SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities and Exchange
Act of 1934 for the quarterly period ended June 30, 1998
[ ] Transitional report for Section 13 or 15(d) of the Securities and Exchange
Act of for the transaction period from to .
Commission file number 0-20033
AMERIRESOURCES TECHNOLOGIES, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 84-1084784
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
8815 E. Long Street Lenexa, Kansas 66215
(Address of Principal Executive Offices) (Zip Code)
(913) 859-9292
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
The number of shares outstanding shares of the issuer's common stock
$0.0001 par value (the only class of voting stock), as of August 19, 1998, was
220,149,781.
<PAGE>
TABLE OF CONTENTS
PART I
ITEM 1. FINANCIAL STATEMENTS................................................. 3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS..................................4
PART II
ITEM 1. LEGAL PROCEEDINGS.....................................................7
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.......................................7
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K......................................8
SIGNATURES.....................................................................9
INDEX TO EXHIBITS.............................................................10
[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]
2
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PART I
ITEM 1. FINANCIAL STATEMENTS
As used herein, the term "Company" refers to AmeriResource
Technologies, Inc., a Delaware corporation, and its subsidiaries and
predecessors unless otherwise indicated. Consolidated, unaudited, condensed
interim financial statements including a balance sheet for the Company as of the
quarter ended June 30, 1998, and statements of operations, statements of
shareholders equity and statements of cash flows for the interim period up to
the date of such balance sheet and the comparable period of the preceding year
are attached hereto as Pages F-1 through F-6 and are incorporated herein by this
reference.
[THIS SPACE HAS BEEN LEFT BLANK INTENTIONALLY.]
3
<PAGE>
AMERIRESOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES
Unaudited Consolidated Condensed Balance Sheet
June 30, 1998
ASSETS
Current Assets:
Cash and cash equivalents .............................. $ 234
Receivables:
Trade .............................................. 730,285
Related party ...................................... 14,471
Notes receivable - related party ................... 332,904
Notes receivable - other ........................... 75,000
Other receivables .................................. 193,000
Allowance for doubtful accounts .................... (583,855)
-----------
Net receivables ................................. 762,039
Prepaid insurance and other current assets ............. 50,249
-----------
Total current assets ......................... 812,288
Property, Plant and Equipment - Net ......................... 20,384
Other Assets
Marketable securities .................................. 189,357
-----------
Total Assets ................................................ $ 1,022,029
===========
F-1
<PAGE>
AMERIRESOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES
Unaudited Consolidated Condensed Balance Sheet
June 30, 1998
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable:
Trade .......................................... $ 634,213
Related party .................................. 69,126
Current portion of long-term debt:
Related party .................................. 552,849
Other .......................................... 255,769
Accrued payroll and related ........................... 646,907
Accrued interest:
Related party ..................................... 97,473
Other ............................................. 77,760
Income tax payable .................................... 35,960
-----------
Total Current Liabilities ...................... 2,370,057
Long-Term Debt: Net of current portion ..................... 1,680,939
Commitments and Contingencies .............................. 105,000
-----------
Total Liabilities .............................. $ 4,155,996
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value;
authorized 10,000,000 shares;
Series A, issued and outstanding,
3,089,621 shares authorized .............................. 3,090
Common stock, $.0001 par value;
authorized, 500,000,000 shares;
issued and outstanding, 217,249,540 shares ............... 21,724
Additional paid-in capital ................................. 6,532,257
Common stock held in treasury;
3,600 shares at cost ..................................... (5,625)
Accumulated deficit ........................................ (9,685,413)
-----------
Total Stockholders' Equity ................................. $(3,133,967)
-----------
Total Liabilities and Stockholders' Equity ................. $ 1,022,029
===========
F-2
<PAGE>
AMERIRESOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES
Unaudited Consolidated Condensed Statements of Operations
For the Six Months Ended June 30, 1998 and 1997
Three Months Six Months
Ended Ended
June 30, June 30,
1998 1998
----------------- --------------
Net service income ....................... $ -- $ --
Operating expenses ....................... -- --
General and administrative expenses ...... 62,630 73,591
Loss from sold and closed subsidiaries ... -- --
----------- -----------
Operating loss ...................... (62,630) (73,591)
Net loss before income tax ............... (62,630) (73,591)
Income tax provision ..................... -- --
----------- -----------
Net loss ................................. (62,630) (73,591)
Net loss per common share ................ $ (0.00) $ (0.00)
Weighted average common shares outstanding 199,570,961 181,892,382
F-3
<PAGE>
AMERIRESOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES
Unaudited Consolidated Condensed Statement of Stockholders' Equity
For the Six Months Ended June 30, 1998
<TABLE>
<CAPTION>
$.0001 Par Value $.0001 Par Value
Common Stock Preferred Stock
Number Additional
Accumulated Number Paid-In Treasury
of Shares Amount of Shares Amount Capital Stock Deficit Total
------------- -------- --------- -------- ---------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997 ......... 164,213,803 $ 16,420 3,089,621 $ 3,090 $ 6,348,204 $ (5,625) $(9,611,822) $(3,249,733)
Issued shares in exchange for
shares of Flexweight Corporation ... 16,257,166 1,626 160,946 162,572
Issued shares in exchange for
shares of Kelly's Coffee Group, Inc. 2,678,571 268 26,517 26,785
Issuance of shares for:
S-8 options exercised .............. 34,100,000 3,410 (3,410) --
Net loss for the six months ended
June 30, 1998 ...................... (73,591) (73,591)
----------- -------- --------- ------ ---------- --------- ---------- ----------
Balance at June 30, 1998 ............. 217,249,540 $ 21,724 3,089,621 $ 3,090 $ 6,532,257 $ (5,625) $(9,685,413) $(3,133,967)
=========== ======== ========= ====== ========== ======== ========== ==========
</TABLE>
F-4
<PAGE>
AMERIRESOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES
Unaudited Consolidated Condensed Statements of Cash Flows
For the Six Months Ended June 30, 1998
Six Months
Ended
June 30,
1998
--------
Reconciliaton of net loss provided by (used in) operating activities:
Net loss ............................................................ $(73,591)
Non-cash items:
Depreciation and amortization .................................. 50,824
Provision for bad debts ........................................ --
Changes in assests affecting operations - increase (decrease)
Accounts receivable ............................................ --
Other receivables .............................................. --
Work-in-process ................................................ --
Prepaid insurance and other expenses ........................... --
Changes in liabilities affecting operations - increase (decrease)
Accounts payable ............................................... 19,146
Accrued payroll and related .................................... --
Accured interest ............................................... --
Commitments and contingencies .................................. --
Other current liabilities ...................................... --
--------
Net cash provided by (used in) operating activities ................. (3,621)
Cash flows from financing activities:
Proceeds from issuance of debt ................................. --
Repayment of debt .............................................. --
--------
Net cash provided by financing activities ........................... --
Net cash used in investing activities ............................... --
Increase (decrease) in cash ......................................... (3,621)
Cash - beginning of period .......................................... 3,855
Cash - end of period ................................................ $ 7,476
========
F-5
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AMERIRESOURCE TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30, 1998
1. Summary of Significant Accounting Policies
The accompanying financial statements have been prepared in accordance
with the instructions of Form 10-QSB and do not include all of the information
and footnotes required by Generally Accepted Accounting Principles for complete
accounting statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included.
