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 000 Xxxxxxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx 00000-0000, and AmeriResource Technologies, Inc.
("AmeriResource") a Delaware corporation with principal offices located at 0000
X. Xxxx Xxxxxx, Xxxxxx, Xxxxxx 00000.
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.
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.
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.
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.
X. Xxxxx'x 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
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.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
To AmeriResource:
AmeriResource Technologies, Inc.
X.X. Xxx 00000
Xxxxxxx Xxxxxxx, Xxxxxx 00000-0000
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
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:_______________________
