Document:

EXHIBIT 10.20

                             LSQ FUNDING GROUP P.C.
                             SUBORDINATION AGREEMENT

THIS AGREEMENT is entered into as of this 11th day of April 2002 by and between
LSQ FUNDING GROUP L.C., a Florida corporation, located at 1403 West Colonial
Drive, Orlando, FL 32804 (hereinafter referred to as "LSQ") and GARDEN STATE
NUTRITIONALS, a division of VITAQUEST INTERNATIONAL, INC. a Delaware corporation
located at 8 Henderson Drive, West Caldwell, New Jersey (hereinafter referred to
as "GSN"). (LSQ and GSN are sometimes hereinafter collectively called
"Creditors" and individually, a "Creditor").

ARTICLE 1. BACKGROUND
           ----------

         1.01. Health & Nutrition Systems International, Inc, a Florida
corporation located at 3750 Investment Lane, Suite 5, West Palm Beach, Florida
33407 (hereinafter referred to as the "Client") entered into a Factoring and
Security Agreement with LSQ effective as of March 15, 2002, as same may be
modified, extended, or amended from time to time (hereinafter referred to as the
"Credit Agreement") pursuant to which the Client sells certain of its accounts
receivable to LSQ which accounts receivable arise out of the ordinary course of
business as more fully set forth in the Credit Agreement.

         To secure its obligations to LSQ in connection with the Credit
Agreement, the Client has provided LSQ with a first priority security interest
in all of its accounts receivable, contract rights, documents, instruments,
chattel paper, inventory, equipment, general intangibles, books, records,
returns, repossessions, deposits and credit balances in relation thereto, and
all increases, substitutions and accessions thereto, wherever situated, now
owned by the Client or hereafter acquired together with the proceeds of such
collateral (hereinafter referred to as the "Collateral").

         1.02 GSN, as the manufacturer of the Client's products, has extended
credit to the Client (the "GSN Loans"). In connection therewith, the Client has
simultaneously with the execution hereof, granted to GSN a second priority
security interest in the Collateral.

         1.03 The Client and GSN have agreed with LSQ that in order for LSQ to
provide the financing of the Client as referenced in the Credit Agreement, LSQ
must have a first priority lien in the Collateral.

         1.04 The Client and LSQ have agreed that GSN shall have a second
priority security interest in the Collateral which security interest shall only
be enforceable upon the occurrence of any of the following: (i) the Client has
become insolvent or has failed to pay its debts generally as such debts become
due (including its obligations to pay under the Credit Agreement) or has
admitted in writing its inability to pay any of its indebtedness; (ii) has
consented to or has petitioned or applied to any authority for the appointment
of a receiver, liquidator, trustee or similar official for itself or for all or
any substantial part of its properties or assets or that any such trustee,
receiver, liquidator or similar official has been appointed; or (iii) that
insolvency, reorganization, arrangement or liquidation proceedings (or similar
proceedings) have been instituted by or against the Client.
<PAGE>

         1.05 Therefore, in consideration of the foregoing and the covenants set
forth below, the Creditors have signed this Agreement to establish the relative
priorities of their respective security interests in the Collateral and to
memorialize certain other agreements with respect to the enforcement of their
respective rights and remedies against the Client.

ARTICLE 2. PRIORITIES
           ----------

         LSQ and GSN agree that the priorities of their respective security
interests in the Collateral shall be as follows:

         2.01 LSQ's Senior Priority. GSN agrees that LSQ's security interest in
the Collateral shall constitute a first and paramount security interest therein.
GSN's security interest in the Collateral shall be inferior and subordinate to
LSQ's security interest therein. Notwithstanding anything to the contrary set
forth in the Credit Agreement, LSQ hereby consents to the granting by Client of
a security interest in the Collateral to GSN.

ARTICLE 3. SUBORDINATION AND STAND-BY
           --------------------------

         3.01 GSN agrees that until LSQ has been paid in full for any and all
Obligations (as defined in the Credit Agreement) due from the Client pursuant to
the Credit Agreement, GSN will not, without LSQ's prior written consent from a
duly authorized officer of LSQ, assert or seek to enforce by legal proceedings
or otherwise, any security interest or other rights that it may have with
respect to the Collateral, and GSN will not accept or receive delivery of any of
the Collateral or payment of any proceeds thereof. In the event that GSN should
directly or indirectly receive any proceeds of the Collateral, GSN shall
immediately notify LSQ of same and promptly remit such proceeds to LSQ. In the
event that GSN shall declare the Client to be in default of any term or
condition pursuant to the GSN Loans, LSQ may, in its sole discretion, continue
its financing arrangement with the Client pursuant to the Credit Agreement and
GSN will not take any action to foreclose or realize upon any of the Collateral
absent the express written consent of a duly authorized officer of LSQ until
such time as the Client's obligations due LSQ under the Credit Agreement have
been paid in full.

ARTICLE 4. AMENDMENTS TO DOCUMENTS
           -----------------------

         4.01 GSN agrees and acknowledges that LSQ, in accordance with the terms
of the Credit Agreement, may at any time or times, in its discretion, (i) renew
or extend the time of payment of any obligations or indebtedness owing to it by
the Client; (ii) waive or release any collateral or guaranties which may be held
therefor, or (iii) modify or amend the documents evidencing its financing
arrangement with the Client (its "Documents") in any manner, in each case
without further consent from the other Creditor or any other person, and without
impairing or affecting this Agreement or any of its rights hereunder.

                                       2
<PAGE>

ARTICLE 5. REPRESENTATIONS CONCERNING THE CLIENT; LIABILITY OF CREDITORS.
           --------------------------------------------------------------

         5.01 No Creditor, nor any of its respective directors, officers, agents
or employees, shall be responsible to the other Creditor or to any other person
for (i) Client's solvency, financial condition or ability to repay its
obligations or indebtedness to any Creditor, (ii) any oral or written statements
of the Client or (iii) the validity, sufficiency or enforceability of such
indebtedness, any of its Documents or the security interest and liens granted by
the Client. Each Creditor has entered into its financing arrangements with the
Client based upon its own independent investigation, and makes no warranty or
representation to the other Creditor, nor does it rely on any warranty or
representation of the other Creditor with respect to the matters referred to in
this Article.

ARTICLE 6. MISCELLANEOUS
           -------------

         6.01 The validity of this Agreement, its construction, interpretation
and enforcement, and the rights of the parties hereunder shall be determined
under, governed by, and construed in accordance with the laws of the State of
Florida.

         6.02 GSN agrees with LSQ that LSQ shall be provided with simultaneous
written notice of any notices pertaining to a default, demand for payment, or
termination delivered to any party in connection with the GSN Loans as well as
any contemplated amendments, modifications or revisions to the GSN Loans.

         6.03 Any notice, declaration, demand, request or other communication
which by any provision of this Agreement is required or permitted to be given to
or served on any party hereto shall be given in writing and shall be deemed to
have been sufficiently given or served for all purposes when (i) delivered
personally; (ii) sent by overnight mail; or (iii) sent by registered or
certified mail, return receipt requested, postage prepaid, to the address set
forth or provided for such party below, or at such other address as one party
may indicate from time to time in writing to the other:

         If to LSQ:          LSQ Funding Group L. C.,
                             1403 West Colonial Drive
                             Orlando, FL   32804
                             Attn: Paul Ellenbogen, Executive Vice President

         If to GSN:          Garden State Nutritionals
                             8 Henderson Drive
                             West Caldwell, New Jersey ______
                             Attn: Scott Yagoda, General Counsel

                                       3
<PAGE>

Notices sent in accordance with the foregoing shall be deemed effective when so
delivered personally, the next business day if sent by overnight mail; or if
mailed, five (5) days after being sent by United States mail.

         6.04 GSN and LSQ represent and warrant that they have not assigned
their respective security interests in the Collateral. Any assignment entered
into after the date of this Agreement shall be made expressly subject to the
terms of this Agreement, and the party so assigning shall give written notice to
the other party to this Agreement at least five (5) business days prior to such
an assignment.

         6.05 This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings between the
parties relating to the subject matter hereof. This Agreement may not be changed
orally, but only by an agreement in writing and signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought.

         6.06 The headings of the various Articles of this Agreement have been
inserted for convenience only and shall not be deemed to be part of this
Agreement.

         6.07 This Agreement shall be binding upon and inure to the benefit of
each of the Creditors and its respective successors, permitted assigns and
affiliates.

         6.08 If any term, restriction or covenant of this Agreement is deemed
illegal or unenforceable, all other terms, restrictions and covenants, and the
application thereof to all persons and circumstances subject hereto, shall
remain unaffected to the extent permitted by law; and if any application of any
term, restriction or covenant to any person or circumstance is deemed illegal,
the application of such term, restriction or covenant to the persons and
circumstances shall remain unaffected to the extent permitted by law.

         6.09 The knowledge by either Creditor of any breach or other
non-observance by the other Creditor of the terms of this Agreement shall not
constitute a waive thereof or of any obligations to be performed by the other
Creditor hereunder.

