Document:

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[SAFEGUARD LOGO]

                                                                   EXHIBIT 10.21

                                                         January 2, 2002

Anthony A. Ibarguen
Safeguard Scientifics, Inc.
435 Devon Park Drive
Wayne, PA   19087

Dear Mr. Ibarguen:

         Safeguard Scientifics, Inc. ("Safeguard") is pleased to enter into this
letter agreement with you (the "Executive"), which will address the terms of
Executive's employment with Safeguard. Safeguard considers it essential to the
best interests of its stockholders to attract and foster the continuous
employment of key management personnel of Safeguard and the arrangements
described in this letter are intended to address that goal.

         1.       Duties. Commencing on the date hereof (the "Commencement
Date") Executive will serve as Managing Director, Business and IT Services, will
report directly to the Chief Executive Officer and will be a member of the
Management Committee of Safeguard.

         2.       Term. Executive's employment relationship with Safeguard is
employment "at will". As a result, Executive's employment may be terminated by
the Chief Executive Officer, the Board of Directors or by Executive at any time
without any liability or obligation, except as set forth in this letter.

         3.       Compensation.

                  (a) Base Salary. During the term of Executive's employment,
Executive will receive a base salary of $300,000 per annum, subject to review
and potential increase in the sole discretion of the Compensation Committee.

                  (b) Bonus. Commencing with the 2002 calendar year, Executive
will participate in the 2002 Management Incentive Plan currently being developed
by
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Safeguard (the "MIP") at a target bonus percentage equal to 100% of Executive's
base salary conditioned upon meeting the performance targets to be set forth in
the MIP.

                  (c) Guaranteed Bonus. Of Executive's 2002 bonus, $150,000 will
be guaranteed and shall be paid to Executive as follows: $75,000 on the date
hereof, $25,000 on March 31, 2002, $25,000 on June 30, 2002 and $25,000 on
September 30, 2002. Executive will repay to Safeguard in full this guaranteed
bonus if Executive terminates his employment with Safeguard prior to the first
anniversary of the Commencement Date.

         4.       Initial Equity Compensation Grants.

                  (a) Option Grant. On the Commencement Date, Executive will be
granted options to purchase 300,000 shares of Common Stock of Safeguard, which
options shares will vest 25% on the first anniversary hereof and the remaining
75% of which will vest in equal monthly installments during the three year
period commencing on the first anniversary of the date hereof. The options will
be granted under the 2001 Associates Equity Compensation Plan (the "Option
Plan") on the date hereof, will have an exercise price equal to the mean of the
high and low sales prices of Safeguard common stock on the date hereof, and will
expire on the eighth anniversary of the date hereof (subject to earlier
termination in accordance with the Option Plan). Additional equity grants may be
awarded commencing in 2002 by action of the Compensation Committee.

                  (b) One Year Restricted Stock Grant. On the Commencement Date,
Executive will be granted 50,000 shares of restricted stock, which restricted
shares will vest in full on the first anniversary of the date hereof. These
restricted shares will be granted under the Option Plan.

                  (c) Two Year Restricted Stock Grant. On the Commencement Date,
Executive will be granted 50,000 shares of restricted stock, which restricted
shares will vest in equal monthly installments during the year commencing on the
first anniversary of the date hereof. These restricted shares will be granted
under the Option Plan.

                  (d) Three Year Restricted Stock Grant. On the Commencement
Date, Executive will be granted 50,000 shares of restricted stock, which
restricted shares will vest in equal monthly installments during the year
commencing on the second anniversary of the date hereof. These restricted shares
will be granted under the Option Plan.

                  (e) Four Year Restricted Stock Grant. On the Commencement
Date, Executive will be granted 50,000 shares of restricted stock, which
restricted shares will vest in equal monthly installments during the year
commencing on the third anniversary of the date hereof. These restricted shares
will be granted under the Option Plan.

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         5.       Fringe Benefits. Executive will be paid a car allowance at the
rate of $10,000 per annum; will be reimbursed for country club dues at the rate
of $8,000 per annum; will participate in Safeguard's executive medical plan
(pursuant to which up to $5,000 of reasonable and necessary medical, healthcare,
vision or dental expenses not allowed under normal health plans are reimbursed);
will receive at Safeguard's cost up to $750,000 of life insurance (assuming that
Executive meets normal insurability requirements); and will participate in all
other benefit programs offered generally by the Company to its other executives.

         6.       Severance Payments. Subject to the terms and conditions of
this letter, in the event Safeguard involuntarily terminates Executive's
employment without cause, or Executive terminates his employment with good
reason (a "Severance Termination"), Safeguard will provide Executive the
following benefits which shall be the only severance benefits or other payments
in respect of Executive's employment with Safeguard to which Executive shall be
entitled. Without limiting the generality of the foregoing, these benefits are
in respect of all salary (except for salary for periods ending on the date of
termination), accrued vacation and other rights which Executive may have against
Safeguard or its affiliates.

                  (a)      Upon a Severance Termination, Executive will receive
a lump sum payment equal to the product of (i) 1.5 (the "Multipler") multiplied
by (ii) the sum of Executive's annual base salary plus Executive's annual target
bonus (calculated at 100 percent of annual base salary).

                  (b)      Upon a Severance Termination, Executive will become
fully vested in 50% of all unvested restricted stock grants held by Executive at
the time of termination (the "Vesting Number"). The restricted shares which will
vest pursuant to the immediately preceding sentence will be first, any
restricted share grants with respect to which an election under Section 83(b) of
the Internal Revenue Code of 1986, as amended, was made by the Executive in the
order of vesting dates which chronologically would have immediately followed the
Severance Termination until the Vesting Number is equaled; and thereafter any
restricted share grants with respect to which no Section 83 (b) election was
made by the Executive in the order of vesting dates which chronologically would
have immediately followed the Severance Termination until the Vesting Number is
equaled. In addition, if a Severance Termination occurs prior to the first
anniversary of the date hereof, Executive will become fully vested in the number
of options which is equal to 300,000 multiplied by a fraction, the numerator of
which is the number of 30 day periods which have elapsed from the date hereof
until the date of termination and the denominator of which is 48. Upon a
Severance Termination, Executive will be able to exercise any options which have
vested on the termination date until the earlier of (a) the first anniversary of
the date of termination, or (b) the expiration date of the option.

                  (c)      Upon a Severance Termination, Executive will receive
continued coverage under Safeguard's medical and health plans and life insurance
plans for 18 months following the termination date, provided that coverage will
end if Executive

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obtains comparable coverage from a subsequent employer. Executive should consult
with Safeguard's Manager of Human Resources concerning the process for assuming
ownership of and continued premium payments for any whole life policy at the end
of such 18 month period. Upon a Severance Termination, Executive will receive up
to $20,000 for outplacement services or office space which Executive secures.
Executive will be reimbursed promptly for all Executive's reasonable and
necessary business expenses incurred on behalf of Safeguard prior to Executive's
termination date.

                  (d)      All compensation and benefits described above will be
contingent on Executive's execution of a release of all claims against Safeguard
substantially in the form of Exhibit A.

                  (e)      Safeguard will pay Executive the lump sum payments
described above within five business days of the date on which the release
Executive executes becomes effective. Safeguard will prepare the final release
(which will be substantially in the form attached as Exhibit A to this letter)
within five business days of Executive's termination of employment. Executive
will have 21 days in which to consider the release although Executive may
execute it sooner. Please note that the release has a rescission period of seven
days. All other payments will be made to Executive within five business days of
the date on which they become due or, in the case of payments payable on notice
from Executive, within five business days of such notice.

