AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 10, 2000
REGISTRATION NO. 333-95021
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
____________________
LAKOTA TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
COLORADO 58-2230297
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
4828 Loop Central Drive, Suite 150
Houston, TX 77081
(Address of Principal Executive Offices, Including Zip Code)
____________________
Agreement and General Mutual Releases
Legal Services Agreements
Consulting Agreements
(Full Title of the Plan)
____________________
Majed Jalali
Chief Executive Officer
4828 Loop Central Drive, Suite 150
Houston, TX 77081
(713) 592-0371
(Name, Address, and Telephone Number of Agent for Service)
COPIES TO:
Brian A. Lebrecht, Esq.
Cutler Law Group
610 Newport Center Drive, Suite 800
Newport Beach, California 92660
(949) 719-1977
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered Offering Price per Share(1) Aggregate Offering Price Registration Fee
- ----------------------- ------------- ---------------------------- ------------------------- -----------------
Common Stock, 7,880,000 $0.70 $5,516,000 $1,456.23
par value $0.001(2)
TOTAL REGISTRATION FEE $1,456.23
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457(c).
(2) Represents shares of Common Stock issued to legal counsel, consultants, and
departing employees of the Company. Please refer to the Selling Shareholders
section of this document.
<PAGE>
EXPLANATORY NOTE
Lakota Technologies, Inc("Lakota") has prepared this Registration Statement in
accordance with the requirements of Form S-8 under the Securities Act of 1933,
as amended (the "1933 Act"), to register certain shares of common stock, par
value $0.001 per share, issued to certain selling shareholders. Under cover of
this Form S-8 is a Reoffer Prospectus Lakota prepared in accordance with Part I
of Form S-3 under the 1933 Act. The Reoffer Prospectus may be utilized for
reofferings and resales of up to 7,880,000 shares of common stock acquired by
the selling shareholders.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Lakota will send or give the documents containing the information specified in
Part 1 of Form S-8 to employees or consultants as specified by Securities and
Exchange Commission Rule 428 (b) (1) under the Securities Act of 1933, as
amended (the "1933 Act"). Lakota does not need to file these documents with the
commission either as part of this Registration Statement or as prospectuses or
prospectus supplements under Rule 424 of the 1933 Act.
<PAGE>
REOFFER PROSPECTUS
LAKOTA TECHNOLOGY, INC.
4828 LOOP CENTRAL DRIVE, SUITE 150
HOUSTON, TEXAS 77081
(713) 592-0371
7,880,000 SHARES OF COMMON STOCK
The shares of common stock, $0.001 par value per share, of Lakota Technologies,
Inc. ("Lakota"or the "Company") offered hereby (the "Shares") will be sold from
time to time by the individuals listed under the Selling Shareholders section of
this document (the "Selling Shareholders"). The Selling Shareholders acquired
the Shares in exchange for employment services that the Selling Shareholders
provided to Lakota.
The sales may occur in transactions on the NASDAQ over-the-counter market at
prevailing market prices or in negotiated transactions. Lakota will not receive
proceeds from any of the sale the Shares. Lakota is paying for the expenses
incurred in registering the Shares.
The Shares are "restricted securities" under the Securities Act of 1933 (the
"1933 Act") before their sale under the Reoffer Prospectus. The Reoffer
Prospectus has been prepared for the purpose of registering the Shares under the
1933 Act to allow for future sales by the Selling Shareholders to the public
without restriction. To the knowledge of the Company, the Selling Shareholders
have no arrangement with any brokerage firm for the sale of the Shares. The
Selling Shareholders may be deemed to be an "underwriter" within the meaning of
the 1933 Act. Any commissions received by a broker or dealer in connection with
resales of the Shares may be deemed to be underwriting commissions or discounts
under the 1933 Act.
Lakota's common stock is currently traded on the NASDAQ Over-the-Counter
Bulletin Board under the symbol "LAKO."
________________________
This investment involves a high degree of risk. Please see "Risk Factors"
beginning on page 16.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED WHETHER
THIS REOFFER PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
________________________
February 10, 2000
<PAGE>
TABLE OF CONTENTS
Where You Can Find More Information . . . . . . . . . . . . 2
Incorporated Documents . . . . . . . . . . . . . . . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . 16
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 18
Selling Shareholders . . . . . . . . . . . . . . . . . . . . . 19
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . 19
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . 20
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 20
________________________
You should only rely on the information incorporated by reference or provided in
this Reoffer Prospectus or any supplement. We have not authorized anyone else
to provide you with different information. The common stock is not being
offered in any state where the offer is not permitted. You should not assume
that the information in this Reoffer Prospectus or any supplement is accurate as
of any date other than the date on the front of this Reoffer Prospectus.
WHERE YOU CAN FIND MORE INFORMATION
Lakota is required to file annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission
(the "SEC") as required by the Securities Exchange Act of 1934, as amended (the
"1934 Act"). You may read and copy any reports, statements or other information
we file at the SEC's Public Reference Rooms at:
450 Fifth Street, N.W., Washington, D.C. 20549;
Seven World Trade Center, 13th Floor, New York, N.Y. 10048
Please call the SEC at 1-800-SEC-0330 for further information on the Public
Reference Rooms. Our filings are also available to the public from commercial
document retrieval services and the SEC website (http://www.sec.gov).
INCORPORATED DOCUMENTS
The SEC allows Lakota to "incorporate by reference" information into this
Reoffer Prospectus, which means that the Company can disclose important
information to you by referring you to another document filed separately with
the SEC. The information incorporated by reference is deemed to be part of this
Reoffer Prospectus, except for any information superseded by information in this
Reoffer Prospectus.
Lakota's Report on Form 8-K, dated January 18, 2000, and Form S-8, dated January
19, 2000, are incorporated herein by reference. The Form 10-SB of AGM, Inc.,
filed with the Commission on October 26, 1999 is incorporated herein by
reference. In addition, all documents filed or subsequently filed by the
Company under Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act, before the
termination of this offering, are incorporated by reference.
<PAGE>
The Company will provide without charge to each person to whom a copy of this
Reoffer Prospectus is delivered, upon oral or written request, a copy of any or
all documents incorporated by reference into this Reoffer Prospectus (excluding
exhibits unless the exhibits are specifically incorporated by reference into the
information the Reoffer Prospectus incorporates). Requests should be directed
to the Chief Financial Offer at Lakota's executive offices, located at 4828 Loop
Central Drive, Suite 150, Houston, Texas 77081. Lakota's telephone number is
(713) 592-0371. The Company's corporate Web site address is
http://www.lakotatech.com.
THE COMPANY
COMPANY OVERVIEW
We are a holding company which, through the operations of our three
wholly-owned subsidiaries, is engaged in two very distinct business sectors.
The first, which we have been involved in since early 1997, is oil and gas
exploration and operations. Our subsidiary, Lakota Oil and Gas, Inc.'s,
strategy is to invest with joint partners in oil and gas exploration projects
that already underway. The target joint partners are larger, well-financed
entities that have access to greater pools of resources which we believe will
result in enhanced success rates. This strategy emphasizes a balanced,
risk-spreading approach to create what we believe to be the maximum return on
investment.
We are also involved in the rapidly growing high technology Internet
sector. We recently completed two acquisitions which provided our means of
entry into this exciting arena. Our subsidiary, 2-Infinity.com, Inc., provides
low-cost, high-speed, dedicated Internet access, focusing on the hotel and
multiple residential markets. Our subsidiary, AirNexus, Inc., is a retail
provider of commercial voice and data services with an emphasis on wireless, or
ethernet, networks. 2-Infinity and AirNexus gave us the opportunity to
diversify from our traditional oil and gas business into the exciting world of
high technology and the Internet.
We maintain an Internet website at http://www.lakotatech.com.
--------------------------
ORGANIZATIONAL HISTORY
On November 14, 1995, our founders formed Lakota Energy, Inc. in the State
of Colorado for the purpose of engaging in oil and gas exploration and
operations. On November 6, 1996, Lakota Energy, Inc. was merged with and into
another Colorado corporation named Chancellor Trading Group, Inc. Chancellor
was a publicly traded corporation which was incorporated on July 14, 1995 and
had no significant operations prior to their merger with us. Immediately
following the merger, the shareholders of Chancellor voted to change its name to
Lakota Energy, Inc.
<PAGE>
Immediately prior to the acquisition, Chancellor had 1,801,000 shares of
common stock outstanding. As part of the merger, and in exchange for all of the
outstanding common stock of Lakota Energy, Inc., Chancellor issued 9,187,500
shares to the shareholders of Lakota Energy, Inc. and an additional 118,000
shares were issued to third parties who assisted in closing the transaction.
Therefore, on November 6, 1996, immediately following the acquisition
transaction, we had 11,106,500 shares of common stock outstanding, and no shares
of preferred stock outstanding.
On January 18, 2000, we entered into an agreement with the majority
shareholders of AGM, Inc., a Nevada corporation, pursuant to which we issued up
to 2,200,000 of our newly-issued shares of common stock to acquire up to 100% of
AGM. AGM was a reporting company with the Securities and Exchange Commission.
As part of the acquisition, we elected to have successor issuer status under
rule 12g-3 of the Securities Exchange Act of 1934, which makes us a reporting
company.
On January 27, 2000, the directors of AirNexus and 2Infinity agreed to a
merger of AirNexus with and into 2Infinity. Said merger will be effective when
a certificate of merger, or substantially similar document, is filed with the
Texas secretary of state. Although the merger is expected to result in a
reduced amount of overhead expenses, it is not expected to have a material
effect on operations.
Our common stock is currently traded on the OTC bulletin board under the
symbol "LAKO."
LAKOTA OIL AND GAS, INC.
On June 9, 1999, we incorporated a Texas corporation named Lakota Oil and
Gas, Inc., which is our wholly-owned subsidiary. Subsequently, on June 14,
1999, we transferred our interest in two oil exploration projects, which
constituted all of our oil-and-gas-related assets at the time, to Lakota Oil.
The purpose of the transactions was to organize our oil and gas related business
into one operating subsidiary, separate and distinct from our other operating
subsidiaries, in order to more accurately reflect our diversified operations.
The strategic plan of Lakota Oil is to participate in projects that have
been developed by other successful, well financed companies. The specific areas
of interest to Lakota Oil are Texas and Louisiana. We are adopting the
philosophy of several highly successful companies, both private and public, that
do not have large or expensive exploration and operating staffs. These
companies utilize the capital they would normally pay in salaries and benefits
to participate in a greater number of sound drilling prospects. We have found,
through experience, that it is more advantageous to use outside consultants who
have worked in a confined geologic area that are familiar with the nuances of
the prospect's geological province. These consultants are located through
existing contacts and relationships of our management, and more specifically
John Hayes, and are typically paid an hourly fee at the going market rate for
their services. Each drilling project has a central operating company or entity
that is responsible for contracting with, hiring, and compensating consultants,
as well as sub-contractors, on the project.
This plan will allow us to operate and finance the growth of Lakota Oil
through cash flow and optional debt financing.
Currently, we are parties to agreements with, among others, Cummins and
Walker Oil Company, York Resources, and other large private investors. Our
partners have the necessary technical, engineering, data acquisition and land
procurement resources already in place, making an affiliation with them
attractive.
<PAGE>
Our investment in the South Halter Island Prospect, located in St. Mary and
Tennebonne Parishes, Louisiana, in which we are under contract with Panaco,
Inc., York Resources, Inc., Janivo Realty, Inc., and Carson Energy, Inc.,
entitled us to a 7.5% working interest with a 75% net revenue interest in the
specific oil well. Our initial investment into the project was $24,000, plus an
additional $163,748, which represented our share of the operating expenses. On
July 27, 1999, the decision was made to plug and abandon the well.
Our investment in the Union Central Life Insurance Co. Well No. 1, located
in Colorado County, Texas, in which we are under contract with Everest Minerals
Corporation and Cummins & Walker Oil Company, Inc., entitled us to a 20% working
interest with a 75% net revenue interest in the specific oil well. Our initial
investment into the project was $57,225, plus an additional $36,649, which
represented our share of the operating expenses. Development of this well is
currently ongoing.
Our investment in the well known as the VUA: Bernard #1, located in
Lafayette Parish, Louisiana, entitles us to a 100% working interest with a
73.74% net revenue interest in the specific oil well. Our initial investment in
this project was $35,000, plus an additional $55,112, which represented our
shares of the operating and work-over expenses. Currently, the well is awaiting
further downhole work.
Our investment in the Glass Mountain Prospect, located in Pecos County,
Texas, in which we own the land leases solely, entitles us to a 100% working
interest with a 81.25% net revenue interest in the 1,159 acres in this lease.
Our initial investment in the project was 414,375 shares of Lakota Energy, Inc.
preferred stock, which has since been retired.
In general, we are seeking projects with the following criteria:
- - 2D and 3D seismic interpretation
- - Analog production data
- - Reasonable lease terms
- - Infrastructure must be in place and accessible
- - Risked economic model must fit the following profile: pay out less than
one year, minimum of 3:1 PV10 return on investment
- - Prospect must have multi-pay potential with minimum of 10 BCF, or billion
cubic feet, potential
Once we have screened projects using the above criteria, we generally
acquire an interest in the project ranging from 5% to 20%, depending on its cost
and our available capital. Although we have no specific goal for the number of
investments during the next 12 months, we do intend to continue to seek
investments which we believe are consistent with our business plan.
Lakota Oil currently has one employee, its president John Hayes.
It is the intention of our Board of Directors to spin-off Lakota Oil or
enter into a transaction for the sale of substantially all of its assets. We
have not entered into negotiations with any specific buyer for these
transactions.
<PAGE>
We own an 99.9% interest in another Texas corporation, West Bolt Energy,
Inc., which previously owned and operated a small number of oil and gas
properties. West Bolt Energy, Inc. is not engaged in any significant operations
and has not been for several years, and does not represent a measurable
percentage of the assets or revenues of Lakota.
2-INFINITY.COM, INC.
On May 28, 1999, we acquired all of the outstanding stock of
2-Infinity.com, Inc., a Texas corporation. As consideration for the
acquisition, we issued 3,000,000 shares of our common stock to Majed Jalali, the
sole shareholder of 2-Infinity. In addition, Mr. Jalali is entitled to receive
up to an additional 6,000,000 shares of our common stock if 2-Infinity reaches
gross revenue goals ranging from $1,000,000 to $4,650,000. As part of the
acquisition, 2-Infinity entered into a three year employment agreement with
Majed Jalali, president of 2-Infinity. Our management located and negotiated
the transaction, and as a result there were no finders or brokers' fees.
The acquisition of 2-Infinity triggered the beginning of our changed
business focus into the high technology and Internet markets. 2-Infinity offers
high-speed, dedicated Internet access, focusing initially on the Houston, Texas
residential area during the next 12 months, and with plans to expand world-wide
in the near future. Currently, 2-Infinity has approximately 5 customers.
Tut Systems, Inc.
2-Infinity has entered into a Value Added ReSeller Agreement with Tut
Systems, Inc., which gives them the non-exclusive right to sell Tut's products.
Under the terms of the VAR Agreement, 2-Infinity has the right to purchase Tut's
products at prices according to regularly published price lists from Tuts and
re-sell them to their customers. 2-Infinity is obligation to purchase a minimum
of $1,000,000 in products per year. There are no limits on the re-sale prices
2-Infinity can charge on the products. The agreement is automatically renewed
for successive one year terms, but can be terminated by either party on 90 days
notice.
Tut's is in the business of delivering plug-and-play network solutions for
local loop, enterprise, and residential environments. Tut's products deliver
high-speed data over normal telephone wires using their FastCopper (tm)
technology. Tut's products are easy to install and use, providing customers
with a dedicated connection 24 hours a day, while still allowing full use of the
telephone line for voice use. More importantly, Tut's products require no
additional wiring or modifications to the telephone lines. Through the VAR
Agreement, 2-Infinity can offer its clients Tut's-enhanced Internet access at a
very reasonable price.
2-Infinity management will market the Tut's products through existing
contacts and personal introductions, and is seeking to enter into agreements
with the owners and managers of multi dwelling units, such as apartment
complexes, hotels, high rise apartment buildings, and residential developers to
become the Internet service provider for the entire developments.
