REORGANIZATION AGREEMENT
This Reorganization Agreement ("Agreement") is made and entered into
this 31st day of October, 1997 between and among (i) United States Mining &
Exploration, Inc., a Utah corporation, which is referred to herein as the
"Company," (ii) Global Digital Information, Inc., a Washington corporation,
which is referred to herein as "GDI," and (iii) those persons identified in
Schedule A-1 attached hereto, who are the beneficial owners of shares of
common stock of GDI, no par value per share (the "GDI Shareholders" or the
"Shareholders"), and (iv) the person identified in Schedule A-2 hereto, who
is the holder of an option (the "Option") to purchase a total of 50,000
shares of GDI's common stock (the "Option Holder"). The GDI Shareholders, and
the Option Holder shall hereinafter be referred to collectively as the
"Shareholders."
WHEREAS, the GDI Shareholders, as set forth in Schedule A-1, own and have
the right to sell, transfer and convey those shares of GDI's common stock, no
par value per share, set forth in Schedule A-1; and
WHEREAS, the Option Holder, as set forth in Schedule A-2 hereto, owns and
has the right to sell, transfer and convey the Option to purchase 50,000
shares of the common stock of GDI , which constitutes one hundred percent
(100%) of the issued and outstanding options of GDI; and
WHEREAS, the Company wishes to acquire one hundred percent (100%) of the
issued and outstanding common stock of GDI through exchanging for the shares
of GDI's common stock held by the Common Shareholders, shares of the Company's
$0.001 par value per share common stock as set forth in Schedule A-1 hereto;
and
WHEREAS, the Company also wishes to acquire one hundred percent (100%) of
the issued and outstanding option of GDI, from the Option Holder through
exchanging for the Option held by such Option Holder, the Company's options as
set forth in Schedule A-2 hereto, possessing identical rights, terms and
provisions as the GDI Option; and
WHEREAS, the GDI Shareholders have agreed to exchange their GDI common
shares for shares of the Company's common stock as set forth in Schedule A-1;
and
WHEREAS, the Option Holder has agreed to exchange his GDI Option for the
Company's newly issued options as set forth in Schedule A-2 hereto, possessing
identical rights, terms and conditions as the GDI Option; and
WHEREAS, the parties hereto wish to formalize the above mentioned
agreements and thereafter accomplish such exchange on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants hereinafter set forth, the parties hereto have agreed and by these
presents do hereby agree as follows:
1. Representations and Warranties by GDI and the GDI Shareholders. GDI
and those GDI Shareholders that shall execute and deliver their respective
counterpart signature pages to this Agreement, only to the extent that such
GDI Shareholders are expressly referred to herein, hereby jointly and
severally make the following express representations and warranties to the
Company:
A. GDI is a corporation duly organized, validly existing and in good
standing under the laws of the state of Washington and has the
corporate power to own its property and carry on its business in the
locations which its business is now conducted. Copies of GDI's
Articles of Incorporation and By-laws have heretofore been furnished
to the Company by GDI, and all such copies are true, correct and
complete copies of the original Articles of Incorporation and
By-laws including all amendments thereto.
B. GDI has the corporate authority to issue a total of 10,000,000
shares of common stock with no par value par value per share, of
which 8,500,000 shares of have been issued and are outstanding. In
addition, GDI has issued and outstanding that Option to purchase
shares of its common stock set forth in Schedule A-2 hereto.
C. Since inception, GDI has sold shares of its common stock to various
investors in transactions described in Schedule B hereto. Such sales
were conducted pursuant to exemptions from registration under the
Securities Act of 1933, as amended (the "Act") and state securities
laws applicable to the offer and sale of securities ("State Acts").
Schedule B hereto accurately identifies by asterisk those investors
in GDI'S common stock that are known by GDI of certainty as
qualified "Accredited Investors" as such term is defined in
Regulation D as promulgated under the Act. The offering documents
utilized by GDI in offering and selling its shares to those
investors identified in Schedule B hereto contained no misstatements
or omissions respecting any material facts and the GDI shares
offered and sold to such investors were offered and sold in
compliance with the Act and all State Acts. ").
D. Each of the GDI Shareholders has full power and authority to
exchange their respective shares of GDI upon the terms and
conditions provided for in this Agreement, and said shares have been
duly and validly issued and will be free and clear of any lien or
other encumbrance on the Closing Date specified herein.
E. The Option Holder has the full power and authority to exchange the
Option, which is held by him upon the terms and conditions provided
for in this Agreement, and said Option has been duly and validly
issued and will be free and clear of any lien or other encumbrance
on the Closing Date specified herein.
F. The GDI balance sheet dated July 31, 1997 (the "Balance Sheet")
attached hereto as Exhibit 1, contains substantially true and
correct statements concerning GDI and the financial condition of
GDI's assets and liabilities as of such date. Except as described
in the Balance Sheet or Exhibit 2 attached hereto, GDI has not:
(1) issued any additional shares of its capital stock, or
any additional options to acquire such stock, to any
person;
(2) paid or declared any dividends or distributions of
capital, surplus, or profits with respect to any of its
issued and outstanding shares of capital stock; or
(3) entered into any other transaction or agreement which
would, or might, materially impair the shareholder's
equity of GDI.
G. Since July 31, 1997, and except as provided in the Balance
Sheet or Exhibit 2 attached hereto, GDI has not engaged in any
material transactions other than transactions in the normal
course of the operation of its business, which would, or
might, materially impair the shareholder's equity of GDI as
reflected in the Balance Sheet.
H. GDI is not involved in any pending or threatened litigation
which would, or might, materially affect its financial
condition and which has not been:
(1) disclosed in the Balance Sheet, or
(2) disclosed to the Company in writing.
I. GDI has good and marketable title to all of its material
property and assets free and clear of any and all liens,
encumbrances or restrictions, except for:
(1) taxes and assessments which may become due and payable
in the ordinary course of business; and
(2) easements or other minor restrictions with respect to
its property which do not materially affect the present
use of such property.
J. Except as disclosed in the Balance Sheet, there are no unpaid
assessments or proposed assessments of taxes pending against
GDI and all liabilities for taxes, as shown on the tax returns
filed, or to be filed, by GDI, have been paid or the liability
therefor has been provided for and all taxes for periods
subsequent to the periods covered by said returns likewise
have been paid or adequately accrued; except where the failure
to pay would not have a material adverse effect on the
business of GDI.
K. The GDI Shareholders are acquiring the common stock of the
Company, and the Option Holder is acquiring the option of the
Company solely for their own accounts, for investment, and not
with a view to any subsequent "distribution" thereof within
the meaning of the Act. The GDI Shareholders understand that
the Company's common stock, and the Option Holder understands
that the Company's options and the shares of the Company's
common stock issuable upon exercise of its options have not
been registered under the Act or securities laws of any State
("State Act") by reason of the specific exemptions therefrom,
which exemptions depend in part upon their subjective
investment intent as expressed herein.
L. The GDI Shareholders and the Option Holder hereby acknowledge
that:
(1) They are an "Accredited Investor" as such term is
defined in Regulation D promulgated under the Act, or
they have such knowledge and experience in financial and
business matters that they are capable of evaluating the
merits and risks of the proposed exchange of GDI's
securities for securities of the Company, and
(2) They are able to bear the economic risks of the
investment in the Company's securities and they are
able to protect their own interests in an investment of
this nature.
M. GDI has those subsidiaries set forth in Schedule C hereto.
Each such Subsidiary is duly organized and is authorized to
conduct its business as now conducted.
N. Each of the GDI Shareholders, through execution and delivery
of their respective counterpart signature pages to this
Reorganization Agreement hereby waives any and all preemptive
rights that they may possess in the GDI shares issued to them
or to any other shareholder, it being understood that such
waiver shall apply nunc pro tunc.
GDI, the GDI Shareholders and the GDI Option Holder further represent and
warrant that all of the representations and warranties set forth above are
true as of the date of this Agreement, shall be true at the Closing Date and
shall survive the Closing for a period of one year from the Closing Date.
2. Representations and Warranties by The Company. The Company hereby
makes the following express representations and warranties to GDI and the GDI
Shareholders:
A. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Utah and
has the corporate power to own its properties and carry on its
business as now being conducted. Certified copies of the
Company's Articles of Incorporation and By-Laws have
heretofore been furnished to GDI and the GDI Shareholders by
the Company, and all such copies are true, correct and
complete copies of the original Articles of Incorporation and
By-Laws including all amendments thereto.
B. The Company has the corporate authority to issue a total of
50,000,000 shares of $0.001 par value per share common stock,
of which 491,314 shares are presently issued and outstanding.
