AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 20, 2000
REGISTRATION NO. 33-____________
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.)
2849 Paces Ferry Road, Suite 710
Atlanta, GA 30339
(Address of Principal Executive Offices, Including Zip Code)
____________________
Consulting Agreements
Legal Services Agreements
(Full Title of the Plan)
____________________
Ken Honeyman
President
2849 Paces Ferry Road, Suite 710
Atlanta, GA 30339
(770) 433-8250
(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,
par value $0.001(2) 2,175,000 $ 0.11 $ 239,250 $ 63.17
- ----------------------- ------------- ---------------------------- ------------------------- -----------------
TOTAL REGISTRATION FEE $ 63.17
</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 consultants and legal counsel to
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 2,175,000 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.
2849 PACES FERRY ROAD, SUITE 710
ATLANTA, GEORGIA 30339
(770) 433-8250
2,175,000 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 pursuant to a Consulting Agreement and a Legal Services Agreement for
consulting and legal 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 except with respect to the legal fees
incurred in connection therewith, which have been waived by our counsel in
connection with this registration statement.
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 "LAKOE." Effective January 20, 2000, as a
result of our compliance with NASD Rule 6530, our common stock will be traded
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.
________________________
January 19, 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 is 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 2849 Paces
Ferry Road, Suite 710, Atlanta, Georgia 30339. Lakota's telephone number is
(770) 433-8250. 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.
Our common stock is currently traded on the OTC bulletin board under the
symbol "LAKOE." Effective January 20, 2000, as a result of our compliance with
NASD Rule 6530, our common stock will be traded 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.
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.
<PAGE>
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.
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.
<PAGE>
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.
- 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.
<PAGE>
- 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 October 1, 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 are located at 2849 Paces Ferry Road, Suite
710, Atlanta, Georgia 30339, which we occupy under a lease ending January 14,
2000 for $2,261.86 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.
2-Infinity.com maintains executive offices located at 4828 Loop Central
Drive, Suite 150, Houston, Texas 77081, which they occupy 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.
<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 Ken Honeyman and Howard Wilson, our
president 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 LAKOE. Effective January 20, 2000, as a result of our compliance with
NASD Rule 6530, our common stock will be traded 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 legal and
consulting 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 19, 2000, the number of
Shares 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 (1) BEFORE SALE PROSPECTUS AFTER SALE AFTER SALE
- ------------------ ----------- ------------- ------------ ------------
M. Richard Cutler 1,556,250 1,556,250 0 0.00%
- ------------------ ----------- ------------- ------------ ------------
Brian A. Lebrecht 393,750 393,750 0 0.00%
- ------------------ ----------- ------------- ------------ ------------
Vi Bui 225,000 225,000 0 0.00%
- ------------------ ----------- ------------- ------------ ------------
</TABLE>
(1) M. Richard Cutler is the sole shareholder of MRC Legal Services Corporation,
which does business as Cutler Law Group, and is Lakota's legal counsel. Brian
A. Lebrecht and Vi Bui are employees of the Cutler Law Group.
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).
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.
<PAGE>
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 other than
the legal fees incurred in connection with the preparation of this registration
statement 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 1,556,250 shares of the Company's Common Stock.
Employees of the Cutler Law Group hold 618,750 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 8-K for an event on January 18, 2000, filed with the
Commission on January 18, 2000.
(ii) Registrant's Form 10-SB (in the name of AGM, Inc., the Company's
reporting predeceesor), filed with the Commission on October 26, 1999.
(iii) 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 1,556,250 shares of the
Company's Common Stock. Employees of the Cutler Law Group hold 618,750 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 advisory and legal 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
- ----------- -----------
3.1 Articles of Incorporation of Chancellor Trading Group, Inc.
filed July 14, 1995.
3.2 Articles of Merger between Lakota Energy, Inc. and Chancellor
Trading Group, Inc. filed December 27, 1996.
3.3 Articles of Amendment to the Articles of Incorporation of
Lakota Energy, Inc. filed August 4, 1999.
3.4 Bylaws of Lakota Energy, Inc., as amended.
5 Opinion of Cutler Law Group with respect to legality of
the securities of the Registrant begin registered
10.1 Consulting Agreement dated January 17, 2000.
10.2 Letter Agreement dated January 18, 2000.
23.1 Consent of Jones, Jensen & Company, Certified Public
Accountants
23.3 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.
(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.
<PAGE>
(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 Atlanta, State of Georgia, on January 19, 2000.
Lakota Technologies, Inc.
/s/ Ken Honeyman
By: Ken Honeyman, President
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/ Ken Honeyman President and Director
______________________
/s/ Howard Wilson Secretary, Chief Financial Officer,
and Director
______________________
/s/ Majed Jalali Director
______________________
/s/ Patrick "Cody" Morgan Director
______________________
/s/ John B. Hayes Director
______________________
/s/ Nicholas Athens Director
______________________
[951089477 C $50.00]
[SECRETARY OF STATE]
[07-14-95 08:42]
ARTICLES OF INCORPORATION
OF
CHANCELLOR TRADING GROUP, INC.
KNOW ALL MEN BY THESE PRESENTS that the undersigned Incorporator being a
natural person of the age of eighteen years of age or older and desiring to
form a body corporate under the laws of the State of Colorado does hereby
sign, verify and deliver in duplicate to the Secretary of State of the State
of Colorado these Articles of Incorporation:
ARTICLE I
Name
The name of the Corporation is CHANCELLOR TRADING GROUP, INC.
ARTICLE II
Period of Duration
This Corporation shall exist in perpetuity, from and after the date of
filing these Articles of Incorporation with the Secretary of State of
Colorado unless and until dissolved according to the laws of the State of
Colorado.
ARTICLE III
Purposes
Section 1. Specific Purposes
A. To engage in the business of developing and establishing tio
Wading corporations for import and export of materials and services.
B. To provide management services to corporations engaged in the
business of international trading.
Section 2. General Purposes
A. To own, operate and maintain such real or personal property as may be
necessary to conduct such business and to do all of the things in connection
with the real or personal property which might be done by an individual.
B. To hire and employ agents and employees, and to enter into
agreements of employment and collective bargaining agreements for the
purpose of advancement and performance of the purposes of this Corporation.
<PAGE>
C. To carry on any other business, whether or not related to the
foregoing, including the transaction of all lawful business for which
corporations may be organized pursuant to, the Colorado Corporation Act, to
have and exercise all powers, privileges and immunities now or hereafter
conferred upon or permitted to corporations by the laws of the State of
Colorado, and to do any and all things herein set forth to the same extent
as natural persons could do insofar as permitted by the laws of the State of
Colorado.
D. To do those things which are authorized and permitted by the Colorado
Corporations Code.
E. To do all things authorized by law or incidental thereto.
ARTICLE IV
Powers
The powers of the Corporation shall be those powers granted by Article Two
of the Colorado Corporation Code under which this Corporation is formed. In
addition, the Corporation shall have the following specific powers:
Section 1. Officers. The Corporation shall have the power to elect or
appoint officers and agents of the Corporation and to fix their compensation.
Section 2. Capacity. The Corporation shall have the power to act as an agent
for any individual, association, partnership, corporation or other legal
entity, and to act as general partner for any limited partnership.
Section 3. Acquisitions. The Corporation shall have the power to receive,
acquire, hold, exercise rights arising out of the ownership or possession
thereof, sell, or otherwise dispose of, shares or other interests in, or
obligations of, individuals, associations, partnerships, corporations or
governments.
Section 4. Earned Surplus. The Corporation shall have the power to receive,
acquire, hold, pledge, transfer, or otherwise dispose of shares of the
Corporation, but such shares may only be purchased, directly or indirectly,
out of earned surplus.
Section 5. Gifts. The Corporation shall have the power to make gifts or
contributions for the public welfare or for charitable, scientific or
educational purposes.
<PAGE>
ARTICLE V
Capital Structure
Section 1. Authorized Capital. The aggregate number of shares and the amount
of the total authorized capital of said Corporation shall consist of
50,000,000 shares of common stock, no par value per share, and 5,000,000
shares of non-voting preferred stock, no par value per share.
Section 2. Share Status. All common shares will be equal to each other, and
when issued, shall be fully paid and nonassessable, and the private property
of shareholders shall not be liable for corporate debts. Preferred shares
shall have such preferences as the Directors may assign to them prior to
issuance. Each holder of a common share of record shall have one vote for
each share of stock outstanding in his name on the books of the Corporation
and shall be entitled to vote said stock.
Section 3. Consideration for Shares. The common stock of the Corporation
shall be issued for such consideration as shall be fixed from time to time
by the Board of Directors. In the absence of fraud, the judgment of the
Directors as to the value of any property or services received in full or
partial payment for shares shall be conclusive. When shares are issued upon
payment of the consideration fixed by the Board of Directors, such shares
shall be taken to be fully paid stock and shall be nonassessable.
Section 4. Pre-Emptive Rift. Except as may otherwise be provided by the
Board of Directors, holders of shares of stock of the Corporation shall have
no preemptive right to purchase, subscribe for or otherwise acquire shares
of stock of the Corporation, rights, warrants or options to purchase stocks
or securities of any land convertible into stock of the Corporation.
SECTION 5. Dividends. Dividends in cash, property or shares of the
Corporation may be paid, as and when declared by the Board of Directors, out
of funds of the Corporation to the extent and in the manner permitted by law.
Section 6. Distribution in Liquidation. Upon any liquidation, dissolution or
winding up of the Corporation, and after paying or adequately providing for
the payment of all its obligations, the remainder of the assets of the
Corporation shall be distributed, either in cash or in kind, pro rata to the
holders of the common stock, subject to prefere es, if any, granted to
holders of the preferred shares. The Board of Directors may, from time to
time, distribute to the shareholders in partial liquidation from stated
capital of the Corporation, in cash or property, without the vote of the
shareholders, in the manner permitted and upon compliance with limitations
unposed by law.
<PAGE>
ARTICLE VI
Voting by Shareholders
Section 1. Voting Rights: Cumulative Voting. Each outstanding share of
common stock is entitled to one vote and each fractional share of common
stock is entitled to a corresponding fractional vote on each matter
submitted to a vote of shareholders. Cumulative voting shall not be allowed
in the election of Directors of the corporation and every shareholder
entitled to vote at such election shall have the right to vote the number of
shares owned by him for as many persons as there are Directors to be
elected, and for whose election he has a right to vote. Preferred shares
have no voting rights unless granted by amendment to these Articles of
Incorporation.
Section 2. Majority Vote. When, with respect to any action to be taken by
the Shareholders of the Corporation, the Colorado Corporation Code requires
the vote or concurrence of the holders of two-thirds of the outstanding
shares entitled to vote thereon, or of any class or series, any and every
such action shall be taken, notwithstanding such requirements of the
Colorado Corporation Code, by the vote or concurrence of the holders of a
majority of the outstanding shares entitled to vote thereon, or of any class
or series.
ARTICLE ViI
Registered and Initial Principal Office and Registered Agent
The registered office and initial principal office of the Corporation is
located at 1291 South Lincoln Street, Denver, Colorado 80210, and the name
of the registered agent of the Corporation at such address is Edward H.
Hawkins.
ARTICLE VIII
Incorporator
The name and address of the Incorporator is Edward H. Hawkins, 1291 South
Lincoln Street, Denver, Colorado 80210.
ARTICLE IX
Board of Directors
Section 1. The corporate powers shall be exercised by a majority of the
Board of Directors. The number of individuals to serve on the Board of
Directors shall be set forth in the Bylaws of the Corporation; provided,
however, that the initial Board of Directors shall consist of one person
below-named to manage the affairs of the Corporation until such time as he
resigns or his successor is elected by a majority vote of the Shareholders:
Name of Director Address
Edward H. Hawkins 1291 So. Lincoln St.