         6.10 Except as provided herein, the subordinations, agreements and
priorities set forth hereinabove shall remain in full force and effect
regardless of whether any party hereto in the future seeks to rescind, amend or
terminate or reform by litigation or otherwise, its respective agreements with
the Client until such time as any and all obligations due GSN and LSQ have been
paid in full or until GSN and LSQ or their respective heirs or assigns shall
have agreed to a written termination hereof.

         6.11 The subordinations and priorities specified herein are applicable,
irrespective of the time or order of attachment or perfection of the security
interests referred to herein, the time or order of filing of financing
statements, or the acquisition of or time of giving or failing to give notice of
the acquisition or expected acquisition of purchase money or other security
interests.

                                       4
<PAGE>

         6.12 This Agreement may be executed in one or more counterparts, each
of which shall constitute an original, but which when taken together shall be
deemed one and the same instrument.

         6.13 This Agreement is solely for the benefit of the parties hereto and
nothing contained herein shall confer upon anyone other than the parties hereto
and their permitted successors and assigns, any right to insist upon or to
enforce the performance or observance of any of the obligations contained
herein; provided, however, that notwithstanding the foregoing, it is
acknowledged and agreed that the Client may rely on the consent set forth in
Section 2.01 hereof.

         IN WITNESS WHEREOF, the Creditors have signed this Agreement as of the
date first written above.

Witnesses:                            "LSQ"

                                      LSQ FUNDING GROUP L.C.
                                      a Florida corporation

______________________________        By: /s/ A. Maxwell Eliscu
                                         -----------------------------------
                                              A. Maxwell Eliscu
                                              President
------------------------------

                                      "GSN"

                                      Garden State Nutritionals,
                                      a _______________ corporation

                                      /s/ Keith Frankel
------------------------------        ------------------------------------------
                                          Keith Frankel

______________________________        Name: Keith Frankel
                                           ------------------------------------
                                      Title: President and CEO
                                           ------------------------------------

The Client hereby consents to all of the terms and conditions of the foregoing
Subordination Agreement, and agrees to be bound in all respects thereby.
<TABLE>
<CAPTION>
<S>                                   <C>

                                      Health & Nutrition Systems International, Inc.,
                                      a Florida corporation

------------------------------        ------------------------------
                                      Name: Christopher Tisi

______________________________        Title: President and Chief Executive Officer

</TABLE>
                                       5Exhibit 10.9 to Form 10-KSB for the year ended December 31, 2001

                                PLEDGE AGREEMENT

         PLEDGE AGREEMENT ("Agreement") dated as of ________________, 2001, made
by FIRST  CHESAPEAKE  FINANCIAL  CORPORATION,  a Virginia  corporation,  with an
address  at  12  East  Oregon  Avenue,  Philadelphia,  Pennsylvania  19148  (the
"Pledgor") to CRUSADER BANK, a federally  chartered savings bank with offices at
1230 Walnut Street, Philadelphia, Pennsylvania 19107 (the "Bank").

                                   WITNESSETH:
                                   ----------

         WHEREAS,  on February 5, 1999 the Bank and Pledgor and  Collateral  One
Mortgage  Corporation,  a Virginia corporation  ("Collateral One"), (Pledgor and
Collateral  One  being  hereinafter   sometimes   collectively  referred  to  as
"Borrower"), executed a Business Loan Agreement (the "Business Loan Agreement"),
wherein the Bank agreed to lend the Borrower the sum of One Million Five Hundred
Thousand  Dollars  ($1,500,000.00)  (the "Loan") for the acquisition of Mortgage
One Concepts, Inc.; and

         WHEREAS on February 5, 1999 the Borrower executed and made to the order
of the Bank a promissory note in the amount of One Million Five Hundred Thousand
Dollars ($1,500,000.00) (the "Note"); and

         WHEREAS,  on  November  10,  1999,  the Bank and  Pledgor  executed  an
Amendment of Mortgage and Other Loan  Documents (the  "Amendment"),  wherein the
Borrower requested the Bank to amend the Note to increase the loan amount to Two
Million  One  Hundred  Eight  Thousand  and  Five  Hundred   Sixty-Six   Dollars
($2,108,566.00) (the "Increased Loan Amount") and to extend the maturity date to
November 4, 2000 (the "Extended  Maturity  Date"),  and the Bank agreed to amend
the Note on the terms, covenants and conditions set forth therein; and

         WHEREAS,  on even  date  herewith  the Bank  and  Borrower  executed  a
Forbearance  Agreement  (the  "Forbearance  Agreement")  wherein  Bank agreed to
forbear from  exercising the rights and remedies  available to it under the Note
on the terms, covenants and conditions set forth therein; and

         WHEREAS, the Pledgor is the legal and beneficial owner of the shares of
capital  stock  described  in Exhibit A hereto and issued by the  issuers  named
therein (the "Pledge Shares"); and

         WHEREAS,  it is a condition  precedent to execution of the  Forbearance
Agreement by the Bank that Pledgor  shall have made the pledge  contemplated  by
this Agreement;

         NOW, THEREFORE, in consideration of the foregoing premises and in order
to induce the Bank to execute the  Forbearance  Agreement,  and  intending to be
legally bound hereby, the Pledgor hereby covenants and agrees as follows:

         SECTION 1. Pledge.  The Pledgor  hereby pledges to the Bank, and grants
to the Bank a first priority  security  interest in, the following (the "Pledged
Collateral"):

         (a) all of the Pledged Shares;

         (b) all additional  shares of stock of any issuer of the Pledged Shares
from time to time acquired by the Pledgor in any manner;

         (c) the certificates representing the shares referred to in clauses (a)
and (b) above;

         (d) the assignment  separate from  certificate  representing the shares
referred to in clauses (a) and (b) above; and

         (e) subject to Section 7, all dividends,  cash,  instruments  and other
property  or  proceeds,  from time to time  received,  receivable  or  otherwise
distributed or  distributable in respect of or in exchange for any or all of the
shares referred to in clauses (a), (b), (c) and (d) above.

         SECTION 2. Security for Obligations.  This Agreement  secures,  and the
Pledged  Collateral is security for, the  indefeasible  payment on demand of the
Note as amended,  and all  obligations of the Pledgor now or hereafter  existing
under this Agreement and the  Forbearance  Agreement (all such  obligations  and
other  obligations  of the  Pledgor  being  referred  to herein as the  "Secured
Obligations").

         SECTION  3.  Transfer  Of Pledged  Collateral.  The Bank shall have the
right,  at any time, in its  discretion  and without  notice to the Pledgor,  to
transfer to or to register in its name or any of its  nominees any or all of the
Pledged  Collateral,  subject only to the revocable  rights specified in Section
6(a) of this Agreement and to applicable  law. In addition,  the Bank shall have
the right at any time to exchange  certificates  or instruments  representing or
evidencing  Pledged  Collateral  for  certificates  or instruments of smaller or
larger denominations.

         SECTION 4.  Representations and Warranties.  The Pledgor represents and
warrants as follows:

         (a) The  Pledgor is the legal and  beneficial  owner of all the Pledged
Collateral free and clear of any liens.

         (b) The Pledged Collateral represents all of the issued and outstanding
shares of Collateral One.

         (c) The Pledgor has full power,  authority,  and legal right to pledge,
assign,  transfer,  deliver, deposit and set over the Pledged Collateral pledged
to the Bank as provided herein.

         (d) The Pledgor has not, prior to the date of this Agreement, taken any
action that would reduce the value of the Pledged Collateral.

         (e) The pledge of the Pledged Shares pursuant to this Agreement creates
a  valid  and  perfected  first  priority   security  interest  in  the  Pledged
Collateral, securing the payment of the Secured Obligations.

         (f) Pledgor  shall not accept any  dividends or  distributions  paid or
payable by Collateral One to Pledgor  except as provided for in the  Forbearance
Agreement.

         The  representations  and  warranties set forth in this Section 4 shall
survive the execution and delivery of this Agreement.

         SECTION 5. Further Assurances: Supplements.

         (a) The Pledgor  agrees that at any time and from time to time,  at the
expense of the  Pledgor,  the  Pledgor  will  promptly  execute  and deliver all
further  instruments  and documents,  and take all further  action,  that may be
necessary or  desirable,  or that the Bank may request,  in order to perfect and
protect any security  interest  granted or purported to be granted  hereby or to
enable the Bank to exercise and enforce its rights and remedies  hereunder  with
respect to any Pledged Collateral.

         (b) The Pledgor will defend the title to the Pledged Collateral and the
liens of the Bank thereon  against the claim of any Person and will maintain and
preserve such liens so long as any Secured  Obligations or any commitment of the
Bank under the Business Loan Agreement are outstanding.

         (c) The Pledgor  shall not cause any  payment to be made by  Collateral
One except as provided in the Forbearance Agreement.

         SECTION 6.  Voting Rights: Dividends: Etc.

