EXHIBIT 10.67
SUBSIDIARY GUARANTY
New York, New York June 23, 2004
FOR VALUE RECEIVED, and in consideration of note purchases from,
loans made or to be made or credit otherwise extended or to be extended
by Laurus Master Fund, Ltd. ("Laurus") to or for the account of Host
America Corporation, a Colorado corporation ("Debtor"), from time to time
and at any time and for other good and valuable consideration and to
induce Laurus, in its discretion, to purchase such notes, make such loans
or extensions of credit and to make or grant such renewals, extensions,
releases of collateral or relinquishments of legal rights as Laurus may
deem advisable, each of the undersigned (and each of them if more than
one, the liability under this Guaranty being joint and several) (jointly
and severally referred to as "Guarantors " or "the undersigned")
unconditionally guaranties to Laurus, its successors, endorsees and
assigns the prompt payment when due (whether by acceleration or
otherwise) of all present and future obligations and liabilities of any
and all kinds of Debtor to Laurus and of all instruments of any nature
evidencing or relating to any such obligations and liabilities upon which
Debtor or one or more parties and Debtor is or may become liable to
Laurus, whether incurred by Debtor as maker, endorser, drawer, acceptor,
guarantors , accommodation party or otherwise, and whether due or to
become due, secured or unsecured, absolute or contingent, joint or
several, and however or whenever acquired by Laurus, whether arising
under, out of, or in connection with (i) that certain Securities Purchase
Agreement dated as of the date hereof by and between the Debtor and
Laurus (the "Securities Purchase Agreement") and (ii) each Related
Agreement referred to in the Securities Purchase Agreement (the
Securities Purchase Agreement and each Related Agreement, as each may be
amended, modified, restated or supplemented from time to time, are
collectively referred to herein as the "Documents"), or any documents,
instruments or agreements relating to or executed in connection with the
Documents or any documents, instruments or agreements referred to therein
or otherwise, or any other indebtedness, obligations or liabilities of
the Debtor to Laurus, whether now existing or hereafter arising, direct
or indirect, liquidated or unliquidated, absolute or contingent, due or
not due and whether under, pursuant to or evidenced by a note, agreement,
guaranty, instrument or otherwise (all of which are herein collectively
referred to as the "Obligations"), and irrespective of the genuineness,
validity, regularity or enforceability of such Obligations, or of any
instrument evidencing any of the Obligations or of any collateral
therefor or of the existence or extent of such collateral, and
irrespective of the allowability, allowance or disallowance of any or all
of the Obligations in any case commenced by or against Debtor under Title
11, United States Code, including, without limitation, obligations or
indebtedness of Debtor for post-petition interest, fees, costs and
charges that would have accrued or been added to the Obligations but for
the commencement of such case. Terms not otherwise defined herein shall
have the meaning assigned such terms in the Securities Purchase
Agreement. In furtherance of the foregoing, the undersigned hereby
agrees as follows:
1. NO IMPAIRMENT. Laurus may at any time and from time to time,
either before or after the maturity thereof, without notice to or further
consent of the undersigned, extend the time of payment of, exchange or
surrender any collateral for, renew or extend any of the Obligations or
increase or decrease the interest rate thereon, or any other agreement
with Debtor or with any other party to or person liable on any of the
Obligations, or interested therein, for the extension, renewal, payment,
compromise, discharge or release thereof, in whole or in part, or for any
modification of the terms thereof or of any agreement between Laurus and
Debtor or any such other party or person, or make any election of rights
Laurus may deem desirable under the
United States Bankruptcy Code, as amended, or any other federal or state
bankruptcy, reorganization, moratorium or insolvency law relating to or
affecting the enforcement of creditors' rights generally (any of the
foregoing, an "Insolvency Law") without in any way impairing or affecting
this Guaranty. This instrument shall be effective regardless of the
subsequent incorporation, merger or consolidation of Debtor, or any
change in the composition, nature, personnel or location of Debtor and
shall extend to any successor entity to Debtor, including a debtor in
possession or the like under any Insolvency Law.