<PAGE>
At the present time, given 2-Infinity's exclusive focus on the Houston
area, there are no direct competitors. However, there are many competitors
offering traditional dial-up Internet service, both in the Houston area and
worldwide. In addition to traditional dial-up Internet access, many other
companies are offering alternative forms of Internet access, such as through
cable and wireless via satellite. There can be no assurance that 2-Infinity's
current method of technology will be accepted on a widespread basis, nor can
there be any assurance that it will be able to compete with larger,
well-financed competitors within their marketplace.
2-Infinity offers its products in two different packages. The first option
allows the subscriber to rent equipment monthly on a low cost-per-unit basis.
The second option allows the subscriber to purchase the equipment. In either
case, in addition to the rental or purchase of the equipment, subscribers will
pay a monthly subscription fee expected to be approximately $50.00 per
subscriber. In addition to the basic Internet access, subscribers will receive
a value-added package including:
- - A guarantee of over 1Mbps dedicated access for each resident
- - Creation and maintenance of a web site for each specific complex,
property, or community
- - Community pages and chat rooms
- - Technical support
- - On-site hardware support
- - Software updates
- - Complete billing services
- - Multimedia and videoconferencing capabilities and assistance
- - Advertising and merchandising support
- - Static IP addresses
- - Multiple email accounts
- - Internet training programs
2-Infinity currently has 10 employees, all of which are located at their
offices at 4828 Loop Central Drive, Suite 150, Houston, Texas 77081.
AIRNEXUS, INC.
On June 8, 1999, we acquired all of the outstanding stock of Voice Design,
Inc., a Texas corporation which later changed its name to AirNexus, Inc. As
consideration for the acquisition, we issued an aggregate of 3,000,000 shares of
our common stock to Patrick Cody Morgan, Candice Morgan, and Charles H. Downey,
Jr. We also paid the cash sum of $60,000. In addition, Mr. Morgan is entitled
to receive up to an additional 3,000,000 shares of our common stock if net
revenue goals ranging from $32,400 to $762,400 per year are met. As part of the
acquisition, AirNexus entered into three year employment agreements with each of
Patrick Cody Morgan and Charles H. Downey, their chief executive officer and
president, respectively. Our management located and negotiated the transaction,
and as a result there were no finders or brokers' fees.
The acquisition of AirNexus furthered our changed business plan to enter
the high technology and Internet markets. AirNexus is a Houston based provider
of business telephone and voice mail systems. As part of these services,
AirNexus is a reseller of equipment manufactured by third parties such as 3Com,
Panasonic, ESI, Vodavi, Maisoft, and Cortelco.
<PAGE>
Strategic Alliances
AirNexus has developed a relationship with 3COM Corporation to deliver
their new NBX 100 product to the Houston market. This "Product of the Year/Best
of Show in 1998", as awarded by Computer Telephony Magazine at the Computer
Telephony Expo 1998, along with wireless Ethernet technology enables the NBX 100
to give businesses the ability to consolidate voice, video and data on one
single cable. This creates an unprecedented integration between computers,
telephone networks and the Internet.
Under the terms of the 3Com agreement, AirNexus has the non-exclusive
rights to license and distribute specific 3Com products in the Houston, Texas
and surrounding areas. 3Com may terminate the agreement in certain situations,
including breach of the agreement by AirNexus and the failure of AirNexus to
purchase a minimum of $200,0000 worth of product per year.
AirNexus also can, and in the near future intends to, deliver the Tuts
system to commercial properties as well as school and small to medium sized
businesses as a target market. Recently, AirNexus has signed an agreement to
become a re-seller of Cortelco Systems' Millennium PBX, a communication platform
that offers state of the art switching and call routing. AirNexus currently has
approximately 25 material customers.
Target Markets
The target market for AirNexus is businesses with between 20-100 employees.
This sector of the market typically does not have a systems manager or network
administrator on staff, and due to this, AirNexus believes they are an excellent
target candidate for their integrated services. A high percentage of these
companies have a network in place and are receptive to new advancements and
technology. AirNexus intends to provide this sector with a convenient and
easily acceptable avenue to outsource voice, data and Internet services by
utilizing the referenced product line and by continually seeking further
business solutions that fit the customer profile.
AirNexus obtains leads for potential customers in a variety of ways:
- - Manufacturers provide leads from their customers
- - Outside telemarketers are utilized
- - Referrals from existing customers
- - Marketing lists are purchased
- - Yellow Pages advertising, and
- - Print advertising.
All leads are given to individual account managers to follow-up with each
customer. Once a customer has agreed to purchase the equipment and services,
AirNexus does the installation and provides all the follow-up customer support.
Sales Strategy
AirNexus has designed a strategy intended to make them a leader in the
telephony marketplace.
<PAGE>
- - Develop product lines which give clients the latest features at a discount
over competing systems.
- - Waive activation fees and hardware costs in return for long term
contracts.
- - Lease-to-own all wireless equipment required to build the network, with
terms up to 60 months.
- - Develop contracts with commercial management companies to deliver the
services to their tenants. This value-added approach allows these
management companies the ability to maintain long term occupancy and
generate new tenants.
- - Commence an advertising campaign that targets technology buyers.
- - Build an interactive demonstration room that provides potential clients a
hands-on approach to the products and services.
AirNexus currently employs 6 employees, all located at their offices at 333 N.
Sam Houston Parkway East, Suite 870, Houston, Texas 77060.
INTELLECTUAL PROPERTY
We regard our copyrights, service marks, trademarks, trade secrets and
similar intellectual property as critical to our success, and rely on trademark
and copyright law, trade secret protection and confidentiality and/or license
agreements with our employees, customers, partners and others to protect our
proprietary rights. We have no registered trademarks or service marks to date.
It may be possible for unauthorized third parties to copy some or all of our
products or reverse engineer or obtain and use information that we regard as
proprietary. In addition, the laws of some foreign countries do not protect
proprietary rights to the same extent as do the laws of the United States.
There can be no assurance that our means of protecting our proprietary rights in
the United States or abroad will be adequate.
Other parties may assert, from time to time, infringement claims against
us. We may also be subject to legal proceedings and claims from time to time in
the ordinary course of our business, including claims of alleged infringement of
the trademarks and other intellectual property rights of third parties by us and
our licensees, if any. Such claims, even if not meritorious, could result in
the expenditure of significant financial and managerial resources.
GOVERNMENTAL REGULATION
Because our strategy is to be minority investors in a number of different
oil and gas exploration projects, we are not directly subject to industry
regulations. Each of the agreements to which we are currently a party provides
that the central operator of the project will identify and address any
compliance requirements and expenses associated with that particular project.
As a result, we do not believe we have any obligations to identify and comply
with environmental regulations in our oil and gas business. Because we often
are responsible for a pro-rata share of ongoing operating expenses, however, the
return on our investment in any particular project may be negatively effected if
unforseen environmental or regulatory expenses are incurred.
<PAGE>
Although there are currently few laws and regulations directly applicable
to the Internet and e-commerce, it is possible that a number of laws and
regulations may be adopted with respect to the Internet or e-commerce covering
issues such as user privacy, pricing, content, copyrights, distribution,
antitrust and characteristics and quality of products and services. Further,
the growth and development of the market for Internet services may prompt calls
for more stringent consumer protection laws that may impose additional burdens
on those companies conducting business online. The adoption of any additional
laws or regulations may impair the growth of the Internet or commercial online
services, which could, in turn, decrease the demand for our products and
services and increase our cost of doing business, or otherwise have a material
adverse effect on our business, operating results and financial condition.
Moreover, the applicability to the Internet of existing laws in various
jurisdictions governing issues such as property ownership, sales and other
taxes, libel and personal privacy is uncertain and may take years to resolve.
Any such new legislation or regulation, the application of laws and regulations
from jurisdictions whose laws do not currently apply to our business or the
application of existing laws and regulations to the Internet could have a
material adverse effect on our business, operating results and financial
condition.
RESEARCH AND DEVELOPMENT
We have not spent any measurable amount of time on research and development
activities.
EMPLOYEES
As of December 31, 1999, Lakota Technologies, Inc. had 3 full-time
employees, 2-Infinity had 10 full-time employees, AirNexus had 6 full-time
employees, and Lakota Oil had 1 full-time employee. None of our employees is
covered by any collective bargaining agreement. We believe that our relations
with our employees are good.
FACILITIES
Our principal executive offices, as well as those of 2-Infinity.com, are
located at 4828 Loop Central Drive, Suite 150, Houston, Texas 77081, which is
occupied under a lease ending June 30, 2002 for $1,668.94 per month. At the end
of such term, we believe that we can lease the same or comparable offices at
approximately the same monthly rate, however, we can make no guarantees or
assurances of that fact.
AirNexus maintains executive offices located at 333 N. Sam Houston Parkway
East, Suite 870, Houston, Texas 77060, which they occupy under a lease ending
October 1, 2004 for $5,621.00 per month. At the end of such term, we believe
that we can lease the same or comparable offices at approximately the same
monthly rate, however, we can make no guarantees or assurances of that fact.
Lakota Oil maintains executive offices located at 3303 FM 1960 West Suite
F, Houston, Texas 77068, which they occupy under a lease ending July 31, 2000
for $495.00 per month. At the end of such term, we believe that we can lease
the same or comparable offices at approximately the same monthly rate, however,
we can make no guarantees or assurances of that fact.
The Company maintains offices located at 2849 Paces Ferry Road, Suite 710,
Atlanta, Georgia 30339, under a lease ending January 14, 2002 for approximately
$2,300 per month.
<PAGE>
RISK FACTORS
In this section we highlight some of the risks associated with Lakota's business
and operations. Prospective investors should carefully consider the following
risk factors when evaluating an investment in the common stock offered by this
Reoffer Prospectus.
RISKS RELATED TO OUR OIL AND GAS BUSINESS AS WELL AS OUR INTERNET AND TECHNOLOGY
BUSINESS
YOU MAY BE UNABLE TO EFFECTIVELY EVALUATE OUR COMPANY FOR INVESTMENT PURPOSES
BECAUSE OUR OIL AND GAS EXPLORATION AND INTERNET TECHNOLOGY BUSINESSES HAVE
EXISTED FOR ONLY A SHORT PERIOD OF TIME. We began in the oil and gas
exploration business in 1997, and our Internet and technology subsidiaries have
been in operation since early 1999. As a result, we have only a limited
operating history upon which you may evaluate our business and prospects. In
addition, you must consider our prospects in light of the risks and
uncertainties encountered by companies in an early stage of development in new
and rapidly evolving markets.
YOUR INVESTMENT MAY NOT INCREASE IN VALUE UNLESS WE ARE ABLE TO BECOME
PROFITABLE. We have incurred losses in our business operation since inception.
We expect to continue to lose money for the foreseeable future, and we cannot be
certain when we will become profitable, if at all. Failure to achieve and
maintain profitability may adversely affect the market price of our common
stock.
WE ARE PRESENTLY IN UNSOUND FINANCIAL CONDITION WHICH MAKES INVESTMENT IN
OUR SECURITIES HIGHLY RISKY. Our financial statements include an auditor's
report containing a modification regarding an uncertainty about our ability to
continue as a going concern. Our financial statements also include an
accumulated deficit of $6,367,274 as of September 30, 1999 and other indications
of weakness in our present financial position. We have been operating primarily
through the issuance of common stock for services by entities, including
affiliates, that we could not afford to pay in cash. We are consequently deemed
by state securities regulators to presently be in unsound financial condition.
No person should invest in this offering unless they can afford to lose their
entire investment.
OUR BUSINESS DEPENDS ON A FEW KEY INDIVIDUALS AND MAY BE NEGATIVELY
AFFECTED IF WE ARE UNABLE TO KEEP OUR KEY PERSONNEL. Our future success depends
in large part on the skills, experience and efforts of our key marketing and
management personnel. The loss of the continued services of any of these
individuals could have a very significant negative effect on our business. In
particular, we rely upon the experience of Majed Jalali and Patrick "Cody"
Morgan, our chief executive officer and secretary, respectively. We do not
currently maintain a policy of key man life insurance on any of our employees or
management team.
<PAGE>
OUR BUSINESS PLAN REQUIRES ADDITIONAL PERSONNEL AND MAY BE NEGATIVELY
AFFECTED IF WE ARE UNABLE TO HIRE AND RETAIN NEW SKILLED PERSONNEL. Qualified
personnel are in great demand throughout the software and Internet start-up
industries. Our success depends in large part upon our ability to attract,
train, motivate and retain highly skilled sales and marketing personnel, web
designers, software engineers and other senior personnel. Our failure to attract
and retain the highly trained technical personnel that are integral to our
direct sales, product development, service and support teams may limit the rate
at which we can generate sales and develop new products and services or product
and service enhancements. This could hurt our business, operating results and
financial condition.
OUR TECHNOLOGY BUSINESSES OWN PROPRIETARY TECHNOLOGY AND OUR SUCCESS
DEPENDS ON OUR ABILITY TO PROTECT THAT TECHNOLOGY. The unauthorized
reproduction or other misappropriation of our proprietary technology could
enable third parties to benefit from our technology without paying us for it.
This could have a material adverse effect on our business, operating results and
financial condition. We have relied primarily on the use of trade secrets to
protect our proprietary technology, which may be inadequate. We do not know
whether we will be able to defend our proprietary rights because the validity,
enforceability and scope of protection of proprietary rights in Internet-related
industries are uncertain and still evolving. Moreover, the laws of some foreign
countries are uncertain and may not protect intellectual property rights to the
same extent as the laws of the United States. If we resort to legal proceedings
to enforce our intellectual property rights, the proceedings could be burdensome
and expensive and could involve a high degree of risk.
WE WILL INCUR SIGNIFICANT EXPENSES IF OTHER COMPANIES CLAIM WE HAVE
INFRINGED ON THEIR PROPRIETARY RIGHTS. Although we attempt to avoid infringing
known proprietary rights of third parties, we are subject to the risk of claims
alleging infringement of third party proprietary rights. If we were to discover
that any of our products violated third party proprietary rights, there can be
no assurance that we would be able to obtain licenses on commercially reasonable
terms to continue offering the product without substantial reengineering or that
any effort to undertake such reengineering would be successful. We do not
conduct comprehensive searches to determine whether the technology used in our
products infringes patents, trademarks, tradenames or other protections held by
third parties. In addition, product development is inherently uncertain in a
rapidly evolving technological environment in which there may be numerous patent
applications pending, many of which are confidential when filed, with regard to
similar technologies. Any claim of infringement could cause us to incur
substantial costs defending against the claim, even if the claim is invalid, and
could distract our management from our business. Furthermore, a party making
such a claim could secure a judgment that requires us to pay substantial
damages. A judgment could also include an injunction or other court order that
could prevent us from selling our products. Any of these events could have a
material adverse effect on our business, operating results and financial
condition.
IF WE ARE UNABLE TO RAISE SUFFICIENT CAPITAL IN THE FUTURE, WE MAY NOT BE
ABLE TO STAY IN BUSINESS. Currently, our capital is insufficient to conduct our
business and if we are unable to obtain needed financing, we will be unable to
promote our products and services, engage in and exploit potential business
opportunities and otherwise maintain our competitive position. Since we intend
to grow our business rapidly, it is certain that we will require additional
capital. We have not thoroughly investigated whether this capital would be
available, who would provide it, and on what terms. If we are unable to raise
the capital required to fund our growth, on acceptable terms, our business may
be seriously harmed or even terminated.
