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SETTLEMENT AGREEMENT
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This Settlement Agreement (the "Agreement") is entered into as of May
15, 1997, by and among Centennial Technologies, Inc., a Delaware corporation
("Centennial") and H. Hamby Hutcheson and Mary Lou Hutcheson (the "Hutchesons").
Centennial and the Hutchesons are referred to collectively herein as the
"Parties" and individually as a "Party".
Effective December 18, 1996, Centennial acquired the outstanding common
stock of each of Intelligent Truck Project, Inc., a Florida corporation ("ITP"),
Fleet.Net, Inc., a Florida corporation ("Fleet.Net"), and Smart Traveler Plazas,
Inc., a Florida corporation ("STP") (collectively, the "Shares") from the
Hutchesons and certain other shareholders, and the Hutchesons acquired shares of
Centennial common stock, in tax-free mergers (collectively, the "Mergers")
effected pursuant to merger agreements between each of ITP, Fleet.Net and STP
and Centennial (the "Merger Agreements"). On March 4, 1997, the Parties entered
into a Letter Agreement (the "Term Sheet") to effect the unwinding of the
Mergers.
W I T N E S S E T H
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WHEREAS, there is pending in the United States District Court for the
Southern District of Florida, West Palm Beach Division, in connection with Case
No. 97-8114 CIV HURLEY entitled H. HAMBY HUTCHESON V. CENTENNIAL TECHNOLOGIES,
INC., ET AL. (the "Civil Action");
WHEREAS, this Agreement contemplates a cash payment by Centennial to the
Hutchesons of $205,000, the making of certain representations, warranties and
covenants by the Hutchesons, the termination of the Term Sheet, the settlement
of all outstanding claims and disputes between the Parties relating to the
Mergers, and a mutual release by the Parties;
NOW, THEREFORE, in consideration of the foregoing and the mutual
exchanges herein contained, the Parties agree as follows.
1. Upon and subject to the terms and conditions of this Agreement,
Centennial shall transfer to the Hutchesons a cash payment of $205,000.
2. In addition, Centennial agrees: (a) within a reasonable period
of time, to satisfy the obligations of ITP, Fleet.Net and STP to the individuals
and entities as reflected in EXHIBIT A; and (b) to make additional payments
simultaneous herewith to (i) Steven McMahon in the amount of $30,000, and (ii)
the law firm of Buchanan Ingersoll P.C. in the amount of $170,000, to satisfy
the obligations of the Hutchesons, ITP, Fleet.Net or STP thereto. Simultaneous
herewith, Steven McMahon and Buchanan Ingersoll P.C. shall acknowledge in
writing to Centennial that such amounts represent full payment of all sums due
from the Hutchesons, Centennial,
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ITP, Fleet.Net or STP.
3. Simultaneous with the execution hereof, the Term Sheet and all
rights and obligations thereunder are hereby terminated in their entirety and of
no further force and effect.
4. Simultaneous with the execution hereof, Centennial, the
Hutchesons, ITP, Fleet.Net and STP shall execute and deliver a General Release
in the form attached hereto as EXHIBIT B.
5. Simultaneous with the execution hereof, the Hutchesons shall
execute and deliver, as of the date hereof, a Stipulation of Dismissal of the
Civil Action in the form attached hereto as EXHIBIT C. The fully executed
Stipulation of Dismissal shall be filed not later than the first business day
following the date hereof, in the United States District Court for the Southern
District of Florida, West Palm Beach Division, by counsel for the Hutchesons.
6. Simultaneous with the filing of the Stipulation of Dismissal in
accordance with Section 5, Centennial shall direct the escrow agent named in the
Merger Agreements to release to the Hutchesons their pro rata share of the
shares of Centennial common stock held by such escrow agent pursuant to the
Merger Agreements.
7. (a) Centennial shall use all reasonable efforts to file, as soon
as practicable after Centennial files restated financial statements with the
Securities and Exchange Commission for its fiscal years ending on or after June
30, 1994, a registration statement to register the resale of shares of
Centennial common stock received by the Hutchesons in the Mergers (the
"Shares"). The Hutchesons acknowledge that such registration statement may cover
the sale or resale of other Centennial securities. Centennial shall use all
reasonable efforts to have the registration statement registering the resale of
the Shares to be declared effective no later than the effectiveness of any other
registration statement filed hereafter by Centennial (other than such
registration statements on Form S-8). Centennial will use reasonable efforts to
keep such registration statement effective for a period of time not to exceed
the earlier of (i) twelve months or (ii) the date on which the Hutchesons would
be entitled to sell all of the Shares they continue to hold under Rule 144
within a three-month period. The expenses of such registration shall be borne by
Centennial, with the exception of underwriting or selling discounts and
commissions and any fees and disbursements of counsel to the Hutchesons. The
Hutchesons shall be entitled to specific enforcement of any breach of
Centennial's obligations under this Section 7.