2. Corporations Included in the Consolidated Financial Statements
Name Location
----------------------------------- ------------
KLH Engineers & Contractors, Inc. Closed
KLH Engineering of Colorado Springs, Inc. Closed
KLH Engineering of Lakewood, Inc. Closed
KLH Engineering of Grand Junction, Inc. Closed
KLH Engineering of San Mateo, Inc. Closed
KLH Engineering of Greeley, Inc. Closed
Tomahawk Construction Company, Inc. Lenexa, Kansas
3. Basis of Presentation and Principles of Consolidation
The consolidated financial statements include the combined accounts of
AmeriResource Technologies, Inc., Tomahawk Construction and the accounts of all
the closed subsidiaries. All material intercompany transactions have been
eliminated in consolidation.
4. Additional footnotes included by reference
Except as indicated in Notes above, there have been no other material
changes in the information disclosed in the notes to the financial statements
included in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1997. Therefore, those footnotes are included herein by reference.
F-6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
General
The Company's primary line of business is currently being conducted
through Tomahawk Construction Company, a wholly owned subsidiary ("Tomahawk").
Tomahawk has traditionally focused its operations on a wide range of
construction projects as a qualified American Indian Minority Business
Enterprise. Tomahawk's construction projects have included utility work,
earthwork, structural concrete, bridge work, asphalt and concrete paving,
commercial buildings, pump stations and treatment plants.
Unfortunately, Tomahawk's ability to generate revenues has been
seriously stifled as a result of filing Chapter 11 Bankruptcy on September 15,
1994. Although Tomahawk emerged from Bankruptcy on August 25, 1995, it has been
unable to obtain any substantial construction contracts. Nonetheless, Tomahawk
continues to bid for new construction projects. (For more information on
Tomahawk's Bankruptcy proceedings, see the Company's Form 10KSB for December 31,
1997.)
As a result of the Company's inability to generate revenues, as it did
in the past through a competitive bidding process, the Company has decided to
shift its operational focus. The Company is in the process of implementing a new
plan of operation in order to satisfy its debts and create operating revenues.
The Company's plan is threefold.
1. The Company plans to reduce its debt through eliminating all of its
engineering subsidiaries.
The Company currently has 10 closed subsidiaries with no
significant assets. The Company is currently in negotiations to sell
off all of these subsidiaries and thereby eliminate most of the
liabilities associated with these subsidiaries from its balance sheet.
The Company intends to complete the sell off by September 30, 1998.
These transactions are expected to have significant impact on the
Company's financial position in the third quarter of 1998.
2. The Company plans to create an integrated system that will focus on
providing housing to Native Americans.
The Company's goal is to position itself to provide
residential construction and lending services to Native Americans
throughout the country. On August 6, 1998, the Company took a large
step in this direction through the acquisition of First American
Mortgage Company ("FAMC"). (For more information on the FAMC
transaction, see the Company's 8-K filed on August 19, 1998). FAMC is a
mortgage company whose focus is to provide financing to Native
Americans. FAMC has already implemented its first pilot program with
the Chicksaw Nation in Oklahoma that has allowed FAMC to secure Ten
Million dollars ($10,000,000) in mortgage funding. FAMC is currently in
negotiations to obtain additional mortgage funding through three
additional Indian Nations in Oklahoma.
In addition, the Company has plans to acquire Cottonwood
Development of K.C., Inc. ("Cottonwood") whose primary line of business
will be the manufacture structural insulated panels ("SIPs"). SIPs are
an alternative to wood source or other conventional building materials
in residential and commercial construction. The advantages of SIPs are
ease of construction, better
4
<PAGE>
insulation, industry wide recognition for their resistance to lateral
loads generated by earthquakes and high winds. The Company has already
begun negotiations with the Chicksaw Nation to form a joint venture to
assist Cottonwood with its plans. Cottonwood is in the preliminary
stages of obtaining financing through private stock placements.
The Company believes that the acquisition of FAMC and the
potential acquisition of Cottonwood will provide the necessary
resources that will allow Tomahawk to secure construction projects
through the utilization of FAMC as a potential financing source and
Cottonwood as a reduced cost material source. The Company's management
believes that these three resources will allow it to better cater to
its niche market, Native Americans. The Company's management further
believes that it will be able to provide a superior product at lower
cost which will allow the Company to expand its market focus outside of
the Native American communities.
3. The Company intends to implement its plans to construct and
subsequently operate a Hydroponic facilities.
The Company through Tomahawk intends to construct a hydroponics
facility and operate it through a Hydroponics Division ("HDC"). The Company
believes that this venture will provide some diversity to the Company's overall
plan of operation. The Company is in possession of construction plans that will
allow it to build a unique hydroponics facility. The facility will utilize nexus
greenhouse structures that are a computerized system that monitors the growing
any of vine crops to include tomatoes, peppers, English cucumbers and lettuce.
The Company has conducted a feasibility study and a pro forma balance sheets
which show that the venture could be profitable. The Company is in the initial
stages of obtaining financing.
The Company's ability to bring its plans to successful fruition are
contingent upon obtaining sufficient capital which it has not successfully
obtained as of the date of this filing. However, the Company has several
prospects for obtaining conventional type loans and is utilizing equity
financing methods to obtain the necessary funds. There is no guarantee that the
Company will be able to obtain sufficient funding.
Liquidity and Capital Resources
The Company and its subsidiaries continue to have very restricted
liquidity. As reported in the Company's Form 10KSB for the year ended December
31, 1997, the Company has experienced severe financial difficulty as a result of
Bankruptcy proceedings involving its subsidiary Tomahawk. Although Tomahawk
emerged from Bankruptcy in August of 1995, Tomahawk's ability to obtain
construction projects has been severely limited as a result of those
proceedings. The Company's overall plan to improve its liquidity and capital
resources as been outline directly above.