As of the date of Closing, there are not any outstanding or
authorized options, warrants, rights, subscriptions, claims of
any character, agreements, obligations, convertible or
exchangeable securities, or other commitments, contingent or
otherwise, relating to the Company's capital stock, pursuant
to which the Company is or may become obligated to issue
shares of the Company's common stock, any other shares of its
capital stock or any securities convertible into, exchangeable
for., or evidencing the right to subscribe for any shares of
the capital stock of the Company. All of the shares of the
Company's common stock have the same voting and other rights.
Notwithstanding the foregoing, The Company will, on or before
closing, forward split its currently issued and outstanding
shares in the ratio of two for one (without changing the par
value thereof) thereby resulting in an increase in the total
number of issued and outstanding shares to 982,628.
C. Commencing February 9, 1984 and ending in January 15, 1985,
the Company offered and sold to the public, 1,369,600 shares
of its common stock for gross offering proceeds of $13,696.
Such offering was conducted by the Company pursuant to a
Registration by Qualification filed by the Company with the
State of Utah and Section 3 (a) (11) of the Securities Act of
1933, as amended and Rule 147 promulgated thereunder.
D. The Company is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The Company has prepared and filed with the Securities
and Exchange Commission ("SEC") a Form 10SB which became
effective on September 15, 1997. The Company's 10SB, as
amended is attached hereto as Exhibit 3. The Company has also
prepared and filed information to conform with the provisions
of Subparagraph (a)(5) of Rule 15c211 of the Securities
Exchange Commission and its shares of common stock were
previously qualified for trading on the NASD Electronic
Bulletin Board.
E. Subsequent to the Closing Date of this Reorganization
Agreement, the Company will file an amendment to its Articles
of Incorporation and adopt such resolutions as necessary for
the purpose of changing the name of the Company to "Global
Digital Information, Inc."
F. On or before the Closing Date of this Reorganization
Agreement, the Company shall issue a total of 717,372 shares
of its common stock to those entities set forth in Schedule D
hereto pursuant to those exemptions from registration also set
forth in Schedule D hereto Upon the completion of the above
stock issuance, the Company will have a total of 1,700,000
shares of common stock, with a par value of $0.001 per share,
which are fully paid, validly issued and outstanding.
G. The audited Financial Statements of the Company which are
attached hereto as Exhibit 4 (the "Financial Statements")
constitute substantially true and correct statements of the
financial condition of the Company and the Company's assets,
liabilities and income as of such date. Since the date of the
Balance Sheet contained in the Financial Statements, the
Company has not, except as provided in paragraph 2F herein
above:
(1) issued any additional shares of its common stock to any
person;
(2) paid or declared any dividends or distributions of
capital, surplus, or profits with respect to any of its
issued and outstanding shares of common stock;
(3) paid or agreed to pay any consideration in redemption of
any of its issued and outstanding shares of common
stock; or
(4) entered into any other transaction or agreement which
would, or might, materially impair the shareholder's
equity of the Company as reflected in such Balance
Sheet.
H. The Company, subject to obtaining shareholder approval of the
proposed amendments to its Articles of Incorporation, as
contemplated hereby, which the Company hereby agrees to
faithfully undertake and complete, has the corporate power and
authority to execute and perform all of its duties and
obligations under the terms of this Agreement and to issue and
deliver to the GDI Shareholders those shares of its $0.001
par value per share common stock that are required to be
issued and delivered under the terms of this Agreement and to
issue and deliver to the GDI Option Holder, that option that
is required to be issued and delivered under the terms of this
Agreement.
.
I. The execution and delivery of this Agreement, and the issuance
of the Company's $0.001 par value per share common and options
required to be issued hereunder, will have been duly
authorized by all necessary corporate action and neither the
execution nor delivery of this Agreement nor the issuance of
the Company's $0.001 par value per share common stock and
options, nor the performance, observance or compliance with
the terms and provisions of this Agreement will violate any
provision of law, any order of any court or other governmental
agency, the Articles of Incorporation or By-Laws of the
Company or any indenture, agreement or other instrument to
which the Company is a party, or by which it is bound or by
which any of its property is bound.
J. The Company is not involved in any pending or threatened
litigation which would, or might, materially affect its
financial condition and which has not been:
(1) provided for in the Financial Statements attached hereto
as Exhibit 4, or
(2) disclosed to GDI, the GDI Shareholders and the Option
Holder in writing.
K. The Company has duly and timely filed or prior to Closing will
file with any federal, state, local or foreign governmental
taxing authority, body or agency, all federal, state, local
and foreign tax returns, declarations, reports estimates,
informational returns and statements (collectively ("Returns")
required to be filed or sent by or on behalf of the Company,
at or prior to the date of Closing, and all such Returns are
or will be true, correct and complete. There are no unpaid
assessments or proposed assessments of State or Federal income
taxes pending against the Company. All liabilities for
Federal and State income or franchise taxes, as shown on the
tax returns filed, or to be filed, by the Company, have been
paid or the liability therefor has been provided for in the
attached Balance Sheet and all Federal and State income or
franchise taxes for periods subsequent to the periods covered
by said returns likewise have been paid or adequately accrued;
except where the failure to pay would not have a material
adverse effect on the business of the Company.
L. The shares of the Company's $0.001 par value per share common
stock which will be delivered to the GDI Shareholders pursuant
to the terms of this Agreement will, on delivery in accordance
with the terms hereof, be duly authorized, validly issued and
fully paid and non assessable. The Company's option issuable
to the Option Holder and the shares of common stock issuable
upon exercise of the Company's option have been duly and
validly authorized and, when issued and delivered against
payment as provided herein, will be validly issued, fully paid
and non assessable. The shares of common stock issuable upon
exercise of the Company's option upon issuance, will not be
subject to the preemptive rights of any shareholders of the
Company or any restrictions upon voting or transfer pursuant
to the Company's Articles of Incorporation, Bylaws, or any
agreement to which the Company is a party. The Company's
option issued to the Option Holder, when delivered, will
constitute valid and binding obligations of the Company
enforceable in accordance with their terms. A sufficient
number of shares of the Company's $0.001 par value per share
common stock have been or shall be reserved, for issuance upon
exercise if the Company's option deliverable to the Option
Holder. Upon delivery of and payment for the shares of common
stock issuable upon exercise of the Company's option issued
to the Option Holder, the holder of the Company's option will
receive good and marketable title thereto, free and clear of
all liens, encumbrances, charges and claims except those
created by, through or under the Company's option and except
restrictions on transfer arising under federal and state
securities laws and their rules and regulations. The Company
will have on the at the time of delivery of its option to the
Option Holder the, full legal corporate right and power and
all authorization and approval required by corporate law to
sell, transfer and deliver such option in the manner provided
hereunder, except for applicable restrictions on transfer
arising under federal and state securities laws and their
rules and regulations respecting the offer and sale of
securities.
M. On the Closing Date, the Company will cause those individuals
set forth in Schedule E to be elected to the Company's Board
of Directors.
N. The consummation of the transaction contemplated hereby will
not: (i) violate any provision of the charter, By-laws or
other organizational documents of the Company, (2) violate in
any material respect any statute, ordinance, rule,
regulations, order or decree of any court of any governmental
or regulatory body, agency or authority applicable to the
Company, (3) require the filing with, or obtaining any permit,
consent or approval of, or the giving of any notice to, any
governmental or regulatory body, agency or authority; or (4)
result in a material violation, termination or breach of,
conflict with, constitute (with or without the giving of
notice or lapse of time or both ) a default (or give rise to
any right of termination, cancellation, payment or
acceleration) under, result in the creation of any lien,
security interest, charge or encumbrance upon any of the
properties or assets of the Company, result in the forfeiture
of any rights, entitlements or privileges under, create any
right or entitlement including without limitation, to
employment or compensation) not expressly provided for herein,
or require the consent or approval of any party under, any of
the terms, conditions or provisions of any note, bond,
mortgage, indenture, license, franchise, permit agreement,
lure, agreement or other instrument or obligation to which the
Company is a party, except for such violations, filings,
consents, approvals, notices, terminations, breaches,
conflicts, defaults, liens, security interests, charges,
encumbrances, forfeitures, rights and entitlements that would
not, individually or in the aggregate, have a materially
adverse effect on the condition of the Company taken as a
whole.
O. Except as set forth in the audited Balance sheet of the
Company attached hereto as Exhibit 4, the Company has no
material claims against it, liabilities or indebtedness,
contingent or otherwise. The Company does not know or have
reason to know of any basis for the assertion against the
Company of any liability of any material nature or in any
material amount not fully reflected or reserved against in the
Company's audited Balance sheet.
