1
February 17, 1997
Xx. Xxxx X. Xxxxxxx
Vice Chairman
Centennial Technologies, Inc.
00 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Re: Agreement to provide interim management and consulting services
Dear Xxxx:
This letter outlines the understanding between Xxx Xxxx & Associates, a Michigan
corporation ("JA&A") and Centennial Technologies, Inc. (the "Company") of the
objectives, tasks, work product and fees for the engagement of JA&A to provide
interim management services to the Company.
OBJECTIVES
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- To serve as interim CEO of the Company and assist the Board in
determining the Company's financial condition
- To serve as interim CFO
TASKS
-----
- To assist the Company in developing operating plans, cash flow forecasts
and control procedures with which to manage the Company.
- Manage the Company operations.
- Interview management employees and review available reports.
- Develop information for the secured lender and negotiate toward revised
loan agreements.
- Assist in such other matters as may be mutually agreed upon.
WORK PRODUCT
------------
Our work product will be in the form of:
- Information to be discussed with you and others, as you may direct.
- Written reports and analysis worksheets to support our suggestions as we
deem necessary or as you may request.
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Xx. Xxxx X. Xxxxxxx
February 17, 1997
Page 2
STAFFING
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Xxxxxxxx X. Xxxxxxxxx will be the principal responsible for the overall
engagement. He will be assisted by a staff of consultants at various levels, all
of whom have a wide range of skills and abilities related to this type of
assignment. In addition, we have relationships with and periodically retain
independent contractors with specialized skills and abilities to assist us.
TIMING, FEES AND EXPENSES
-------------------------
We will commence this engagement immediately upon receipt of a signed engagement
letter and retainer.
Hourly Fees
-----------
This engagement will be staffed with professionals at various levels as the
tasks require. For purposes of semi-monthly xxxxxxxx, our fees will be based on
the hours charged at our hourly rates which are:
Principals $430 - $475
Senior Associates $300 - $325
Associates $235 - $260
Accountants and Consultants $ 90 - $160
Expenses
--------
We will require a retainer of $100,000 to be applied against the time charges,
excluding expenses, specific to the engagement. We will submit semi-monthly
invoices for services rendered and expenses incurred as described above, and we
will offset such invoices against the retainer. Payment will be due upon receipt
of the invoices to replenish the retainer to the agreed upon amount. Any
unearned portion of the retainer will be returned to you at the termination of
the engagement.
In addition to the fees set forth above, the Company shall pay directly or
reimburse JA&A upon receipt of periodic xxxxxxxx, for all reasonable
out-of-pocket expenses incurred in connection with this assignment such as
travel, lodging, postage, telephone and facsimile charges.
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Xx. Xxxx X. Xxxxxxx
February 17, 1997
Page 3
Additional Consideration
------------------------
JA&A is granted options to purchase 200,000 shares of Company stock at a strike
price set at the lowest average price for any 30-day period during the six-month
period immediately following the resumption in trading of the Company's stock.
Exercise period shall be three years after the end of JA&A's engagement.
RELATIONSHIP OF THE PARTIES
---------------------------
The parties intend that an independent contractor relationship will be created
by this agreement. JA&A is not to be considered an employee or agent of the
Company and the employees of JA&A are not entitled to any of the benefits that
the Company provides for the Company's employees.
The Company also agrees not to solicit or recruit any employees or agents of
JA&A for a period of two years subsequent to the completion and/or termination
of this agreement.
CONFIDENTIALITY
---------------
JA&A agrees to keep confidential all information obtained from the Company. JA&A
agrees that neither it nor its directors, officers, principals, employees,
agents or attorneys will disclose to any other person or entity, or use for any
purpose other than specified herein, any information pertaining to the Company
or any affiliate thereof which is either non-public, confidential or proprietary
in nature ("Information") which it obtains or is given access to during the
performance of the services provided hereunder. JA&A also agrees that only those
of its directors, officers, principals, employees, agents and attorneys who have
a need-to-know to perform the services contracted herein and are under an
obligation to maintain the confidentiality of the Information will be given
access to the Information. JA&A may make reasonable disclosures of Information
to third parties in connection with their performance of their obligations and
assignments hereunder. In addition, JA&A will have the right to disclose to
others in the normal course of business its involvement with the Company.
Information includes data, plans, reports, schedules, drawings, accounts,
records, calculations, specifications, flow sheets, computer programs, source or
object codes, results, models, or any work product relating to the business of
the Company, its subsidiaries, distributors, affiliates, vendors, customers,
employees, contractors and consultants.
