EXHIBIT 10.34
MERGER AGREEMENT
THIS AGREEMENT (the "Agreement") is dated for reference purposes
October 26, 2001, among Host America Corporation, a Colorado corporation
("Host"), Host Merger Corporation, a Colorado corporation ("HMC") and
Select Force, Incorporated, an Oklahoma corporation ("Select Force").
RECITALS
A. Host is desirous of entering into a merger transaction with
Select Force, as a result of which the shareholders of Select Force (the
"Select Force Shareholders") will own 700,000 shares of Host restricted
common stock or approximately 32.3 % percent of the Host Common Stock
outstanding; the current shareholders of Host (the "Host Shareholders")
will retain an ownership of approximately 1,470,147 (67.7%) in Host common
stock outstanding. The transactions to be undertaken by Host and Select
Force to accomplish this result are herein collectively referred to as the
"Merger".
B. In order to accomplish the Merger, Host has created HMC as a
wholly-owned subsidiary of Host.
D. It is intended that the Merger will qualify as reorganization
under section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code").
C. In order to accomplish the Merger, Select Force will merge into
HMC, and HMC shall be the surviving entity. Pursuant to this Agreement,
the Select Force shareholders shall receive common stock in Host in
exchange for the cancellation of their Select Force common stock.
D. The respective boards of directors of Host, HMC and Select Force
deem it advisable and in the best interest of each corporation and their
respective shareholders that the foregoing transaction to be accomplished
in accordance with the terms of this agreement, and such boards of
directors have authorized and approved the execution and delivery of this
agreement on behalf of such respective corporations.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the respective
covenants and provisions herein contained, and intending to be legally
bound hereby, the parties agree as follows:
1. THE MERGER AND RELATED TRANSACTIONS.
1.1 THE SELECT FORCE/HMC MERGER. Upon the terms and subject to the
conditions set forth in this Agreement, Select Force shall be merged with
and into HMC. Following the Merger, the separate corporate existence of
Select Force shall cease and HMC shall continue as the surviving party in
the Merger (HMC is sometimes referred to as the "Surviving Corporation").
1.2 EFFECTIVE TIME OF THE MERGER. At the Closing (as defined in
Article 2) and subject to the terms and conditions hereof, HMC and Select
Force shall file appropriate certificates (the "Articles of Merger") in
such form as is required by and which shall be executed in accordance with
Section 7-111-105 of the Colorado Business Corporation Act and with the
applicable provisions of the Oklahoma Corporation Code. The Merger shall
become effective at such time as the Articles of Merger are duly filed with
the Colorado Secretary of State and Oklahoma Secretary of State, or at such
time as HMC and Select Force shall agree and as shall be specified in the
Articles of Merger (the "Effective Time of the Merger").
1.3 ARTICLES OF INCORPORATION, BYLAWS, BOARD OF DIRECTORS AND
OFFICERS OF THE SURVIVING CORPORATION.
(a) The Articles of Incorporation of HMC as in effect
immediately prior to the Effective Time of the Merger shall be the
Articles of Incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable
law, except that the name of the Surviving Corporation shall be
changed to the name Select Force.
(b) At the Effective Time of the Merger, the Bylaws of HMC as in
effect immediately prior to the Effective Time of the Merger shall be
the Bylaws of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law.
(c) The directors and officers of the Surviving Corporation
shall be the persons to be listed in Schedule 1.3(iii) of the Host
Disclosure Letter, and each person shall hold his or her respective
office or offices from and after the Effective Time of the Merger
until they first resign or their respective successors shall have been
elected or appointed and shall have qualified, or as otherwise
provided in the Bylaws of the Surviving Corporation.
1.4 CERTAIN INFORMATION WITH RESPECT TO THE CAPITAL STOCK OF HMC AND
SELECT FORCE. The respective designations and numbers of outstanding
shares of each class of outstanding capital stock of Host, HMC and Select
Force as of the date of this Agreement are as follows:
(i) The authorized and outstanding capital stock of HMC consists
of 100 shares of common stock, of which 100 shares are issued and
outstanding (the "HMC Stock").
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(ii) The authorized capital stock of Select Force consists of
1,000,000 shares of common stock, $.01 value, of which 748,700 shares
are issued and outstanding (the "Select Force Stock").
(iii) The authorized capital stock of Host consists of
80,000,000 shares of common stock, $.001 par value, of which 1,470,147
shares are issued and outstanding and 2,000,000 shares of preferred
stock, $.001 par value, of which 700,000 shares of Series A Preferred
Stock is outstanding (the "Host Stock").
1.5 EFFECT OF MERGER. At the Effective Time of the Merger, the
effect of the Merger shall be as provided in Section 7-111-106 of the
Colorado Business Corporation Act.
1.6 CONVERSION OF SELECT FORCE STOCK. At the Effective Time of the
Merger by virtue of the Merger and without any action on the part of the
holders of the Select Force Stock, the Select Force Stock shall be
converted into the right to receive from Host 700,000 shares of restricted
common stock of Host as set forth in Schedule 1.6.
1.7 EFFECT OF MERGER ON HMC CAPITAL STOCK. At the Effective Time of
the Merger without any action on the part of the holders of HMC Stock, each
share of HMC Stock issued and outstanding immediately prior to the
Effective Time of the Merger shall remain outstanding as one share of HMC
Stock.
1.8 DELIVERY OF CERTIFICATES. At the Effective Time of the Merger,
the Select Force Stock shall be canceled and the Select Force Shareholders
shall receive instruments evidencing the ownership of the securities of
Host as set forth on Schedule 1.6. Each Select Force Shareholder shall
deliver to Host at the Closing the Certificates representing the shares of
Select Force Stock owned by the Select Force Shareholder (the "Select Force
Certificates"), duly endorsed in blank by the Select Force Shareholder, or
accompanied by blank stock powers. Each Select Force Shareholder agrees
promptly to cure any deficiencies with respect to the endorsement of his
Select Force Certificates or other documents of conveyance with respect to
the Select Force Stock or with respect to the stock powers accompanying any
Select Force Stock. Until surrender as contemplated by this Section 1.6,
each Select Force Certificate shall be deemed at any time after the
Effective Time of the Merger to represent only the Host Stock received by
the shareholders of Select Force, as set forth in Schedule 1.8, and each
holder of a Select Force Certificate shall cease to have any rights with
respect to the Select Force Stock.
2. CLOSING.
Subject to the terms and conditions of this Agreement, the closing of
the transactions contemplated by this Agreement (the "Closing") will take
place on the second business day after the satisfaction or waiver (subject
to applicable law) of the conditions set forth in Sections 8 and 9, unless
another time or date is agreed to in writing by the parties hereto (the
actual time and date of the Closing being referred to herein as the
"Closing Date"). The Closing shall be held at the offices of Berenbaum,
Weinshienk & Eason, P.C., 370 Seventeenth Street, Suite 2600 Denver,
Colorado 80202, unless another place is agreed to in writing by the parties
hereto.
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3. REPRESENTATIONS AND WARRANTIES OF SELECT FORCE CONCERNING SELECT FORCE.
Except as provided in the Select Force Disclosure Letter (as defined
below) to be delivered pursuant to Section 10.2, Select Force represents
and warrants to Host and HMC that all of the following representations and
warranties in this Section 3 are true at the date of this Agreement and
shall be true at the time of Closing. As used in this Agreement, the
"Select Force Disclosure Letter" shall mean the disclosure letter delivered
by Select Force pursuant to this Section 3.
3.1 DUE ORGANIZATION. Select Force is a corporation duly organized,
validly existing and in good standing under the laws of the state of
Oklahoma, and has the requisite power and authority to carry on its
business as it is now being conducted. Select Force is duly qualified to
do business and is in good standing in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties makes
such qualification necessary, except (i) as will be set forth on Schedule
3.1 to the Select Force Disclosure Letter or (ii) where the failure to be
so authorized or qualified would not have a material adverse effect on the
business, operations, properties, assets or condition (financial or
otherwise), of Select Force taken as a whole (as used herein with respect
to Select Force, or with respect to any other person, a "Material Adverse
Effect"). Select Force is not authorized nor qualified to do business in
any jurisdiction, except the State of Oklahoma. True, complete and correct
copies of the Articles of Incorporation and Bylaws, each as amended, of
Select Force (the "Select Force Charter Documents") shall be made available
to Host. The stock records of Select Force as heretofore made available to
Host, are correct and complete in all material respects. Select Force has
made all minutes available to Host.
3.2 SUBSIDIARIES. As qualified in Schedule 3.4, Select Force does
not own or control, and has not in the past owned or controlled, directly
or indirectly, an corporation, partnership, limited liability company or
other business entity. Select Force does not own, directly or indirectly
any ownership, equity, or voting interest in any corporation, partnership,
join venture or other entity, and has no agreement or commitment to
purchase any such interest.
3.3 CAPITAL STRUCTURE. The authorized capital stock of Select Force
consists of 1,000,000 shares of common stock, $.01 value, of which 748,700
shares are issued and outstanding on October 22, 2001. All of the
outstanding shares of common stock have been duly authorized and are
validly issued, fully paid and non-assessable. Select Force has no common
stock or other shares of capital stock reserved for or otherwise subject to
issuance. Select Force has no other outstanding shares of capital stock.