         (a)  As  long  as no  Event  of  Default  shall  have  occurred  and be
continuing:  The Pledgor  shall be  entitled to exercise  any and all voting and
other consensual rights pertaining to the Pledged Collateral or any part thereof
for any purpose not inconsistent with the terms of the Forbearance  Agreement or
the Business  Loan  Agreement;  provided,  however,  that the Pledgor  shall not
exercise or refrain from  exercising  any such right if such action would have a
material  adverse  effect on the  value of the  Pledged  Collateral  or any part
thereof.

         (b) Upon the  occurrence  and  during the  continuation  of an Event of
Default:all  rights of the pledgor to exercise  the voting and other  consensual
rights which it would otherwise be entitled to exercise pursuant to section 6(a)
above shall cease, and all such rights shall thereupon become vested in the bank
which  shall  thereupon  have the sole right to  exercise  such voting and other
consensual rights.

         (c) In order to permit the Bank to exercise the voting and other rights
which it may be  entitled to exercise  pursuant  to Section  6(b) above,  and to
receive  all  dividends  and  distributions  which it may be entitled to receive
under Section 7 below,  the Pledgor shall, if necessary,  upon written notice of
the Bank, from time to time execute and deliver to the Bank appropriate proxies,
dividend  payment  orders  and  other  instruments  as the Bank  may  reasonably
require.

         SECTION 7.  Dividends

         (a) All dividends  paid in respect of the pledged  collateral  shall be
paid to the Bank until the Note is paid in full, including the following:

                  (i)  dividends  paid or payable  other than in cash in respect
of,  and  instruments  and other  property  received,  receivable  or  otherwise
distributed in respect of, or in exchange for, any Pledged Collateral;

                  (ii) dividends and other distributions paid or payable in cash
in respect  of any  Pledged  Collateral  in  connection  with a partial or total
liquidation  or  dissolution  prohibited  by  any  other  Loan  Document  or  in
connection with a reduction of capital, capital surplus or paid-in-surplus; and

                  (iii)  cash  paid,   payable  or  otherwise   distributed   in
redemption of, or in exchange for, any Pledged Collateral, all of which shall be
held as Pledged Collateral and shall, if received by the Pledgor, be received in
trust for the  benefit of the Bank,  be  segregated  from the other  property or
funds  of the  Pledgor,  and be  forthwith  delivered  to the  Bank  as  Pledged
Collateral in the same form as so received (with any necessary endorsement).

         SECTION 8. Transfers and Other Liens:  Additional  Shares.  The Pledgor
agrees that it will not (i) sell, assign or transfer or otherwise dispose of, or
grant any option or warrant  with respect to, any of the Pledged  Collateral  or
(ii) create or permit to exist any lien,  security interest,  or other charge or
encumbrance  upon or with respect to any of the Pledged  Collateral,  except for
the lien in favor of the Bank under this Agreement.

         SECTION 9. Bank Appointed Attorney-in-Fact. The Pledgor hereby appoints
the Bank the  Pledgor's  attorney-in-fact,  such  power  being  irrevocable  and
coupled  with an  interest,  with full  authority  in the place and stead of the
Pledgor  and in the name of the  Pledgor or  otherwise  from time to time in the
Bank's  discretion  to take any action and to execute any  instrument  which the
Bank  may deem  necessary  or  advisable  to  accomplish  the  purposes  of this
Agreement,  including,  without limitation,  to receive, endorse and collect all
instruments  made payable to the Pledgor  representing  any  dividend,  interest
payment or other  distribution in respect of the Pledged  Collateral or any part
thereof and to give full  discharge for the same.  The Bank agrees that,  except
upon the occurrence and during the continuation of an Event of Default,  it will
forbear from  exercising the power of attorney or any rights granted to the Bank
pursuant to this Section 9.

         SECTION  10.  Bank May  Perform.  If the  Pledgor  fails to perform any
agreement  contained herein,  the Bank may itself perform,  or cause performance
of,  such  agreement,  and the  expenses  of the  Bank  incurred  in  connection
therewith shall be payable by the Pledgor under Section 12 of this Agreement.

         SECTION 11. Events of Default.  Each of the following shall  constitute
an event of default ("Event of Default") hereunder:

         (a) The  occurrence  of an Event of  Default  under the  Business  Loan
Agreement,  the Amendment,  the Note, or the Forbearance  Agreement or any other
documents executed by Pledgor or Collateral One in connection therewith; or

         (b) Failure by Pledgor to observe or perform any of the  provisions  of
this Agreement; or

         (c) Any  representation or warranty of Pledgor made herein proves to be
false or misleading in any material respect.

         SECTION 12.  Remedies Upon Default.  If any Event of Default shall have
occurred:

         (a) The Bank may  exercise  in respect of the  Pledged  Collateral,  in
addition to other rights and remedies provided for herein or otherwise available
to it, all the  rights  and  remedies  of a secured  party in default  under the
Uniform   Commercial  Code  (the  "Code")  in  effect  in  the  Commonwealth  of
Pennsylvania  at that  time,  and the Bank may also,  without  notice  except as
specified below,  transfer or sell the Pledged Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange,  broker's  board
or at any of the Bank's offices or elsewhere,  for cash, on credit or for future
delivery,  and  upon  such  other  terms  as  the  Bank  may  deem  commercially
reasonable.

         (b) All cash  proceeds  received by the Bank in respect of any sale of,
collection  from,  or other  realization  upon  all or any  part of the  Pledged
Collateral shall be applied by the Bank:

                  First,  to the payment of the costs and expenses of such sale,
including  reasonable  compensation to the Bank and its agents and counsel,  and
all  expenses,  liabilities  and  advances  made  or  incurred  by the  Bank  in
connection therewith;

                  Second,  to the Bank on account of the Secured  Obligations in
such order as the Bank may elect; and

                  Third,  after  indefeasible  payment  in full  of all  Secured
Obligations,  to the payment to the Pledgor, or its successors or assigns, or to
whomsoever  may be  lawfully  entitled  to  receive  the  same or as a court  of
competent  jurisdiction  may direct,  of any surplus  then  remaining  from such
proceeds.

         SECTION  13.  Special  Covenants.  During  the  term  of  this  Pledge,
Collateral  One shall not take any action to (a)  terminate  the  employment  of
William  Everslage  ("Everslage") or otherwise  release Everslage from any terms
and  conditions of the employment  agreement  dated February 9, 1999 without the
prior  consultation  of the  Bank;  (b)  enter  into  any  other  employment  or
management  agreements with any other party without the prior written consent of
the Bank; (c) transfer  substantially all of the assets of Collateral One to any
other  party;  (d)  enter  into  any  agreements  with  Pledgor  or  any  of its
shareholders  without the prior  written  consent of the Bank;  or (e) borrow or
transfer  any  monies  to  or  from  Pledgor,  its  affiliates,  principals,  or
subsidiaries,  unless  otherwise  permitted  under  the  terms  of that  certain
Forbearance Agreement between the Bank, Pledgor and Collateral One.

         SECTION  14.  Expenses.  The  Pledgor  will upon demand pay any and all
expenses,  which may be incurred in connection  with (a) the  administration  of
this Agreement,  (b) the custody or preservation of, or the sale of,  collection
from, or other realization upon any of the Pledged Collateral;  (c) the exercise
or enforcement of any of the rights of the Bank hereunder; or (d) the failure by
the Pledgor to perform or observe any of the provisions hereof.

         SECTION  15.  Security  Interest  Absolute.  All rights of the Bank and
security interests hereunder, and all obligations of the Pledgor hereunder shall
be absolute and unconditional irrespective of:

         (a)  any  lack of  validity  or  enforceability  of the  Business  Loan
Agreement,  the Note or any  other  Loan  Document  or any  other  agreement  or
instrument relating thereto;

         (b) any change in the time,  manner or place of  payment  of, or in any
other term of, all or any of the Secured Obligations,  or any other amendment or
waiver of or any consent to any departure from the Business Loan Agreement,  the
Note or any other Loan Document;

         (c) any exchange,  release or nonperfection of any other collateral, or
any release or amendment or waiver of or consent to departure  from any guaranty
for all or any of the Secured Obligations; or

         (d) any other circumstance  which might otherwise  constitute a defense
available to, or a discharge of, the Pledgor or a third party pledgor.

         SECTION 16.  Indemnification.  The Pledgor agrees to indemnify and hold
the Bank harmless from and against any taxes,  liabilities,  claims and damages,
including  reasonable  attorneys'  fees and  disbursements,  and other  expenses
incurred or arising by reason of the taking or the failure to take action by the
Bank, in good faith, in respect of any transaction effected under this Agreement
or  in  connection  with  the  lien  provided  for  herein,  including,  without
limitation, any taxes payable in connection with the delivery or registration of
any of the Pledged Collateral as provided herein. The obligations of the Pledgor
under this Section 16 shall survive the termination of this Agreement.