(b) Notwithstanding the foregoing, (i) Centennial's obligation
to register any such shares pursuant to this Section 7 is subject to its right
to effect a "black out"
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on any resale, the terms of which right are set forth in Section 8 below.
(c) Centennial will take all commercially reasonable action
which may be required in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as reasonably are requested by the
Hutchesons, provided that Centennial shall not be obligated to register the
Shares in any state or execute or file any general consent to service of process
or to qualify as a foreign corporation to do business under the laws of any such
jurisdiction.
(d) Centennial's obligation under this Section 7 shall be
conditioned upon a timely receipt by Centennial in writing of information as
Centennial may reasonably require from the Hutchesons, or any underwriter for
any of them, in connection with the preparation of a registration statement
filed pursuant to this Section 7, including any post-effective amendment to such
registration statement, and the sale of the Shares by the Hutchesons.
(e) Centennial shall furnish the Hutchesons such number of
prospectuses as shall reasonably be requested.
8. Centennial shall be entitled to (a) postpone the effectiveness
of a registration statement, or (b) elect that the registration statement not be
usable and require the Hutchesons to suspend sales pursuant to the prospectus
contained therein, for a reasonable period of time, but not in excess of 60 days
(a "Blackout Period"), if Centennial determines in good faith that the
registration and distribution of registrable securities (or the use of the
registration statement or related prospectus) would interfere with any pending
material acquisition, material corporate reorganization or any other material
corporate development involving Centennial or any of its subsidiaries or would
require premature disclosure thereof. Centennial shall promptly give the
Hutchesons written notice of such determination, containing a general statement
of the reasons for such postponement or restriction on use and an approximation
of the anticipated delay; PROVIDED, HOWEVER, that the aggregate number of days
included in all Blackout Periods during any consecutive 12 months during the
period within which Centennial is obligated to keep such registration statement
effective shall not exceed 120 days, and that the Blackout Periods shall not
count against the period of time for which Centennial is bound to keep such
registration statement effective pursuant to Section 7(a).
9. The Hutchesons jointly and severally represent and warrant to
Centennial as follows:
(a) Except as may result from any failure of Centennial to meet its
obligations under Section 2(a), (i) all technology and intellectual property
(defined herein as software programs and interfaces, including all related
human-readable source code form and machine-readable object code form, and all
documentation and
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hardware relating thereto, together with prototypes, models, user manuals,
handbooks, written reports or on-line materials relating to the programs and
interfaces) (the "Intellectual Property") relating to the operation of the
respective businesses of ITP, Fleet.Net and STP developed and/or owned by the
Hutchesons has been transferred by the Hutchesons to ITP, Fleet.Net and STP;
(ii) all Intellectual Property developed by or on behalf of ITP, Fleet.Net and
STP dating from their inception to the date hereof has been developed by
employees of, or consultants having written agreements assigning ownership
thereof to, ITP, Fleet.Net and STP and ITP, Fleet.Net and STP own or otherwise
possess legally enforceable rights to use, the Intellectual Property; (iii) to
the knowledge of the Hutchesons, the Intellectual Property and the planned use
thereof does not infringe the intellectual property rights of any third party
and none of the Hutchesons, ITP, Fleet.Net or STP, has received notice of any
claim, demand or other assertion of such infringement; (iv) neither the
Hutchesons nor ITP, Fleet.Net nor STP has taken any action, or refrained from
taking any action, that would impair the ownership and/or use rights of ITP,
Fleet.Net and STP relating to the Intellectual Property; and (v) neither the
Hutchesons and, to the Hutchesons' knowledge, no other officer or employee of
ITP. Fleet.Net or STP has authorized the transfer or the right to use the
Intellectual Property to any person PROVIDED, HOWEVER, that nothing herein shall
be construed as a representation by the Hutchesons as to the value, suitability
or functionality of such Intellectual Property.