Denver, CO 80210
<PAGE>
Section 2. If in the interval between the annual meetings of shareholders of
the Corporation, the Board of Directors of the Corporation deems it
desirable that the number of Directors be increased, additional Directors
may be elected by a unanimous vote of the Board of Directors of the
Corporation then in office, or as otherwise set forth in the Bylaws of the
Corporation.
Section 3. The number of Directors comprising the whole Board of Directors
may be increased or decreased from time to time within such foregoing limit
as set forth in the Bylaws of the Corporation.
ARTICLE X
Powers of the Board of D ors
In furtherance and not in limitation of the powers conferred by the State of
Colorado, the Board of Directors is expressly authorized and empowered:
Section 1. Bylaws. To make, alter, amend and repeal the Bylaws, subject to
the power of the shareholders to alter or repeal the Bylaws made by the
Board of Directors.
Section 2. Books ad Records. Subject to the applicable provisions of the
Bylaws then in effect, to determine, from time to time, whether and to what
extent, and at what times and places, and under what conditions and
regulations, the accounts and books of the Corporation or any of them, shall
be open to shareholder inspection. No shareholder shall have any right to
inspect any of the accounts, books, or documents of the Corporation, except
as permitted by law, unless and until authorized to do so by resolution of
the Board of Directors or of the shareholders of the Corporation.
Section 3. Power to Borrow. To authorize and issue, without shareholder
consent, obligations of the Corporation, secured and unsecured, under such
terms and conditions as the Board, in its sole discretion, may determine,
and to pledge, or mortgage, as security therefor, any real or personal
property of the Corporation, including after-acquired property.
Section 4. Dividends. To determine whether any and, if so, what part, of the
earned surplus of the Corporation shall, be paid in dividends to the
shareholders, and to direct and determine other use and disposition of any
such earned surplus.
Section 5. Profits. To fix, from time to time, the amount of the profits of
the Corporation to be reserved as working capital or for any other lawful
purposes.
Section 6. Employees' Plans. From time to time to provide and carry out and
to recall, abolish, revise, amend, alter, or change a plan or plans for the
participation by all or any of the employees, including Directors and
officers of this Corporation or of any corporation in which or in the
welfare of which the Corporation has any interest, and those actively
engaged in the conduct of this Corporation's business, in the profits of this
<PAGE>
Corporation or of any branch or division thereof, as a part of this
Corporation's legitimate expenses, and for the furnishing to such employees
and persons, or any of them, at this Corporation's expense, of medical
services, insurance against accident, sickness, or death, pensions during
old age, disability, or unemployment, education, housing, social services,
recreation, or other similar aids for their relief or general welfare, in
such manner and upon such terms and conditions as may be determined by the
Board of Directors.
Section 7. Warrants an Options. The Corporation, by resolution or
resolutions of its Board of Directors, shall have power to create and issue,
whether or not in connection with the issue and sale of any shares of any
other securities of the Corporation, warrants, rights, or options entitling
the holders-thereof to purchase from the Corporation any shares of any class
or classes of any other securities of the Corporation, such warrants, rights
or options to be evidenced by or in such instrument or instruments as shall
be approved by the Board of Directors. The terms upon which, the time or
times (which may be limited or unlimited in duration), and the price or
prices (not less than the minimum amount prescribed by law, if any) at which
any such warrants, rights, or options may be issued and any such shares or
other securities may be purchased from the Corporation upon the exercise of
such warrant, right, or option shall be such as shall be fixed and stated in
the resolution or resolutions of the Board of Directors providing for the
creation and issue of such warrants, rights or options. The Board of
Directors is hereby authorized to create and issue any such warrants, rights
or options from time to time for such consideration, and to such persons,
firms, or corporations, as the Board of Directors may determine.
Section 8. Compensation. To provide for the reasonable compensation of its
own members, and to fix the s and conditions upon which such compensation
will be paid.
Section 9. Not in Limitation. In addition to the powers and authority
hereinabove, or by statute expressly conferred upon it, the Board of
Directors may exercise all such powers and do all such acts and things as
may be exercised or done by the Corporation, subject, nevertheless, to the
provisions of the laws of the State of Colorado, of these Articles of
Incorporation and of the Bylaws of the Corporation.
ARTICLE XI
Right of Directors to Contract with Corporation
No contract or other transaction between this Corporation and one or more of
its Directors or any other corporation, firm, association, or entity in
which one or more of its Directors are directors or officers or are
financially interested shall be either void or voidable solely because of
such relationship or interest or solely because such directors are present
at the meeting of the Board of Directors or a committee thereof which
authorizes, approves, or ratifies such contract or transaction or solely
because their votes are counted for such purpose if:
<PAGE>
A. The fact of such relationship or interest is disclosed or known to the
Board of Directors or committee which authorizes, approves, or ratifies the
contract or tr nsaction by a vote or consent sufficient for the purpose
without counting the votes of consents of such interested Directors; or
B. The fact of such relationship or interest is disclosed or known to the
shareholders entitled to vote and they authorize, approve, or ratify such
contract or tr nsaction by vote or written consent, or
C. The contract or transaction is fair and reasonable to the Corporation.
ARTICLE XII
Corporate Opportunity
The officers, Directors and other members of management of this Corporation
shall be subject to the doctrine of "corporate opportunities" only insofar.
as it applies to business opportunities in which this Corporation has expressed
an interest as determined from time to time by this Corporation's Board of
Directors as evidenced by resolutions appearing in the Corporation's minutes.
Once such areas of interest are delineated, all such business opportunities
within such areas of interest which come to the attention of the officers,
Directors, and other members of in agement of this Corporation shall be
disclosed promptly to this Corporation and made available to it. The Board
of Directors may reject any business opportunity presented to it and thereafter
any officer, Director or other member of management may avail himself of such
opportunity. Until such time as this Corporation, through its Board of
Directors, has designated an area of interest, the officers, Directors and
other members of management of this Corporation shall be free to engage in such
areas of interest on their own and this doctrine shall not limit the right
of any officer, Director or other member of management of this Corporation
to continue a business existing prior to the time that such area of interest is
designated by the Corporation. Tins provision shall not be construed to release
any employee of this Corporation (other than an officer, Director or member of
management) any duties which he may have to this Corporation.
ARTICLE XIII
Indemnification of Officers, Directors and Others
The Board of Directors of the Corporation shall have the power to:
A. Indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal. administrativer or investigative (other than an
action by or in the right of the Corporation), by reason of the fact that he
is or was a director, officer, employee or agent of the Corporation or is or
was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection
<PAGE>
with such action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in the best interests of the Corporation
and, with respect to any criminal action or proceedings, had no reasonable
cause to believe his conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement or conviction or upon a
plea of nolo contendere or its equivalent shall not of itself create a
presumption that the person did not act in good faith and in a manner which
he reasonably believed to be in the best interests of the Corporation and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
B. Indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the
right of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of the Corporation, partnership,
joint venture, trust or other enterprise against expenses (including
attorney's fees) actually and reasonably incurred by him in. connection with
the defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in the best interests of the
Corporation; but no indemnification shall be made in respect of any claim,
issue or matter as to which such person has been adjudged to be liable for
negligence or misconduct in the performance of his duty to the Corporation
unless and only to the extent that the court in which such action or suit
was brought determines upon application that, despite the adjudication of
liability, but in view of all cir cumstances of the case, such person is
fairly and reasonably entitled to demnification for such expenses which
such court deems proper.
C. Indemnify a Director, officer, employee or agent of the Corporation to
the extent that such person has been successful on the merits in defense of
any action, suit or proceeding referred to in Subparagraph A or B of this
Article or in defense of any claim, issue, or matter therein, against
expenses (including attorney's fees) actually and reasonably incurred by him
in connection therewith.
D. Authorize on under Subparagraph A or B of this Article (unless ordered by
a court) in the specific case upon a determination that indemnification
of the Director, officer, employee or agent is proper in the because he has
met the applicable standard of conduct set forth in said Subparagraph A or
B. Such determination shall be made by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or, if such a quorum is not obtainable or even if
obtainable a quorum of directors so directs, by independent legal counsel
in a written opinion, or by the shareholders.
E. Authorize payment of expenses (including attorney's fees) incurred in
defending a civil or criminal action, suit or proceeding in advance of the
final disposition of such action, suit or proceeding as authorized in
Subparagraph D of this Article upon receipt of an undertaking by or on
behalf of the Director, officer, employee or agent to
<PAGE>
repay such amount unless it is ultimately determined that he is entitled to
be indemnified by the Corporation as authorized in this Article.
F. Purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation or who is or was
serving at the request of the Corporation as a Director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by him in
any such capacity or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability
under the provision of this Article.
The indemnification provided by this Article shall not be deemed exclusive
of any other rights to which those indemnified may be entitled under these
Articles of Incorporation, and the Bylaws, agreement, vote of shareholders
or disinterested directors or otherwise, and any procedure provided for by
any of the foregoing, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as
to a person who has ceased to be a Director, officer, employee or agent and
shall inure to the benefit of heirs, executors and administrators of such a
person.
ARTICLE XIV
Right to Amend
The right is expressly reserved to amend, alter, change, or repeal any
provision or provisions contained in these Article of Incorporation or any
Article herein by a majority vote of the members of the Board of Directors,
and a majority vote of the shareholders of the Corporation.
IN WITNESS WHEREOF, the undersigned has set his hand and seal this 13th day of
of July, 1995.
/s/ Edward H. Hawkins
Edward H. Hawkins, Incorporator
CONSENT OF AGENT
The undersigned hereby consents to the appointment as agent for the above
named corporation under the Section 105 of the Colorado Business Corporation
Act, until such as he resings such position.
/s/ Edward H. Hawkins
Edward H. Hawkins, Agent
1291 So. Lincoln St., Denver, CO 80210
[961168718 M $85.00]
[SECRETARY OF STATE]
[12-06-96 11:48 ]
ARTICLES OF MERGER
CHANGE OF NAME
ARTICLES OF MERGER (these "Articles") mad and entered into as of the
7th day of November, 1996 by and between Lakota Energy, Inc., a Colorado
corporation ("Lakota") and Chancellor Trading Group, Inc., a Colorado
corporation ("Chancellor"). These Articles are adopted pursuant to, Section
7-111-107 of the Colorado Business Corporation Act. All of such laws expressly
permit the merger described herein; subject to and pursuant to all the terms
and conditions as set forth herein.
ARTICLE I
SURVIVOR CORPORATION
Chancellor, a Colorado corporation, shall be the survivor corporation.
ARTICLE II
SHARES AUTHORIZED AND OUTSTANDING
On the date of these Articles of Merger, Chancellor has authority to issue
50,000,000 shares of common stock (the "Chancellor Common Shares") no par
value, of which 1,801,000 common shares are issued and outstanding and
5,000,000 shares of non-voting preferred stock, no par value per share of
which no preferred share are issued and outstanding.
On the date of these Articles of Merger, Lakota has authority to issue
15,000,000 shares of common stock, no par value (the "Lakota Common
Shares"), of which 4,593,750 shares am issued and outstanding. Lakota has
the authority to issue 5,000,000 shares of preferred stock, no par value, of
which no preferred shares are issued and outstanding.
ARTICLE III
SHAREHOLDER VOTE
On November 6, 1996, pursuant to written consent shareholders entitled to
vote on the action constituting 100% of the outstanding 4,593,750 Lakota
Common Shares approved the Agreement of Merger, none opposed. Said number of
votes was sufficient for approval by the stockholders.
On November 6, 1996, pursuant to written consent, shareholders entitled to
vote on the action constituting 100% of the outstanding Chancellor Common
Shares approved the Agreement of Merger, none opposed. Said number of vows
was sufficient for approval by the stockholders.
ARTICLE IV
PLAN OF MERGER
The executed agreement of merger is on file at the principal place of
business of the surviving corporation. Said address is 3350 Cumberland
Circle, Suite 1900, Atlanta, Georgia 30339.