The names of all of the holders of the Select Force Stock and the number of
shares owned by each holder will be set forth in Schedule 3.3 to the Select
Force Disclosure Letter. Except as will be listed in Schedule 3.3 to the
Select Force Disclosure Letter or as set forth above, there are no pre-
emptive or other outstanding rights, options, warrants, conversion rights,
stock appreciation rights, redemption rights, repurchase rights,
agreements, arrangements or commitments to issue or sell any shares of
capital stock or other securities of Select Force or any securities or
obligations convertible or exchangeable into or exercisable for, or giving
any person a right to subscribe for or acquire, any securities of Select
Force, and no securities or obligations evidencing such rights are
authorized, issued or outstanding. Select Force does not have outstanding
any bonds, debentures, notes or other debt
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obligations the holders of which have the right to vote (or convertible
into or exercisable for securities having the right to vote). There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to Select Force. To the
knowledge of Select Force, there are no voting trusts, proxies or other
agreements or understandings with respect to the voting of the capital
stock of Select Force.
3.4 PREDECESSOR STATUS; ETC. There shall be included in Schedule 3.4
to the Select Force Disclosure Letter an accurate list of all names of all
predecessor companies of Select Force, including the names of any entities
acquired by Select Force (by stock purchase, merger or otherwise) or owned
by Select Force or from whom Select Force previously acquired material
assets, in any case, from the earliest date upon which any person acquired
his or her stock in Select Force. Except as will be disclosed on Schedule
3.4 to the Select Force Disclosure Letter, Select Force has not been,
within such period of time, a subsidiary or division of another corporation
or a part of an acquisition which was later rescinded.
3.5 SPIN-OFF BY SELECT FORCE. Except as will be set forth on
Schedule 3.5 to the Select Force Disclosure Letter, there has not been any
sale, spin-off or split-up of material assets of either Select Force or any
other person or entity that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, Select Force ("Affiliates") since its inception.
3.6 FINANCIAL STATEMENTS. Schedule 3.6 to the Select Force
Disclosure Letter will include copies of the following financial statements
(the "Select Force Financial Statements") of Select Force: Select Force's
audited Balance Sheet as of December 31, 2000 and audited Statements of
Income and Comprehensive Income, Stockholders' Equity and Cash Flows forth
fiscal year ended December 31, 2000 (December 31, 2000 being hereinafter
referred to as the "Balance Sheet Date") and unaudited interim financial
statements through June 30, 2001. Prior to Closing, Select Force will
provide unaudited financial statements through the last day of the calendar
month immediately preceding Closing. The audited Select Force Financial
Statements have been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods indicated (except as noted thereon or as will be noted on Schedule
3.6 to the Select Force Disclosure Letter). Except as will be set forth on
Schedule 3.6 to the Select Force Disclosure Letter, such Balance Sheet
present fairly in all material respects the financial position of Select
Force as of the date indicated thereon, and such Statement of Income and
Comprehensive Income, Stockholders' Equity and Cash Flows present fairly in
all material respects the results of operations for the period indicated
thereon, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments which were not or are
not expected to be material in amount.
3.7 LIABILITIES AND OBLIGATIONS. Schedule 3.7 to the Select Force
Disclosure Letter will include accurate lists as of June 30, 2001 of (i)
all material liabilities of Select Force which are not reflected on the
interim balance sheet of Select Force at June 30, 2001 or otherwise
reflected in the Select Force Financial Statements at June 30, 2001 which
by their nature would be required in accordance with GAAP to be reflected
in such balance sheet, and (ii) all loan agreements, indemnity or guaranty
agreements, bonds, mortgages, liens, pledges or other security agreements.
Since June 30, 2001, Select Force has not incurred any material liabilities
of any kind, character and description, whether accrued, absolute, secured
or unsecured, contingent or otherwise, other than liabilities incurred in
the ordinary course of business, except for that
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certain promissory note, in the amount of $150,000.00, dated July 11, 2001,
between Select Force and Host. To the knowledge of Select Force, Select
Force has no contingent liabilities related to pending litigation or
threatened litigation, or any other liability which is not fixed or
otherwise accrued or reserved.
3.8 PERMITS AND INTANGIBLES.
(a) Select Force holds no licenses, franchises, permits, or
other governmental authorizations.
(b) Select Force does not own, use or license any patents,
trademarks, marks, copyrights, software, technical information, data
process technology, plans and drawings or any other intellectual
property, except that Select Force owns and uses know how, trade
secrets, confidential information and customer lists in the ordinary
course of its business. To the knowledge of Select Force, Select Force
has not infringed on or misappropriated, is not now infringing on or
misappropriating, and has not received any notice that it is
infringing on, misappropriating, or otherwise conflicting with the
intellectual property rights of any third parties; and there is no
claim pending or, to the knowledge of Select Force, threatened against
Select Force with respect to the alleged infringement or
misappropriation by Select Force or a conflict with, any intellectual
property rights of others.
3.9 ENVIRONMENTAL MATTERS. To the knowledge of Select Force, Select
Force has complied with and is in compliance with all Federal, state, local
and foreign statutes (civil and criminal), laws, ordinances, regulations,
rules, notices, permits, judgments, orders and decrees applicable to any of
them or any of their respective properties, assets, operations and
businesses relating to environmental protection (collectively
"Environmental Laws") including, without limitation, Environmental Laws
relating to air, water, land and the generation, storage, use, handling,
transportation, treatment or disposal of Hazardous Wastes and Hazardous
Substances including petroleum and petroleum products (as such terms are
defined in any applicable Environmental Laws).
3.10 PERSONAL PROPERTY. Except as set forth in the balance sheet as
of June 30, 2001, Select Force owns no personal property with an individual
value in excess of $10,000 and has entered into no leases and agreements in
respect of personal property in excess of $10,000. All material personal
property used by Select Force in its business is owned by Select Force.
3.11 MATERIAL CONTRACTS AND COMMITMENTS. Schedule 3.11 to the Select
Force Disclosure Letter will include an accurate list as of or on the date
hereof, of all material written or oral leases, agreements or other
contracts or legally binding contractual rights or contractual obligations
or contractual commitments relating to or in any way affecting the
operation or ownership of the business of Select Force (the "Material
Contracts"), including but not limited, those of a type described below:
(a) Any consulting agreement, employment agreement, change-in-
control agreement, and collective bargaining arrangements with any
labor union and any such agreements currently in negotiation or
proposed;
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(b) Any contract for capital expenditures or the acquisition or
construction of fixed assets in excess of $10,000;
(c) Any contract for the purchase, maintenance or acquisition,
or the sale or furnishing, of materials, supplies, merchandise,
products, machinery, equipment, parts or other property or services in
excess of $10,000 (except if such contract is made in the ordinary
course of business and requires aggregate future payments of less than
$10,000);
(d) Any contract other than trade payables in the ordinary
course of business relating to the borrowing of money, or the guaranty
of another person's borrowing of money, including, without limitation,
any notes, mortgages, indentures and other obligations, guarantees of
performance, agreements and instruments for or relating to any lending
or borrowing, including assumed indebtedness, except for that certain
promissory note, in the amount of $150,000.00, dated July 11, 2001,
between Select Force and Host;
(e) Any contract granting any person a lien on all or any part
of the assets of Select Force;
(f) Any contract for the cleanup, abatement or other actions in
connection with hazardous materials as defined under any Environmental
Laws, the remediation of any existing environmental liabilities or
relating to the performance of any environmental audit or study;
(g) Any contract granting to any person an option or a first
refusal, first-offer or similar preferential right to purchase or
acquire any material assets of Select Force;
(h) Any contract with any agent, distributor or representative
which is not terminable by Select Force upon ninety calendar days' or
less notice without penalty;
(i) Any contract under which Select Force is (1) a lessee or
sublessee of any machinery, equipment, vehicle or other tangible
personal property, or (2) a lessor of any tangible personal property
owned by Select Force, in either case having an original value in
excess of $50,000;
(j) Any contract under which Select Force has granted or
received a license or sublicense or under which it is obligated to pay
or has the right to receive a royalty, license fee or similar payment;
(k) Any contract concerning any Affiliates;
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(l) Any contract providing for the indemnification or holding
harmless of any officer, director, employee or other person, other
than as provided in the Select Force Charter Documents;
(m) Any contract for purchase or sale by Select Force or the
granting of any options with respect to, or providing for any labor,
services or materials (including brokerage or management services)
involving any real property on which Select Force conducts any aspect
of its business involving aggregate future payments of more than
$10,000;
(n) Any contract limiting, restricting or prohibiting Select
Force from conducting business anywhere in the United States or
elsewhere in the world;
(o) Any joint venture or partnership agreement;
(p) Any lease, sublease or associated agreements relating to the
property leased by Select Force;
(q) Any material contract requiring prior notice, consent or
other approval upon a change of control in the equity ownership of
Select Force, which contracts shall be separately identified on
Schedule 3.11 to the Select Force Disclosure Letter;
(r) Any contract with a customer of Select Force involving work
to be performed or product to be delivered, in each case subsequent to
Balance Sheet Date, in excess of $10,000;
(s) Any other contract, whether or not made in the ordinary
course of business, which involves future payments in excess of
$50,000.