P. There is no legal, administrative, arbitral or other
proceedings claim, action, cause of action or governmental
investigation of any nature seeking to impose, or that could
result in the imposition, on the Company of any liability
easing under any local, state or federal environmental
statute, regulation or ordinance, including, without
limitation, the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, pending or
threatened against the Company, which would be required to be
disclosed pursuant to Item 103 or 303 of Regulation SK (17 CFR
229). To the best knowledge of the Company there is no
reasonable basis for any such proceeding, claim action, or
governmental investigation that would impose any such
liability; and the Company is not subject to any agreement
order, judgment, decree or memorandum by or with any court,
governmental authority, regulatory agency third party imposing
any such liability.
Q. The Company has not established, maintained or contributed to
any employee benefit plans. As used herein, the term
"Employee Benefit Plans" means all employee benefit plans
within the meaning of section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). As of the
date of Closing all other plans, including but not limited to,
programs and arrangements providing profit sharing,
retirement, pension, savings, thrift, deferred compensation,
stock option, stock purchase, group insurance, accident,
sickness, medical, dental, disability, have been terminated
and there are no continuing obligations by the Company
pursuant to said plans. All vacation pay, severance pay,
incentive compensation and bonuses have been paid, and there
are no continuing obligations by the Company.
The Company further represents and warrants that all of the
representations and warranties set forth above are true as of the date of this
Agreement, shall be true at the Closing Date and shall survive the closing for
a period of one year from the Closing Date.
3. Conditions to the Obligations of The Company. The obligations of the
Company hereunder shall be subject to the following conditions:
A. The Company shall not have discovered any material error,
misstatement or omission in any of the representations and
warranties made by GDI, and/or the Shareholders herein and all
the terms and conditions of this Agreement to be performed and
complied with have been performed and complied with.
B. There shall have been no substantial adverse changes in the
financial condition, business or operations of GDI from the
date of this Reorganization Agreement, until the Closing Date,
except for changes resulting from operations in the usual and
ordinary course of its business, and between such dates no
business and assets of GDI shall have been materially
adversely affected as the result of any fire, explosion,
earthquake, flood, accident, strike, lockout, combination of
the workmen, taking over of any such assets by any
governmental authorities, riot, activities of armed forces, or
Acts of God or of the public enemies.
4. Conditions to the Obligations of The Shareholders and GDI. The
obligations of the GDI Shareholders and GDI hereunder are subject to the
following conditions:
A. The Shareholders and GDI shall not have discovered any
material error or misstatement in any of the representations
and warranties made by the Company herein and all the terms
and conditions of this Agreement to be performed and complied
with by the Company have been performed and complied with.
B. There shall have been no substantial adverse changes in the
financial condition, business or operations of the Company,
except for changes resulting from those operations in the
usual ordinary course of the business, and no business and
assets of the Company shall have been materially adversely
affected as the result of any fire, explosion, earthquake,
flood, accident, strike, lockout, combination of the workmen,
taking over of any such assets by any governmental
authorities, riot, activities of armed forces, or Acts of God
or of the public enemies.
5. Closing Date. The Closing of this Agreement ("Closing Date") shall
take place on or before November 15, 1997.
6. Exchange of Securities. Subject to the terms and conditions set
forth herein,
A. At the time of the Closing referred to in Section 5 hereof the
Company will issue and deliver, or cause to be issued and
delivered to the GDI Shareholders identified in Schedule A-1
hereto certificates evidencing the ownership of the securities
as designated therein and concurrently therewith the GDI
Shareholders identified in Schedule A-1 hereto shall directly
or through their agent deliver or cause to be delivered to the
Company, certificates evidencing the ownership of securities
as designated therein, all duly endorsed to the Company, and
B. At the time of the Closing referred to in Section 5 hereof the
Company will issue and deliver, or cause to be issued and
delivered to the GDI Option Holder identified in Schedule A-2
hereto it option instrument evidencing the ownership of the
Company's option as designated therein and concurrently
therewith the GDI Option Holder identified in Schedule A-2
hereto shall directly or through their agent deliver or cause
to be delivered to the Company, the GDI Option instrument
evidencing the ownership of the GDI Option as designated
therein, all duly endorsed to the Company.
7. Actions at the Closing. At the Closing of this Agreement, the
Company and the GDI Shareholders and the GDI Option Holder will each deliver,
or cause to be delivered to the other, the securities to be exchanged in
accordance with Section 6 of this Agreement and each party shall pay any and
all Federal and State taxes required to be paid in connection with the
issuance and the delivery of their own securities. All stock certificates
shall be in the name of the party to which the same are deliverable. In
addition to the above mentioned exchange of certificates, the following
transactions will take place at the initial and any subsequent Closings.
The Company will deliver to the Shareholders and GDI:
A. Duly certified copies of corporate resolutions and other
corporate proceedings taken by the Company to authorize the
execution, delivery and performance of this Agreement;
B. A certificate executed by a principal officer of the Company
attesting to the fact that all of the foregoing
representations and warranties of the Company are true and
correct as of the Closing Date and that all of the conditions
to the obligations of the GDI Shareholders, and the GDI
Option Holder which are to be performed by the Company have
been performed as of the Closing Date; and
C. A certificate of corporate good standing for the Company from
the State of Utah which shall be dated no more than 60 days
prior to the Closing Date; and
The GDI Shareholders and GDI will deliver to the Company:
A. Duly certified copies of corporate resolutions and other
corporate proceedings taken by GDI to authorize the execution,
delivery and performance of this Agreement;
B. A certificate of corporate good standing for GDI from
Washington which shall be dated no more than 60 days prior to
the Closing Date; and
C. A certificate by a principal officer of GDI that each of the
representations and warranties of GDI are true and correct as
of the Closing Date and that all of the conditions to the
obligations of the Company which are to be performed by GDI
and the GDI Shareholders have been performed as of the Closing
Date.
8. Conduct of Business. Between the date hereof and the Closing Date,
GDI shall conduct its business in the same manner in which it has heretofore
been conducted and the Shareholders will not permit GDI to (1) enter into any
contract, other than in the ordinary course of business, or (2) declare or
make any distribution in the nature of a dividend or return of capital to the
GDI Shareholders, without first obtaining the written consent of the Company.
9. Board of Directors. Immediately after the Closing, the Board of
Directors of the Company shall have a meeting, at which all of the present
directors of the Company shall resign, and they shall fill the vacancies
created by their respective resignations, as members of the Company's Board of
Directors, in accordance with the By-Laws of the Company, with such
individuals as set forth in Schedule E hereto.
10. Future Registration. The GDI Shareholders and the GDI Option Holder
understand that because the Company's common stock and the Company's option
(and the Company's common stock issuable upon exercise of the Company's
option) have not been registered under the Act or any State Act, they must
hold the Company's common stock and the Company's option (and the Company's
common stock issuable upon exercise of the Company's option) indefinitely,
and cannot dispose of any or all of them unless such they are subsequently
registered under the Act and any applicable State Act, or exemptions from
registration are available. The GDI Shareholders and Option Holder
acknowledge and understand that they have no independent right to require the
Company to register the securities held by them. The GDI Shareholders and
Option Holder further understand and the subscription agreement to be executed
by them contain representations evidencing the fact that the Company may, as a
condition to the transfer of any of the shares of the Company's common stock
or the Company's option (or the Company's common stock issuable upon exercise
of the Company's option), require that the request for transfer be accompanied
by an opinion of counsel, in form and substance satisfactory to the Company,
provided at such GDI Shareholders or Option Holders expense, to the effect
that the proposed transfer does not result in violation of the Act or any
applicable State Act, unless such transfer is covered by an effective
registration statement under the Act and is in compliance with all applicable
State Acts.
11. Transferability. All shares of the Company's common stock and its
option which are issued to the GDI Shareholders and Option Holder pursuant to
the terms of this Agreement (and the Company's common stock issuable upon
exercise of the Company's option) shall be "restricted securities" within the
meaning of Regulation D of the Act. The Company shall issue stop transfer
instructions to the transfer agent for its common stock and shall place the
following legend on the certificates representing such stock and option:
"The securities represented by this certificate have been acquired
pursuant to a transaction effected in reliance upon an exemption
under the Securities Act of 1933, as amended (the "Act"), and have
not been the subject to a Registration Statement under the Act or
any state securities act. The securities may not be sold or
otherwise transferred in the absence of such registration or
applicable exemption therefrom under the Act or any applicable State
securities act."