         SECTION 17. Waiver. No delay on the Bank's part in exercising any power
of sale, Lien,  option or other right  hereunder,  and no notice or demand which
may be given to or made upon the  Pledgor by the Bank with  respect to any power
of sale,  Lien,  option or other  right  hereunder,  shall  constitute  a waiver
thereof,  or limit or impair the Bank's  right to take any action or to exercise
any power of sale, lien, option, or any other right hereunder, without notice or
demand, or prejudice the Bank's rights hereunder or the rights of the Bank under
the Business Loan  Agreement or any of the Loan Documents as against the Pledgor
in any respect.

         SECTION 18. Amendments, Etc. No amendment or waiver of any provision of
this Agreement,  nor consent to any departure by the Pledgor herefrom,  shall in
any event be  effective  unless the same  shall be in writing  and signed by the
Bank,  and then such waiver or consent  shall be effective  only in the specific
instance and for the specific purpose for which given.

         SECTION 19. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing and mailed,  telecopied or delivered,
to the Pledgor or to the Bank at the address  provided for in the Business  Loan
Agreement,  or as to any Person at such other  address as shall be designated by
such Person in a written  notice to each other  Person  complying as to delivery
with the terms of this Section. All such notices and other communications shall,
when mailed, be effective when deposited in the mails, addressed as aforesaid.

         SECTION  20.  Continuing  Security  Interest;  Transfer  of Note.  This
Agreement  shall create a continuing  first  priority  security  interest in the
Pledged  Collateral,  and  shall  (a)  remain in full  force  and  effect  until
indefeasible  payment in full of the Secured  Obligations and the termination of
the commitment of the Bank under the Business Loan Agreement; (b) continue to be
effective  or be  reinstated,  as the case may be,  if at any time  payment  and
performance of the Secured  Obligations,  or any part thereof,  is,  pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by the obligee of the Secured  Obligations,  all as though such payment
or  performance  had not  been  made;  (c) be  binding  upon  the  Pledgor,  its
successors  and  assigns;  and (d)  inure  to the  benefit  of the  Bank and its
successors,  transferees and assigns.  The Bank may assign or otherwise transfer
any Note held by it to any other  person or  entity,  and such  other  person or
entity shall  thereupon  become vested with all the benefits in respect  thereof
granted to the Bank herein or  otherwise,  all as provided in the Business  Loan
Agreement.  Upon the indefeasible payment in full of the Secured Obligations and
the termination of the commitment of the Bank under the Business Loan Agreement,
the  Pledgor  shall be  entitled  to the  return,  upon its  request  and at its
expense,  of such of the  Pledged  Collateral  as shall  not have  been  sold or
otherwise applied pursuant to the terms hereof.

         SECTION 21. Severability. If for any reason any provision or provisions
hereof are  determined to be invalid and contrary to any existing or future law,
such  invalidity  shall not impair the operation of or affect those  portions of
this Agreement which are valid.

         SECTION 22.  Section  Titles.  The  Section  titles  contained  in this
Agreement  are and shall be without  substantive  meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.

         SECTION 23.  Waiver of Jury Trial.  The parties  hereto hereby agree to
waive any right they may have to a jury  trial in  connection  with any  action,
suit or proceeding arising out of or related in any way to this Agreement.

         SECTION 24.  Capitalized  Terms.  All  capitalized  terms not otherwise
defined in this Agreement shall have the meanings  ascribed to such terms in the
Forbearance Agreement.

         SECTION 25. Governing Law; Terms.  This Agreement shall be governed by,
and  construed  and  enforced  accordance  with,  laws  of the  Commonwealth  of
Pennsylvania  (without  giving  effect  to  the  conflicts  of  laws  principles
thereof).  Unless  otherwise  defined herein or in the Business Loan  Agreement.
Terms  defined  in  Articles  8 and 9 of  the  Uniform  Commercial  Code  in the
Commonwealth of Pennsylvania are used herein as therein.

         IN WITNESS  WHEREOF,  the Pledgor has caused this  Agreement to be duly
executed and delivered by its officer  thereunto duly  authorized as of the date
first above written.

Attest:                                  First Chesapeake Mortgage Corporation,
                                         A Virginia corporation

_____________________________            By: ________________________________
                                         Name: ______________________________
                                         Title: _____________________________

                                     JOINDER

         Intending  to be legally  bound,  Collateral  One hereby  joins in this
Agreement, and agrees to be bound by its terms and conditions and further agrees
that it will not issue any capital stock  without the prior  written  consent of
the Bank.

Attest:                                  COLLATERAL ONE MORTGAGE CORPORATION, a
                                         Virginia corporation

__________________________               By:___________________________________,
                                         President

<PAGE>

                   FORBEARANCE AGREEMENT AND PLEDGE AGREEMENT

                  This Agreement (hereinafter referred to as the "Agreement") is
made this 2nd day of February,  2001,  by and among  Crusader  Bank, a federally
chartered  savings  bank,  having  an  office  address  at 1230  Walnut  Street,
Philadelphia,  Pennsylvania  19107  (hereinafter  referred to as "Bank"),  First
Chesapeake  Financial  Corporation,  a  Virginia  corporation,  having a mailing
address at 12 East Oregon Avenue, Philadelphia,  Pennsylvania 19148 (hereinafter
referred to as "First  Chesapeake"),  Collateral  One  Mortgage  Corporation,  a
Virginia  corporation,  having  a  mailing  address  at 12 East  Oregon  Avenue,
Philadelphia,  Pennsylvania 19148 (hereinafter  referred to as "Collateral One")
(First  Chesapeake  and  Collateral  One are sometimes  hereinafter  referred to
collectively as the "Borrower") and Mark Mendelson,  an individual,  residing at
______________________________________________,  Villanova,  Pennsylvania  19087
(hereinafter referred to as "Mendelson").

                                   BACKGROUND

                  WHEREAS,  on  February  5,  1999  the  Bank  and the  Borrower
executed a Business Loan Agreement (the "Business Loan Agreement"),  wherein the
Bank agreed to lend the Borrower  the sum of One Million  Five Hundred  Thousand
Dollars  ($1,500,000.00)  (the  "Loan")  for the  acquisition  of  Mortgage  One
Concepts, Inc.; and

                  WHEREAS,  on  February  5,  1999  the  Borrower  executed  and
delivered  to the Bank a  promissory  note in the  amount  of One  Million  Five
Hundred Thousand Dollars ($1,500,000.00) (the "Note"); and

                  WHEREAS,  Mark  Mendelson,  President of First  Chesapeake and
President of Collateral One, by a certain Mortgage dated February 5, 1999 in the
amount of One Million Two Hundred Thousand Dollars  ($1,200,000.00) and recorded
in  the  Office  of  the  Recorder  of  Deeds  in  and  for  Montgomery  County,
Pennsylvania,  in Book ____ Page ____ et seq.,  granted  and  conveyed  unto the
Bank,  its  successors  and  assigns,  a lien on the  property  located  at ____
_______________,  Villanova,  Pennsylvania,  as more  specifically  described in
Exhibit A attached hereto and made a part hereof (the "Villanova Property"),  to
secure  payment of a  guaranty  of the Note by  Mendelson,  which  mortgage  was
amended by agreement  dated  November 10, 1999 and recorded in the Office of the
Recorder  of Deeds for  Montgomery  County on April 11,  2000 in Deed Book ____,
page ____ et seq., increasing the lien of the Mortgage securing the Guaranty, as
amended,  to One Million Eight Hundred  Thousand  Dollars  ($1,800,000.00)  (the
"Villanova Mortgage"); and

                  WHEREAS, on February 5, 1999, Mendelson executed and delivered
to the Bank the Guaranty (the "Mendelson Guaranty"), wherein Mendelson agreed to
guarantee  and become  surety  for  payment  of the Note up to One  Million  Two
Hundred Thousand Dollars ($1,200,000.00); and

                  WHEREAS,  on or  about  November  10,  1999 the  liability  of
Mendelson  under the  Mendelson  Guaranty  was  increased  to One Million  Eight
Hundred Thousand Dollars ($1,800,000.00) by an amendment to Guaranty; and

                  WHEREAS,  on February 5, 1999,  Richard Chakejian executed and
delivered to the Bank a Commercial Guaranty, wherein Richard Chakejian agreed to
guarantee  and become  surety  for  payment  of the Note up to One  Million  Two
Hundred Thousand Dollars ($1,200,000.00); and

                  WHEREAS,  on February 5, 1999, Mark Glatz  ("Glatz")  executed
and delivered to the Bank a Commercial Guaranty (the "Glatz Guaranty"),  wherein
Glatz  agreed to guarantee  and become  surety for payment of the Note up to One
Million Two Hundred Thousand Dollars ($1,200,000.00); and

                  WHEREAS,  on February 5, 1999,  Lester W. Salzman  ("Salzman")
executed  and  delivered  to  the  Bank  a  Commercial  Guaranty  (the  "Salzman
Guaranty"), wherein Salzman agreed to guarantee and become surety for payment of
the Note up to One Million Two Hundred Thousand Dollars ($1,200,000.00); and