                  (f)      Safeguard will pay interest on late payments at the
prime rate at Safeguard's agent bank plus 2 percent compounded monthly. In
addition, Safeguard will pay all reasonable costs and expenses (including
reasonable attorney's fees and all costs of arbitration) incurred by Executive
to enforce this agreement or any obligation hereunder.

                  (g)      In this letter, the term "cause" means (a)
Executive's failure to adhere to any written Safeguard policy if Executive have
been given a reasonable opportunity to comply with such policy or cure
Executive's failure to comply (which reasonable opportunity must be granted
during the ten-day period preceding termination of this Agreement); (b)
Executive's appropriation (or attempted appropriation) of a material business
opportunity of Safeguard, including attempting to secure or securing any
personal profit in connection with any transaction entered into on behalf of
Safeguard; (c) Executive's misappropriation (or attempted misappropriation) of
any of Safeguard's funds or property; or (d) Executive's conviction of,
indictment for (or its procedural equivalent), or Executive's entering of a
guilty plea or plea of no contest with respect to, a felony, the equivalent
thereof, or any other crime with respect to which imprisonment is a possible
punishment. In this letter, the term "good reason" means (a) (i) prior to the
second anniversary of the date hereof, Executive's assignment (without
Executive's consent) to a position, title, responsibilities, or duties of a
materially lesser status or degree of responsibility than the position,
responsibilities, or duties of Managing Director, Business and IT Services,
Executive ceases to be a member of the management committee or a successor
committee of comparable responsibilities, or Executive is

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required to report to any person other than the Chief Executive Officer; or (ii)
a reduction of Executive's base salary; (b) the relocation of Safeguard's
principal executive offices to a location which is more 30 miles outside of
center city Philadelphia; or (c) Executive's assignment (without Executive's
consent) to be based anywhere other than Safeguard's principal executive
offices.

                  (h)      Executive will not be required to mitigate the amount
of any payment provided for in this letter by seeking other employment or
otherwise.

                  (i)      Executive acknowledges that the arrangements
described in this letter will be the only obligations of Safeguard or its
affiliates in connection with any determination by Safeguard to terminate
Executive's employment with Safeguard. This letter does not terminate, alter, or
affect Executive's rights under any plan or program of Safeguard in which
Executive may participate, except as explicitly set forth herein. Executive's
participation in such plans or programs will be governed by the terms of such
plans and programs.

         7.       Withholding; Nature of Obligations. Safeguard will withhold
applicable taxes and other legally required deductions from all payments to be
made hereunder. Safeguard's obligations to make payments under this letter are
unfunded and unsecured and will be paid out of the general assets of Safeguard.

         8.       Miscellaneous. The agreement will inure to the benefit of
Executive's personal representatives, executors, and heirs. In the event
Executive dies while any amount payable under this agreement remains unpaid, all
such amounts will be paid in accordance with the terms and conditions of this
letter. No term or condition set forth in this letter may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Executive and the an officer of Safeguard authorized to sign such
writing by the Board of Directors (or an authorized committee thereof) of
Safeguard. This agreement will be construed and enforced in accordance with the
law of the Commonwealth of Pennsylvania without regard to the conflicts of laws
rules of any state. Any controversy or claim arising out of or relating to this
agreement, or the breach thereof, will be settled by arbitration in
Philadelphia, Pennsylvania, in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association, using
one arbitrator, and judgment upon the award rendered by the arbitrator may be
entered in any court of competent jurisdiction.

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         If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to us the enclosed copy of this letter which will then
constitute our legally binding agreement on this subject.

                                                 Sincerely,

                                                 SAFEGUARD SCIENTIFICS, INC.

                                                 /s/ N. Jeffrey Klauder
                                                 ----------------------
                                                 By:     N. Jeffrey Klauder
                                                 Title:  Managing Director
                                                         and General Counsel

I agree to the terms and conditions of this letter

/s/  Anthony A. Ibarguen
------------------------
Anthony A. Ibarguen

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                                    EXHIBIT A

                          GENERAL RELEASE AND AGREEMENT

NOTICE:

         Various state and federal laws, including the Civil Rights Act of 1964
and 1991 and the Age Discrimination in Employment Act, prohibit employment
discrimination based on age, sex, race, color, national origin, religion,
disability and veteran status. These laws are enforced through he Equal
Employment Opportunity Commission (EEOC), the Department of Labor and state
civil rights agencies.

         If Executive sign this General Release and Agreement and accept the
agreed-upon special severance allowance and other termination benefits described
in the letter addressed to Executive which accompanies this release, Executive
are giving up Executive's right to file a lawsuit pursuant to the aforementioned
federal, state and local laws in local, state or federal courts against
Safeguard Scientifics, Inc. and its affiliates (the "Releasees") with respect to
any claims relating to Executive's employment or termination therefrom which
arise up to the date this Agreement is executed.

         By signing this General Release and Agreement Executive waive
Executive's right to recover any damages or other relief in any claim or suit
brought by or though the Equal Employment Opportunity Commission or any other
state or local agency on Executive's behalf under and federal or state
discrimination law, except where prohibited by law. Executive agree to release
and discharge each Releasee not only from any and all claims which Executive
could make on Executive's own behalf but also specifically waive any right to
become, and promise not to become, a member of any class in any proceeding or
case in which a claim or claims against a Releasee may arise, in whole or in
part, from any event which occurred as of the date of this Agreement. Executive
agree to pay for any legal fees or cost incurred by any Releasee as a result of
any breach of the promises in this paragraph. The parties agree that if
Executive, by no action of Executive's own, become a mandatory member of any
class from which Executive cannot, by operation of law or order of court, opt
out, Executive shall not be required to pay for any legal fees or costs incurred
by a Releasee as a result.

         We encourage Executive to discuss the following release language with
an attorney prior to executing this Agreement. In any event, Executive should
thoroughly review and understand the effect of the release before acting on it.
Therefore, please take this release home and consider it for up to twenty-one
(21) days before Executive decide to sign it.
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                          GENERAL RELEASE AND AGREEMENT

         This GENERAL RELEASE AND AGREEMENT (hereinafter the "Release") is made
and entered into as of this ___ day of ________________, 200_, by and between
SAFEGUARD SCIENTIFICS, INC. ("Safeguard") and _________________ ("Employee").

         1. Background. The parties hereto acknowledge that this Release is
being entered into pursuant to the terms of the Letter Agreement, dated January
2, 2002 (the "Letter Agreement"), between Safeguard and Employee. As used in
this Release, any reference to Safeguard shall include its predecessors and
successors and, in their capacities as such, all of its present, past, and
future directors, officers, employees, attorneys, insurers, agents and assigns,
as well as all Safeguard affiliates, subdivisions and subsidiaries; and any
reference to Employee shall include, in their capacities as such, his or her
attorneys, heirs, administrators, representatives, agents and assigns.

         2. Resignation from Boards. Employee shall, and hereby does resign from
such Boards and officer positions with Safeguard and all affiliates and partner
companies of Safeguard as such employee holds on the date hereof. In this
regard, Employee agrees to pre-sign and deliver to the Company resignation
letters acceptable to Safeguard in order to effect Employee's resignation from
certain companies and entities, and we may submit other such letters from time
to time, although nothing contained herein shall prohibit Employee from
resigning from such boards and officer positions at an earlier time.

