when duly and properly executed and delivered by each
of the Vendor and the Purchaser will be a valid and binding agree-
ment enforceable against the Vendor in accordance with its terms.
3.2 Survival
--------
The covenants, representations, and warranties of the Vendor contained in this
Agreement shall survive the completion of the purchase and sale of the Purchased
Assets as contemplated by this Agreement.
The covenants, representations, and warranties of the Vendor contained in this
Agreement shall be true and correct on the Closing Date with the same force and
effect as if made at that time.
ARTICLE 4 - PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
-----------------------------------------------------
4.1 Representations, Warranties and Covenants
-----------------------------------------
The Purchaser hereby covenants, represents and warrants to the Vendor as
follows:
a) the Purchaser has good right, full power and absolute authority to
purchase from the Vendor the Purchased Assets for the purposes and
in the manner herein provided for, according to the true intent and
meaning of this Agreement;
b) the Purchaser is a corporation incorporated under the provisions of
the Act and is a valid and subsisting corporation in good standing
under the Act;
c) this Agreement when duly and properly executed and delivered by each
of the Vendor and the Purchaser will be a valid and binding agree-
ment enforceable against the Purchaser in accordance with its terms;
and
d) there is not any impediment, legal or otherwise, to the ability of
the Purchaser to purchase from the Vendor the Purchased Assets or
any item included therein in accordance with the provisions of this
Agreement.
4.2 Survival
--------
The covenants, representations, and warranties of the Purchaser contained in
this Agreement shall survive the completion of the purchase and sale of the
Purchased Assets as contemplated by this Agreement.
The covenants, representations, and warranties of the Purchaser contained in
this Agreement shall be true and correct on the Closing Date with the same force
and effect as if made at that time.
ARTICLE 5 - CONDITIONS
----------
5.1 Conditions of Closing in favour of the Purchaser
------------------------------------------------
The sale and purchase of the Purchased Assets is subject to the following terms
and conditions for the exclusive benefit of the Purchaser, to be performed or
fulfilled on or prior to the Closing Date:
a) The Purchaser shall have received written confirmation from each of
the Canada Customs and Revenue Agency and the CIBC as to the
monetary payout amount necessary to discharge and release any liens,
charges, mortgages, security interests, adverse claims, pledges,
encumbrances, Governmental Charges, trusts, or demands whatsoever
held by each of them, respectively, against the assets of the
Vendor, and the Purchaser shall be satisfied as to the discharge and
release of same;
b) Interactive Mining Technologies, LLC, an Affiliate of the Purchaser,
shall have acquired the proprietary rights to the domain names
"miningexchange.com" and "miningexchange.net" to the satisfaction
of counsel to the Purchaser;
c) Glen Jones shall have executed an employment agreement with the
Purchaser with terms and conditions including those set out in
Schedule "D" attached hereto, such agreement to be in the form and
content satisfactory to the Purchaser;
d) No legal or regulatory action or proceeding shall be pending or
threatened by any person to enjoin, restrict or prohibit the
purchase and sale of the Purchased Assets contemplated hereby;
e) No material damage by fire or otherwise to the whole or any material
part of the Purchased Assets shall have occurred on or prior to the
Closing Date;
f) All actions, proceedings, instruments and documents required to
implement this Agreement, or instrumental thereto, and all legal
matters relating to the purchase of the Purchased Assets, including
title of the Vendor to the Purchased Assets, shall have been
approved as to form and legality by counsel for the Purchaser,
acting reasonably;
g) All of the terms, covenants and conditions of this Agreement to be
complied with or performed by the Vendor on or before the Closing
Date shall have been complied with or performed, and a certificate
of the of the Vendor, dated the Closing Date, to that effect shall
have been delivered to the Purchaser, such certificate to be in form
and substance satisfactory to the Purchaser; and,
h) The representations and warranties of the Vendor contained in this
Agreement shall be true and correct as at the Closing Date with the
same force and effect as if such representations and warranties were
made at and as of such date, and a certificate of the President of
the Vendor, dated the Closing Date, to that effect shall have been
delivered to the Purchaser, such certificate to be in form and
substance satisfactory to the Purchaser.