In the interim, the Company will continue to utilize the resources of
its president Delmar Janovec until it plans begin generating revenues. Mr.
Janovec has advanced in excess of $490,000 to date to support the Company's
limited operations and has continued to work without pay since October 1, 1996.
However, there is no guarantee that Mr. Janovec will continue such support. The
Company will also utilize its common stock to compensate consultants, employees
and creditors when possible. In addition, the Company's subsidiaries Tomahawk
and FAMC are currently seeking financing through lending institutions and
private investors.
5
<PAGE>
The Company entered into several Stock Exchange Agreements during the
quarter in the hopes of improving its capital resources. On June 19, 1998, the
Company exchanged 2,678,571 shares of it common stock for 1,500,000 shares of
Kelly's Coffee Group, Inc.'s common stock. On June 19 ,1998, the Company
exchanged 16,257,166 shares of its common stock for 113,800 shares of Flexweight
Corporation's common stock. All shares issued were issued pursuant to section
4(2) of the Securities Act of 1933. The Company acquired these shares as an
investment and is considering further business arrangements with these entities
in the construction arena.
The Company also issued approximately Thirty Four Million One Hundred
Thousand (34,100,000) shares of its common stock pursuant to an S-8 option plan
to pay employees and consultants. Subsequent to the issuance of these shares the
Company discovered that it had not properly filed a required Financial Data
Schedule with its Form 10QSB for the period ended March 31, 1998. The Company
has subsequently submitted the required Financial Data Schedule. This oversight,
however, may have jeopardized the validity of its Form S-8.
During the quarter ended June 30, 1998, the Company's working capital
deficit was approximately $1,557,769. The Company has no comparison for the same
quarter in 1997 because no financial statement was prepared for that quarter.
Furthermore, the Company can not produce such statements due to a lack of cash
flow which would be required in order to recompile financials for that quarter.
However, the Company believes that a comparison is of no material value given
that the Company's poor financial position this year stems from the Company's
inability to produce revenues as a result of Tomahawks now concluded Bankrupcty.
Any changes in the Company's working capital deficit is believed to be
immaterial.
Net stockholders' equity in the Company was a deficit of $3,133,967, as
of June 30, 1998. Due to the financial difficulties that the Company experienced
in 1997 no quarterly financials were filed for the quarter ended June 30, 1997.
However, the Company's net stockholder's equity for June 30, 1997, was also a
significant deficit. The Company's deficit is a result of the Company's
inability to generate construction revenues and the accumulation of debts in its
inoperable engineering subsidiaries prior to current managements involvement
with the Company.
The Company believes its proposed plans will enable the Company to
substantially reduce its debt for third quarter of 1998 through the elimination
of unprofitable debt ridden subsidiaries should allow the Company to reduce or
perhaps eliminate its net stockholder's equity deficit and decrease its working
capital deficit. In addition, the Company anticipates that its plans involving
FAMC, Cottonwood, HDC and Tomahawk will hopefully allow the Company to begin
producing some revenues before the end of the year.
Results of Operations
The Company's operations for the second quarter consisted of bidding
for construction projects and formulating a plan of operation. The Company was
unsuccessful at its attempts to procure revenue construction projects during the
quarter. However, the Company made significant progress towards its plan of
operation, including the signing of an agreement which allowed the Company to
acquire a 100% interest in FAMC subsequent to the end of the second quarter.
(For more information on the acquisition of FAMC, see the Company's Form 8-K
filed on August 19, 1998)
Net service income for the quarter ended June 30, 1998, was $ 0. Although
no comparable numbers are available, the net service income was nominal for the
same period in 1997. Unfortunately, the Company
6
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had no net service income because of Tomahawks inability to procure any revenue
construction projects. Likewise, in the comparable quarter in 1997, the Company
was unable to procure any significant construction projects
Operating expenses were $0 for the quarter ended on June 30, 1998. No
comparable numbers are available for the comparable period in 1997. However, the
operating expenses for the comparable quarter in 1997 are believed to have been
significantly higher given that the operating expenses were $737,256 for the
year ended December 31, 1997. The decrease in operating expenses is a result of
the Company's lack of construction operations.
General, and administrative expenses were $62,630 for the quarter ended
on June 30,1998. Again , the Company has no comparable for the same period in
1997. The Company does not believe, however, that there is any material
difference in general and administrative expenses for the comparable period. The
Company's administrative staff consists of three employees and the
administration of the Company and other related expenses have not changed
significantly since the first quarter of 1997.
The Company's net loss was $62,630 for the quarter ended on June 30,
1998. Again, the Company has no comparable for the same period in 1997. However,
the Company believes that the net loss in the comparable quarter in 1997 was
substantially higher due to the fact that the Company has significantly reduced
its expenses in both first and second quarter 1998.
The management highly recommends reading this Form 10QSB/A in
conjunction with the Company's Form 10KSB for the year ended December 31, 1997,
in order to gain a more complete picture of the Company's financial condition in
light of the fact that no substantiated comparable numbers were available for
the quarter ended June 30, 1997.
PART II
ITEM 1. LEGAL PROCEEDINGS
The only change in the Company's legal proceedings during the second
quarter occurred in regards to the following case:
American Factors Group, LLC v. AmeriResources Technologies, Inc. - In
February 1997, a complaint was filed against the Company and certain
subsidiaries for breach of contract and fraud in the extension of credit on a
factoring agreement. The Company disputes this claim in that the contract called
for American Factors Group to purchase the receivables from the Company on a
non-recourse basis. American Factors Group, LLC claims it is owed $291,044 plus
interest. The Company's demand to arbitrate was granted. Subsequent to June 30,
1998, the matter was submitted to arbitration case No. 13 181 01190 97. The
Company's counsel has advised the Company that the arbitrator will likely make a
decision by the middle of August of 1998.
For additional information regarding the Company's legal proceeding,
see the Company's "Legal Proceedings" section in its Form 10KSB for December 31,
1997.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
7
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The Company has defaulted upon interest and principal with respect to a
promissory note in favor of the Olivia I. Dodge Charitable Remainder Unitrust
(the "Dodge Trust") which became due on December 31, 1995. The total due as of
May 1, 1996, according to the Dodge Trust's attorney, is $169,760.80, which sum
is reflected in the accounts payable of the Company.