         3. General Release.

                  (a) Employee, for and in consideration of the special
severance allowance and other termination benefits offered to him by Safeguard
specified in the letter that accompanies this Release, and intending to be
legally bound, does hereby REMISE, RELEASE AND FOREVER DISCHARGE Safeguard, of
and from any and all causes of actions, suits, debts, claims and demands
whatsoever in law or in equity, which he ever had, now has, or hereafter may
have or which his or her heirs, executors or administrators may have, by reason
of any matter, cause or thing whatsoever, from the beginning of his or her
employment with Safeguard to the date of this Release, and particularly, but
without limitation, any claims arising from or relating in any way to his or her
employment or the termination of his or her employment relationship with
Safeguard, including, but not limited to, any claims arising under any federal,
state, or local laws, including Title VII of the Civil Rights Act of 1964, as
amended, 42 U.S.C. Section 2000e et seq., ("Title VII"), the Age Discrimination
in Employment Act, 29 U.S.C. Section 621 et seq. ("the ADEA"), the Americans
with Disabilities Act, 42 U.S.C. Section 12101 et seq. ("ADA"), the Employee
Retirement Income Security Act of 1974, 29 U.S.C. Section 301, et seq., as
amended ("ERISA"), the Pennsylvania Wage Payment and Collection Law, Pa. Stat.
Ann. tit. 43 Sections 260.1-260.11a ("WPCL"), the Pennsylvania Human Relations
Act, 43 P.S. Section 951 et seq. (the "PHRA"), and any and all other federal,
state or local laws, and any
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common law claims now or hereafter recognized, including claims for wrongful
discharge, slander and defamation, as well as all claims for counsel fees and
costs.

                  (b) By signing this Release, Employee represents that Employee
has not commenced any proceeding against Safeguard in any forum (administrative
or judicial) concerning Employee's employment or the termination thereof.
Employee further acknowledges that Employee was given sufficient notice under
the Worker Adjustment and Retraining Notification Act (the "WARN Act") and that
the termination of Employee's employment does not give rise to any claim or
right to notice, or pay or benefits in lieu of notice under the WARN Act. In the
event any WARN Act issue does exist or arises in the future, Employee agrees and
acknowledges that the payments and benefits set forth in this Release shall be
applied to any pay or benefits in lieu of notice required by the WARN Act,
provided that any such offset shall not impair or affect the validity of any
provision of this Release or the Letter Agreement.

                  (c) Each party to this General Release and Agreement agrees
and covenants not to sue or to bring, or assign to any third person, any claims
or charges against one another with respect to any known matter arising before
the date of this Release or covered by the release and not to assert against one
another in any action, grievance, suit, litigation or proceeding any known
matter before the date of this Release or covered by the release. The parties
agree that in the event of a breach of any covenant of this Release by any
party, the party breached shall be entitled to recover attorneys' fees and costs
in an action to prosecute such breach, in addition to compensatory damages.

                  (d) Anything herein to the contrary notwithstanding, neither
party is released from any of his, her or its obligations under the Letter
Agreement and Employee acknowledges that Safeguard's obligations under the
Letter Agreement and this Release are the only obligations of Safeguard or its
affiliates in connection with the severance of Employee's service with
Safeguard. This Release does not terminate, alter, or affect Employee's rights
under any plan or program of Safeguard in which Employee may participate
(including the Safeguard LTIP), except as explicitly set forth in the Letter
Agreement. Employee's participation in such plans or programs will be governed
by the terms of such plans and programs.

         4. Confidentiality; Non-Disparagement.

                  (a) Except to the extent required by law, including SEC and
New York Stock Exchange disclosure requirements, Safeguard and Employee agree
that the terms of this Release will be kept confidential by both parties, except
that Employee may advise his family and confidential advisors, and Safeguard may
advise those people needing to know to implement the above terms. Safeguard
shall use its best efforts to obtain Employee's prior written approval prior to
making any required disclosure.

                  (b) Employee will not at any time knowingly reveal to any
person or entity any of the trade secrets or confidential information of
Safeguard or of any third

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party which Safeguard is under an obligation to keep confidential (including but
not limited to trade secrets or confidential information respecting inventions,
products, designs, methods, know-how, techniques, systems, processes, software
programs, works of authorship, customer lists, projects, plans and proposals),
and Employee shall keep secret all confidential matters relating to Safeguard
and shall not use or attempt to use any such confidential information in any
manner which injures or causes loss or may reasonably be calculated to injure or
cause loss whether directly or indirectly to Safeguard. These restrictions
contained in this sub-paragraph (b) shall not apply to: (i) information that at
the time of disclosure is in the public domain through no fault of Employee;
(ii) information received from a third party outside of Safeguard that was
disclosed without a breach of any confidentiality obligation; (iii) information
approved for release by written authorization of Safeguard; or (iv) information
that may be required by law or an order of the court, agency or proceeding to be
disclosed; provided, Employee shall provide Safeguard notice of any such
required disclosure once Employee has knowledge of it and will help Safeguard at
Safeguard's expense to the extent reasonable to obtain an appropriate protective
order.

                  (c) Employee represents that Employee has not taken, used or
knowingly permitted to be used any notes, memorandum, reports, lists, records,
drawings, sketches, specifications, software programs, data, documentation or
other materials of any nature relating to any matter within the scope of the
business of Safeguard or its partner companies or concerning any of its dealings
or affairs otherwise than for the benefit of Safeguard. Employee shall not,
after the termination of my employment, use or knowingly permit to be used any
such notes, memoranda, reports, lists, records, drawings, sketches,
specifications, software programs, data, documentation or other materials, it
being agreed that all of the foregoing shall be and remain the sole and
exclusive property of Safeguard and that immediately upon the termination of
Employee's employment, Employee shall deliver all of the foregoing, and all
copies thereof, to Safeguard, at its main office.

                  (d) In accordance with normal ethical and professional
standards, Safeguard and Employee agree that they shall not in any way engage in
any conduct or make any statement that would defame or disparage the other, or
make to, or solicit for, the media or others, any comments, statements (whether
written or oral), and the like that may be considered to be derogatory or
detrimental to the good name or business reputation of either party. It is
understood and agreed that Safeguard's obligation under this paragraph extends
only to the conduct of Safeguard's senior officers. The only exception to the
foregoing shall be in those circumstances in which Employee or Safeguard is
obligated to provide information in response to an investigation by a duly
authorized governmental entity or in connection with legal proceedings.

         5. Indemnity.

                  (a) This Release shall not release Safeguard or any of its
insurance carriers from any obligation it or they might otherwise have to defend
and/or indemnify

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Employee and hold him harmless from any claims made against him arising out of
his activities as director or officer of Safeguard, to the same extent as
Safeguard or its insurance carriers are or may be obligated to defend and/or
indemnify and hold harmless any other director or officer and Safeguard affirms
its obligation to provide indemnification to Employee as a director, officer or
former director, officer of Safeguard, as set forth in Safeguard's bylaws and
charter documents in effect on October 12, 2001.

                  (b) Employee agrees that Employee will personally provide
reasonable assistance and cooperation to Safeguard, at Safeguard's expense, in
activities related to the prosecution or defense of any pending or future
lawsuits or claims involving Safeguard.

         6. General.

                  (a) Employee understands that this Release is revocable by him
for a period of seven days following execution of the Release. This Release
shall not become effective or enforceable until this seven day revocation period
has ended.

                  (b) Employee has carefully read and fully understands all the
provisions of the Notice and the Release which set forth the entire agreement
between him and Safeguard, and he acknowledges that he has not relied upon any
representation or statement, written or oral, not set forth in this document.