                  WHEREAS,  on  February  5, 1999,  John  Papandon  ("Papandon")
executed  and  delivered  to  the  Bank a  Commercial  Guaranty  (the  "Papandon
Guaranty"),  wherein  Papandon agreed to guarantee and become surety for payment
of the Note up to One Million Two Hundred Thousand Dollars ($1,200,000.00); and

                  WHEREAS,  on February  5, 1999,  Thomas  Leonard and  Kathleen
Leonard,  his wife (jointly referred to as "Leonard")  executed and delivered to
the Bank a Commercial Guaranty (the "Leonard Guaranty"),  wherein Leonard agreed
to  guarantee  and  become  surety for  payment of the Note up to Three  Hundred
Thousand Dollars ($300,000.00); and

                  WHEREAS,  on November 10, 1999, the Bank and First  Chesapeake
executed an Amendment of Mortgage and Other Loan  Documents  (the  "Amendment"),
wherein the Borrower  requested  the Bank to amend the Note to increase the loan
amount to Two Million One Hundred  Eight  Thousand  and Five  Hundred  Sixty-Six
Dollars ($2,108,566.00) (the "Increased Loan Amount") and to extend the maturity
date to November 4, 2000 (the "Extended  Maturity  Date"),  modify the Villanova
Mortgage to increase the amount secured by the Villanova Property and modify the
Mendelson  Guaranty to increase  the amount of the  Mendelson  Guaranty  and the
Villanova Mortgage to One Million Eight Hundred Thousand Dollars ($1,800,000.00)
and the Bank agreed to amend the Note, the Villanova  Mortgage and the Mendelson
Guaranty on the terms, covenants and conditions set forth therein; and

                  WHEREAS,  by document  dated  November 9, 1999 (which date the
Bank,  Mendelson and Delaware  Avenue  Development  Corporation,  a Pennsylvania
corporation ("DADC") agree was an error and was intended to be, and is actually,
November 10, 1999) the Bank,  Mendelson  and DADC entered into an  Assignment of
Partnership Income and Security Agreement (the "Assignment  Agreement")  wherein
DADC  agreed to assign its income  interest  in Liberty  Landing  Associates,  a
Pennsylvania  general  partnership  ("Liberty  Landing") formed pursuant to that
certain  Joint  Venture  Agreement  dated June 26, 1987, by and between DADC and
Delaware-Washington       Corporation,      a      Pennsylvania      corporation
("Delaware-Washington")  (the "Joint Venture Agreement") to secure the Increased
Loan Amount guaranteed by Mendelson,  the President of DADC, under the Guaranty,
as amended; and

                  WHEREAS, Mendelson is the sole shareholder of DADC; and

                  WHEREAS, the Assignment Agreement contemplated the consent and
execution of  Delaware-Washington  and  Delaware-Washington  did not execute the
consent; and

                  WHEREAS,  the Note,  as amended,  matured on November 4, 2000;
and

                  WHEREAS,   the  Borrower   failed  to  pay  to  the  Bank  all
outstanding  principal  and accrued  interest due and payable under the Note, as
amended, by the Extended Maturity Date; and

                  WHEREAS, the Borrower has requested that the Bank forbear from
exercising its rights and remedies, at law or in equity, under the Business Loan
Agreement,  the Note, the Villanova  Mortgage and the Amendment and the Bank has
agreed to forbear from exercising its rights and remedies,  at law or in equity,
under the Business Loan  Agreement,  the Note,  the  Villanova  Mortgage and the
Amendment on the terms, covenants and conditions set forth herein.

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

                  1. Incorporation of Background.  The recitals contained in the
Background are  incorporated  into and made a substantive part of this Agreement
and the Borrower  acknowledges  and  represents  that the  statements  set forth
therein are true and correct.

                  2.  Capitalized  Terms.  All  capitalized  terms not otherwise
defined in this Agreement shall have the meanings  ascribed to such terms in the
Business Loan Agreement,  the Note, the Villanova Mortgage,  the Amendment,  the
Mendelson  Guaranty,  the Salzman  Guaranty,  the Glatz  Guaranty;  the Papandon
Guaranty,  the Leonard  Guaranty  and the  Assignment  Agreement  (collectively,
including this Agreement and all Joinders hereto, the Mendelson Pledge, the DADC
Pledge  and  the  First  Chesapeake   Pledge,  are  referred  to  as  the  "Loan
Documents").

                  3.  Ratification  of  Loan  Documents.   The  Borrower  hereby
ratifies, confirms and reaffirms in all respects, and without condition, all the
terms,  covenants and  conditions  set forth in the Loan  Documents,  and hereby
agrees  to remain  unconditionally  liable  to the Bank in  accordance  with the
respective  terms,  covenants and conditions of the Loan Documents,  as the same
may be modified herein.

                  4 (a) Reaffirmation of Guarantees. Each of Mendelson, Salzman,
Glatz, Papandon and Leonard (collectively the "Guarantors")  expressly reaffirms
his or her Confession of Judgment and every other provision of their  respective
Guaranty  Agreements.  In the event of any  default by Borrower  hereunder,  the
Guarantors  understand  that  the Bank may  proceed  against  any of them or any
collateral  granted by them in connection with the Business Loan Agreement,  the
Note or the other Loan Documents.

                           b)  Amendment to Mendelson  Guaranty.  The  Mendelson
Guaranty is hereby  amended to provide  that it is limited to One Million  Eight
Hundred Thousand Dollars  ($1,800,000.00)  of the principal amount due under the
Note, as amended,  plus interest,  attorney's  fees, costs of collection and any
other sums due under the Loan  Documents  and shall be reduced by the amounts of
the First Mandatory Payment,  the Second Mandatory Payment,  the Third Mandatory
Payment and the Fourth Mandatory Payment,  as defined below, that are applied to
reduce the  principal  due under the Note.  Mandatory  Weekly  Payments or other
payments  shall not  reduce  the  liability  of  Mendelson  under the  Mendelson
Guaranty. Upon payment in full of its debt, Mendelson shall be subrogated to the
Bank's rights  against  Thomas and Kathleen  Leonard under the Leonard  Guaranty
unless Thomas or Kathleen  Leonard shall have  previously  paid  $300,000.00  in
satisfaction of their guaranty.

                  5.  Amendment  to the  Note.  The Note is  hereby  amended  to
provide that the maturity date shall be ON DEMAND.  However, Bank agrees that in
the  absence  of the  occurrence  of an Event of  Default,  Bank will not demand
payment before June 30, 2001.  Note is further  amended to provide that Borrower
shall make  mandatory  payments in the amount of Four Hundred  Thousand  Dollars
($400,000.00) on February 15, 2001 (the "First Mandatory Payment"),  One Hundred
Thousand  Dollars  ($100,000.00)  on  April  15,  2001  (the  "Second  Mandatory
Payment"),  One  Hundred  Thousand  Dollars  ($100,000.00)  on May 15, 2001 (the
"Third Mandatory Payment")and One Hundred Thousand Dollars ($100,000.00) on June
15, 2001 (the "Fourth  Mandatory  Payment").  Borrower shall also make mandatory
weekly payments in the amount of Ten Thousand Dollars  ($10,000.00),  commencing
on February 9, 2001 and  continuing on the Friday of each week  thereafter to be
applied  to sums due  under  the Note in the sole  discretion  of the Bank  (the
"Mandatory  Weekly  Payments").  In addition,  Borrowers  shall make a $5,000.00
payment on each of March 2, 2001 and March 30, 2001,  which shall be in addition
to the Mandatory  Weekly Payments for these dates. At Closing  Borrower will pay
Bank the sum of Sixteen Thousand One Hundred Seventy Five Dollars  ($16,175.00),
reflecting past due payments for the month of January, 2001. Notwithstanding the
foregoing,  Borrower shall make an additional  payment each month to ensure that
the total  payment  for the month is equal to the  greater of (a) total  monthly
interest payments payable under the Note for any month plus the required payment
of Borrower  under  paragraph 5(d) of the Amendment to pay to Bank Fifty Percent
(50%) of its cash flow,  or (b) the total of the Mandatory  Weekly  Payments for
that month.  Notwithstanding  the  foregoing,  Borrower  shall be deemed to have
complied with the provisions of Section 5 hereof relating to the First,  Second,
Third,  and Fourth  Mandatory  Payment,  provided  Borrower  delivers to Bank an
aggregate  of  cash  and  stock  subscription  agreements  satisfactory  to Bank
providing for  identifiable  and dedicated  accounts for payment of  obligations
under said  subscription  agreements for each amount required,  and provided all
subscription agreements are funded within two weeks of the date set forth herein
for such payments.

