EXHIBIT 10.42
NON-COMPETITION, CONFIDENTIALITY, AND
-------------------------------------
NON-SOLICITATION AGREEMENT
--------------------------
This Non-Competition, Confidentiality, and Non-Solicitation Agreement
(the "Agreement") is dated March 28, 2002, between HOST AMERICA
CORPORATION ("Company") and MR. ROGER LOCKHART ("Seller").
RECITALS
--------
A. The Company and Select Force, Inc. ("Select Force") are parties
to a Merger Agreement ("Merger Agreement") dated October , 2001 pursuant
to which the Company is purchasing all of the issued and outstanding shares
of Select Force.
B. The Seller is the record and beneficial holder of approximately
forty-nine percent (49%) of the issued and outstanding shares of Select
Force's capital stock and is an officer and the sole director of Select
Force.
C. Pursuant to the Merger Agreement, Seller is receiving from
Company a total of 345,933 shares of the Company's Common Stock,
representing sixteen percent (16%) of the total outstanding Common Stock of
the Company following the merger.
D. The Seller is entering into this Agreement as a condition to and
as additional consideration for the closing under the Merger Agreement.
AGREEMENT
---------
NOW, THEREFORE, the parties hereto agree as follows:
1. SELLER'S ACKNOWLEDGEMENT. Seller acknowledges that
a. He is an officer, director and forty-nine percent (49%)
shareholder of Select Force and is one of the principal persons responsible
for the success of Select Force;
b. Contemporaneously herewith the Company is acquiring one
hundred percent (100%) of the issued and outstanding shares of Select
Force's stock; and
c. It will likely materially jeopardize the Company's business
and substantially reduce the value of the Company's acquisition if the
Seller violated the provisions of this Agreement.
2. NON-COMPETITION AGREEMENT. The Seller covenants and agrees that
for a period of one (1) year from and after the date of this Agreement,
Seller will not, directly or indirectly (through one or more
intermediates), whether individually or as an officer, director,
shareholder, partner, owner, member, manager, employee or consultant,
operate or assist any corporation, partnership, limited liability company
or other business enterprise in operating
1
any pre-employment screening service company or company offering similar
type services within the geographic territory described as the United
States.
3. CONFIDENTIALITY. "Confidential Information" shall mean any
information known to Seller as a result of Seller's involvement as an
officer and director of Select Force from and after the date of Seller's
involvement with Select Force (including information originated by Seller)
of a secret, proprietary or confidential nature relating to Select Force
and its operations including without limitation, all methods, trade
secrets, processes, products, techniques, know-how, marketing plans, data,
improvements, strategies, forecasts, client lists, prospective client
lists, mailing lists, client information, marketing programs, accounting
systems, unless such information is now or thereafter in the public domain
to such an extent as to be readily available to competitors. Seller agrees
that Seller will not at any time from and after the date of this Agreement,
directly or indirectly, use, communicate, disclose, disseminate, or put
into the public domain any Confidential Information or any other
information of a secret, proprietary, confidential or generally undisclosed
nature relating to Select Force or its operations, products, processes or
services. The parties acknowledge that this paragraph shall survive for a
period of one (1) year from and after the date of this Agreement.
4. NON-SOLICITATION OF CLIENTS. Seller convenants and agrees that
for a period of one (1) year from and after the date of this Agreement,
Seller will not directly or indirectly solicit existing clients of Select
Force.
5. NON-SOLICITATION OF EMPLOYEES. Seller convenants and agrees that
for a period of one (1) year from and after the date of this Agreement,
Seller will not directly or indirectly solicit any employees, consultants,
contractors or suppliers engaged by the Company or its subsidiaries for the
purpose of inducing them to commence a relationship with any business which
operates any pre-employment screening service company or company offering
similar services in the United States.
6. SPECIFIC ENFORCEMENT; LEGAL FEES. Seller acknowledges that
Seller's breach of any provision of this Agreement would be likely to
result in irreparable and unreasonable harm to the Company or its
subsidiaries and injunctive relief as well as actual damages would be
appropriate for breach of any such provision. In the event of any legal
proceedings arising under this Agreement, the prevailing party shall be
awarded its reasonable attorney fees and costs. NOTWITHSTANDING ANYTHING TO
THE CONTRARY CONTAINED IN THIS AGREEMENT, SELLER'S CUMULATIVE LIABILITY FOR
DAMAGES OF ANY KIND RESULTING FROM OR ARISING OUT OF THIS AGREEMENT SHALL
NOT EXCEED THE TOTAL NUMBER OF SHARES RECEIVED BY SELLER FROM THE COMPANY
PURSUANT TO THE MERGER AGREEMENT. THIS LIMITATION SHALL APPLY EVEN IF THE
REMEDY FAILS IN ITS ESSENTIAL PURPOSE.
7. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Seller and his respective heirs, executors, assigns and administrators and
shall inure to the benefit of the Company and its successors and assigns.
8. SEVERABILITY. Whenever there is any conflict between any
provision of this Agreement and statute, law, regulations or judicial
proceeding, the latter shall prevail, but in
2
each such event, the provisions of this Agreement thus affected shall be
curtailed and limited only to the extent necessary to bring them within the
requirement of the law. In the event that any part, section, paragraph or
clause of this Agreement shall be held by a court of proper jurisdiction to
be indefinite, invalid or otherwise unenforceable, the entire Agreement
shall not fail on account thereof, but the balance of the Agreement shall
continue in full force and effect unless such consideration would be
clearly contrary to the intention of the parties or would be
unconscionable.
9. GOVERNING LAW. The legality, validity and enforceability and
interpretation of this Agreement shall be governed by the laws of the State
of Colorado without giving effect to the principles of conflicts of law.
In WITNESS WHEREOF, this Agreement has been executed as of the date
set forth above.
HOST AMERICA CORPORATION ROGER LOCKHART
BY: /s/ GEOFFREY RAMSEY /s/ ROGER LOCKHART
--------------------------- -----------------------------
Its: President
---------------------------
3