                  (c) Employee agrees that any breach of this Agreement by
Employee will cause irreparable damage to Safeguard and that in the event of
such breach Safeguard shall have, in addition to any and all remedies of law,
the right to an injunction, specific performance or other equitable relief to
prevent the violation of Employee's obligations hereunder.

                  (d) No term or condition set forth in this letter may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by Employee and an officer of Safeguard duly
authorized by the Board of Directors of Safeguard.

                  (e) Any waiver by Safeguard of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach of such provision or any other provision hereof.

         IN WITNESS WHEREOF, the parties have executed this Release as of the
date written above.

Dated: January 2, 2002                            /S/ ANTHONY IBARGUEN
                                                  --------------------
                                                  Name of Employee:

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                                                  SAFEGUARD SCIENTIFICS, INC.
Dated: January 2, 2002
                                                  By: /S/ N. JEFFREY KLAUDER

                                                  Title:  Managing Director and
                                                          General Counsel

                                       5<PAGE>
                                                                   EXHIBIT 10.22

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                            SAFEGUARD DELAWARE, INC.

                           LOAN AND SECURITY AGREEMENT

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         This LOAN AND SECURITY AGREEMENT is entered into as of November 21,
2001, by and between COMERICA BANK-CALIFORNIA ("Bank") and SAFEGUARD DELAWARE,
INC. ("Borrower").

                                    RECITALS

         Borrower wishes to obtain credit from time to time from Bank, and Bank
desires to extend credit to Borrower. This Agreement sets forth the terms on
which Bank will advance credit to Borrower, and Borrower will repay the amounts
owing to Bank.

                                    AGREEMENT

         The parties agree as follows:

         1. DEFINITIONS AND CONSTRUCTION.

                  1.1 Definitions. As used in this Agreement, the following
terms shall have the following definitions:

                           "Affiliate" means, with respect to any Person, any
Person that owns or controls directly or indirectly such Person, any Person that
controls or is controlled by or is under common control with such Person, and
each of such Person's senior executive officers, directors, and partners.

                           "Bank Expenses" means all: reasonable costs or
expenses (including reasonable attorneys' fees and expenses) incurred in
connection with the preparation, negotiation, administration, and enforcement of
the Loan Documents; reasonable Collateral audit fees; and Bank's reasonable
attorneys' fees and expenses incurred in amending, enforcing or defending the
Loan Documents (including fees and expenses of appeal), incurred before, during
and after an Insolvency Proceeding, whether or not suit is brought.

                           "Borrower's Books" means all of Borrower's books and
records including: ledgers; records concerning Borrower's assets or liabilities,
the Collateral, business operations or financial condition; and all computer
programs, or tape files, and the equipment, containing such information.

                           "Business Day" means any day that is not a Saturday,
Sunday, or other day on which banks in the State of California are authorized or
required to close.

                           "Closing Date" means the date of this Agreement.

                           "Code" means the California Uniform Commercial Code.

                           "Collateral" has the meaning assigned in Section 4.1.

                           "Contingent Obligation" means, as applied to any
Person, any direct or indirect liability, contingent or otherwise, of that
Person with respect to (i) any indebtedness, lease, dividend, letter of credit
or other obligation of another, including, without limitation, any such
obligation directly or indirectly guaranteed, endorsed, co-made or discounted or
sold with recourse by that Person, or in respect of which that Person is
otherwise directly or indirectly liable; (ii) any obligations with respect to
undrawn letters of credit issued for the account of that Person; and (iii) all
obligations arising under any interest rate, currency or commodity swap
agreement, interest rate cap agreement, interest rate collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; provided, however,
that the term "Contingent Obligation" shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determined amount of the primary obligation in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith; provided, however, that such amount shall not in any event exceed the
maximum amount of the obligations under the guarantee or other support
arrangement.

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                           "Credit Extension" means each Letter of Credit issued
by Bank for the benefit of Borrower hereunder.

                           "Daily Balance" means the amount of the Obligations
owed at the end of a given day.

                           "Event of Default" has the meaning assigned in
Article 8.

                           "GAAP" means generally accepted accounting principles
as in effect from time to time.

                           "Indebtedness" means (a) all indebtedness for
borrowed money or the deferred purchase price of property or services, including
without limitation reimbursement and other obligations with respect to surety
bonds and letters of credit, (b) all obligations evidenced by notes, bonds,
debentures or similar instruments, (c) all capital lease obligations and (d) all
Contingent Obligations.

                           "Insolvency Proceeding" means any proceeding
commenced by or against any person or entity under any provision of the United
States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency
law, including assignments for the benefit of creditors, formal or informal
moratoria, compositions, extension generally with its creditors, or proceedings
seeking reorganization, arrangement, or other relief.

                           "Investment" means any beneficial ownership of
(including stock, partnership interest or other securities) any Person, or any
loan, advance or capital contribution to any Person.

                           "IRC" means the Internal Revenue Code of 1986, as
amended, and the regulations thereunder.

                           "Lien" means any mortgage, lien, deed of trust,
charge, pledge, security interest or other encumbrance.

                           "Loan Documents" means, collectively, this Agreement,
any letter of credit application executed by Borrower, and any other agreement
entered into between Borrower and Bank in connection with this Agreement, all as
amended or extended from time to time.

                           "Material Adverse Effect" means a material adverse
effect on (i) the business operations or condition (financial or otherwise) of
the Borrower, taken as a whole or (ii) the ability of Borrower to repay the
Obligations or otherwise perform its obligations under the Loan Documents.

                           "Obligations" means all debt, principal, interest,
Bank Expenses and other amounts owed to Bank by Borrower pursuant to this
Agreement or any other agreement, whether absolute or contingent, due or to
become due, now existing or hereafter arising, including any interest that
accrues after the commencement of an Insolvency Proceeding and including any
debt, liability, or obligation owing from Borrower to others that Bank may have
obtained by assignment or otherwise.

                           "Periodic Payments" means all installments or similar
recurring payments that Borrower may now or hereafter become obligated to pay to
Bank pursuant to the terms and provisions of any instrument, or agreement now or
hereafter in existence between Borrower and Bank.

                           "Person" means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
firm, joint stock company, estate, entity or governmental agency.

                           "Portfolio Company" or "Portfolio Companies" means
Persons in which Borrower has made and retains Investments in accordance with
the Certificate of Incorporations.

                           "Portfolio Fund" or "Portfolio Funds" means limited
partnerships or limited liability companies in which Borrower is a member or
limited partner.

                                       2
<PAGE>
                           "Prime Rate" means the variable rate of interest, per
annum, most recently announced by Bank, as its "prime rate," whether or not such
announced rate is the lowest rate available from Bank.

                           "Responsible Officer" means each of the individuals
or officers of each of the Borrower listed on Schedule 1 attached hereto (as the
same may be modified from time to time).

                           "Revolving Facility" means the facility under which
Borrower may request Bank to issue Letters of Credit, as specified in Section
2.1 hereof.

                           "Revolving Line" means aggregate Credit Extensions of
up to Ten Million Dollars ($10,000,000).

                           "Revolving Maturity Date" means the day before the
first anniversary of the Closing Date.

                           "Schedule" means the schedule of exceptions attached
hereto.

                           "Subordinated Debt" means any debt incurred by
Borrower that is subordinated to the debt owing by Borrower to Bank on terms
reasonably acceptable to Bank (and identified as being such by Borrower and
Bank).

                  1.2 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP and all calculations
made hereunder shall be made in accordance with GAAP. When used herein, the
terms "financial statements" shall include the notes and schedules thereto.