<PAGE>
WE COULD LOSE REVENUE AND INCUR SIGNIFICANT COSTS IF OUR COMPUTER SYSTEMS
OR THE COMPUTER SYSTEMS OF THIRD-PARTIES ARE NOT YEAR 2000 COMPLIANT. Many
currently installed computer systems and software products accept only two
digits to identify the year in any date. Thus, the year 2000 will appear as
"00," which a system or software might consider to be the year 1900 rather than
the year 2000. This error could result in system failures, delays or
miscalculations that disrupt our operations. The failure of our internal
systems, or any material third-party systems, to be year 2000 compliant could
result in significant liabilities and could seriously harm our business. We have
conducted a review of our business systems, including our computer systems. We
have taken steps to remedy potential problems, but have not yet developed a
comprehensive year 2000 contingency plan. There can be no assurance that we will
identify all year 2000 problems in our computer systems before they occur or
that we will be able to remedy any problems that are discovered. We have also
queried many of our customers, vendors and resellers as to their progress in
identifying and addressing problems that their computer systems may face in
correctly interrelating and processing date information as the year 2000
approaches and is reached. We have received responses from several of these
parties, but there can be no assurance that we will identify all such year 2000
problems in the computer systems of our customers, vendors or resellers before
they occur or that we will be able to remedy any problems that are discovered.
Our efforts to identify and address year 2000 problems, and the expenses we may
incur as a result of such problems, could have a material adverse effect on our
business, financial condition and results of operations. In addition, the
revenue stream and financial stability of existing customers may be adversely
impacted by year 2000 problems, which could cause fluctuations in our revenue.
If we fail to identify and remedy year 2000 problems, we could also be at a
competitive disadvantage relative to companies that have corrected such
problems. Any of these outcomes could have significant adverse effects on our
business, financial condition and results of operations.
WE MAY NOT HAVE SUFFICIENT INTEREST IN OUR INTERNET BUSINESSES TO MAKE
MONEY. If the market for the services offered by 2-Infinity.com, Inc. and
AirNexus, Inc. do not grow at a significant rate, our business, operating
results and financial condition will be negatively affected. Our
Internet-related services are a relatively new concept. Future demand for
recently introduced technologies is highly uncertain, and therefore we cannot
guaranty that our business will grow as we expect.
OUR INTERNET BUSINESSES ARE IN HIGHLY COMPETITIVE INDUSTRIES, AND THUS
THERE MAY NOT BE ENOUGH DEMAND FOR OUR PRODUCTS OR SERVICES FOR US TO MAKE
MONEY. There are numerous competitors offering the services of 2-Infinity.com,
Inc. and AirNexus, Inc. Many of our current and potential competitors have
longer operating histories, larger customer bases, greater brand recognition and
significantly greater financial, marketing and other resources than we do and
may enter into strategic or commercial relationships with larger, more
established and well-financed companies. Some of our competitors may be able to
enter into such strategic or commercial relationships on more favorable terms.
In addition, new technologies and the expansion of existing technologies may
increase competitive pressures on us. Increased competition may result in
reduced operating margins and loss of market share.
<PAGE>
REVENUES FROM OUR INTERNET BUSINESSES WILL BE LESS LIKELY TO DEVELOP IF THE
INTERNET DOES NOT REMAIN A VIABLE COMMERCIAL MARKETPLACE. Our ability to
generate revenues is substantially dependent upon continued growth in the use of
the Internet and the infrastructure for providing Internet access and carrying
Internet traffic. We don't know if the necessary infrastructure or complementary
products will be developed or that the Internet will prove to be a viable
commercial marketplace. To the extent that the Internet continues to experience
significant growth in the level of use and the number of users, we cannot
guaranty that the infrastructure will continue to be able to support the demands
placed upon it by such potential growth. In addition, delays in the development
or adoption of new standards or protocols required to handle levels of Internet
activity, or increased governmental regulation may restrict the growth of the
Internet. If the necessary infrastructure or complementary products and services
are not developed or if the Internet does not become a viable commercial
marketplace, our business, operating results and financial condition would be
negatively affected.
WE MAY INCUR A LOSS OF REVENUES AND SIGNIFICANT COSTS IF WE CANNOT MAINTAIN
THE SECURITY OF OUR INTERNET PRODUCTS AND SERVICES. Internet companies rely on
encryption and authentication technology to provide the security and
authentication necessary to effect secure transmission of confidential
information. There can be no assurance that advances in computer capabilities,
new discoveries in the field of cryptography or other developments will not
result in a compromise or breach of the algorithms used by companies to protect
consumer's transaction data. If any such compromise of this security were to
occur, it could have a material adverse effect on our potential clients,
business, prospects, financial condition and results of operations. A party who
is able to circumvent security measures could misappropriate proprietary
information or cause interruptions in operations. We may be required to expend
significant capital and other resources to protect against such security
breaches or to alleviate problems caused by such breaches. Concerns over the
security of transactions conducted on the Internet and the privacy of users may
also hinder the growth of online services generally. To the extent that our
activities or third-party contractors involve the storage and transmission of
proprietary information, such as credit card numbers, or personal data
information, security breaches could damage our reputation and expose us to a
risk of loss or litigation and possible liability. We cannot be sure that our
security measures will not prevent security breaches or that failure to prevent
such security breaches will not have a material adverse effect on our business.
RISKS RELATED TO OUR OIL AND GAS EXPLORATION BUSINESS
OUR REVENUES MAY VARY WIDELY BECAUSE OIL AND GAS PRICES ARE HIGHLY
VOLATILE. A portion of our future potential revenue is dependent on the
prevailing market price for oil and gas. The prices for oil and gas
historically have been volatile and are subject to wide fluctuations in response
to changes in the supply of and demand for oil and gas, market uncertainties and
a variety of additional factors beyond our control. These factors include the
level of consumer product demand, weather conditions, domestic and foreign
governmental regulation, political conditions in the Middle East, the foreign
supply of oil and gas, the price and availability of alternative fuels and
overall oil and gas market conditions. It is impossible to predict future oil
and gas price movements with any certainty. Any substantial or extended decline
in the price of oil and gas would have a negative effect on our financial
condition and results of operations, as well as reduce the amount of our oil and
gas that we can produce economically.
<PAGE>
IF LOCAL OPERATORS DO NOT EFFECTIVELY MANAGE OUR PROPERTIES, WE MAY SUFFER
A LOSS OF REVENUES OR SIGNIFICANT ADDITIONAL EXPENSES. None of our oil and gas
properties are operated by us. As a result, we have limited control over the
manner in which operations are conducted on such properties, including the
safety and environmental standards. Under the terms of the operating agreements
governing operations on the properties in which we have an interest, we do not
have any measurable influence or control over the nature and timing of
exploration and development activities. As a result, the operators of such
properties could undertake exploration or development projects at a time when we
and our joint partners do not have the funds required to finance our share of
the costs of such projects. In such event, in accordance with the operating
agreements relating to properties in which we have an interest, the other
parties to such agreements who fund their share of the cost of such a project
are generally entitled to receive all cash flow from such project, subject to
rights of third party royalty or other interest owners, until they have
recovered a multiple of the costs of such project prior to our receipt of any
production or revenues from such project or, in the event drilling is necessary
to maintain leasehold interests, we may be required to forfeit our interests in
such projects. Conversely, the operators of such properties could refuse to
initiate exploration or development projects, in which case we would be required
to propose such activities and may be required to proceed with such activities
at much higher levels of participation than expected and without receiving any
funding from the other interest owners or the operators may initiate exploration
or development projects on a slower schedule than we prefer. Any of these events
could have a significant effect on our anticipated exploration and development
activities and financing thereof.
OUR REVENUES AND PROFITABILITY WILL BE NEGATIVELY AFFECTED IF THERE ARE
OPERATIONAL ACCIDENTS OR OTHER UNFORSEEN LIABILITIES. Our operations are
subject to risks inherent in the oil and gas industry, such as blowouts,
cratering, explosions, uncontrollable flows of oil, gas or well fluids, fires,
pollution and other environmental risks. These risks could result in substantial
losses to us due to injury and loss of life, severe damage to and destruction of
property and equipment, pollution and other environmental damage and suspension
of operations. In accordance with customary industry practice, we are not fully
insured against all risks incident to its business. Because of the nature of
industry hazards, it is possible that liabilities for pollution and other
damages arising from a major occurrence could exceed insurance coverage or
policy limits. Any such liabilities could have a materially adverse effect on
our operations and profitability.
OUR SELECTION PROCESS FOR OIL AND GAS INVESTMENTS MAY RESULT IN PROPERTIES
THAT ARE UNPRODUCTIVE. We intend to continue acquiring oil and gas properties.
Although we perform a review of the properties to be acquired that we believe is
consistent with industry practices, our reviews are inherently incomplete.
Generally, it is not feasible to review in-depth every individual property
involved in each acquisition. Ordinarily, we will focus its review efforts on
the higher-valued properties and will sample the remainder. However, even an
in-depth review of all properties and records may not necessarily reveal
existing or potential problems nor will it permit a buyer to become sufficiently
familiar with the properties to assess fully their deficiencies and
capabilities. Inspections may not always be performed on every well, and
environmental problems, such as ground water contamination, are not necessarily
observable even when an inspection is undertaken. Furthermore, we must rely on
information, including financial, operating and geological information, provided
by the seller of the properties without being able to verify fully all such
information and without the benefit of knowing the history of operations of all
such properties.
<PAGE>
DUE TO RISKS BEYOND OUR CONTROL, A SIGNIFICANT AMOUNT OF CAPITAL MAY BE
LOST ON INVESTMENTS THAT UNPRODUCTIVE. A high degree of risk of loss of
invested capital exists in almost all exploration and development activities
which we undertake. No assurance can be given that oil or gas will be discovered
to replace reserves currently being developed, produced and sold, or that if oil
or gas reserves are found, they will be of a sufficient quantity to enable us to
recover the substantial sums of money incurred in their acquisition, discovery
and development. Drilling activities are subject to numerous risks, including
the risk that no commercially productive oil or gas reservoirs will be
encountered. The cost of drilling, completing and operating wells is often
uncertain. Our operations may be curtailed, delayed or cancelled as a result of
numerous factors including title problems, weather conditions, compliance with
governmental requirements and shortages or delays in the delivery of equipment.
The availability of a ready market for the our gas production depends on a
number of factors, including, without limitation, the demand for and supply of
natural gas, the proximity of gas reserves to pipelines, the capacity of such
pipelines and government regulations.
IF GOVERNMENTAL REGULATIONS CHANGE, WE MAY INCUR SUBSTANTIAL INCREASED
EXPENSES. Our oil and gas business is subject to a number of federal, state and
local laws and regulations relating to the exploration for and development and
production of oil and gas, as well as environmental and safety matters. Such
laws and regulations have generally become more stringent in recent years, often
imposing greater liability on a larger number of potentially responsible
parties. Because the requirements imposed by such laws and regulations are
frequently changed, we are unable to predict the ultimate cost of compliance
with such requirements and their effect on us.
RISKS RELATED TO THIS OFFERING AND OWNERSHIP OF OUR STOCK.
OUR BOARD OF DIRECTORS CAN ISSUE PREFERRED STOCK WITHOUT SHAREHOLDER
CONSENT AND DILUTE OR OTHERWISE SIGNIFICANTLY AFFECT THE RIGHTS OF EXISTING
SHAREHOLDERS. Our articles of incorporation provide that preferred stock may be
issued from time to time in one or more series. Our board of directors is
authorized to determine the rights, preferences, privileges and restrictions
granted to and imposed upon any wholly unissued series of preferred stock and
the designation of any such shares, without any vote or action by our
shareholders. The board of directors may authorize and issue preferred stock
with voting power or other rights that could adversely affect the voting power
or other rights of the holders of common stock. In addition, the issuance of
preferred stock could have the effect of delaying, deferring or preventing a
change in control, because the terms of preferred stock that might be issued
could potentially prohibit the consummation of any merger, reorganization, sale
of substantially all of its assets, liquidation or other extraordinary corporate
transaction without the approval of the holders of the outstanding shares of the
preferred stock. We will not offer preferred stock to promoters except on the
same terms as it is offered to all other existing shareholders or to new
shareholder or unless the issuance is approved by a majority of our independent
directors who do not have an interest in the transactions and who have access,
at our expense, to our legal counsel or independent legal counsel.
YOU MAY NOT BE ABLE TO SELL YOUR STOCK, OR MAY BE FORCED TO SELL AT REDUCED
PRICES, BECAUSE THE MARKET FOR OUR COMMON STOCK IS VERY VOLATILE. Our stock is
presently trading on the OTC bulletin board maintained by Nasdaq under the
symbol LAKO. Nevertheless, there has been limited volume in trading in the
public market for the common stock, and there can be no assurance that a more
active trading market will develop or be sustained. The market price of the
shares of common stock is likely to be highly volatile and may be significantly
affected by factors such as fluctuations in our operating results, announcements
of technological innovations or new products and/or services by us or our
competitors, governmental regulatory action, developments with respect to
patents or proprietary rights and general market conditions.
<PAGE>
YOU MAY NOT BE ABLE TO SELL YOUR SHARES BECAUSE OF THE PENNY-STOCK RULES.
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure relating to the market for penny stocks in connection with
trades in any stock defined as a penny stock. The Commission has adopted
regulations that generally define a penny stock to be any equity security that
has a market price of less than $5.00 per share, subject to a few exceptions.
Such exceptions include any equity security listed on Nasdaq and any equity
security issued by an issuer that has
- - net tangible assets of at least $2,000,000, if such issuer has been in
continuous operation for three years,
- - net tangible assets of at least $5,000,000, if such issuer has been in
continuous operation for less than three years, or
- - average annual revenue of at least $6,000,000, if such issuer has been in
continuous operation for less than three years.
Unless an exception is available, the regulations require the delivery, prior to
any transaction involving a penny stock, of a disclosure schedule explaining the
penny stock market and the risks associated therewith.
FORWARD LOOKING STATEMENTS. Except for historical information, the
discussion in this registration statement contains some forward-looking
statements that involve risks and uncertainties. These statements may refer to
our future plans, objectives, expectations and intentions. These statements may
be identified by the use of the words such as expect, anticipate, believe,
intend, plan and similar expressions. Our actual results could differ materially
from those anticipated in such forward-looking statements.
USE OF PROCEEDS
Lakota will not receive any of the proceeds from the sale of shares of common
stock by the Selling Shareholders.
<PAGE>
SELLING SHAREHOLDERS
The Shares of the Company to which this Reoffer Prospectus relates are being
registered for reoffers and resales by the Selling Shareholders, who acquired
the Shares pursuant to a compensatory benefit plan with Lakota for services they
provided to Lakota. The Selling Shareholders may resell all, a portion or none
of such Shares from time to time.
The table below sets forth with respect to the Selling Shareholders, based upon
information available to the Company as of January 31, 2000, the number of
Shares 0 owned, the number of Shares registered by this Reoffer Prospectus and
the number and percent of outstanding Shares that will be owned after the sale
of the registered Shares assuming the sale of all of the registered Shares.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
NUMBER OF NUMBER OF % of SHARES
SHARES SHARES NUMBER OF OWNED BY
SELLING OWNED REGISTERED BY SHARES OWNED SHAREHOLDER
SHAREHOLDERS BEFORE SALE PROSPECTUS AFTER SELL AFTER SALE
- ----------------- ----------- ---------------- -------------- -----------
Ken Honeyman (1) 6,676,429 3,000,000 3,676,429 6.07%
Howard Wilson (1) 4,329,643 1,000,000 3,329,643 5.50%
John B. Hayes 4,800,000 2,500,000 2,300,000 3.80%
Michael Omer 475,000 475,000 - 0 - 0.00%
Brent Cavasos 1,100,385 605,000 495,385 0.82%
Vincent Jalali 100,000 100,000 - 0 - 0.00%
Pat Morgan 100,000 100,000 - 0 - 0.00%
Al Cooper 100,000 100,000 - 0 - 0.00%
</TABLE>
(1) Each of Mr. Honeyman and Mr. Wilson have been issued 1,000,000 shares of
Lakota common stock which is being held in escrow by the Company's legal
counsel. Each of Mr. Honeyman and Mr. Wilson will be required to retire the
shares in the event they receive the sum of $100,000 by March 1, 2000 per the
terms of their Agreement and General Mutual Release, as amended.
PLAN OF DISTRIBUTION
The Selling Shareholders may sell the Shares for value from time to time under
this Reoffer Prospectus in one or more transactions on the Over-the-Counter
Bulletin Board maintained by Nasdaq, or other exchange, in a negotiated
transaction or in a combination of such methods of sale, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at prices otherwise negotiated. The Selling Shareholders may effect
such transactions by selling the Shares to or through brokers-dealers, and such
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Shareholders and/or the purchasers
of the Shares for whom such broker-dealers may act as agent (which compensation
may be less than or in excess of customary commissions).
