Exhibit 10.1

 

EXECUTION COPY

 

COOPERATION AGREEMENT

 

This AGREEMENT, dated as of April 23, 2018 (this “Agreement”), is made and
entered into by and among Safeguard Scientifics, Inc., a Pennsylvania
corporation (the “Company”), and each of the persons set forth on the signature
page hereto (each, an “Investor” and collectively, the “Investors” or, with
their respective affiliates and associates, the “Investor Group”), which
presently are or may be deemed to be members of a “group” with respect to the
common stock of the Company, $0.10 par value per share (the “Common Stock”),
pursuant to Rule 13d-5 promulgated by the U.S. Securities and Exchange
Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”);

 

WHEREAS, the Investor Group is deemed to beneficially own shares of the Common
Stock totaling, in the aggregate, 1,055,968 shares of the Common Stock
outstanding as of the date hereof constituting approximately 5.1% of the
Company’s issued and outstanding shares of Common Stock;

 

WHEREAS, the Investor Group has (i) submitted an advance notice of nomination to
the Company on February 23, 2018 (the “Nomination Notice”), in respect of its
intention to nominate, and to solicit proxies for the election of, four (4)
individuals as director candidates to the Company’s board of directors (the
“Board”) at the 2018 Annual Meeting of Shareholders of the Company (including
any adjournment, postponement, continuation or rescheduling thereof, the “2018
Annual Meeting”), and (ii) taken steps towards planning a contested solicitation
of proxies from the Company’s shareholders in connection with the 2018 Annual
Meeting to elect to the Board the four (4) individuals named in the Nomination
Notice (the “Proxy Contest”);

 

WHEREAS, the Company and the Investor Group have determined that the interests
of the Company and its shareholders would be best served by, among other things,
avoiding the substantial expense and disruption that would result from the
continuation of the Proxy Contest;

 

WHEREAS, the Company has agreed, at the request of the Investor Group, to cause
Russell D. Glass and Ira M. Lubert (collectively, the “New Directors”) to be
appointed to the Board, effective immediately following the execution of this
Agreement;

 

WHEREAS, the Company has agreed, at the request of the Investor Group, to cause
each of the New Directors to be nominated and recommended for election to the
Board by the Company’s shareholders at the 2018 Annual Meeting;

 

WHEREAS, the Investor Group has agreed to, among other things, (i) withdraw its
Nomination Notice, (ii) withdraw the Shareholder Inspection Demand that it
delivered to the Company on March 12, 2018 (the “Shareholder Inspection Demand”)
pursuant to Section 1508 of the Pennsylvania Business Corporation Law, as
amended (the “PBCL”), (iii) terminate the Proxy Contest, (iv) refrain from
submitting any director nominations or shareholder proposals during the
Standstill Period (as defined below), and (v) vote for the election of the
Company’s slate of director nominees for election to the Board and other matters
(subject to certain limitations) during the Standstill Period, as provided in
this Agreement; and

 

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WHEREAS, the Company and the Investor Group, without admitting to any of the
matters asserted by any of the parties, have determined to come to an agreement
with respect to certain matters related to the termination of the Proxy Contest,
the composition of the Board and certain other matters, as provided in this
Agreement;

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, agree as follows,
effective as of the date hereof:

 

1.          Board Composition Matters.

 

(a)          2018 Annual Meeting. The Company agrees that it shall take all
actions as are necessary (including, without limitation, calling a special
meeting of the Board to approve all actions contemplated hereby), effective
immediately following the execution of this Agreement, to (i) cause the Board to
increase the size of its membership from seven (7) to nine (9) members; and (ii)
appoint each of the New Directors to the Board with a term expiring at the 2018
Annual Meeting and until each of their successors are duly elected and
qualified. The Company also agrees that it shall take all action as is necessary
(including, without limitation, calling a special meeting of the Board to
approve all actions contemplated hereby), to cause the slate of five (5)
nominees recommended by the Board and standing for election at the 2018 Annual
Meeting to include (x) any three (3) members of the Board who are on the Board
prior to the execution of this Agreement (the “Incumbent Slate”), provided that
the Incumbent Slate shall be selected by the members of the Board who are on the
Board prior to the execution of this Agreement, and (y) the two (2) New
Directors (collectively, with the Incumbent Slate, the “2018 Nominees”), such
that a total of five (5) directors are to be elected at the 2018 Annual Meeting.
The Company specifically agrees to: (i) nominate each of the 2018 Nominees for
election at the 2018 Annual Meeting as a director of the Company with a term
expiring at the Company’s 2019 Annual Meeting of Shareholders (the “2019 Annual
Meeting”) and until each of their successors are duly elected and qualified;
(ii) recommend to the Company’s shareholders each of the 2018 Nominees for
election as directors of the Company at the 2018 Annual Meeting; (iii) cause the
Company to support, and solicit proxies for, the election of each of the New
Directors in substantially the same manner as the Company supports and solicits
proxies for the election of each of the members of the Incumbent Slate at the
2018 Annual Meeting; and (iv) cause all proxies received by the Company that
provide shareholders with the opportunity to vote for all of the 2018 Nominees
to be voted in the manner specified by such proxies. The Company agrees to
convene the 2018 Annual Meeting no later than Friday, June 22, 2018.

 

(b)          Committees. The Company agrees that, concurrent with the
appointment of the New Directors to the Board, the Board shall take such action
as is necessary such that one of the New Directors is appointed to the
Nominating & Corporate Governance Committee of the Board and the other New
Director is appointed to the Compensation Committee of the Board; provided that,
with respect to such committee appointments, the New Director to be appointed to
such committee is and continues to remain eligible to serve as a member of such
committee pursuant to applicable law and the listing standards and/or rules of
the New York Stock Exchange (the “NYSE”) that are applicable to the composition
of such committee.

 

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(c)          Board Policies and Procedures. The Investor Group acknowledges that
the New Directors shall be required to comply with all policies, processes,
procedures, codes, rules, standards, and guidelines applicable to members of the
Board, as in effect from time to time, including, but not limited to, the
Company’s Business Conduct and Code of Ethics, and policies on confidentiality,
ethics, hedging and pledging of Company securities, public disclosures, stock
trading, and stock ownership, the New Directors will be required to complete and
execute directors’ and officers’ questionnaires in the same manner as all other
members of the Board, and that the New Directors shall be required to strictly
preserve the confidentiality of Company business and information, including the
discussion of any matters considered in meetings of the Board whether or not the
matters relate to material non-public information, unless previously publicly
disclosed by the Company. Further, the Investor Group and the New Directors
shall provide the Company with such information as is reasonably requested by
the Company concerning the New Directors as is required to be disclosed under
applicable law or stock exchange regulations, including the completion of the
Company’s standard directors’ and officers’ questionnaires (to the extent not
previously completed), in each case as promptly as necessary to enable the
timely filing of the Company’s proxy statement and other periodic reports with
the SEC.

 

(d)          Rights and Benefits of the New Directors. The Company agrees that
the New Directors shall receive (i) the same benefits of director and officer
insurance, and any indemnity and exculpation arrangements available generally to
the directors on the Board, (ii) the same compensation for his or her service as
a director as the compensation received by other non-management directors on the
Board with similar Board assignments, and (iii) such other benefits on the same
basis as all other non-management directors on the Board, including having the
Company (or its legal counsel) prepare and file with the Securities and Exchange
Commission (“SEC”), at the Company’s expense, any Forms 3, 4, and 5 under
Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), that are required to be filed by each director of the Company.

 

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(e)          Replacements of New Directors. The Company agrees that, during the
Standstill Period (as defined below), if any of the New Directors (or his
replacement appointed pursuant to this Section 1(e)) is unable or unwilling to
serve as a director, resigns as a director or is removed as a director of the
Company (other than on account of failure to be elected or re-elected), and at
such time the Investor Group beneficially owns in the aggregate at least the
lesser of five percent (5.0%) of the Company’s then outstanding Common Stock and
1,028,0371 shares of Common Stock (subject to adjustment for share issuances,
stock splits, reclassifications, combinations and similar actions by the Company
that increase the number of outstanding shares of Common Stock), then the
Company and the Investor Group shall work together in good faith to identify and
propose a replacement director candidate to be appointed to the Board who shall
only be appointed to the Board after having been mutually agreed upon by both
the Company and the Investor Group. Any such mutually agreed upon replacement
director candidate shall (i) qualify as “independent” pursuant to SEC
regulations and the NYSE’s listing standards, (ii) have, in the reasonable and
good faith judgment of the Company, the relevant financial and business
experience to serve on the Board, and (iii) be independent of the Investor Group
and not have previously served as a nominee proposed or recommended by any
Investor for election to the board of directors at any other company. Each of
the Board and the Investor Group shall determine, and inform the other party of
its determination, whether any proposed replacement director candidate is
acceptable within ten (10) business days after such party has conducted
interview(s) of such replacement director candidate if any such interviews are
conducted. Each of the Board and the Investor Group shall use its reasonable
best efforts to cause any interview(s) contemplated by this Section 1(e) to be
conducted as promptly as practicable, but in any case, assuming reasonable
availability of the replacement director candidate, within ten (10) business
days after such candidate has been recommended by either the Board or the
Investor Group. Upon acceptance of a replacement director candidate by both the
Company and the Investor Group, the Board shall take such actions as to appoint
such replacement director candidate to the Board no later than ten (10) business
days after both parties have confirmed in writing that they have mutually agreed
upon such candidate; provided, however, that if the Board does not appoint such
replacement director candidate to the Board pursuant to this Section 1(e), the
parties shall continue to follow the procedures of this Section 1(e) until a
replacement director candidate is appointed to the Board. Upon a replacement
director candidate’s appointment to the Board in accordance with this Section
1(e), the Board and all applicable committees of the Board shall take all
necessary actions to appoint such replacement director candidate to any
applicable committee of the Board of which the replaced director was a member
immediately prior to such director’s resignation or removal. Any replacement
director appointed to the Board pursuant to this Section 1(e) prior to the 2018
Annual Meeting shall stand for election at the 2018 Annual Meeting together with
the other 2018 Nominees. Following the appointment of any replacement director
in accordance with this Section 1(e), any reference to New Directors in this
Agreement shall be deemed to include such replacement director.