         2. LOAN AND TERMS OF PAYMENT.

                  2.1 Letters of Credit

                           Borrower promise to pay to the order of Bank, in
lawful money of the United States of America, the aggregate unpaid principal
amount of all Credit Extensions made by Bank to Borrower and/or Borrower
hereunder. Borrower shall also pay interest on the unpaid principal amount of
such Credit Extensions at rates in accordance with the terms hereof.

                                    (i) Subject to the terms and conditions of
this Agreement, Bank agrees to issue or cause to be issued letters of credit for
the account of Borrower (each, a "Letter of Credit" and collectively, the
"Letters of Credit") in an aggregate outstanding face amount not to exceed the
Revolving Line. All Letters of Credit shall be, in form and substance,
acceptable to Bank in its sole discretion and shall be subject to the terms and
conditions of Bank's form of standard application and letter of credit agreement
(the "Application"), which Borrower hereby agrees to execute, including Bank's
standard fee equal to 0.5% per annum of the face amount of each Letter of
Credit. Prior to the Revolving Maturity Date, Borrower shall secure in cash all
obligations under any outstanding Letters of Credit on terms acceptable to Bank.

                                    (ii) The obligation of Borrower to reimburse
Bank for drawings made under Letters of Credit shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement, the Application, and such Letters of Credit, under all
circumstances whatsoever. Borrower shall indemnify, defend, protect, and hold
Bank harmless from any loss, cost, expense or liability, including, without
limitation, reasonable attorneys' fees, arising out of or in connection with any
Letters of Credit, except for expenses caused by Bank's gross negligence or
willful misconduct.

                                    (iii) Borrower shall use the Letters of
Credit to support the business operations of Borrower and its Affiliates and
obligations of the Portfolio Companies and Portfolio Funds.

                  2.2 Payments. Bank shall, at its option, charge all amounts
due in connection with any Letter of Credit, all Bank Expenses, and all Periodic
Payments against the Collateral and/or any of Borrower's deposit

                                       3
<PAGE>
accounts. All payments shall be free and clear of any taxes, withholdings,
duties, impositions or other charges, to the end that Bank will receive the
entire amount of any Obligations payable hereunder, regardless of source of
payment.

                  2.3 Crediting Payments. Prior to the occurrence of an Event of
Default, Bank shall credit a wire transfer of funds, check or other item of
payment to such deposit account or Obligation as Borrower specify. After the
occurrence of an Event of Default, the receipt by Bank of any wire transfer of
funds, check, or other item of payment shall be immediately applied to
conditionally reduce Obligations, but shall not be considered a payment on
account unless such payment is of immediately available federal funds or unless
and until such check or other item of payment is honored when presented for
payment. Notwithstanding anything to the contrary contained herein, any wire
transfer or payment received by Bank after 12:00 noon Pacific time shall be
deemed to have been received by Bank as of the opening of business on the
immediately following Business Day. Whenever any payment to Bank under the Loan
Documents would otherwise be due (except by reason of acceleration) on a date
that is not a Business Day, such payment shall instead be due on the next
Business Day, and additional fees or interest, as the case may be, shall accrue
and be payable for the period of such extension.

                  2.4 Fees. Borrower shall pay to Bank the following:

                           (a) Facility Fee. A fee equal to 0.25% per annum of
the difference between the Revolving Line and the average balance of all
outstanding Letters of Credit, which fee shall be payable within 20 days of the
last day of each fiscal quarter; provided that no such fee shall be charged for
any period during which Borrower maintains in one or more accounts with Bank or
its Affiliates at least $5,000,000 more than the face amount of the outstanding
Letters of Credit; and

                           (b) Bank Expenses. On the Closing Date, all Bank
Expenses incurred through the Closing Date, including reasonable attorneys' fees
and expenses and, after the Closing Date, all Bank Expenses, including
reasonable attorneys' fees and expenses, as and when they become due.

                  2.5 Additional Costs. In case any law, regulation, treaty or
official directive or the interpretation or application thereof by any court or
any governmental authority charged with the administration thereof or the
compliance with any guideline or request of any central bank or other
governmental authority (whether or not having the force of law):

                           (a) subjects Bank to any tax with respect to payments
of principal or interest or any other amounts payable hereunder by Borrower or
otherwise with respect to the transactions contemplated hereby (except for taxes
on the overall net income of Bank imposed by the United States of America or any
political subdivision thereof);

                           (b) imposes, modifies or deems applicable any deposit
insurance, reserve, special deposit or similar requirement against assets held
by, or deposits in or for the account of, or loans by, Bank; or

                           (c) imposes upon Bank any other condition with
respect to its performance under this Agreement,

and the result of any of the foregoing is to increase the cost to Bank, reduce
the income receivable by Bank or impose any expense upon Bank with respect to
the Obligations, Bank shall notify Borrower thereof. Borrower agrees to pay to
Bank the amount of such increase in cost, reduction in income or additional
expense as and when such cost, reduction or expense is incurred or determined,
upon presentation by Bank of a statement of the amount and setting forth Bank's
calculation thereof, all in reasonable detail, which statement shall be deemed
true and correct absent manifest error.

                  2.6 Term. This Agreement shall become effective on the Closing
Date and, subject to Section 12.7, shall continue in full force and effect for
so long as any Obligations are outstanding. Borrower may terminate this
Agreement at any time upon written notice to Bank and satisfaction of all
outstanding obligations. Notwithstanding the foregoing, Bank shall have the
right to terminate its obligation to make Credit Extensions under

                                       4
<PAGE>
this Agreement immediately and without notice upon the occurrence and during the
continuance of an Event of Default. Notwithstanding termination, Bank's Lien on
the Collateral shall remain in effect for so long as any Obligations are
outstanding. Borrower may at any time repay any amount outstanding hereunder and
terminate this Agreement upon five (5) days' prior notice.

         3. CONDITIONS OF ISSUANCE OF LETTERS OF CREDIT.

                  3.1 Conditions Precedent to Initial Letter of Credit. The
obligation of Bank to issue the first Letter of Credit is subject to the
condition precedent that Bank shall have received, in form and substance
satisfactory to Bank, the following:

                           (a) this Agreement;

                           (b) a certificate of a Responsible Officer of
Borrower with respect to incumbency and resolutions authorizing the execution
and delivery of this Agreement;

                           (c) financing statement (Form UCC-1);

                           (d) a copy of the Certificate of Incorporation of
Borrower, certified by the Delaware Secretary of State;

                           (e) an opinion of counsel to Borrower;

                           (f) payment of the fees and Bank Expenses then due
specified in Section 2.4 hereof; and

                           (g) such other documents, and completion of such
other matters, as Bank may reasonably deem necessary or appropriate.

                  3.2 Conditions Precedent to all Letters of Credit. The
obligation of Bank to issue each Letter of Credit, including the initial Letter
of Credit, is further subject to the following conditions:

                           (a) timely receipt by Bank of the Payment/Advance
Form as provided in Section 2.1

                           (b) Bank's receipt in pledge pursuant to this
Agreement of an amount not less than 105% of the face amount of the requested
Letter of Credit; and

                           (c) the representations and warranties contained in
Section 5 shall be true and correct in all material respects on and as of the
date of such Payment/Advance Form and on the date of issuance of each Letter of
Credit as though made at and as of each such date, and no Event of Default shall
have occurred and be continuing, or would exist after giving effect to such
issuance. The issuance of each Letter of Credit shall be deemed to be a
representation and warranty by Borrower on the date of such issuance that the
facts referred to in this Section 3.2 are accurate.