<PAGE>
The Selling Shareholders and any broker-dealers that participate in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of Section 2(11) of the 1933 Act, and any commissions received by them and any
profit on the resale of the Shares sold by them may be deemed be underwriting
discounts and commissions under the 1933 Act. All selling and other expenses
incurred by the Selling Shareholders will be borne by the Selling Shareholders.
In addition to any Shares sold hereunder, the Selling Shareholders may, at the
same time, sell any shares of common stock, including the Shares, owned by him
or her in compliance with all of the requirements of Rule 144, regardless of
whether such shares are covered by this Reoffer Prospectus.
There is no assurance that the Selling Shareholders will sell all or any portion
of the Shares offered.
The Company will pay all expenses in connection with this offering and will not
receive any proceeds from sales of any Shares by the Selling Shareholders.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by the Cutler Law Group, Newport Beach, California. M. Richard Cutler,
the sole shareholder of MRC Legal Services Corporation which does business as
the Cutler Law Group, holds 1,330,000 shares of the Company's Common Stock.
Employees of the Cutler Law Group hold 630,000 shares of the Company's Common
Stock.
EXPERTS
The balance sheets as of December 31, 1998 and June 30, 1999 and the statements
of operations, shareholders' equity and cash flows for the periods ended
December 31, 1998 and June 30, 1999 of Lakota Technologies, Inc., have been
incorporated by reference in this Registration Statement in reliance on the
report of Jones, Jensen & Company, LLC, independent accountants, given on the
authority of that firm as experts in accounting and auditing.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are hereby incorporated by reference in this
Registration Statement:
(i) Registrant's Form S-8, filed with the Commission on January 20, 2000.
(ii) Registrant's Form 8-K for an event on January 18, 2000, filed with the
Commission on January 18, 2000.
(iii) Registrant's Form 10-SB (in the name of AGM, Inc., the Company's
reporting predeceesor), filed with the Commission on October 26, 1999.
(iv) All other reports and documents subsequently filed by the Registrant
pursuant after the date of this Registration Statement pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 and prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference and to be a part hereof
from the date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Certain legal matters with respect to the Common Stock offered hereby will be
passed upon for the Company by Cutler Law Group, counsel to the Company. MRC
Legal Services Corporation does business as Cutler Law Group. M. Richard
Cutler, the sole shareholder of MRC Legal Services Corporation which does
business as the Cutler Law Group, holds 1,330,000 shares of the Company's Common
Stock. Employees of the Cutler Law Group hold 630,000 shares of the Company's
Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Corporation Laws of the State of Colorado and the Company's Bylaws
provide for indemnification of the Company's Directors for liabilities and
expenses that they may incur in such capacities. In general, Directors and
Officers are indemnified with respect to actions taken in good faith in a manner
reasonably believed to be in, or not opposed to, the best interests of the
Company, and with respect to any criminal action or proceeding, actions that the
indemnitee had no reasonable cause to believe were unlawful. Furthermore, the
personal liability of the Directors is limited as provided in the Company's
Articles of Incorporation.
<PAGE>
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The Shares were issued for employment services rendered. These sales were
made in reliance of the exemption from the registration requirements of the
Securities Act of 1933, as amended, contained in Section 4(2) thereof covering
transactions not involving any public offering or not involving any "offer" or
"sale".
ITEM 8. EXHIBITS
Exhibit No. Description
---------- -----------
5 Opinion of Cutler Law Group with respect to legality of the
securities of the Registrant begin registered
10.1 Agreement and General Mutual Release dated January 6, 2000
for Ken Honeyman.
10.2 Addendum to Agreement and General Mutual Release and Escrow
Agreement for Ken Honeyman dated January 20, 2000.
10.3 Agreement and General Mutual Release dated January 6, 2000
for Howard Wilson.
10.4 Addendum to Agreement and General Mutual Release and Escrow
Agreement for Howard Wilson dated January 20, 2000.
10.5 Escrow Agreement dated January 6, 2000.
10.6 Agreement and General Mutual Release dated February 3, 2000
for John B. Hayes.
10.7 Letter Agreement dated January 24, 2000 with Michael Omer
10.8 Letter Agreement dated January 24, 2000 with Brent Cavasos
10.9 Letter Agreement dated January 24, 2000 with Vincent Jalali
10.10 Consulting Agreement dated January 12, 2000 with Patsy Morgan
10.11 Consulting Agreement dated January 12, 2000 with Allan Cooper
23.1 Consent of Jones, Jensen & Company, Certified Public
Accountants
23.2 Consent of Cutler Law Group (contained in opinion to be filed
as Exhibit 5)
________________________
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to include any material
information with respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such information in the
Registration Statement.
<PAGE>
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that is meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on February 9, 2000.
Lakota Technologies, Inc.
/s/ Majed Jalali
By: Majed Jalali, Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
/s/ Majed Jalali Chairman, Chief Executive Officer, and
Chief Financial Officer
_____________________
/s/ Patrick "Cody" Morgan Director and Secretary
______________________
<PAGE>
[CUTLER LAW GROUP LETTERHEAD]
February 9, 2000
Securities and Exchange Commission
Division of Corporate Finance
Washington, D.C. 20549
Re: Lakota Technologies, Inc.
Ladies and Gentlemen:
This office represents Lakota Technologies, Inc., a Colorado corporation
(the "Registrant") in connection with the Registrant's Registration Statement on
Form S-8 under the Securities Act of 1933 (the "Registration Statement"), which
relates to the resale of up to 7,880,000 shares by Ken Honeyman, Howard Wilson,
John B. Hayes, Michael Omer, Brent Cavasos, Vincent Jalali, Pat Morgan, and Al
Cooper (collectively, the "Selling Shareholders") in accordance with various
legal services, settlement, and consulting agreements between the Registrant and
the Selling Shareholders (the "Registered Securities"). In connection with our
representation, we have examined such documents and undertaken such further
inquiry as we consider necessary for rendering the opinion hereinafter set
forth.
Based upon the foregoing, it is our opinion that the Registered Securities,
when issued as set forth in the Registration Statement, will be legally issued,
fully paid and nonassessable.
We acknowledge that we are referred to under the heading "Legal Matters" in
the Resale Prospectus which is a part of the Registrant's Form S-8 Registration
Statement relating to the Registered Securities, and we hereby consent to such
use of our name in such Registration Statement and to the filing of this opinion
as Exhibit 5 to the Registration Statement and with such state regulatory
agencies in such states as may require such filing in connection with the
registration of the Registered Securities for offer and sale in such states.
Sincerely,
/s/ Cutler Law Group
Cutler Law Group
AGREEMENT AND GENERAL MUTUAL RELEASE
This Agreement ("Agreement") is entered into as of this 6th day of January,
2000, by and between ROBERT KENT HONEYMAN, an individual, and CAN-AM RESOURCES,
INC., a Georgia corporation (hereinafter referred to as "Can Am" and,
collectively with Robert Kent Honeyman, as "Honeyman"), on one hand, and LAKOTA
TECHNOLOGIES, INC., a Colorado corporation (hereinafter referred to, along with
its subsidiaries Lakota Oil and Gas, Inc., a Texas corporation, 2-Infinity.com,
Inc., a Texas corporation, and AirNexus, Inc., a Texas corporation, as
"Lakota"), HOWARD N. WILSON, an individual (hereinafter referred to as
"Wilson"), MAJED JALALI, an individual (hereinafter referred to as "Jalali"),
PATRICK "CODY" MORGAN, an individual (hereinafter referred to as "Morgan"), JOHN
B. HAYES, an individual (hereinafter referred to as "Hayes"), and NICHOLAS R.
ATHENS, an individual (hereinafter referred to as "Athens"), on the other hand
(each of Honeyman, Lakota, Wilson, Jalali, Morgan, Hayes, and Athens shall be
referred to as a "Party" and collectively as the "Parties").
RECITALS
A. WHEREAS, the Parties desire to enter into this agreement regarding
(i) Honeyman's continued employment by Lakota, (ii) his position as an officer
and director of Lakota, and (iii) compensation and other consideration due and
owing between Lakota and Honeyman (the "Matters").
B. The Parties desire, pursuant to the terms of this Agreement, to
resolve the Matters and all disputes between Honeyman and the other Parties.
NOW, THEREFORE, for good and adequate consideration, the receipt of which
is hereby acknowledged, without admitting or denying any wrongdoing by any Party
hereto, the Parties covenant, promise and agree as follows:
AGREEMENT
1. Obligations of Honeyman. As a material term of this Agreement,
-------------------------
Honeyman agrees to the following:
A. Resignations. As evidenced by his execution hereof, Honeyman hereby
resigns, effective as of the Effective Date as defined below, as an employee,
officer, and director of Lakota and each of its subsidiaries. Honeyman further
covenants and agrees, except as set forth in this Agreement, to release the
Parties hereto, and each of them, from any and all obligations with respect to
salary, severance, benefits, indebtedness to or from the Parties and each of
them, and any and all other obligations which may now or in the future be owed
to Honeyman. Honeyman further agrees to return any and all documents,
correspondence, books, records, keys, and other items in his possession
belonging to Lakota within ten (10) days of the Effective Date.
<PAGE>
B. Discharge of Indebtedness. As evidenced by his execution hereof, except
as otherwise provided herein, Honeyman hereby waives and forgives any amounts
owing to him and/or Can Am by Lakota.
C. Consulting Services. For a period of up to sixty (60) days following the
execution of this Agreement, as directed and determined solely by the Board of
Directors of Lakota, Honeyman shall provide a reasonable level of services to
Lakota as an independent consultant and contractor in connection with Lakota's
currently pending SB-2 registration statement.
D. Release of Lakota, Wilson, Jalali, Morgan, Hayes, and Athens. Honeyman
hereby forever releases and discharges Lakota, Wilson, Jalali, Morgan, Hayes,
and Athens, and each of them, their affiliates, divisions, predecessors,
successors and assigns, and each and all of their present and former agents,
officers, directors, attorneys, and employees, from and against any and all
claims, agreements, contracts, covenants, representations, obligations, losses,
liabilities, demands and causes of action, known or unknown, which Honeyman may
now or hereafter have or claim to have against them, arising out of or
pertaining to the subject matter of the Matters. Honeyman further covenants and
agrees, except as set forth in this Agreement, to release the Parties hereto,
and each of them, from any and all obligations with respect to salary,
severance, benefits, indebtedness to or from the Parties and each of them, and
any and all other obligations which may now or in the future be owed to
Honeyman. This release of claims and defenses shall not alter the prospective
duties between the parties under this Agreement.
E. Conditions Precedent. Each of the obligations of Honeyman as set forth
in this Agreement is subject to, as conditions precedent to the performance of
his obligations hereunder, the performance of the obligations of each of the
other Parties to this Agreement. The effective date of the actions to be taken
by Honeyman hereunder (the "Effective Date") shall be the date that Lakota
delivers the $25,000 as required by section 2(A)(i) and the 2,000,000 shares as
required by section 2(A)(iv), and Jalali delivers the 1,000,000 shares as
required by section 2(B) hereof.
2. Obligations of Lakota, Wilson, Jalali, Morgan, Hayes, and Athens.
-------------------------------------------------------------------
A. Obligations of Lakota.
<PAGE>
(i) Within five (5) days of the date hereof, Lakota shall deliver, via
certified funds or bank wire, to the Cutler Law Group, attention Brian A.
Lebrecht, Esq., as escrow agent (the "Escrow Agent"), the sum of Twenty Five
Thousand Dollars ($25,000) to be delivered to Honeyman upon execution of this
Agreement by all Parties and delivery of the Pledged Shares to the Escrow Agent
as set forth in section 2(B) hereof, and as more fully set forth in the Escrow
Agreement of even date herewith and executed by all Parties hereto (the "Escrow
Agreement").
(ii) Within ten (10) days of the earlier of (a) the effectiveness of a
registration statement, whether on Form SB-2 or otherwise (the "Registration
Statement"), as declared by the United States Securities and Exchange Commission
(the "SEC") (the "Registration Effective Date"), or (b) March 1, 2000, Lakota
shall deliver or cause to be delivered, via certified funds or bank wire, to
Honeyman the sum of One Hundred Thousand Dollars ($100,000). In the event that
Lakota fails to make the payment as described in this section 2(A)(ii) by March
11, 2000, and upon written demand received by the Escrow Agent from Honeyman,
then 1,000,000 shares of Lakota common stock issued in the name of Jalali and
held by the Escrow Agent (see section 2(B) below) shall be immediately released
to Honeyman in full satisfaction of the obligations in this section 2(A)(ii), as
more fully set forth in the Escrow Agreement.
(iii) On or before February 5, 2000, and again on or before March 5, 2000,
Lakota shall pay to Honeyman the sum of Seven Thousand Five Hundred Dollars
($7,500) as a consulting fee for services rendered in accordance with section 18
of this Agreement. Honeyman shall not be reimbursed for any expenses incurred
as a result of rendering consulting services unless such expenses are previously
approved, in writing, by Lakota.
(iv) Within five (5) days of the date hereof, Lakota shall deliver to the
Escrow Agent an aggregate of 2,000,000 shares of "restricted" common stock of
Lakota, issued to Honeyman or his assigns, to be delivered to Honeyman upon
execution of this Agreement by all Parties and delivery of the Pledged Shares to
the Escrow Agent as set forth in section 2(B) hereof, as more fully set forth in
the Escrow Agreement.
(v) Within twenty (20) days of the earlier of (i) the Registration Effective
Date, (ii) March 11, 2000, or (iii) such other date as Lakota becomes obligated
to file periodic reports pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, Lakota shall deliver to Honeyman or his assigns an
aggregate of 2,000,000 shares of "free trading" common stock of Lakota. In
accordance herewith, Lakota hereby undertakes to prepare and file a Form S-8 or
other form of registration statement as necessary to effectuate the delivery of
the shares as described in this section 2(A)(v).
<PAGE>
(vi) As evidenced by its execution hereof, Lakota hereby forever waives and
forgives any amounts owing to it by Honeyman and/or Can Am.
(vii) In the event an "Indemnifiable Action" (as hereinafter defined) is
brought against Honeyman at any time, then Lakota agrees to indemnify Honeyman
for any and all liabilities related to or arising from the Indemnifiable Action
(the "Indemnified Liabilities"). Indemnifiable Action shall mean a legal cause
of action commenced and physically served on Honeyman which names Honeyman as a
party, related to or arising from his relationship (whether past, present or
future) as an employee, consultant, officer and/or director of Lakota or any of
its current or pre-existing subsidiaries The foregoing indemnification shall
further be subject to the requirement that in the event Honeyman becomes
actually aware of an Indemnifiable Action, he shall have Five (5) business days
to deliver written notice to Lakota of his intention to enforce the terms of
this Agreement.
B. Obligations of Jalali. Within five (5) days of the date hereof,
Jalali shall deliver to the Escrow Agent an aggregate of One Million (1,000,000)
shares of Lakota common stock (the "Pledged Shares"), along with a fully
executed and medallion guaranteed stock power sufficient to transfer title and
ownership of the Pledged Shares, to be delivered in accordance with the terms of
the Escrow Agreement which shall include terms substantially as follows:
(i) Upon the timely delivery of the $100,000 set forth in section 2(A)(ii)
hereof, the Escrow Agent shall return the Pledged Shares to Jalali, and the
obligations of the Escrow Agent and Jalali arising under this section 2(B) shall
cease;
(ii) Notwithstanding the foregoing, however, in the event that the $100,000
is not timely delivered to Honeyman as set forth in section 2(A)(ii) hereof,
then upon receipt of written demand from Honeyman after March 11, 2000, the
Escrow Agent shall deliver to Honeyman the Pledged Shares, along with the
executed stock power, and the obligations of the Escrow Agent and Jalali arising
under this section 2(B) shall cease.