 

(f)          Size of the Board. The Company further agrees that, without the
unanimous approval of the Board or unless the Company enters into a definitive
agreement relating to a strategic transaction that contemplates a counterparty
to such transaction being able to designate individuals to be appointed or
nominated for election to the Board, (i) only five (5) director candidates
(including the New Directors) shall stand for election to the Board at the 2018
Annual Meeting, and (ii) during the period from the conclusion of the 2018
Annual Meeting until the end of the Standstill Period, the size of the Board
shall not be increased beyond five (5) members.

 

2.          Actions by the Investor Group.

 

(a)          Withdrawal of Investor Group’s Advance Notice of Nomination. The
Investor Group hereby (i) irrevocably withdraws the Nomination Notice and any
and all amendments and supplements thereto, (ii) agrees not to deliver to the
Company or any representative thereof any advance notices of nominations,
business or shareholder proposals with respect to any meeting of the Company’s
shareholders during the Standstill Period (as defined below), and (iii) agrees
not to bring any nominations, business or shareholder proposals before or at the
2018 Annual Meeting or at any time thereafter during the Standstill Period.

 

(b)          Withdrawal of Section 1508 Inspection Demand. Effective
immediately, the Investor Group hereby (i) irrevocably withdraws the Shareholder
Inspection Demand that it delivered to the Company on March 12, 2018, pursuant
to Section 1508 of the PBCL, and (ii) agrees not to deliver to the Company or
any representative thereof any shareholder inspection demands during the
Standstill Period, whether pursuant to Section 1508 of the PBCL, any other
statutory right or otherwise.

 

 

 

1 Based on 20,560,746 shares outstanding as of April 19, 2018.

 

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(c)          Voting Agreement.

 

(i)          Shareholders Meetings. At the 2018 Annual Meeting and each annual
and special meeting of shareholders held prior to the expiration of the
Standstill Period, each of the Investors agrees to (A) appear at such
shareholders’ meeting or otherwise cause all shares of Common Stock beneficially
owned by each Investor and their respective Affiliates and Associates (as
defined below) to be counted as present thereat for purposes of establishing a
quorum; (B) vote, or cause to be voted, all shares of Common Stock beneficially
owned by each Investor and their respective Affiliates and Associates on the
Company’s proxy card or voting instruction form in favor of each of the nominees
for election as directors nominated by the Board and recommended by the Board
(and not in favor of any other nominees to serve on the Board), and, except in
connection with any Opposition Matter (as defined below) or Other Voting
Recommendation (as defined below), each of the proposals listed on the Company’s
proxy card or voting instruction form as identified in the Company’s definitive
proxy statement or supplement thereto in accordance with the Board’s
recommendations, including in favor of all matters recommended by the Board for
shareholder approval and against all matters that the Board recommends against
shareholder approval; provided, however, in the event that Institutional
Shareholder Services Inc. (“ISS”) issues a recommendation with respect to any
matter (other than with respect to the election of nominees as directors to the
Board or the removal of directors from the Board) that is different from the
recommendation of the Board, each of the Investors shall have the right to vote
their shares of Common Stock on the Company’s proxy card or voting instruction
form in accordance with the ISS recommendation (the “Other Voting
Recommendation”); and (C) not execute any proxy card or voting instruction form
in respect of such shareholders’ meeting other than the proxy card and related
voting instruction form being solicited by or on behalf of the Company or the
Board. No later than five (5) business days prior to each annual or special
meeting of shareholders held prior to the expiration of the Standstill Period,
each Investor shall, and shall cause each of its Associates and Affiliates to,
vote any shares of Common Stock beneficially owned by such Investors and each of
its Associates and Affiliates in accordance with this Section 2. No Investor nor
any of its Affiliates or Associates nor any person under its direction or
control shall take any position, make any statement or take any action
inconsistent with this Section 2(c)(i). For purposes of this Agreement,
“Opposition Matter” shall mean any of the following transactions, but only to
the extent submitted by the Board to the Company’s shareholders for approval:
(A) the sale or transfer of all or substantially all of the Company’s assets in
one or a series of transactions; (B) the sale or transfer of a majority of the
outstanding shares of the Company’s Common Stock (through a merger, stock
purchase, or otherwise); (C) any merger, consolidation, acquisition of control
or other business combination; (D) any tender or exchange offer; (E) any
dissolution, liquidation, or reorganization; (F) any changes in the Company’s
capital structure (but excluding any proposals relating to the adoption,
amendment or continuation of any equity plans, none of which shall be deemed an
Opposition Matter for purposes of this Agreement); (G) any proposals relating to
the Tax Benefits Plan (as defined herein); or (H) any other transactions that
would result in a Change of Control of the Company.

 

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(ii)         Actions By Written Consent. In connection with any action by
written consent that is sought to be taken by any party, other than the Company
or the Board, prior to the expiration of the Standstill Period (as defined
below), each of the Investors agrees not to vote and to take all necessary
action, including, without limitation, the execution and completion of any
consent revocation card solicited by the Company or the Board, in accordance
with the recommendation of the Board, to cause not to be voted, any of their
shares of Common Stock beneficially owned by each Investor and/or their
respective Affiliates and Associates on any consent card related to or affecting
the removal, replacement or election of Board members and solicited by any
party, other than the Company or the Board. No Investor nor any of its
Affiliates or Associates nor any person under its direction or control shall
take any position, make any statement or take any action inconsistent with this
Section 2(c)(ii).

 

(iii)        Special Meeting Demands. In connection with any demand by a
shareholder of the Company that the Company call a special meeting of
shareholders, made prior to the expiration of the Standstill Period (as defined
below), each of the Investors agrees not to vote and shall take all necessary
action, including, but not limited to, the execution and completion of any
consent revocation card solicited by the Company or the Board in accordance with
the recommendation of the Board, to cause not to be voted, any of their shares
of Common Stock beneficially owned by each Investor and/or their respective
Affiliates and Associates for any special meeting demand proposed or sought to
be made by any party. No Investor nor any of its Affiliates or Associates nor
any person under its direction or control shall take any position, make any
statement or take any action inconsistent with this Section 2(c)(iii).

 

(d)          Notice to the SEC. The Investor Group shall promptly (but no later
than the two (2) business days following the execution of this Agreement) notify
the Staff of the SEC in writing that it is terminating the Proxy Contest, and
shall, thereafter, promptly provide the Company with a copy of this
communication.

 

3.          Standstill.

 

(a)          Each Investor agrees that, from the date of this Agreement until
the expiration of the Standstill Period (as defined below), without the prior
written consent of at least two-thirds of the members of the Board (which, for
the avoidance of doubt, means at least four (4) members of a five (5) member
Board) specifically expressed in a written resolution, neither it nor any of its
Related Persons (as defined below) will, and it will cause each of its Related
Persons not to, directly or indirectly, alone or with others, in any manner:

 

(i)          publicly announce or otherwise publicly disclose an intent to
propose or enter into or agree to enter into, singly or with any other person,
directly or indirectly, (x) any form of business combination or acquisition or
other transaction relating to a material amount of assets or securities of the
Company or any of its subsidiaries, (y) any form of restructuring,
recapitalization or similar transaction with respect to the Company or any of
its subsidiaries or (z) any form of tender or exchange offer for the Common
Stock, whether or not such transaction involves a Change of Control of the
Company; provided, however, that this clause (i) shall not preclude the tender
by any Investor of any securities of the Company into any tender or exchange
offer not made, financed, or otherwise supported by the Investor Group or any
Affiliate or Associate thereof or preclude the ability of any Investor to vote
its shares of Common Stock for or against any transaction involving the
Company’s securities where the transaction is not proposed or sponsored by any
Investor or any Affiliate or Associate thereof;

 

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(ii)         engage in any solicitation of proxies or written consents to vote
any voting securities of the Company, or conduct any non-binding referendum with
respect to any voting securities of the Company, or engage in any solicitation
activities on behalf of any person, or conduct any exempt solicitation,
including under Rule 14a-2(b)(1) under the Exchange Act, or assist or
participate in any other way, directly or indirectly, in any solicitation of
proxies or written consents with respect to any voting securities of the
Company, or otherwise take any action that could cause any Investor to be deemed
a “participant” in a “solicitation,” as such terms are defined in Instruction 3
of Item 4 of Schedule 14A and Rule 14a-1, respectively, under the Exchange Act,
to vote any securities of the Company in opposition to any recommendation or
proposal of the Board;

 