Select Force has provided Host a true and complete copy of each written
Material Contract and a true and complete summary of each oral Material
Contract, in each case including all amendments or other modifications
thereto. Except as will be set forth on Schedule 3.11 to the Select Force
Disclosure Letter, each Material Contract is a valid and binding obligation
of, and enforceable in accordance with its terms against, Select Force, and
the other parties thereto, and is in full force and effect, subject only to
bankruptcy, reorganization, receivership and other laws affecting
creditors' rights generally. Except as will be set forth on Schedule 3.11
of the Select Force Disclosure Letter, Select Force has performed all
obligations required to be performed by it as of the date hereof and will
have performed all obligations required to be performed by it as of the
Closing Date under each Material Contract and neither Select Force, nor any
other party to any Material Contract is in breach or default thereunder,
and there exists no condition which would, with or without the lapse of
time or the giving of notice, or both, constitute a breach or default
thereunder. Select Force has not been notified that any party to any
Material Contract intends to cancel, terminate, not renew, or exercise an
option under any Material Contract, whether in connection with the
transactions contemplated hereby or otherwise.
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3.12 REAL PROPERTY. Schedule 3.12 to the Select Force Disclosure
Letter will set forth a correct and complete list, and a brief description
of all real property leased by Select Force (the "Leased Real Property"),
and all facilities thereon. Except as lessee of Leased Real Property,
Select Force is not a lessee under or otherwise a party to any lease,
sublease, license, concession or other agreement, whether written or oral,
pursuant to which another person or entity has granted to Select Force the
right to use or occupy all or any portion of any real property. Select
Force does not have an ownership interest in any real property.
Select Force has, assuming good title in the landlord, a valid
leasehold interest in the Leased Property free and clear of all liens,
assessments or restrictions (including, without limitation, inchoate liens
arising out of the provision of labor, services or materials to any such
Real Property) other than (a) mortgages shown on the Select Force Financial
Statements as securing specified liabilities or obligations, with respect
to which no default (or event that, with notice or lapse of time or both,
would constitute a default) exists, (b) liens for current taxes not yet
due, and (c) minor imperfections of title, such as utility and access
easements that do not impair the intended use of the Real Property, none of
which is substantial in amount, materially detracts from the value or
impairs the use of the property subject thereto, or impairs the operations
of Select Force, and zoning laws and other land use restrictions or
restrictive covenants that do not materially impair the present use of the
property subject thereto. The Leased Real Property constitutes all the
real properties reflected on the Select Force Financial Statements or used
or occupied by Select Force in connection with its business or otherwise.
With respect to the Leased Real Property, except as will be reflected
on Schedule 3.12 to the Select Force Disclosure Letter:
(a) Select Force is in exclusive possession thereof and no
easements, licenses or rights are necessary to conduct business
thereon in addition to those which exist as of the date hereof;
(b) To the knowledge of Select Force, no portion thereof is
subject to any pending condemnation proceeding or proceeding by any
public or quasi-public authority materially adverse to the Leased Real
Property and to the knowledge of Select Force there is no threatened
condemnation or proceeding with respect thereto;
(c) To the knowledge of Select Force, the Leased Real Property
is not in violation of any health, safety, building, or environmental
ordinances, laws, codes or regulations; nor has any notice of any
claimed violation of any such ordinances, laws, codes or regulations
been served on Select Force;
(d) The Leased Real Property is supplied with utilities and
other third-party services, such as water, sewer, electricity, gas,
roads, rail service and garbage collection, necessary for the current
operation of the business and such Leased Real Property is maintained
in all material respects in accordance with all laws applicable to
Select Force or the Leased Real Property;
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(e) Select Force is not a party to any written or oral agreement
or undertaking with owners or users of properties adjacent to the
Leased Real Property relating to the use, operation or maintenance of
such facility or any adjacent real property;
(f) Select Force is not a party to any lease, sublease, license,
concession or other agreement, whether written or oral, pursuant to
which Select Force has granted to any party or parties the right to
use or occupy all or any portion of the Leased Real Property;
3.13 INSURANCE. Schedule 3.13 to the Select Force Disclosure Letter
will include (i) an accurate list of all insurance policies carried by
Select Force that are currently in effect, and (ii) an accurate list of all
insurance loss claims or workers compensation claims received since
inception and complete copies of the foregoing items have been delivered to
Host. Such insurance policies evidence all of the insurance that Select
Force has been required to carry pursuant to all of its contracts and other
agreements and pursuant to all applicable laws. All insurance policies for
the current policy periods are in full force and effect and shall remain in
full force and effect through the Closing Date.
3.14 COMPENSATION; EMPLOYMENT AGREEMENTS; ORGANIZED LABOR MATTERS.
Schedule 3.14 to the Select Force Disclosure Letter will include an
accurate list of (i) all officers, directors and key employees of Select
Force, (ii) all employment agreements with such officers, directors and key
employees and the rate of compensation (and the portions thereof
attributable to salary, bonus and other compensation, respectively) of each
of such persons as of the Balance Sheet Date and the date hereof. Select
Force has provided to Host true, complete and correct copies of any
employment agreements for persons to be listed on Schedule 3.14 to the
Select Force Disclosure Letter. Since the Balance Sheet Date, there have
been no increases in the compensation payable or any special bonuses to any
officer, director, key employee or other employee, except ordinary salary
increases implemented on a basis consistent with past practices. Except as
will be set forth on Schedule 3.14 to the Select Force Disclosure Letter,
(i) Select Force is not bound by or subject to (and none of its assets or
properties is bound by or subject to) any arrangement with any labor union,
(ii) no employees of Select Force are represented by any labor union or
covered by any collective bargaining agreement, and (iii) there is no
pending or to the knowledge of Select Force, threatened labor dispute
involving Select Force and any group of its employees nor has Select Force
experienced any labor interruptions over the past three years. Select
Force believes its relationship with its employees to be good.
3.15 EMPLOYEE BENEFIT PLANS. Schedule 3.15 to the Select Force
Disclosure Letter shall set forth all employee benefit plans of Select
Force, including all employment agreements not listed in Schedule 3.14 and
other agreements or arrangements containing "golden parachute" or other
similar provisions, and deferred compensation agreements. Select Force has
delivered to Host true, complete and correct copies of such plans,
agreements and any trusts related thereto, and classifications of employees
covered thereby as of June 30, 2001. Except for the employee benefit
plans, if any, to be described on Schedule 3.15 to the Select Force
Disclosure Letter, Select Force does not sponsor, maintain or contribute to
any plan program, fund or arrangement that constitutes an "employee pension
benefit plan," nor has Select Force any obligation to contribute to or
accrue or pay any benefits under any deferred compensation or retirement
funding arrangement on behalf of any employee or employees (such as, for
example, and without limitation, any individual retirement account or
annuity, any "excess benefit plan"
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(within the meaning of Section 3(36) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or any non-qualified deferred
compensation arrangement). For the purposes of this Agreement, the term
"employee pension benefit plan" shall have the same meaning as is given
that term in Section 3(2) of ERISA. Select Force has not sponsored,
maintained or contributed to any employee pension benefit plan other than
the plans to be set forth on Schedule 3.15 to the Select Force Disclosure
Letter, nor is Select Force required to contribute to any retirement plan
pursuant to the provisions of any collective bargaining agreement
establishing the terms and conditions or employment of any employees of
Select Force. All accrued contribution obligations of Select Force, as of
June 30, 2001, with respect to any plan to be listed on Schedule 3.15 to
the Select Force Disclosure Letter have either been fulfilled in their
entirety or are fully reflected on the balance sheet of the Select Force as
of June 30, 2001.
3.16 COMPLIANCE WITH ERISA. Select Force has no plans that are
intended to or due qualify under Section 401(a) of the Code, except as set
forth in Schedule 3.15 to the Select Force Disclosure Letter.
3.17 CONFORMITY WITH LAW; LITIGATION.
(a) Except to the extent will be set forth on Schedule 3.17 to
the Select Force Disclosure Letter, Select Force is not in violation
of any law or regulation or any order of any court or Federal, state,
municipal or other governmental department, commission, board, bureau,
agency or instrumentality having jurisdiction over it which would have
a Material Adverse Effect.
(b) Except as will be set forth on Schedule 3.17 to the Select
Force Disclosure Letter (which shall disclose the parties to, nature
of and relief sought for each matter to be disclosed), other than
collection actions by Select Force, in the ordinary course of business
on its own behalf, none of which is greater than $25,000 and which in
the aggregate do not exceed $50,000:
(i) There is no suit, action, proceeding, investigation,
claim or order pending or, to the knowledge of Select Force,
threatened against Select Force or pending or, to the knowledge
of Select Force, threatened against any of the officers,
directors or employees of Select Force with respect to the
business or currently proposed business activities of Select
Force, or to which Select Force is otherwise a party, or which
may have or is likely to have a Material Adverse Effect, before
any court, or before any governmental authority, department,
commission, bureau, agency or other governmental department or
arbitrator (collectively, "Claims").
(ii) Select Force is not subject to any unsatisfied or
continuing judgment, order or decree of any court or governmental
authority which could have a Material Adverse Effect. Schedule
3.17 to the Select Force Disclosure Letter will set forth all
closed litigation matters to which Select Force was a party
during the preceding five years, the dates such litigation was
commenced and concluded, and the nature of the resolution thereof
(including amounts paid in settlement or judgment).
