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i D. The Board has been requested to approve the issuance of the Bonds for the benefit of the Borrower in the amount up to $6,025,000. E. The Issuer is authorized by the Act to facilitate the financing of the Project; F. The Borrower has requested that the Bonds be issued as three bonds, consisting of a tax-exempt Series A Bond in the initial principal amount of up to $3,825,000; a taxable Series B Bond in the initial principal amount of up to $1,150,000; and a taxable Series C Bond in the initial principal amount of up to $1,050,000. G. On December 19, 1996, the Issuer adopted Resolution No. 96-159 (the "TEFRA Resolution")approving,for purposes of Section 147(f)of the Internal Revenue Code of 1986, as amended, and subject to the satisfactions of all conditions set forth in the TEFRA Resolution, the Issuance of tax-exempt bonds in an aggregate principal amount not to exceed $5,000,000 to finance the cost of the Project and the tax- exempt bonds to be issued under this Resolution will consist of the Series 1997A Bond in the initial principal amount of up to $3,825,000. H. To evidence its obligations,the Borrower proposes to execute and deliver to the Issuer a Loan Agreement, dated as of April 8, 1997 (the "Loan Agreement"), a Mortgage, Security Agreement and Assignment of Leases and Rents, dated as of April 8, 1997 (the "Mortgage"), an Assignment of Loan Documents, dated as of April 8, 1997 (the "Assignment") and certain Loan Documents (as that term is defined in the Loan Agreement) all as described in and provided in the Loan Agreement with respect to the Bonds. The obligations of the Borrower under the Loan Agreement and the Mortgage will be guaranteed by Safeguard Scientifics, Inc., a Pennsylvania corporation, under that Unconditional and Limited Guaranty Agreement, dated as of April 8, 1997 (the "Guaranty"). I. It is necessary and desirable to approve the form of the Bonds, the Loan Agreement, the Mortgage, the Guaranty and the Assignment in connection with the issuance of the Bonds and to specify the interest rates, maturity dates and prepayment provisions for the Bonds; and J. The isuance of the Bonds and the sale of the Bonds to Barnett Bank, N.A. (the"Purchaser") will,in the judgment of the Issuer,serve the intended public purpose and in all respects conform to the provisions and requirements of the Act. -2-