<PAGE>
C. Obligations of Lakota, Wilson, Jalali, Morgan, Hayes, and Athens.
Lakota, Wilson, Jalali, Morgan, Hayes, and Athens, and each of them and their
officers, directors, shareholders, members, managers, employees, attorneys,
associates, affiliates, and assigns, hereby forever release and discharge
Honeyman, his affiliates, divisions, predecessors, successors and assigns, and
each and all of his present and former agents, officers, directors, attorneys,
and employees, from and against any and all claims, agreements, contracts,
covenants, representations, obligations, losses, liabilities, demands and causes
of action, known or unknown, which Lakota, Wilson, Jalali, Morgan, Hayes, and
Athens may now or hereafter have or claim to have against Honeyman arising out
of or pertaining to the subject matter of the Matters. This release of claims
and defenses shall not alter the prospective duties between the parties under
this Agreement.
D. Conditions Precedent. Each of the obligations of Lakota, Wilson, Jalali,
Morgan, Hayes, and Athens, and each of them, as set forth in this Agreement is
subject to, as conditions precedent to the performance of their obligations
hereunder, the performance of the obligations of Honeyman under the terms of
this Agreement.
4. Scope of Release. Each Party acknowledges and agrees that this
-------------------
Agreement applies to all claims that any Party may have against the other Party
relating to the subject matter of the Matters, including, but not limited to,
causes of action, injuries, damages, claims for costs or losses to any Party's
person and property, real or personal, whether those injuries, damages, or
losses are known or unknown, foreseen or unforseen, or patent or latent, and
further includes any and all acts and matters related to Honeyman's involvement
with Lakota as an employee, consultant, officer and/or director. This Agreement
is not intended to, nor shall it, alter or modify any rights or obligations of
the Parties under any other agreements not mentioned herein to which the Parties
may be a party.
5. Confidentiality. Each Party hereto will hold and will cause its
----------------
consultants and advisors to hold in strict confidence, unless compelled to
disclose by judicial or administrative process or, in the opinion of its
counsel, by other requirements of law, all documents and information concerning
any other Party furnished it by such other Party or its representatives in
connection with the subject matter of the Matters (except to the extent that
such information can be shown to have been (i) previously known by the Party to
which it was furnished, (ii) in the public domain through no fault of such
Party, or (iii) later lawfully acquired from other sources by the Party to which
it was furnished), and each Party will not release or disclose such information
to any other person, except its auditors, attorneys, financial advisors, bankers
and other consultants and advisors in connection with this Agreement. Each
Party shall be deemed to have satisfied its obligation to hold confidential
information concerning or supplied by the other Party if it exercises the same
care as it takes to preserve confidentiality for its own similar information.
6. No Representations. Each Party acknowledges and represents that, in
------------------
executing this Agreement, such Party has not relied on any inducements,
promises, or representations made by any Party or any party representing or
serving such Party, unless expressly set forth herein.
7. Disputed Claim. This Agreement pertains to a disputed claim and
---------------
does not constitute an admission of liability by any Party for any purpose.
<PAGE>
8. Covenant Re: Assignment. The Parties hereto, and each of them,
-------------------------
represent and warrant to each other that each is the sole and lawful owner of
all right, title and interest in and to every claim and other matter which each
purports to release herein, and that they have not heretofore assigned or
transferred, or purported to assign or transfer, to any person, firm,
association, corporation or other entity, any right, title or interest in any
such claim or other matter. In the event that such representation is false,
and any such claim or matter is asserted against any Party hereto (and/or the
successor of such Party) by any Party or entity who is the assignee or
transferee of such claim or matter shall fully indemnify, defend and hold
harmless the Party against who such claim or matter is asserted (and its
successors) from and against such claim or matter and from all actual costs,
fees, expenses, liabilities, and damages which that Party (and/or its
successors) incurs as a result of the assertion of such claim or matter.
9. Survival of Warranties. The representations and warranties
------------------------
contained in this Agreement are deemed to and do survive the execution hereof.
10. Modifications. This Agreement may not be amended, canceled,
-------------
revoked or otherwise modified except by written agreement subscribed by all of
the Parties to be charged with such modification.
11. Agreement Binding on Successors. This Agreement shall be binding
---------------------------------
upon and shall inure to the benefit of the Parties hereto and their respective
partners, employees, agents, servants, heirs, administrators, executors,
successors, representatives and assigns.
12. Attorney's Fees. All Parties hereto agree to pay their own costs
----------------
and attorneys' fees except as follows:
(a) In the event of any action, suit or other proceeding instituted to
remedy, prevent or obtain relief from a breach of this Agreement, arising out of
a breach of this Agreement, involving claims within the scope of the releases
contained in this Agreement, or pertaining to a declaration of rights under this
Agreement, the prevailing Party shall recover all of such Party's attorneys'
fees and costs incurred in each and every such action, suit or other proceeding,
including any and all appeals or petitions therefrom.
(b) As used herein, attorneys' fees shall be deemed to mean the full
and actual costs of any legal services actually performed in connection with the
matters involved, calculated on the basis of the usual fee charged by the
attorneys performing such services.
13. Choice of Law; Venue. This Agreement and the rights of the parties
--------------------
hereunder shall be governed by and construed in accordance with the laws of the
State of Texas, including all matters of construction, validity, performance,
and enforcement and without giving effect to the principles of conflict of laws.
Any cause of action brought in connection with this Agreement shall be brought
in Harris County, in the State of Texas.
<PAGE>
14. Terms & Conditions. The Parties agree and stipulate that each
--------------------
and every term and condition contained in this Agreement is material, and that
each and every term and condition may be reasonably accomplished within the time
limitations, and in the manner set forth in this Agreement.
15. Time is of the Essence. The Parties agree and stipulate that time
------------------------
is of the essence with respect to compliance with each and every item set forth
in this Agreement.
16. Entire Agreement. This Agreement and the Escrow Agreement set
------------------
forth the entire agreement and understanding of the Parties hereto and
supersedes any and all prior agreements, arrangements and understandings related
to the subject matter hereof. No understanding, promise, inducement, statement
of intention, representation, warranty, covenant or condition, written or oral,
express or implied, whether by statute or otherwise, has been made by any party
hereto which is not embodied in this Agreement or the written statements,
certificates, or other documents delivered pursuant hereto or in connection with
the transactions contemplated hereby, and no Party hereto shall be bound by or
liable for any alleged understanding, promise, inducement, statement,
representation, warranty, covenant or condition not so set forth.
17. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which when executed and delivered shall be an original,
and all of which when executed shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties hereto, agreeing to be bound hereby,
execute this Agreement upon the date first set forth above.
Dated: ROBERT KENT HONEYMAN, an individual
/s/ Robert Kent Honeyman
______________________________________
Dated: CAN-AM RESOURCES, INC., a Georgia
corporation
/s/ Robert Kent Honeyman
________________________________________
By: Robert Kent Honeyman
Its: President
<PAGE>
Dated: LAKOTA TECHNOLOGIES, INC.
/s/ Majed Jalali
______________________________________
By: Majed Jalali, on behalf of the
Board of Directors
Dated: HOWARD N. WILSON, an individual and as a
Director of Lakota Technologies, Inc.
/s/ Howard N. Wilson
______________________________________
Dated: MAJED JALALI, an individual and as a
Director of Lakota Technologies, Inc.
/s/ Majed Jalali
______________________________________
Dated: PATRICK "CODY" MORGAN, an individual and as
a Director of Lakota Technologies, Inc.
/s/ Patrick "Cody" Morgan
______________________________________
Dated: JOHN B. HAYES, an individual and as a
Director of Lakota Technologies, Inc.
/s/ John B. Hayes
______________________________________
Dated: NICHOLAS R. ATHENS, an individual and as a
Director of Lakota Technologies, Inc.
/s/ Nicholas R. Athens
______________________________________
ADDENDUM TO AGREEMENT AND GENERAL MUTUAL RELEASE
AND ESCROW AGREEMENT
This Addendum to Agreement and General Mutual Release and Escrow Agreement
("Addendum") is executed effective January 20, 2000 by and between ROBERT KENT
HONEYMAN, an individual, and CAN-AM RESOURCES, INC., a Georgia corporation
(hereinafter referred to as "Can Am" and, collectively with Robert Kent
Honeyman, as "Honeyman"), on one hand, and LAKOTA TECHNOLOGIES, INC., a Colorado
corporation (hereinafter referred to, along with its subsidiaries Lakota Oil and
Gas, Inc., a Texas corporation, 2-Infinity.com, Inc., a Texas corporation, and
AirNexus, Inc., a Texas corporation, as "Lakota"), HOWARD N. WILSON, an
individual (hereinafter referred to as "Wilson"), MAJED JALALI, an individual
(hereinafter referred to as "Jalali"), PATRICK "CODY" MORGAN, an individual
(hereinafter referred to as "Morgan"), JOHN B. HAYES, an individual (hereinafter
referred to as "Hayes"), and NICHOLAS R. ATHENS, an individual (hereinafter
referred to as "Athens"), on the other hand (each of Honeyman, Lakota, Wilson,
Jalali, Morgan, Hayes, and Athens shall be referred to as a "Party" and
collectively as the "Parties").
RECITALS
WHEREAS, the Parties have entered into that certain Agreement and General
Mutual Release dated January 6, 2000 ("Agreement"), as well as that certain
Escrow Agreement dated January 6 , 2000 ("Escrow Agreement"), and desire to
modify the terms of thereof as set forth herein. Defined terms therein shall
have the same meaning herein.
NOW, THEREFORE, for good and adequate consideration, the receipt of which
is hereby acknowledged, the parties covenant, promise, and agree as follows:
1. The resignations of Honeyman as set forth in section 1(A) of the
Agreement shall be effective as of January 20, 2000.
2. Lakota shall deliver the $25,000 as set forth in section 2(A)(i) of the
Agreement directly to Honeyman no later than Monday, January 24, 2000.
3. Within five (5) business days of the date hereof, Lakota shall cause to
be issued, in the name of Honeyman, and delivered to the Escrow Agent, an
aggregate of 1,000,000 shares of "restricted" common stock, to be held and
distributed by the Escrow Agent in lieu of the 1,000,000 shares previously to be
pledged by Jalali in accordance with section 2(B) of the Agreement.
4. Lakota hereby agrees that all of the 2,000,000 shares to be issued to
Honeyman in accordance with section 2(A)(iv) of the Agreement shall be
registered on Form S-8 and delivered, free of any restrictive legend, to
Honeyman no later than twenty (20) days following the date of this Addendum.
<PAGE>
5. Lakota hereby agrees that 1,000,000 of the shares to be delivered to
Honeyman in accordance with section 2(A)(v) of the Agreement shall be registered
on Form S-8 and delivered, free of any restrictive legend, to Honeyman no later
than twenty (20) days following the date of this Addendum. The other 1,000,000
shares to be delivered in accordance with section 2(A)(v) of the Agreement shall
be "restricted" securities, and shall be delivered no later than five (5) days
following the date hereof.
6. All other terms and conditions of the Agreement and the Escrow Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the Parties hereto, agreeing to be bound hereby,
execute this Agreement upon the date first set forth above.
Dated: ROBERT KENT HONEYMAN, an individual
/s/ Robert Kent Honeyman
______________________________________
Dated: CAN-AM RESOURCES, INC., a Georgia
corporation
/s/ Robert Kent Honeyman
________________________________________
By: Robert Kent Honeyman
Its: President
Dated: LAKOTA TECHNOLOGIES, INC.
/s/ Majed Jalali
______________________________________
By: Majed Jalali, on behalf of the
Board of Directors
Dated: HOWARD N. WILSON, an individual and as a
Director of Lakota Technologies, Inc.
/s/ Howard N. Wilson
______________________________________
<PAGE>
Dated: MAJED JALALI, an individual and as a
Director of Lakota Technologies, Inc.
/s/ Majed Jalali
______________________________________
Dated: PATRICK "CODY" MORGAN, an individual and as
a Director of Lakota Technologies, Inc.
/s/ Patrick "Cody" Morgan
______________________________________
Dated: JOHN B. HAYES, an individual and as a
Director of Lakota Technologies, Inc.
/s/ John B. Hayes
______________________________________
Dated: NICHOLAS R. ATHENS, an individual and as a
Director of Lakota Technologies, Inc.
/s/ Nicholas R. Athens
______________________________________
AGREEMENT AND GENERAL MUTUAL RELEASE
This Agreement ("Agreement") is entered into as of this 6th day of January,
2000, by and between HOWARD N. WILSON, an individual (hereinafter referred to as
"Wilson"), on one hand, and LAKOTA TECHNOLOGIES, INC., a Colorado corporation
(hereinafter referred to, along with its subsidiaries Lakota Oil and Gas, Inc.,
a Texas corporation, 2-Infinity.com, Inc., a Texas corporation, and AirNexus,
Inc., a Texas corporation, as "Lakota"), ROBERT KENT HONEYMAN, an individual
(hereinafter referred to as "Honeyman"), MAJED JALALI, an individual
(hereinafter referred to as "Jalali"), PATRICK "CODY" MORGAN, an individual
(hereinafter referred to as "Morgan"), JOHN B. HAYES, an individual (hereinafter
referred to as "Hayes"), and NICHOLAS R. ATHENS, an individual (hereinafter
referred to as "Athens"), on the other hand (each of Wilson, Lakota, Honeyman,
Jalali, Morgan, Hayes, and Athens shall be referred to as a "Party" and
collectively as the "Parties").
RECITALS
A. WHEREAS, the Parties desire to enter into this agreement regarding
(i) Wilson's continued employment by Lakota, (ii) his position as an officer and
director of Lakota, and (iii) compensation and other consideration due and owing
between Lakota and Wilson (the "Matters").
B. The Parties desire, pursuant to the terms of this Agreement, to
settle the Matters and all disputes between Wilson and the other Parties.
NOW, THEREFORE, for good and adequate consideration, the receipt of which
is hereby acknowledged, without admitting or denying any wrongdoing by any Party
hereto, the Parties covenant, promise and agree as follows:
AGREEMENT
1. Obligations of Wilson. As a material term of this Agreement, Wilson
---------------------
agrees to the following:
A. Resignations. As evidenced by his execution hereof, Wilson hereby
resigns, effective as of the Effective Date as defined below, as an employee,
officer, and director of Lakota and each of its subsidiaries. Wilson further
covenants and agrees, except as set forth in this Agreement, to release the
Parties hereto, and each of them, from any and all obligations with respect to
salary, severance, benefits, indebtedness to or from the Parties and each of
them, and any and all other obligations which may now or in the future be owed
to Wilson. Wilson further agrees to return any and all documents,
correspondence, books, records, keys, and other items in his possession
belonging to Lakota within ten (10) days of the Effective Date.
<PAGE>
B. Discharge of Indebtedness. As evidenced by his execution hereof, except
as otherwise provided herein, Wilson hereby waives and forgives any amounts
owing to him by Lakota.
C. Consulting Services. For a period of up to sixty (60) days following the
execution of this Agreement, as directed and determined solely by the Board of
Directors of Lakota, Wilson shall provide a reasonable level of services to
Lakota as an independent consultant and contractor in connection with Lakota's
currently pending SB-2 registration statement.
D. Release of Lakota, Honeyman, Jalali, Morgan, Hayes, and Athens. Wilson
hereby forever releases and discharges Lakota, Honeyman, Jalali, Morgan, Hayes,
and Athens, and each of them, their affiliates, divisions, predecessors,
successors and assigns, and each and all of their present and former agents,
officers, directors, attorneys, and employees, from and against any and all
claims, agreements, contracts, covenants, representations, obligations, losses,
liabilities, demands and causes of action, known or unknown, which Wilson may
now or hereafter have or claim to have against them, arising out of or
pertaining to the subject matter of the Matters. Wilson further covenants and
agrees, except as set forth in this Agreement, to release the Parties hereto,
and each of them, from any and all obligations with respect to salary,
severance, benefits, indebtedness to or from the Parties and each of them, and
any and all other obligations which may now or in the future be owed to Wilson.
This release of claims and defenses shall not alter the prospective duties
between the parties under this Agreement.