The Company has defaulted upon interest and principal with respect to a
$40,818.55 note in favor of the Roy Lee Johnston Trust (the "Johnston Trust").
The Johnston Trust has received a judgment in its favor on the note and has made
unsuccessful attempts to collect on the judgment. This obligation is reflected
in the accounts payable of the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required to be attached by Item 601 of Regulation S-B are
listed in the Index to exhibits on page 9 of this Form 10QSB/A and are
incorporated by reference.
(b) Reports on Form 8-K. No reports were filed on Form 8-K during the
second quarter.
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this Annual
Report on Form 10-QSB/A to be executed on its behalf by the undersigned,
thereunto duly authorized.
AMERIRESOURCE TECHNOLOGIES, INC.
/s/ Delmar Janovec August 21, 1998
Delmar Janovec
Chairman of the Board of Directors
and Chief Executive Officer
8
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INDEX TO EXHIBITS
EXHIBIT PAGE DESCRIPTION
NO. NO.
10 (i) 10 Stock Exchange Agreement dated August 7, 1998
between the Corporation and Flexweight Corporation,
a Kansas corporation.
10(ii) 16 Stock Exchange Agreement Stock Exchange Agreement
dated August 7, 1998 between the Corporation and
Kelly's Coffee Group, Inc., a Colorado corporation.
9
STOCK EXCHANGE AGREEMENT
This Stock Exchange Agreement ("Agreement") is entered into this 7th
day of August, 1998 by and between Flexweight Corporation, ("Flexweight") a
Kansas corporation with principal offices located at 1946 Plateau Way Wendover,
Nevada 89883, and AmeriResource Technologies, Inc. ("AmeriResource") a Delaware
corporation with principal offices located at 8815 E. Long Street, Lenexa,
Kansas 66215.
WHEREAS, Flexweight desires to acquire from AmeriResource approximately
Seven Million Six Hundred Ninety Two Thousand Three Hundred Eight (7,692,308)
restricted shares of the common stock of AmeriResource, in exchange for Ten
Thousand Five Hundred Twenty Six (10,526) restricted shares of the common stock
of Flexweight.
NOW, THEREFORE with the above being incorporated into and made a part
hereof for the mutual consideration set out herein and, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Exchange. Flexweight will, in a tax free exchange, acquire from
AmeriResource, Seven Million Six Hundred Ninety Two Thousand Three Hundred Eight
(7,692,308) restricted shares of the common stock of AmeriResource, valued as of
August 7, 1998 at $.013 per share, in a tax free exchange wherein AmeriResource
shall acquire Ten Thousand Five Hundred Twenty Six (10,526) restricted shares of
Flexweight common stock, valued as of August 7, 1998 at $9.50 per share.
2. Exchange of Shares. On or before the closing date, set herein to be August
21, 1998, the above-mentioned shares are to be exchanged.
3. Termination. This Agreement may be terminated at any time prior to the
Closing Date:
A. By Flexweight or AmeriResource:
(1) If there shall be any actual or threatened action or
proceeding by or before any court or any other governmental
body which shall seek to restrain, prohibit, or invalidate the
transactions contemplated by this Agreement and which, in
judgement of such Board of Directors made in good faith and
based upon the advice of legal counsel, makes it inadvisable
to proceed with the transactions contemplated by this
Agreement; or
(2) If the Closing shall have not occurred prior to August 21,
1998, or such later date as shall have been approved by
parties hereto, other than for reasons set forth herein.
B. By AmeriResource:
(1) If Flexweight shall fail to comply in any material respect
with any of its or their covenants or agreements contained in
this Agreement or if any of the representation or warranties
of Flexweight contained herein shall be inaccurate in any
material respect; or
C. By Flexweight:
(1) If AmeriResource shall fail to comply in any material
respect with any of its covenants or agreements contained in
this Agreement of if any of the representation or warranties
of AmeriResource contained herein shall be inaccurate in any
material respect;
In the event this Agreement is terminated pursuant to this Paragraph,
this Agreement shall be of no further force or effect, no obligation, right, or
liability shall arise hereunder, and each party shall bear its own costs as well
as the legal, accounting, printing, and other costs incurred in connection with
negotiation, preparation and execution of the Agreement and the transactions
herein contemplated.
<PAGE>
4. Representations and Warranties of AmeriResource. AmeriResource hereby
represents and warrants that effective this date and the Closing Date, the
following representations are true and correct:
A. Corporate Authority. AmeriResource has the full corporate
power and authority to enter this Agreement and to carry out
the transactions contemplated by this Agreement. The Board of
Directors of AmeriResource has duly authorized the execution,
delivery and performance of this Agreement.
B. Financial Statements. The latest 10-Q report ("AmeriResource
Financials") has been given to Flexweight prior to closing.
C. No Conflict With Other Instruments. The execution of this
Agreement will not violate or breach any document, instrument,
agreement, contract, or commitment material to the business of
AmeriResource to which AmeriResource is a party and has been
duly authorized by all appropriated and necessary action.
D. Information. The information concerning AmeriResource as set
forth in this Agreement and in the AmeriResource Financials is
complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to
state a material fact required to make the statements made in
light of the circumstances under which they were made not
misleading.
E. Deliverance of Shares. As of the Closing Date, the
AmeriResource Shares to be delivered to Flexweight will be
restricted and constitute valid and legally issued shares of
AmeriResource, fully paid and non-assessable and equivalent in
all respects to all other issued and outstanding shares of
AmeriResource restricted stock.
F. No Conflict with Other Instrument. The execution of this
agreement will not violate or breach any document, instrument,
agreement, contract or commitment material to AmeriResource.
G. Information. The information concerning AmeriResource and set
forth in this Agreement, is complete and accurate in all
material respects and does not contain any untrue statement of
a material fact or omit to state a material fact required to
make the statements made, in light of the circumstances under
which they were made, not misleading.
H. Restricted Shares. The shares of Flexweight common stock which
are being acquired for AmeriResource's own account and for
investment and not with a view to the public resale or
distribution thereof. AmeriResource will not sell, transfer or
otherwise dispose of the Flexweight Shares except in
compliance with the Securities Act of 1933, as amended (the
"Act"), and is aware the Flexweight Shares are "restricted
securities" as that term is defined in Rule 144 of the General
Rules and Regulations under the Act ("Rule 144").
AmeriResource acknowledges and understands that the Flexweight
Shares are unregistered in reliance of Section 4(2) of the Act
and must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such
registration is available.