12. Access to Information. Concurrently herewith, the Company has
delivered to the GDI Shareholders and the Option Holder correct and complete
copies of all documents and records requested by the Shareholders including.
but not limited to a copy of this Agreement with a copy of the most recent
Form 10SB, as amended (attached hereto as Exhibit 3) filed by the Company with
the SEC. In addition, the GDI Shareholders and Option Holder have had the
opportunity to ask questions of, and received answers from, officers and
directors of the Company, and persons acting on its behalf concerning such
information and the terms and conditions of the Agreement, and have received
sufficient information relating to the Company to enable them to make an
informed decision with respect to the acquisition of the common stock, and the
option.
13. No Solicitation. At no time were the GDI Shareholders, or Option
Holder presented with or solicited by any leaflet, public promotion meeting,
circular, newspaper or magazine article, radio or television advertisement, or
any other form of general advertising in connection with their acquisition of
the common stock or the Company's option.
14. Expenses. The GDI Shareholders and Option Holder, GDI and the
Company shall each pay their respective expenses incident to this Agreement
and the transactions contemplated hereby, including all fees of their counsel
and accountants, whether or not such transactions shall be consummated.
15. Finders. The GDI Shareholders and Option Holder and GDI shall
indemnify and hold the Company harmless against and with respect to all claims
or brokerage or other commissions relative to this Agreement or the
transactions contemplated hereby, based on any agreements, arrangements, or
understandings claimed to have been made by the Shareholders and/or GDI with
any third party. The Company shall indemnify and hold the GDI Shareholders and
Option Holder and GDI harmless against and with respect to all claims for
brokerage or other commissions relative to this Agreement or the transactions
contemplated hereby, based in any agreements, arrangements, or understandings
claimed to have been made by the Company with any third party. Except as
provided in Exhibit 5, each party to this Agreement represents and warrants to
each other party that it has not dealt with and does not know of any person,
firm or corporation asserting a brokerage, finder's or similar claim in
connection with the making or negotiation of this Agreement or the
transactions contemplated hereby.
16. Attorney's Fees. In the event of any litigation among the parties
related to this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees and costs to be fixed by the court, said fees to
include appeal and collection of judgment.
17. Miscellaneous.
A. This Agreement shall be controlled, construed and enforced in
accordance with the laws of Utah.
B. This Agreement shall not be assignable by either party without
prior written consent of the other.
C. All paragraph headings herein are inserted for convenience
only. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, which together
shall constitute one and the same instrument.
D. This Agreement sets forth the entire understanding between the
parties, there being no terms, conditions, warranties or
representations other than those contained herein, and no
amendments hereto shall be valid unless made in writing and
signed by the parties hereto.
E. This Agreement shall be binding upon and shall inure to the
benefit of the heirs, executors, administrators and assigns of
the GDI Shareholders, the and Option Holder and GDI and upon
the successors and assigns of the Company.
F. All notices, requests, instructions, or other documents to be
given hereunder shall be in writing and sent by registered
mail:
If to GDI Shareholders, the GDI Warrant Holders or GDI:
Global Digital Information, Inc.
00000 X.X. 00xx Xxxxxx #000
Xxxxxxxx, Xxxxxxxxxx 00000
With Copies to:
Xxxxx X. Xxxxxxx, Esq.
00000 X.X. 0xx Xx.
Xxxxxxxx, Xxxxxxxxxx 00000
If to the Company:
United States Mining & Exploration, Inc.
c/o Xxxxxxx X. Xxxxxxxxxx
Hermes Building Suite 200
455 East Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
G. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which shall
constitute the same instrument.
REORGANIZATION AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
Global Digital Information, Inc. a
Washington corporation
By: /s/ Xxxxxxx Xxxxxxx
REORGANIZATION AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
United States Mining & Exploration, Inc.,
a Utah corporation
By: /s/ Xxxxxx Xxxx
COUNTERPART
REORGANIZATION AGREEMENT SIGNATURE PAGE
GDI SHAREHOLDERS
All GDI Shareholders are accredited with the exception of the four (4) marked
with an asterisk.
October 29, 1997 /s/ Xxxxxxx Xxxxxxx
October 24, 1997 /s/ Xxxx-Xxxx Xxxxxx
October 17, 1997 /s/ Xxxxxxx Xxxxxx
October 27, 1997 /s/ Xxxxxx Xxx Arensmeir
October 21, 1997 /s/ Xxxxx X. Xxxxxxx
October 22, 1997 /s/ J. Xxxx Xxxxxx
October 22, 1997 /s/ Xxxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxx
November 3, 1997 /s/ Xxxxx X. Xxxxxx
/s/ Xxxxxxx X. X'Xxxxx
/s/ Xxxxx Xxxxxxxx
/s/ Xxxxxxx X. Xxx
October 23, 1997 /s/ Xxxxxxx X. Xxxxxxxxxxx
October 21, 1997 /s/ Xxxx X. Xxxxxx
October 16, 1997 /s/ Xxxxxxx X. Scheatzel
October 24, 1997 /s/ Rainbow Trading, Inc.
October 26, 1997 /s/ Xxxxxx Xxxxxxxxx
October 24, 1997 /s/ Xxxxxxxxx Corporation
October 24, 1997 /s/ Xxxxxx Xxxxxxxx
/s/ Xxxxx Xxxxx
October 25, 1997 /s/ Xxxxx X. Xxxxxxx, P.S.
October 24, 1997 /s/ Xxxxxx X. Xxxx
October 28, 1997 /s/ Xxxxxxx X. Xxxx
October 23, 1997 /s/ Xxxxxxx Xxxxxxxx
October 23, 1997 /s/ Xxxxx Xxxxxxxx
October 23, 1997 /s/ Xxxxx Xxxxxxxx
October 23, 1997 /s/ Xxxx Xxxxxxx
October 23, 1997 /s/ Xxxxxx Xxxxxxx
October 23, 1997 /s/ Xxxxxx Xxxxxxxx
October 21, 1997 /s/ Xxxxx Xxxxx
October 28, 1997 /s/ Xxxx Xxxxxxxx
October 22, 1997 /s/ Xxxxxxx X. Xxxxxxx
October 21, 1997 /s/ Xxxxxx X. and Xxxxxxx X. Xxxxx
October 24, 1997 /s/ Xxxxx Xxxxxxx
October 27, 1997 /s/ Xxxx X. Xxxxxxxxx
October 22, 1997 /s/ Xxxxx X. Xxxxxx
October 29, 1997 /s/ Xxxxxx X. XxXxxxxx
November 6, 1997 /s/ Dee Xxx Xxxxxx
October 21, 1997 /s/ Xxxxxxx X. Xxxxxx
October 22, 1997 /s/ Xxxxxxx X. Xxxxxx
October 21, 1997 /s/ Xxxxx Xxxxxxx
October 22, 1997 /s/ Xxxxxx Xxxxxxxxxx
October 27, 1997 /s/ Xxxxxxx X. and Xxxxx X. Xxxxx
October 27, 1997 /s/ Xxxxx X. Broullett
October 24, 1997 /s/ Xxxx X. Xxxxxxxxx, Xx.
October 22, 1997 * /s/ Xxxx X. Xxxxxxxxx
October 22, 1997 /s/ Xxxxx X. Xxxxx
November 3, 1997 /s/ Richland Medical Group
October 23, 1997 /s/ Xxxx X. Song
/s/ Xxxxxx X. Xxxxx
/s/ Xxxx Xxxxxxx
/s/ X. X. Xxxxxx and Xxxxxx Xxxxxx
October 27, 1997 /s/ Xxxxxx Xxxxxx
October 24, 1997 /s/ Xxxxx X. Xxxxx
October 21, 1997 /s/ Xxxx X. Xxxxxxxx
October 27, 1997 /s/ Xxxx X. and Xxxxxx X. Xxxxxx
October 27, 1997 /s/ Xxxxxxx X. Xxxxxx
October 21, 1997 /s/ Xxxxx X. Xxxxxxx
October 21, 1997 /s/ Xxxxxx Xxxx
November 3, 1997 /s/ Xxxxxxxx Xxxxxxx
October 22, 1997 /s/ Xxxxxxx X. Xxxxxx
October 24, 1997 /s/ Technologie Finance Ltd.
October 23, 1997 /s/ Xxxx Xxxxxxx
October 24, 1997 /s/ Xxxxxxxxx Corp.
October 24, 1997 /s/ Rainbow Trading, Inc.