E. Conditions Precedent. Each of the obligations of Wilson as set forth in
this Agreement is subject to, as conditions precedent to the performance of his
obligations hereunder, the performance of the obligations of each of the other
Parties to this Agreement. The effective date of the actions to be taken by
Wilson hereunder (the "Effective Date") shall be the date that Lakota delivers
the $25,000 as required by section 2(A)(i) and the 2,000,000 shares as required
by section 2(A)(iv), and Morgan delivers the 1,000,000 shares as required by
section 2(B) hereof.
2. Obligations of Lakota, Honeyman, Jalali, Morgan, Hayes, and Athens.
-------------------------------------------------------------------
A. Obligations of Lakota.
<PAGE>
(i) Within five (5) days of the date hereof, Lakota shall deliver, via
certified funds or bank wire, to the Cutler Law Group, attention Brian A.
Lebrecht, Esq., as escrow agent (the "Escrow Agent"), the sum of Twenty Five
Thousand Dollars ($25,000) to be delivered to Wilson upon execution of this
Agreement by all Parties and delivery of the Pledged Shares to the Escrow Agent
as set forth in section 2(B) hereof, and as more fully set forth in the Escrow
Agreement of even date herewith and executed by all Parties hereto (the "Escrow
Agreement").
(ii) Within ten (10) days of the earlier of (a) the effectiveness of a
registration statement, whether on Form SB-2 or otherwise (the "Registration
Statement"), as declared by the United States Securities and Exchange Commission
(the "SEC") (the "Registration Effective Date"), or (b) March 1, 2000, Lakota
shall deliver or cause to be delivered, via certified funds or bank wire, to
Wilson the sum of One Hundred Thousand Dollars ($100,000). In the event that
Lakota fails to make the payment as described in this section 2(A)(ii) by March
11, 2000, and upon written demand received by the Escrow Agent from Wilson, then
1,000,000 shares of Lakota common stock issued in the name of Morgan and held by
the Escrow Agent (see section 2(B) below) shall be immediately released to
Wilson in full satisfaction of the obligations in this section 2(A)(ii), as more
fully set forth in the Escrow Agreement.
(iii) On or before February 5, 2000, and again on or before March 5, 2000,
Lakota shall pay to Wilson the sum of Seven Thousand Five Hundred Dollars
($7,500) as a consulting fee for services rendered in accordance with section 18
of this Agreement. Wilson shall not be reimbursed for any expenses incurred as
a result of rendering consulting services unless such expenses are previously
approved, in writing, by Lakota.
(iv) Within five (5) days of the date hereof, Lakota shall deliver to the
Escrow Agent an aggregate of 2,000,000 shares of "restricted" common stock of
Lakota, issued to Wilson or his assigns, to be delivered to Wilson upon
execution of this Agreement by all Parties and delivery of the Pledged Shares to
the Escrow Agent as set forth in section 2(B) hereof, as more fully set forth in
the Escrow Agreement.
(v) As evidenced by its execution hereof, Lakota hereby forever waives and
forgives any amounts owing to it by Wilson.
<PAGE>
(vi) In the event an "Indemnifiable Action" (as hereinafter defined) is
brought against Wilson at any time, then Lakota agrees to indemnify Wilson for
any and all liabilities related to or arising from the Indemnifiable Action (the
"Indemnified Liabilities"). Indemnifiable Action shall mean a legal cause of
action commenced and physically served on Wilson which names Wilson as a party,
related to or arising from his relationship (whether past, present or future) as
an employee, consultant, officer and/or director of Lakota or any of its current
or pre-existing subsidiaries. The foregoing indemnification shall further be
subject to the requirement that in the event Wilson becomes actually aware of an
Indemnifiable Action, he shall have Five (5) business days to deliver written
notice to Lakota of his intention to enforce the terms of this Agreement.
B. Obligations of Morgan. Within five (5) days of the date hereof,
Morgan shall deliver to the Escrow Agent an aggregate of One Million (1,000,000)
shares of Lakota common stock (the "Pledged Shares"), along with a fully
executed and medallion guaranteed stock power sufficient to transfer title and
ownership of the Pledged Shares, to be delivered in accordance with the terms of
the Escrow Agreement which shall include terms substantially as follows:
(i) Upon the timely delivery of the $100,000 set forth in section 2(A)(ii)
hereof, the Escrow Agent shall return the Pledged Shares to Morgan, and the
obligations of the Escrow Agent and Morgan arising under this section 2(B) shall
cease;
(ii) Notwithstanding the foregoing, however, in the event that the $100,000
is not timely delivered to Wilson as set forth in section 2(A)(ii) hereof, then
upon receipt of written demand from Wilson after March 11, 2000, the Escrow
Agent shall deliver to Wilson the Pledged Shares, along with the executed stock
power, and the obligations of the Escrow Agent and Morgan arising under this
section 2(B) shall cease.
C. Obligations of Lakota, Honeyman, Jalali, Morgan, Hayes, and Athens.
Lakota, Honeyman, Jalali, Morgan, Hayes, and Athens, and each of them and their
officers, directors, shareholders, members, managers, employees, attorneys,
associates, affiliates and assigns, hereby forever release and discharge Wilson,
his affiliates, divisions, predecessors, successors and assigns, and each and
all of his present and former agents, officers, directors, attorneys, and
employees, from and against any and all claims, agreements, contracts,
covenants, representations, obligations, losses, liabilities, demands and causes
of action, known or unknown, which Lakota, Honeyman, Jalali, Morgan, Hayes, and
Athens may now or hereafter have or claim to have against Wilson arising out of
or pertaining to the subject matter of the Matters. This release of claims and
defenses shall not alter the prospective duties between the parties under this
Agreement.
<PAGE>
D. Conditions Precedent. Each of the obligations of Lakota, Honeyman,
Jalali, Morgan, Hayes, and Athens, and each of them, as set forth in this
Agreement is subject to, as conditions precedent to the performance of their
obligations hereunder, the performance of the obligations of Wilson under the
terms of this Agreement.
4. Scope of Release. Each Party acknowledges and agrees that this
-------------------
Agreement applies to all claims that any Party may have against the other Party
relating to the subject matter of the Matters, including, but not limited to,
causes of action, injuries, damages, claims for costs or losses to any Party's
person and property, real or personal, whether those injuries, damages, or
losses are known or unknown, foreseen or unforseen, or patent or latent, and
further includes any and all acts and matters related to Wilson's involvement
with Lakota as an employee, consultant, officer and/or director. This Agreement
is not intended to, nor shall it, alter or modify any rights or obligations of
the Parties under any other agreements not mentioned herein to which the Parties
may be a party.
5. Confidentiality. Each Party hereto will hold and will cause its
----------------
consultants and advisors to hold in strict confidence, unless compelled to
disclose by judicial or administrative process or, in the opinion of its
counsel, by other requirements of law, all documents and information concerning
any other Party furnished it by such other Party or its representatives in
connection with the subject matter of the Matters (except to the extent that
such information can be shown to have been (i) previously known by the Party to
which it was furnished, (ii) in the public domain through no fault of such
Party, or (iii) later lawfully acquired from other sources by the Party to which
it was furnished), and each Party will not release or disclose such information
to any other person, except its auditors, attorneys, financial advisors, bankers
and other consultants and advisors in connection with this Agreement. Each
Party shall be deemed to have satisfied its obligation to hold confidential
information concerning or supplied by the other Party if it exercises the same
care as it takes to preserve confidentiality for its own similar information.
6. No Representations. Each Party acknowledges and represents that, in
------------------
executing this Agreement, such Party has not relied on any inducements,
promises, or representations made by any Party or any party representing or
serving such Party, unless expressly set forth herein.
7. Disputed Claim. This Agreement pertains to a disputed claim and
---------------
does not constitute an admission of liability by any Party for any purpose.
8. Covenant Re: Assignment. The Parties hereto, and each of them,
-------------------------
represent and warrant to each other that each is the sole and lawful owner of
all right, title and interest in and to every claim and other matter which each
purports to release herein, and that they have not heretofore assigned or
transferred, or purported to assign or transfer, to any person, firm,
association, corporation or other entity, any right, title or interest in any
such claim or other matter. In the event that such representation is false,
and any such claim or matter is asserted against any Party hereto (and/or the
successor of such Party) by any Party or entity who is the assignee or
transferee of such claim or matter shall fully indemnify, defend and hold
harmless the Party against who such claim or matter is asserted (and its
successors) from and against such claim or matter and from all actual costs,
fees, expenses, liabilities, and damages which that Party (and/or its
successors) incurs as a result of the assertion of such claim or matter.
<PAGE>
9. Survival of Warranties. The representations and warranties
------------------------
contained in this Agreement are deemed to and do survive the execution hereof.
10. Modifications. This Agreement may not be amended, canceled,
-------------
revoked or otherwise modified except by written agreement subscribed by all of
the Parties to be charged with such modification.
11. Agreement Binding on Successors. This Agreement shall be binding
---------------------------------
upon and shall inure to the benefit of the Parties hereto and their respective
partners, employees, agents, servants, heirs, administrators, executors,
successors, representatives and assigns.
12. Attorney's Fees. All Parties hereto agree to pay their own costs
----------------
and attorneys' fees except as follows:
(a) In the event of any action, suit or other proceeding instituted to
remedy, prevent or obtain relief from a breach of this Agreement, arising out of
a breach of this Agreement, involving claims within the scope of the releases
contained in this Agreement, or pertaining to a declaration of rights under this
Agreement, the prevailing Party shall recover all of such Party's attorneys'
fees and costs incurred in each and every such action, suit or other proceeding,
including any and all appeals or petitions therefrom.
(b) As used herein, attorneys' fees shall be deemed to mean the full
and actual costs of any legal services actually performed in connection with the
matters involved, calculated on the basis of the usual fee charged by the
attorneys performing such services.
13. Choice of Law; Venue. This Agreement and the rights of the parties
--------------------
hereunder shall be governed by and construed in accordance with the laws of the
State of Texas, including all matters of construction, validity, performance,
and enforcement and without giving effect to the principles of conflict of laws.
Any cause of action brought in connection with this Agreement shall be brought
in Harris County, in the State of Texas.
14. Terms & Conditions. The Parties agree and stipulate that each
--------------------
and every term and condition contained in this Agreement is material, and that
each and every term and condition may be reasonably accomplished within the time
limitations, and in the manner set forth in this Agreement.
15. Time is of the Essence. The Parties agree and stipulate that time
------------------------
is of the essence with respect to compliance with each and every item set forth
in this Agreement.
<PAGE>
16. Entire Agreement. This Agreement and the Escrow Agreement set
------------------
forth the entire agreement and understanding of the Parties hereto and
supersedes any and all prior agreements, arrangements and understandings related
to the subject matter hereof. No understanding, promise, inducement, statement
of intention, representation, warranty, covenant or condition, written or oral,
express or implied, whether by statute or otherwise, has been made by any party
hereto which is not embodied in this Agreement or the written statements,
certificates, or other documents delivered pursuant hereto or in connection with
the transactions contemplated hereby, and no Party hereto shall be bound by or
liable for any alleged understanding, promise, inducement, statement,
representation, warranty, covenant or condition not so set forth.
17. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which when executed and delivered shall be an original,
and all of which when executed shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties hereto, agreeing to be bound hereby,
execute this Agreement upon the date first set forth above.
Dated: HOWARD N. WILSON, an individual
/s/ Howard N. Wilson
______________________________________
Dated: LAKOTA TECHNOLOGIES, INC.
/s/ Majed Jalali
______________________________________
By: Majed Jalali, on behalf of the
Board of Directors
Dated: ROBERT KENT HONEYMAN, an individual and as a
Director of Lakota Technologies, Inc.
/s/ Robert Kent Honeyman
______________________________________
Dated: MAJED JALALI, an individual and as a
Director of Lakota Technologies, Inc.
/s/ Majed Jalali
______________________________________
Dated: PATRICK "CODY" MORGAN, an individual and as
a Director of Lakota Technologies, Inc.
/s/ Patrick "Cody" Morgan
______________________________________
<PAGE>
Dated: JOHN B. HAYES, an individual and as a
Director of Lakota Technologies, Inc.
/s/ John B. Hayes
______________________________________
Dated: NICHOLAS R. ATHENS, an individual and as a
Director of Lakota Technologies, Inc.
/s/ Nicholas R. Athens
______________________________________
ADDENDUM TO AGREEMENT AND GENERAL MUTUAL RELEASE
AND ESCROW AGREEMENT
This Addendum to Agreement and General Mutual Release and Escrow Agreement
("Addendum") is executed effective January 20, 2000 by and between HOWARD N.
WILSON, an individual (hereinafter referred to as "Wilson"), on one hand, and
LAKOTA TECHNOLOGIES, INC., a Colorado corporation (hereinafter referred to,
along with its subsidiaries Lakota Oil and Gas, Inc., a Texas corporation,
2-Infinity.com, Inc., a Texas corporation, and AirNexus, Inc., a Texas
corporation, as "Lakota"), ROBERT KENT HONEYMAN, an individual (hereinafter
referred to as "Honeyman"), MAJED JALALI, an individual (hereinafter referred to
as "Jalali"), PATRICK "CODY" MORGAN, an individual (hereinafter referred to as
"Morgan"), JOHN B. HAYES, an individual (hereinafter referred to as "Hayes"),
and NICHOLAS R. ATHENS, an individual (hereinafter referred to as "Athens"), on
the other hand (each of Wilson, Lakota, Honeyman, Jalali, Morgan, Hayes, and
Athens shall be referred to as a "Party" and collectively as the "Parties").
RECITALS
WHEREAS, the Parties have entered into that certain Agreement and General
Mutual Release dated January 6, 2000 ("Agreement"), as well as that certain
Escrow Agreement dated January 6 , 2000 ("Escrow Agreement"), and desire to
modify the terms of thereof as set forth herein. Defined terms therein shall
have the same meaning herein.
NOW, THEREFORE, for good and adequate consideration, the receipt of which
is hereby acknowledged, the parties covenant, promise, and agree as follows:
1. The resignations of Wilson as set forth in section 1(A) of the Agreement
shall be effective as of January 20, 2000.
2. Lakota shall deliver the $25,000 as set forth in section 2(A)(i) of the
Agreement directly to Wilson no later than Monday, January 24, 2000.
3. Within five (5) business days of the date hereof, Lakota shall cause to
be issued, in the name of Wilson, and delivered to the Escrow Agent, an
aggregate of 1,000,000 shares of "restricted" common stock, to be held and
distributed by the Escrow Agent in lieu of the 1,000,000 shares previously to be
pledged by Morgan in accordance with section 2(B) of the Agreement.
4. Lakota hereby agrees that 1,000,000 of the shares to be delivered to
Wilson in accordance with section 2(A)(iv) of the Agreement shall be registered
on Form S-8 and delivered, free of any restrictive legend, to Wilson no later
than twenty (20) days following the date of this Addendum. The other 1,000,000
shares to be delivered in accordance with section 2(A)(iv) of the Agreement
shall be "restricted" securities, and shall be delivered no later than five (5)
days following the date hereof.
<PAGE>
5. All other terms and conditions of the Agreement and the Escrow Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the Parties hereto, agreeing to be bound hereby,
execute this Agreement upon the date first set forth above.
Dated: HOWARD N. WILSON, an individual
/s/ Howard N. Wilson
______________________________________
Dated: LAKOTA TECHNOLOGIES, INC.
/s/ Majed Jalali
______________________________________
By: Majed Jalali, on behalf of the
Board of Directors
Dated: ROBERT KENT HONEYMAN, an individual and as a
Director of Lakota Technologies, Inc.
/s/ Robert Kent Honeyman
______________________________________
Dated: MAJED JALALI, an individual and as a
Director of Lakota Technologies, Inc.
/s/ Majed Jalali
______________________________________
Dated: PATRICK "CODY" MORGAN, an individual and as
a Director of Lakota Technologies, Inc.
/s/ Patrick "Cody" Morgan
______________________________________
<PAGE>
Dated: JOHN B. HAYES, an individual and as a
Director of Lakota Technologies, Inc.
/s/ John B. Hayes
______________________________________
Dated: NICHOLAS R. ATHENS, an individual and as a
Director of Lakota Technologies, Inc.
