ADMINISTRATIVE SERVICES AGREEMENT
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THIS AGREEMENT, dated as of this 21st day of May 1998, by and between
SAFEGUARD SCIENTIFICS, INC., a Pennsylvania corporation, ("Safeguard"), XL
VISIONS, INC., a Delaware corporation ("XL Vision") and WHO? VISIONS SYSTEMS,
INC., a Delaware corporation, ("Company").
W I T N E S S E T H:
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WHEREAS, Safeguard and XL Vision are willing to provide Company with
certain administrative support services; and
WHEREAS, Safeguard, XL Vision and Company have agreed to enter into an
Administrative Services Agreement to reflect the parties' respective rights and
obligations.
NOW, therefore, the parties hereto, in consideration of their mutual
covenants and intending to be legally bound, hereby agree as follows:
1. Services. Safeguard and XL Vision agree to provide (each either directly
or indirectly through its subsidiaries) to Company for the term specified herein
administrative support services and access to the broad management experience of
the corporate management staff of Safeguard. Such services shall include,
without limitation, consultation in regard to general management, investor
relations, financial management, human resources management, legal services,
insurance programs administration, audit administration and, tax research and
planning. Nothing herein shall be construed to require Safeguard or XL Vision to
provide any services under this Agreement which cannot reasonably be provided by
Safeguard or XL Vision's management and corporate staff.
2. Special Project Services. Notwithstanding the foregoing, if certain
particular projects will require extensive administrative support from Safeguard
or XL Vision, in either Safeguard or XL Vision's reasonable judgment, and such
projects are not in the ordinary course of Company's business, prior to
undertaking to provide such services Safeguard or XL Vision each may propose to
Company that it provide all or a part of such services only upon the payment of
an additional fee by Company. If agreement as to such fees cannot be reached
between Company and Safeguard or the Company and XL Vision, Safeguard or XL
Vision may decline to provide such services. Specific examples of types of
projects which may require additional fee payments include, without limitation,
rights offerings; secondary public offerings; acquisitions; investments by third
parties, and negotiation of material contracts.
3. Fee. In consideration of the services to be rendered by Safeguard and XL
Vision under this Agreement, Company shall pay an annual fee ("Services Fee")
equal to 1-1/2% of Company's gross revenues each year, with such Services Fees
to be at least $100,000 and not more than $300,000 in any given year. This
Service Fee shall be split equally between Safeguard and XL Vision such that
each shall receive 0.75% of the Company's annual gross revenues subject to the
limitations set forth above. The Services Fee shall be payable to each of
Safeguard and XL Vision in monthly installments within 30 days of the
commencement of each month based on revenues from the preceding month and shall
be subject to adjustment on the basis of the fiscal year audited financial
statements of Company; provided, however, that the Service Fee will accrue to
each of Safeguard and XL Vision until the Company's cash flow is positive or the
Company completes its initial public offering and payments of the current and
accrued fees will then be made as provided in this paragraph for such periods
during which the cash flow remains positive.
4. Outside Services. Company recognizes that Safeguard and XL Vision each
may provide, or make arrangements for others to provide, certain other services
and benefits for Company. Such services and benefits may include, without
limitation, various types of insurance programs; and various legal, accounting
and other matters requiring outside professional services. To the extent either
Safeguard or XL Vision incurs obligations for Company at Company's request in
connection with such services and benefits, Company shall pay to Safeguard, XL
Vision or to the provider of such services and benefits as the case may be, in
addition to the fees provided in Paragraphs 1 or 2 of this Agreement, the actual
and identifiable costs of such services and benefits or, in those cases where
actual costs cannot be identified, Company's proportionate share of such
benefits or services, and the sums necessary to discharge, repay or to otherwise
compensate Safeguard or XL Vision for any obligations incurred by Safeguard or
XL Vision in connection therewith. Safeguard and XL Vision shall submit to
Company a monthly statement of all such sums due in accordance with the
provisions of this Paragraph and each such statement shall be paid by Company
within 30 days after the delivery of such statement to Company.
5. Term. This Agreement shall be effective on May 18, 1998, and shall
extend through and include May 18, 2003, and shall automatically continue to be
effective thereafter on an annual basis, subject to termination on the final day
of any succeeding calendar year by delivery of written notice by either party to
the other party no less than 90 days prior to the termination date.
6. Miscellaneous.
(a) Nothing herein shall be construed to relieve the directors or
officers of Company from the performance of their respective duties or limit the
exercise of their powers in accordance with the Certificate or Articles of
Incorporation or By-Laws of Company, any applicable provisions of the applicable
corporate law, or otherwise. The activities of Company shall at all times be
subject to the control and direction of its Board of Directors and Officers.
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(b) This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and may not be amended or
modified except by the written agreement of the parties hereto.
(c) This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors. Nothing in this Agreement,
expressed or implied, is intended to confer on any other person other than the
parties hereto, or their respective successors, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
(d) This Agreement and any rights or obligations pursuant hereto shall
not be assignable by either party without prior written consent of the other
party.
(e) Nothing in this Agreement shall be deemed to constitute the parties
hereto joint venturers, partners or participants in an unincorporated business
or other separate entity.
(f) This Agreement shall be governed by the laws of the State of
Delaware.
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IN WITNESS WHEREOF, Safeguard Scientifics, Inc., XL Vision, Inc. and
Who? Vision Systems, Inc. have caused this Agreement to be executed in their
respective corporate names by an officer thereunto duly authorized, all as of
the date first above written.
ATTEST: SAFEGUARD SCIENTIFICS, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Title: Vice President and Chief Financial Officer
ATTEST: XL VISION, INC.
/s/ Xxxxxxxx Xxxx By: Xxxx X. Xxxxx
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Xxxxxxxx Xxxx Xxxx X. Xxxxx
Assistant Secretary Chief Executive Officer
ATTEST: WHO? VISION SYSTEMS, INC.
/s/ Xxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx Xxxxxx Xxxxx Xxxxxxxx
Title: V.P. Chief Financial Officer