October 29, 1997 /s/ Xxxxxx X. Xxxx
October 29, 1997 /s/ Xxxxxx X. Xxxx
October 24, 1997 /s/ Xxxx Xxxx Xxx
* /s/ Xxxxxx Xxxx Xxxxxx
October 20, 1997 * /s/ Xxxx Xxxxxxxx
October 27, 1997 * /s/ Xxxxxx Xxxxxx
October 29, 1997 /s/ Xxxxx Xxxxxxxxx
October 24, 1997 /s/ Xxxxxx Xxxxx
October 22, 1997 /s/ Xxxxxx X. Xxxxxx
October 31, 1997 /s/ E. Xxx Xxxxxx
October 17, 1997 /s/ Xxxxxx X. Xxxxxx
October 30, 1997 /s/ Xxxxxxx Xxxxxxxx
/s/ Xxxx Xxxxx
October 28, 1997 /s/ Xxxx Xxxxxxx
COUNTERPART
REORGANIZATION AGREEMENT SIGNATURE PAGE
GDI OPTION HOLDER
November 24, 1997 /s/ Xxxxx X. Xxxxxx
SCHEDULE A-1
Name & Address Cert. # Amount of Shares
Xxxxxxx Xxxxxxx 1 675,000 Founders
00000 XX 0xx Xx. X-0
Xxxxxxxx, XX 00000
Xxxx-Xxxx Xxxxxx 2 50,000 Founders
0000 000xx Xxx XX
Xxxxxxxx, XX 00000
Xxxxxxx Xxxxxx 3 200,000 Founders
0000 Xxxxxxxx Xx
Xxxxxx, XX 00000
Xxx Arensmeir 4 75,000 Founders
0000 Xxxxx
Xxxxxx, Xx. 00000
Xxxxx Xxxxxxx 5 100,000 Founders
00 Xxxxxx Xxx.
Xxx Xxxxxxxxx, XX 00000
J. Xxxx Xxxxxx 6 100,000 Founders
00 Xxxxxxx Xx.
Xxxxxxxxx, XX 00000-0000
Xxxxxxx Xxxxxx 7 100,000 Founders
0000 00xx Xxx. X
Xxxxxxx, XX 00000
Xxx Xxxxxxx 8 200,000 Founders
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxxx Xxxxxx 9 10,000 Founders
00000 XX Xxxxxx Xx.
Xxxxxxxx, XX 00000
Xxxxxxx X'Xxxxx 10 10,000 Founders
0000 Xxxxxxxx XX
Xxxxxxxxx, XX 00000
Xxxxx Xxxxxxxx 11 25,000 Founders
00000 XX 00XX
Xxxxxxxx, XX 00000
Xxxxxxx Xxx 12 25,000 Founders
0000 Xxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxxxxx Xxxxxxxxxxx 13 100,000 Founders
0000 Xxxxxx XX. X
Xxxxxxx, XX 00000
Xxxxxx Xxxxxxxx 14 50,000 Founders
0000 000XX XX
Xxxxxx, XX 00000
Xxxxxx Xxxxxx 15 50,000 Founders
000 Xxxxxxx Xx
Xxxx XX Xxxxxx, Xxx XX000XX
Xxxx Xxxxxx 16 100,000 Founders
X.X Xxx 0000
Xxxxxxx Xxx, XX 00000
Xxxxx Xxxxxxx 17 35.000 Founders
0000 X 00XX
Xxxxxxx, XX 00000
Xxxxxx Xxxxxxx 19 10,000 Founders
E. 00000 Xxx 0
Xxxxxxx, XX 00000
Xxxx Scheatzel 20 25,000 Founders
0000 Xxxxxxxxx Xx.
Xxxxxxx, XX 00000
Dallington Corporation 21 400,000 Founders
000 Xxxxxxx Xxxx
Xxxx Xx. Xxxxxxx, Xxx
XX000XX, XX
Xxxxxx Xxxxxxxxx, TTE 22 400,000 Founders
0000 Xxxxxxx Xxx
Xxxxx "d" Xxxx, XX 00000
Rainbow Trading, Inc. 23 300,000 Founders
000 Xxxxxxx Xxxxxx
Xxxx Xx. Xxxxxxx, Xxx.
IP327HE, UK
Xxxxxxxxx Corporation 24 252,000 Founders
000 Xxxxxxx Xxxxxx
Xxxx Xx. Xxxxxxx, Xxx.
IP327HE, UK
Xxxxxx Xxxxxxxx 25 25,000 Founders
X.X. Xxx 0000
Xxxxxxx, XX 00000
Xxxxxx Xxxx 26 5,000 Founders
0000 000 Xxx. XX
Xxxxxxxx, XX 00000
Cairo Development Technologies 27 25,000 Founders
0000 X. 000 Xx.
Xxxx, XX 00000
Xxxxx X. Xxxxxxx, P.S. 28 25,000 Founders
00000 XX 0XX Xx. Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxx Xxxx 29 100,000 Founders
0000 Xxxxxxx Xxxx Xx.
X. Xxxxxxxxx, XX 00000
Xxxxxxx Xxxx 30 50,000 Founders
00000 Xxxxxx Xxx
Xxx Xxxxx,XX 00000
Xxxxxxx Xxxxxxxx 31 10,000 Founders
00000 XX 00XX
Xxxxxxxx, XX 00000
Xxxxx Xxxxxxxx 32 10,000 Founders
00000 XX 00XX
Xxxxxxxx, XX 00000
Xxxxx Xxxxxxxx 33 10,000 Founders
00000 XX 00XX
Xxxxxxxx, XX 00000
Xxxx Xxxxxx 34 10,000 Founders
00000 XX 00XX
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxxx 35 10,000 Founders
00000 XX 00XX
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxxxx 36 285,000 Founders
00000 XX 00XX
Xxxxxxxx, XX 00000
Xxxxx Xxxxx 37 18,000 Founders
0000 X. 000x Xxxx X-000
Xxxxxxx Xxx, XX 00000
Xxxxx Xxxxxxxx 38 40,000 Founders
0000 00XX Xxx. X.X.
Xxxxxx, XX 00000
Xxxx Xxxxxxxx 39 60,000 Founders
517 Rivershire PI.
Xxxxxxxxxxxx, XX 00000
Xxxxxxx Xxxxxxx 40 20,000 Founders
0000 XX 000XX
Xxxxxxx Xxx, XX 00000
Xxxxxx and Xxxxxxx Xxxxx 41 10,000 Founders
00000 Xx Xxxxxx Xxxx.
Xxxxxx, XX 00000
Xxxxx Xxxxxxx 42 15,000 Founders
0000 X 00XX
Xxxxxxx, XX 00000
Xxxx Xxxxxxxxx 43 80,000 Founders
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Xxxxx Xxxxxx 44 20,000 Founders
00000 Xxxxx Xxx.
Xxxxxxx, XX 00000
Xxxxxx XxXxxxxx 45 6,000 Founders
0000 X. Xxx. 00
0000 Xxxxxxxx, XX 00000
X. Xxxxxxx 46 14,000 Founders
0000 Xxxxxxx Xxx
Xxxxxx, XX 00000
Dee Xxx Xxxxxx 47 15,000 Founders
0000 Xxxxxx Xx X
Xxxxxxx, XX 00000
Xxxxxxx Xxxxxx 48 13,600 Founders
0000 Xxxxxxxx Xx
Xxxxxxxxx, XX 00000
Xxxxxxx Xxxxxx 49 20,000 Founders
0000 00XX Xxx X
Xxxxxxx, XX 00000
Xxxxx Xxxxxxx 50 7,250 Founders
0000 000XX Xxx XX
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxx 51 400 Founders
0000 X Xxxx
Xxxxxx, XX 00000
Alliance Hyponotherapy 52 1,000 Founders
00000 Xxxxxxx Xxx X.
Xxxxxxx Xxx, XX 00000
Xxxxx Xxxxx 53 10,000 Founders
00 Xxxxxx Xxxx Xxxx #0
Xxx Xxxxxxx, XX 00000
Xxxxxx Xxxxxxxxxx 54 34,000 WA Corp Fd
000 Xxxxx
Xxxxxxx, XX 00000
Xxxxxxx Xxxxx 55 10,000 Founders
0000 Xxxxxxx Xx.
Xxxx Xxxxxxxx, XX 00000
Xxxx Xxxxxx 56 10,000 Founders
00000 XX 00XX Xx.
Xxxxxxxx, XX 00000
Xxxxxxxxx XxXxxx 57 Canceled Founders
Xxxxx Xxxxxxxxx 58 5,000 Founders
0000 00XX Xx. XX
Xxxxxxxxxx, XX 00000
Discovery Chiropractic Center 59 1,000 Founders
0000 00 XxxX
Xxxxxxx, XX 00000
Xxxx and Xxxx Xxxxxxxxx Xx. 60 10,000 $1.00
0000 00XX Xxx. XX
Xxxxxx, XX 00000
Xxxx and Xxxxxx X Xxxxxxxxx 61 3,000 $1.00
0000 Xxxxx
Xxxxxxxxxx,XX 00000
Law Office Of Xxxxx X.