2. GUARANTY ABSOLUTE. Subject to Section 5(c), each of the
undersigned jointly and severally guarantees that the Obligations will be
paid strictly in accordance with the terms of the Documents and/or any
other document, instrument or agreement creating or evidencing the
Obligations, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights
of Debtor with respect thereto. Guarantors hereby knowingly accept the
full range of risk encompassed within a contract of "continuing guaranty"
which risk includes the possibility that Debtor will contract additional
indebtedness for which Guarantors may be liable hereunder after Debtor's
financial condition or ability to pay its lawful debts when they fall due
has deteriorated, whether or not Debtor has properly authorized incurring
such additional indebtedness. The undersigned acknowledge that (i) no
oral representations, including any representations to extend credit or
provide other financial accommodations to Debtor, have been made by
Laurus to induce the undersigned to enter into this Guaranty and (ii) any
extension of credit to the Debtor shall be governed solely by the
provisions of the Documents. The liability of each of the undersigned
under this Guaranty shall be absolute and unconditional, in accordance
with its terms, and shall remain in full force and effect without regard
to, and shall not be released, suspended, discharged, terminated or
otherwise affected by, any circumstance or occurrence whatsoever,
including, without limitation: (a) any waiver, indulgence, renewal,
extension, amendment or modification of or addition, consent or
supplement to or deletion from or any other action or inaction under or
in respect of the Documents or any other instruments or agreements
relating to the Obligations or any assignment or transfer of any thereof,
(b) any lack of validity or enforceability of any Document or other
documents, instruments or agreements relating to the Obligations or any
assignment or transfer of any thereof, (c) any furnishing of any
additional security to Laurus or its assignees or any acceptance thereof
or any release of any security by Laurus or its assignees, (d) any
limitation on any party's liability or obligation under the Documents or
any other documents, instruments or agreements relating to the
Obligations or any assignment or transfer of any thereof or any
invalidity or unenforceability, in whole or in part, of any such
document, instrument or agreement or any term thereof, (e) any
bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to Debtor, or
any action taken with respect to this Guaranty by any trustee or
receiver, or by any court, in any such proceeding, whether or not the
undersigned shall have notice or knowledge of any of the foregoing, (f)
any exchange, release or nonperfection of any collateral, or any release,
or amendment or waiver of or consent to departure from any guaranty or
security, for all or any of the Obligations or (g) any other circumstance
which might otherwise constitute a defense available to, or a discharge
of, the undersigned. Any amounts due from the undersigned to Laurus
shall bear interest until such amounts are paid in full at the highest
rate then applicable to the Obligations. Obligations include
post-petition interest whether or not allowed or allowable.
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3. Waivers.
(a) This Guaranty is a guaranty of payment and not of
collection. Laurus shall be under no obligation to institute suit,
exercise rights or remedies or take any other action against Debtor
or any other person liable with respect to any of the Obligations or
resort to any collateral security held by it to secure any of the
Obligations as a condition precedent to the undersigned being
obligated to perform as agreed herein and each of the Guarantors
hereby waives any and all rights which it may have by statute or
otherwise which would require Laurus to do any of the foregoing.
Each of the Guarantors further consents and agrees that Laurus shall
be under no obligation to marshal any assets in favor of Guarantors,
or against or in payment of any or all of the Obligations. The
undersigned hereby waives all suretyship defenses and any rights to
interpose any defense, counterclaim or offset of any nature and
description which the undersigned may have or which may exist
between and among Laurus, Debtor and/or the undersigned with respect
to the undersigned's obligations under this Guaranty, or which
Debtor may assert on the underlying debt, including but not limited
to failure of consideration, breach of warranty, fraud, payment
(other than cash payment in full of the Obligations), statute of
frauds, bankruptcy, infancy, statute of limitations, accord and
satisfaction, and usury.
(b) Each of the undersigned further waives (i) notice of the
acceptance of this Guaranty, of the making of any such loans or
extensions of credit, and of all notices and demands of any kind to
which the undersigned may be entitled, including, without
limitation, notice of adverse change in Debtor's financial condition
or of any other fact which might materially increase the risk of the
undersigned and (ii) presentment to or demand of payment from anyone
whomsoever liable upon any of the Obligations, protest, notices of
presentment, non-payment or protest and notice of any sale of
collateral security or any default of any sort.