                  6.  Conditions  Precedent to  Forbearance.  The Bank agrees to
forbear  from  exercising  the rights  and  remedies  available  to it under the
Business Loan  Agreement,  the Note,  the Villanova  Mortgage and the other Loan
Documents, contingent upon the following:

                           (a)   simultaneously   with  the  execution  of  this
Agreement,  DADC  execute and  deliver to the Bank that  certain  Assignment  of
Partnership  Income  in  respect  of its  partnership  interest  in the  Liberty
Landing;

                           (b)  Mendelson  execute  and  deliver  to the  Bank a
Subordinate  Pledge  Agreement  pledging  his  shares in First  Chesapeake  (the
"Mendelson  Pledge") and an  Assignment  Separate from  Certificate  executed in
blank, all in form and substance satisfactory to the Bank;

                           (c)  Mendelson  execute  and  deliver  to the Bank an
Agreement  pledging  his shares in DADC (the "DADC  Pledge")  and an  Assignment
Separate  from  Certificate  executed  in  blank,  all  in  form  and  substance
satisfactory to the Bank;

                           (d) Mendelson deliver to the Bank all stock of DADC;

                           (e) First Chesapeake  execute and deliver to the Bank
an  Agreement  pledging  its shares in  Collateral  One (the  "First  Chesapeake
Pledge") and an Assignment  Separate from Certificate  executed in blank, all in
form and substance satisfactory to the Bank;

                           (f)  Borrower  deliver  to  the  Bank  good  standing
certificates  certified  by the  Secretary  of  State  of  Borrower's  state  of
incorporation;

                           (g) Borrower deliver to the Bank (i) a certified copy
of the employment  agreement by and between Collateral One and William Everslage
and all amendments  thereto (the "Everslage  Employment  Agreement")  evidencing
that the Employment Agreement remains in full force and effect; (ii) a statement
of William Everslage and Collateral One certifying that the Everslage Employment
Agreement is in full force and effect as of the date of the  certification,  and
agreement that it will not be amended  without the prior written  consent of the
Bank; (iii) certified copy of the term insurance contract on the life of William
Everslage;  (iv) a  collateral  assignment  to Bank of the Term  Life  Insurance
Policy on the life of William Everslage,  in form and substance  satisfactory to
Bank; (v) a certified copy of the employment agreement by and between Collateral
One and  Matthew  Duncan and all  amendments  thereto  (the  "Duncan  Employment
Agreement")  evidencing  that the Duncan  Employment  Agreement  remains in full
force and effect,  and agreement  that it will not be amended  without the prior
written  consent of the Bank;  (vi) a statement of Matthew Duncan and Collateral
One certifying that the Duncan Employment  Agreement is in full force and effect
as of the  date  of the  certification;  (vii)  a  certified  copy  of the  term
insurance  contract  on the life of  Matthew  Duncan;  and  (viii) a  collateral
assignment  to Bank of the Term Life  Insurance  Policy  on the life of  Matthew
Duncan, in form and substance satisfactory to Bank.

                           (h) Borrower  execute or obtain the proper  execution
by all pertinent parties to the any documents determined, in the sole discretion
of the  Bank or its  counsel,  necessary  to grant  and/or  perfect  the  Bank's
security interest in and to any collateral  pledged or intended to be pledged in
connection  with the execution of this  Agreement,  the Business Loan Agreement,
the Loan, the Villanova Mortgage,  the Amendment,  the Assignment  Agreement and
the Loan Documents;

                           (i)   Mendelson   deliver   to  the  Bank   proof  of
satisfaction  of the lien placed on the  Villanova  Property by Cecelia  Kodroff
(Montgomery County, Pennsylvania Docket #96-05243);

                           (j)  Mendelson   produce  and  deliver  to  the  Bank
evidence  of payment  of all real  estate  taxes,  water and sewer  charges  and
insurance premiums due and payable on the Villanova Property;

                           (k) DADC pay to the Bank the sum of  Eleven  Thousand
Two Hundred  Seventy-Nine Dollars and Fifteen Cents ($11,279.15) to pay off Loan
No. 01-50002053;

                           (l) DADC execute an Assignment of Partnership  Income
and Security Agreement.

                           (m) all corporations deliver appropriate  resolutions
authorizing  the execution and delivery of this Agreement by the officers of the
corporations and all documents and instruments contemplated hereby, certified by
the secretary of such corporation;

                           (n) DADC assign to Bank all fees due or to become due
under Section 3.5 of the Joint Venture Agreement;

                           (o) simultaneously herewith,  Mendelson shall execute
that certain Amendment to Mortgage and Loan Documents III of even date herewith;
and

                           (p) Mendelson  Family Trust and the Mendelson  Family
Children's  Trust  execute and  deliver to the Bank that  certain  Amendment  to
Construct  Loan  Agreement,  Mortgages  and  Forbearance  Agreement of even date
herewith.

                  7. Prohibition on Distributions.  Collateral One is prohibited
from making any distribution,  payment of management fee or other  compensation,
dividend  payment,   transfer,  loan  or  hypothecation  of  property  to  First
Chesapeake  and First  Chesapeake  is prohibited  from making any  distribution,
payment of management fee to its shareholders,  dividend payment, transfer, loan
or  hypothecation  of  property  to any of its  shareholders  without  the prior
written consent of the Bank.  Notwithstanding  the foregoing,  in the event that
Borrower delivers,  the First Mandatory  Payment,  the Second Mandatory Payment,
the Third  Mandatory  Payment,  the  Fourth  Mandatory  Payment  and each of the
Mandatory  Weekly  Payments,  on a timely  basis,  and no Event of  Default  has
occurred,  the Bank hereby  consents to the payment of any monthly  distribution
from  Collateral  One to First  Chesapeake for bona fide third party expenses or
employee  compensation  (excluding payments to any Guarantor of First Chesapeake
(except Glatz)or any third party or employee affiliated with, or related to, any
Guarantor of First Chesapeake except Glatz), provided that such distributions do
not exceed excess cash flow, as defined in paragraph  5(d) of the Amendment over
the monthly payments due Bank under Section 5 hereof.

                  8.  Release  and  Waiver  of  Claims.  The  Borrowers,   their
officers, directors,  trustees, employees, personal representatives,  successors
and assigns and guarantors  (collectively,  the "Releasors"),  remise,  release,
quitclaim and forever discharge the Bank and any other corporation, partnership,
trust or other entity  controlled  by,  controlling or under common control with
the Bank, and their  respective  employees,  officers,  directors,  contractors,
shareholders,  partners, agents, attorneys (including without limitation Spector
Gadon & Rosen,  P.C., and each of its shareholders and employees),  accountants,
heirs, executors,  administrators,  and personal representatives  (collectively,
the "Releasees"),  of and from any and all damages,  losses,  expenses,  claims,
liabilities,  demands,  actions,  causes of action,  suits,  judgments,  orders,
decrees,  and any  execution  thereon,  whether at law, in equity or  otherwise,
which  Releasors  had,  have,  or may in the future have,  of any kind or nature
whatsoever, past, present or future, known or unknown, and whether the same were
or could have been  discovered,  against any other party,  fixed or  contingent,
from the beginning of time to the date of these presents and forever,  under the
laws of any state or the United States of America,  or any other  nation,  which
Releasors  may have or  claim  to have  against  Releasees  as a  result  of any
transaction or agreement between Releasors and Releasees.

                  9. Waiver of Defenses.  Releasors hereby confirm,  acknowledge
and agree that they have no defenses, charges, claims, demands, pleas or offsets
whatsoever  in law or in equity to the  indebtedness  evidenced  by the Business
Loan  Agreement,  the Note,  the Amendment and the other Loan  Documents,  or to
their obligations due thereunder.

                  10. Covenant Not to Sue.  Releasors  covenant and agree not to
institute legal or equitable  proceedings or any actions or to assert any claims
or  defenses  described  in  paragraphs  8 and 9  above  against  Releasees.  If
Releasors  do  institute  such  actions or  proceedings  or raise such claims or
defenses,  the parties agree that  Releasees'  remedies at law may be inadequate
and therefore equitable relief including, without limitation,  injunctive relief
shall be available to Releasees to, inter alia, preclude Releasors from pursuing
any  such  action  and  entitle  Releasees  to  payment  from  Releasors  of any
attorney's  fees,  costs  and  expenses  which  may be  incurred  as a result of
responding  to or defending  against any such action.  The remedies of Releasers
hereunder at law or in equity shall run concurrently and are cumulative.

                  11.  Indemnity.  The Borrower,  for  themselves  and all those
claiming  under or through them,  agree to protect,  indemnify,  defend and hold
harmless the Bank, its directors,  officers and employees,  from and against any
and all liability,  expense, or damage of any kind or nature and from any suits,
claims or demands,  including reasonable legal fees and expenses, arising out of
this Agreement,  the Business Loan Agreement, the Note, the Villanova Mortgages,
or any other documents previously,  contemporaneously,  or hereafter executed by
either of them. This obligation  specifically shall survive the repayment of the
Note, as amended.