Xxxxx, P.S., Inc. 62 250 $.50
00000 Xxxxxxx Xxx. X Xxxxx X
Xxxxxxx Xxx, XX 00000
Richland Medical Group 63 25,000 $1.00
000 Xxxxx Xxxx. Xxxxx 000
Xxxxxxxx, XX 00000
Xxxx Song 64 1,000 Founders
C/O Ace Cleaners
00000 Xxxxx Xxxxxx Xxx. XX
Xxxxx Xxxxxx, XX 00000
Xxxx Xxxxx 65 500 $1.00
0000 X. 000XX Xx.
Xxxxxx, XX 00000-0000
Xxxxxxx X. Antonio 66 2,000 $.50
00000 00xx. Xxx X
Xxxxxxxx, XX 00000
Xxxxxx X Xxxxx 67 5,000 $1.00
000 Xxxxxx Xxxx.
Xxx Xxxxxx, XX 00000
Cy Yasuo Kawasaki 68 3,000 Founders
0000 XX 00XX
Xxxxxx, XX 00000
Xxxx Xxxxxx Xxxxxxx 69 1,500 $1.00
00000 00Xx Xx. X.X
Xxxxxxx Xxx, XX 00000
Xxxxxx X Xxxxxx 70 200 Founders
0000 X. Xxxx
Xxxxxx, XX 00000
Xxxxxx X Xxxxxxxxxx 71 Canceled Founders
000 Xxxxx Xx.
Xxxxxxx, XX 00000
Xxxxx X. Xxxxxx 72 2,800 $.50
0000 Xxxxx Xxx. XX
Xxxxxx, XX 00000
E. Xxx Xxxxxx 73 Canceled $1.00
000 Xxxxxx
Xxxxxxxx, XX 00000
Xxxxx X Xxxxxx 74 50,000 $.50
00000 00XX Xxx X
Xxxx, XX 00000
Xxxxxx Xxxxxx 75 10.000 $.50
X.X. Xxx 00000
Xxxxxxx Xxx, XX 00000
Xxxxx Xxxxx 76 16,400 Founders
0000 X 000xx Xx.
Xxxx, XX 00000
E. Xxx Xxxxxx 77 Canceled $1.00
000 Xxxxxx
Xxxxxxx, XX 00000
Xxxxxx Xxxxxxxx 81 20,000 Founders
00000 XX 00xx
Xxxxxxxx, XX 00000
Xxxx Xxxxxxx 82 50,000 Founders
X.X. Xxx 00000
Xxxxxxx Xxx, XX 00000-0000
Xxxx and Xxxxxx Xxxxxx 83 10,000 $.50
0000 Xxxxxx Xx. Xx. 000
Xxxxxxxxxx Xxxxx, XX 00000
Xxxxxxx and Xxxxxx Xxxxxx 84 2,000 $.50
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Xxxxxx Xxxx 00 5,000 Founders
000 Xxxxxx Xxxxxx
Xxxxx, XX 00000
Xxxx XxXxxxxxx 86 5,000 Founders
000 Xxxxxx Xxxxxx
Xxxxx, XX 00000
Xxxxxxxxx Corporation 87 65,000 Founders
000 Xxxxxxx Xxxxxx
Xxxx Xx. Xxxxxxx, Xxx.
IP327HE, UK
XX Xxxx, MD, PSP 88 25,000 Founders
000 Xxxxxx Xxxxxx
Xxxxx, XX 00000
Xxxxx and Xxxxx Xxxxxxx 89 289,617.50 Founders
00000 00xx Xxx XX
Federal Way, 98023
Antony & Xxxxxxxxx Xxxx 90 289,617.50 Founders
0000 00xx Xxxxxx X.X.
Xxxxxx, XX 00000
Xxxxxx Xxxxxx 91 92,870 Founders
X.X. Xxx 00000
Xxxxxxx Xxx, XX 00000
Xxxxxxx & Xxxxx Xxxxx 92 110,352.50 Founders
0000 Xxxxxxx Xxxxxx
Xxxx Xxxxxxxx, XX 00000
Xxxxxxxx & Xxxxx Xxxxxxx 93 27,565 Founders
X.X. Xxx 0000
Xxxxxxx, XX 00000
Xxxxxx X Xxxxx 94 106,652.50 Founders
00000 Xxxxxxx Xxx, X.
Xxxxxxx Xxx, XX 00000
Steven&Laura Xxxxxx 95 8,325 Founders
0000 00x Xxx. X
Xxxxxxx, XX 00000
Xxxxx Xxxxxxx 96 1,500 $1.00
0000 Xxxx Xxxxx Xxx
Xxxxxxx, XX 00000
Xx. Xxxxx Xxxxx 97 100,000 $1.00
0000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Technologie Finance Ltd 98 1,000,000 Founders
000 Xxxxxxx Xxxxxx
Xxxx Xx. Xxxxxxx
Xxxxxxx, XX000XX, XX
Xxxx Xxxxxxx 99 320,000 Founders
00000 XX 0x Xxxxx X-0
Xxxxxxxx, Xx 00000
Xxxxxxxxx Corp 100 100,000 Founders
000 Xxxxxxx Xxxxxx
Xxxx Xx. Xxxxxxx
Xxxxxxx, XX000XX
Rainbow Trading, Inc 101 100,000 Founders
000 Xxxxxxx Xxxxxx
Xxxx Xx. Xxxxxxx
Xxxxxxx, XX000XX, XX
Xxxx Family Gift Trust 103 400,000 Founders
00 000 Xxx XX #0
Xxxxxxxx, XX 00000
Xxxx Xxxxxxx 102 Cancelled
0000 XX 0xx. Xxxxx X-0
Xxxxxxxx, XX 00000
Xxxx Xxxxxxxxx 104 45,000 Founders
000 000xx Xxx. XX #000
Xxxxxxx, XX 00000
Xxxxx Xxxx 105 45,000 Founders
000 Xxxxxxx Xxx.
Xxxxxxx, XX 00000
Xxxx Xxxx 106 47,100 Founders
X.X. Xxx 0000
Xxxxxxxxx, XX 00000
Xxxx Xxx 107 5,000 $1.00
0000 Xxxxxxx Xxxx.
Xxxx xx Xxxxx, XX 00000
Xxxxx Xxxxxx 108 20,000 $.50
00000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Xxxx Xxxxxxxx 109 12,500 1.00
000 Xxxxxxxxx Xx.
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxx 110 3,000 $1.00
0000 X. Xxxxxxxxx Xxx.
Xxxxx, XX 00000
Xxxxx Xxxxxxxxx 111 5,000 $1.00
0000 XX 000xx Xxxxxx
Xxxxxxxxxx, XX 00000
Xxxxxx Xxxxx 112 5,000 $1.00
00000 XX 00xx Xxxxxx
Xxxxxxx, XX 00000
Xxxxxx Xxxxxx 113 5,000 $1.00
00000 Xxxxxxxx Xxxx X.
Xxxxxx, XX 00000
X. X. Xxxxxxxx (Lavato) 114 25,000 Replacement
000 Xxxxxx
Xxxxxxx, XX 00000
Xxxxxxx Xxxxx 115 10,000 Founders
Ski and Sport
0000 X 000 Xx.
Xxxx, XX 00000
Xxxxxx Xxxxxx, XXX 116 5,000 Founders
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Xxxxx X Xxxxxx, XXX 117 5,000 Founders
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Xxxxxx X Xxxxxx D.M.D. P.C. 118 60,000 Founders
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Xxxxxx X. Xxxxxx 119 30,000 Founders
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Xxxxxxx Xxxxx 120 99,000 Founders
0000 Xxxxxxx Xx.
Xxxx Xxxxxxxx, XX 00000
Xxxx Bemired 121 1,000 Founders
0000 Xxxxxxx Xx
Xxxx Xxxxxxxx, XX 00000
Xxxxxxx Xxxxxxxx 122 3,000 Founders
X.X. Xxx 0000
Xxxx, XX 00000
Xxxx Xxxxx 123 1,000 $1.00
0000 X. 000xx
Xxxxxx, XX 00000-0000
Xxxxxxx Xxxxxxx 124 500 Founders
0000 00xx Xxx. X.
Xxxxxxx, XX 00000
Xxxx Xxxxx 125 8,000 Founders
Xxxxx Designs
0000 0xx Xxx Xxxxx 00000
Xxxx Xxxxxxx 126 233,500 Founders
SCHEDULE A-2
Options
Xxxxx X. Xxxxxx 50,000
SCHEDULE B
GDI Investors
See Schedule A-1
SCHEDULE C
GDI Subsidiaries
None
SCHEDULE D
Schedule D-1 Shares issued by the Company pursuant to Regulation D
Name Number of Shares
Edgewater, Ltd. 101,593
P.O. Box 2097
Georgetown Grand Cayman
Cayman Islands, B.W.I.