<PAGE>
The terms of the Agreement of Merger are as follows:
(1) Merger. Lakota shall be merged with and into Chancellor, and Chancellor
shall be the survivor corporation ("Survivor Corporation") of the merger
("Merger"), effective upon the date when this Merger Agreement is made
effective in accordance with applicable laws (the "Effective Date").
(2) Amendment to Articles. Article One of the Articles of Incorporation of
the Survivor Corporation shall be amended to read:
The name of the corporation shall be Lakota Energy, Inc.
(3) Directors and Officers and Governing Documents. The directors and
officers of Chancellor shall, redsign. The directors of Chancellor shall
appoint the nominees designated by Lakota to the Board of Directors of the
Survivor Corporation.
The Bylaws of Chancellor, in effect on the Effective Date, shall continue
to be the Bylaws of the Surviving Corporation without change or amendment
until further amended in accordance with the provisions thereof and
applicable laws.
(4) Succession. On the Effective Date, Lakota shall succeed to Chancellor
in the manner of and as more fully set forth in the Colorado Revised Statutes.
(5) Further Assurances. From time to time, as and when required by
Chancellor or by its successors and assigns, there shall be executed and
delivered on behalf of Lakota such deeds and other instruments, and there
shall be taken or caused to be taken by it such further and other action, as
shall be appropriate or necessary in order to vedst, perfect or confirm, of
record or otherwise, in Chancellor the title to and possession of all the
property, interests, assets, tights, privileges, immunities, powers,
franchises and authority of Lakota, and otherwise to carry out the purposes
of this Merger Agreement, and the officers and directors of Chancellor are
fully authorized in the name and on behalf of Lakota or otherwise to take
any and all such action and to execute and deliver any and all such deeds
and other instruments.
(6) Stock of Chancellor. Upon the Effective Date, by virtue of the merger
and without any action on die part of the holder thereof, each. Chancellor
Common and Preferred Sham outstanding immediately prior thereto shall be
changed and converted into 1,801,000 and 300, respectively, fully paid and
nonassessable shares of the Survivor Corporation's common stock ("Survivor
Common Shares").
(7) Stock of Lakota. On and after the Effective Date, all of the outstanding
certificates which prior to that time represented Lakota Common Shares shall
be recalled and canceled and 9,187,500 restricted Survivor Common Sham shall
be issued to current Lakota in proportion to their ownership percentage. The
registered owner on the books and records of Lakota or its transfer agents
of any such outstanding stock certificate shall, until such certificate
shall have been surrendered for transfer or otherwise accounted for to
Chancellor or its transfer agents, have and be entitled to exercise any
voting and other tights with respect to and to receive any dividend and
other distributions upon the Survivor Common Shares evidenced by such
outstanding certificate as above provided.
<PAGE>
(8) Covenants of Chancellor. Chancellor covenants and agrees that it will,
on or before the Effective Date:
(i) Qualify to do business as a foreign corporation in the State of
Georgia, and in connection therewith irrevocably appoint an agent for
service of process as required under the provisions of the Georgia Business
Corporation Code; and
(ii) File any and all documents with the Georgia Department of Revenue
necessary to the assumption by Chancellor of all of the tax liabilities of
Lakota.
(9) Book Entries. As of the Effective Date, entries shall be made upon the
books of Chancellor in accordance with the following.
(a) The assets and liabilities of Lakota shall be recorded at the amounts at
which they were carried on the books of Lakota immediately prior to die
Effective Date, with appropriate adjustments to reflect the retirement of
the Lakota Common Shares presently issued and outstanding.
(b) There shall be credited to the common stock account of the Survivor
Corporation the aggregate amount of the stated value of all Chancellor
Common Shares resulting from the conversion of the outstanding Lakota Common
Shares pursuant to the merger.
(C) There shall be credited to the retained earnings account of Chancellor
the aggregate of the amount carded in the retained earnings account of
Lakota immediately prior to the Effective Date.
(10) Access to Documentation. Prior to the merger, Chancellor and Lakota
shall provide each other full access to their books and records, and shall
furnish financial and operating data and such other information with respect
to their business and assets as may reasonably be requested from time to
dram If the proposed transaction is not consummated, all parties shall keep
confidential any information any (unless ascertainable from public filings or
published information) obtained concerning each others operations, assets
and business.
(11) Merger Expenses. Lakota shall pay the legal, accounting and any other
expenses reasonably incurred in connection with this transaction not to
exceed $5,000. Each party shall bear its own expenses if the transaction is
not consummated.
(12) Abandonment. At any time before the effective Date, this Merger
Agreement may be terminated and the merger may be abandoned by the Board of
Directors of either Chancellor or Lakota or both, notwithstanding approval
of this Agreement by the shareholders of Chancellor or the shareholders of
Lakota or both.
<PAGE>
IN WITNESS WHEREOF, these Articles of Merger, having first been duly
approved by resolution of die Boards of Directors of Chancellor and Lakota
and their respective shareholders, is hereby executed on behalf of each of
said two corporations by their respective officers hereunto duly authorized.
Chancellor Trading Group, Inc. ATTEST:
A Colorado corporation
/s/Unknown /s/Unknown
President Secretary
Lakota Energy, Inc. ATTEST:
A Colorado corporation
/s/Ken Honeyman /s/Howard Wilson
President Secretary
State of Georgia )
)ss.
County of Cabb )
On the 7th day of November, 1996, personally appeared before me the
President of Lakota Energy, Inc. a Colorado corporation, the signer of the
above instrument who duly acknowledged to me that he executed the same on
behalf of said corporation pursuant to duly adopted director's resolutions.
/s/Diana B. Greenway
NORARY PUBLIC
549 Goose Ridge St.
Marietta, GA 30064
Address
My Commission Expires: [Stamp of Diana B. Greenway]
[December 28, 1998]
[NOTARY SEAL]
<PAGE>
State of Georgia )
)ss.
County of Cabb )
On the 7th day of November, 1996, personally appeared before me the Secretary
of Lakota Energy, Inc., a Colorado corporation, the signer of the above
instrument who duly acknowledged to me that he executed the same on behalf
of said corporation pursuant to duly adopted director's resolutions.
/s/Diana B. Greenway
NOTARY PUBLIC
549 Goose Ridge St.
Marietta, GA 30064
Address
My Commission Expires: [Stamp of Diana B. Greenway]
[December 28, 1998 ]
[NOTARY SEAL]
City of Surrey, Province of British Columbia )
)ss.
County of Canada )
On the 14th day of November, 1996, personally appeared before me the
President of Chancellor Trading Group, Inc., a Colorado corporation, the
signer of the above instrument who duly acknowledged to me that he executed
the same on behalf of said corporation pursuant to duly adopted director's
resolutions.
/s/Judy Friesen
NOTARY PUBLIC
[Stamp of Judy Friesen]
[Notary Public]
[#200-1676 Martin Drive]
[Surrey, B.C. V4A 6E7]
[Tel. (604) 538-0415]
My Commission Expires: Permanent
SEAL
<PAGE>
City of Surrey, Province of British Columbia )
)ss.
County of Canada )
On the 14th day of November, 1996, personally appeared before me theSecretaryof
Chancellor Trading Group, Inc., a Colorado corporation, the signer of the
above instrument who duly acknowledged to me that he executed the same on
behalf of said corporation pursuant to duly adopted director's resolutions.
/s/Judy Friesen
NOTARY PUBLIC
[Stamp of Judy Friesen]
[Notary Public]
[#200-1676 Martin Drive]
[Surrey, B.C. V4A 6E7]
[Tel. (604) 538-0415]
My Commission Expires: Permanent
SEAL
<PAGE>
VERIFICATION
The undersigned, after being duly sworn, does hereby depose and state, that
he is the Secretary of Chancellor Trading Group, Inc., a Colorado
corporation, and that he has read the foregoing Articles of Merger and knows
the contents thereof, and does hereby certify that these Articles of Merger
contain a truthful statement of the Agreement of Merger as duly adopted by
the Board of Directors.
/s/Unknown
Secretary
City of Surrey, Province of British Columbia )
)ss.
County of Canada )
On the 14 day of November, 1996, personally appeared before me the Secretary
of Chancellor Trading Group, Inc., a Colorado corporation, the signer of the
above instrument who duly acknowledged to me that he executed the same on
behalf of said corporation pursuant to duly adopted director's resolutions.
/s/Judy Friesen
NOTARY PUBLIC
[Stamp of Judy Friesen]
[Notary Public]
[#200-1676 Martin Drive]
[Surrey, B.C. V4A 6E7]
[Tel. (604) 538-0415]
My Commission Expires: Permanent
SEAL
<PAGE>
VERIFICATION
The undersigned, after being duty sworn does hereby depose and state, that
he is the Secretary of Lakota Energy, Inc., a Colorado corporation, and that
he has read the foregoing Articles of Merger and knows the contents thereof,
and does hereby certify that these Articles of Merger contain a truthful
statement of the Agreement of Merger as duly adopted by the Board of
Directors by a majority of the stockholders of the corporation.
/s/Howard Wilson
Secretary
State of
)ss.
County of
On the 14th day of November, 1996, personally appeared before me the
Secretary of Lakota Energy, Inc., a Colorado corporation, the signer of the
above instrument who duly acknowledged to me that he executed the same on behalf
of said corporation pursuant to duly adopted director's resolutions.
/s/Diana B. Greenway
NOTARY PUBLIC
549 Goose Ridge St.
Marietta, GA 30064
Address
My Commission Expires: [Stamp of Diana B. Greenway]
[December 28, 1998 ]
[NOTARY SEAL]
<PAGE>
MERGER CONSOLIDATION
CANCELLATION OF LIMITED PARTNERSHIP DUE TO MERGER
DOMESTIC FOREIGN PROFIT NONPROFIT
MERGER #961168718
LAKOTA ENERGY, INC. DP951139679
(COLORADO CORPORATION)
INTO
CHANCELLOR TRADING GROUP, INC. DP951089447
(COLORADO CORPORATION)
THE SURVIVOR
CHANGING ITS NAME TO
LAKOTA ENERGY, INC.
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
LAKOTA ENERGY, INC.
Pursuant to the provisions of the Colorado Business Corporation
Act, the undersigned corporation adopts the following Articles of
Amendment to its Articles of Incorporation:
FIRST: The name of the corporation is Lakota Energy, Inc.
SECOND: The following amendment to the Articles of Incorporation
was adopted on July 16, 1999, as prescribed by the Colorado Business
Corporation Act. Such amendment was adopted by a vote of the
shareholders. The number of shares voted for the amendment was
sufficient for approval.
THIRD: Article I of the Articles of Incorporation is restated and
amended to read as follows:
"Article I
Name
The name of the Corporation is Lakota Technologies, Inc."
FOURTH: Article V, Section 1 of the Articles of Incorporation is
restated and amended to read as follows:
"Article V
Capital Structure
Section 1. Authorized Capital. The aggregate number of shares
and the amount of the total authorized capital of said Corporation
shall consist of 100,000,000 shares of common stock, no par value
per share, and 25,000,000 shares of preferred stock, no par value
per share."
/s/R.K. Honeyman
By: R.K. Honeyman
Title: President
BYLAWS
OF
CHANCELLOR TRADING GROUP, INC.
ARTICLE I
OFFICES
The principal office of the Corporation in Colorado shall initially be
located in Denver, Colorado. The Corporation may have such other offices,
either within or outside the State of Colorado, as the Board of Directors
may designee, or as the business of the Corporation may require from time to
time.
The registered office of the Corporation required by the Colorado Business
Corporation Act to be maintained in the State of Colorado may be, but need
not be, identical with the principal office, and the address of the
registered office may be changed from time to time by the Board of Directors.
ARTICLE II
Shareholders
Section 1. Annual Meeting.
The annual meeting of the shareholders shall be held pursuant to notice
given by the Board of Directors for the purpose of electing directors and
for the transaction of such other business as may come before the meeting.