                  12. Events of Default.  The following acts or omissions  shall
constitute an event of default ("Event of Default") under this Agreement:

                           (a) the  failure by the  Borrower to pay any sums due
hereunder at the times and in the manner set forth herein;

                           (b) the failure by the Borrower to perform or observe
any term,  condition,  warranty,  requirement  or provision  of this  Agreement,
specifically including but not limited to, the covenant not to sue;

                           (c) the occurrence of any default or Event of Default
under the  Business  Loan  Agreement,  the Note,  the  Villanova  Mortgage,  the
Amendment, the Assignment Agreement or the other Loan Documents;

                           (d) any  representation  of Borrower being materially
untrue or misleading as of the date hereof; or

                           (e) any  amendment or  modification  to the Everslage
Employment  Agreement  or the  Duncan  Employment  Agreement  without  the prior
written consent of the Bank,  including,  but not limited to, any release of the
non-compete provisions therein.

                  13. Notices. All Notices and other communications  required or
permitted  under this Agreement  shall be in writing and shall be deemed to have
been given or made: if hand delivered,  when delivered; if by facsimile or other
method of electronic transmission, when transmitted; if by nationally recognized
overnight  courier service,  on the following day; or if mailed by regular mail,
on the day of deposit in the United States mail, postage prepaid,  registered or
certified mail, return receipt  requested,  addressed to a party and sent to its
address set forth below or such other address as such party may  designate  from
time to time by notice  to the other  parties  in the  manner  set forth in this
Amendment.

                  To First Chesapeake:

                  12 East Oregon Avenue
                  Philadelphia, PA 19148
                  Attn:  Mark Mendelson
                  Fax: 610.433.8186

                  To Collateral One:

                  12 East Oregon Avenue
                  Philadelphia, PA 19148
                  Attn:  Mark Mendelson
                  Fax: 610.433.8186

                  To the Bank:

                  Joseph M. Matisoff, President
                  Crusader Savings Bank, FSB
                  1230 Walnut Street
                  Philadelphia, PA 19107
                  Fax:  215.893.1532

                  and:

                  Bruce Levy
                  Crusader Savings Bank, FSB
                  1230 Walnut Street
                  Philadelphia, PA 19107
                  Fax:  215.893.1532

                  with a copy to:

                  Edward G. Fitzgerald, Esquire
                  Spector Gadon & Rosen, P.C.
                  1635 Market Street -- 7th Floor
                  Seven Penn Center
                  Philadelphia, PA 19103
                  Fax:  215.241.8844

                  14. Cross Default. Any Event of Default by the Borrower or any
other  party to the  Loan  Documents  under  this  Agreement  or any of the Loan
Documents, shall constitute an event of default under any note, instrument, loan
agreement,  guaranty,  or other agreement executed by Mendelson or the Mendelson
Family Trust or the Mendelson  Family  Children's  Trust (the "Trusts")  (except
for: (i) that certain  promissory  note dated July 25, 1997 made by Mendelson to
the Bank,  as  amended  on August  22,  1997 and on May 5,  1999;  and (ii) that
certain  promissory  note dated December 26, 1997 given by Mendelson to the Bank
and any  mortgages  given to  secure  such  notes),  or any  agreement  given in
connection  with any  other  obligation  of any of them to Bank,  as a result of
which  Bank may  exercise  any and all of its  rights  and  remedies  under this
Agreement, the Loan Documents or any other document, loan agreement, guaranty or
other instrument executed by Mendelson or the Trusts.

                  15. Notice and Opportunity to Cure.  Other than for the First,
Second,  Third,  and  Fourth  Mandatory  Payments  required  by this  Agreement,
Borrower  shall have a five (5) day grace period after  written  notice from the
Bank to cure any monetary default under this Agreement or the Loan Documents and
a ten (10) day  grace  period  after  written  notice  from the Bank to cure any
non-monetary default under this Agreement or the Loan Documents,  all such grace
periods to run concurrently with any notice and grace period presently  existing
under the Loan Documents.

                  16.  Representations  and Warranties.  Borrowers represent and
warrant as follows:

                           (a) each of First  Chesapeake  and Collateral One (i)
is duly organized and validly  existing  under the state of their  incorporation
and each is duly qualified and is in good standing in each jurisdiction in which
the  failure  to so  qualify  would  have an  adverse  effect  on the  financial
condition,  operations,  business,  properties or assets of First  Chesapeake or
Collateral  One,  respectively;  (ii) has the  requisite  power and authority to
effect the transactions  contemplated  hereby; and (iii) has all requisite power
and  authority  and the legal  right to own,  pledge,  mortgage  and operate its
property,  and to  conduct  its  business  as now or  currently  proposed  to be
conducted;

                           (b)  the  execution,   delivery  and  performance  by
Borrower of this  Agreement  are within the  respective  powers of Borrower  and
Borrower has been duly authorized by all necessary  corporate action,  including
the consent of shareholders where required;

                           (c)  this   Agreement  has  been  duly  executed  and
delivered by Borrower;

                           (d)  this   Agreement  is,  and  each  of  the  other
agreements to which Borrower is or will be a party, when delivered  hereunder or
thereunder,  will  be,  a legal,  valid  and  binding  obligation  of  Borrower,
enforceable against it in accordance with its terms;

                           (e) the persons executing this Agreement on behalf of
the corporations are authorized to do so by all necessary corporate resolutions;

                           (f) there is no agreement between  Collateral One and
any of the Guarantors; and

                           (g)  there  are  no  amounts   presently   due  First
Chesapeake, or any affiliate or shareholder of First Chesapeake, from Collateral
One except that certain  $600,000 loan from First  Chesapeake to Collateral One.
No advances  shall be made by First  Chesapeake or any  affiliates to Collateral
One and  Collateral  One will not make  advances to First  Chesapeake  except as
permitted  herein.  So long as the Loan shall  remain  unpaid  First  Chesapeake
hereby  acknowledges that any indebtedness of Collateral One to First Chesapeake
is  subject  and  subordinate  to the  rights of the Bank and in the event of an
occurrence  of an Event of  Default  which  results in the Bank  exercising  its
rights under the First  Chesapeake  Pledge  Agreement,  First  Chesapeake  shall
assign such indebtedness to the Bank or its assignee.

                  17.  Estoppel.  Borrower  hereby  acknowledges,  warrants  and
represents  that as of the date hereof the principal  balance due under the Note
is Two Million One Hundred Seven Thousand Three Hundred  Twenty-One  Dollars and
Nineteen Cents  ($2,107,321.19) and the interest and other charges due under the
Note through January 31, 2001 is $105,470.18.

                  18. No Waiver.  This  Agreement is not and shall not be deemed
to be a waiver of any provision of the Business Loan  Agreement,  the Note,  the
Villanova Mortgage, the Amendment,  the Assignment Agreement or any of the other
Loan Documents, any event of default or of any other default which may now exist
or hereafter  occur under the Business Loan  Agreement,  the Note, the Villanova
Mortgage, the Amendment,  the Assignment Agreement or any of the Loan Documents,
any obligation  thereunder or under this  Agreement,  the documents  executed in
connection therewith or any obligations thereunder.

                  19. Jury Trial Waiver. THE BORROWER WAIVES THE RIGHT TO A JURY
TRIAL IN ANY ACTION HEREUNDER,  OR ALLEGING ANY CLAIM BASED ON THIS AGREEMENT OR
THE BUSINESS LOAN AGREEMENT OR THE NOTE.

                  20.  Consent  to  Jurisdiction.  The  Borrower  and  the  Bank
irrevocably  agree to the exclusive  jurisdiction and venue of the Courts of the
Common Pleas of  Philadelphia,  Pennsylvania  and/or the United States  District
Court for the Eastern District of Pennsylvania in any and all disputes,  actions
or proceedings  between the Bank and the Borrower,  whether arising hereunder or
under  any  other  agreement  or  undertaking;  and the  Borrower  and the  Bank
irrevocably  agree to  service  of process by  certified  mail,  return  receipt
requested,  to the respective parties at the addresses listed in Paragraph 13 of
this Agreement. Nothing herein contained shall in any manner prevent or preclude
Bank or its nominee from  bringing any one or more actions  against the Borrower
in any jurisdiction in the United States or elsewhere.