         4. CREATION OF SECURITY INTEREST.

                  4.1 Grant of Security Interest. Borrower shall maintain a
deposit account with Bank, one or more certificates of deposit issued by Bank,
or other mutually acceptable forms of property in an amount equal to or greater
than 105 percent of the face amount of all outstanding Letters of Credit,
including any drawn but unreimbursed Letters of Credit. Such property, together
with all proceeds thereof, interest paid thereon, and substitutions therefor,
and all accounts, securities, instruments, securities entitlements and financial
assets arising out of any of the foregoing, including without limitation Account
No. 1892018167, are the "Collateral". Borrower grants and pledges to Bank a
continuing security interest in all presently existing and hereafter acquired or
arising Collateral, in order to secure prompt repayment of any and all
Obligations. Borrower authorizes Bank to execute and/or file such documents, and
take such actions, as Bank determines reasonable to perfect its security
interest in

                                       5
<PAGE>
the Collateral. Such security interest constitutes a valid, first priority
security interest in the Collateral, and will constitute a valid, first priority
security interest in Collateral acquired after the date hereof. Upon maturity of
the Collateral in accordance with its terms, or in the event the Collateral
otherwise becomes payable during the term of this Agreement, such maturing
Collateral may be presented for payment, exchange, or otherwise marketed by Bank
on behalf of Borrower and the proceeds therefrom used to purchase a certificate
of deposit issued by Bank in which Bank has a first priority security interest,
provided that, as long as an Event of Default is not then continuing, Bank shall
pay such proceeds to Borrower as long as the aggregate value of the Collateral
that remains subject to Bank's first priority security interest is at least
equal to 105% of the face amount of the outstanding Letters of Credit. Subject
to the preceding sentence, Bank shall retain such successor collateral as
Collateral securing the Obligations for so long as any Obligations are
outstanding.

                  4.2 Delivery of Additional Documentation Required. Borrower
shall from time to time execute and deliver to Bank, at the request of Bank, all
financing statements and other documents that Bank may reasonably request, in
form satisfactory to Bank, to perfect and continue perfected Bank's security
interests in the Collateral and in order to fully consummate all of the
transactions contemplated under the Loan Documents.

         5. REPRESENTATIONS AND WARRANTIES.

                  Borrower represents and warrants as follows:

                  5.1 Due Organization and Qualification. Borrower is a
corporation duly existing under the laws of Delaware and qualified and licensed
to do business in any state in which the conduct of its business or its
ownership of property requires that it be so qualified.

                  5.2 Due Authorization; No Conflict. The execution, delivery,
and performance of the Loan Documents are within Borrower's powers, have been
duly authorized, and are not in conflict with nor constitute a breach of any
provision contained in any Certificate of Incorporation, nor will they
constitute an event of default under any material agreement to which Borrower is
a party or by which Borrower is bound. Borrower is not in default under any
agreement to which it is a party or by which it is bound, which default could
have a Material Adverse Effect.

                  5.3 No Prior Encumbrances. Borrower has good and marketable
title to the Collateral, free and clear of Liens, except for Permitted Liens.

                  5.4 Name; Location of Chief Executive Office. Except as
disclosed in the Schedule, Borrower has not done business under any name other
than that specified on the signature page hereof. The chief executive office of
Borrower is located at the address indicated in Section 10 hereof.

                  5.5 Litigation. Except as set forth in the Schedule, there are
no actions or proceedings pending by or against Borrower before any court or
administrative agency in which an adverse decision could have a Material Adverse
Effect, or a material adverse effect on Borrower's interest or Bank's security
interest in the Collateral.

                  5.6 No Material Adverse Change in Financial Statements. All
consolidated financial statements related to Borrower that Bank has received
fairly present in all material respects Borrower's consolidated financial
condition as of the date thereof and Borrower's consolidated results of
operations for the period then ended. There has not been a material adverse
change in the consolidated financial condition of Borrower since the date of the
most recent of such financial statements submitted to Bank.

                  5.7 Solvency, Payment of Debts. Borrower is solvent and able
to pay its debts (including trade debts) as they mature.

                  5.8 Regulatory Compliance. Borrower is not an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940. Borrower is not engaged principally, or
as one of the important activities, in the business of extending credit for the
purpose of

                                       6
<PAGE>
purchasing or carrying margin stock (within the meaning of Regulations T and U
of the Board of Governors of the Federal Reserve System). Borrower has not
violated any statutes, laws, ordinances or rules applicable to it, violation of
which could have a Material Adverse Effect.

                  5.9 Environmental Condition. Except as disclosed in the
Schedule, none of Borrower's properties or assets has ever been used by Borrower
or, to the best of Borrower's knowledge, by previous owners or operators, in the
disposal of, or to produce, store, handle, treat, release, or transport, any
hazardous waste or hazardous substance other than in accordance with applicable
law; to the best of Borrower's knowledge, none of Borrower's properties or
assets has ever been designated or identified in any manner pursuant to any
environmental protection statute as a hazardous waste or hazardous substance
disposal site, or a candidate for closure pursuant to any environmental
protection statute; no lien arising under any environmental protection statute
has attached to any revenues or to any real or personal property owned by
Borrower; and Borrower has not received a summons, citation, notice, or
directive from the Environmental Protection Agency or any other federal, state
or other governmental agency concerning any action or omission by Borrower
resulting in the releasing, or otherwise disposing of hazardous waste or
hazardous substances into the environment.

                  5.10 Taxes. Borrower has filed or caused to be filed all tax
returns required to be filed, and has paid, or has made adequate provision for
the payment of, all taxes reflected therein.

                  5.11 Investment Accounts. Except as disclosed in writing to
Bank, none of Borrower's property is maintained or invested with a Person other
than Bank or an Affiliate of Bank.

                  5.12 Government Consents. Borrower has obtained all consents,
approvals and authorizations of, made all declarations or filings with, and
given all notices to, all governmental authorities that are necessary for the
continued operation of Borrower's business as currently conducted, the failure
to obtain which could have a Material Adverse Effect.

                  5.13 Full Disclosure. No representation, warranty or other
statement made by Borrower in any certificate or written statement furnished to
Bank contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained in such
certificates or statements not misleading.

         6. AFFIRMATIVE COVENANTS.

                  Borrower covenants and agrees that, until payment in full of
all outstanding Obligations, and for so long as Bank may have any commitment to
make a Credit Extension hereunder, Borrower shall do all of the following:

                  6.1 Good Standing. Borrower shall maintain its corporate
existence in its jurisdiction of incorporation and maintain qualification in
each jurisdiction in which the failure to so qualify could have a Material
Adverse Effect. Borrower shall maintain in force all licenses, approvals and
agreements, the loss of which could have a Material Adverse Effect.

                  6.2 Government Compliance. Borrower shall comply with all
statutes, laws, ordinances and government rules and regulations to which it is
subject, noncompliance with which could have a Material Adverse Effect, or a
material adverse effect on the Collateral or the priority of Bank's Lien on the
Collateral.

                  6.3 Financial Statements, Reports, Certificates. Borrower
shall deliver to Bank:

                           (a) as soon as available, but in any event within 45
days of the end of each fiscal quarter, a copy of Form 10Q filed or required to
be filed by Borrower;

                           (b) as soon as available, but in any event within 90
days of the end of each fiscal year, a copy of Form 10K fled or required to be
filed by Borrower;

                                       7
<PAGE>
                           (c) copies of all statements, reports and notices
sent or made available generally by Borrower to its security holders or to any
holders of Subordinated Debt or to the Securities and Exchange Commission or any
other department or agency of the United States;

                           (d) promptly upon receipt of notice thereof, a report
of any legal actions pending or threatened against Borrower that is reasonably
likely to result in damages or costs to Borrower of One Million Dollars
($1,000,000) or more; and

                           (e) such other financial information as Bank may
reasonably request from time to time.