Section 2. Special Meetings
Special meetings of the shareholders, for any purpose, unless otherwise
prescribed by statute may be called by the President or by the Board of
Directors, and shall be called by the President at the request of the holders
of not less than ten (10%) percent of all the outstanding shares of the
Corporation entitled to vote at the meeting. Such request shall state the
purposes of the proposed meeting.
Section 3. Adjournment.
a. When the annual meeting is convened, or when any special meeting is
convened, the presiding officer may adjourn it for such period of time as
may be reasonably necessary to reconvene the meeting at another place and
another time.
b. The presiding officer shall have the power to adjourn any
meeting of the shareholders for any proper purpose, including, but not
limited to, lack of a quorum, to secure a more adequate meeting place, to
elect officials to count and tabulate votes, to review any shareholder
proposals or to pass upon any challenge which may properly come before the
meeting.
c. When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place
to which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and any business may be transacted at the adjourned
meeting that might have been transacted on the original date of the meeting.
If, however, after the adjournment the Board fixes a new record date for the
adjourned meeting, a notice of the adjourned meeting shall be given in
compliance with Subsection (4)(a) of this Article II to each shareholder of
record on the new record date entitled to vote at such meeting.
<PAGE>
Section 4. Notice of Meeting; Purpose of Meeting;
a. Each shareholder of record entitled to vote at any meeting
shall be given in person, or by first class mail, postage prepaid, written
notice of such meeting which, in the case of a special meeting, shall set
forth the purpose(s) for which the meeting is called, not less than ten (10)
or more then fifty (50) days before the date of such meeting. If mailed,
such notice is to be sent to the shareholder's address as it appears on the
stork transfer books of the Corporation unless the shareholder shall have
requested of the Secretary in writing at least fifteen (15) days prior to
the distribution of any required notice that any notice intended for him to
be sent to some other address, in which case the notice may be sent to the
address so designated. Notwithstanding any such request by a shareholder,
notice sent to a shareholder's address as it appears on the stock transfer
books of this Corporation as of the record date shall be deemed properly
given. Any notice of a meeting sent by the United States mail shall be
deemed delivered when deposited with proper postage thereon with the United
States Postal Service or in any mail receptacle under its control.
b. A shareholder waives notice of any meeting by attendance,
either in person or by proxy, at such meeting or by waiving notice in
writing either before, during or after such meeting. Attendance at a meeting
for the express purpose of objecting that the meeting was not lawfully
called or convened, however, will not constitute a waiver of notice by a
shareholder stating at the beginning of the meeting, his objection that the
meeting is not lawfully called or convened.
C. Whenever the holders of at least eighty (80%) percent of the capital
stock of the Corporation having the right to vote shall be present at any
annual or special meeting of shareholders, however called or notified, and
shall sign a written consent thereto on the minutes of such meeting, the
meeting shall be valid for all purposes.
d. A Waiver of Notice signed by all shareholders entitled to vote at a
meeting of shareholders may also be used for any other proper purpose
including, but not limited to, designating any place within or without the
State of Colorado as the place for holding such a meeting.
e. Neither the business to be transacted at, nor the purpose of,
any regular or special meeting of shareholders need be specified in any
written Waiver of Notice.
<PAGE>
Section 5. Closing of Transfer Books: Record Date- -Sharcholders' List.
a. In order to determine the holders of record of the capital stock of the
Corporation who are entitled to notice of meetings, to vote at a meeting or
adjournment thereof, or to receive payment of any dividend, or for any other
purpose, the Board of Directors may fix a date not more than fifty (50) days
prior to the date set for any of the abovementioned activities for such
determination of shareholders.
b. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten (10) days
immediately preceding such meeting.
c. In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the date for such determination of shareholders,
such date in any caw to be not more than fifty (50) days and, in case of a
meeting of shareholders, not less than ten (10) days prior to the date on
which the particular action, requiring such determination of shareholders,
is to be taken.
d. If the stock transfer books are not closed and no record date
is fixed for the determination of shareholders entitled to notice or to vote
at a meeting of shareholders, or to receive payment of a dividend, the date
on which notice of the meeting is mailed or the date on which the resolution
of the Board of Directors declaring such dividend is adopted, as the case
may be, shall be the record date for such determination of shareholders:
<PAGE>
e. When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as pro-sided in this section, such determination
shall apply to any adjournment thereof, unless the Board of Directors fixes
a new record date under tins section for the adjourned meeting
f. The officer or agent having charge of the stock transfer books
of the Corporation shall make, as of a date at least ten (10) days before
each meeting of shareholders, a complete list of the shareholders entitled
to vote at such meeting or any adjournment thereof, with the address of
each shareholder and the number and class and series, if any, of shares held
by each shareholder. Such list shall be kept on file at the registered
office of the Corporation or at the office of the transfer agent or
registrar of the Corporation for a period of ten (10) days prior to such
meeting and shall be available for inspection by any shareholder at any time
during usual business hours. Such list shall also be produced and kept open
at the time and place of any meeting of shareholders and shall be subject to
inspection by any shareholder at any time during the meeting.
g. The original stock transfer books shall be prima facie evidence
as to the shareholders entitled to examine such list or stock transfer books
or to vote at any meeting of shareholders.
h. If the requirements of Subsection 5(f) of this Article II have not been
substantially complied with then, on the demand of any shareholder in person
or by proxy, the meeting shall be adjourned until such requirements are
complied with.
I. If no demand pursuant to Section 5(h) is made, failure to
comply with the requirements of this Section shall not affect the validity
of any action taken at such meeting.
j. Subsection 5(g) of this Article II shall be operative only at
such time(s) as the Corporation shall have six (6) or more shareholders.
Section 6. Quorum.
a. At any meeting of the shareholders of the Corporation, the
presence, in person or by proxy, of shareholders owning a majority of the
issued and outstanding sham of the capital stock of the Corporation entitled
to vote thereat shall be necessary to constitute a quorum for the
transaction of any business. If a quorum is present the affirmative vote of
a majority of the shares represented at such meeting and entitled to vote on
the subject matter shall be the act of the shareholders. If there shall not
be a quorum at any meeting of the shareholders of the Corporation, then the
holders of a majority of the shares of the capital stock of the Corporation
who shall be present at such meeting, in person or by proxy, may adjourn
such meeting from time to time until holders of a majority of the shares of
the capital stork shall attend. At any such adjourned meeting at which a
quorum shall be present any business may be transacted which might have been
transacted at the meeting as originally scheduled.
b. The shareholders at a duty organized meeting having a quorum
may continue to transact business until adjournment notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
Section 7. Presiding Officer. Order of Business.
a. Meetings of the shareholders shall be presided over by the
Chairman of the Board, or, if he is not present, by the President or, if he
is not present, by a Vice President or, if none of the Chairman of the
Board, the President; or a Vice President is present; the meeting shall be
presided over by a Chairman to be chosen by a plurality of the shareholders
entitled to vote at the meeting who are present, in person or by proxy. The
presiding officer of any meeting of the shareholders may delegate the duties
and obligations of the presiding officer of the meeting as he sees fit.
b. The Secretary of the Corporation, or, in his absence, an Assistant
Secretary Shan act as Secretary of every meeting of shareholders, but if
neither the Secretary nor an Assistant Secretary is present the presiding
officer of the meeting shall choose any person present to act as Secretary
of the meeting.
<PAGE>
c. The order of business shall be as follows:
1. Call of meeting to order.
2. Proof of notice of meeting.
3. Reading of minutes of last previous shareholders meeting
or a Waiver thereof.
4. Reports of officers.
5. Reports of committees.
6. Election of directors.
7. Regular and miscellaneous business.
8. Special matters.
9. Adjournment.
d. Notwithstanding the provisions of Article II Section 7,
Subsection c, the order and topics of business to be transacted at any
meeting shall be determined by the presiding officer of the meeting in his
sole discretion. In no event shall any variation in the order of business or
additions and deletions from the order of business as specified in Article
11, Section 7, Subsection c, invalidate any actions properly taken at any
meeting.
Section 8. Voting.
a. Unless otherwise provided for in the Certificate of
Incorporation, each shareholder shall be entitled, at each meeting and upon
each proposal to be voted upon, to one vote for each sham of voting stock
recorded in his name on the books of the Corporation on the record date
fixed as provided for in Article II Section 5.
b. The presiding officer at any meeting of the shareholders shall
have the power to determine the method and means of voting when any matter
is to be voted upon. The method and means of voting may include, but shall
not be limited to, vote by ballot, vote by hand or vote by voice. However,
no method of voting maybe adopted which fails to take account of any
shareholder's right to vote by proxy as provided for in Section 10 of this
Article II. In no event may any method of voting be adopted which would
prejudice the outcome of the vote.
Section 9. Action Without Meeting.
a. Any action required to be taken at any annual or special meeting of
shareholders of the Corporation, or any action which may be taken at any
annual or special meeting of such shareholders, may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that
would be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were
present and voted. If any class of shares is entitled to vote thereon as a
class, such written consent shall be required of the holders of a majority
of the shares of each class of shares entitled to vote thereon.
b. Within ten (10) days after obtaining such authorization by
written consent, notice must be given to those shareholders who have not
consented in writing. The notice shall fairly summarize the material
features of the authorized action and, if the action be a merger,
consolidation or sale or exchange of assets for which dissenters' rights are
provided under the Colorado Business Corporation Act, the notice shall
contain a clear statement of the right of the shareholders dissenting
therefrom to be paid the fair value of their shares upon compliance with
further provisions of the Colorado Business Corporation Act regarding the
rights of dissenting shareholders.
c. In the event that the action to which the shareholders' consent is such
as would have required the filing of a certificate under the Colorado
Business Corporation Act if such action had been voted on by shareholders at
a meeting thereof, the certificate filed under such other section shall
state that written consent has been given in accordance with the provisions
of this Article II, Section 9.
<PAGE>
Section 10. Proxies.
a. Every shareholder entitled to vote at a meeting of shareholders
or to express consent or dissent without a meeting, or his duly authorized
attorney-in-fact may authorize another person or persons to act for him by
proxy.
b. Every proxy must be signed by the shareholder or his attorney-in-fact. No
proxy shall be valid after the expiration of eleven (11) months from the
date thereof unless otherwise provided in the proxy. Every proxy shall be
revocable at the pleasure of the shareholder executing it, except as
otherwise provided in this Article II, Section 10.
c. The authority of the holder of a proxy to act shall not be revoked by the
incompetence or death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer
responsible for maintaining the list of shareholders.
d. Except when other provisions shall have been made by written
agreement between the parties, the record holder of shares held as pledges
or otherwise as security or which belong to another, shall issue to the
pledgor or to such owner of such shares, upon demand therefor and payment of
necessary expenses thereof, a proxy to vote or take other action thereon.
e. A proxy which states that it is irrevocable is irrevocable when it is
held by any of the following or a nominee of any of the following: (1) a
pledgee; (ii) a person who has purchased or agreed to purchase the shares;
(iii) a creditor or creditors of the Corporation who extend or continue to
extend credit to the Corporation in consideration of the proxy, if the proxy
states that it was given in consideration of such extension or continuation
of credit the amount thereof, and the name of the person extending or
continuing credit; (iv) a person who has contracted to perform services as
an officer of the Corporation, if a proxy is required by the contract of
employment if the proxy states that it was given in consideration of such
contract of employment and states the name of the employee and the period of
employment contracted for, and (v) a person designated by or under an
agreement as provided in Article XI hereof.
f. Notwithstanding a provision in a proxy stating that it is
irrevocable, the proxy becomes revocable after the pledge is redeemed, or
the debt of the Corporation is paid, or the period of employment provided
for in the contract of employment has terminated, or the agreement under
Article XII hereof, has terminated and, in a case provided for in Subsection
10(e)(iii) or Subsection 10(e)(iv) of this Article II becomes irrevocable
three years after the date of the proxy or at the end of the period, if any,
specified therein, whichever period is less, unless the period of
irrevocability is renewed from time to time by the execution of a new
irrevocable proxy as provided in this Article IL Section 10. This Subsection
10(f) does not affect the duration of a proxy under Subsection 10(b) of this
Article II.
g. A proxy may be revoked, notwithstanding a provision making it
irrevocable, by a purchaser of shares without knowledge of the existence of
the provision unless the existence of the proxy and its irrevocability is
noted conspicuously on the face or back of the certificate representing such
shares.
h. If a proxy for the same shares confers authority upon two (2)
or more persons and does not otherwise provide a majority of such persons
present at the meeting, or if only one is present, then that one may exercise
all the powers conferred by the proxy. If the proxy holders present at the
meeting are equally divided as to the right and manner of voting in any
particular case, the voting of such shares shall be prorated.