Chantilly Investments, Ltd. 101,593
P.O. Box 2097
Georgetown Grand Cayman
Cayman Islands, B.W.I.
Folkstone, Ltd. 101,593
P.O. Box 2097
Georgetown Grand Cayman
Cayman Islands, B.W.I.
Gordian Investments Ltd. 16,593
P.O. Box 2097
Georgetown Grand Cayman
Cayman Islands, B.W.I.
Huggermugger, Ltd. 16,593
P.O. Box 2097
Georgetown Grand Cayman
Cayman Islands, B.W.I.
Xxx Lammance 102,319
Xxxxxxx Xxxxxxx Xxxxxx
Xxx. 00-X 0xx Xxxxx
Xxxx, Xxxxxxx 000000
Schedule D-1 Shares issued by the Company pursuant to S-8
Name Number of Shares
Xxxxxxx X. Xxxxxxxxxx, Esq 32,000
Xxxxxxx X. Xxxxxx 244,410
SCHEDULE E
Global Digital Information, Inc.
Designated Directors
Xxxxxxx Xxxxxxx
Xxxx-Xxxx Xxxxxx
Xxxxxx Xxxxxxxx
Xxxxx X. Xxxxxxx
REORGANIZATION AGREEMENT
EXHIBIT 1
GDI., Financial Statements
See Item 7 of this Report.
REORGANIZATION AGREEMENT
EXHIBIT 2
Exceptions to GDI Balance Sheet
None.
REORGANIZATION AGREEMENT
EXHIBIT 3
United States Mining & Exploration, Inc.
Form 10SB
This document has been previously filed with the Securities and Exchange
Commission and is incorporated herein by reference.
REORGANIZATION AGREEMENT
EXHIBIT 4
United States Mining & Exploration, Inc.
Financial Statements
The Board of Directors and Shareholders
United States Mining & Exploration, Inc.
We have audited the accompanying balance sheet of United States Mining &
Exploration, Inc. as of March 31, 1997, and the related statements of
operations, stockholders' deficit, and cash flows for the years ended March
31, 1997 and 1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of United States Mining &
Exploration, Inc. as of March 31, 1997, and the results of their operations
and their cash flows for the years ended March 31, 1997 and 1996, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that United
States Mining & Exploration, Inc. will continue as a going concern. As
discussed in note 5 to the financial statements, the Company has accumulated
losses from operations, has no assets, and has a net working capital
deficiency that raise substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also
described in note 5. The financial statements do not include any adjustment
that might result from the outcome of this uncertainty.
Xxxxxxx, XxXxxxxxxx and Associates
Salt Lake City, Utah
May 10, 1997, except as to note 9, which is dated October 17, 1997.
UNITED STATES MINING & EXPLORATION, INC.
Balance Sheet
March 31, 1997
ASSETS
Assets $ -0-
Total Assets $ -0-
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities:
Payable to Stockholders - note 8 1,902
Total Liabilities 1,902
Stockholders' Deficit:
Capital Stock -- 50,000,000 shares authorized having a
par value of $.001 per share; 491,314 shares issued
and outstanding - note 9 491
Additional Paid-in Capital 441,169
Accumulated Deficit (443,562)
Total Stockholders' Deficit (1,902)
Total Liabilities and Stockholders' Deficit -0-
See accompanying notes to financial statements.
UNITED STATES MINING & EXPLORATION, INC.
Statements of Operations
For the Years Ended March 31, 1997 and 1996
1997 1996
Revenues $ -0- $ -0-
General & Administrative Expenses 5,133 3,385
Operating Loss (5,133) (3,385)
Extraordinary item:
Income from Forgiveness of Debt - note 7 12,314 30,232
Provision for income tax on extraordinary
item -0- -0-
Net Income from Extraordinary Item 12,314 30,232
Net Income Before Income Taxes 7,181 26,847
Current Year Provision for Income Taxes -0- -0-
Net Income $ 7,181 $26,847
Loss per Share from operations $ (.01) $ (.01)
Income per Share from extraordinary item .03 .11
Net Income per Share $ .02 $ .10
Weighted Average Shares Outstanding 390,095 262,599
See accompanying notes to financial statements.
UNITED STATES MINING & EXPLORATION, INC.
Statements of Stockholders' Deficit
For the Years Ended March 31, 1997 and 1996
Additional Net
Common Common Paid in Accumulated Stockholders'
Shares Stock Capital Deficit Deficit
Balance, March 31,
1995 242,057 $ 242 $ 419,908 $(477,590) $ (57,440)
Issued 133,088
shares of common
stock as repayment
of stockholder loans 133,088 133 11,355 0 11,488
Net Income for the
Year Ended
March 31, 1996 26,847 26,847
Balance, March 31,
1996 375,145 375 431,263 (450,743) (19,105)
Issued 116,169
shares of common
stock as repayment
of stockholder loans 116,169 116 9,906 0 10,022
Net Income for the
Year Ended
March 31, 1997 7,181 7,181
Balance, March 31,
1997 491,314 491 441,169 (443,562) (1,902)
See accompanying notes to financial statements.
UNITED STATES MINING & EXPLORATION, INC.
Statements of Cash Flows
For the Years Ended March 31, 1997 and 1996
1997 1996
Cash Flows Provided by/(Used for)
Operating Activities
Net Income $ 7,181 $ 26,847
Adjustments to reconcile net income to net
cash provided by operating activities:
Decrease in accounts payable (19,105) (38,335)
Net Cash Used for Operating Activities (11,924) (11,488)
Cash Flows Provided by/(Used for) Financing
Activities
Proceeds from stockholder loans 11,924 11,488
Net Cash Provided by Financing Activities 11,924 11,488
Net Increase/(Decrease)in Cash -0- -0-
Beginning Cash Balance -0- -0-
Ending Cash Balance $ -0- $ -0-
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for interest $ -0- $ -0-
Cash paid during the year for income taxes $ -0- $ -0-
Xxxxxxx Financing Activities:
Common stock issued in repayment of
stockholder loan $ 10,022 $ 11,488
See accompanying notes to financial statements.
UNITED STATES MINING & EXPLORATION, INC.
Notes to Financial Statements
March 31, 1997
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization
United States Mining & Exploration, Inc. [formerly known as Forward
Electronics Corporation] was formerly in the business of exploring,
acquiring, developing and exploiting mineral and mining rights, and
developing mining technology and equipment for sale. The Company
incorporated under the laws of the State of Utah in 1983. The
Company has not engaged in significant operations since 1990.
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles. The
following summarizes the more significant of such policies.
(b) Income Taxes
Effective April 1, 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 109 [the Statement],
Accounting for Income Taxes. The Statement requires an asset and
liability approach for financial accounting and reporting for
income taxes, and the recognition of deferred tax assets and
liabilities for the temporary differences between the financial
reporting bases and tax bases of the Company's assets and
liabilities at enacted tax rates expected to be in effect when such
amounts are realized or settled. The cumulative effect of this
change in accounting for income taxes as of March 31, 1997 is $0
due to the valuation allowance established as described below.
(c) Net Income Per Common Share
Net income per common share is based on the weighted-average number
of shares outstanding.
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
[continued]
(d) Statement of Cash Flows
For purposes of the statements of cash flows, the Company considers
cash on deposit in the bank to be cash. The Company had $0 cash at
March 31, 1997.
NOTE 0 XXXXXXXXXXX XX XXXXXX XXXXXX MINING & EXPLORATION, INC.
Forward Electronics Corporation incorporated under the laws of the
State of Utah in 1983. In 1988, Forward Electronics Corporation
entered into an agreement and plan of reorganization with United
States Mining & Exploration, Inc., incorporated in 1987 under the
laws of the State of Delaware. Provisions of the agreement
included the acquisition of all 1,000 issued and outstanding common
shares of United States Mining & Exploration, Inc. in exchange for
223,458 common shares of Forward Electronics Corporation. The
transaction closed with the exchange of shares provided for in the
agreement. Subsequent to the closing date, Forward Electronics
Corporation filed "Articles of Amendment to Forward Electronics
Corporation" with the Division of Corporations of the State of Utah
changing the Corporate Name to "United States Mining & Exploration,
Inc." The Division of Corporations and Commercial Code of the Utah
State Department of Business Regulation approved and recorded the
amendment, resulting in a parent company and a wholly-owned
subsidiary company with the same name. The subsidiary corporation
was dissolved.