(iii)        acquire, offer or propose to acquire, or agree to acquire, directly
or indirectly, whether by purchase, tender or exchange offer, through the
acquisition of control of another person, by joining a partnership, limited
partnership, syndicate or other group (including any group of persons that would
be treated as a single “person” under Section 13(d) of the Exchange Act),
through swap or hedging transactions or otherwise, any additional securities
(including common and preferred equity interests and debt that is convertible
into any equity interests) of the Company or any rights decoupled from the
underlying securities of the Company representing in the aggregate in excess of
ten percent (10%) of the shares of Common Stock then outstanding; provided,
however, that the Investor Group acknowledges the Section 382 Tax Benefits
Preservation Plan, dated as of February 19, 2018 (the “Tax Benefits Plan”), by
and between the Company, Computershare Inc., a Delaware corporation
(“Computershare”), and Computershare’s wholly-owned subsidiary, Computershare
Trust Company, N.A., a federally chartered trust company, and that under the Tax
Benefits Plan, any Investor must seek a waiver or exemption from the Company
under the Tax Benefits Plan prior to acquiring beneficial ownership of any
additional shares of the Common Stock, and nothing contained in this Section
3(a)(iii) or elsewhere in this Agreement shall be interpreted as any intention
or commitment by the Company to grant any such waiver or exemption, if
requested;

 

(iv)        advise, encourage or influence any person with respect to the voting
of (or execution of a proxy or written consent in respect of) or disposition of
any securities of the Company;

 

(v)         other than in sale transactions on the NYSE or through a broker or
dealer where the identity of the purchaser is not known or in underwritten
widely dispersed public offerings, knowingly sell, offer or agree to sell
directly or indirectly, through swap or hedging transactions or otherwise, any
securities (including common and preferred equity interests and debt that is
convertible into any equity interests) of the Company or any rights decoupled
from the underlying securities held by the Investors or their Affiliates or
Associates to any person or entity not a party to this Agreement (a “Third
Party”) that would result in such Third Party, together with its Affiliates and
Associates, owning, controlling or otherwise having any, beneficial, economic or
other ownership interest representing in the aggregate more than 4.99% of the
shares of Common Stock outstanding at such time;

 

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(vi)        sell, offer or agree to sell directly or indirectly, through swap or
hedging transactions or otherwise, any securities (including common and
preferred equity interests and debt that is convertible into any equity
interests) of the Company or any rights decoupled from the underlying securities
held by the Investors to any Affiliate or Associate of the Investors not a party
to this Agreement;

 

(vii)       engage in any short sale with respect to any security (other than a
broad-based market basket or index) that includes, relates to, or derives any
significant part of its value from a decline in the market price or value of the
securities of the Company;

 

(viii)      except as otherwise expressly set forth in this Agreement
(including, without limitation, Sections 1(a) and (e) with respect to the
appointment, nomination and replacement of the New Directors, Section 1(f) with
respect to the size of the Board, Section 2(c) with respect to voting on any
Opposition Matter or Other Voting Recommendation and Section 3(c) with respect
to private discussions with the Company), take any action in support of or make
any proposal or request that constitutes: (A) advising, controlling, changing or
influencing the Board or management of the Company, including any plans or
proposals to change the number or term of directors or to fill any vacancies on
the Board, (B) any material change in the capitalization, stock repurchase
programs and practices or dividend policy of the Company, (C) any other material
change in the Company’s management, governance, compensation, policies,
strategic direction, business or corporate structure, (D) seeking to have the
Company waive or make amendments or modifications to the Company’s Second
Amended and Restated Articles of Incorporation or the Company’s Third Amended
and Restated Bylaws, or other actions that may impede or facilitate the
acquisition of control of the Company by any person, (E) causing a class of
securities of the Company to be delisted from, or to cease to be authorized to
be quoted on, any securities exchange, or (F) causing a class of securities of
the Company to become eligible for termination of registration pursuant to
Section 12(g)(4) of the Exchange Act;

 

(ix)         call or seek to call, or request the call of, alone or in concert
with others, any meeting of shareholders, whether or not such a meeting is
permitted by the Company’s Second Amended and Restated Articles of Incorporation
or the Company’s Third Amended and Restated Bylaws, including, but not limited
to, a “town hall meeting;”

 

(x)          seek, alone or in concert with others, representation on the Board,
except as expressly permitted by this Agreement;

 

(xi)         initiate, encourage or participate in any “vote no,” “withhold” or
similar campaign relating to the Company;

 

(xii)        deposit any Common Stock in any voting trust or subject any Common
Stock to any arrangement or agreement with respect to the voting of any Common
Stock (other than any such voting trust, arrangement or agreement solely among
the members of the Investor Group that is otherwise in accordance with this
Agreement);

 

(xiii)       seek, or encourage any person, to submit nominations in furtherance
of a “contested solicitation” for the election or removal of directors with
respect to the Company or seek, encourage or take any other action with respect
to the election or removal of any directors of the Company or with respect to
the submission of any shareholder proposals (including any submission of
shareholder proposals pursuant to Rule 14a-8 under the Exchange Act);

 

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(xiv)      form, join or in any other way participate in any “group” (within the
meaning of Section 13(d)(3) of the Exchange Act) with respect to the Common
Stock (other than the Investor Group); provided, however, that nothing herein
shall limit the ability of an Affiliate of the Investor Group to join the
“group” following the execution of this Agreement, so long as any such Affiliate
agrees, in a writing executed and delivered to the Company, to be bound by the
terms and conditions of this Agreement as though it was a party hereto;

 

(xv)       demand a copy of the Company’s list of shareholders or its other
books and records, whether pursuant to Section 1508 of the PBCL or pursuant to
any other statutory right or otherwise;

 

(xvi)      institute, solicit or join, as a party, any litigation, arbitration
or other proceeding (including any derivative action) against the Company or any
of its future, current or former directors or officers or employees; provided,
however, that for the avoidance of doubt, the foregoing shall not prevent any
Investor from (A) bringing litigation to enforce the provisions of this
Agreement, (B) making counterclaims with respect to any proceeding initiated by,
or on behalf of, the Company against an Investor, or (C) exercising statutory
dissenter’s, appraisal or similar rights under the PBCL; provided, further, that
the foregoing shall also not prevent the Investors from responding to or
complying with a validly issued legal process in connection with litigation that
it did not initiate, invite, facilitate or encourage, except as otherwise
permitted in this Section 3(a)(xvi);

 

(xvii)     engage any private investigations firm or other person to investigate
any of the Company’s directors or officers;

 

(xviii)    take any action, directly or indirectly, to interfere with any
employment, consulting, compensation, indemnification, separation or other
agreements, arrangements or understandings, whether written or oral, formal or
informal, between the Company and any current or former director or officer of
the Company, or which are intended to benefit any current or former director or
officer of the Company, including, but not limited to, any provisions of the
Company’s Second Amended and Restated Articles of Incorporation and Third
Amended and Restated Bylaws intended to indemnify, provide advancement of
expenses or limit the liability of, any current or former director or officer of
the Company;

 

(xix)       disclose publicly or privately, in a manner that could reasonably be
expected to become public, any intent, purpose, plan, or proposal with respect
to the Board, the Company, its management, policies, or affairs, any of its
securities or assets or this Agreement that is inconsistent with the provisions
of this Agreement;

 

(xx)        enter into any negotiations, agreements, or understandings with any
person or entity with respect to any of the foregoing, or advise, assist,
knowingly encourage or seek to persuade any person or entity to take any action
or make any statement with respect to any of the foregoing, or otherwise take or
cause any action or make any statement inconsistent with any of the foregoing;

 

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(xxi)       make any request or submit any proposal to amend the terms of this
Agreement other than through non-public communications with the Company that
would not be reasonably determined to trigger public disclosure obligations for
any party;

 

(xxii)      take any action challenging the validity or enforceability of any of
the provisions of this Section 3 or publicly disclose, or cause or facilitate
the public disclosure (including, without limitation, the filing of any document
with the SEC or any other governmental agency or any disclosure to any
journalist, member of the media, or securities analyst) of, any intent, purpose,
plan or proposal to either (A) obtain any waiver or consent under, or any
amendment of, any provision of this Agreement, or (B) take any action
challenging the validity or enforceability of any provisions of this Section 3;
or

 

(xxiii)      otherwise take, or solicit, cause or encourage others to take, any
action inconsistent with the foregoing.

 

(b)          Notwithstanding the foregoing, the provisions of this Section 3
shall not limit in any respect each of the New Directors from taking actions in
good faith solely in his or her capacity as directors of the Company,
recognizing that such actions are subject to such director’s fiduciary duties to
the Company and its shareholders (it being understood and agreed that neither
the Investors nor any of their Affiliates or Associates shall seek to do
indirectly through either of the New Directors anything that would be prohibited
if done by any of the Investors or their Affiliates and Associates directly).

 

(c)          The foregoing provisions of this Section 3 shall not prohibit the
Investor Group or its directors, officers, partners, employees, members, or
agents, in each case acting in such capacity, from engaging in private
discussions with the Company concerning the Investor Group’s views or
suggestions concerning the Company so long as such private discussions are not
intended to, and would not be reasonably expected to, trigger public disclosure
obligations for any party or run afoul of any of the provisions of Section 3(a).
The provisions of this Section 3 shall also not prevent the Investor Group from
voting its shares of Common Stock on the Company’s proxy card or voting
instruction form in a manner that does violate the provisions of Section 2
hereof or taking any actions as specifically contemplated in Section 1 hereto.