I. If a proxy expressly so provides, any proxy holder may appoint
in writing a substitute to act in his place.
Section 11. Voting of Shares by Shareholders.
a. Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent or proxy designated by the
Bylaws of the corporate shareholder, or, in the absence of any applicable
Bylaw, by such person as the Board of Directors of the corporate shareholder
may designate. Proof of such designation may be
<PAGE>
made by presentation of a certified copy of the Bylaws or other instrument
of the corporate shareholder. In the absence of any such designation, or in
case of conflicting designation by the corporate shareholder, the Chairman
of the Board, President any vice president secretary and treasurer of the
corporate shareholder, in that order shall be presumed to possess authority
to vote such shares.
b. Shares held by an administrator, executor, guardian or
conservator may be voted by him, either in person or by proxy, without a
transfer of such shares into his name Shares standing in the name of a
trustee may be voted by him, either in person or by proxy, but no trustee
shall be entitled to vote shares held by him without a transfer of such
shares into his name.
c. Shares standing in the name of a receiver may be voted by such receiver.
Shares held by or under the control of a receiver but not standing in the
name of such receiver, may be voted by such receiver without the transfer
thereof into his name if authority to do so is contained in an appropriate
order of the court by which such receiver was appointed.
d. A shareholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into the name of the
pledge.
c. Shares of the capital stock of the Corporation belonging to the
Corporation or held by it in a fiduciary capacity shall not be voted,
directly or indirectly, at any meeting, and shall not be counted in
determining the total number of outstanding shares.
ARTICLE III
Directors
Section 1. Board of Directors Exercise of Powers.
a. All corporate powers shall be exercised by or under the
authority of, and the business and affairs of the Corporation shall be
managed under the direction of the Board of Directors except as may be
otherwise provided in the Articles of Incorporation. If any such provision
is made in the Articles of Incorporation, the powers and duties conferred or
imposed upon the Board of Directors shall be exercised or performed to such
extent and by such person or persons as shall be provided in the Articles of
Incorporation.
b. Directors need not be residents of the state of incorporation
unless the Articles of Incorporation so require.
c. The Board of Directors shall have authority to fix the compensation of
Directors unless otherwise provided in the Articles of Incorporation.
d. A Director shall perform his duties as a Director, including
his duties as a member of any committee of the Board upon which he may
serve, in good faith, in a manner he reasonably believes to be in the best
interests of the Corporation, and with such care as an ordinarily prudent
person in a like position would use under similar circumstances.
e. In performing his duties, a Director shall be entitled to rely
on information, opinions, reports or statements, including financial data,
in each case prepared or presented by: (I) one or more officers or employees
of the Corporation whom the Director reasonably believes to be, reliable and
competent in the matters presented; (ii) counsel, public accountants or
other persons as to matters which the Director reasonably believes to be
within such persons professional or expert competence; or (iii) a committee
of the Board upon which he does not serve, duly designated in accordance
with a provision of the Articles of Incorporation or the Bylaws, as to
matters within its designated authority, which committee the Director
reasonably believes to merit confidence.
<PAGE>
f. A Director shall not be considered to be acting in good faith
if he has knowledge concerning the matter in question that would cause such
reliance described in Subsection 1(e) of this Article III to be unwarranted.
g. A person who performs his duties in compliance with this Article
III, Section 1 shall have no liability by reason of being or having been a
Director of the Corporation.
h. A Director of the Corporation who is present at a meeting of the Board
of Directors at which action on any corporate matter is taken consents
thereto unless he votes against such action or abstains from voting in
respect thereto because of an asserted conflict of interest.
Section 2. Number Election; Classification of Directors; Vacancies.
a. The Board of Directors of this Corporation shall consist of not
less than three (3) nor more than seven (7) members, unless the number of
shareholders is less than three, in which the Corporation shall have as many
directors as there are shareholders. The number of directors shall be fixed
by the initial Board of Directors. The number of directors constituting the
initial Board of Directors shall be fixed by the Articles of Incorporation.
The number of directors may be increased from time to time by the Board of
directors, but no decrease shall have the effect of shortening the term of
any incumbent director.
b. Each person named in the Articles of Incorporation as a member
of the initial Board of Directors, shall hold office until the first annual
meeting of shareholders, and until his successor shall have been elected and
qualified or until his earlier resignation, removal from office or death.
c. At the first annual meeting of shareholders and at each annual meeting
thereafter the shareholders shall elect directors to hold office until the
next succeeding annual meeting, except in case of the classification of
directors as permitted by die Colorado Business Corporation Act. Each
director shall hold office for the term for which he is elected and until
his successor shall have been elected and qualified or until his earlier
resignation, removal from office or death.
d. The shareholders, by amendment to these Bylaws, may provide that
the directors be divided into not more than four classes, as nearly equal in
number as possible, whose terms of office shall respectively expire at
different times, but no such term shall continue longer than four (4) years,
and at least one-fifth (1/5) in number of the directors shall be elected
annually.
e. If directors are classified and the number of directors is thereafter
changed, any increase or decrease in directorships shall be so apportioned
among the classes as to make all classes as nearly equal in number as possible.
f. Any vacancy occurring in the Board of Directors including any
vacancy created by reason of an increase in the number of directors, may be
filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the Board of Directors. A director elected to
fill a vacancy shall hold office only until the next election of directors
by the shareholders.
Section 3. Removal of Directors.
a. At a meeting of shareholders called expressly for that purpose,
directors may be removed in the manner provided in this Article III, Section
3. Any director or the entire Board of Directors may be removed, with or
without cause, by a vote of the holders of a majority of the shares then
entitled to vote at an election of directors.
b. If the Corporation has cumulative voting, if less than the
entire Board is to be removed, no one of the directors may be removed if the
votes cast against his removal would be sufficient to elect him if then
cumulatively voted at an election of the entire Board of Directors, or, if
there be classes of directors, at an election of the class of directors of
which he is a member.
<PAGE>
Section 4. Director Quorum and Voting.
a. A majority of the number of directors fixed in the manner
provided in these Bylaws shall constitute a quorum for the transaction of
business unless a greater number if required elsewhere in these Bylaws.
b. A majority of the members of an Executive Committee or other
committee shall constitute a quorum for the transaction of business at any
meeting of such Executive Committee or other committee.
c. The act of the majority of the directors present at a Board meeting at
which a quorum is present shall be the act of the Board of Directors.
d. The act of a majority of the members of an Executive Committee
present at an Executive Committee meeting at which a quorum is present shall
be the act of the Executive Committee.
e. The act of a majority of the members of any other committee present at a
committee meeting at which a quorum is present shall be the act of the
committee.
Section 5. Director Conflicts of Interest.
a. No contract or other transaction between this Corporation and
one or more of its directors or any other Corporation, firm, association or
entity in winch one or more of its directors are directors or officers or
are financially interested, shall be either void or voidable because of a
relationship or interest or because such director or directors arc present
at the meeting of the Bond of Directors or a committee thereof which
authorizes, approves or ratifies such contract or transaction or because his
or their votes are counted for such purpose, if:
(I) The fact of such relationship or interest is disclosed or known
to the Board of Directors or committee which authorizes, approves or
ratifies the contract or transaction by a vote or consent sufficient for the
purpose without counting the votes or consents of such interested directors; or
(ii) The fact of such relationship or interest is disclosed or known
to the shareholders entitled to vote and they authorize, approve or ratify
such contract or transaction by vote or written consent, or
(iii) The contract or transaction is fair and reasonable as to the
Corporation at the time it is authorized by the Board, a committee, or the
shareholders.
b. Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or a committee thereof
which authorizes, approves or ratifies such contract or transaction.
Section 6. Executive and Other Committees; Designation; Authority.
a. The Board of Directors, by resolution adopted by a majority of
the fail Board of Directors, may designate from among its members an
Executive Committee and one or more other committees each of which, to the
extent provided in such resolution or in the Articles of Incorporation or
these Bylaws, shall have and may exercise all the authority of the Board of
Directors, except that no such committee shall have the authority to: (1)
approve or recommend to shareholders actions or proposals required by the
Colorado Business Corporation Act to be approved by shareholders; (ii)
designate candidates for the office of director for purposes of proxy
solicitation or otherwise; (iii) fill vacancies on the Board of Directors or
any committee thereof; (iv) amend the Bylaws; or (v) authorize or approve
the issuance or sale of, or any contract to issue or sell, sham or designate
the terms of a series of class of shares, unless the Board of Directors,
having acted regarding general authorization for the issuance or sale of
shares, or any contract therefor, and, in the case of a series, the
designation thereof, has specified a general formula or method by resolution
or by adoption of a stock option or other plan, authorized a committee to
fix the terms upon which such shares may be issued or sold, including,
without limitation, the price, the rate or manner of payment of dividends,
provisions for
<PAGE>
redemption, sinking fund, conversion, and voting preferential rights, and
provisions for other features of a class of shuts, or a series of class of
shares, with full power in such committee to adopt any final resolution
setting forth all the terms thereof and to authorize the statement of the
tam of a series for filing with the Secretary of State under the Colorado
Business Corporation Act.
b. The Board, by resolution adopted in accordance with Article
III, Subsection 6(a) may designate one or more directors as alternate
members of any such committee, who may act in the place and stead of any
absent member or members at any meeting of such committee.
c. Neither the designation of any such committee, the delegation thereto of
authority, nor action by such committee pursuant to such authority shall
alone constitute compliance by any member of the Board of Directors, not a
member of the committee in question, with his responsibility to act in good
faith, in a manner he reasonably believes to be in the best interests of the
Corporation, and with such care as an ordinarily prudent person in a file
position would use under similar circumstances.
Section 7. Place, Time, Notice, and Call of Directors' Meetings.
a. Meetings of the Board of Directors, regular or special, may be
held either within or without this state.
b. A regular meeting of the Board of Directors of the Corporation
shall be held for the election of officers of the Corporation and for the
transaction of such other business as may come before such meeting as
promptly as practicable after the annual meeting of the shareholders of this
Corporation without the necessity of other notice than this Bylaw. Other
regular meetings of the Board of Directors of the Corporation may be held at
such times and at such places as the Board of Directors of the Corporation
may from time to time resolve without other notice than such resolution.
Special meetings of the Board of Directors may be held at any time upon call
of the Chairman of the Board or the President or a majority of the Directors
of the Corporation, at such time and at such place as shall be specified in
the call thereof Notice of any special meeting of the Board of Directors
must be given at least two (2) days prior thereto, if by written notice
delivered personally, or at least five (5) days prior thereto, if mailed;
or at least two (2) days prior thereto, if by telegram; or at least two (2)
days prior thereto, if by telephone. If such notice is given by mail, such
notice shall be deemed to have been delivered when deposited with the United
States Postal Service addressed to the business address of such director
with postage thereon prepaid. If notice be given by telegram, such notice
shall be deemed delivered when the telegram is delivered to the telegraph
company If notice is given by telephone, such notice shall be deemed
delivered when the call is completed.
c. Notice of a meeting of the Board of Directors need not be given to any
director who sips a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all objections to the place of the
meeting, the time of the meeting, or the manner in which it has been called
or convened, except when a director states, at the beginning of the meeting,
any objection to the transaction of business because the meeting is not
lawfully called or convened.
d. Neither the business to be transacted at, nor the purpose of
any regular or special meeting of the Board of Directors need be specified
in the notice or waiver of notice of such meeting.
e. A majority of the directors present; whether or not a quorum. exists, may
adjourn any meeting of the Board of Directors to another time and place.