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3.18 TAXES. Select Force has timely filed all requisite federal,
state and other tax returns or extension requests for all fiscal periods
ended on or before the Balance Sheet Date; and to the knowledge of Select
Force, there are no examinations in progress or claims against any of them
for federal, state and other Taxes (including penalties and interest) for
any period or periods prior to and including June 30, 2001 and no notice of
any claim for taxes has been received. All Taxes, for the periods ended on
or before the Balance Sheet Date, including interest and penalties (whether
or not shown on any tax return) owed by Select Force, with respect to any
payment made or deemed made by Select Force herein have been paid. The
amounts shown as accruals for Taxes on the Select Force Financial
Statements are sufficient for the payment of all Taxes of the kinds
indicated (including penalties and interest) for all fiscal periods ended
on or before that date. Copies of (i) any tax examinations, (ii) extensions
of statutory limitations and (iii) the federal and local income tax returns
and franchise tax returns of Select Force for the last three fiscal years,
will be attached as Schedule 3.18 to the Select Force Disclosure Letter.
3.19 NO VIOLATIONS. Select Force is not in violation of any of its
Charter Documents. Select Force is not in default under any lease,
instrument, agreement, license, or permit set forth on the Schedules to the
Select Force Disclosure Letter, or any Material Contracts (the "Material
Documents"); and, except as will be set forth in Schedule 3.19 to the
Select Force Disclosure Letter, (a) the rights and benefits of Select Force
under the Material Documents will not be adversely affected by the
transactions contemplated hereby and (b) the execution of this Agreement
and the performance of the obligations hereunder and the consummation of
the transactions contemplated hereby will not result in any violation of,
or breach of, or constitute a default under, any of the terms or provisions
of the Material Documents or the Charter Documents. Except as will be set
forth on Schedule 3.19 to the Select Force Disclosure Letter, none of the
Material Documents requires notice to, or the consent or approval of, any
governmental agency or other third party with respect to any of the
transactions contemplated hereby in order to remain in full force and
effect and consummation of the transactions contemplated hereby will not
give rise to any right to termination, cancellation or acceleration or loss
of any right or benefit. Except as will be set forth on Schedule 3.19 to
the Select Force Disclosure Letter, none of the Material Documents
prohibits the use or publication by Select Force of the name of any other
party to such Material Document, and none of the Material Documents
prohibits or restricts Select Force from freely providing services to any
other customer or potential customer of Select Force.
3.20 GOVERNMENT CONTRACTS. Select Force is not now a party to any
governmental contract subject to price redetermination or renegotiation.
3.21 ABSENCE OF CHANGES. Since Balance Sheet Date, except as will be
set forth on Schedule 3.21 to the Select Force Disclosure Letter, there has
not been:
(a) Any material adverse change in the financial condition,
assets, liabilities (contingent or otherwise), income or business of
Select Force;
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(b) Any damage, destruction or loss (whether or not covered by
insurance) in excess of $10,000 causing a Material Adverse Effect on
Select Force;
(c) Any change in the authorized capital of Select Force or its
outstanding securities or any change in its ownership interests or any
grant of any options, warrants, calls, conversion rights or
commitments;
(d) Any declaration or payment of any dividend or distribution
in respect of the capital stock or any direct or indirect redemption,
purchase or other acquisition of any of the capital stock of Select
Force;
(e) Any ten (10) percent or more increase in the compensation,
bonus, sales commissions or fee arrangement payable or to become
payable by Select Force to any of their respective officers,
directors, stockholders, employees, consultants or agents, except for
ordinary and customary bonuses and salary increases for such persons
in accordance with past practice;
(f) Any work interruptions, labor grievances or claims filed, or
any event or condition of any character, materially adversely
affecting the business of Select Force;
(g) Any sale or transfer, or any agreement to sell or transfer,
any material assets, property or rights of Select Force to any person,
including, without limitation, any of the stockholders and their
affiliates;
(h) Any cancellation, or agreement to cancel, any indebtedness
or other obligation owing to Select Force, including without
limitation any indebtedness or obligation of any stockholder or any
affiliate thereof;
(i) Any plan, agreement or arrangement granting any preferential
rights to purchase or acquire any interest in any of the assets,
property or rights of Select Force or requiring consent of any party
to the transfer and assignment of any such assets, property or rights;
(j) Any purchase or acquisition of, or agreement, plan or
arrangement to purchase or acquire, any property, rights or assets
outside of the ordinary course of business of Select Force;
(k) Any waiver of any material rights or claims of Select Force;
(l) Any amendment or termination of any Material Documents or
other right to which Select Force is a party;
(m) Any transaction by Select Force outside the ordinary course
of its business, except for that certain promissory note, in the
amount of $150,000.00, dated July 11, 2001, between Select Force and
Host;
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(n) Any cancellation or termination of a Material Contract with
a customer or client prior to the scheduled termination date; or
(o) Any other distribution of property or assets by Select Force
other than in the ordinary course of business.
3.22 DEPOSIT ACCOUNTS; POWERS OF ATTORNEY. Schedule 3.22 to the
Select Force Disclosure Letter will include an accurate list as of the date
of the Agreement of: (i) the name of each financial institution in which
Select Force has accounts or safe deposit boxes; (ii) the names in which
the accounts or boxes are held; (iii) the type of account and account
number; and (iv) the name of each person authorized to draw thereon or have
access thereto. Schedule 3.22 to the Select Force Disclosure Letter also
sets forth the name of each person, corporation, firm or other entity
holding a general or special power of attorney from Select Force and a
description of the terms of such power.
3.23 RELATIONS WITH GOVERNMENTS. Except for political contributions
made in a lawful manner which, in the aggregate, do not exceed $10,000 per
year since its inception, Select Force has not made, offered or agreed to
offer anything of value to any governmental official, political party or
candidate for government office nor has it otherwise taken any action which
would cause Select Force to be in material violation of the Foreign Corrupt
Practices Act of 1977, as amended or any law of similar effect, with
respect to political contributions.
3.24 DISCLOSURE. To the knowledge of Select Force, this Agreement,
including the Schedules and Select Force Disclosure Letter to be provided
and the Schedules to be attached thereto, together with the other
information furnished to Host and HMC by Select Force and the Select Force
Shareholders in connection herewith, do not contain an untrue statement of
a material fact or omit to state a material fact necessary to make the
statements herein and therein, in light of the circumstances under which
they were made, not misleading.
3.25 PROHIBITED ACTIVITIES. Select Force has not, between June 30,
2001 and the date hereof, taken any of the actions (Prohibited Activities)
set forth in Section 6.3, as qualified by any schedules set forth in
Section 6.3.
3.26 NO CONFLICTS. The execution, delivery and performance of this
Agreement by Select Force and the consummation by Select Force of the
transactions contemplated hereby will not conflict with or result in a
breach or violation of any term or provision of, or (with or without notice
or passage of time, or both) constitute a default under, any indenture,
mortgage, deed of trust, trust (constructive and other), loan agreement or
other agreement or instrument to which Select Force is a party or violate
the provisions of any statute, or any order, rule or regulation of any
governmental body or agency or instrumentality thereof, or any order, writ,
injunction or decree of any court or any arbitrator, having jurisdiction
over Select Force or the property of Select Force.
3.27 CERTAIN BUSINESS RELATIONSHIPS WITH SELECT FORCE. Except as
listed in Schedule 3.27, neither of the Select Force Shareholders nor any
relative of any Select Force Shareholder or Affiliate of Select Force has
been involved in any business arrangement or relationship with Select Force
since May 1, 1997, and neither of the Select Force Shareholders, nor any
relative of
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any Select Force Shareholder or Affiliate of Select Force owns any asset,
tangible or intangible, which is used in Select Force's operations.
3.28 AUTHORIZATION & ENFORCEABILITY. Select Force has all necessary
corporate powers and authority to execute, deliver and perform its
obligations under this Agreement and each of the certificates, instruments
and documents executed or delivered by Select Force pursuant to the terms
of this Agreement. All corporate action on the part of the Board of
Directors of Select Force necessary for the authorization, execution,
delivery and performance of this Agreement, the consummation of the Merger
and the performance of all Select Force's obligations under this Agreement
to which Select Force is a party has been taken. All corporate action on
the part of the Board of Directors of Select Force necessary for the
authorization, execution, delivery and performance of documents executed by
Select Force pursuant to the terms of this Agreement has been or will be
taken prior to the Effective Time of Merger. All corporate action on the
part of the shareholders of Select Force necessary for the authorization,
execution, delivery and performance of this Agreement and other documents
executed by it pursuant to the terms of this Agreement has been taken or
will be taken as of or prior to the Effective Time of Merger. This
Agreement has been, and each of the other documents to which Select Force
is a party at the Closing will have been, duly executed and delivered by
Select Force and the Agreement is, and each of the document to which Select
Force is a party will be at Closing, a legal, valid, and binding oblation
of Select Force, enforceable against Select Force in accordance with it
terms, except as to the effect, if any, of (i) applicable bankruptcy and
similar laws affecting the rights of creditors generally, or (ii) rules of
law governing specific performance, injunctive relief and other equitable
remedies.