NOTE 3 ACQUISITION OF RIDGE ROCK MINING CORPORATION
In 1988, United States Mining & Exploration, Inc. [parent] entered
into an agreement and plan of reorganization with Ridge Rock Mining
Corporation, incorporated in 1987 under the laws of the State of
Utah. Provisions of the agreement included the acquisition of all
49,998 issued and outstanding common shares of Ridge Rock Mining
Corporation in exchange for 3,475 common shares of United States
Mining & Exploration, Inc. At closing, Ridge Rock Mining
Corporation became a wholly-owned subsidiary of United States Mining
& Exploration, Inc. The subsidiary corporation was dissolved.
NOTE 4 ACQUISITION OF ROCKY MOUNTAIN-PROCESS COMPONENTS
Xxxxxx 0000, Xxxxxx Xxxxxx Mining & Exploration, Inc. [parent]
entered into an agreement and plan of reorganization with Rocky
Mountain-Process Components. Provisions of the agreement included
the acquisition of all 2,000 issued and outstanding common shares of
Rocky Mountain-Process Components in exchange for 17,712 common
shares of United States Mining & Exploration, Inc. At closing,
Rocky Mountain-Process Components became a wholly-owned subsidiary
of United States Mining & Explorations, Inc. The subsidiary
corporation was dissolved.
NOTE 5 LIQUIDITY
The Company has accumulated losses since inception through March 31,
1997 amounting to $443,562, has no assets, and has a net working
capital deficiency at March 31, 1997. These factors raise
substantial doubt about the Company's ability to continue as a going
concern.
Management plans include finding a well-capitalized merger candidate
to recommence its operations. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
NOTE 6 INCOME TAXES
The Company adopted the provisions of Statement of Financial
Accounting Standards No. 109 [the Statement], Accounting for Income
Taxes, as of April 1, 1993. Prior years' financial statements have
not been restated to apply the provisions of the Statement. No
provision has been made for income taxes in the financial
statements because the Company has accumulated substantial losses
since inception.
The tax effects of temporary differences that give rise to
significant portions of the deferred tax asset at March 31, 1997
have no impact on the financial position of the Company. A
valuation allowance is provided when it is more likely than not that
some portion of the deferred tax asset will not be realized.
Because of the lack of taxable earnings history, the Company has
established a valuation allowance for all future deductible
temporary differences.
NOTE 7 INCOME FROM FORGIVENESS OF DEBT
During the year, management successfully negotiated the settlement
of all outstanding debts to outside creditors. As a result of these
successful negotiations, the Company benefitted with $12,314 and
$30,232 of forgiveness of debt income for the fiscal years ended
March 31, 1997, and 1996, respectively.
NOTE 8 RELATED-PARTY TRANSACTIONS
During the fiscal year ended March 31, 1996, a shareholder and
consultant advanced funds totaling $11,488 for payment of operating
expenses and settlement of certain of the Company's existing debts.
The Board of Directors authorized the issuance of 133,088 shares
of common stock as reimbursement for the advances.
During the fiscal year ended March 31, 1997, a shareholder and
consultant advanced funds totaling $11,924 for payment of operating
expenses and settlement of certain of the Company's existing debts.
The Board of Directors authorized the issuance of 116,169 shares
of common stock as reimbursement for a portion of the advances,
leaving a remaining balance payable to stockholders of $1,902 at
March 31, 1997.
NOTE 9 REVERSE STOCK SPLIT
On June 2, 1997, the Company effected a 1 for 86.322 reverse stock
split. The par value and authorized number of shares remain
unchanged. At the time of the reverse stock split, the Company had
42,404,945 shares issued and outstanding. The resulting number of
shares, subsequent to the reverse stock split, was 491,314, adjusted
for rounding for fractional shares. All share amounts in the
financial statements have been restated to reflect the post-split
denominations.
UNITED STATES MINING & EXPLORATION, INC.
BALANCE SHEETS
September 30, 1997 and March 31, 1997
9/30/97 3/31/97
[Unaudited]
ASSETS
Total Current Assets $ 0 $ 0
TOTAL ASSETS $ 0 $ 0
LIABILITIES AND STOCKHOLDERS' DEFICIT
LIABILITIES:
Loans from stockholders $ 0 1,902
Total liabilities 0 1,902
TOTAL LIABILITIES 0 1,902
EQUITY
Common Stock 1,044 42,405
Paid-in Capital 446,147 399,255
Accumulated Deficit (447,191) (443,562)
TOTAL EQUITY 0 (1,902)
TOTAL LIABILITIES & EQUITY $ 0 $ 0
NOTE TO FINANCIAL STATEMENTS: Interim financial statements reflect all
adjustments which are, in the opinion of management, necessary to a fair
statement of the results for the periods. The March 31, 1997 balance
sheet has been derived from the audited financial statements. These
interim financial statements conform with the requirements for interim
financial statements and consequently do not include all the disclosures
normally required by generally accepted accounting principles.
UNITED STATES MINING & EXPLORATION, INC
STATEMENTS OF OPERATIONS
For the Six-Month Periods Ended September 30, 1997 and 1996
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
9/30/97 9/30/96 9/30/97 9/30/96
[Unaudited] [Unaudited] [Unaudited] [Unaudited]
REVENUE
Income $ O $ O $ O $ O
NET REVENUE 0 0 0 0
OPERATING EXPENSES
Office Expenses 0 1,028 191 1,103
Professional Fees 1,135 2,631 3,438 2,634
TOTAL OPERATING EXPENSES 1,135 3,659 3,629 3,737
OPERATING INCOME/(LOSS)$(1,135) $ (3,659) $ (3,629) $ (3,737)
OTHER INCOME/(EXPENSE)
Income from forgiveness
of debt 0 0 0 13,090
NET INCOME/(LOSS) $(1,135) $ (3,659) $ (3.629) $ 9,353
NET LOSS PER SHARE $ (0.01) $ (0.01) $ (0.01) $ 0.01
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 583,497 32,383,155 14,508,616 32,383,155
UNITED STATES MINING & EXPLORATION, INC.
STATEMENTS OF CASH FLOWS
For the Six-Month Periods Ended September 30, 1997 and 1996
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
9/30/97 9/30/96 9/30/97 9/30/96
[Unaudited] [Unaudited] [Unaudited] [Unaudited]
Cash Flows Used For
Operating Activities
Net Loss $ (1,135) $ (3,659) $ (3,629) $ 9,354
Adjustments to
reconcile net loss
to net cash used in
operating activities:
Forgiveness of Debt 0 0 0 (13,090)
Issuance of common
stock in exchange for
expenses paid by a
shareholder 5,531 0 5,531 0
Increase/(Decrease) in
advance-shareholder (4,396) 3,659 (1,902) 3,736
Net Cash Used For
Operating Activities $ O $ O $ 0 $ O
REORGANIZATION AGREEMENT
EXHIBIT 5
Finders
NONE
CLOSING CERTIFICATE
OF
UNITED STATES MINING & EXPLORATION, INC.
The undersigned, President of United States Mining & Exploration, Inc., a
corporation formed under the laws of Utah ("US Mining") pursuant to that
certain Reorganization Agreement dated October 31, 1997, among the Global
Digital Information, Inc. ("GDI"), the GDI Shareholders, the GDI Option
Holder, and US Mining (the "Agreement") hereby certifies that:
Each of the representations and warranties of US Mining are true and correct
as of October 31, 1997, and that all of the conditions to the obligations of
Global Digital Information, Inc., the GDI Shareholders and the GDI Option
Holder which are to be performed by US Mining pursuant to the Agreement have
been performed as of the Closing Date.
Dated: November 11, 0000
Xxxxxx Xxxxxx Mining & Exploration, Inc.
By /s/ Xxxxxx Xxxx
Its President
CLOSING CERTIFICATE
OF
GLOBAL DIGITAL INFORMATION, INC.
The undersigned, the President of Global Digital Information, Inc., a
corporation formed under the laws of Washington ("GDI") pursuant to that
certain Reorganization Agreement dated October 31, 1997, among GDI, the GDI
Shareholders, the GDI Option Holder, and United States Mining & Exploration,
Inc., a Utah corporation (the "Agreement") hereby certifies that:
Each of the representations and warranties of GDI are true and correct as of
October 31, 1997, and that all of the conditions to the obligations of United
States Mining & Exploration which are to be performed by GDI the GDI
Shareholders and the GDI Option Holder pursuant to the Agreement have been
performed as of the Closing Date.
The Company has mailed to each of its shareholders, by U.S. mail, a copy of
the United States Mining & Exploration current Form 10SB, as amended.
Dated: October 31, 1997
Global Digital Information, Inc.
By /s/ Xxxxxxx Xxxxxxx
Its President