(c) Notwithstanding any payment or payments made by the
undersigned hereunder, or any setoff or application of funds of the
undersigned by Laurus, the undersigned shall not be entitled to be
subrogated to any of the rights of Laurus against Debtor or against
any collateral or guarantee or right of offset held by Laurus for
the payment of the Obligations, nor shall the undersigned seek or be
entitled to seek any contribution or reimbursement from Debtor in
respect of payments made by the undersigned hereunder, until all
amounts owing to Laurus by Debtor on account of the Obligations are
paid in full and Laurus' obligation to extend credit pursuant to the
Documents have been terminated. If, notwithstanding the foregoing,
any amount shall be paid to the undersigned on account of such
subrogation rights at any time when all of the Obligations shall not
have been paid in full and Laurus' obligation to extend credit
pursuant to the Documents shall not have been terminated, such
amount shall be held by the undersigned in trust for Laurus,
segregated from other funds of the undersigned, and shall forthwith
upon, and in any event within two (2) business days of, receipt by
the undersigned, be turned over to Laurus in the exact form received
by the undersigned (duly endorsed by the undersigned to Laurus, if
required), to be applied against the Obligations, whether matured or
unmatured, in such order as Laurus may determine, subject to the
provisions of the Documents. Any and all present and future debts
and obligations of Debtor to any of the undersigned are hereby
waived and postponed in favor of, and subordinated to the full
payment and performance of, all present and future debts and
Obligations of Debtor to Laurus.
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4. SECURITY. All sums at any time to the credit of the
undersigned and any property of the undersigned in Laurus' possession or
in the possession of any bank, financial institution or other entity that
directly or indirectly, through one or more intermediaries, controls or
is controlled by, or is under common control with, Laurus (each such
entity, an "Affiliate") shall be deemed held by Laurus or such Affiliate,
as the case may be, as security for any and all of the undersigned's
obligations to Laurus and to any Affiliate of Laurus, no matter how or
when arising and whether under this or any other instrument, agreement or
otherwise.
5. REPRESENTATIONS AND WARRANTIES. Each of the undersigned
respectively, hereby jointly and severally represents and warrants (all
of which representations and warranties shall survive until all
Obligations are indefeasibly satisfied in full and the Documents have
been irrevocably terminated), that:
(a) CORPORATE STATUS. It is a corporation, partnership or
limited liability company, as the case may be, duly organized,
validly existing and in good standing under the laws of its
jurisdiction of organization indicated on the signature page hereof
and has full power, authority and legal right to own its property
and assets and to transact the business in which it is engaged.
(b) AUTHORITY AND EXECUTION. It has full power, authority and
legal right to execute and deliver, and to perform its obligations
under, this Guaranty and has taken all necessary corporate,
partnership or limited liability company, as the case may be, action
to authorize the execution, delivery and performance of this
Guaranty.
(c) LEGAL, VALID AND BINDING CHARACTER. This Guaranty
constitutes its legal, valid and binding obligation enforceable in
accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting the enforcement of
creditor's rights and general principles of equity that restrict the
availability of equitable or legal remedies.
(d) VIOLATIONS. The execution, delivery and performance of
this Guaranty will not violate any requirement of law applicable to
it or any contract, agreement or instrument to it is a party or by
which it or any of its property is bound or result in the creation
or imposition of any mortgage, lien or other encumbrance other than
to Laurus on any of its property or assets pursuant to the
provisions of any of the foregoing, which, in any of the foregoing
cases, could reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect.
(e) CONSENTS OR APPROVALS. No consent of any other person or
entity (including, without limitation, any creditor of the
undersigned) and no consent, license, permit, approval or
authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority
is required in connection with the execution, delivery, performance,
validity or enforceability of this Guaranty by it, except to the
extent that the failure to obtain any of the foregoing could not
reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
(f) LITIGATION. No litigation, arbitration, investigation or
administrative proceeding of or before any court, arbitrator or
governmental authority, bureau or agency is currently pending or, to
the best of its knowledge, threatened (i) with respect to this
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Guaranty or any of the transactions contemplated by this Guaranty or
(ii) against or affecting it, or any of its property or assets,
which, in each of the foregoing cases, if adversely determined,
could reasonably be expected to have a Material Adverse Effect.
(g) FINANCIAL BENEFIT. It has derived or expects to derive a
financial or other advantage from each and every loan, advance or
extension of credit made under the Documents or other Obligation
incurred by the Debtor to Laurus.
6. ACCELERATION.
(a) If any breach of any covenant or condition or other event
of default shall occur and be continuing under any agreement made by
Debtor or any of the undersigned to Laurus, or either Debtor or any
of the undersigned should at any time become insolvent, or make a
general assignment, or if a proceeding in or under any Insolvency
Law shall be filed or commenced by, or in respect of, any of the
undersigned, or if a notice of any lien, levy, or assessment is
filed of record with respect to any assets of any of the undersigned
by the United States of America or any department, agency, or
instrumentality thereof, or if any taxes or debts owing at any time
or times hereafter to any one of them becomes a lien or encumbrance
upon any assets of the undersigned in Laurus' possession, or
otherwise, any and all Obligations shall for purposes hereof, at
Laurus' option, be deemed due and payable without notice
notwithstanding that any such Obligation is not then due and payable
by Debtor.