(b) Since March 4, 1997, the Hutchesons have not obligated or caused
ITP, Fleet.Net or STP to (i) incur any obligation or liability (absolute or
contingent), except current liabilities incurred and obligations under contracts
entered into in the ordinary course of business; (ii) mortgage, pledge, or
subject to any lien, charge or other encumbrance any of the assets owned by ITP,
Fleet.Net and STP from their inception to the date hereof, including the
Intellectual Property (collectively, the "Assets"); (iii) sell, assign or
transfer any of the Assets, except for inventory sold in the ordinary course of
business; (iv) cancel any debts or claims, except in the ordinary course of
business; (v) waive any rights of material value; (vi) modify, amend, alter or
terminate any of its executory contracts; (vii) take or permit any act or
omission constituting a breach or default under any contract, indenture or
agreement by which its properties are bound; or (viii) commit or agree to do any
of the foregoing in the future;
(c) The Hutchesons have returned to ITP, Fleet.Net and STP, and have
retained no copies (in whatever medium) of any (i) files, letters, memoranda,
reports, records, data, sketches, drawings, program notebooks, program listings,
computer programs, diskettes or other written, photographic, electronic or other
tangible material containing Intellectual Property or (ii) customer or supplier
lists, formulae, techniques, methods, processes, personnel data or plans of ITP,
Fleet.Net or STP or their respective businesses; and
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(d) As of the date hereof, H. Hamby Hutcheson is in compliance with
each provision contained in the employment agreements in effect between H. Hamby
Hutcheson and each of ITP, Fleet.Net and STP, each agreement dated March 1, 1996
(the "Employment Agreements").
10. The Hutchesons covenant and agree as follows:
(a) The Hutchesons hereby relinquish any and all right and claim to
all of the Assets and transfer to Centennial any such right and claim free and
clear of all counterclaims, liabilities, liens, pledges, security interests or
encumbrances of any kind, except to the extent provided herein;
(b) to execute and deliver any and all documents which may be
required for the purpose of effectuating the foregoing representations,
warranties and covenants;
(c) H. Hamby Hutcheson will to continue to be bound by the terms of
his Employment Agreements (other than the employment provisions) to the extent
provided therein; and
(d) the Hutchesons hereby indemnify Centennial against any and all
obligations of ITP, Fleet.Net and STP with respect to (i) current and former
employees or consultants which are not set forth on EXHIBIT A, and (ii) Steven
McMahon or Buchanan Ingersoll P.C. which are not set forth in Section 2 above.
11. The representations contained in Section 9(a)(i) and 9(a)(ii)
shall terminate and cease to be of force in effect on December 18, 1998; the
remainder of the representations contained in Section 9 shall terminate and
cease to be of force and in effect two years from the date hereof.
12. Simultaneous with the execution hereof, Centennial hereby
accepts the resignation of H. Hamby Hutcheson as President and CEO of ITP,
Fleet.Net and STP, dated May 9, 1997.
13. Centennial hereby indemnifies the Hutchesons for any claims
brought against them by the other former stockholders of ITP, Fleet.Net or STP
based upon alleged breaches of any representation, warranty, covenant or
agreement made to such former stockholders by Centennial in the Merger
Agreements. The Hutchesons will give Centennial prompt notice of any such claims
and Centennial shall be entitled to control the defense thereof.
14. All prior agreements between the Parties are hereby merged into
this Agreement, which together with all transactions contemplated hereby and all
agreements, instruments and other documents delivered herewith (collectively,
the
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"Settlement Documents") constitute the complete and exclusive agreement among
the Parties with respect to the subject matter thereof, and supersede all prior
and contemporaneous agreements and understandings, oral or written, between the
Parties, with respect to such subject matter. Except as provided herein and in
the Settlement Documents, no representation, promise, proposal, warranty,
covenant, condition, inducement, statement or intention, or other statement or
communication, express or implied, has been made by any Party, and no Party
shall be bound by any purported representation, promise, proposal, warranty,
covenant, condition, inducement, statement of intention, or other statement or
communication, express or implied, with respect to such subject matter that is
not set forth in the Agreement and/or the Settlement Documents. Further, no
Party is relying on any representation, promise, proposal, warranty, covenant,
condition, inducement, statement of intention, or other statement or
communication, express or implied, made by or any other Party except as
expressly set forth in the Settlement Documents.
15. The Parties state that they have been represented by counsel of
their choice throughout the negotiation of this Agreement, that they fully
discussed its terms and conditions with counsel, and that they fully understood
its terms and conditions.
16. This Agreement shall be binding upon and inure to the benefit of
the Parties and their respective successors in interest, transferees, heirs and
assigns.
17. The Parties agree that the terms and conditions of this
Agreement are valid and enforceable under the laws of the State of Delaware and
that the Agreement shall be governed by and construed in accordance with the
substantive law of the State of Delaware.