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Xx. Xxxx X. Xxxxxxx
February 17, 1997
Page 4
The Company acknowledges that all advice (written or oral) given by JA&A to the
Company in connection with JA&A's engagement is intended solely for the benefit
and use of the Company (limited to its management) in considering the
transactions to which it relates. The Company agrees that no such advice shall
be used for any other purpose or reproduced, disseminated, quoted or referred to
at any time in any manner or for any purpose other than accomplishing the tasks
and programs referred to herein or in discussions with the Company's lenders or
debt holders, without JA&A's prior approval (which shall not be unreasonably
withheld) except as required by law. This agreement will survive the termination
of the engagement.
FRAMEWORK OF THE ENGAGEMENT
---------------------------
The Company acknowledges that it is hiring JA&A purely to assist and advise the
Company in business planning and restructuring. JA&A's engagement shall not
constitute an audit, review or compilation, or any other type of financial
statement reporting engagement that is subject to the rules of the AICPA or
other such state and national professional bodies.
INDEMNIFICATION
---------------
In engagements of this nature, it is our practice to receive indemnification.
Accordingly, in consideration of our agreement to act on your behalf in
connection with this engagement, you agree to indemnify, hold harmless, and
defend us (including our principals, employees and agents) from and against all
claims, liabilities, losses, damages and reasonable expenses as they are
incurred, including reasonable legal fees and disbursements of counsel, relating
to or arising out of the engagement, including any legal proceeding in which we
may be required or agree to participate but in which we are not a party. We, our
principals, employees and agents may, but are not required to, engage a single
firm of separate counsel of our choice subject to your consent, which consent
shall not be unreasonably withheld, in connection with any of the matters to
which this indemnification agreement relates. This indemnification agreement
does not apply to actions taken or omitted to be taken by us in bad faith or
from our gross negligence. This agreement will survive the termination of the
engagement.
In addition to the foregoing indemnification, Xxxxxxxx X. Xxxxxxxxx and Xxxxxx
Xxxxxx shall, along with other JA&A personnel, if any, who serve as officers of
the Company, be individually covered by the same indemnification as is
applicable to other officers of the Company. This agreement will survive the
termination of the engagement.
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Xx. Xxxx X. Xxxxxxx
February 17, 1997
Page 5
TERMINATION AND SURVIVAL
------------------------
The agreement may be terminated at any time by written notice by one party to
the other; provided, however, that notwithstanding such termination JA&A will be
entitled to any fees and expenses due under the provisions of the agreement.
Such payment obligation shall inure to the benefit of any successor or assignee
of JA&A.
The obligations of the parties under the Indemnification and Confidentiality
sections of this agreement shall survive the termination of the agreement as
well as the other sections of this agreement which expressly provide that they
shall survive termination of this agreement.
GOVERNING LAW
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This letter agreement is governed by and construed in accordance with the laws
of the State of Delaware with respect to contracts made and to be performed
entirely therein and without regard to choice of law or principles thereof.
CONFLICTS
---------
We know of no fact or situation which would represent a conflict of interest for
us with regard to the Company.
SEVERABILITY
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If any portion of the letter agreement shall be determined to be invalid or
unenforceable, we each agree that the remainder shall be valid and enforceable
to the maximum extent possible.
ENTIRE AGREEMENT
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All of the above contains the entire understanding of the parties relating to
the services to be rendered by JA&A and may not be amended or modified in any
respect except in writing signed by the parties.
NOTICES
-------
All notices required or permitted to be delivered under this letter agreement
shall be sent, if to us, to the address set forth at the head of this letter, to
the attention of Xx. Xxxxxx X. Xxxxxxxxxxxx, and if to you, to the address for
you set forth above, to the
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Xx. Xxxx X. Xxxxxxx
February 17, 1997
Page 6
attention of your General Counsel, or to such other name or address as may be
given in writing to the other party. All notices under the agreement shall be
sufficient if delivered by facsimile or overnight mail. Any notice shall be
deemed to be given only upon actual receipt.
If these terms meet with your approval, please sign and return the enclosed copy
of this proposal and wire transfer the amount to establish the retainer.
We look forward to working with you.
Sincerely yours,
XXX XXXX & ASSOCIATES
Xxxxxxxx X. Xxxxxxxxx
Principal
Acknowledged and Agreed to:
CENTENNIAL TECHNOLOGIES, INC.
By:
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Xxxxxx X. Xxxx
Its:
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Treasurer and General Counsel
Dated:
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