Notice of any such adjourned meeting shall be given to the directors who
were not present at the time of the adjournment and, unless the time and
place of the adjourned meeting are announced at the time of the adjournment,
to the other directors.
f. Members of the Board of Directors may participate in a meeting of such
Board by means of a conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each
other at the same time. Participation by such means shall constitute
presence in person at a meeting.
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Section 8. Action by Directors Without a Meeting.
Any action required by the Colorado Business Corporation Act to be taken at
a meeting of the directors of the Corporation, or a committee therefrom, may
be taken without a meeting if a consent in writing, setting forth the action
so to be taken, signed by all of the directors, or all of the members of the
committee, as the case may be, is filed in the minutes of the proceedings of
the Board or of the committee. Such consent shall have the same effect as a
unanimous vote.
Section 9. Compensation.
The directors and members of the Executive and any other committee of the
Board of Directors shall be entitled to such reasonable compensation for
their services and on such basis as shall be fixed from time to time by
resolution of the Board of Directors. The Board of Directors and members of
any committee of the Board of Directors shall be entitled to reimbursement
for any reasonable expenses incurred in attending any Board or committee
meeting. Any director receiving compensation under this section shall not be
prevented from serving the Corporation in any other capacity and shall not
be prohibited from receiving reasonable compensation for such other services.
Section 10. Resignation.
Any Director of the Corporation may resign at any time without acceptance by
the Corporation. Such resignation shall be in writing and may provide that
such resignation shall take effect immediately or on any future date stated
in such notice.
Section 11. Removal.
Any Director of the Corporation may be removed for cause by a majority vote
of the other members of the Board of Directors as then constituted or with
or without cause by the vote of the holders of a majority of the outstanding
shares of capital stock shareholders of the Corporation called for such
purpose.
Section 12. Vacancies.
In the event that a vacancy shall occur on the Board of Directors of the
Corporation whether because of death, resignation, removal, an increase in
the number of directors or any other reason, such vacancy may be filled by
the vote of a majority of the remaining directors of the Corporation even
though such remaining directors represent less than a quorum. An increase in
the number of directors shall create vacancies for the purpose of this
section. A director of the Corporation elected to fill a vacancy shall hold
office for the unexpired term of his predecessor, or in the case of an
increase in the number of directors, until the election and qualification of
directors at the next annual meeting of the shareholders.
ARTICLE IV
Officers
Section 1. Election; Number Terms of Office.
a. The officers of the Corporation shall consist of a Chairman of the Board,
a President; a Secretary and a Treasurer, each of whom shall be elected by
the Board of Directors at such time and in such manner as may be prescribed
by these Bylaws. Such other officers and assistant officers and agents as
may be deemed necessary may be elected or appointed by the Board of Directors.
b. All officers and agents, as between themselves and the Corporation, shall
have such authority and perform such duties in the management of the
Corporation as are provided in these Bylaws, or as may be determined by
resolution of the Board of Directors not inconsistent with these Bylaws.
<PAGE>
c. Any two (2) or more offices may be held by the same person except the
offices of die President and Secretary.
d. A failure to elect a Chairman of the Board, President a Secretary and a
Treasurer shall not affect the existence of the Corporation.
Section 2. Removal.
An officer of the Corporation shall hold office until the election and
qualification of his successor, however, any officer of the Corporation may
be removed from office by the Board of Directors whenever in its judgment
the best interests of the Corporation will be served thereby Such removal
shall be without prejudice to the contract rights, if any, of the person so
removed. Election or appointment of any officer shall not of itself create
any contract right to employment or compensation
Section 3. Vacancies.
Any vacancy in any office from any cause may be filled for the unexpired
portion of the term of such office by the Board of Directors.
Section 4. Powers and Duties.
a. The Chairman of the Board shall be the Chief Executive Officer of the
Corporation. The Chairman of the Board shall preside at all meetings of the
shareholders and of the Board of Directors. Except where by law the
signature of the President is required or unless the Board of Directors
shall rule otherwise, the Chairman of the Board shall possess the same power
as die President to sip all certificates, contracts and other instruments of
the Corporation which may be authorized by the Board of Directors. Unless a
Chairman of the Board is specifically elected, the President shall be deemed
to be the Chairman of the Board.
b. The President shall be the Chief Operating Officer of the Corporation. He
shall be responsible for the general day-to-day supervision of the business
and affairs of the Corporation. He shall sip or countersign all
certificates, contracts or other instruments of the Corporation as
authorized by the Board of Directors. He may, but need not, be a member of
the Board of Directors. In the absence of the Chairman of the Board, die
President shall be the Chief Executive Officer of the Corporation and shall
preside at all meetings of the shareholders and the Board of Directors. He
shall make reports to the Board of Directors and shareholders. He shall
perform such other duties as are incident to his office or are properly
required of him by the Board of Directors. The Board of Directors will at
all times retain the power to expressly delegate the duties of the President
to any other officer of the Corporation.
c. The Vice-President(s), if any, in the order designated by the Board of
Directors, shall exercise the functions of the President during the absence,
disability, death, or refusal to act of the President During the time that
any Vice. President is properly exercising the functions of the President
such Vice-president shall have all the powers of and be subject to all the
restrictions upon the President Each Vice-President shall have such other
duties as me assigned to him from time to time by the Board of Directors or
by the President of the Corporation.
d. The Secretary of the Corporation shall keep the minutes of the meetings
of the shareholders of the Corporation and, if so requested, the Secretary
shall keep die minutes of the meetings of the Board of Directors of the
Corporation. Ile Secretary shall be the custodian of the minute books of the
Corporation and such other books and records of the Corporation as the Board
of Directors of the Corporation may direct. The Secretary shall make or
cause to be made all proper entries in all corporate books that the Board of
Directors of the Corporation may direct. The Secretary shall have the
general responsibility for maintaining the stock transfer books of the
Corporation, or of supervising the maintenance of the stock transfer books
of the Corporation by the transfer agent if any, of the Corporation. The
Secretary shall be the custodian of the corporate seal of the Corporation
and shall affix the corporate seal of the Corporation on contracts and other
instruments as the Board of Directors of the Corporation may direct. The
<PAGE>
Secretary shall perform such other duties as are assigned to him from time
to time by the Board of Directors or the President of the Corporation.
e. The Treasurer of the Corporation shall have custody of all funds and
securities owned by the Corporation. The Treasurer shall cause to be entered
regularly in the proper books of account of the Corporation full and
accurate accounts of the receipts and disbursements of the Corporation. The
Treasurer of the Corporation shall render a statement of cash, financial and
other accounts of the Corporation whenever he is directed to render such a
statement by the Board of Directors or by the President of the Corporation.
The Treasurer shall at all reasonable times make available the Corporation's
books and financial accounts to any Director of the Corporation during
normal business hours. The Treasurer shall perform all other acts incident
to the office of the Treasurer of the Corporation, and he shall have such
other duties as are assigned to him from time to time by the Board of
Directors or the President of the Corporation.
f. Other subordinate or assistant officers appointed by the Board
of Directors or by the President if such authority is delegated to him by
the Board of Directors, shall exercise such powers and perform such duties
as may be delegated to them by the Board of Directors or by the President as
the case may be.
g. In case of the absence or disability of any officer of the Corporation
and of any person authorized to act in his place during such period of
absence or disability, the Board of Directors may from time to time delegate
the powers and duties of such officer to any other officer or any director
or any other person whom it may select
Section 5. Salaries.
The salaries of all Officers of the Corporation shall be fixed by the Board
of Directors. No officer shall be ineligible to receive such salary by
reason of the fact that he is also a Director of the Corporation and
receiving compensation therefor.
ARTICLE V
Loans to Employees and Officers;
Guaranty of Obligations of Employees and Officers
This Corporation may lend money to, guarantee any obligation of, or
otherwise assist any officer or other employee of the Corporation or of a
subsidiary, including any officer or employee who is a Director of the
Corporation or of a subsidiary, whenever, in the judgment of the Directors,
such loan, guaranty or assistance may reasonably be expected to benefit the
Corporation. The loan, guaranty or other assistance may be with or without
interest and may be unsecured, or secured in such manner as the Board of
Directors shall approve including, without limitation, a pledge of shares of
stock of the Corporation. Nothing in this Article shall be deemed to deny,
limit or restrict the powers of guaranty or warranty of this Corporation at
common law or under any statute.
ARTICLE VI
STOCK CERTIFICATES; VOTING TRUSTS; TRANSFERS
Section 1. Certificates Representing Shares.
a. Every holder of shares in this Corporation shall be entitled to
one or more certificates, representing all shares to which he is entitled
and such certificates shall be signed by the President or a Vice President
and the Secretary or an Assistant Secretary of the Corporation and may be
sealed with the seal of the Corporation or a facsimile thereof. The
signatures of the President or Vice President and the Secretary or Assistant
Secretary may be facsimiles if the certificate is manually signed on behalf
of a transfer agent or a registrar, other than the Corporation itself or an
employee of die Corporation. In case any officer who signed or whose
facsimile signature has been placed upon such certificate
<PAGE>
shall have ceased to be such officer before such certificate is issued, it
may be used by the Corporation with the same effect as if he were such officer
at the date of its issuance.
b. Each certificate representing shares shall state upon the face
thereof. (I) the name of the Corporation; (ii) that the Corporation is
organized under the laws of this state; (iii) the name of the person or
persons to whom issued; (iv) the number and class of shares, and the
designation of the series, if any, which such certificate represents; and
(v) the par value of each share represented by such certificate, or a
statement that the shares are without par value.
c. No certificate shall be issued for any shares until such shares are
fully paid.
Section 2. Transfer: Book.
The Corporation shall keep at its registered office or principal place of
business or in the office of its transfer agent or registrar, a book (or
books where more than one kind, class, or series of stock is outstanding) to
be known as the Stock Book, containing the names, alphabetically arranged,
addresses and Social Security numbers of every shareholder, and the number
of shares of each kind, class or series of stock held of record. Where the
Stock Book is kept in the office of the transfer agent, the Corporation
shall keep at its office in the State of Colorado copies of the stock fists
prepared from said Stock Book and sent to it from time to time by said
transfer agent. The Stock Book or stock lists shall show the current status
of the ownership of sham of the Corporation provided, if the transfer agent
of the Corporation be located elsewhere, a reasonable time shall be allowed
for transit or mail.
Section 3. Transfer of Shares.
a. The name(s) and address(s) of the person(s) to whom shares of
stock of this Corporation are issued, shall be entered on the Stock Transfer
Books of the Corporation, with the number of shares and date of issuance.
b. Transfer of shares of the Corporation shall be made on the
Stock Transfer Books of the Corporation by the Secretary or the transfer
agent, only when the holder of record thereof or the legal representative of
such holder of record or the attorney-in-fact of such holder of record,
authorized by power of attorney duly executed and filed with the Secretary
or transfer agent of the Corporation, shall surrender die Certificate
representing such shares for cancellation. Lost, destroyed or stolen Stock
Certificates shall be replaced pursuant to Section 5 of this Article VI.
c. The person or persons in whose names sham stand on the books of the
Corporation shall be deemed by the Corporation to be the owner of such
shares for all purposes, except as otherwise provided pursuant to Section 10
and 11 of Article II, or Section 4 of this Article VI.