(b) Each of the undersigned will promptly notify Laurus of any
default by such undersigned in its respective performance or
observance of any term or condition of any agreement to which the
undersigned is a party if the effect of such default is to cause, or
permit the holder of any obligation under such agreement to cause,
such obligation to become due prior to its stated maturity and, if
such an event occurs, Laurus shall have the right to accelerate such
undersigned's obligations hereunder.
7. PAYMENTS FROM GUARANTORS. Laurus, in its sole and absolute
discretion, with or without notice to the undersigned, may apply on
account of the Obligations any payment from the undersigned or any other
guarantors, or amounts realized from any security for the Obligations, or
may deposit any and all such amounts realized in a non-interest bearing
cash collateral deposit account to be maintained as security for the
Obligations.
8. COSTS. The undersigned shall pay on demand, all costs, fees
and expenses (including expenses for legal services of every kind)
relating or incidental to the enforcement or protection of the rights of
Laurus hereunder or under any of the Obligations.
9. NO TERMINATION. This is a continuing irrevocable guaranty and
shall remain in full force and effect and be binding upon the
undersigned, and each of the undersigned's successors and assigns, until
all of the Obligations have been paid in full and Laurus' obligation to
extend credit pursuant to the Documents has been irrevocably terminated.
If any of the present or future Obligations are guarantied by persons,
partnerships or corporations in addition to the undersigned, the death,
release or discharge in whole or in part or the bankruptcy, merger,
consolidation, incorporation, liquidation or dissolution of one or more
of them shall not discharge or affect the liabilities of any undersigned
under this Guaranty.
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10. RECAPTURE. Anything in this Guaranty to the contrary
notwithstanding, if Laurus receives any payment or payments on account of
the liabilities guaranteed hereby, which payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee,
receiver, or any other party under any Insolvency Law, common law or
equitable doctrine, then to the extent of any sum not finally retained by
Laurus, the undersigned's obligations to Laurus shall be reinstated and
this Guaranty shall remain in full force and effect (or be reinstated)
until payment shall have been made to Laurus, which payment shall be due
on demand.
11. BOOKS AND RECORDS. The books and records of Laurus showing the
account between Laurus and Debtor shall be admissible in evidence in any
action or proceeding, shall be binding upon the undersigned for the
purpose of establishing the items therein set forth and shall constitute
prima facie proof thereof.
12. NO WAIVER. No failure on the part of Laurus to exercise, and
no delay in exercising, any right, remedy or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise by
Laurus of any right, remedy or power hereunder preclude any other or
future exercise of any other legal right, remedy or power. Each and
every right, remedy and power hereby granted to Laurus or allowed it by
law or other agreement shall be cumulative and not exclusive of any
other, and may be exercised by Laurus at any time and from time to time.
13. WAIVER OF JURY TRIAL. EACH OF THE UNDERSIGNED DOES HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY
IN ANY ACTION OR PROCEEDING BASED ON OR WITH RESPECT TO THIS GUARANTY OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR RELATING OR INCIDENTAL
HERETO. THE UNDERSIGNED DOES HEREBY CERTIFY THAT NO REPRESENTATIVE OR
AGENT OF LAURUS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LAURUS
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS WAIVER OF
RIGHT TO JURY TRIAL PROVISION.
14. GOVERNING LAW; JURISDICTION; AMENDMENTS. THIS INSTRUMENT
CANNOT BE CHANGED OR TERMINATED ORALLY, AND SHALL BE GOVERNED, CONSTRUED
AND INTERPRETED AS TO VALIDITY, ENFORCEMENT AND IN ALL OTHER RESPECTS IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT HAVING EFFECT
TO PRINCIPLES OF CONFLICTS OF LAWS. EACH OF THE UNDERSIGNED EXPRESSLY
CONSENTS TO THE JURISDICTION AND VENUE OF THE SUPREME COURT OF THE STATE
OF NEW YORK, COUNTY OF NEW YORK, AND OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK FOR ALL PURPOSES IN CONNECTION
HEREWITH. ANY JUDICIAL PROCEEDING BY THE UNDERSIGNED AGAINST LAURUS
INVOLVING, DIRECTLY OR INDIRECTLY ANY MATTER OR CLAIM IN ANY WAY ARISING
OUT OF, RELATED TO OR CONNECTED HEREWITH SHALL BE BROUGHT ONLY IN THE
SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK OR THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE
UNDERSIGNED FURTHER CONSENTS THAT ANY SUMMONS, SUBPOENA OR OTHER PROCESS
OR PAPERS (INCLUDING, WITHOUT LIMITATION, ANY NOTICE OR MOTION OR OTHER
APPLICATION TO EITHER OF THE AFOREMENTIONED COURTS OR A JUDGE THEREOF) OR
ANY NOTICE IN CONNECTION WITH ANY PROCEEDINGS HEREUNDER, MAY BE SERVED
INSIDE OR OUTSIDE OF THE STATE
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OF NEW YORK OR THE SOUTHERN DISTRICT OF NEW YORK BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL SERVICE PROVIDED
A REASONABLE TIME FOR APPEARANCE IS PERMITTED, OR IN SUCH OTHER MANNER AS
MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS. EACH OF THE
UNDERSIGNED WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION
INSTITUTED HEREON AND SHALL NOT ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE OR BASED UPON FORUM NON CONVENIENS.