                  21. Carryover of this Agreement in the Event of Bankruptcy. If
Borrower or any entity with which the  Borrower is  associated  files a petition
for relief  under Title 11 of the United  States Code,  as amended  ("Bankruptcy
Code"),  or is adjudicated a Debtor pursuant to 11  U.S.C.ss.101 et seq.,  under
the Bankruptcy Code, the Borrower agrees as follows:

                           (a)  Relief  from the  Automatic  Stay.  In the event
Borrower or an entity with which the Borrower is associated files a petition for
relief with any bankruptcy court of competent  jurisdiction,  or is subjected to
any petition  under the  Bankruptcy  Code which  results in any order for relief
under the  Bankruptcy  Code or is  adjudicated  a Debtor  pursuant  to 11 U.S.C.
ss.101 et seq., the Bank shall be given automatic and immediate  relief from the
stay under  ss.362(d) of the Bankruptcy  Code to enforce its rights and remedies
hereunder,  and the Borrower hereby waives any right to object to such relief or
to seek  reimpositioning  of the stay,  if  available  to the  Borrower.  If the
foregoing  portion of this  paragraph  is deemed  unenforceable  as against  the
Borrower,  then the Borrower  hereby agrees not to defend against or contest any
motion or pleading filed by the Bank seeking relief from the automatic stay;

                           (b)   No   Extension   of   Automatic   Stay   of  11
U.S.C.ss.362.  In the event  Borrower  or an entity  with which the  Borrower is
associated  files a petition for relief with any  bankruptcy  court of competent
jurisdiction or is adjudicated a Debtor pursuant to 11 U.S.C.ss.101 et seq., the
Borrower hereby waives any rights to seek any extension to them of the automatic
stay provisions of 11 U.S.C.ss.362;

                           (c) No Renewal of  Exclusivity  Period,  Relief  from
Automatic Stay. The Borrower agrees that if an entity with which the Borrower is
associated is a debtor in a Chapter 11 proceeding under the Bankruptcy Code, and
the bankruptcy  court enters a Cash  Collateral  Order,  or Order  affecting the
Bank's rights to the Villanova Property,  then, subject to Court approval,  that
Order  shall  provide  that  if the  debtor  does  not  file a Plan  within  any
exclusivity period pursuant to 11 U.S.C.  ss.1121,  the Bank shall,  without the
necessity  of any  additional  notice to the debtor or to other  creditors,  any
hearing or any further order of the Court, have immediate relief from stay under
Bankruptcy  Code  ss.362(d)  to  implement  and enforce the  provisions  of this
Agreement, the Construction Loan Agreement, the Note or any Loan Document;

                           (d) Further Relief from  Automatic  Stay. If the Bank
requests relief from the automatic stay,  neither the Borrower nor any person on
the Borrowers'  behalf shall object to or oppose the Bank from having  immediate
relief from the automatic stay under ss.362(d) of the Bankruptcy Code; and

                           (e) Perfection. During the pendency of any bankruptcy
case of Borrower or any entity associated with the Borrower, if it is determined
that any of the rights granted to the Bank  hereunder are security  interests or
liens,  they  shall be  deemed  perfected  and  fully  enforceable  without  the
necessity  of the  filing  of  any  documents  or  commencement  of  proceedings
otherwise required under non-bankruptcy law for the perfection or enforcement of
security interests,  with such perfection and enforcement being binding upon the
Trusts and any subsequently appointed trustee, either in Chapter 11 or under any
other Chapter of the Bankruptcy  Code, and upon other  creditors of the Borrower
and/or any entity with which the Borrower is  associated,  who have  extended or
who may hereafter  extend secured or unsecured credit to the Borrower and/or any
such entities with which the Borrower may be associated.

                  22.  Assumption  of  Collateral  One.  Collateral  One  hereby
assumes,  jointly and severally,  any and all  obligations  of First  Chesapeake
under the Amendment.

                  23. Waiver of Fees under Amendment. The Bank hereby waives any
right to any fees  under  paragraph  5(c) of the  Amendment  that  have not been
previously paid or capitalized as part of the loan balance.

                  24. Entire Agreement.  This Agreement,  the documents given in
connection  herewith,  the Business  Loan  Agreement,  the Note,  the  Villanova
Mortgage,  the Amendment,  the  Assignment  Agreement,  and the Loan  Documents,
contain the entire  agreement  between the parties  relating to the transactions
contemplated  hereby, and supercedes all oral statements and prior writings with
respect thereto.

                  25.  Additional  Acts.  Each party hereto shall,  from time to
time, execute, acknowledge and deliver such further instruments and perform such
additional  acts as the other party may  reasonably  request to  effectuate  the
intent of this Agreement.

                  26. Burdens and Benefits. This Agreement shall be binding upon
and  shall  inure  to the  benefit  of  the  respective  legal  representatives,
successors  and  assigns of Bank,  or its  nominee,  and  Borrower,  their legal
representatives, successors and assigns.

                  27. No Novation. The Borrower acknowledges and agrees that the
execution of this Agreement by Bank is not intended nor shall it be construed as
a novation of the Business Loan Agreement, the Note, the Villanova Mortgage, the
Amendment,  the Assignment  Agreement or any of the Loan  Documents.  All of the
terms and  provisions of the Business Loan  Agreement,  the Note,  the Villanova
Mortgage,  the Amendment,  the Assignment Agreement and the Loan Documents shall
continue  to  remain in full  force and  effect,  except as  expressly  modified
herein.  By executing this Agreement,  the Bank does not waive any of its claims
against the Borrower under the Business Loan Agreement,  the Note, the Villanova
Mortgage,  the Amendment,  the Assignment Agreement,  any of the Loan Documents,
this Agreement or any of its rights and remedies at law or in equity.

                  28. Headings.  The headings and sub-headings  contained in the
titling of this Agreement are intended to be used for convenience only and shall
not be used or  deemed  to  limit  or  diminish  any of the  provisions  of this
Agreement.

                  29.  Severability.  Whenever  possible each  provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable  law,  but, if any provision of this  Agreement  shall be found to be
illegal,  invalid,  prohibited, or unenforceable for any reason whatsoever under
such law, such provision shall be ineffective to the extent of such  illegality,
invalidity,  prohibition or unenforceability  without invalidating the remainder
of such provision or the remaining provisions of this Agreement.

                  30.  Counterparts.  This  Agreement  may be executed in one or
more  counterparts,  each of which shall be deemed an original and each of which
when taken  together shall  constitute one and the same  instrument and shall be
binding  upon  each of the  undersigned  as fully and  completely  as if all had
signed the same instrument.

                  31.  Governing  Law.  This  Agreement  shall be  governed  and
construed  in  accordance  with the  laws of the  Commonwealth  of  Pennsylvania
(without giving effect to the conflicts of laws principles  thereof)  applicable
to contracts made and to be performed in Pennsylvania.

                  32.  Amendment.  This Agreement may not be amended,  modified,
changed, waived,  terminated,  or discharged orally, but only by an agreement in
writing signed by all parties hereto.

         IN WITNESS WHEREOF,  the parties hereto,  intending to be legally bound
hereby have caused this  Agreement to be duly executed and delivered the day and
year first written above.

                                             CRUSADER BANK

                                         By: _____________________________(SEAL)
                                             Joseph M. Matisoff, President

Attest:                                      FIRST CHESAPEAKE FINANCIAL
                                             CORPORATION

__________________________               By: _____________________________(SEAL)
                                             Mark Mendelson, Chief Executive
                                             Officer  and Chairman of the Board
                                             of Directors

Attest:                                  COLLATERAL ONE MORTGAGE CORPORATION

__________________________               By: _____________________________(SEAL)
                                             Mark Mendelson, Chairman of the
                                             Board of Directors

                               JOINDER AND CONSENT

         The   undersigned,   being  guarantors  of  the  obligations  of  First
Chesapeake  hereby join in the execution of this Forbearance  Agreement dated as
of this day of January,  2001,  for the purpose of  consenting  to the terms and
conditions  containing  herein and,  intending  to be legally  bound agree to be
bound by the provisions of this Agreement.

Witness:                                 GUARANTORS:

__________________________               _____________________________(SEAL)
                                         Mark Mendelson

Witness:
__________________________               _____________________________(SEAL)
                                         Mark Glatz

Witness:
__________________________               _____________________________(SEAL)
                                         Lester W. Salzman

Witness:
__________________________               _____________________________(SEAL)
                                         John Papandon

Witness:
__________________________               _____________________________(SEAL)
                                         Thomas Leonard

Witness:
__________________________               _____________________________(SEAL)
                                         Kathleen Leonard

                                     JOINDER

         DADC and Mendelson,  as Guarantor,  join in this Agreement for purposes
of ratifying and reaffirming  the  Assignments of Partnership  Income dated July
25, 1997 and  November 9, 1999 (which date the DADC and  Mendelson  agree was an
error and was intended to be, and is actually,  November 10, 1999) (collectively
referred to as the  "Assignments")  and hereby affirm that said Assignments were
effective  to assign  all of DADC's  rights to  receive  income  under the Joint
Venture Agreement including,  but not limited to, Net Cash Flow, as such term is
defined under the Joint Venture  Agreement,  and any fees payable to DADC or its
affiliates pursuant to paragraph 3.5 of the Joint Venture Agreement, as security
for the Loan, as increased by the Amendment, and the Mendelson Guaranty, and any
sale proceeds from the sale of DADC to interest in the Joint Venture.

         Further,  intending to be legally bound Mendelson agrees to be bound by
the terms and conditions of paragraph 22.

Attest:                                  DELAWARE AVENUE DEVELOPMENT
                                         CORPORATION

__________________________               By: _____________________________(SEAL)
                                             Mark Mendelson, President
Witness:

__________________________                   _____________________________(SEAL)
                                             Mark Mendelson

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00037-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00037-of-00352.parquet"}]]