Section 4. Voting Trusts.
a. Any number of shareholders of the Corporation may create a voting trust
for the purpose of conferring upon a trustee or trustees the right to vote
or otherwise represent their shares, for a period not to exceed ten (10)
years, by: (I) entering into a written voting bust, (ii) depositing a
counterpart of the agreement with the Corporation at its registered office;
and (iii) transferring their shares to such trustee or trustees for die
purposes of this Agreement. Prior to the recording of the Agreement the
shareholder concerned shall tender the stock certificate(s) described
therein to the corporate secretary who shall note on each certificate:
"This Certificate is subject to the provisions of it voting trust agreement
dated , recorded in Minute Book ,of the Corporation.
Secretary"
b. Upon the transfer of such shares, voting bust certificates
shall be issued by the trustee or trustees to the shareholders who transfer
their share in trust Such trustee or trustees shall keep a record of the
holders of the voting
<PAGE>
trust certificates evidencing a beneficial interest in the voting trust,
giving the names and addresses of all such holders and the number and class
of the shares in respect of which the voting trust certificates held by each
are issued, and shall deposit a copy of such record with the Corporation at
its registered office.
b. Upon the transfer of such shares, voting trust certificates
shall be issued by the trustee or trustees to the shareholders who transfer
their sham in trust. Such trustee or trustees shall keep a record of the
holders of the voting trust certificates evidencing a beneficial interest in
the voting bust, giving the names and addresses of all such holders and the
number and class of the shares in respect of which the voting trust
certificates held by each are issued, and shall deposit a copy of such
record with the Corporation at its registered office.
c. The counterpart of the voting trust agreement and the copy of such
record so deposited with the Corporation shall be subject to the same right
of examination by a shareholder of the Corporation, in person or by agent or
attorney, as are the books and records of the Corporation, and such
counterpart and such copy of such record shall be subject to examination by
any holder of record of voting trust certificates either in person or by
agent or attorney, at any reasonable time for any proper purpose.
d. At any time before the expiration of a voting trust agreement
as originally fixed or as extended one or more times under this Article VI,
Subsection 4(d) one or more holders of voting bug certificates may, by
agreement in writing, extend the duration of such voting trust agreement
nominating the same or substitute trustee or trustees, for an additional
period not exceeding ten (10) years. Such extension agreement shall not
affect the rights or obligations of persons not parties to the agreement,
and such persons shall be entitled to remove their shares from the trust and
promptly to have their stock certificates reissued upon the expiration date
of the original term of the voting bust agreement. The extension agreement
shall in every respect comply with and be subject to all the provisions of
this Article VI, Section 4 applicable to the original voting trust agreement
except that the ten (10) year maximum period of duration shall commence on
the date of adoption of the extension agreement
c. The trustees under the terms of the agreements entered into under the
provisions of this Article VI, Section 4 shall not acquire the legal title
to the shares but shall be vested only with the legal right and title to the
voting power which is incident to the ownership of the shares.
Section 5. Lost, Destroyed, or Stolen Certificates.
No certificate representing shares of the stock in the Corporation shall be
issued in place of any Certificate alleged to have been lost, destroyed, or
stolen except on production of evidence, satisfactory to the Board of
Directors, of such loss, destruction or theft, and, if the Board of
Directors so requires, upon the famishing of an indemnity bond in such
amount (but not to exceed twice the fair market value of the shares
represented by the Certificate) and with such terms and with such surety as
the Board of Directors may, in its discretion, require.
ARTICLE VII
Books and Records
a. The Corporation shall keep correct and complete books and
records of account and shall keep minutes of the proceedings of its
shareholders, Board of Directors and committees of Directors.
b. Any books, records and minutes may be in written form or in any
other form capable of being converted into written form within a reasonable
time.
c. Any person who shall have been, a holder of record of one quarter of
one percent of all shares or of voting trust certificates therefor at least
six months immediately preceding his demand or shall be the holder of record
of, or the holder of record of voting trust certificates for, at least five
(5%) percent of the outstanding sham of any class or series of the
Corporation, upon written demand stating the purpose thereof, shall have the
right to examine, in person
<PAGE>
or by agent or attorney, at any reasonable time or times, for any proper
purpose, its relevant books and records of account, minutes and record of
shareholders and to make extracts therefrom.
d. No shareholder who within two (2) years has sold or offered for
sale any list of shareholders or of holders of voting trust certificates for
shares of this Corporation or any other Corporation; has aided or abetted
any person in procuring any fist of shareholders or of holders of voting
trust certificates for any such purpose; or has improperly used any
information secured through any prior examination of the books and records
of account minutes, or record of shareholders or of holders of voting trust
certificates for shares of the Corporation or any other Corporation; shall
be entitled to examine the documents and records of the Corporation as
provided in Subsection c of this Article VII. No shareholder who does not
act in good faith or for a proper purpose in making his demand shall be
entitled to examine the documents and records of the Corporation as provided
in Subsection c of this Article VII.
e. Unless modified by resolution of the shareholders, this Corporation shall
prepare not later than four (4) months after the close of each fiscal year
(I) A balance sheet showing in reasonable detail the financial
conditions of the Corporation as of the date of its fiscal year.
(ii) A profit and loss statement showing the results of its operation during
its fiscal year.
f. Upon the written request of any shareholder or holder of voting
bust certificates for shuts of the Corporation, the Corporation shall mail
to such shareholder or holder of voting trust certificates a copy of its
most recent balance sheet and profit and loss statement
g. Such balance sheets and profit and loss statements shall be
filed and kept for at least five (5) years in the registered office of the
Corporation in this state and shall be subject to inspection during business
hours by any shareholder or holder of voting bust certificates.
ARTICLE VIII
Dividends
The Board of Directors of the Corporation may, from time to time, declare
and the Corporation may pay dividends on its shares in cash, property or its
own shares, except when the Corporation is insolvent or when the payment
thereof would render the Corporation insolvent subject to the following
provisions:
a. Dividends in cash or property may be declared and paid, except as
otherwise provided in this Article VIII, only out of the unreserved and
unrestricted earned surplus of the Corporation or out of capital surplus,
however arising, but each dividend paid out of capital surplus shall be
identified as a distribution of capital surplus, and the amount per share
paid from such capital surplus shall be disclosed to the shareholders
receiving the same concurrently with the distribution.
b. Dividends may be declared and paid in the Corporation's treasury shares.
c. Dividends may be declared and paid in the Corporation's authorized but
unissued shares out of any unreserved and unrestricted surplus of the
Corporation upon the following conditions:
(I) If a dividend is payable in the Corporation's own sham having a par
value, such shares shall be issued at not less than the par value thereof
and there shall be transferred to stated capital at the time such dividend
is paid an amount of surplus equal to the aggregate par value of the shares
to be issued as a dividend.
(ii) If a dividend is payable in the Corporation's own shares without par
value, such shares shall be issued at such stated value as shall be fixed by
the Board of Directors by resolution adopted at the time such dividend
<PAGE>
is declared, and there shall be transferred to stated capital at the time
such dividend is paid an amount of surplus equal to the aggregate stated
value so fixed in respect of such shares; and the amount per share so
transferred to stated capital shall be disclosed to the shareholders
receiving such dividend concurrently with the payment thereof
d. No dividend payable in sham of any class shall be paid to the
holders of shares of any other class unless the Articles of Incorporation so
provide or such payment is authorized by the affirmative vote or written
consent of the holders of at least a majority of the outstanding shares of
the class in which the payment is to be made.
e. A split up or division of the issued shares of any class into a greater
number of shares of the same class without increasing the stated capital of
the Corporation shall not be construed to be a stock dividend within the
meaning of this Article VIII.
ARTICLE IX
Indemnification.
Section 1. Action, etc. Other Than by or in the Right of the Corporation.
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding or investigation, whether civil, criminal or
administrative, and whether external or internal to the Corporation, (other
than a judicial action or suit brought by or in the right of the
Corporation) by reason of the fact that he is or was a director, officer:,
employee or agent of the Corporation, or that, being or having been such a
director, officer; employee or agent he is or was serving at the request of
the Corporation as a director, officer, employee, or trustee or agent of
another corporation, partnership, joint venture, trust or other enterprise
(all such persons being referred to hereafter as an "Agent"), against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding, or any appeal therein, if such person acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and with respect to any criminal
action or proceeding, had no reasonable cause to believe such conduct was
unlawful. The termination of any action, suit or proceeding -- whether by
judgment order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent-- shall not of itself, create a presumption that the person
did not act in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interests of the Corporation, and, with
respect to any criminal action or proceeding, that such person had
reasonable cause to believe that his conduct was unlawful.
Section 2. Action, etc., by or in the Right of the Corporation.
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
judicial action or suit brought by or in the right of the Corporation to
proem a judgment in its favor by reason of the fact that he is or was an
Agent (as defined above) against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense,
settlement or appeal of such action or suit if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable for gross negligence or willful misconduct in the
performance of his or her duty to the Corporation unless and only to the
extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the court shall
deem proper.
Section 3. Determination of Right of Indemnification.
Any indemnification under Section 1 or 2 (unless ordered by a court) shall
be made by the Corporation unless a determination is reasonably and promptly
made (I) by the Board by a majority vote of a quorum consisting of directors
who Avert not parties to such action, suit or proceeding, or (ii) if such a
quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested directors so directs, by independent legal counsel in a
written opinion, or (iii) by the
<PAGE>
stockholders, that such person acted in bad faith and in a manner that such
person did not believe to be in or not opposed to the best interests of the
Corporation, or, with respect to any criminal proceeding, that such person
believed or had reasonable cause to believe that his conduct was unlawful.
Section 4. Indemnification Against Expenses of Successful Party.
Notwithstanding the other provisions of this Article, to the extent that an
Agent has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice or the settlement
of an action without admission of liability, in defense of any proceeding or
in defense of any claim, issue or matter therein, or on appeal from any such
proceeding, action, claim or matter, such Agent shall be indemnified against
all expenses incurred in connection therewith.
Section 5. Advances of Expenses.
Except as limited by Section 6 of this Article, costs, charges and expenses
(including attomeys' fees) incurred in any action, suit, proceeding or
investigation or any appeal therefrom shall be paid by the Corporation in
advance of the final disposition of such matter, if the Agent shall
undertake to repay such amount in the event that it is ultimately
determined, as provided herein, that such person is not entitled to
indemnification. Notwithstanding the foregoing, no advance shall be made by
the Corporation if a determination is reasonably and promptly made by the
Board of Directors or if a majority vote of a quorum of disinterested
directors cannot be obtained, then by independent legal counsel in a written
opinion, that based upon the facts known to the Board or counsel at the time
such determination is made, such person acted in bad faith and in a manner that
such person did not believe to be in or not opposed to the best interest of
the Corporation, or, with respect to any criminal proceeding, that such
person believed or had reasonable cause to believe his conduct was unlawful.
In no event shall any advance be made in instances where the Board or
independent Legal counsel reasonably determines that such person
deliberately breached his duty to the Corporation or its shareholders.
Section 6. Right of Agent to Indemnification Upon Application;
Procedure Upon Application.
Any indemnification under Sections 1, 2 and 4 or advance under Section 5 of
this Article, shall be made promptly, and in any event within ninety (90)
days, upon the written request of the Agent unless with respect to
applications under Sections 1, 2 or 5, a determination is reasonably and
promptly made by the Board of Directors by a majority vote of a quorum of
disinterested directors that such Agent acted in a manner set forth in such
Sections as to justify the Corporation's\ not indemnifying or making an
advance to the Agent In the event no quorum of disinterested directors is
obtainable, the Board of Directors shall promptly direct that independent
legal counsel shall decide whether the Agent acted in the manner set forth
in such Sections as to justify the Corporation's not indemnifying or making
an advance to the Agent. The right to indemnification or advances as granted
by this Article shall be enforceable by the Agent in any court competent
jurisdiction, if the Board or independent legal counsel denies the claim, in
whole or in part, or if no disposition of such claim is made within ninety
(90) days. Ile Agent's costs and expenses incurred in connection with
successfully establishing his right to indemnification, in whole or in part,
in any such proceeding shall also be indemnified by the Corporation.