AmeriResource is fully aware of the applicable limitation on
the resale of the Flexweight Shares. These restrictions for
the most part are set forth in Rule 144. Rule 144 permits
sales of "restricted securities" upon compliance with the
requirements of such rule. If Rule 144 is available to
AmeriResource, AmeriResource may make only routine sales of
securities in limited amounts, in accordance with the terms
and conditions of that Rule.
5. Representations and Warranties of Flexweight.
<PAGE>
Flexweight hereby represents and warrants that, effective this date and
the Closing Date, the representations and warranties listed below are true and
correct.
A. Corporate Authority. Flexweight has the full corporate power
and authority to enter this Agreement and to carry out the
transactions contemplated by this Agreement. The Board of
Directors of Flexweight has duly authorized the execution,
delivery, and performance of this Agreement.
B. Financial Statements. The latest 10-Q report ("Flexweight
Financials") has been given to AmeriResource prior to closing.
C. No Conflict With Other Instruments. The execution of this
Agreement will not violate or breach any document, instrument,
agreement, contract, or commitment material to the business of
Flexweight to which Flexweight is a party and has been duly
authorized by all appropriated and necessary action.
D. Information. The information concerning Flexweight as set
forth in this Agreement and in the Flexweight Financials is
complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to
state a material fact required to make the statements made in
light of the circumstances under which they were made not
misleading.
E. Deliverance of Shares. As of the Closing Date, the Flexweight
Shares to be delivered to AmeriResource will be restricted and
constitute valid and legally issued shares of Flexweight fully
paid and non-assessable and equivalent in all respects to all
other issued and outstanding shares of Flexweight restricted
stock.
F. No Conflict with Other Instrument. The execution of this
agreement will not violate or breach any document, instrument,
agreement, contract or commitment material to Flexweight.
G. Information. The information concerning Flexweight and set
forth in this Agreement, is complete and accurate in all
material respects and does not contain any untrue statement of
a material fact or omit to state a material fact required to
make the statements made, in light of the circumstances under
which they were made, not misleading.
H. Restricted Shares. The shares of AmeriResource common stock
which are being acquired for Flexweight's own account and for
investment and not with a view to the public resale or
distribution thereof. Flexweight will not sell, transfer or
otherwise dispose of the AmeriResource Shares except in
compliance with the Securities Act of 1933, as amended (the
"Act"), and is aware the AmeriResource Shares are "restricted
securities" as that term is defined in Rule 144 of the General
Rules and Regulations under the Act ("Rule 144")
Flexweight acknowledges and understands that the Shares are
unregistered in reliance of Section 4(2) of the Act and must
be held indefinitely unless they are subsequently registered
under the Act or an exemption from such registration is
available.
Flexweight is fully aware of the applicable limitation on the
resale of the Flexweight Shares. These restrictions for the
most part are set forth in Rule 144. Rule 144 permits sales of
"restricted securities" upon compliance with the requirements
of such rule. If Rule 144 is available to Flexweight,
Flexweight may make only routine sales of securities in
limited amounts, in accordance with the terms and conditions
of that Rule.
6. Closing. The Closing as herein referred to shall occur upon such
date as the parties hereto may mutually agree upon, but is expected to be on or
before August 21, 1998.
<PAGE>
At closing Flexweight will deliver the Flexweight Shares to
AmeriResource, and AmeriResource shall deliver the AmeriResource Shares to
Flexweight.
7. Conditions Precedent of AmeriResource to Effect Closing. All obligations of
AmeriResource under this Agreement are subject to fulfillment prior to or as of
the Closing Date, of each of the following conditions:
A. The representations and warranties by or on behalf of Flexweight
contained in this Agreement or in any certificate or documents
delivered to AmeriResource pursuant to the provisions hereof shall be
true in all material respects at end as of the time of Closing as
though such representations and warranties were made at and as of such
time.
B. Flexweight shall have performed and complied with all covenants,
agreements and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing.
C. All instruments and documents delivered to AmeriResource pursuant to
the provisions hereof shall be reasonably satisfactory to
AmeriResource' legal counsel.
8. Conditions Precedent of Flexweight to Effect Closing. All obligations of
Flexweight under this Agreement are subject to fulfillment prior to or as of the
date of Closing, of each of the following conditions:
A. The representations and warranties by or on behalf of AmeriResource
contained in this Agreement or in any certificate or documents
delivered to Flexweight pursuant to the provisions hereof shall be true
in all material respects at end as of the time of Closing as though
such representations and warranties were made at and as of such time.
B. AmeriResource shall have performed and complied with all covenants,
agreements and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing.
C. All instruments and documents delivered to Flexweight pursuant to
the provisions hereof shall be reasonably satisfactory to Flexweight's
legal counsel.
9. Damages and Limit of Liability. Each party shall be liable, for any material
breach of the representations, warranties, and covenants contained herein which
results in a failure to perform any obligation under this Agreement, only to the
extent of the expenses incurred in connection with such breach or failure to
perform Agreement.
10. Nature and Survival of Representations and Warranties. All representations,
warranties and covenants made by any party in this Agreement shall survive the
Closing hereunder. All of the parties hereto are executing and carrying out the
provisions of this Agreement in reliance solely on the representations,
warranties and covenants and agreements contained in this Agreement or at the
Closing of the transactions herein provided for and not upon any investigation
upon which it might have made or any representations, warranty, agreement,
promise, or information, written or oral, made by the other party or any other
person other than as specifically set forth herein.
11. Indemnification Procedures. If any claim is made by a party which would give
rise to a right of indemnification under this paragraph, the party seeking
indemnification (Indemnified Party) will promptly cause notice thereof to be
delivered to the party from whom is sought (Indemnifying Party). The Indemnified
Party will permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting from the claims. Counsel for the Indemnifying Party
which will conduct the defense must be approved by the Indemnified Party (whose
approval will not be unreasonable withheld), and the Indemnified Party may
participate in such defense at the expense of the Indemnified Party. The
indemnifying Party will not in the defense of any such claim or litigation,
consent to entry of any judgement or enter into any settlement without the
written consent of the Indemnified Party (which consent will not be unreasonably
withheld). The Indemnified Party will not, in connection with any such claim or
litigation, consent to entry of any judgement or enter into any settlement
without the written consent of the Indemnifying Party (which consent will not be
unreasonable withheld). The Indemnified Party will cooperate fully with the
Indemnifying
<PAGE>
Party and make available to the Indemnifying Party all pertinent information
under its control relating to any such claim or litigation. If the Indemnifying
Party refuses or fails to conduct the defense as required in this Section, then
the Indemnified Party may conduct such defense at the expense of the
Indemnifying Party and the approval of the Indemnifying Party will not be
required for any settlement or consent or entry of judgement.