                  6.4 Taxes. Borrower shall make, due and timely payment or
deposit of all material federal, state, and local taxes, assessments, or
contributions required of it by law, and will execute and deliver to Bank, on
demand, appropriate certificates attesting to the payment or deposit thereof;
and Borrower will make, timely payment or deposit of all material tax payments
and withholding taxes required of it by applicable laws, and will, upon request,
furnish Bank with proof satisfactory to Bank indicating that Borrower has made
such payments or deposits; provided that Borrower need not make any payment if
the amount or validity of such payment is contested in good faith by appropriate
proceedings and is reserved against (to the extent required by GAAP) by
Borrower.

                  6.5 Insurance. Borrower shall maintain insurance relating to
Borrower's business in amounts and of a type that are customary to businesses
similar to Borrower's. All such policies of insurance shall be in such form,
with such companies and in such amounts as may be reasonably satisfactory to
Bank.

                  6.6 Principal Depository. Within 90 days of the Closing Date,
Borrower shall open and thereafter maintain its principal depository account
with Bank.

         7. NEGATIVE COVENANTS.

                  Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until payment in full of the outstanding
Obligations or for so long as Bank may have any commitment to make any Credit
Extensions, Borrower will not do any of the following:

                  7.1 Dispositions. Convey, sell, lease, transfer or otherwise
dispose of (collectively, a "Transfer") all or any part of the Collateral.

                  7.2 Change in Business; Change in Control or Executive Office.
Engage in any business other than the businesses currently engaged in by
Borrower and any business substantially similar or related thereto (or
incidental thereto); or change its state of incorporation.

                  7.3 Mergers or Acquisitions. Merge or consolidate with or into
any other business organization, or acquire all or substantially all of the
capital stock or property of another Person, other than Permitted Investments.
Notwithstanding the foregoing, this Section 7.3 shall not apply to (i)
transactions in which all outstanding Obligations are satisfied in full
concurrent with the closing of that transaction, and any commitment by Bank to
make any additional Credit Extensions is terminated, and (ii) cash investment
into and acquisition of Portfolio Companies made in the ordinary course of
Borrower's business. Notwithstanding the foregoing, Borrower's interests in any
Portfolio Company shall not be deemed in violation of this Section 7.3.

                  7.4 Encumbrances. Create, incur, assume or suffer to exist any
Lien with respect to the Collateral.

                  7.5 Transactions with Affiliates. Directly or indirectly enter
into or permit to exist any material transaction with any Affiliate of Borrower
except for transactions that are in the ordinary course of Borrower's business,
upon fair and reasonable terms that are no less favorable to Borrower than would
be obtained in an arm's length transaction with a non-affiliated Person.

                                       8
<PAGE>
                  7.6 Compliance. Become an "investment company" or be
controlled by an "investment company," within the meaning of the Investment
Company Act of 1940, or become principally engaged in, or undertake as one of
its important activities, the business of extending credit for the purpose of
purchasing or carrying margin stock, or use the proceeds of any Credit Extension
for such purpose; or fail to comply with, or violate any, law or regulation,
which failure or violation could have a Material Adverse Effect, or a material
adverse effect on the Collateral or the priority of Bank's Lien on the
Collateral.

         8. EVENTS OF DEFAULT.

                  Any one or more of the following events shall constitute an
Event of Default under this Agreement:

                  8.1 Payment Default. If Borrower fails to pay, within five (5)
Business Days of the date due, any of the Obligations hereunder;

                  8.2 Covenant Default. If Borrower fails to perform any
obligation under Article 6 or violates any of the covenants contained in Article
7 of this Agreement, or fails or neglects to perform, keep, or observe any other
term, provision, condition, covenant, or agreement contained in this Agreement,
in any of the Loan Documents, or in any other present or future agreement
between Borrower and Bank and as to any default under such other term,
provision, condition, covenant or agreement that can be cured, has failed to
cure such default within twenty (20) days after Borrower receives notice thereof
or any officer of Borrower becomes aware thereof;

                  8.3 Borrower Composition. If Borrower is dissolved or any
action is taken to effect such dissolution;

                  8.4 Material Adverse Effect. If any circumstance occurs that
could reasonably be expected to have a Material Adverse Effect;

                  8.5 Attachment. If any portion of the Collateral is attached,
seized, subjected to a writ or distress warrant, or is levied upon, or comes
into the possession of any trustee, receiver or person acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not
been removed, discharged or rescinded within ten (10) days, or if Borrower is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgment or
other claim becomes a lien or encumbrance upon any portion of the Collateral, or
if a notice of lien, levy, or assessment is filed of record with respect to any
of the Collateral by the United States Government, or any department, agency, or
instrumentality thereof, or by any state, county, municipal, or governmental
agency, and the same is not paid within ten (10) days after Borrower receives
notice thereof, provided that none of the foregoing shall constitute an Event of
Default where such action or event is stayed or an adequate bond has been posted
pending a good faith contest by Borrower (provided that no Credit Extensions
will be required to be made during such cure period);

                  8.6 Insolvency or Bankruptcy. If Borrower becomes insolvent,
or if an Insolvency Proceeding is commenced by Borrower, or if an Insolvency
Proceeding is commenced against Borrower and is not dismissed or stayed within
thirty (30) days (provided that no Credit Extensions will be made prior to the
dismissal of such Insolvency Proceeding);

                  8.7 Other Agreements. If there is a default in any agreement
to which Borrower is a party with a third party or parties resulting in a right
by such third party or parties, whether or not exercised, to accelerate the
maturity of any Indebtedness in an amount in excess of One Million Dollars
($1,000,000) or that could have a Material Adverse Effect;

                  8.8 Subordinated Debt. If Borrower makes any payment on
account of Subordinated Debt, except to the extent such payment is allowed under
any subordination agreement entered into with Bank;

                  8.9 Judgments. If a judgment or judgments for the payment of
money in an amount, individually or in the aggregate, of at least One Million
Dollars ($1,000,000) shall be rendered against Borrower and

                                       9
<PAGE>
shall remain unsatisfied and unstayed for a period of ten (10) days (provided
that no Credit Extensions will be made prior to the satisfaction or stay of such
judgment); or

                  8.10 Misrepresentations. If any material misrepresentation or
material misstatement exists now or hereafter in any warranty or representation
set forth herein or in any certificate delivered to Bank by any Responsible
Officer pursuant to this Agreement or to induce Bank to enter into this
Agreement or any other Loan Document.

         9. BANK'S RIGHTS AND REMEDIES.

                  9.1 Rights and Remedies. Upon the occurrence and during the
continuance of an Event of Default, Bank may, at its election, without notice of
its election and without demand, do any one or more of the following, all of
which are authorized by Borrower:

                           (a) Cease advancing money or extending credit to or
for the benefit of Borrower under this Agreement or under any other agreement
between Borrower and Bank;

                           (b) Make such payments and do such acts as Bank
considers necessary or reasonable to protect its security interest in the
Collateral. Borrower agrees to assemble any documents evidencing the Collateral
if Bank so requires, and to make such documents available to Bank as Bank may
designate;

                           (c) Set off and apply to the Obligations any and all
(i) Collateral, (ii) balances and deposits of Borrower held by Bank, or (iii)
indebtedness at any time owing to or for the credit or the account of Borrower
held by Bank;

                           (d) Dispose of the Collateral at either a public or
private sale, or both, by way of one or more contracts or transactions, for cash
or on terms, in such manner and at such places (including Borrower's premises)
as Bank determines is commercially reasonable, and apply any proceeds to the
Obligations in whatever manner or order Bank deems appropriate; and

                           (e) Any deficiency that exists after disposition of
the Collateral as provided above will be paid immediately by Borrower.