If any of the conditions contained in this section 5.1 shall not be performed or
fulfilled on or prior to the Closing Date to the satisfaction of the Purchaser
acting reasonably, the Purchaser may, by notice to the Vendor, terminate this
Agreement and the obligations of the Purchaser and the Vendor under this
Agreement, other than the obligations contained in section 6.1. Any such
condition may be waived in whole or in part by the Purchaser without prejudice
to any claims it may have for breach of covenant, representation or warranty.
ARTICLE 6 - INDEMNIFICATION
---------------
6.1 Indemnification by Vendor
-------------------------
The Vendor agrees to indemnify and save harmless the Purchaser, and its
shareholders, directors, officers and employees, (the "Indemnified Persons")
from and against all damages, liabilities, losses, costs, charges and expenses
(including, without limitation, all consequential damages and solicitors and
other professional fees) suffered or incurred by the Indemnified Persons as a
result of or arising directly or indirectly out of or in connection with:
a) any breach by the Vendor of or any inaccuracy of any representation
or warranty of the Vendor contained in this Agreement or in any
agreement, certificate or other document delivered pursuant hereto;
b) any breach or non-performance by the Vendor of any covenant to be
performed by it that is contained in this Agreement or in any
agreement, certificate or other document delivered pursuant hereto;
or,
c) the operations of the business of the Vendor up to the time of
Closing.
ARTICLE 7 - GENERAL MATTERS
---------------
7.1 Risk of Loss
------------
From the date hereof up to the time of Closing on the Closing Date, the
Purchased Assets shall be and remain at the risk of the Vendor.
7.2 Governing Law
-------------
This Agreement shall be governed by and construed in accordance with the laws of
the Province of Alberta and the Vendor and the Purchaser hereby submit to the
jurisdiction of the courts of the Province of Alberta.
7.3 Further documents
-----------------
The Vendor and the Purchaser shall do or cause to be done all such further acts
and things and shall execute or cause to be executed all such further deeds,
documents and instruments, as may be reasonably necessary for the purpose of
completing the transactions contemplated by this Agreement.
7.4 Time
----
Time shall be of the essence in this Agreement.
7.5 Enurement
---------
This Agreement and rights and obligations herein contained shall enure to the
benefit of and be binding upon the Vendor and the Purchaser together with their
respective successors and assigns. This Agreement is solely between the Vendor
and the Purchaser and is not for the benefit of any other person or third party
beneficiary.
7.6 Entire Agreement
----------------
This Agreement represents the entire agreement between the Vendor and the
Purchaser with respect to the matters herein. No amendment or variation of this
Agreement shall be effective or binding upon either the Vendor or the Purchaser
unless it is set forth in writing and has been duly executed by each of the
Vendor and the Purchaser.
7.7 Notices
-------
Any notice or other communication required or permitted to be given by any party
hereto to any other party hereto shall be in writing and shall be:
(a) personally served upon a party at the address noted below, by
courier service or otherwise, in which case such notice or other
communication shall conclusively be deemed to have been given to the
addressee at the time of such service; or
(b) transmitted by facsimile to a party to the facsimile number of such
party noted below, in which case such notice or other communication
shall conclusively be deemed to be given on the day it was sent.
If to the Vendor:
302, 1000 - 8th Avenue S.W.
Calgary, Alberta T2P 3M7
Fax: (403) 234-8160
Attn: Glen Jones
If to the Purchaser:
200, 724 - 11th Avenue S.W.
Calgary, Alberta T2R 0E4
Fax: (403) 266-3034
Attn: Robert Livingston
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
31st day of January, 2000.
G.E. Jones Enterprises Ltd.
Per: /s/Glen E. Jones
EnerSource Mapping Inc.