12. Default at Closing. Notwithstanding the provisions hereof, if AmeriResource
shall fail or refuse to deliver any of the AmeriResource Shares, or shall fail
or refuse to consummate the transaction described in this Agreement prior to the
Closing Date, such failure or refusal shall constitute a default by
AmeriResource and Flexweight at its option and without prejudice to its rights
against such defaulting party, may either (a) invoke any equitable remedies to
enforce performance hereunder including, without limitation, an action or suit
for specific performance, or (b) terminate all of its obligations hereunder with
respect to AmeriResource.
13. Costs and Expenses. AmeriResource and Flexweight shall bear their own costs
and expenses in the proposed exchange and transfer described in this Agreement.
AmeriResource and Flexweight have been represented by their own attorney in this
transaction, and shall pay the fees of its attorney, except as may be expressly
set forth herein to the contrary.
14. Notices. Any notice under this Agreement shall be deemed to have been
sufficiently given if sent by registered or certified mail, postage prepaid,
addressed as follows:
To Flexweight:
Flexweight Corporation
1946 Plateau Way
Wendover, Nevada 89883
To AmeriResource:
AmeriResource Technologies. Inc.
P.O. Box 14748
Shawnee Mission, Kansas 66285-4748
15. Miscellaneous.
A. Further Assurances. At any time and from time to time, after the
effective date, each party will execute such additional instruments
and take such as may be reasonably requested by the other party to
confirm or perfect title to any property transferred hereunder or
otherwise to carry out the intent and purposes of this Agreement.
B. Waiver. Any failure on the part of any party hereto to comply with
any of its obligations, agreements, or conditions hereunder may be
waived in writing by the party to whom such compliance is owed.
C. Brokers. Neither party has employed any brokers or finders with
regard to this Agreement no disclosed herein.
D. Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
E. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
F. Governing Law. This Agreement was negotiated and is being
contracted for in the State of Utah, and shall be governed by the
laws of the State of Utah, notwithstanding any conflict-of-law
provision to the
<PAGE>
contrary. Any suit, action or legal proceeding arising from or related
to this Agreement shall be submitted for binding arbitration resolution
to the American Arbitration Association, in Salt Lake City, Utah,
pursuant to their Rules of Procedure or any other mutually agreed upon
arbitrator. The parties agree to abide by decisions rendered as final
and binding, and each party irrevocably and unconditionally consents to
the jurisdiction of such Courts in such suit, action or legal
proceeding and waives any objection to the laying of venue in, or the
jurisdiction of, said Courts.
G. Binding Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties their respective heirs,
administrators, executors, successors, and assigns.
H. Entire Agreement. The Agreement contains the entire agreement
between the parties hereto and supersedes any and all prior agreements,
arrangements or understandings between the parties relating to the
subject matter hereof. No oral understandings, statements, promises or
inducements contrary to the terms of this Agreement exist. No
representations, warranties covenants, or conditions express or
implied, other than is set forth here, have been made by any party.
I. Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full force
and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.
Flexweight Corporation
By:_______________________
Its:_______________________
AmeriResource Technologies, Inc.
By:_______________________
Its:_______________________
STOCK EXCHANGE AGREEMENT
This Stock Exchange Agreement ("Agreement") is entered into this 7th
day of August, 1998 by and between Kelly's Coffee Group, Inc., ("Kelly's") a
Colorado corporation with principal offices located at 647 Seventeenth Avenue,
Longmont, Colorado 80502-1539, and AmeriResource Technologies, Inc.
("AmeriResource") a Delaware corporation with principal offices located at 8815
E. Long Street, Lenexa, Kansas 66215.
WHEREAS, Kelly's desires to acquire from AmeriResource approximately
Fifteen Million Three Hundred Eighty Four Thousand Six Hundred Fifteen
(15,384,615) restricted shares of the common stock of AmeriResource, in exchange
for Five Million (5,000,000) restricted shares of the common stock of Kelly's.
NOW, THEREFORE with the above being incorporated into and made a part
hereof for the mutual consideration set out herein and, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Exchange. Kelly's will, in a tax free exchange, acquire from AmeriResource,
Fifteen Million Three Hundred Eighty Four Thousand Six Hundred Fifteen
(15,384,615) restricted shares of the common stock of AmeriResource, valued as
of August 7, 1998 at $.013 per share, in a tax free exchange wherein
AmeriResource shall acquire Five Million (5,000,000) restricted shares of
Kelly's common stock, valued as of August 7, 1998 at $.04 per share.
2. Exchange of Shares. On or before the closing date, set herein to be August
21, 1998, the above-mentioned shares are to be exchanged.
3. Termination. This Agreement may be terminated at any time prior to the
Closing Date:
A. By Kelly's or AmeriResource:
(1) If there shall be any actual or threatened action or
proceeding by or before any court or any other governmental
body which shall seek to restrain, prohibit, or invalidate the
transactions contemplated by this Agreement and which, in
judgement of such Board of Directors made in good faith and
based upon the advice of legal counsel, makes it inadvisable
to proceed with the transactions contemplated by this
Agreement; or
(2) If the Closing shall have not occurred prior to August 7,
1998, or such later date as shall have been approved by
parties hereto, other than for reasons set forth herein.
B. By AmeriResource:
(1) If Kelly's shall fail to comply in any material respect
with any of its or their covenants or agreements contained in
this Agreement or if any of the representation or warranties
of Kelly's contained herein shall be inaccurate in any
material respect; or
C. By Kelly's:
(1) If AmeriResource shall fail to comply in any material
respect with any of its covenants or agreements contained in
this Agreement of if any of the representation or warranties
of AmeriResource contained herein shall be inaccurate in any
material respect;
In the event this Agreement is terminated pursuant to this Paragraph,
this Agreement shall be of no further force or effect, no obligation, right, or
liability shall arise hereunder, and each party shall bear its own costs as well
as the legal, accounting, printing, and other costs incurred in connection with
negotiation, preparation and execution of the Agreement and the transactions
herein contemplated.
<PAGE>
4. Representations and Warranties of AmeriResource. AmeriResource hereby
represents and warrants that effective this date and the Closing Date, the
following representations are true and correct:
A. Corporate Authority. AmeriResource has the full corporate
power and authority to enter this Agreement and to carry out
the transactions contemplated by this Agreement. The Board of
Directors of AmeriResource has duly authorized the execution,
delivery and performance of this Agreement.