4. REPRESENTATIONS AND WARRANTIES OF HOST AND HMC.
Except as will be provided in the Host Disclosure Letter (as defined
below) to be delivered pursuant to in Section 10.2, Host and HMC jointly
and severally represent and warrant to Select Force and the Select Force
Shareholders that all of the following representations and warranties in
this Section 4 are true at the date of this Agreement and shall be true at
the time of Closing. As used in this Agreement, the "Host Disclosure
Letter" shall mean the disclosure letter delivered by Host and HMC to
Select Force and the Select Force Shareholders regarding Host and HMC
pursuant to this Section 4. As used in this Section 4, unless the context
otherwise requires, Host refers to Host and all of its wholly-owned
subsidiaries.
4.1 DUE ORGANIZATION. Each of Host and HMC is a corporation duly
organized, validly existing and in good standing under the laws of the
state of its incorporation, and has the requisite power and authority to
carry on its business as it is now being conducted. Each of Host and HMC
is duly qualified to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification necessary, except (i) as
will be set forth on Schedule 4.1 to Host Disclosure Letter or (ii) where
the failure to be so authorized or qualified would not have a material
adverse effect on the business, operations, properties, assets or condition
(financial or otherwise), of Host taken as a whole (as used herein with
respect to Host, or with respect to any other person, a "Material Adverse
Effect"). Schedule 4.1 to the Host Disclosure Letter will set forth the
jurisdiction in which Host and HMC are incorporated and contain a list of
all jurisdictions in which Host and HMC are authorized or qualified to do
business.
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4.2 SUBSIDIARIES. The names and jurisdiction of incorporation of the
subsidiaries of Host are set forth in Schedule 4.2 to the Host Disclosure
Letter. Except as set forth in Schedule 4.2 to the Host Disclosure Letter,
(i) neither Host nor HMC owns or controls, and has not in the past owned or
controlled, directly or indirectly, any corporation, partnership, limited
liability company or other business entity, and (ii) neither Host nor HMC
owns, directly or indirectly any ownership, equity, or voting interest in
any corporation, partnership, join venture or other entity, and does not
have any agreement or commitment to purchase any such interest
4.3 CAPITAL STRUCTURE. The authorized capital stock of Host and HMC
is as set forth in Section 1.4. All of the issued and outstanding shares
of the capital stock of Host and HMC have been duly authorized and are
validly issued, fully paid and non-assessable. All of the outstanding
shares of common stock have been duly authorized and are validly issued,
fully paid and non-assessable. Schedule 4.3 to the Host Disclosure Letter
sets forth a list of all outstanding options, warrants, and other
securities convertible into capital stock of Host. HMC has no options,
warrants, or other securities convertible into capital stock.
4.4 EQUITY FINANCING. No equity financing is presently contemplated.
4.5 SEC DOCUMENT. Host has made all filings with the Securities and
Exchange Commission (the "SEC") that it has been required to make under the
Securities Act of 1933, as amended, and the Securities Exchange Act of
1934, as amended (collectively, the "SEC Documents"). Host has furnished
Select Force with true and complete copies of its Annual Report on Form
10-K for the fiscal year ended June 28, 2001, all Forms 8-K and 10-Q's filed
after the date of the last Form 10-K and its Proxy Statement relating to
its 2000 Annual Meeting of Stockholders. As of their respective dates,
each of the SEC Documents complied in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended and the
rules and regulations of the SEC promulgated thereunder. As of the Closing
Date, none of the SEC Documents, as of their respective dates, contained
any untrue statement of a fact or omitted to state a fact necessary in
order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. As of the Closing Date, the
financial statements included in or incorporated by reference into the SEC
Documents, including the related notes and schedules, have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, are correct and complete in all respects, and are
consistent with the books and records of Host.
4.6 EVENTS SUBSEQUENT. Since the date of the financial statements set
forth in Host's most recent quarterly report, there has not been any
adverse change in the assets, liabilities, business, financial condition,
operations, results of operations, or future prospects of Host taken as a
whole.
4.7 LITIGATION. Host is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or is a party or to the
knowledge of Host is threatened to be made a party to any action, suit,
proceeding, hearing, or investigation of, in, or before any court or quasi-
judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator.
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4.8 DISCLOSURE. This Agreement, including the Exhibits and Host
Disclosure Letter to be provided and the Schedules to be attached thereto,
together with the other information furnished to Select Force and the
Select Force Shareholders by Host and HMC in connection herewith, do not
contain an untrue statement of a material fact or omit to state a material
fact necessary to make the statements herein and therein, in light of the
circumstances under which they were made, not misleading.
4.9 NO CONFLICTS. Except as described in Schedule 4.9 to the Host
Disclosure Letter concerning the Commercial Loan and Security Agreement
(the "Loan Agreement") by and among Webster Bank, Host and Lindley Food
Service Corporation ("Lindley"), the execution, delivery and performance of
this Agreement by Host and HMC and the consummation by Host and HMC of the
transactions contemplated hereby will not conflict with or result in a
breach or violation of any term or provision of, or (with or without notice
or passage of time, or both) constitute a default under, any indenture,
mortgage, deed of trust, trust (constructive and other), loan agreement or
other agreement or instrument to which Host is a party or violate the
provisions of any statute, or any order, rule or regulation of any
governmental body or agency or instrumentality thereof, or any order, writ,
injunction or decree of any court or any arbitrator, having jurisdiction
over Host, HMC or any of their property.
4.10 AUTHORIZATION & ENFORCEABILITY. Each of Host and HMC has all
necessary corporate powers and authority to execute, deliver and perform
their obligations under this Agreement and each of the certificates,
instruments and documents executed or delivered by them pursuant to the
terms of this Agreement. All corporate action on the part of each of the
Board of Directors of Host and HMC necessary for the authorization,
execution, delivery and performance of this Agreement, the consummation of
the Merger and the performance of all their obligations under this
Agreement to which they are a parties have been taken. All corporate
action on the part of each of the Board of Directors of Host and HMC
necessary for the authorization, execution, delivery and performance of
documents executed by them pursuant to the terms of this Agreement has been
or will be taken prior to the Effective Time of Merger. All corporate
action on the part of each of the shareholders of Host and HMC necessary
for the authorization, execution, delivery and performance of this
Agreement and other documents executed by it pursuant to the terms of this
Agreement has been taken or will be taken as of or prior to the Effective
Time of Merger. This Agreement has been, and each of the other documents
to which each of Host and HMC is a party at the Closing will have been,
duly executed and delivered by each of Host and HMC, and the Agreement is,
and each of the document to which each of Host and HMC is a party will be
at Closing, a legal, valid, and binding oblation of each of Host and HMC,
enforceable against each of Host and HMC in accordance with it terms,
except as to the effect, if any, of (i) applicable bankruptcy and similar
laws affecting the rights of creditors generally, or (ii) rules of law
governing specific performance, injunctive relief and other equitable
remedies.
4.11 NASDAQ LISTING STATUS. Schedule 4.11 sets forth the listing
status of Host's Common Stock on the Nasdaq SmallCap Market, including the
status of any de-listing procedures and the status of Host's response to
the Nasdaq's November 15, 2000 letter and any subsequent correspondence
between Host and the Nasdaq in connection with any de-listing procedures.
-17-
5. CERTIFICATE OF THE SELECT FORCE SHAREHOLDERS CONCERNING THE
TRANSACTION.
Prior to Closing, Select Force shall obtain, in writing, a Certificate
from each Select Force Shareholder to the effect that all of the following
representations and warranties in this Section 5 are true and correct as of
the date of this Agreement and as of the date of Closing. Such Certificate
shall be delivered to Host and HMC at Closing.
5.1 AUTHORIZATION. All action on the part of the individual Select
Force Shareholder executing the Certificate necessary for the
authorization, execution and delivery of this Agreement by Select Force has
been taken.
5.2 TITLE TO THE SHARES. Each Select Force Shareholder owns, and is
transferring to, or a duly authorized agent of the Select Force Shareholder
is transferring to Host at the Closing, good, valid and marketable title to
the number of Shares set forth opposite the name of the Select Force
Shareholder in Schedule 3.3 to the Select Force Disclosure Letter free and
clear of all liens, claims, options and encumbrances whatsoever. There are
no outstanding options, warrants or rights to purchase or acquire any of
the Shares of the Shareholder or any of the capital stock of Select Force
held by such Select Force Shareholder.
5.3 PURCHASE ENTIRELY FOR HIS OWN ACCOUNT. The Host securities will
be acquired for investment for the Select Force Shareholder's own account,
not as a nominee or agent, and not with the view to the resale or
distribution of any part thereof, and the Select Force Shareholder has no
present intention of selling, granting any participation in, or otherwise
distributing Host securities. The Select Force Shareholder has no
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to such person with respect to any of the
securities of Host.
5.4 DISCLOSURE OF INFORMATION. Each Select Force Shareholder has
received and had the opportunity to review the reports filed by Host with
the SEC and has had the opportunity to ask questions of, and receive
answers from, representatives of Host to obtain additional information
regarding Host.