 

(d)          As of the date of this Agreement, (i) none of the Investors or its
Affiliates and Associates are engaged in any discussions or negotiations with
any person, concerning the acquisition of economic ownership of any securities
(including common and preferred equity interests and debt that is convertible
into any equity interests) of the Company or any rights decoupled from the
underlying securities of the Company, (ii) none of the Investors or its
Affiliates and Associates have any agreements, arrangements, or understandings,
written or oral, formal or informal, and whether or not legally enforceable,
with any person concerning the acquisition of economic ownership of any
securities (including common and preferred equity interests and debt that is
convertible into any equity interests) of the Company or any rights decoupled
from the underlying securities of the Company, and (iii) none of the Investors
or its Affiliates and Associates have any actual and non-public knowledge that
any other shareholders of the Company, including, but not limited to, Yakira
Capital Management, Inc. or Yakira Partners, L.P. or any shareholders that have
a Schedule 13D currently on file with the SEC with respect to securities of the
Company, have any intention of taking any actions that if taken by the Investors
would violate any of the terms of this Agreement. The Investors and its
Affiliates and Associates agree to refrain from taking any actions during the
Standstill Period to intentionally encourage other shareholders of the Company
or any other persons to engage in any of the actions referred to in the previous
sentence.

 

 10 

 

 

(e)            As used in this Agreement, the terms “Affiliate” and “Associate”
shall have the respective meanings set forth in Rule 12b-2 promulgated by the
SEC under the Exchange Act; the terms “beneficial owner” and “beneficial
ownership” shall have the same meanings as set forth in Rule 13d-3 promulgated
by the SEC under the Exchange Act; the terms “economic owner” and “economically
own” shall have the same meanings as “beneficial owner” and “beneficially own,”
except that a person will also be deemed to economically own and to be the
economic owner of (i) all shares of Common Stock that such person has the right
to acquire pursuant to the exercise of any rights in connection with any
securities or any agreement, regardless of when such rights may be exercised and
whether they are conditional, and (ii) all shares of Common Stock in which such
person has any economic interest, including, without limitation, pursuant to a
cash-settled call option or other derivative security, contract, or instrument
in any way related to the price of shares of Common Stock; the terms “person” or
“persons” shall mean any individual, corporation (including not-for-profit),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, or other entity of any kind or nature;
the term “Related Person” shall mean, as to any person, any Affiliates or
Associates of such person; and the term “business day” shall mean any day that
is not a Saturday, Sunday or other day on which commercial banks in the
Commonwealth of Pennsylvania are authorized or obligated to be closed by
applicable law.

 

(f)             Notwithstanding anything contained in this Agreement to the
contrary:

 

(i)        The provisions of Sections 1, 2, and 3 of this Agreement shall
automatically terminate upon the occurrence of a Change of Control transaction
(as defined below) involving the Company if the acquiring or counter-party to
the Change of Control transaction has conditioned the closing of the transaction
on the termination of such sections; provided, however, that the Company shall
not directly or indirectly, propose, seek, encourage or otherwise influence such
acquiring or counter-party to the Change of Control transaction to condition the
closing of such transaction on the termination of Sections 1, 2, and 3 of this
Agreement; and

 

(ii)        For purposes of this Agreement, a “Change of Control” transaction
shall be deemed to have taken place if (A) any person becomes a beneficial
owner, directly or indirectly, of more than 50% of the Common Stock, or (B) the
announcement by the Company that it has entered into a definitive agreement with
respect to any merger, consolidation, acquisition, business combination, sale of
a division, sale of substantially all of the Company’s assets, recapitalization,
restructuring, liquidation, dissolution, or other similar extraordinary
transaction that would, if consummated, result in the acquisition by any person
or group of persons (other than any direct or indirect subsidiaries of the
Company) of more than 50% of the Common Stock.

 

(g)            For purposes of this Agreement, “Standstill Period” shall mean
the period commencing on the date of this Agreement and ending at 11:59 p.m.,
Eastern Time, on the date that is the earlier of (x) ten (10) calendar days
prior to the expiration of the advance notice period for the submission by
shareholders of director nominations for consideration at the 2019 Annual
Meeting (as set forth in the advance-notice provisions of the Company’s Third
Amended and Restated Bylaws), and (y) one hundred (100) calendar days prior to
the first anniversary of the 2018 Annual Meeting.

 

 11 

 

 

4.          Expenses. Each of the Company and the Investors shall be responsible
for its own fees and expenses incurred in connection with the negotiation,
execution, and effectuation of this Agreement and the transactions contemplated
hereby, including, but not limited to, attorneys’ fees incurred in connection
with the negotiation and execution of this Agreement and all other activities
related to the foregoing; provided, however, that the Company shall reimburse
the Investor Group, within ten (10) business days following the later of (i) the
date of this Agreement, and (ii) the date that the Company receives reasonable
supporting documentation, for the Investor Group’s expenses, including legal and
proxy solicitor fees and expenses, as actually incurred in connection with the
matters related to the Investor Group’s involvement at the Company, including,
without limitation, the Investor Group’s filings with the SEC of a Schedule 13D
and amendments thereto relating to the Company, the preparation of the
Nomination Notice, correspondence related thereto and the negotiation and
execution of this Agreement in an amount not to exceed, in the aggregate,
$150,000.

 

5.          Representations and Warranties of the Company. The Company
represents and warrants to the Investors that (a) the Company has the corporate
power and authority to execute this Agreement and to bind it thereto, (b) this
Agreement has been duly and validly authorized, executed and delivered by the
Company, constitutes a valid and binding obligation and agreement of the
Company, and is enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, or similar laws
generally affecting the rights of creditors and subject to general equity
principles, and (c) the execution, delivery, and performance of this Agreement
by the Company does not and will not (i) violate or conflict with any law, rule,
regulation, order, judgment, or decree applicable to it, or (ii) result in any
breach or violation of or constitute a default (or an event that with notice or
lapse of time or both could become a default) under or pursuant to, or result in
the loss of a material benefit under, or give any right of termination,
amendment, acceleration, or cancellation of, any organizational document, or any
material agreement, contract, commitment, understanding, or arrangement to which
the Company is a party or by which it is bound.

 

6.          Representations and Warranties of the Investors. Each Investor, on
behalf of itself, severally represents and warrants to the Company that (a) as
of the date hereof, such Investor beneficially owns, directly or indirectly,
only the number of shares of Common Stock as described opposite its name on
Exhibit A, and Exhibit A includes all Affiliates and Associates of any Investor
that own any securities of the Company beneficially or of record and reflects
all shares of Common Stock in which the Investor has any right to acquire or has
an interest therein or related thereto, whether through derivative securities,
voting agreements, contracts or instruments in any way related to the price of
the Common Stock (other than a broad-based market basket or index), or
otherwise, (b) this Agreement has been duly and validly authorized, executed,
and delivered by such Investor, and constitutes a valid and binding obligation
and agreement of such Investor, enforceable against such Investor in accordance
with its terms, except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or
similar laws generally affecting the rights of creditors and subject to general
equity principles, (c) such Investor has the authority to execute this Agreement
on behalf of itself and the applicable Investor associated with that signatory’s
name, and to bind such Investor to the terms hereof, (d) each of the Investors
shall use its commercially reasonable efforts to cause its respective Affiliates
and Associates to comply with the terms of this Agreement and (e) the execution,
delivery and performance of this Agreement by such Investor does not and will
not violate or conflict with (i) any law, rule, regulation, order, judgment, or
decree applicable to it, or (ii) result in any breach or violation of or
constitute a default (or an event that with notice or lapse of time or both
could become a default) under or pursuant to, or result in the loss of a
material benefit under, or give any right of termination, amendment,
acceleration or cancellation of, any organizational document, agreement,
contract, commitment, understanding, or arrangement to which such Investor is a
party or by which it is bound.

 

 12 

 

 

7.          Mutual Non-Disparagement.

 

(a)         Each Investor agrees that, until the expiration of the Standstill
Period, neither it nor any of its Affiliates or Associates will, and it will
cause each of its Affiliates and Associates not to, directly or indirectly,
publicly make, express, transmit, speak, write, verbalize, or otherwise publicly
communicate in any way (or cause, further, assist, solicit, encourage, support,
or participate in any of the foregoing), any remark, comment, message,
information, declaration, communication or other statement of any kind, whether
verbal or in writing, that might reasonably be construed to be derogatory or
critical of, or negative toward, the Company or any of its directors, officers,
Affiliates, Associates, subsidiaries, employees, agents or representatives
(collectively, the “Company Representatives”), or that reveals, discloses,
incorporates, is based upon, discusses, includes, or otherwise involves any
confidential or proprietary information of the Company or its subsidiaries or
Affiliates or Associates, or to malign, harm, disparage, defame, or damage the
reputation or good name of the Company, its business or any of the Company
Representatives.

 

(b)         The Company hereby agrees that, until the expiration of the
Standstill Period, neither it nor any of its Affiliates will, and it will cause
each of its Affiliates not to, directly or indirectly, publicly make, express,
transmit, speak, write, verbalize, or otherwise publicly communicate in any way
(or cause, further, assist, solicit, encourage, support, or participate in any
of the foregoing), any remark, comment, message, information, declaration,
communication, or other statement of any kind, whether verbal or in writing,
that might reasonably be construed to be derogatory or critical of, or negative
toward, the Investors or their Affiliates or Associates or any of their agents
or representatives (collectively, the “Investor Agents”), or that reveals,
discloses, incorporates, is based upon, discusses, includes, or otherwise
involves any confidential or proprietary information of any Investor or its
Affiliates or Associates, or to malign, harm, disparage, defame, or damage the
reputation or good name of any Investor, its business, or any of the Investor
Agents.