18. Any notice rendered necessary as a result of this Agreement
shall be in writing, and shall be deemed duly delivered two business days after
it is sent by registered or certified mail, return receipt requested, postage
prepaid, or one business day after it is sent via a reputable nationwide
overnight courier service, in each case to the intended recipient as set forth
below:
If to Centennial: Copy to:
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Centennial Technologies, Inc. Hale and Dorr LLP
37 Manning Road 60 State Street
Billerica, Massachusetts 01821 Boston, Massachusetts 02109
Attn: President Attn: Jay E. Bothwick, Esq.
cc: Donald R. Peck, Esq.,
General Counsel
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If to the Hutchesons: Copy to:
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20071 N.W. Fifth Street Buchanan Ingersoll P.C.
Pembroke Pines, FL 33029 301 Grant St., 20th Floor
Pittsburgh, Pennsylvania 15219
Attn: Bruce Bowden, Esq.
19. This Agreement may be executed in one or more counterparts, each
of which, when so executed, shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
[REST OF PAGE LEFT INTENTIONALLY BLANK.]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized officers or agents as of the date set forth
immediately below their respective signatures.
CENTENNIAL TECHNOLOGIES, INC.
By:
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Title:
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H. HAMBY HUTCHESON
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MARY LOU HUTCHESON
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OUTSTANDING PAYROLL OBLIGATIONS-5/15/97 EXHIBIT A
ITP/FLEET.NET
4/15/97 4/30/97 5/15/97 TOTAL ACC.VAC. TOTAL
(GROSS)
ITP:
Ashfaque, Ashan 1,045.15 1,045.15
DeBauce, Bradley 2,200.43 2,200.43 4,400.86 1,427.07 5,827.93
Dillard, Donald 415.07 415.07
Ellis, Michael 2,126.78 2,126.77 4,253.55 661.16 4,914.71
Forney, Jan 971.22 971.22
Franco, Ozvaldo 3,329.73 3,329.73 6,659.46 1,487.39 8,146.85
Leader, Sheldon 2,385.41 2,644.23 5,029.64 1,000.13 6,029.77
Miller, Douglas 807.84 782.76 782.76
Mon, Jorge 2,126.30 2,126.30 1,743.12 3,869.42
Muller, Joseph 1,659.08 1,659.07 1,659.07 4,977.22 1,524.75 6,501.97
Newton-John, Peter 5,176.21 5,176.21 10,352.42 3,786.39 14,138.81
Otto, Marc 2,258.15 2,258.15 182.38 2,440.53
Raglin, Steven 663.90 663.90
Renuart, Michael 3,705.89 3,705.89 7,411.78 595.07 8,006.85
Robinson, Richard 2,336.55 2,336.55 174.80 2,511.35
Skoog, James 2,569.47 2,596.48 5,192.95 1,419.01 6,611.96
Smith, Graham 2,794.42 2,794.41 5,588.83 1,377.72 6,966.55
Socarras, Rick 2,225.20 2,225.20 1,457.38 3,682.58
Whalen, Michael 1,315.24 1,315.23 1,315.23 3,945.70 618.62 4,564.32
Yin, Carol 1,616.38 1,616.38 1,228.56 2,844.94
Schmidt, Frank -- -- -- -- -- --
Taxes 21,716.12 13,117.65 4,633.50 39,467.27 39,467.27
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OUTSTANDING PAYROLL OBLIGATIONS-5/15/97 EXHIBIT A
ITP/FLEET.NET
4/15/97 4/30/97 5/15/97 TOTAL ACC.VAC. TOTAL
(GROSS)
FLEET.NET
Chen, Harriet 1,492.62 1,492.61 1,492.61 4,477.84 1,165.50 5,643.34
Clements, Kenneth 1,490.62 159.80 1,650.42 187.10 1,837.52
Ford, Philomenia 1,549.67 1,630.74 1,549.66 4,730.07 1,126.00 5,856.07
Fradin, Mildred 893.48 893.48 1,786.96 451.49 2,238.45
Quintana, Javier 1,314.60 1,314.60 1,314.60
Yin, John 2,436.76 2,436.76 2,436.76
Hutchenson, Hamby 6,877.41 3,812.32 3,812.32 14,502.05 15,111.28 29,613.33
Brisbane, Carol 192.92 192.92 1,048.97 1,241.89
Goni, Malvis 227.56 227.56 217.80 445.36
Quintana, Javier 159.80 159.80 709.46 869.26
Taxes -- 3,084.56 15,808.64 18,893.20 18,893.20
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74,730.04 53,127.73 31,164.51 158,214.44 42,579.25 200,793.69
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EXHIBIT B
MUTUAL GENERAL RELEASE
For good and valuable consideration, the receipt of which is hereby
acknowledged, except for the transactions and understandings contained in that
certain Settlement Agreement, dated May 15, 1997 (the "Settlement Agreement"),
Centennial Technologies, Inc., a Delaware corporation, Intelligent Truck
Project, Inc., a Florida corporation ("ITP"), Fleet.Net, Inc., a Florida
corporation ("Fleet.Net") and Smart Traveler Plazas, Inc., a Florida corporation
("STP") hereby release H. Hamby Hutcheson and Mary Lou Hutcheson, and the
current and former partners, successors, heirs, assigns, servants, employees,