5.5 RESTRICTIONS ON TRANSFER.
(a) The securities of Host that the Select Force Shareholders
will acquire have not been registered under the Securities Act of
1933, as amended (the "Securities Act") and, accordingly, such
securities will not be fully transferable except as permitted under
various exemptions contained in the Securities Act or upon
satisfaction of the registration and prospectus delivery requirements
of the Securities Act. The Select Force Shareholders must bear the
economic risk of his investment in such securities for an indefinite
period of time as such securities have not been registered under the
Securities Act and therefore cannot be sold unless they are
subsequently registered or an exemption from registration is
available. The Select Force Shareholders are acquiring the securities
for investment purposes only, for their own account, and not as
nominee or agent for any other person, and not with the view to, or
for resale in connection with, any distribution thereof within the
meaning of the Securities Act.
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(b) The certificates evidencing the securities of Host the
Select Force Shareholders will acquire pursuant to this Agreement, and
each instrument or certificate issued in transfer thereof, will bear
substantially the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES
ONLY AND NOT WITH A VIEW TO THE DISTRIBUTION THEREOF,
AND SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED
UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT COVERING SUCH SECURITIES OR AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE. IF THE SECURITIES
ARE TO BE SOLD OR TRANSFERRED PURSUANT TO AN EXEMPTION
THE CORPORATION MAY REQUIRE AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER STATING THAT SUCH
SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND WILL
NOT VIOLATE SUCH ACT OR ANY OTHER APPLICABLE SECURITIES
LAWS.
(c) Each Select Force Shareholder understands a notation on the
records of Host and its transfer agent will be made in order to
implement the restrictions on transfer set forth in this Section 5.5.
5.6 RESTRICTIONS ON VOTING. There are no voting trusts, proxies or
other agreements or understandings with respect to the voting of the
capital stock of Select Force.
6. COVENANTS OF SELECT FORCE PRIOR TO CLOSING.
6.1 ACCESS AND COOPERATION; DUE DILIGENCE. Between the date of this
Agreement and the Closing Date, Select Force will afford to the officers
and authorized representatives of Host and HMC access to all of the sites,
properties, books and records of Select Force and will furnish Host and HMC
such additional financial and operating data and other information as to
the business and properties of Select Force as Host and HMC may from time
to time reasonably request. Select Force will cooperate with Host and HMC,
their representatives, auditors and counsel in the preparation of any
documents or other material which may be required in connection with any
documents or materials required by this Agreement or necessary to complete
the transactions contemplated hereunder.
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6.2 CONDUCT OF BUSINESS PENDING CLOSING. Between the date of this
Agreement and the Closing, Select Force will, except as will be set forth
on Schedule 6.2 to the Select Force Disclosure Letter:
(a) Carry on its business in substantially the same manner as it
has heretofore and not introduce any material new method of
management, operation or accounting;
(b) Maintain its properties and facilities in as good working
order and condition as at present, ordinary wear and tear excepted;
(c) Perform in all material respects all of its obligations
under agreements relating to or affecting its respective assets,
properties or rights;
(d) Use all reasonable efforts to keep in full force and effect
present insurance policies or other comparable insurance coverage;
(e) Use its reasonable efforts to maintain and preserve its
business organization intact, retain its present key employees and
maintain its relationships with suppliers, customers and others having
business relations with it;
(f) Maintain compliance with all material permits, laws, rules
and regulations, consent orders, and all other orders of applicable
courts, regulatory agencies and similar governmental authorities;
(g) Maintain present debt and lease instruments and not enter
into new or amended debt or lease instruments, without the knowledge
and consent of Host (which consent shall not be unreasonably
withheld), provided that debt and/or lease instruments may be replaced
without the consent of Host if such replacement instruments are on
terms at least as favorable to Select Force as the instruments being
replaced; and
(h) Maintain or reduce present salaries and commission levels
for all officers, directors, employees and agents except for ordinary
and customary bonus and salary increases for employees in accordance
with past practices.
6.3 PROHIBITED ACTIVITIES. Between the date hereof and the Closing
Date, Select Force will not, without the prior written consent of Host,
engage in any of the following (the "Prohibited Activities'):
(a) Make any change in its Charter Documents;
(b) Issue any securities, options, warrants, calls, conversion
rights or commitments relating to its securities of any kind other
than in connection with the exercise of options or warrants to be
listed in Schedule 3.3 to the Select Force Disclosure Letter;
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(c) Declare or pay any dividend, or make any distribution in
respect of its stock whether now or hereafter outstanding, or
purchase, redeem or otherwise acquire or retire for value any shares
of its stock;
(d) Deliver or sell, authorize the delivery or sale of, or
purchase or propose the purchase of, any shares of its stock;
(e) Except as listed in Schedule 6.3 and except for that certain
promissory note, in the amount of $150,000.00, dated July 11, 2001,
between Select Force and Host, enter into any contract or commitment
or incur or agree to incur any liability or make any capital
expenditures, except if it is in the normal course of business
(consistent with past practice) and involves an amount not in excess
of $5,000;
(f) Create, assume or permit to exist any mortgage, pledge or
other lien or encumbrance upon any assets or properties whether now
owned or hereafter acquired, except (1) with respect to purchase money
liens incurred in connection with the acquisition of equipment with an
aggregate cost not in excess of $50,000 necessary or desirable for the
conduct of the businesses of Select Force, (2) (A) liens for taxes
either not yet due or being contested in good faith and by appropriate
proceedings (and for which contested taxes adequate reserves have been
established and are being maintained) or (B) materialmen's, mechanics'
or other like liens arising in the ordinary course of business (the
liens set forth in clause (2) being referred to herein as "Statutory
Liens"), or (3) liens to be set forth on Schedule 3.7 and/or 3.11 to
the Select Force Disclosure Letter;
(g) Sell, assign, lease or otherwise transfer or dispose of any
property or equipment except in the normal course of business;
(h) Negotiate for the acquisition of any business or the start-up
of any new business;
(i) Merge or consolidate or agree to merge or consolidate with
or into any other corporation;
(j) Waive any material rights or claims of Select Force,
provided that Select Force may negotiate and adjust bills in the
course of good faith disputes with customers in a manner consistent
with past practice;
(k) Commit a breach or amend or terminate any Material Documents
or right of Select Force; or
(l) Enter into any other transaction outside the ordinary course
of its business or prohibited hereunder.
6.4 NO SHOP. Neither Select Force, nor any agent, officer, director,
trustee or any representative of any of the foregoing will, during the
period commencing on the date of this Agreement and ending with the earlier
to occur of the Closing Date or the termination of this Agreement in
accordance with its terms, directly or indirectly: (i) solicit or initiate
the submission of proposals or offers from any person for; (ii) participate
in any discussions
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pertaining to; or (iii) furnish any information to any person other than
Host or their authorized agents relating to, any acquisition or purchase
of all or a material amount of the assets of, or any equity interest in,
Select Force or a merger, consolidation or business combination of Select
Force; provided, however, that nothing contained in this Section 6.4 shall
prohibit the Board of Directors of Select Force from engaging in
discussions or participating in negotiations with and furnishing
information to another party making an acquisition proposal to the extent
the Board of Directors of Select Force determines in good faith after
consultation with its outside legal counsel that its fiduciary obligations
under applicable law require it to do so.
6.5 NOTIFICATION OF CERTAIN MATTERS. Select Force shall give prompt
notice to Host and HMC of (i) the occurrence or non-occurrence of any event
the occurrence or non-occurrence of which would be likely to cause any
representation or warranty of Select Force contained herein or to be set
forth in the Select Force Disclosure Letter to be untrue or inaccurate in
any material respect at or prior to the Closing and (ii) any material
failure of Select Force to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by such person hereunder.
The delivery of any notice pursuant to this Section 6.5 shall not be deemed
to (i) modify the representations or warranties of the party delivering
such notice, (ii) modify the conditions set forth in Sections 7 and 8, or
(iii) limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
6.6 FINAL FINANCIAL STATEMENTS. Select Force shall provide to Host
prior to the Closing Date, the unaudited balance sheets of Select Force as
of the end of all months following June 30, 2001, and the unaudited
statement of income and comprehensive income and cash flows for all months
ended after June 30, 2001, disclosing no material adverse change in the
financial condition or the results of its operations from the financial
statements as of the Balance Sheet Date. Such financial statements shall
have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods indicated (except as noted therein). Except as noted
in such financial statements, all of such financial statements will present
fairly the results of operations for the periods indicated therein.
7. COVENANTS OF HOST AND HMC PRIOR TO CLOSING.
7.1 COOPERATION. Between the date of this Agreement and the Closing
Date, each of Host and HMC will cooperate with Select Force, its
representatives, and counsel in the preparation of any documents or other
material which may be required in connection with any documents or
materials required by this Agreement or necessary to complete the
transactions contemplated hereunder.
7.2 NOTIFICATION OF CERTAIN MATTERS. Host and HMC shall give prompt
notice to Select Force and the Select Force Shareholders of (i) the
occurrence or non-occurrence of any event the occurrence or non-occurrence
of which would be likely to cause any representation or warranty of Host
contained herein or in the Host Disclosure Letter to be untrue or
inaccurate in any material respect at or prior to the Closing and (ii) any
material failure of Host to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by such person hereunder.