 

(c)         Notwithstanding the foregoing, nothing in this Section 7 or
elsewhere in this Agreement shall prohibit any person from (i) reporting
possible violations of federal law or regulation to any governmental authority
pursuant to Section 21F of the Exchange Act or Rule 21F promulgated thereunder,
or (ii) making any other statement or disclosure required under the federal
securities laws or other applicable laws.

 

(d)         The limitations set forth in Sections 7(a) and 7(b) shall not
prevent any party from responding to any public statement made by the other
party of the nature described in Sections 7(a) or 7(b) if such statement by the
other party was made in breach of this Agreement.

 

 13 

 

 

8.          Public Announcements. Promptly following the execution of this
Agreement, the Company shall issue a press release (the “Press Release”),
announcing certain terms of this Agreement, substantially in the form attached
hereto as Exhibit B. Prior to the issuance of the Press Release, neither the
Company nor any of the Investors shall issue any press release or make any
public announcement regarding this Agreement or take any action that would
require public disclosure thereof without the prior written consent of the other
party. During the Standstill Period, neither the Company nor the Investor Group
or any of its Affiliates or Associates shall make any public announcement or
statement that is inconsistent with or contrary to the statements made in the
Press Release, except as required by law or the rules of any stock exchange
(and, in any event, each party must provide the other party, prior to making any
such public announcement or statement, a reasonable opportunity to review and
comment on such disclosure, to the extent reasonably practicable under the
circumstances, and each party will consider any comments from the other in good
faith) or with the prior written consent of the other party, and otherwise in
accordance with this Agreement.

 

9.          SEC Filings.

 

(a)          No later than two (2) business days following the execution of this
Agreement, the Company shall file a Current Report on Form 8-K with the SEC
reporting the entry into this Agreement and appending or incorporating by
reference this Agreement as an exhibit thereto. The Company shall provide the
Investor Group and its counsel a reasonable opportunity to review and comment on
the Form 8-K prior to such filing, which comments shall be considered in good
faith.

 

(a)          No later than two (2) business days following the execution of this
Agreement, the Investor Group shall file an amendment to its Schedule 13D with
respect to the Company that has been filed with the SEC, reporting the entry
into this Agreement, amending applicable items to conform to their obligations
hereunder and appending or incorporating by reference this Agreement as an
exhibit thereto. The Investor Group shall provide the Company and its counsel a
reasonable opportunity to review and comment on the Schedule 13D prior to such
filing, which comments shall be considered in good faith.

 

10.         Mutual Releases.

 

(a)          Releases by the Investor Group. Each of the Investors, on behalf of
itself and, to the extent within the control of such Investor, its respective
subsidiaries, Affiliates, Associates, officers, directors, employees, members,
managers, partners, trustees, beneficiaries, predecessors, and principals (the
“Investor Group Releasors”), hereby does fully, unconditionally and irrevocably
release and forever discharge, and covenant not to assert, sue or take any steps
to further, any claim, action or proceeding against the Company, its
subsidiaries and all of their past and present Affiliates, Associates, officers,
directors, members, partners, managers, employees, and their heirs, successors,
predecessors, and assigns (the “Company Releasees”), and each of them, from and
in respect of any and all claims, demands, rights, actions, potential actions,
causes of action, liabilities, damages, losses, obligations, judgments, duties,
suits, agreements, costs, expenses, debts, interest, penalties, sanctions, fees,
attorneys’ fees, judgments, decrees, matters, issues, and controversies of any
kind, nature or description whatsoever, whether known or unknown, contingent or
absolute, suspected or unsuspected, foreseen or unforeseen, disclosed or
undisclosed, liquidated or unliquidated, matured or unmatured, fixed or
contingent, accrued or unaccrued, apparent or unapparent, including Unknown
Claims (as defined below), that are, have been, could have been, or could now
be, asserted in any court, tribunal or proceeding (including, but not limited
to, any shareholder derivative claims for, based upon or arising out of any
actual or alleged breach of fiduciary or other duty, negligence, fraud or
misrepresentation, or any other claims based upon or arising under any federal,
state, local, foreign, statutory, regulatory, common, or other law or rule,
which shall be deemed to include but is not limited to any federal or state
securities, antitrust, or consumer protection laws, whether or not within the
exclusive jurisdiction of the federal courts), whether legal, equitable, or any
other type, direct, indirect or representative in nature, foreseen or
unforeseen, matured or unmatured, known or unknown, which all or any of the
Investor Group Releasors have, had or may have against the Company Releasees, or
any of them, of any kind, nature or type whatsoever, up to the date of this
Agreement, except that the foregoing release does not release any rights and
duties under this Agreement or any claims the Investor Group Releasors may have
for the breach of any provisions of this Agreement.

 

 14 

 

 

(b)          Releases by the Company. The Company, on behalf of itself and, to
the extent within the control of the Company, its subsidiaries, Affiliates,
Associates, officers, directors, employees, members, managers, partners,
trustees, beneficiaries, predecessors, and principals (the “Company Releasors”),
hereby do fully, unconditionally and irrevocably release and forever discharge,
and covenants not to assert, sue or take any steps to further any claim, action
or proceeding against, any Investor and its respective Affiliates, Associates,
and all of their past and present Affiliates, Associates, officers, directors,
members, managers, partners, trustees, beneficiaries, employees and its heirs,
successors, predecessors, subsidiaries and principals (the “Investor Group
Releasees”), and each of them, from and in respect of any and all claims,
demands, rights, actions, potential actions, causes of action, liabilities,
damages, losses, obligations, judgments, duties, suits, agreements, costs,
expenses, debts, interest, penalties, sanctions, fees, attorneys’ fees,
judgments, decrees, matters, issues, and controversies of any kind, nature or
description whatsoever, whether known or unknown, contingent or absolute,
suspected or unsuspected, foreseen or unforeseen, disclosed or undisclosed,
liquidated or unliquidated, matured or unmatured, fixed or contingent, accrued
or unaccrued, apparent or unapparent, including Unknown Claims (as defined
below), that are, have been, could have been, or could now be, asserted in any
court, tribunal or proceeding (including, but not limited to, any claims based
upon or arising under any federal, state, local, foreign, statutory, regulatory,
common, or other law or rule, which shall be deemed to include but is not
limited to any federal or state securities, antitrust, or consumer protection
laws, whether or not within the exclusive jurisdiction of the federal courts),
whether legal, equitable, and whether direct, indirect or representative in
nature, foreseen or unforeseen, matured or unmatured, known or unknown, which
all or any of the Company Releasors have, had or may have against the Investor
Group Releasees, or any of them, of any kind, nature or type whatsoever, up to
the date of this Agreement, except that the foregoing release does not release
any rights and duties under this Agreement or any claims any of the Company
Releasors may have for the breach of any provisions of this Agreement.

 

(c)          Transfer and Assignment. Each of the parties to this Agreement
represents and warrants that it has not heretofore transferred or assigned, or
purported to transfer or assign, to any person, firm, or corporation any claims,
demands, obligations, losses, causes of action, damages, penalties, costs,
expenses, attorneys’ fees, liabilities or indemnities herein released. Each of
the parties represents and warrants that neither it nor any assignee has filed
any lawsuit against the other.

 

 15 

 

 

(d)          No Limitations on Releases. The parties to this Agreement waive any
and all rights (to the extent permitted by state law, federal law, principles of
common law or any other law) which may have the effect of limiting the releases
as set forth in this Section 10. Without limiting the generality of the
foregoing, the parties acknowledge that there is a risk that the damages which
they believe they have suffered or will suffer may turn out to be other than or
greater than those now known, suspected, or believed to be true. In addition,
the cost and damages they have incurred or have suffered may be greater than or
other than those now known. Facts on which they have been relying in entering
into this Agreement may later turn out to be other than or different from those
now known, suspected or believed to be true. The parties acknowledge that in
entering into this Agreement, they have expressed that they agree to accept the
risk of any such possible unknown damages, claims, facts, demands, actions, and
causes of action. Accordingly, the releases contemplated by this Agreement shall
be deemed to extend to claims that any of the releasing persons do not know or
suspect exist in his, her, or its favor at the time of the release of the
released claims, which if known might have affected the decision to enter into
this Agreement (the “Unknown Claims”).

 

(e)          Releases Binding, Unconditional and Final. The parties hereby
acknowledge and agree that the releases and covenants provided for in this
Section 10 are binding, unconditional and final as of the date hereof.

 

11.          No Litigation. Each party hereby covenants and agrees that it shall
not, and shall not permit any of its Affiliates or Associates to, directly or
indirectly, alone or in concert with others, encourage, pursue, or assist any
other person to threaten or initiate, any lawsuit, claim or proceeding before
any court (each, a “Legal Proceeding”) against any other party or any of its
Affiliates or Associates, based on claims arising out of any facts known or that
should have been known by such party as of the date of this Agreement, except
for any Legal Proceeding initiated solely to remedy a breach of or to enforce
this Agreement; provided, however, that the foregoing shall not prevent any
party hereto or any of its Affiliates or Associates from responding to oral
questions, interrogatories, requests for information or documents, subpoenas,
civil investigative demands or similar processes (each, a “Legal Requirement”)
in connection with any Legal Proceeding if such Legal Proceeding has not been
initiated by, or on behalf of, or at the suggestion of, such party or any of its
Affiliates or Associates; provided, further, that in the event any party hereto
or any of its Affiliates or Associates receives such Legal Requirement, such
party shall give prompt written notice of such Legal Requirement to such other
party (except where such notice would be legally prohibited or not practicable).
Each of the parties hereto represents and warrants that neither it nor any
assignee has filed any lawsuit against any other party.