15. SEVERABILITY. To the extent permitted by applicable law, any
provision of this Guaranty which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
16. AMENDMENTS, WAIVERS. No amendment or waiver of any provision
of this Guaranty nor consent to any departure by the undersigned
therefrom shall in any event be effective unless the same shall be in
writing executed by each of the undersigned directly affected by such
amendment and/or waiver and Laurus.
17. NOTICE. All notices, requests and demands to or upon the
undersigned, shall be in writing and shall be deemed to have been duly
given or made (a) when delivered, if by hand, (b) three (3) days after
being sent, postage prepaid, if by registered or certified mail, (c) when
confirmed electronically, if by facsimile, or (d) when delivered, if by a
recognized overnight delivery service in each event, to the numbers
and/or address set forth beneath the signature of the undersigned.
18. SUCCESSORS. Laurus may, from time to time, without notice to
the undersigned, sell, assign, transfer or otherwise dispose of all or
any part of the Obligations and/or rights under this Guaranty. Without
limiting the generality of the foregoing, Laurus may assign, or grant
participations to, one or more banks, financial institutions or other
entities all or any part of any of the Obligations. In each such event,
Laurus, its Affiliates and each and every immediate and successive
purchaser, assignee, transferee or holder of all or any part of the
Obligations shall have the right to enforce this Guaranty, by legal
action or otherwise, for its own benefit as fully as if such purchaser,
assignee, transferee or holder were herein by name specifically given
such right. Laurus shall have an unimpaired right to enforce this
Guaranty for its benefit with respect to that portion of the Obligations
which Laurus has not disposed of, sold, assigned, or otherwise
transferred.
19. Release. Nothing except cash payment in full of the
Obligations shall release any of the undersigned from liability under
this Guaranty, provided that this Guaranty shall be released upon the
provision by Laurus of written confirmation to the Debtor that (x) all
indebtedness obligations (excluding, in any event, the Warrant) owed by
the Debtor or any Guarantor to Laurus have been repaid in full
(including, without limitation, all principal, interest and fees related
to the Notes and any other indebtedness outstanding at such time and owed
to
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Laurus) and (y) all commitments by Laurus to fund any indebtedness have
been terminated in their entirety.
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SIGNATURE PAGE IMMEDIATELY FOLLOWS]
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IN WITNESS WHEREOF, this Guaranty has been executed by the
undersigned this 23rd day of June, 2004.
LINDLEY FOOD SERVICE CORPORATION
By: /s/ Geoffrey Ramsey
---------------------------
Name: Geoffrey Ramsey
---------------------------
Title: CEO
---------------------------
Address: 201 Wallace Street
New Haven, CT 06511
Telephone: (203) 777-3598
Facsimile: (203) 230-8667
State of Incorporation: Connecticut
SELECTFORCE, INC.
By: /s/ Geoffrey Ramsey
---------------------------
Name: Geoffrey Ramsey
---------------------------
Title: CEO
---------------------------
Address: 200 NW 66th , Ste. 972
Oklahoma City, OK 73113
Telephone: (405) 842-2088
Facsimile: (203) 230-8667
State of Incorporation: Colorado
GLOBALNET ENERGY INVESTORS, INC.
By: /s/ Geoffrey Ramsey
---------------------------
Name: Geoffrey Ramsey
---------------------------
Title: CEO
---------------------------
Address: 1840 Hutton Drive, Ste. 130
Carrollton, TX 75006
Telephone: (972) 484-0880
Facsimile: (203) 230-8667
State of Incorporation: Texas
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