The delivery of any notice pursuant to this Section 7.2 shall not be deemed
to (i) modify the representations or warranties of the party delivering
such notice, (ii) modify the conditions set forth in Sections 8 and 9, or
(iii) limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
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7.3 NO SHOP. Neither Host, nor any agent, officer, director, trustee
or any representative of any of the foregoing will, during the period
commencing on the date of this Agreement and ending with the earlier to
occur of the Closing Date or the termination of this Agreement in
accordance with its terms, directly or indirectly: (i) solicit or initiate
the submission of proposals or offers from any person for; (ii) participate
in any discussions pertaining to; or (iii) furnish any information to any
person other than Select Force or their authorized agents relating to, any
merger, consolidation or business combination of Host; provided, however,
that nothing contained in this Section 7.3 shall prohibit the Board of
Directors of Host from engaging in discussions or participating in
negotiations with and furnishing information to another party making an
acquisition proposal to the extent the Board of Directors of Host
determines in good faith after consultation with its outside legal counsel
that its fiduciary obligations under applicable law require it to do so.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF HOST AND HMC.
The obligations of Host and HMC with respect to actions to be taken on
the Closing Date are subject to the satisfaction or waiver on or prior to
the Closing Date of all of the following conditions.
8.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All
representations and warranties of Select Force contained in this Agreement
shall be true and correct in all material respects as of the Closing Date
as though such representations and warranties had been made as of that
time; all the terms, covenants and conditions of this Agreement to be
complied with and performed by Select Force on or before the Closing Date
shall have been duly complied with and performed in all material respects;
and certificates to the foregoing effect dated the Closing Date, and signed
by Select Force and the Select Force Shareholders, as the case may be,
shall have been delivered to Host.
8.2 SATISFACTION. All actions, proceedings, instruments and
documents required to carry out this Agreement or incidental hereto and all
other related legal matters shall be reasonably satisfactory to Host and
its counsel.
8.3 NO LITIGATION. No action or proceeding before a court or any
other governmental agency or body shall have been instituted or threatened
to restrain or prohibit the transactions contemplated hereunder and no
governmental agency or body shall have taken any other action or made any
request of Select Force or the Select Force Shareholders as a result of
which Host deems it inadvisable to proceed with the transactions hereunder.
8.4 CONSENTS AND APPROVALS. The shareholders of Host shall have
approved this Agreement. All necessary consents and approvals as listed in
Schedule 3.19 shall have been obtained. All necessary consent of and
filings with any governmental authority or agency relating to the
consummation of the transaction contemplated herein shall have been
obtained and made and no action or proceeding shall have been instituted or
threatened to restrain or prohibit the transactions hereunder and no
governmental agency or body shall have taken any other action or made any
request of Select Force or the Select Force Shareholders as a result of
which Host deems it inadvisable to proceed with the transactions hereunder.
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8.5 GOOD STANDING CERTIFICATES. Select Force shall have delivered to
Host a certificate, dated as of a date no later than ten days prior to the
Closing Date, duly issued by the Secretary of State of Select Force's state
of incorporation that Select Force is in good standing and that all state
franchise and/or income tax returns and taxes for each for all periods
prior to the Closing have been filed and paid.
8.6 NO MATERIAL ADVERSE CHANGE. No event or circumstance shall have
occurred with respect to Select Force which would constitute a Material
Adverse Effect.
8.7 OFFICER'S CERTIFICATE. Host shall have received a certificate or
certificates, dated the Closing Date and signed by the President of Select
Force, certifying the truth and correctness of attached copies of its
Articles of Incorporation (including amendments thereto) and Bylaws
(including amendments thereto).
8.8 INCUMBENCY CERTIFICATE AND OTHER DOCUMENTS. Host shall have
received an incumbency certificate or certificates, dated the Closing Date
and signed by the Secretary of Select Force certifying the names, titles
and signatures of the officers authorized to execute the documents referred
to in this Section 8 and such additional supporting documentation and other
information with respect to the transactions contemplated hereunder as Host
or their counsel may reasonably request.
8.9 OPINION OF COUNSEL. Host shall have received an opinion from
counsel for Select Force, dated the Closing Date, in form and substance
reasonably satisfactory to counsel for Host.
8.10 RELEASE OF OBLIGATIONS AND STOCK OPTIONS. Host shall have
obtained a release of each of the officers and directors of Select Force
related to all matters involving Select Force.
8.11 EMPLOYMENT AND NONCOMPETITION AGREEMENTS. Tammi Didlot shall
have executed an employment agreement for a period of three years in the
form attached hereto as Exhibit A. The sole director of Select Force, Roger
Lockhart shall have executed a Noncompetition Agreement in the form
attached hereto as Exhibit B.
8.12 LOAN DOCUMENTS. Webster Bank shall have granted to Host a waiver
of certain loan covenants contained in the Loan Agreement. Host shall have
negotiated, and Select Force, Host and Lindley shall have executed such
documents as may be required by Webster Bank to modify or amend the Loan
Agreement, and related agreements thereto.
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9. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELECT FORCE AND THE
SHAREHOLDERS.
The obligations of Select Force and the Select Force Shareholders with
respect to actions to be taken on the Closing Date are subject to the
satisfaction or waiver on or prior to the Closing Date of all of the
following conditions.
9.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. All
the representations and warranties of Host and HMC contained in this
Agreement shall be true and correct in all material respects as of the
Closing Date with the same effect as though such representations and
warranties had been made on and as of that time; all the terms, covenants
and conditions of this Agreement to be complied with and performed by Host
and HMC on or before the Closing Date shall have been duly complied with
and performed in all material respects; and certificates to the foregoing
effect dated the Closing Date, and signed by Host and HMC shall have been
delivered to Select Force.
9.2 SATISFACTION. All actions, proceedings, instruments and documents
required to carry out this Agreement or incidental hereto and all other
related legal matters shall be reasonably satisfactory to Select Force or
the Select Force Shareholders, and their counsel.
9.3 NO LITIGATION. No action or proceeding before a court or any
other governmental agency or body shall have been instituted or threatened
to restrain or prohibit the transactions hereunder and no governmental
agency or body shall have taken any other action or made any request of
Host as a result of which Select Force and the Select Force Shareholders
deem it inadvisable to proceed with the transactions hereunder.
9.4 CONSENTS AND APPROVALS. The Select Force Shareholders shall have
approved this Agreement. All necessary consents and approvals as listed in
Schedule 4.19 shall have been obtained. All necessary consent of and
filings with any governmental authority or agency relating to the
consummation of the transaction contemplated herein shall have been
obtained and made and no action or proceeding shall have been instituted or
threatened to restrain or prohibit the transactions hereunder and no
governmental agency or body shall have taken any other action or made any
request of Host as a result of which Select Force and the Select Force
Shareholders deem it inadvisable to proceed with the transactions
hereunder.
9.5 NO MATERIAL ADVERSE CHANGE. No event or circumstance shall have
occurred with respect to Host or HMC which would constitute a Material
Adverse Effect.
9.6 INCUMBENCY CERTIFICATE AND OTHER DOCUMENTS. Select Force and the
Select Force Shareholders shall have received an incumbency certificate or
certificates, dated the Closing Date, and signed by the Secretary of Host,
certifying the names, titles and signatures of the officers authorized to
execute the documents referred to in this Section 9 and such additional
supporting documentation and other information with respect to the
transactions contemplated hereunder as Select Force and the Select Force
Shareholders or their counsel may reasonably request.
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9.7 OPINION OF COUNSEL. Select Force shall have received an opinion
from counsel for Host and HMC, dated the Closing Date, in form and
substance reasonably satisfactory to counsel for Select Force.
9.8 OFFICER'S CERTIFICATE. Select Force shall have received a
certificate or certificates, dated the Closing Date and signed by the
President of Host, certifying the truth and correctness of attached copies
of its Articles of Incorporation (including amendments thereto) and Bylaws
(including amendments thereto).
10. ADDITIONAL AGREEMENTS.
10.1 REASONABLE BEST EFFORTS. Subject to the terms and conditions of
this Agreement, each party will use its reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement as soon as
practicable after the date hereof. Host, shall promptly prepare and file
with the SEC a proxy statement (the "Proxy Statement") and Host will take,
in accordance with applicable law and its Articles of Incorporation and
Bylaws, all action necessary to convene a meeting of its shareholders to
consider and vote upon the adoption of this Agreement. Select Force shall
cooperate with Host in the preparation of the Proxy Statement, including
providing such information about Select Force and its plans with respect to
Host after the Merger as may be reasonably requested by Host.
10.2 COMPLETION OF THE DISCLOSURE LETTERS. Select Force shall use its
reasonable best efforts to complete and deliver to Host and HMC the Select
Force Disclosure Letter on or before 30 days after the date first above
written. Host and HMC shall use their reasonable best efforts to complete
and deliver to Select Force and the Select Force Shareholders the Host
Disclosure letter on or before 30 days after the date first above written.
10.3 PUBLIC ANNOUNCEMENTS. The initial press release of Host with
respect to this Agreement shall be reviewed and approved by Select Force.
Thereafter, Host shall consult with Select Force prior to issuing any press
releases or otherwise making public announcements with respect to this
Agreement and the transactions contemplated by this Agreement, except as
may be required by law.