 

12.          No Concession or Admission of Liability. This Agreement is being
entered into for the purpose of avoiding litigation, uncertainty, controversy
and legal expense, constitutes a compromise and settlement entered into by each
party hereto, and shall not in any event constitute, be construed or deemed a
concession or admission of any liability or wrongdoing of any of the parties
hereto.

 

13.          Specific Performance. Each of the Investors, on the one hand, and
the Company, on the other hand, acknowledge and agree that irreparable injury to
the other party hereto may occur in the event any of the provisions of this
Agreement are not performed in accordance with their specific terms or are
otherwise breached and that such injury would not be adequately compensable by
the remedies available at law (including the payment of money damages). It is
accordingly agreed that the Investors or any Investor, on the one hand, and the
Company, on the other hand (the “Moving Party”), shall each be entitled to seek
specific enforcement of, and injunctive or other equitable relief to prevent any
violation of, the terms hereof, and the other party hereto will not take action,
directly or indirectly, in opposition to the Moving Party seeking such relief on
the grounds that any other remedy or relief is available at law or in equity.
This Section 13 shall not be the exclusive remedy for any violation of this
Agreement.

 

 16 

 

 

14.          Notice. Any notices, consents, determinations, waivers, or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon confirmation of receipt, when sent
by email (provided such confirmation is not automatically generated); or (iii)
one (1) business day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive the
same. The addresses, including email addresses, for such communications shall
be:

 

If to the Company:

 

Safeguard Scientifics, Inc.

170 North Radnor-Chester Road, Suite 200

Radnor, PA 19087

Fax: (610) 482-9105

Email: bsisko@safeguard.com

Attention: Brian J. Sisko, Esq.

Chief Operating Officer, Executive Vice President and Managing Director

 

With copies (which shall not constitute notice) to:

 

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA 19103-2921

Fax: (215) 963.5001

Email: richard.aldridge@morganlewis.com

Attention: Richard B. Aldridge, Esq.

 

and

 

Morgan, Lewis & Bockius LLP

1111 Pennsylvania Avenue, N.W.

Washington, DC 20004

Fax: (202) 739-3001

Email: keith.gottfried@morganlewis.com

Attention: Keith E. Gottfried, Esq.

 

 17 

 

 

 

If to any Investor:

 

Horton Capital Partners, LLC

1717 Arch Street, Suite 3920

Philadelphia, PA 19103

Fax: (215) 399-5402

Email: jmanko@thehortonfund.com

Attention: Joseph M. Manko, Jr.

 

and

 

Maplewood Partners, LLC

555. E. Lancaster Avenue, Suite 520

Radnor, PA 19087

Fax: (610) 941-5009

Email: dwallis@maplewoodllc.com

Attention: Darren C. Wallis

 

With copies (which shall not constitute notice) to:

 

Olshan Frome Wolosky LLP

1325 Avenue of the Americas

New York, NY 10019

Fax No.: (212) 451-2222

E-mail: afreedman@olshanlaw.com

mreda@olshanlaw.com

Attention: Andrew Freedman, Esq.

Meagan Reda, Esq.

 

15.         Governing Law. This Agreement and any disputes arising out of or
related to this Agreement (whether for breach of contract, tortious conduct or
otherwise), shall be governed in all respects, including validity,
interpretation, and effect, by, and construed in accordance with, the laws of
the Commonwealth of Pennsylvania applicable to contracts executed and to be
performed wholly within the Commonwealth of Pennsylvania, without giving effect
to the choice of law or conflict of law principles thereof or of any other
jurisdiction to the extent that such principles would require or permit the
application of the laws of another jurisdiction.

 

16.         Jurisdiction. Each of the parties hereto (a) irrevocably submits to
the personal jurisdiction of the federal or state courts of the Commonwealth of
Pennsylvania in the event any dispute arises out of or related to this Agreement
or the transactions contemplated hereby, (b) agrees that it shall not bring any
action, suit, or other legal proceeding arising out of or relating to this
Agreement or the transactions contemplated by this Agreement in any court other
than the federal or state courts of the Commonwealth of Pennsylvania, and each
of the parties irrevocably waives the right to trial by jury, (c) agrees to
waive any bonding requirement under any applicable law, in the case any other
party seeks to enforce the terms by way of equitable relief, and (d) irrevocably
and unconditionally consents to service of process by first class certified
mail, return-receipt requested, postage prepaid, to the address of such party’s
principal place of business or as otherwise provided by applicable law. Each of
the parties hereto irrevocably and unconditionally waives, and agrees not to
assert, by way of motion, as a defense, counterclaim, or otherwise, in any
action, suit, or other legal proceeding arising out of or related to this
Agreement, (i) any claim that it is not personally subject to the jurisdiction
of the above-named courts for any reason, (ii) that it or its property is exempt
or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment before
judgment, attachment in aid of execution of judgment, execution of judgment, or
otherwise), and (iii) to the fullest extent permitted by applicable law, that
(x) such action, suit, or other legal proceeding in any such court is brought in
an inconvenient forum, (y) the venue of such action, suit, or other legal
proceeding is improper, or (z) this Agreement, or the subject matter hereof, may
not be enforced in or by such court.

 

 18 

 

 

17.         Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED
AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT
CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO
ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL PROCEEDING, (B) SUCH PARTY
HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER
VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
17.

 

18.         Representative. Each Investor hereby irrevocably appoints Joseph M.
Manko, Jr. as its attorney-in-fact and representative (the “Investor Group
Representative”), in such Investor’s place and stead, to do any and all things
and to execute any and all documents and give and receive any and all notices or
instructions in connection with this Agreement and the transactions contemplated
hereby. The Company shall be entitled to rely, as being binding on each
Investor, upon any action taken by the Investor Group Representative or upon any
document, notice, instruction, or other writing given or executed by the
Investor Group Representative.

 

19.         Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement among the parties with regard to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
and representations, whether oral or written, of the parties with respect to the
subject matter hereof. There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings, oral or written, between
the parties other than those expressly set forth herein.

 

20.         Headings. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

21.         Waiver. No failure on the part of any party to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of such right, power,
or remedy by such party preclude any other or further exercise thereof or the
exercise of any other right, power, or remedy.

 

22.         Remedies. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law or equity.

 

 19 

 

 

23.         Receipt of Adequate Information; No Reliance; Representation by
Counsel. Each party acknowledges that it has received adequate information to
enter into this Agreement, that it has had adequate opportunity to make whatever
investigation or inquiry it may deem necessary or desirable in connection with
the subject matter of this Agreement prior to the execution hereof, and that it
has not relied on any promise, representation, or warranty, express or implied
not contained in this Agreement. Each of the parties hereto acknowledges that it
has been represented by counsel of its choice throughout all negotiations that
have preceded the execution of this Agreement, and that it has executed the same
with the advice of said independent counsel. Each party cooperated and
participated in the drafting and preparation of this Agreement and the documents
referred to herein, and any and all drafts relating thereto exchanged among the
parties shall be deemed the work product of all of the parties and may not be
construed against any party by reason of its drafting or preparation.
Accordingly, any rule of law or any legal decision that would require
interpretation of any ambiguities in this Agreement against any party that
drafted or prepared it is of no application and is hereby expressly waived by
each of the parties hereto, and any controversy over interpretations of this
Agreement shall be decided without regards to events of drafting or preparation.
Further, any rule of law or any legal decision that would provide any party with
a defense to the enforcement of the terms of this Agreement against such party
shall have no application and is expressly waived. The provisions of this
Agreement shall be interpreted in a reasonable manner to effect the intent of
the parties.

 

24.         Construction. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement, unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words “include,” “includes,” and “including” are
used in this Agreement, they shall be deemed to be followed by the words
“without limitation.” The words “hereof,” “herein,” and “hereunder” and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. The word “will”
shall be construed to have the same meaning as the word “shall.” The words
“dates hereof” will refer to the date of this Agreement. The word “or” is not
exclusive. The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms. Any agreement, instrument,
law, rule or statute defined or referred to herein means, unless otherwise
indicated, such agreement, instrument, law, rule, or statute as from time to
time amended, modified, or supplemented.

 

25.         Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement shall remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree shall remain in
full force and effect to the extent not held invalid or unenforceable. The
parties further agree to replace such invalid or unenforceable provision of this
Agreement with a valid and enforceable provision that will achieve, to the
extent possible, the purposes of such invalid or unenforceable provision.

 

26.         Amendment. This Agreement may be modified, amended, or otherwise
changed only in a writing signed by all of the parties hereto, or in the case of
the Investors, the Investor Group Representative, or their respective successors
or assigns.

 

 20 

 

 

27.         Successors and Assigns. The terms and conditions of this Agreement
shall be binding upon and be enforceable by the parties hereto and the
respective successors, heirs, executors, legal representatives, and permitted
assigns of the parties, and inure to the benefit of any successor, heir,
executor, legal representative, or permitted assign of any of the parties;
provided, however, that no party may assign this Agreement or any rights or
obligations hereunder without, with respect to any Investor, the express prior
written consent of the Company (with such consent specifically authorized in a
written resolution adopted and approved by the unanimous vote of the entire
membership of the Board), and with respect to the Company, the prior written
consent of the Investor Group Representative.