B. Financial Statements. The latest 10-Q report ("AmeriResource
Financials") has been given to Kelly's prior to closing.
C. No Conflict With Other Instruments. The execution of this
Agreement will not violate or breach any document, instrument,
agreement, contract, or commitment material to the business of
AmeriResource to which AmeriResource is a party and has been
duly authorized by all appropriated and necessary action.
D. Information. The information concerning AmeriResource as set
forth in this Agreement and in the AmeriResource Financials is
complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to
state a material fact required to make the statements made in
light of the circumstances under which they were made not
misleading.
E. Deliverance of Shares. As of the Closing Date, the
AmeriResource Shares to be delivered to Kelly's will be
restricted and constitute valid and legally issued shares of
AmeriResource, fully paid and non-assessable and equivalent in
all respects to all other issued and outstanding shares of
AmeriResource restricted stock.
F. No Conflict with Other Instrument. The execution of this
agreement will not violate or breach any document, instrument,
agreement, contract or commitment material to AmeriResource.
G. Information. The information concerning AmeriResource and set
forth in this Agreement, is complete and accurate in all
material respects and does not contain any untrue statement of
a material fact or omit to state a material fact required to
make the statements made, in light of the circumstances under
which they were made, not misleading.
H. Restricted Shares. The shares of Kelly's common stock which
are being acquired for AmeriResource's own account and for
investment and not with a view to the public resale or
distribution thereof. AmeriResource will not sell, transfer or
otherwise dispose of the Kelly's Shares except in compliance
with the Securities Act of 1933, as amended (the "Act"), and
is aware the Kelly's Shares are "restricted securities" as
that term is defined in Rule 144 of the General Rules and
Regulations under the Act ("Rule 144").
AmeriResource acknowledges and understands that the Kelly's
Shares are unregistered in reliance of Section 4(2) of the Act
and must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such
registration is available.
AmeriResource is fully aware of the applicable limitation on
the resale of the Kelly's Shares. These restrictions for the
most part are set forth in Rule 144. Rule 144 permits sales of
"restricted securities" upon compliance with the requirements
of such rule. If Rule 144 is available to AmeriResource,
AmeriResource may make only routine sales of securities in
limited amounts, in accordance with the terms and conditions
of that Rule.
5. Representations and Warranties of Kelly's.
<PAGE>
Kelly's hereby represents and warrants that, effective this date and
the Closing Date, the representations and warranties listed below are true and
correct.
A. Corporate Authority. Kelly's has the full corporate power and
authority to enter this Agreement and to carry out the
transactions contemplated by this Agreement. The Board of
Directors of Kelly's has duly authorized the execution,
delivery, and performance of this Agreement.
B. Financial Statements. The latest 10-Q report ("Kelly's
Financials") has been given to AmeriResource prior to closing.
C. No Conflict With Other Instruments. The execution of this
Agreement will not violate or breach any document, instrument,
agreement, contract, or commitment material to the business of
Kelly's to which Kelly's is a party and has been duly
authorized by all appropriated and necessary action.
D. Information. The information concerning Kelly's as set forth
in this Agreement and in the Kelly's Financials is complete
and accurate in all material respects and does not contain any
untrue statement of a material fact or omit to state a
material fact required to make the statements made in light of
the circumstances under which they were made not misleading.
E. Deliverance of Shares. As of the Closing Date, the Kelly's
Shares to be delivered to AmeriResource will be restricted and
constitute valid and legally issued shares of Kelly's fully
paid and non-assessable and equivalent in all respects to all
other issued and outstanding shares of Kelly's restricted
stock.
F. No Conflict with Other Instrument. The execution of this
agreement will not violate or breach any document, instrument,
agreement, contract or commitment material to Kelly's.
G. Information. The information concerning Kelly's and set forth
in this Agreement, is complete and accurate in all material
respects and does not contain any untrue statement of a
material fact or omit to state a material fact required to
make the statements made, in light of the circumstances under
which they were made, not misleading.
H. Restricted Shares. The shares of AmeriResource common stock
which are being acquired for Kelly's own account and for
investment and not with a view to the public resale or
distribution thereof. Kelly's will not sell, transfer or
otherwise dispose of the AmeriResource Shares except in
compliance with the Securities Act of 1933, as amended (the
"Act"), and is aware the AmeriResource Shares are "restricted
securities" as that term is defined in Rule 144 of the General
Rules and Regulations under the Act ("Rule 144")
Kelly's acknowledges and understands that the Shares are
unregistered in reliance of Section 4(2) of the Act and must
be held indefinitely unless they are subsequently registered
under the Act or an exemption from such registration is
available.
Kelly's is fully aware of the applicable limitation on the
resale of the Kelly's Shares. These restrictions for the most
part are set forth in Rule 144. Rule 144 permits sales of
"restricted securities" upon compliance with the requirements
of such rule. If Rule 144 is available to Kelly's, Kelly's may
make only routine sales of securities in limited amounts, in
accordance with the terms and conditions of that Rule.
6. Closing. The Closing as herein referred to shall occur upon such
date as the parties hereto may mutually agree upon, but is expected to be on or
before August 7, 1998.
At closing Kelly's will deliver the Kelly's Shares to AmeriResource,
and AmeriResource shall deliver the AmeriResource Shares to Kelly's.
<PAGE>
7. Conditions Precedent of AmeriResource to Effect Closing. All obligations of
AmeriResource under this Agreement are subject to fulfillment prior to or as of
the Closing Date, of each of the following conditions:
A. The representations and warranties by or on behalf of Kelly's
contained in this Agreement or in any certificate or documents
delivered to AmeriResource pursuant to the provisions hereof shall be
true in all material respects at end as of the time of Closing as
though such representations and warranties were made at and as of such
time.
B. Kelly's shall have performed and complied with all covenants,
agreements and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing.
C. All instruments and documents delivered to AmeriResource pursuant to
the provisions hereof shall be reasonably satisfactory to
AmeriResource' legal counsel.
8. Conditions Precedent of Kelly's to Effect Closing. All obligations of Kelly's
under this Agreement are subject to fulfillment prior to or as of the date of
Closing, of each of the following conditions:
A. The representations and warranties by or on behalf of AmeriResource
contained in this Agreement or in any certificate or documents
delivered to Kelly's pursuant to the provisions hereof shall be true in
all material respects at end as of the time of Closing as though such
representations and warranties were made at and as of such time.
