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EXHIBIT 10.4
ADMINISTRATIVE SERVICES AGREEMENT
THIS AGREEMENT, dated as of this 15th day of December, 1997 by and
between SAFEGUARD SCIENTIFICS, INC., a Pennsylvania corporation ("Safeguard")
and XL VISION, INC., a Delaware corporation, ("XL Vision") and eMERGE VISION
SYSTEMS, INC., a Delaware corporation, ("EVS").
WITNESSETH:
WHEREAS, Safeguard and XL Vision are providing EVS with certain
administrative support services; and
WHEREAS, Safeguard, XL Vision and EVS 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. Safeguard and XL Vision agrees to provide (either directly or
indirectly through its subsidiaries) to EVS for the term specified
herein administrative support services and access to the broad
management experience of the corporate management staff of Safeguard
and XL vision. Such services shall be substantially those heretofore
provided by Safeguard and XL Vision to EVS, including without
limitation, consultation in regard to general management, investor
relations, financial management, human resources management, legal
services, insurance programs administration, audit administration, tax
research and planning, and preparation of federal and sate income tax
returns. 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 and XL Vision's management and
corporate staff.
2. In consideration of the services to be rendered by Safeguard and XL
Vision under this Agreement, EVS shall pay an annual fee ("Services
Fee") of 1.5% of EVS's gross revenues each year, with such Services Fee
not to exceed $300,000 in any given year. This Services Fee is to be
divide(f as follows: Safeguard shall receive an annual fee ("Services
Fee") equal to .75 % of EVS's gross revenues each year, and XL Vision
shall receive an annual fee equal to .75 % of EVS's gross revenues each
year. The Services Fee shall be payable in quarterly installments
within 30 days of the commencement of each quarter based on revenues
from the preceding quarter and shall be subject to adjustment on the
basis of the fiscal year audited financial statements of EVS; provided,
however, that the Service Fee will accrue until the Company's cash flow
is positive and payments of the fee will then be made as provided in
this paragraph for such periods during which the cash flow remains
positive.
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3. EVS recognizes that Safeguard and XL Vision have heretofore provided,
or have made arrangements for, certain other services and benefits for
EVS and have incurred guarantees of certain obligations of EVS and that
Safeguard and XL Vision may continue to provide, or make arrangements
for, certain of such services and benefits and may incur guarantees of
obligations of EVS. The foregoing may involve, among other things,
various types of insurance programs; various legal, accounting and
other matters requiring outside professional services or in-house
services by Safeguard and XL Vision personnel (including but not
limited to legal and accounting services) which are not in the ordinary
course; and guarantees of obligations. To the extent Safeguard and XL
Vision continue to incur obligations for EVS at EVS's request in
connection with such services and benefits, EVS shall pay to Safeguard,
XL Vision or to the provider of such services, in addition to the fee
provided in Paragraph 2 of the Agreement, the actual and identifiable
costs of such services and benefits, or in those cases where actual
costs cannot be identified, EVS's proportionate share of such benefits
and services, and the sums necessary to discharge, repay or to
otherwise compensate Safeguard and XL Vision for any obligations
incurred by Safeguard or XL Vision in connection therewith. Safeguard
and XL Vision shall submit to EVS a monthly statement of all such sums
due in accordance with the provisions of this Paragraph and each such
statement shall be paid by EVS within 30 days after the delivery of
such statement to EVS.
4. This Agreement shall be effective December 31, 1997 and shall extend
through and include December 31, 2002 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.
5. Nothing herein shall be construed to relieve the directors or officers
of EVS from the performance of their respective duties or limit the
exercise of their powers in accordance with the Certificate of
Incorporation or By-Laws of EVS, any applicable provisions of the
Corporation Law of the State of Delaware, or otherwise. The activities
of EVS shall at all times be subject to the control and direction of
its Board of Directors and Officers.
6. 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.
7. 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.
8. This Agreement and any rights or obligations pursuant hereto shall not
be assignable by either party without prior written consent of the
other party.
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9. 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.
IN WITNESS WHEREOF, Safeguard Scientifics Inc., XL Vision, Inc. and
eMERGE 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.
/s/: Xxxxxxxx Xxxx By:/s/: Xxxxxxx Xxxxx
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Name: Xxxxxxxx Xxxx Title: Xxxxxxx Xxxxx
Title: Assistant Secretary
ATTEST: XL VISION, INC.
/s/: Xxxxxxxx Xxxx By:/s/: Xxxxxxx Xxxxxxx
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Xxxxxxxx Xxxx Xxxxxxx X. Xxxxxxx
Assistant Secretary President and Chief Operating Officer
ATTEST: eMERGE VISION SYSTEMS, INC.
/s/: Xxxxxxxx Xxxx By:/s/: E. Xxxxx Xxxxxxxxx
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Name: Xxxxxxxx Xxxx E. Xxxxx Xxxxxxxxx
Title: Assistant Secretary Chief Executive Officer
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