Per: /s/Robert Livingston
SCHEDULE "A"
DIGITAL AND HARD COPY MAPS
- --------------------------
Digital Map Name Digital Map Name
- ---------------- ----------------
Lac de Gras Java
Alberta Diamonds Sulawesi
Fort ala Corne Diamonds Irian Jaya
Thelon Basin Philippines
West Timmins Papau New Guinea
East Timmins Myanmar
Kirkland Lake Albania
Barry/Souart Twps Mongolia
Toodoggone Mazenod Lake
Hebron Athabasca Basin
Voisey's Bay Central Saskatchewan
Harp Lake/S. Voisey's Bay Flin Flon/Lynn Lake
SW Labrador Zacatecas
SE Labrador Lac Rocher
Western Canada Diamonds Eretria
Venezuala Greenland
Sierra Leonne Pogo-Fort Knox
Guinea Yukon
Ivory Coast Newfoundland
Ghana New Brunswick
West Africa Operating Mines of Canada
Burkina Faso Namibia
Mali Sierra Madre Belt
Central Asia Mexico Base
Sabah/Sarawak Nevada Base
Kalimantan Peru Base
Sumatra Arizona Base
Congo Base Democratic Congo Base
Zambia
Various Digital Geological Maps of the World
Various company digital files
Various Hard copy maps and data
Contact data base (5000 names)
Historical claim data
Printed hard copy maps (7200 maps)
TRADENAMES, WEBSITES, DOMAIN NAMES AND GOODWILL
- -----------------------------------------------
Enersource Drafting and Graphics
Enersource Drafting Services
the web-site and domain name "enersourcemaps.com"
COMPUTER HARDWARE & SOFTWARE
- ----------------------------
1) 1 HP750CM E size colour plotter, 68mb ram, postscript & Ethernet cards
2) 2 Complete Pentium 166 PC systems with 2Gb hard drives, 2mb video, 64mb,
cd rom etc.
3) 2 Summagrid 36 x 48 digitizing tablets
4) External modem and sound blaster addition
5) 2 Magitronic 20 inch monitors
6) 1 Sony Trinitron 20 inch monitor
7) 1 Hewlett Packard 17 inch monitor
8) Additional memory simms
9) 1 8500/15 MacIntosh Power PC Computer
10) 1 HP 4C Scanner
11) 1 HP 5MP Postscript printer
12) 1 HP 5L Printer and 1 Tektronic Color Printer
13) 1 Quark Express for MacIntosh Software
14) 1 Microstation95 CADD PC Software Upgrade
15) 1 Photoshop for MacIntosh Software Upgrade
16) 1 MapInfo & Vertical Mapper GIS Software
17) Other miscellaneous software, hardware, zip drives, etc.
DRAFTING EQUIPMENT
- ------------------
4 drafting tables, old lettering systems, 3 flat files
FURNITURE & FIXTURES
- --------------------
1) Executive office set including: desk, hutch, table, filing cabinet
2) 1 office chair
3) 1 desk with hutch and extensions
4) 2 desk sets with hutch
5) 1 reception desk with drawer unit
6) 2 reception filing cabinet
7) 1 drafting chair
8) 3 desk chairs
9) 5 black side chairs
10) 8 phones
11) 5 storage cupboards
12) 2 tan file cabinets
13) 1 black file cabinet
14) 2 map roll files
15) 3 map racks
16) miscellaneous office supplies
17) black bookcase
18) 3 coat racks
19) 1 light table
20) 1 calculator
21) stapler
WORK IN PROGRESS
- ----------------
Uravan Minerals: $4000
Canadian Mining Journal: $6000
New colour Lac de Gras map in progress (estimated printing expense of $2000 in
February 2000)
PREPAID RENT/DEPOSIT WITH LANDLORD
- ----------------------------------
$1700 deposit with landlord pursuant to Lease Agreement
SCHEDULE "B"
ALLOCATION OF $175,000 PURCHASE PRICE
-------------------------------------
DIGITAL AND HARD COPY MAPS and related data, TRADENAMES, WEBSITES, and DOMAIN
NAMES: $1.00
ACCOUNTS RECEIVABLE: $27,997.27
WORK IN PROGRESS: $10,000
PREPAID RENT/DEPOSIT WITH LANDLORD: $1700.00
GOODWILL: $116,517.65
COMPUTER HARDWARE & SOFTWARE, DRAFTING EQUIPMENT, FURNITURE & FIXTURES all at
depreciated book value as at January 31, 2000: $18,784.08 (see below)
Calculation of depreciated book value as at January 31, 2000
------------------------------------------------------------
CATEGORY DEPRECIATED RATE DEPRECIATION DEPRECIATED
BOOK VALUE AS AT AMOUNT FOR 6 BOOK VALUE AS AT
JULY 31, 1999 MONTHS JANUARY 31, 2000
Computer $16,239.29 30% $2435.89 $13,803.40
Hardware &
Software
Furniture & $5002.38 20% $502.38 $4500.00
Fixtures
Drafting $560.21 30% $79.53 $480.68
Equipment
Totals $21,801.88 $3017.80 $18784.08
SCHEDULE "D"
EMPLOYMENT TERMS
----------------
TERM OF EMPLOYMENT: 2 YEARS
POSITION: PRESIDENT
SALARY: $72,000 per year
BONUS:
Options to purchase 200,000 of common shares of Unitronix over a two year period
at an exercise price of $0.40 ($U.S.) per share. Such options will vest based
upon 4 performance milestones (to be agreed among EnerSource Mapping Inc. and
Glen Jones within three months of commencement of the term of employment)
Glen Jones will be entitled to participate in the bonus plan for Interactive
Mining Technologies' employees
BENEFITS: Up to a maximum of $350.00 per month will be paid to TAIGA Consulting
(or successor benefits plan provider) by EnerSource Mapping Inc. on behalf of
Glen Jones for health benefits. In the event that EnerSource Mapping Inc. is
charged in excess of the $350.00 maximum in any month during the term of
employment, EnerSource Mapping Inc. will deduct the excess amount from the
salary of Glen Jones.