Section 7. Contribution.
in order to provide for just and equitable. contribution in circumstances in
which the indemnification provided for in this Article is held by a court of
competent jurisdiction to be unavailable to an indemnities in whole or part
the Corporation shalt in such an event after taking into account among other
things, contributions by other directors and officers of the Corporation
pursuant to indemnification agreements or otherwise, and, in the absence of
personal enrichment, acts of intentional fraud or dishonesty or criminal
conduct on the part of the Agent, contribute to the payment of Agent's
losses to the extent that, after other contributions are taken into account,
such losses exceed: (1) in the case of a director of the Corporation or any
of its subsidiaries who is not an officer of the Corporation or any of such
subsidiaries, the amount of fees paid to him for serving as a director
during the 12 months preceding the commencement of the suit proceeding or
investigation; or (ii) in the case of a director of the Corporation or any
of its subsidiaries who
<PAGE>
is also an officer of the Corporation or any of such subsidiaries, the
amount set forth in clause (I) plus 5% of the aggregate cash compensation
paid to said director for service in such office(s) during the 12 months
preceding the commencement of the suit proceeding or investigation; or (iii)
in the case of an officer of the Corporation or any of its subsidiaries, 5%
of the aggregate cash compensation paid to such officer of service in such
office(s) during the 12 months preceding the commencement of such suit,
proceeding or investigation.
Section 8. Other Rights and Remedies.
The indemnification provided by this Article shall not be deemed exclusive
of, and shall not affect, any other rights to which an Agent seeking
indemnification may be entitled under any law, Bylaw, or charter provision,
agreement vote of stockholders or disinterested directors or otherwise, both
as to action in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person who has ceased
to be an Agent and shall inure to the benefit of the heirs, executors and
administrators of such a person. All rights to indemnification under this
Article shall be deemed to be provided by a contract between the Corporation
and the Agent who serves in such capacity at any time while these Bylaws and
other relevant provisions of the general corporation law and other
applicable law, if any are in effect Any repeal or modification thereof
shall not affect any rights or obligations then existing.
Section 9. Insurance.
Upon resolution passed by die Board, the Corporation may purchase and
maintain insurance on behalf of any person who is or was an Agent against
any liability asserted against such person and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify such person against such
liability under die provisions of this Article. The Corporation may create a
trust fund, grant a security interest or use other means (including,
without limitation, a letter of credit) to ensure the payment of such sums
as may become necessary to effect indemnification as provided herein.
Section 10. Constitution Corporation.
For the purposes of this Article., references to the "Corporation" include
all constituent corporations absorbed in a consolidation or merger as well
as the resulting or surviving corporation, so that any person who is or was
a director, officer, employee, agent or trustee of such a constituent
corporation or who, being or having been such a director, officer, employee
or trustee, is or was serving at the request of such constituent corporation
as a director, officer, employee, agent or trustee of another corporation,
partnership, joint venture, Mist or other enterprise shall stand in the same
position under the provisions of this Article with respect to the resulting
or surviving corporation as such person would if he had served the resulting
or surviving corporation in the same capacity.
Section 11. Other Enterprises, Fines and Serving at Corporation's Request.
For purposes of this Article, references to "other enterprise" in Sections 1
and 10 shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to any employee
benefit plan-, and references to "serving at the request of the Corporation"
shall include any service by Agent as director, officer, employee, trustee
or agent of the Corporation which imposes duties on, or involves services
by, such Agent with respect to any employee benefit plan, its participants,
or beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the Corporation" as referred to
in this Article.
Section 12. Savings Clause.
If this Article or any portion thereof shall be invalidated on any ground by
any court of competent jurisdiction, then the Corporation shall nevertheless
indemnify each Agent as to expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement. with respect to any action, suit,
appeal, proceeding or investigation, whether civil,
<PAGE>
criminal or administrative, and whether internal or external, including a
grand jury proceeding and an action or suit brought by or in the right of
the Corporation, to the full extent permitted by any applicable portion of
this Article that shall not have been invalidated, or by any other
applicable law.
ARTICLE X
Amendment of Bylaws
a. The Board of Directors shall have the power to amend, alter, or
repeal these Bylaws, and to adopt new Bylaws, from time to time.
b. The shareholders of the Corporation, may, at any annual meeting
of the shareholders of the Corporation or at any special meeting of the
shareholders of the Corporation called for the purpose of amending these
Bylaws, amend, alter, or repeal these Bylaws, and adopt new Bylaws, from
time to time.
c. The Board of Directors shall not have the authority to adopt or amend
any Bylaw if such new Bylaw of such amendment would be inconsistent with any
Bylaw previously adopted by the shareholders of the Corporation. The
shareholders may prescribe in any Bylaw made by them that such Bylaw shall
not be altered, amended or repealed by the Board of Directors.
ARTICLE XI
Shareholder Agreements
Unless the shares of this Corporation are listed on a national securities
"change or are regularly quoted by licensed securities dealers and brokers,
all the shareholders of this Corporation may enter into agreements relating
to any phase of business and affairs of the Corporation and which may
provide for, among other things, the election of directors of the
Corporation in a manner determined without reference to the number of shares
of capital stock of the Corporation owned by its shareholders, the
determination of management policy, and division of profits. Such agreement
may restrict the discretion of the Board of Directors and its management of
the business of the Corporation or may treat the Corporation as if it were a
partnership or may arrange the relationships of the shareholders in a manner
that would be appropriate only among partners. In the event such agreement
shall be inconsistent in whole or in part with the Articles of Incorporation
and/or Bylaws of the Corporation, the terms of such agreement shall govern.
Such agreement shall be binding upon any transferee of shares of THIS
corporation provided such transferee has actual notice thereof or a legend
referring to such agreement is noted on the face or back of the certificate
or certificates representing the shares transferred to such transferee.
ARTICLE XII
Fiscal Year
The Fiscal Year of this Corporation shall be determined by the Board of
Directors.
Date: 12-22-95
/s/William R. Barber
Secretary
[SEAL]
<PAGE>
FIRST AMENDMENT TO
BYLAWS
OF
LAKOTA ENERGY, INC.
F/K/A CHANCELLOR TRADING GROUP, INC.
A COLORADO CORPORATION
Pursuant to unanimous written consent of the Directors on June
11, 1999, Article III, Directors, Section 2, Subsection a. of the
Bylaws is hereby restated in its entirety to read as follows:
"Section 2. Number; Election; Classification of Directors; Vacancies.
a. The Board of Directors of this Corporation shall consist
of not less than three (3) nor more than eleven (11) members, unless
the number of shareholders is less than three, in which the
Corporation shall have as many directors as there are shareholders.
The number of directors shall be fixed by the initial Board of
Directors. The number of directors constituting the initial Board
of Directors shall be fixed by the Articles of Incorporation. The
number of directors may be increased from time to time by the Board
of Directors, but no decrease shall have the effect of shortening
the term of any incumbent director."
CERTIFICATION
I, Howard Wilson, hereby certify that:
I am the Secretary of Lakota Energy, Inc., a Colorado corporation, and
The foregoing First Amendment to Bylaws of Lakota Energy, Inc. f/k/a
Chancellor Trading Group, Inc., consisting of one (1) page, is
a true and correct copy of the First Amendment to Bylaws of Lakota
Energy, Inc. f/k/a Chancellor Trading Group, Inc. as duly adopted by
an affirmative vote by a majority of the Shareholders on July 16, 1999.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
seal of the Corporation this 16th day of July, 1999.
/s/Howard Wilson
Secretary
CUTLER LAW GROUP LETTERHEAD
January 19, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, DC 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 sale of 2,175,000 shares of the Registrant's Common Stock issued
to certain individuals for advisory and consulting services
(the "Shares").
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 sold as set forth in the Registration Statement, will be legally issued,
fully paid and nonassessable.
We hereby consent to the inclusion of this opinion in the Registration
Statement and to the filing of this opinion as Exhibit 5.1 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.
Cutler Law Group
/s/ Cutler Law Group
Cutler Law Group
CONSULTING AGREEMENT
--------------------
CONSULTING AGREEMENT dated as of January 17, 2000 between LAKOTA
TECHNOLOGIES, INC., a Colorado corporation, ("Lakota"), on the one hand, and M.
RICHARD CUTLER ("Cutler"), BRIAN A. LEBRECHT ("Lebrecht"), and VI BUI ("Bui"),
on the other hand. Each of Cutler, Lebrecht, and Bui shall be referred to as a
"Consultant" and collectively as the "Consultants").
WHEREAS:
A. Consultants have agreed to render consulting services with regard to
the negotiation and completion of a stock exchange between Lakota and the
majority shareholders of AGM, Inc., a Nevada corporation (the "AGM
Shareholders").
B. In the event Lakota is able to complete the Stock Exchange with the
AGM Shareholders, Lakota wishes to compensate Consultants for their consulting
services.
NOW THEREFORE, it is agreed:
1. Cash Compensation. Lakota shall pay by bank wire to Consultants, or
their assigns, a consulting fee of $50,000.00 immediately upon the execution of
a stock exchange agreement with the AGM Shareholders. The fee shall be
accounted for as follows: $40,000 to Cutler and $10,000 to Lebrecht.
2. Stock Compensation. Lakota shall pay and cause to be issued to
Consultants, or their assigns, a consulting fee of 1,500,000 shares of common
stock of Lakota (the "Shares") immediately upon the execution of a stock
exchange agreement with the AGM Shareholders. The parties hereto agree that the
value of such Shares shall be 50% of the average closing bid price for the 5
business days preceding this Agreement. The Shares shall be issued in the
following manner: 1,050,000 shares to Cutler, and 225,000 shares to each of
Lebrecht and Bui. Such shares shall be subject to registration by Lakota on
Form S-8, at Lakota's sole expense, within 15 days of Lakota becoming eligible
for such registration.
3. Miscellaneous. This Agreement (i) shall be governed by the laws of
the State of California; (ii) may be executed in counterparts each of which
shall constitute an original; (iii) shall be binding upon the successors,
representatives, agents, officers and directors of the parties; and (iv) may not
be modified or changed except in a writing signed by all parties.
<PAGE>
This Consulting Agreement has been executed as of the date first above
written.
LAKOTA TECHNOLOGIES, INC.
/s/ Ken Honeyman /s/ M. Richard Cutler
_______________________________ ______________________________
By: Ken Honeyman, President M. Richard Cutler
/s/ Brian A. Lebrecht /s/ Vi Bui
_______________________________ ______________________________
Brian A. Lebrecht Vi Bui
CUTLER LAW GROUP LETTERHEAD
January 18, 2000
Via Facsimile (770) 433-9194
Ken Honeyman
Lakota Technologies, Inc.
2849 Paces Ferry Road, Suite 710
Atlanta, GA 30339
Dear Ken:
This letter will confirm our agreement as to the following:
1. The 475,000 shares of common stock previously issued to MRC Legal
Services Corporation and/or Brian A. Lebrecht shall be registered on Form S-8
within 15 days of the Company's eligibility to do so; and
2. An additional 200,000 shares of restricted common stock will be
issued to MRC Legal Services Corporation in exchange for a credit to the
outstanding balance owing to this firm by Lakota of the lesser of (i) the entire
balance due and owing as of January 31, 2000, or (ii) $25,000. These additional
shares shall also be registered on Form S-8 within 15 days of the Company's
eligibility to do so.
Please indicate your acceptance of the terms hereof by your signature
below.
Sincerely,
/s/ Brian A. Lebrecht
Brian A. Lebrecht, Esq.
Lakota Technologies, Inc.
/s/ Ken Honeyman
_______________________________
By: Ken Honeyman, President
CONSENT OF INDEPENDENT AUDITORS'
--------------------------------
We hereby consent to the use in this Form S-8 of Lakota Technologies, Inc.,
of our audit report dated September 15, 1999 of Lakota Technologies, Inc.
for the year ended December 31, 1998 and the six months ended June 30, 1999,
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
January 19, 2000