 

28.         No Third-Party Beneficiaries. The representations, warranties and
agreements of the parties contained herein are intended solely for the benefit
of the party to whom such representations, warranties, or agreements are made
and no other person or entity shall be entitled to rely thereon, and nothing in
this Agreement shall confer any rights, benefits, remedies, obligations, or
liabilities hereunder, whether legal or equitable, in any other person or
entity; provided, however, that the releases provided for in Section 10 hereof,
and only Section 10, are also for the intended benefit of the parties released
thereby.

 

29.         Counterparts; PDF Signatures. This Agreement and any amendments
hereto may be signed in any number of textually identical counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement shall become effective
when each party hereto shall have received a counterpart hereof signed by the
other parties hereto. In the event that any signature to this Agreement or any
amendment hereto is delivered by e-mail delivery of a portable document format
(.pdf or similar format) data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such “.pdf” signature page was an
original thereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

[SIGNATURE PAGE FOLLOWS]

 

 21 

 

 

[SIGNATURE PAGE TO COOPERATION AGREEMENT]

 

IN WITNESS WHEREOF the parties have duly executed and delivered this Agreement
as of the date first above written.

 

SAFEGUARD SCIENTIFICS, INC.         By: /s/ Brian J. Sisko   Name: Brian J.
Sisko   Title: Chief Operating Officer, Executive Vice President and Managing
Director  

 

HORTON CAPITAL MANAGEMENT, LLC         By: /s/ Joseph M. Manko, Jr.   Name:
Joseph M. Manko, Jr.   Title: Managing Member  

 

/s/ Joseph M. Manko, Jr.   JOSEPH M. MANKO, JR.  

 

MAPLEWOOD PARTNERS, LLC         By: /s/ Darren C. Wallis   Name: Darren C.
Wallis   Title: Managing Member  

 

MAPLEWOOD ADVISORS IM, LLC         By: /s/ Darren C. Wallis   Name: Darren C.
Wallis   Title: Managing Member  

 

/s/ Darren C. Wallis   DARREN C. WALLIS  

 

HORTON CAPITAL PARTNERS, LLC         By: /s/ Joseph M. Manko, Jr.   Name: Joseph
M. Manko, Jr.   Title: Managing Member  

 

 22 

 

 

[SIGNATURE PAGE TO COOPERATION AGREEMENT]

 

SIERRA CAPITAL INVESTMENTS, LP

 

By: Horton Capital Partners, LLC and Maplewood Global Partners, LLC, its General
Partners

 

By: /s/ Joseph M. Manko, Jr.   Name: Joseph M. Manko, Jr.   Title: Managing
Member, Horton Capital Partners, LLC         By: /s/ Darren C. Wallis   Name:
Darren C. Wallis   Title: Managing Member, Maplewood Global Partners, LLC      
MAPLEWOOD GLOBAL PARTNERS, LLC         By: /s/ Darren C. Wallis   Name: Darren
C. Wallis   Title: Managing Member         HORTON CAPITAL PARTNERS FUND, LP    
  By: Horton Capital Partners, LLC, its General Partner         By: /s/ Joseph
M. Manko, Jr.   Name: Joseph M. Manko, Jr.   Title: Managing Member         AVI
CAPITAL PARTNERS, LP       By: Maplewood Advisors GP, LLC, its General Partner  
      By: /s/ Darren C. Wallis   Name: Darren C. Wallis   Title: Managing Member
      MAPLEWOOD ADVISORS GP, LLC         By: /s/ Darren C. Wallis   Name: Darren
C. Wallis   Title: Managing Member  

 

 23 

 

 

EXHIBIT A

 

SHAREHOLDERS, AFFILIATES, ASSOCIATES, AND OWNERSHIP

 

Investor  Shares of Common Stock
Beneficially Owned  Horton Capital Management, LLC   1,045,870  Joseph M. Manko,
Jr   1,045,870  Maplewood Partners, LLC   1,022,665  Maplewood Advisors IM, LLC 
 1,022,665  Darren C. Wallis   1,022,665  Horton Capital Partners, LLC 
 741,148  Sierra Capital Investments, LP   707,845  Maplewood Global Partners,
LLC   707,845  Horton Capital Partners Fund, LP   33,303  AVI Capital Partners,
LP   10,098  Maplewood Advisors GP, LLC   10,098  Aggregate total beneficially
owned by the Investor Group:   1,055,968 

 

 24 

 

 

EXHIBIT B

 

PRESS RELEASE

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

[PRESS RELEASE FOLLOWS]

 

 25 

 

 

Safeguard Scientifics Announces Agreement with Sierra Capital

Appoints Two New Independent Directors

 

Radnor, PA. – April 23, 2018 – Safeguard Scientifics, Inc. (NYSE: SFE)
(“Safeguard” or “the Company”) today announced that it has entered into an
agreement with Sierra Capital Investments, L.P. and its
affiliates (collectively, “Sierra”), which currently own approximately 5.1% of
the Company’s outstanding common stock. Under the terms of the agreement, the
Safeguard Board of Directors has appointed two new independent directors,
Russell D. Glass and Ira M. Lubert, to the Safeguard Board, effective
immediately, and will support their re-election at the 2018 Annual Meeting of
Shareholders as part of a five-person slate of nominees recommended by the
Safeguard Board.

 

Dr. Robert J. Rosenthal, Chairman of the Safeguard Board, said, “We are pleased
to have reached this cooperation agreement with Sierra and appreciate the
constructive dialogue we have had with them. I am also pleased to welcome
Russell and Ira to the Safeguard Board and am confident they will complement the
strengths of the current members of our Board and help us oversee the execution
of the Company’s strategy to streamline its organizational structure, reduce
operating costs and monetize Partner Company interests to maximize net proceeds
distributable to shareholders.”

 

Joseph M. Manko, Jr. of the Horton Fund and Darren C. Wallis of Maplewood
Capital, LLC, speaking on behalf of Sierra, stated, “We appreciate the
constructive engagement and open dialogue we have had with Safeguard’s Board and
senior management team, and we are supportive of Safeguard’s new strategy, which
addresses the suggestions raised during our engagement. With this cooperation
agreement, we look forward to continuing to collaborate with Safeguard’s Board
and senior management team as they execute on the Company’s strategy to maximize
value for all shareholders.”

 

Under the terms of the cooperation agreement, Sierra will vote its shares in
favor of all of Safeguard’s director nominees, including the new independent
directors, at the Company’s 2018 Annual Meeting of Shareholders. Sierra will
also abide by certain customary standstill provisions until the date that is the
earlier of 10 calendar days prior to the expiration of the advance notice period
for the submission of shareholder nominations to be considered at Safeguard’s
2019 Annual Meeting of Shareholders pursuant to Safeguard’s Bylaws and 100 days
prior to the first anniversary of Safeguard’s 2018 Annual Meeting of
Shareholders.

 

The complete agreement among Safeguard, Sierra and various affiliates of Sierra
will be included as an exhibit to a Current Report on Form 8-K that Safeguard
will file with the Securities and Exchange Commission.

 

Morgan, Lewis & Bockius LLP served as legal counsel to Safeguard. Olshan Frome
Wolosky LLP served as legal advisor to Sierra.

 

 26 

 

 

About Russell D. Glass

 

Russell D. Glass has served as the Founder and Managing Member of RDG Capital
LLC and affiliated investment partnerships, which focus on undervalued companies
with identifiable catalyst opportunities to enhance shareholder value, since
2005. He has also served as the Managing Partner of RDG Capital Fund Management,
an investment advisory firm, since 2014, and as a Partner and Senior Adviser at
Knights Genesis, a private equity firm, since 2017. Previously, he served as the
Managing Member of Princeford Capital Management, an investment advisory firm,
from 2009 to 2014, and as Chief Executive Officer of Cadus Pharmaceutical
Corporation (n/k/a Cadus Corporation (OTCMKTS: KDUS)), a biotechnology holding
company (“Cadus”), from 2000 to 2003. He also served on the Board of Directors
of Cadus from 1998 to 2011. Mr. Glass served as the Co-Chairman and Chief
Investment Officer of Ranger Partners, an investment fund management company,
from 2002 to 2003. From 1998 to 2002, he served as the President and Chief
Investment Officer of Icahn Associates Corporation, a diversified investment
firm and principal investment vehicle for Carl Icahn. Mr. Glass also previously
served as a Partner at Relational Investors LLC, an investment fund management
company, from 1996 to 1998, and Premier Partners Inc., an investment banking and
research firm, from 1988 to 1996. Prior to that, Mr. Glass served as an Analyst
with Kidder, Peabody & Co., an investment banking firm, from 1984 to 1986. He
currently serves as a Director of Blue Bite LLC, a digital marketing technology
company, since 2009, and the A.G. Spanos Corporation, a national real estate
developer and owner of the NFL Los Angeles Chargers, since 1993. Mr. Glass is
also a board member of the Council for Economic Education, a non-profit
organization that promotes economic literacy. Mr. Glass previously served as a
Director of Automated Travel Systems, Inc., an enterprise systems software firm;
Axiom Biotechnologies, a pharmacology profiling company; Global Discount Travel
Services/Lowestfare.com, a travel services company; National Energy Group, an
oil & gas exploration and production company; and Next Generation Technology
Holdings, Inc., a healthcare information company. Mr. Glass is a co-owner of the
New York Mets of Major League Baseball. He has been a guest lecturer at Columbia
Business School and earned an A.B. degree in Economics from Princeton University
and an M.B.A. from Stanford University Graduate School of Business.

