ADMINISTRATIVE SERVICES AGREEMENT
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Agreement dated February 26, 1987 by and between SAFEGUARD SCIENTIFICS,
INC., a Pennsylvania corporation ("Safeguard") and XXXXXXX COMPUTER ASSOCIATES,
INC., a Pennsylvania corporation ("Xxxxxxx").
Background
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X. Xxxxxxx is engaged in the design, development, marketing and support
of computer products for use in the financial services industry.
B. Safeguard Scientifics (Delaware), Inc., a Safeguard subsidiary ("SSI
Delaware"), has agreed to purchase shares of the Common Stock, no par value, of
Xxxxxxx and Xxxxxxx has agreed to commence an offering to holders of Safeguard
common stock of rights to purchase additional shares of the Common Stock, no par
value, of Xxxxxxx (the "Rights Offering") as set forth in and subject to the
applicable terms and conditions of the Common Stock, Warrants & Rights Agreement
(the "Purchase Agreement") among Xxxxxxx, Safeguard and SSI Delaware.
X. Xxxxxxx desires that Safeguard provide certain support services to
assist Xxxxxxx in its development, subject to the terms and conditions
hereinafter set forth.
Agreements
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NOW, THEREFORE, the parties hereto, in consideration of the premises and
intending to be legally bound, agree as follows:
1. Services. Safeguard agrees to provide (either directly or
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indirectly through its subsidiaries) to Xxxxxxx for the term specified herein
administrative support services and access to the broad management experience
of the corporate management staff of Safeguard. Such services include
consultation in regard to general management, investor relations, financial
management, human resource management, legal services, insurance programs
administration, and tax research and planning. Nothing herein will be construed
to require Safeguard to provide any services under this Agreement which
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cannot reasonably be provided by Safeguard's management and corporate staff in
light of its other commitments. The services of director designates of
Safeguard on the Xxxxxxx Board of Directors will be furnished to Xxxxxxx without
additional charge.
2. Outside Services. Safeguard may provide or make arrangements for
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certain services and benefits outside the scope of Section 1 at the request of
Xxxxxxx. The foregoing may involve, among other thing, various types of
insurance programs and various legal, accounting and other matters requiring
outside professional services. To the extent Safeguard will incur obligations
for Xxxxxxx in connection with such services and benefits, Xxxxxxx will pay to
Safeguard or to the provider of such services, in addition to the fee provided
in Section 3, the actual and identifiable costs of such services and benefits.
Safeguard will submit to Xxxxxxx a monthly statement of all such sums due in
accordance with the provisions of this Paragraph and each such statement will be
paid by Xxxxxxx within 30 days after the delivery of such statement to Xxxxxxx.
3. Fee. In consideration of the services to be provided by Safeguard,
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Xxxxxxx will pay Safeguard, during the term of this Agreement, a fee (the
"Services Fee") as follows:
Each Quarter
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4/1/87 - 3/31/88: $12,500
4/1/88 - 3/31/89: $18,750
4/1/89 - 3/31/91: $25,000
The Services Fee for each year will be subject to reduction in the event that
1 1/2% of Xxxxxxx'x sales for that year, as determined in its audited fiscal
year financial statements, is less than the Services Fee. The amount of any
such reduction will be credited against future Services Fee payments; provided
that if no further payments are due, the amount of the reduction will be paid to
Xxxxxxx. All fees are payable within 30 days of the commencement of each
quarter.
4. Term. This Agreement will be effective as of the date of execution,
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will extend through and include March 31, 1991 and will continue to be effective
thereafter
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on a quarterly basis, subject to termination on March 31, 1991 or on the final
day of any quarter thereafter, by delivery of written notice to such effect by
either party to the other no later than the final day of the preceding quarter.
5. Miscellaneous. (a) Nothing herein will be construed to relieve the
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directors or officers of Xxxxxxx from the performance of their respective duties
or limit the exercise of their powers in accordance with the Articles of
Incorporation or By-Laws of Xxxxxxx, any applicable provisions of the Business
Corporation Law of the Commonwealth of Pennsylvania, or otherwise. The
activities of Xxxxxxx will at all times be subject to the control and direction
of its Board of Directors and officers.
(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 will 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 will
not be assignable by either party hereto without written consent of the other
party.
(e) Nothing in this Agreement will be deemed to constitute the parties
hereto joint venturers, partners or participants in an unincorporated or other
separate entity.
(f) Xxxxxxx acknowledges that the services to be provided by Safeguard
under Section 2.6 of the Purchase Agreement, for which compensation other than
the Services Fee is to be paid, are distinct and separate from those to be
provided by Safeguard under this Agreement.
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IN WITNESS WHEREOF, Safeguard Scientifics, Inc. and Xxxxxxx Computer
Associates, 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.
SAFEGUARD SCIENTIFICS, INC.
By: [SIGNATURE APPEARS HERE]
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Vice President
XXXXXXX COMPUTER ASSOCIATES, INC.
By: [SIGNATURE APPEARS HERE]
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President