/s/ Nicholas R. Athens
______________________________________
ESCROW AGREEMENT
This ESCROW AGREEMENT (the "Escrow Agreement") is entered into as of
January 6, 2000 by and between ROBERT KENT HONEYMAN, an individual ("Honeyman"),
HOWARD N. WILSON, an individual ("Wilson"), LAKOTA TECHNOLOGIES, INC., a
Colorado corporation (together with its subsidiaries Lakota Oil and Gas, Inc., a
Texas corporation, 2-Infinity.com, Inc., a Texas corporation, and AirNexus,
Inc., a Texas corporation referred to as "Lakota"), MAJED JALALI, an individual
("Jalali"), PATRICK "CODY" MORGAN, an individual ("Morgan"), and MRC LEGAL
SERVICES CORPORATION, a California corporation doing business as Cutler Law
Group, as escrow agent ("Escrow Agent"). Each of Honeyman, Wilson, Lakota,
Jalali, and Morgan may be referred to as a "Party" and collectively as the
"Parties".
R E C I T A L S
A. Honeyman has entered into a Settlement Agreement of even date
herewith (the "Honeyman Settlement") with Lakota, Jalali, Morgan, and other
parties providing for the settlement of a dispute between the parties thereto;
B. Wilson has entered into a Settlement Agreement of even date herewith
(the "Wilson Settlement") with Lakota, Jalali, Morgan, and other parties
providing for the settlement of a dispute between the parties thereto;
C. As a condition to the Honeyman Settlement, Lakota has agreed to
deposit $25,000 (the "Honeyman Funds") with the Escrow Agent, along with an
aggregate of 2,000,000 shares of "restricted" common stock of Lakota issued in
the name of Honeyman or his assigns (the "Honeyman Shares"). In addition, as a
further condition to the Honeyman Settlement, Jalali has agreed to deposit an
aggregate of 1,000,000 shares of common stock of Lakota (the "Jalali Shares"),
together with a medallion guaranteed Stock Power sufficient to transfer all
right, title and interest in the Jalali Shares to Honeyman, in form and
substance satisfactory to Honeyman, as shall be effective to vest in Honeyman
all right, title and interest in and to all of the Jalali Shares;
D. As a condition to the Wilson Settlement, Lakota has agreed to
deposit $25,000 (the Wilson Funds") with the Escrow Agent, along with an
aggregate of 2,000,000 shares of "restricted" common stock of Lakota issued in
the name of Wilson or his assigns (the "Wilson Shares"). In addition, as a
further condition to the Wilson Settlement, Morgan has agreed to deposit an
aggregate of 1,000,000 shares of common stock of Lakota (the "Morgan Shares"),
together with a medallion guaranteed Stock Power sufficient to transfer all
right, title and interest in the Morgan Shares to Wilson, in form and substance
satisfactory to Wilson, as shall be effective to vest in Wilson all right, title
and interest in and to all of the Morgan Shares;
E. Escrow Agent has agreed to act as the escrow agent hereunder, in
accordance with the terms and conditions set forth in this Escrow Agreement.
<PAGE>
NOW THEREFORE, for and in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:
1. APPOINTMENT OF ESCROW AGENT. The Parties hereby mutually appoint
and designate the Escrow Agent to receive, hold and release, as escrow agent,
the Honeyman Funds, Honeyman Shares, Jalali Shares, Wilson Funds, Wilson Shares,
and the Morgan Shares and the Escrow Agent hereby accepts such appointment and
designation.
2. ESCROW DELIVERY. Within five (5) days of the date of the Honeyman
Settlement and the Wilson Settlement, (i) Lakota shall deliver the Honeyman
Funds, Honeyman Shares, Wilson Funds and the Wilson Shares, (ii) Jalali shall
deliver the Jalali Shares, and (iii) Morgan shall deliver the Morgan Shares, to
the Escrow Agent to be held by the Escrow Agent and released in accordance with
the terms of this Escrow Agreement.
3. CONDITIONS OF ESCROW.
3.1 The Escrow Deposit. Escrow Agent shall hold and release the
--------------------
Honeyman Funds, Honeyman Shares, Wilson Funds, Wilson Shares, Jalali Shares, and
the Morgan Shares (collectively, the "Deposited Assets") as follows:
a. Release of the Honeyman Funds and Honeyman Shares From Escrow. The
-------------------------------------------------------------------
Escrow Agent shall release and distribute the Honeyman Funds and the Honeyman
Shares to Honeyman, or his assigns, immediately upon the receipt by the Escrow
Agent of a fully executed copy of the Honeyman Settlement and the Jalali Shares
(accompanied by a Stock Power as referenced above).
b. Release of the Wilson Funds and Wilson Shares From Escrow. The Escrow
------------------------------------------------------------
Agent shall release and distribute the Wilson Funds and the Wilson Shares to
Wilson, or his assigns, immediately upon the receipt by the Escrow Agent of a
fully executed copy of the Wilson Settlement and the Morgan Shares (accompanied
by a Stock Power as referenced above).
c. Release of the Jalali Shares From Escrow. The Escrow Agent shall release
----------------------------------------
and distribute the Jalali Shares as follows:
i. to Jalali upon receipt by the Escrow Agent of proof of delivery of the
sum of $100,000 to Honeyman, or his assigns, from Lakota as set forth in section
2(A)(ii) of the Honeyman Settlement.
ii. to Honeyman, or his assigns, upon receipt by the Escrow Agent, after
March 11, 2000, of a written demand from Honeyman directing that the Jalali
Shares be delivered to him, and containing representations, under penalty of
perjury, that the $100,000 had not previously been delivered to Honeyman.
<PAGE>
iii. to Honeyman or Jalali, as the case may be, pursuant to (a) written
instructions executed by both Honeyman and Jalali, or (b) any "final order" of a
court of competent jurisdiction, any such order being deemed to be "final" if
(i) such order has not been reserved, stayed, enjoined, set aside, annulled or
suspended, (ii) no request for a stay, suspension or an injunction, petition for
reconsideration or appeal, or sua sponte action with comparable effect is
--- ------
pending with respect to the order, and (iii) the time for filing any such
request, petition or appeal or further taking of any such sua sponte action has
--- ------
expired.
d. Release of the Morgan Shares From Escrow. The Escrow Agent shall release
----------------------------------------
and distribute the Morgan Shares as follows:
i. to Morgan upon receipt by the Escrow Agent of proof of delivery of the
sum of $100,000 to Wilson, or his assigns, from Lakota as set forth in section
2(A)(ii) of the Wilson Settlement.
ii. to Wilson, or his assigns, upon receipt by the Escrow Agent, after March
11, 2000, of a written demand from Wilson directing that the Morgan Shares be
delivered to him, and containing representations, under penalty of perjury, that
the $100,000 had not previously been delivered to Wilson.
iii. to Wilson or Morgan, as the case may be, pursuant to (a) written
instructions executed by both Wilson and Morgan, or (b) any "final order" of a
court of competent jurisdiction, any such order being deemed to be "final" if
(i) such order has not been reserved, stayed, enjoined, set aside, annulled or
suspended, (ii) no request for a stay, suspension or an injunction, petition for
reconsideration or appeal, or sua sponte action with comparable effect is
--- ------
pending with respect to the order, and (iii) the time for filing any such
request, petition or appeal or further taking of any such sua sponte action has
--- ------
expired.
<PAGE>
3.2 Conflicting Instructions. If a controversy arises between the Parties
-------------------------
concerning the release of the Deposited Assets hereunder, they shall notify the
Escrow Agent. In that event (or, in the absence of such notification, if in the
good faith judgment of the Escrow Agent such controversy exists), the Escrow
Agent shall not be required to resolve such controversy or take an action but
shall be entitled to await resolution of the controversy by joint instructions
from the Parties. The Escrow Agent may institute an interpleader action in
state or federal court in the State of California to resolve such controversy.
If a suit is commenced against the Escrow Agent, it may answer by way of
interpleader and name the Parties as additional parties to such action, and the
Escrow Agent may tender the Deposited Assets into such court for determination
of the respective rights, titles and interests of the Parties. Upon such
tender, the Escrow Agent shall be entitled to receive from the Parties its
reasonable attorneys' fees and expenses incurred in connection with said
interpleader action or in any related action or suit. As between the Parties,
such fees, expenses and other sums shall be paid by the party which fails to
prevail in the proceedings brought to determine the appropriate distribution of
the Deposited Assets. If and when the Escrow Agent shall so interplead such
Parties, or either of them, and deliver the Deposited Assets to the clerk of
such court, all of its duties hereunder shall cease, and it shall have no
further obligation in this regard. Nothing herein shall prejudice any right or
remedy of the Escrow Agent.
4. CONCERNING ESCROW AGENT
4.1 Duties. Escrow Agent undertakes to perform all duties which are
------
expressly set forth herein; provided, however, that the Escrow Agent shall not
be required to make or be liable in any manner of its failure to make any
determination under the Agreement or any other agreement, including whether any
of the Parties is entitled to delivery of the Deposited Assets under the
Honeyman Settlement or the Wilson Settlement.
4.2 Indemnification.
---------------
a. Escrow Agent may rely upon and shall be protected in acting or refraining
from acting upon any written notice, instructions or request furnished to it
hereunder and believed by it to be genuine and authorized.
b. Escrow Agent shall not be liable for any action taken by it in good faith
and without gross negligence or wilful misconduct, and believed by it to be
authorized or within the rights or powers conferred upon it by this Escrow
Agreement, and may consult with counsel of its own choice and shall have full
and complete authorization and protection for any action taken or suffered by it
hereunder in good faith and in accordance with the opinion of such counsel.
c. The Parties, and each of them, hereby agrees to indemnify the Escrow
Agent for, and hold the Escrow Agent harmless against, any loss, liability or
expense incurred without gross negligence or wilful misconduct or bad faith on
the part of the Escrow Agent, arising out of or in connection with the Escrow
Agent's entering into this Escrow Agreement and carrying out the Escrow Agent's
duties hereunder, including, without limitation, costs and expenses of defending
the Escrow Agent against any claim or liability with respect thereto.
<PAGE>
d. Escrow Agent shall have no implied obligations or responsibilities
hereunder, nor shall it have any obligation or responsibility to collect funds
or seek the deposit of money or property, nor is the Escrow Agent a party to any
other agreement entered into among the Parties.
4.3 Other Matters. Escrow Agent (and any successor escrow agent or
--------------
agents) reserves the right to resign as the Escrow Agent at any time, provided
fifteen (15) days' prior written notice is given to the other parties hereto,
and provided further that a mutually acceptable successor Escrow Agent(s) within
such fifteen (15) day period, the Escrow Agent may petition any court in the
State of California having jurisdiction to designate a successor Escrow Agent.
The resignation of the Escrow Agent (and any successor escrow agent or agents)
shall be effective only upon delivery of the Deposited Assets to the successor
escrow agent(s). The Parties reserve the right to jointly remove the Escrow
Agent at any time, provided fifteen (15) days' prior written notice is given to
the Escrow Agent. In the event of litigation or dispute by the Parties in which
the performance of the duties of the Escrow Agent is at issue, the Escrow Agent
shall take no action until such action is agreed in writing by the Parties, or
until receipt of any order pursuant to 3.1(c)iii or 3.1(d)iii above directing
the Escrow Agent with respect to the action which is the subject of such
litigation or dispute. Provided that no dispute occurs with respect to the
provisions and transactions contemplated in this Escrow Agreement, the Escrow
Agent's fee for acting as Escrow Agent in this transaction shall be $2,500.
5. TERMINATION. This Escrow Agreement shall be terminated upon the
release of the Deposited Assets in accordance with the terms and conditions of
Section 3 hereof, or otherwise by written mutual consent signed by all parties
hereto.
6. NOTICE. All notices, demands, requests, or other communications
which may be or are required to be given, served or sent by any party to any
other party pursuant to this Escrow Agreement shall be in writing and shall be
hand delivered (including delivery by courier), sent by facsimile, or mailed by
first-class, registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to Honeyman: _____________________________
_____________________________
_____________________________
Facsimile (___) ___________
If to Wilson: _____________________________
_____________________________
_____________________________
Facsimile (___) ___________
If to Lakota: _____________________________
_____________________________
_____________________________
Facsimile (___) ___________
<PAGE>
If to Jalali: _____________________________
_____________________________
_____________________________
Facsimile (___) ___________
If to Morgan: _____________________________
_____________________________
_____________________________
Facsimile (___) ___________
If to Escrow Agent: MRC Legal Services Corporation
610 Newport Center Drive, Suite 800
Newport Beach, CA 92660
Attn: Brian A. Lebrecht, Esq.
Facsimile (949) 719-1988
or such other address as the addressee may indicate by written notice to the
other parties. Each notice, demand, request or communication which shall be
given or made in the manner described above shall be deemed sufficiently given
or made for all purposes at such time as it delivered to the addressee (with the
return receipt, the delivery receipt or the affidavit of messenger being deemed
conclusive but not exclusive evidence of such delivery) or at such time as
delivery is refused by the addressee upon presentation.
7. BENEFIT AND ASSIGNMENT. This Escrow Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns as permitted hereunder. No person or entity other than
the parties hereto is or shall be entitled to bring any action to enforce any
provision in this Escrow Agreement against any of the parties hereto, and the
covenants and agreements set forth in this Escrow Agreement shall be solely for
the benefit of, and shall be enforceable only by, the parties hereto or their
respective successors and assigns this Escrow Agreement or any rights hereunder
without the prior written consent of the parties hereto.
8. ENTIRE AGREEMENT; AMENDMENT. This Escrow Agreement, the Honeyman
Settlement, and the Wilson Settlement executed simultaneously herewith contain
the entire agreement among the parties with respect to the subject matter hereof
and supersedes all prior oral or written agreements, commitments or
understandings with respect to such matters. This Escrow Agreement may not be
changed orally, but only by an instrument in writing signed by the party against
whom enforcement of any waiver, change, modification, extension or discharge is
sought.
9. HEADINGS. The headings of the sections and subsections contained in
this Escrow Agreement are inserted for convenience only and do not form a part
or affect the meaning, construction or scope thereof.
<PAGE>
10. GOVERNING LAW; VENUE. This Escrow Agreement shall be governed and
constructed under and in accordance with the laws of the State of California
(but not including the conflicts of laws and rules thereof). For purposes of
any action or proceeding involving this Escrow Agreement each of the parties to
this Escrow Agreement expressly submits to the jurisdiction of the federal and
state courts located in the State of California and consents to the service of
any process or paper by registered mail or by personal service within or without
the State of California in accordance with applicable law, provided a reasonable
time for appearance is allowed.
11. SIGNATURE IN COUNTERPARTS. This Escrow Agreement may be executed
in separate counterparts, none of which need contain the signature of all
parties, each of which shall be deemed to be an original and all of which taken
together constitute one and the same instrument. It shall not be necessary in
making proof of this Escrow Agreement to produce or account for more than the
number of counterparts containing the respective signatures of, or on behalf of,
all of the parties hereto.
12. ATTORNEY'S FEES. Should any action be commenced between the
parties to this Agreement concerning the matters set forth in this Agreement or
the right and duties of either in relation thereto, the prevailing party in such
action shall be entitled, in addition to such other relief as may be granted, to
a reasonable sum as and for its Attorney's Fees and Costs.
IN WITNESS WHEREOF, each of the parties has caused this Escrow Agreement to
be duly executed and delivered in its name and on its behalf, all as of the date
and year first above written.
Dated: ROBERT KENT HONEYMAN, an individual
/s/ Robert Kent Honeyman
______________________________________
Dated: HOWARD N. WILSON, an individual
/s/ Howard N. Wilson
______________________________________
Dated: LAKOTA TECHNOLOGIES, INC.
/s/ Majed Jalali
______________________________________
By: Majed Jalali, on behalf of the
Board of Directors
<PAGE>
Dated: MAJED JALALI, an individual and as a
Director of Lakota Technologies, Inc.
/s/ Majed Jalali
______________________________________
Dated: PATRICK "CODY" MORGAN, an individual and as
a Director of Lakota Technologies, Inc.