OTHER TERMS:
Non-disclosure/non-competition provisions
After one year of continuous employment, consideration will be given to making
Glen Jones a member of the Unitronix Corporation Board of Directors
- 13 -
EXHIBIT 20.1
------------
Press Release for after 4:30 p.m. (EST) 2/10/00
Interactive Mining Technologies, LLC Forms EnerSource Mapping, Inc.
Acquires Mapping Assets of Glen E. Jones Enterprises, Ltd.
PEABODY, MA, February 10, 2000: Interactive Mining Technologies, LLC (IMT)
announces the formation of a new Alberta company, EnerSource Mapping, Inc. which
has purchased all of the assets of G.E.Jones Enterprises, Limited of Calgary,
Alberta, known as EnerSource. The company specializes in the compilation,
tracking, and production of international mineral exploration property
(tenement) maps. Interactive Mining Technologies, LLC is a majority owned
subsidiary of Unitronix Corporation (UTRX: BB:OTC).
Glen E. Jones has been appointed President of EnerSource Mapping, Inc.
According to John D. Harvey, VP of Exploration Technologies and Chief Geologist
for IMT, "EnerSource produces the best claims ownership maps available. In hot
areas including the new Platinum and Palladium discoveries, the need for current
claim information is essential to exploration companies. With the resources now
at our disposal, this is a natural extension of some of the work we are doing in
the areas of predictive software and more useful integration of the various
"layers" of geotechnical data. When coupled with detailed tenement maps, we
feel that we will have a more unique and highly desirable package to offer to
the explorationist."
Unitronix Corporation, Peabody, MA (UTRX:OTC:BB) owns 60% of Interactive Mining
Technologies, LLC (IMT), a South Carolina limited liability company, formerly
called Geotronix, LLC: Goldsat Mining, Inc, Calgary, Alberta (CDNX: GOM) owns
40%. IMT has an 83 1/3% interest in EnerSource Mapping, Inc and Goldsat Mining,
Inc, the remaining 16 2/3% giving each company an equal interest in the venture.
Goldsat has extensive mineral exploration experience and Unitronix has been
engaged in commercial software development, support and marketing for many
years. The company's primary business focus is to bring advanced technologies
to the mineral exploration community.
For further information, please contact:
Mary L. Ready
Phone: (978) 535-8933
Fax: (978) 535-9745
Email: [email protected]
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
- --------------------------------------------------------------------------------
The statements contained in this press release, other than historical
information, include forward-looking statements and are based on current
expectations and involve risks and uncertainties. Consequently, the Company's
actual results could differ materially from expectations expressed herein. The
various factors that could cause the Company's actual results to differ include,
but are not limited to, failure of the Company's products to gain market
acceptance, the management of product development and sales channels, the
ability to fund operations, the impact of competitive products and pricing, the
rapid pace with which technology changes, and other risks detailed from time to
time in the Company's Securities and Exchange Commission filings. Actual results
may differ materially from management expectations. The company undertakes no
obligation to revise or update any forward-looking statements to reflect events
or circumstances after the date of this release.