 

About Ira M. Lubert

 

Ira M. Lubert has served as Co-Founder and Chairman of each of Lubert-Adler
Management Company, L.P. (since 1997), which advises a series of real estate
funds, and Independence Capital Partners, LLC (since 1997), which provides
services to certain investment advisers. He is also a Co-Founder of and a
Partner in a series of private equity and real estate fund advisers, including
LLR Management, L.P. (since 1999), which focuses on lower middle market growth
companies; Quaker Partners Management, L.P. (since 2002), which advises a series
of life sciences funds; LEM Capital, L.P. (since 2002), which advises a series
of real estate funds invested primarily in multifamily properties; LBC Credit
Management, LP (since 2005), which advises a series of structured finance funds;
and Patriot Financial Management, L.P. (since 2007), which advises a series of
community banking funds. Mr. Lubert has also served as a Co-Founder of Versa
Capital Management, LLC (2004), specializing in distressed and special
situations and worked with Rubenstein Partners, L.P., an office real estate
investment firm, to found its first fund, Rubenstein Properties Fund, L.P.
(2005). Previously, he was a General Partner of Rose Glen Capital Management,
LP, a private equity fund. Mr. Lubert began his private equity career with
Safeguard. In 1986, he founded Radnor Venture Partners, Safeguard’s first
venture fund. From 1986 to 1997, he was a Managing Director and Co-Founder of TL
Ventures, the subsequent Safeguard-affiliated family of early stage venture
funds with over $1 billion of capital under management. Prior to that, he served
as Chairman of the Board and President of CompuCom Systems (formerly
NASDAQ:CMPC), a microcomputer reseller. Mr. Lubert currently serves on the Board
of Trustees of Pennsylvania State University (since 2015), where he served as
Chairman from July 2016 to July 2017. He had previously served on the
Pennsylvania State University Board from 1997 to 2000 and from 2007 to 2013. He
currently sits on the Boards of Trustees of the Franklin Institute, a science
museum and the center of science education and research in Philadelphia, and the
National Constitution Center, a history museum. He previously served as a member
of the Board of Directors of Thomas Jefferson University. He also previously
served on the Board of Trustees of Pennsylvania Real Estate Investment Trust
(NYSE:PEI), a real estate investment trust, from 2001 to 2014. Mr. Lubert was
honored as Drexel University's LeBow College of Business 60th Business Leader of
the Year and also has been honored by other institutions and organizations in
the Commonwealth for his leadership and entrepreneurial nature and was honored
by Temple University for his excellence in leadership with the Musser Award. Mr.
Lubert holds a B.S. from Pennsylvania State University.

 

 27 

 

 

About Safeguard Scientifics

 

Historically, Safeguard Scientifics (NYSE:SFE) has provided capital and relevant
expertise to fuel the growth of technology-driven businesses. Safeguard has a
distinguished track record of fostering innovation and building market leaders
that spans more than six decades. For more information, please visit
www.safeguard.com or follow us on Twitter @safeguard.

 

Forward-looking Statements

 

Except for the historical information and discussions contained herein,
statements contained in this press release may constitute “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act
of 1995. Our forward-looking statements are subject to risks and uncertainties.
Forward-looking statements include, but are not limited to, statements regarding
Safeguard’s initiatives taken or contemplated to enhance and unlock value for
all of its shareholders, Safeguard’s efforts to execute on and implement its
strategy to streamline its organizational structure, reduce its operating costs,
pursue monetization opportunities for Partner Companies and maximize the net
proceeds distributable to its shareholders, Safeguard’s ability to create,
unlock, enhance and maximize shareholder value, Safeguard’s ability to have a
smooth transition to a new management team, the timing of Safeguard’s management
succession plan and its effect on driving increased organizational effectiveness
and efficiencies, the ability of the new management team to execute Safeguard’s
strategy, the availability of, the timing of, and the proceeds that may
ultimately be derived from the monetization of Partner Companies, Safeguard’s
projections regarding the reduction in its ongoing operating expenses,
Safeguard’s projections regarding annualized operating expenses and expected
severance expenses, monetization opportunities for Partner Company Interests,
and the amount of net proceeds from the monetization of Partner Company
Interests that are ultimately distributable to Safeguard shareholders after
satisfying Safeguard’s debt obligations and working capital needs and the timing
of such distributions. Such forward-looking statements are not guarantees of
future operational or financial performance and are based on current
expectations that involve a number of uncertainties, risks and assumptions that
are difficult to predict. Therefore, actual outcomes and/or results may differ
materially from those expressed or implied by such forward-looking statements.
The risks and uncertainties that could cause actual results to differ materially
include, among others, our ability to make good decisions about the monetization
of our Partner Companies for maximum value or at all and distributions to our
shareholders, our ability to successfully execute on our strategy to streamline
our organizational structure and align our cost structure to increase
shareholder value, whether our strategy will better position us to focus our
resources on the highest-return opportunities and deliver enhanced shareholder
value, the ongoing support of our existing Partner Companies, the fact that our
Partner Companies may vary from period to period, challenges to achieving
liquidity from our partner company holdings, fluctuations in the market prices
of our publicly traded partner company holdings, competition, our inability to
obtain maximum value for our partner company holdings, our ability to attract
and retain qualified employees, market valuations in sectors in which our
Partner Companies operate, our inability to control our Partner Companies, our
need to manage our assets to avoid registration under the Investment Company Act
of 1940, risks, disruption, costs and uncertainty caused by or related to the
actions of activist shareholders, including that if individuals are elected to
our Board with a specific agenda, it may adversely affect our ability to
effectively implement our business strategy and create value for our
shareholders and perceived uncertainties as to our future direction as a result
of potential changes to the composition of our Board may lead to the perception
of a change in the direction of our business, instability or a lack of
continuity that may adversely affect our business, and risks associated with our
Partner Companies, including the fact that most of our Partner Companies have a
limited operating history and a history of operating losses, face intense
competition and may never be profitable, the effect of economic conditions in
the business sectors in which Safeguard’s Partner Companies operate, and other
uncertainties described in our filings with the Securities and Exchange
Commission. Many of these factors are beyond the Company’s ability to predict or
control. As a result of these and other factors, the Company’s past operational
and financial performance should not be relied on as an indication of future
performance. The Company does not assume any obligation to update any
forward-looking statements or other information contained in this press release.

 

 28 

 

 

Important Additional Information And Where To Find It

 

Safeguard Scientifics, its directors and certain of its executive officers are
deemed to be participants in the solicitation of proxies from Safeguard
Scientifics’ shareholders in connection with the matters to be considered at
Safeguard Scientifics’ 2018 Annual Meeting of Shareholders. Information
regarding the names of Safeguard Scientifics’ directors and executive officers
and their respective interests in Safeguard Scientifics through security
holdings or otherwise can be found in Safeguard Scientifics’ proxy statement for
its 2017 Annual Meeting of Shareholders, filed with the SEC on April 12, 2017.
To the extent holdings of Safeguard Scientifics’ securities have changed since
the amounts set forth in Safeguard Scientifics’ proxy statement for its 2017
Annual Meeting of Shareholders, such changes have been reflected on Initial
Statements of Beneficial Ownership on Form 3 or Statements of Change in
Ownership on Form 4 filed with the SEC. These documents are available free of
charge at the SEC’s website at www.sec.gov. Safeguard Scientifics intends to
file a proxy statement and accompanying proxy card with the SEC in connection
with the solicitation of proxies from Safeguard Scientifics’ shareholders in
connection with the matters to be considered at Safeguard Scientifics’ 2018
Annual Meeting of Shareholders. Additional information regarding the identity of
participants, and their direct or indirect interests, through security holdings
or otherwise, will be set forth in Safeguard Scientifics’ proxy statement for
its 2018 Annual Meeting, including the schedules and appendices thereto.
INVESTORS AND SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ ANY SUCH PROXY
STATEMENT AND THE ACCOMPANYING WHITE PROXY CARD AND OTHER DOCUMENTS FILED BY
SAFEGUARD SCIENTIFICS WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY
BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders will
be able to obtain the Proxy Statement, any amendments or supplements to the
Proxy Statement, the accompanying proxy card, and other documents filed by
Safeguard Scientifics with the SEC free of charge at the SEC’s website at
www.sec.gov. Copies will also be available free of charge at the Investor
Relations section of Safeguard Scientifics’ corporate website at
www.safeguard.com, by writing to Safeguard Scientifics’ Corporate Secretary at
Safeguard Scientifics , Inc. 170 North Radnor-Chester Road, Suite 200, Radnor,
PA 19087 or by contacting Safeguard Scientifics’ investor relations department
at 610.975.4952.

 

SAFEGUARD CONTACT:

John E. Shave III

Senior Vice President, Investor Relations and Corporate Communications

(610) 975.4952

jshave@safeguard.com

 

Bruce H. Goldfarb/Patrick McHugh

Okapi Partners LLC

212-297-0720

 

MEDIA CONTACT:

Ed Trissel / Aura Reinhard

Joele Frank Wilkinson Brimmer Katcher

(212) 355-4449

 

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