B. AmeriResource shall have performed and complied with all covenants,
agreements and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing.
C. All instruments and documents delivered to Kelly's pursuant to the
provisions hereof shall be reasonably satisfactory to Kelly's legal
counsel.
9. Damages and Limit of Liability. Each party shall be liable, for any material
breach of the representations, warranties, and covenants contained herein which
results in a failure to perform any obligation under this Agreement, only to the
extent of the expenses incurred in connection with such breach or failure to
perform Agreement.
10. Nature and Survival of Representations and Warranties. All representations,
warranties and covenants made by any party in this Agreement shall survive the
Closing hereunder. All of the parties hereto are executing and carrying out the
provisions of this Agreement in reliance solely on the representations,
warranties and covenants and agreements contained in this Agreement or at the
Closing of the transactions herein provided for and not upon any investigation
upon which it might have made or any representations, warranty, agreement,
promise, or information, written or oral, made by the other party or any other
person other than as specifically set forth herein.
11. Indemnification Procedures. If any claim is made by a party which would give
rise to a right of indemnification under this paragraph, the party seeking
indemnification (Indemnified Party) will promptly cause notice thereof to be
delivered to the party from whom is sought (Indemnifying Party). The Indemnified
Party will permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting from the claims. Counsel for the Indemnifying Party
which will conduct the defense must be approved by the Indemnified Party (whose
approval will not be unreasonable withheld), and the Indemnified Party may
participate in such defense at the expense of the Indemnified Party. The
indemnifying Party will not in the defense of any such claim or litigation,
consent to entry of any judgement or enter into any settlement without the
written consent of the Indemnified Party (which consent will not be unreasonably
withheld). The Indemnified Party will not, in connection with any such claim or
litigation, consent to entry of any judgement or enter into any settlement
without the written consent of the Indemnifying Party (which consent will not be
unreasonable withheld). The Indemnified Party will cooperate fully with the
Indemnifying Party and make available to the Indemnifying Party all pertinent
information under its control relating to any such claim or litigation. If the
Indemnifying Party refuses or fails to conduct the defense as required in this
Section, then the Indemnified Party may conduct such defense at the expense of
the Indemnifying Party and the approval of the
<PAGE>
Indemnifying Party will not be required for any settlement or consent or entry
of judgement.
12. Default at Closing. Notwithstanding the provisions hereof, if AmeriResource
shall fail or refuse to deliver any of the AmeriResource Shares, or shall fail
or refuse to consummate the transaction described in this Agreement prior to the
Closing Date, such failure or refusal shall constitute a default by
AmeriResource and Kelly's at its option and without prejudice to its rights
against such defaulting party, may either (a) invoke any equitable remedies to
enforce performance hereunder including, without limitation, an action or suit
for specific performance, or (b) terminate all of its obligations hereunder with
respect to AmeriResource.
13. Costs and Expenses. AmeriResource and Kelly's shall bear their own costs and
expenses in the proposed exchange and transfer described in this Agreement.
AmeriResource and Kelly's have been represented by their own attorney in this
transaction, and shall pay the fees of its attorney, except as may be expressly
set forth herein to the contrary.
14. Notices. Any notice under this Agreement shall be deemed to have been
sufficiently given if sent by registered or certified mail, postage prepaid,
addressed as follows:
To Kelly's:
Kelly's Coffee Group, Inc.
647 Seventeenth Avenue
Longmont, Colorado 80502-1539
To AmeriResource:
AmeriResource Technologies, Inc.
P.O. Box 14748
Shawnee Mission, Kansas 66285-4748
15. Miscellaneous.
A. Further Assurances. At any time and from time to time, after the
effective date, each party will execute such additional instruments and
take such as may be reasonably requested by the other party to confirm
or perfect title to any property transferred hereunder or otherwise to
carry out the intent and purposes of this Agreement.
B. Waiver. Any failure on the part of any party hereto to comply with
any of its obligations, agreements, or conditions hereunder may be
waived in writing by the party to whom such compliance is owed.
C. Brokers. Neither party has employed any brokers or finders with
regard to this Agreement no disclosed herein.
D. Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
E. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
F. Governing Law. This Agreement was negotiated and is being contracted
for in the State of Utah, and shall be governed by the laws of the
State of Utah, notwithstanding any conflict-of-law provision to the
contrary. Any suit, action or legal proceeding arising from or related
to this Agreement shall be submitted for binding arbitration resolution
to the American Arbitration Association, in Salt Lake City, Utah,
pursuant to their Rules of Procedure or any other mutually agreed upon
arbitrator. The parties agree to abide by
<PAGE>
decisions rendered as final and binding, and each party irrevocably and
unconditionally consents to the jurisdiction of such Courts in such
suit, action or legal proceeding and waives any objection to the laying
of venue in, or the jurisdiction of, said Courts.
G. Binding Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties their respective heirs,
administrators, executors, successors, and assigns.
H. Entire Agreement. The Agreement contains the entire agreement
between the parties hereto and supersedes any and all prior agreements,
arrangements or understandings between the parties relating to the
subject matter hereof. No oral understandings, statements, promises or
inducements contrary to the terms of this Agreement exist. No
representations, warranties covenants, or conditions express or
implied, other than is set forth here, have been made by any party.
I. Severability. If any part of this Agreement is deemed to be
unenforceable, the balance of the Agreement shall remain in full force
and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
first above written.
Kelly's Coffee Group, Inc.
By:_______________________
Its:_______________________
AmeriResource Technologies, Inc.
By:_______________________
Its:_______________________
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
UNAUDITED CONDENSED FINANCIAL STATEMENTS FILED WITH THE COMPANY'S JUNE 30,
1998 QUARTERLY REPORT ON FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000876490
<NAME> AmeriResource Technologies, Inc.
<MULTIPLIER> 1
<CURRENCY> U. S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<CASH> 234
<SECURITIES> 189,357
<RECEIVABLES> 1,345,666
<ALLOWANCES> 583,555
<INVENTORY> 0
<CURRENT-ASSETS> 812,288
<PP&E> 820,530
<DEPRECIATION> (800,146)
<TOTAL-ASSETS> 1,022,029
<CURRENT-LIABILITIES> 2,370,057
<BONDS> 0
0
3090
<COMMON> 21,724
<OTHER-SE> (3,158,781)
<TOTAL-LIABILITY-AND-EQUITY> 1,022,029
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 62,630
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (62,630)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (62,630)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