agents and attorneys of each of them (collectively, the "Hutchesons"), from any
and all debts, demands, causes of action, contracts, liabilities, agreements,
and any and all claims of any nature, in law or in equity, which Centennial,
ITP, Fleet.Net or STP now have, or ever have had, against the Hutchesons from
the beginning of the world to this date, and, particularly, but without
limitation, on account of the civil action now pending in the United States
District Court for the Southern District of Florida, West Palm Beach Division,
Case No. 97-8114-CIV-HURLEY entitled H. HAMBY HUTCHESON V. CENTENNIAL
TECHNOLOGIES, INC. ET AL., and further without limitation, the predecessor
action pending previously in the Circuit Court of the Fifteenth Judicial Circuit
in and for Palm Beach County, Florida (Case No. 97-1692 AO), including any
claims or causes of action which Centennial, ITP, Fleet.Net or STP could have
asserted therein.
FURTHER, for good and valuable consideration, including a cash payment
of $205,000 by Centennial to the Hutchesons and the other consideration recited
in the Settlement Agreement, the receipt of which is hereby acknowledged, except
for the transactions, understandings, representations, warranties and covenants
contained in the Settlement Agreement, the Hutchesons hereby release Centennial,
ITP, Fleet.Net and STP, and the current and former partners, successors,
assigns, servants, officers, directors, agents, employees and attorneys of each
of them (collectively, the "Centennial Parties") from any and all debts,
demands, causes of action, contracts, liabilities, agreements, and any and all
claims of any nature, in law or in equity, which the Hutchesons, whether jointly
or severally, now have, or ever have had, against the Centennial Parties from
the beginning of the world to this date, and, particularly, but without
limitation, on account of the civil action now pending in the United States
District Court for the Southern District of Florida, West Palm Beach Division,
Case No. 97-8114-CIV-HURLEY entitled H. HAMBY HUTCHESON V. CENTENNIAL
TECHNOLOGIES, INC. ET AL., and further without limitation, the predecessor
action pending previously in the Circuit Court of the Fifteenth Judicial Circuit
in and for Palm Beach County, Florida (Case No. 97-1692 AO), including any
claims or causes of action which the Hutchesons could have asserted therein.
Each party hereto is executing this mutual general release in its
corporate and/or individual capacity, as well as current or former shareholder,
officer and/or director of any of the entities named herein.
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This mutual general release may be executed in multiple copies, each of
which will be deemed to be a fully executed original document.
Signed as a sealed instrument:
CENTENNIAL TECHNOLOGIES, INC.
By:
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Title:
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H. HAMBY HUTCHESON
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MARY LOU HUTCHESON
INTELLIGENT TRUCK PROJECT, INC.
By:
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Title:
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FLEET.NET, INC.
By:
----------------------------------------
Title:
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SMART TRAVELER PLAZAS, INC.
By:
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Title:
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EXHIBIT C
UNITED STATES DISTRICT COURT
FOR THE
SOUTHERN DISTRICT OF FLORIDA
H. HAMBY HUTCHESON )
)
Plaintiff, )
)
)
VS. ) No. 97-8114-CIV-HURLEY
)
)
CENTENNIAL TECHNOLOGIES, INC., ET AL. )
)
)
Defendants. )
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STIPULATION OF DISMISSAL
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Pursuant to Federal Rule of Civil Procedure 41(a)(1)(ii), it is agreed
between all parties that the within action, may be dismissed, with prejudice,
without costs and without the right of appeal.
SO MOVED JOINTLY:
H. HAMBY HUTCHESON CENTENNIAL TECHNOLOGIES, INC.
By his Attorney: By its Attorney:
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Samuel W. Braver Jason M. Murray
Jeffrey Goodz Morgan, Lewis & Bockius LLP
Buchanan Ingersoll P.C. 5300 First Union Financial Center
19495 Biscayne Blvd., Suite 605 200 South Biscayne Blvd.
Aventura, FL 33180-5600 Miami, FL 33131-2399
(305) 933-5600 (305) 579-0424
FAX: (305) 933-2350 FAX: (305) 579-0321
Dated: May ___, 1997