/s/ Partick "Cody" Morgan
______________________________________
Dated: MRC LEGAL SERVICES CORPORATION
/s/ M. Richard Cutler
______________________________________
By: M. Richard Cutler
Its: President
AGREEMENT AND GENERAL MUTUAL RELEASE
This Agreement ("Agreement") is entered into as of this 3rd day of
February, 2000 (the "Effective Date"), by and between JOHN B. HAYES, an
individual (hereinafter referred to as "Hayes"), on one hand, and LAKOTA
TECHNOLOGIES, INC., a Colorado corporation (hereinafter referred to, along with
its subsidiaries Lakota Oil and Gas, Inc., a Texas corporation, 2-Infinity.com,
Inc., a Texas corporation, and AirNexus, Inc., a Texas corporation, as
"Lakota"), MAJED JALALI, an individual (hereinafter referred to as "Jalali"),
and PATRICK "CODY" MORGAN, an individual (hereinafter referred to as "Morgan").
Each of Hayes, Lakota, Jalali, and Morgan shall be referred to as a "Party" and
collectively as the "Parties".
RECITALS
A. WHEREAS, the Parties desire to enter into this agreement regarding
(i) Hayes' continued employment by Lakota, (ii) his position as an officer and
director of Lakota, and (iii) compensation and other consideration due and owing
between Lakota and Hayes (the "Matters").
B. The Parties desire, pursuant to the terms of this Agreement, to
settle the Matters and all disputes between Hayes and the other Parties.
NOW, THEREFORE, for good and adequate consideration, the receipt of which
is hereby acknowledged, without admitting or denying any wrongdoing by any Party
hereto, the Parties covenant, promise and agree as follows:
AGREEMENT
1. Obligations of Hayes. As a material term of this Agreement, Hayes
----------------------
agrees to the following:
A. Resignations. As evidenced by his execution hereof, Hayes hereby
resigns, effective as of the Effective Date, as an employee, officer, and
director of Lakota and each of its subsidiaries. Hayes further covenants and
agrees, except as set forth in this Agreement, to release the Parties hereto,
and each of them, their attorneys, agents and assigns, from any and all
obligations with respect to salary, severance, benefits, indebtedness to or from
the Parties and each of them, and any and all other obligations which may now or
in the future be owed to Hayes. Hayes further agrees to return any and all
documents, correspondence, books, records, keys, and other items in his
possession belonging to Lakota within ten (10) days of the Effective Date.
B. Discharge of Indebtedness. As evidenced by his execution hereof, except
as otherwise provided herein, Hayes hereby waives and forgives any amounts owing
to him by Lakota.
<PAGE>
D. Release of Lakota, Jalali, and Morgan. Hayes hereby forever releases and
discharges Lakota, Jalali, and Morgan, and each of them, their affiliates,
divisions, predecessors, successors and assigns, and each and all of their
present and former agents, officers, directors, attorneys, and employees, from
and against any and all claims, agreements, contracts, covenants,
representations, obligations, losses, liabilities, demands and causes of action,
known or unknown, which Hayes may now or hereafter have or claim to have against
them, arising out of or pertaining to the subject matter of the Matters or any
dispute or claim arising out of acts or omissions thereby. Hayes further
covenants and agrees, except as set forth in this Agreement, to release the
Parties hereto, and each of them, their affiliates, divisions, predecessors,
successors and assigns, and each and all of their present and former agents,
officers, directors, attorneys, and employees from any and all obligations with
respect to salary, severance, securities, benefits, indebtedness to or from the
Parties and each of them, and any and all other obligations which may now or in
the future be owed to Hayes. This release of claims and defenses shall not
alter the prospective duties between the parties under this Agreement.
2. Obligations of Lakota.
-----------------------
A. Obligations of Lakota.
(i) Within five (5) days of the date hereof, Lakota shall deliver to Hayes
an aggregate of 3,500,000 shares of "restricted" common stock of Lakota,
2,500,000 of which will be registered on Form S-8 as soon as reasonably
possible.
(ii) As evidenced by its execution hereof, Lakota hereby forever waives and
forgives any amounts owing to it by Hayes.
(iii) In the event an "Indemnifiable Action" (as hereinafter defined) is
brought against Hayes at any time, then Lakota agrees to indemnify Hayes for any
and all liabilities related to or arising from the Indemnifiable Action (the
"Indemnified Liabilities"). Indemnifiable Action shall mean a legal cause of
action commenced and physically served on Hayes which names Hayes as a party,
related to or arising from his relationship (whether past, present or future) as
an employee, consultant, officer and/or director of Lakota or any of its current
or pre-existing subsidiaries. The foregoing indemnification shall further be
subject to the requirement that in the event Hayes becomes actually aware of an
Indemnifiable Action, he shall have Five (5) business days to deliver written
notice to Lakota of his intention to enforce the terms of this Agreement.
<PAGE>
(iv) Lakota hereby forever releases and discharges Hayes, his affiliates,
divisions, predecessors, successors and assigns, and each and all of his present
and former agents, officers, directors, attorneys, and employees, from and
against any and all claims, agreements, contracts, covenants, representations,
obligations, losses, liabilities, demands and causes of action, known or
unknown, which Lakota may now or hereafter have or claim to have against Hayes
arising out of or pertaining to the subject matter of the Matters. This release
of claims and defenses shall not alter the prospective duties between the
parties under this Agreement.
4. Scope of Release. Each Party acknowledges and agrees that this
-------------------
Agreement applies to all claims that any Party may have against the other Party
relating to the subject matter of the Matters, including, but not limited to,
causes of action, injuries, damages, claims for costs or losses to any Party's
person and property, real or personal, whether those injuries, damages, or
losses are known or unknown, foreseen or unforseen, or patent or latent, and
further includes any and all acts and matters related to Hayes's involvement
with Lakota as an employee, consultant, officer and/or director. This Agreement
is not intended to, nor shall it, alter or modify any rights or obligations of
the Parties under any other agreements not mentioned herein to which the Parties
may be a party.
5. Confidentiality. Each Party hereto will hold and will cause its
----------------
consultants and advisors to hold in strict confidence, unless compelled to
disclose by judicial or administrative process or, in the opinion of its
counsel, by other requirements of law, all documents and information concerning
any other Party furnished it by such other Party or its representatives in
connection with the subject matter of the Matters (except to the extent that
such information can be shown to have been (i) previously known by the Party to
which it was furnished, (ii) in the public domain through no fault of such
Party, or (iii) later lawfully acquired from other sources by the Party to which
it was furnished), and each Party will not release or disclose such information
to any other person, except its auditors, attorneys, financial advisors, bankers
and other consultants and advisors in connection with this Agreement. Each
Party shall be deemed to have satisfied its obligation to hold confidential
information concerning or supplied by the other Party if it exercises the same
care as it takes to preserve confidentiality for its own similar information.
6. No Representations. Each Party acknowledges and represents that, in
------------------
executing this Agreement, such Party has not relied on any inducements,
promises, or representations made by any Party or any party representing or
serving such Party, unless expressly set forth herein.
7. Disputed Claim. This Agreement pertains to a disputed claim and
---------------
does not constitute an admission of liability by any Party for any purpose.
<PAGE>
8. Covenant Re: Assignment. The Parties hereto, and each of them,
-------------------------
represent and warrant to each other that each is the sole and lawful owner of
all right, title and interest in and to every claim and other matter which each
purports to release herein, and that they have not heretofore assigned or
transferred, or purported to assign or transfer, to any person, firm,
association, corporation or other entity, any right, title or interest in any
such claim or other matter. In the event that such representation is false,
and any such claim or matter is asserted against any Party hereto (and/or the
successor of such Party) by any Party or entity who is the assignee or
transferee of such claim or matter shall fully indemnify, defend and hold
harmless the Party against who such claim or matter is asserted (and its
successors) from and against such claim or matter and from all actual costs,
fees, expenses, liabilities, and damages which that Party (and/or its
successors) incurs as a result of the assertion of such claim or matter.
9. Survival of Warranties. The representations and warranties
------------------------
contained in this Agreement are deemed to and do survive the execution hereof.
10. Modifications. This Agreement may not be amended, canceled,
-------------
revoked or otherwise modified except by written agreement subscribed by all of
the Parties to be charged with such modification.
11. Agreement Binding on Successors. This Agreement shall be binding
---------------------------------
upon and shall inure to the benefit of the Parties hereto and their respective
partners, employees, agents, servants, heirs, administrators, executors,
successors, representatives and assigns.
12. Attorney's Fees. All Parties hereto agree to pay their own costs
----------------
and attorneys' fees except as follows:
(a) In the event of any action, suit or other proceeding instituted to
remedy, prevent or obtain relief from a breach of this Agreement, arising out of
a breach of this Agreement, involving claims within the scope of the releases
contained in this Agreement, or pertaining to a declaration of rights under this
Agreement, the prevailing Party shall recover all of such Party's attorneys'
fees and costs incurred in each and every such action, suit or other proceeding,
including any and all appeals or petitions therefrom.
(b) As used herein, attorneys' fees shall be deemed to mean the full
and actual costs of any legal services actually performed in connection with the
matters involved, calculated on the basis of the usual fee charged by the
attorneys performing such services.
13. Choice of Law; Venue. This Agreement and the rights of the parties
--------------------
hereunder shall be governed by and construed in accordance with the laws of the
State of Texas, including all matters of construction, validity, performance,
and enforcement and without giving effect to the principles of conflict of laws.
Any cause of action brought in connection with this Agreement shall be brought
in Harris County, in the State of Texas.
14. Terms & Conditions. The Parties agree and stipulate that each
--------------------
and every term and condition contained in this Agreement is material, and that
each and every term and condition may be reasonably accomplished within the time
limitations, and in the manner set forth in this Agreement.
15. Time is of the Essence. The Parties agree and stipulate that time
------------------------
is of the essence with respect to compliance with each and every item set forth
in this Agreement.
<PAGE>
16. Entire Agreement. This Agreement and the Escrow Agreement set
------------------
forth the entire agreement and understanding of the Parties hereto and
supersedes any and all prior agreements, arrangements and understandings related
to the subject matter hereof. No understanding, promise, inducement, statement
of intention, representation, warranty, covenant or condition, written or oral,
express or implied, whether by statute or otherwise, has been made by any party
hereto which is not embodied in this Agreement or the written statements,
certificates, or other documents delivered pursuant hereto or in connection with
the transactions contemplated hereby, and no Party hereto shall be bound by or
liable for any alleged understanding, promise, inducement, statement,
representation, warranty, covenant or condition not so set forth.
17. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which when executed and delivered shall be an original,
and all of which when executed shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties hereto, agreeing to be bound hereby,
execute this Agreement upon the date first set forth above.
Dated: JOHN B. HAYES, an individual
/s/ John B. Hayes
______________________________________
Dated: LAKOTA TECHNOLOGIES, INC.
/s/ Majed Jalali
______________________________________
By: Majed Jalali, CEO
Dated: MAJED JALALI, an individual and as a
Director of Lakota Technologies, Inc.
/s/ Majed Jalali
______________________________________
Dated: PATRICK "CODY" MORGAN, an individual and as
a Director of Lakota Technologies, Inc.
/s/ Partick "Cody" Morgan
______________________________________
January 24, 2000
To: Michael L. Omer, Consultant
14403 Broadgreed Drive
Houston, Texas 77079
RE: Consulting Agreement
Dear Mr. Omer:
Please allow this letter to outline the terms of our consulting agreement
between Lakota Technologies, Inc. (the "Company") and Michael L. Omer (the "
Consultant"). Consultant has been retained beginning on the date hereof and
continuing until March 31, 2000, to provide services to the Company in the
areas of corporate consulting, records management, regulatory matters and
corporate management services.
As consideration for these services, Consultant shall receive an aggregate
of 450,000 shares of Company common stock, to be registered on Form S-8 as
soon as reasonably practicable.
For and on behalf of Company,
Lakota Technologies, Inc.
/s/ Patrick C. Morgan
By: Cody Morgan, Corporate Secretary
and Director
Agreed and accepted by Consultant:
/s/ Michael L. Omer
By: Michael L. Omer
CAVAZOS & HIGGINS
1314 TEXAS AVE., Suite 500
Houston, Texas 77002
713-266-9949
January 24, 2000
Pursuant to our conversation on January 23, 2000, we, Brent Cavazos
& Ronald Higgins, Attorneys at Law, ("The Attorneys") agree to continue
with our representation of Lakota Technology ("Client") in pending
litigation with Kenny Vincent (Tiger Petroleum) and Pilares Oil and Gas.
We, the Attorneys, are to continue with our representation in this
litigation until a settlement is completed or a final verdict is rendered
by a Jury or Judge in a civil trial. As consideration for these services,
client agrees to tender 605,000, six hundred and five hundred thousand,
shares of Lakota Technology stock to be registered on Form S-8 as soon
as reasonably practicable.
Executed this 24 day of Jan., 2000.
/s/ Brent Cavazos
Brent Cavazos
/s/ Ronald Higgins
Ronald Higgins
/s/Majed Jalali
Majed Jalali, Lakota Technologies
[LAKOTA TECHNOLOGIES LETTERHEAD]
January 24, 2000
Vincent Jalali
Re: Consulting Agreement
Dear Mr. Jalali:
Please allow this letter to outline the terms of our consulting agreement
between Lakota Technologies, Inc. (the "Company") and Vincent Jalali (the
"Consultant"). Consultant has been retained beginning on the date hereof and
continuing until March 31, 2000, to provide services to the Company in the areas
of business plan review and modification, public speaking on behalf of the
Company, preparation and drafting of the Company's quarterly and annual reports
and the design and implementation of an internal ongoing plan for the
preparation of quarterly and annual reports.
As consideration for these services, Consultant shall receive an aggregate
of 100,000 shares of Company common stock, to be registered on Form S-8 as soon
as reasonably practicable.
Lakota Technologies, Inc.
/s/ Cody Morgan /s/ Vicent Jalali
______________________________ ______________________________
By: Cody Morgan Vincent Jalali
Its: Secretary and Director
[LAKOTA TECHNOLOGIES LETTERHEAD]
January 24, 2000
Patsy R. Morgan
Re: Consulting Agreement
Dear Ms. Morgan:
Please allow this letter to outline the terms of our consulting agreement
between Lakota Technologies, Inc. (the "Company") and Patsy R. Morgan (the
"Consultant"). Consultant has been retained beginning on the date hereof and
continuing until March 31, 2000, to provide services to the Company in the areas
of business plan review and modification, marketing plans, the design and
implementation of customer service policies and procedures, and preparation of
internal financial statements and analysis.
As consideration for these services, Consultant shall receive an aggregate
of 100,000 shares of Company common stock, to be registered on Form S-8 as soon
as reasonably practicable.
Lakota Technologies, Inc.
/s/ Cody Morgan /s/ Patsy R. Morgan
______________________________ ______________________________
By: Cody Morgan Patsy R. Morgan
Its: Secretary and Director
[LAKOTA TECHNOLOGIES LETTERHEAD]
January 24, 2000
Allan G. Cooper
Re: Consulting Agreement
Dear Mr. Cooper:
Please allow this letter to outline the terms of our consulting agreement
between Lakota Technologies, Inc. (the "Company") and Allan G. Cooper (the
"Consultant"). Consultant has been retained beginning on the date hereof and
continuing until March 31, 2000, to provide services to the Company in the areas
of bookkeeping, design and implementation of internal policies and procedures
for ongoing bookkeeping tasks, and preparation and review of quarterly and
annual reports.
As consideration for these services, Consultant shall receive an aggregate
of 100,000 shares of Company common stock, to be registered on Form S-8 as soon
as reasonably practicable.
Lakota Technologies, Inc.
/s/ Cody Morgan /s/ Allan G. Cooper
______________________________ ______________________________
By: Cody Morgan Allan G. Cooper
Its: Secretary and Director
[JONES, JENSEN & COMPANY, LLC LETTERHEAD]
Board of Directors
Lakota Technologies, Inc.
Atlanta, Georgia
We hereby consent to the use in this Form S-8 of Lakota Technologies, Inc.,
of our report dated September 15, 1999 of Lakota Technologies, Inc. for the year
ended December 31, 1998, which is part of this Form S-8, and to all references
to our firm included in this Form S-8.
/s/Jones Jensen & Company
Jones Jensen & Company
Salt Lake City, Utah
February 9, 2000