10.4 FURTHER ASSURANCES. Subject to the terms and conditions of this
Agreement, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all action, and to do, or cause to be done,
all things necessary, common, proper or advisable under applicable legal
requirements, to consummate and make effective the transactions
contemplated by this Agreement. If at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, Host, HMC, Select Force and the Select Force Shareholders, as
the case may be, shall take or cause to be taken all such necessary or
convenient action and execute, and deliver and file, or cause to be
executed, delivered and filed, all necessary or convenient documentation.
10.5 HOST MERGER CORPORATION. Upon execution of this Merger
Agreement, Host shall act promptly to form a Colorado corporation, Host
Merger Corporation ("HMC"), in accordance
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with Sections 1.4 and 4.3 hereof. As soon as it has been established, Host
shall cause HMC to execute this Merger Agreement.
10.6 AUDIT OF SELECT FORCE. Host agrees to pay all expenses related
to the independent audit of Select Force.
10.7 NASDAQ LISTING. Host agrees to file with the Nasdaq SmallCap
Market a Notification Form for Listing of Additional Shares with regards to
the shares of Host Common Stock issuable pursuant to this Agreement.
11. TERMINATION OF AGREEMENT.
11.1 TERMINATION. This Agreement may be terminated at any time prior
to the Closing Date solely:
(a) By mutual consent of all of the parties hereto;
(b) By Select Force, on the one hand, or by Host and HMC on the
other hand, if the transactions contemplated by this Agreement to take
place at the Closing shall not have been consummated by December 31,
2001, which date may be continued for up to an additional ninety (90)
days to permit clearance by the SEC of the Proxy Statement, unless the
failure of such transactions to be consummated is due to the failure
of the party seeking to terminate this Agreement to perform any of its
obligations under this Agreement to the extent required to be
performed by it prior to or on the Closing Date;
(c) By Select Force, on the one hand, or by Host and HMC, on the
other hand, if a material breach of the representations or a material
breach or default shall be made by the other party in the observance
or in the due and timely performance of any of the covenants or
agreements contained herein, and the curing of such default shall not
have been made on or before the Closing Date or by the Select Force
Shareholders, if the conditions set forth in Section 9 hereof have not
been satisfied or waived as of the Closing Date, or by Host, if the
conditions set forth in Section 8 hereof have not been satisfied or
waived as of the Closing Date;
(d) By Select Force if the Host Disclosure Letter shall not have
been completed and delivered to Select Force on or before 30 days
after the date first above written, or if the Host Disclosure Letter
contains information which causes Select Force to determine it would
be inadvisable to proceed with the transactions hereunder; and Select
Force has provided written notification to Host on or before ten (10)
days after receipt of Host Disclosure Letter that Agreement is
terminated;
(e) By Host and HMC if the Select Force Disclosure Letter shall
not have been completed and delivered to Host and HMC on or before 30
days after the date first above written, or if the Select Force
Disclosure Letter contains information which causes Host and HMC to
determine it would be inadvisable to proceed with the transactions
hereunder, and Host and HMC has provided written notification to
Select Force on or before 10 days after receipt of the Select Force
Disclosure Letter that the Agreement is terminated;
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(f) By Select Force on or before on or before 30 days after the
date first above written, if it determines that the merger would
result in an adverse tax obligation and the parties to this Agreement
have not been able to agree to a restructuring of the transaction.
11.2 LIABILITIES IN EVENT OF TERMINATION. Termination of this
Agreement will in no way limit any obligation or liability of any party
based on or arising from a breach or default by such party with respect to
any of its representations, warranties, covenants or agreements contained
in this Agreement or in the Schedules delivered by such party, including,
but not limited to, legal and audit costs and out of pocket expenses.
12. RESERVED.
13. GENERAL PROVISIONS.
13.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
representations and warranties of the parties hereto contained in this
Agreement or in any writing delivered pursuant hereto or at the Closing
shall survive the execution and delivery of this Agreement and the Closing
and the consummation of the transactions contemplated hereby (and any
examination or investigation by or on behalf of any party hereto) until the
date twelve months after the Closing Date (except for claims in respect
thereof pending at such time, which shall survive until finally resolved or
settled); provided, also, the representations, warranties, covenants and
agreements in Section 3.18 shall survive until the expiration of the
statutory period of limitations for assessment of tax deficiencies,
including any extensions thereof, for each taxable period of Select Force
which begins before the Closing Date and the representations, warranties,
covenants and agreements in Section 5 shall survive until the expiration of
the applicable period of limitations, including any extensions thereof. No
action may be commenced with respect to any representation, warranty,
covenant or agreement in this Agreement, or in any writing delivered
pursuant hereto, unless written notice, setting forth in reasonable detail
the claimed breach thereof, shall be delivered pursuant to Section 13.7 to
the party or parties against whom liability for the claimed breach is
charged on or before the termination of the survival period specified in
Section 13.1 for such representation, warranty, covenant or agreement.
13.2 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise),
without the prior written consent of the other parties, and any attempt to
make any such assignment without such consent shall be null and void.
Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
13.3 ENTIRE AGREEMENT. This Agreement and any attachments hereto, the
Select Force Disclosure letter and the Schedules thereto (including the
schedules, exhibits and annexes attached hereto and thereto), the Host
Disclosure Letter and the Schedules thereto (including the schedules,
exhibits and annexes attached hereto and thereto) and the documents
delivered pursuant hereto constitute the entire agreement and understanding
among the parties and supersede any prior agreement and understanding
relating to the subject matter of this Agreement. This Agreement, upon
execution, constitutes a valid and binding agreement of the
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parties hereto enforceable in accordance with its terms and may be modified
or amended only by a written instrument executed by all parties.
13.4 COUNTERPARTS. This Agreement may be executed simultaneously in
counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
13.5 BROKERS AND AGENTS. Each party represents and warrants that it
employed no broker or agent in connection with this transaction, except as
provided in Schedule 13.5.
13.6 EXPENSES. Except as otherwise specifically provided herein, each
party to this Agreement shall bear its own direct and indirect expenses
incurred in connection with the negotiation and preparation of this
Agreement and the consummation and performance of the transactions
contemplated hereby, including, without limitation, all legal fees and fees
of any brokers, finders or similar agents.
13.7 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed duly given (i) on the date of delivery if
delivered personally, or by telecopy or facsimile upon confirmation of
receipt, (ii) on the first business day following the date of dispatch if
delivered by a recognized next-day courier service, or (iii) on the 5th
business day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid. All notices
hereunder shall be delivered as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice:
(a) If to Host or HMC:
Host America Corporation
2 Broadway
Hamden, CT 06518
Facsimile: (203) 230-8776
Attention: Geoffrey Ramsey
with a copy to:
Berenbaum, Weinshienk & Eason, P.C.
370 17th Street, Suite 2600
Denver, CO 80202
Facsimile: (303) 629-7610
Attention: John Wills, Esq.
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(b) If to Select Force or the Select Force Shareholders:
Roger Lockhart
Select Force Incorporated
P.O. Box 10
Beaver, Arkansas 72613
Facsimile: (501) 253-5256
Attention: Roger Lockhart
with a copy to:
Brewer & Pritchard, P.C.
Three Riverway, Suite 1800
Houston, Texas 77056
Facsimile: (713) 659-5302
Attention: Thomas C. Pritchard, Esq.
13.8 GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of Colorado.
13.9 ENFORCEMENT. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly
agreed that the parties shall be entitled to specific performance of the
terms hereof, this being in addition to any other remedy to which they are
entitled at law or in equity.
13.10 EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise
provided herein, no delay of or omission in the exercise of any right,
power or remedy accruing to any party as a result of any breach or default
by any other party under this Agreement shall impair any such right, power
or remedy, nor shall it be construed as a waiver of or acquiescence in any
such breach or default, or of any similar breach or default occurring
later; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default occurring before or after that
waiver.
13.11 TIME. Time is of the essence with respect to this
Agreement.
13.12 REFORMATION AND SEVERABILITY. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the
extent possible, be modified in such manner as to be valid, legal and
enforceable but so as to most nearly retain the intent of the parties, and
if such modification is not possible, such provision shall be severed from
this Agreement, and in either case the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in
any way be affected or impaired thereby.
13.13 REMEDIES CUMULATIVE. No right, remedy or election given by
any term of this Agreement shall be deemed exclusive, but each shall be
cumulative with all other rights, remedies and elections available at law
or in equity.
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13.14 CAPTIONS; CONSTRUCTION. The headings of this Agreement are
inserted for convenience only, and shall not constitute a part of this
Agreement or be used to construe or interpret any provision hereof. This
Agreement has been fully reviewed and negotiated by the parties and no
uncertainty or ambiguity in any term or provision of this Agreement shall
be construed strictly against any party under any rule of construction or
otherwise.
(the remainder of this page is intentionally left blank)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
HOST AMERICA CORPORATION SELECT FORCE, INCORPORATED
By:/s/ GEOFFREY RAMSEY By: /s/ ROGER LOCKHART
-------------------------- -----------------------------
Name: Geoffrey Ramsey Name: Roger Lockhart
------------------------ ---------------------------
Title: Chief Executive Officer Title: Chairman of the Board
----------------------- --------------------------
HOST MERGER CORPORATION
By: /s/ GEOFFREY RAMSEY
--------------------------
Name: Geoffrey Ramsey
------------------------
Title: Chief Executive Officer
-----------------------
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