                  9.2 Right of Setoff; Deposit Accounts. Upon and after the
occurrence of any Event of Default, Bank is hereby authorized by Borrower, at
any time and from time to time, (a) to set off against, and to appropriate and
apply to the payment of, the obligations and liabilities of Borrower under the
Loan Documents (whether matured or unmatured, fixed or contingent or liquidated
or unliquidated) any and all amounts owing by Bank to Borrower (whether payable
in U.S. Dollars or any other currency, whether matured or unmatured, and, in the
case of deposits, whether general or special, time or demand and however
evidenced) and (b) pending any such action, to the extent necessary, to hold
such amounts as collateral to secure such obligations and liabilities and to
return as unpaid for insufficient funds any and all checks and other items drawn
against any deposits so held as Bank in its sole discretion may elect.

                  9.3 Power of Attorney. Effective only upon the occurrence and
during the continuance of an Event of Default, Borrower hereby irrevocably
appoints Bank (and any of Bank's designated officers, or employees) as
Borrower's true and lawful attorney to: (a) endorse Borrower's name on any
checks or other forms of payment or security that may come into Bank's
possession; (b) dispose of any Collateral; (c) enforce Borrower's rights under
the Partnership Agreement and otherwise against any Partners or other Persons,
including the right to compel Partners to make capital contributions and
otherwise to perform their obligations under the Partnership Agreement; and (d)
to file, in its sole discretion, one or more financing or continuation
statements and amendments thereto, relative to any of the Collateral without the
signature of Borrower where permitted by law; provided Bank may exercise such
power of attorney to sign the name of Borrower on any of the documents described
in Section 4.2 regardless of whether an Event of Default has occurred. The
appointment of Bank as Borrower's attorney in fact, and each and every one of
Bank's rights and powers, being coupled with an interest, is irrevocable until
all of the

                                       10
<PAGE>
Obligations have been fully repaid and performed and Bank's obligation to
provide advances hereunder is terminated.

                  9.4 Bank's Liability for Collateral. Bank shall not in any way
or manner be liable or responsible for: (a) the safekeeping of the Collateral;
(b) any loss or damage thereto occurring or arising in any manner or fashion
from any cause; (c) any diminution in the value thereof; or (d) any act or
default of any carrier, warehouseman, bailee, forwarding agency, or other person
whomsoever. All risk of loss, damage or destruction of the Collateral shall be
borne by Borrower.

                  9.5 Remedies Cumulative. Bank's rights and remedies under this
Agreement, the Loan Documents, and all other agreements shall be cumulative.
Bank shall have all other rights and remedies not inconsistent herewith as
provided under the Code, by law, or in equity. No exercise by Bank of one right
or remedy shall be deemed an election, and no waiver by Bank of any Event of
Default on Borrower's part shall be deemed a continuing waiver. No delay by Bank
shall constitute a waiver, election, or acquiescence by it. No waiver by Bank
shall be effective unless made in a written document signed on behalf of Bank
and then shall be effective only in the specific instance and for the specific
purpose for which it was given.

                  9.6 Demand; Protest. Borrower waives demand, protest, notice
of protest, dishonor, notice of any default, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees at any time held by Bank on which
Borrower may in any way be liable.

         10. NOTICES.

                  Unless otherwise provided in this Agreement, all notices or
demands by any party relating to this Agreement or any other agreement entered
into in connection herewith shall be in writing and (except for financial
statements and other informational documents which may be sent by first-class
mail, postage prepaid) shall be personally delivered or sent by a recognized
overnight delivery service, certified mail, postage prepaid, return receipt
requested, or by telefacsimile to Borrower or to Bank, as the case may be, at
its addresses set forth below:

If to any Borrower:             Safeguard Delaware, Inc.
                                435 Devon Park Drive
                                Wayne, PA 19087
                                Attn:  Christopher J. Davis
                                FAX: (610) 975-4922

                                with a copy to:

                                Pepper Hamilton LLP
                                3000 Two Logan Square
                                Philadelphia, PA 19103
                                Attn:  Lisa R. Jacobs, Esquire
                                FAX: (215) 981-4750

If to Bank:                     Comerica Bank-California
                                333 West Santa Clara Street
                                San Jose, CA 95113
                                Attn:  Corporate Banking Center
                                FAX: (408) 451-8586

with a copy to:                 Comerica Bank-California
                                2420 Sand Hill Road, Suite 102
                                Menlo Park, CA 94025
                                Attn: Judith Erwin
                                FAX: (650) 233-3075

                                       11
<PAGE>
         The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other. A notice given to a party hereunder shall be effective regardless of
whether a copy of such notice is given to any other Person.

         11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

                  This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of California, without regard to
principles of conflicts of law. Borrower and Bank hereby submit to the
jurisdiction of the state and Federal courts located in the County of Santa
Clara, State of California for purposes of this Agreement. BORROWER AND BANK
EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY
RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND
WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.

         12. GENERAL PROVISIONS.

                  12.1 Successors and Assigns. This Agreement shall bind and
inure to the benefit of the respective successors and permitted assigns of each
of the parties; provided, however, that neither this Agreement nor any rights
hereunder may be assigned by Borrower without Bank's prior written consent,
which consent may be granted or withheld in Bank's sole discretion. Bank shall
have the right without the consent of or notice to Borrower to sell, transfer,
negotiate, or grant participation in all or any part of, or any interest in,
Bank's obligations, rights and benefits hereunder.

                  12.2 Indemnification. Borrower shall defend, indemnify and
hold harmless Bank and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with the transactions contemplated by this Agreement; and
(b) all losses or Bank Expenses in any way suffered, incurred, or paid by Bank
as a result of or in any way arising out of, following, or consequential to
transactions between Bank and Borrower whether under this Agreement, or
otherwise (including without limitation reasonable attorneys fees and expenses),
except for losses caused by Bank's gross negligence or willful misconduct.

                  12.3 Time of Essence. Time is of the essence for the
performance of all obligations set forth in this Agreement.

                  12.4 Severability of Provisions. Each provision of this
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.

                  12.5 Amendments in Writing, Integration. This Agreement cannot
be amended or terminated orally. All prior agreements, understandings,
representations, warranties, and negotiations between the parties hereto with
respect to the subject matter of this Agreement, if any, are merged into this
Agreement and the Loan Documents.

                  12.6 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement.

                  12.7 Survival. All covenants, representations and warranties
made in this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding. The obligations of Borrower to indemnify Bank
with respect to the expenses, damages, losses, costs and liabilities described
in Section 12.2 shall

                                       12
<PAGE>
survive until all applicable statute of limitations periods with respect to
actions that may be brought against Bank have run.

              [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       13
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.

                                      SAFEGUARD DELAWARE, INC.

                                      By: /s/ Christopher Davis
                                         ---------------------------------------
                                      Title: Vice President

                                      COMERICA BANK-CALIFORNIA

                                      By: /s/ Elizabeth Beier
                                         ---------------------------------------
                                      Title: Assistant Vice President

                                       14

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