Document:

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                                  EXHIBIT 10.85

                        SEPARATION AND RELEASE AGREEMENT

         This SEPARATION AND RELEASE AGREEMENT (the "Agreement"), executed this
27th day of March, 2001, is entered into by and between Fidelity Holdings, Inc.
(together with its subsidiaries and affiliates (including, without limitation,
IG2, Inc., f/k/a/ Computer Business Sciences, Inc.) being collectively referred
to herein as the "Company") and Kimberly Peacock (the "Employee").

                               W I T N E S S E T H

         WHEREAS, the Employee has ceased to be an Employee of the Company as of
the Separation Date (as hereinafter defined);

         WHEREAS, the Employee and the Company desire to settle fully and
finally any and all employment-related matters between them as of the Separation
Date, including, but not limited to, any issues that may arise out of the
Employee's employment with the Company and the termination thereof.

         NOW, THEREFORE, in consideration of the mutual agreements and
understandings set forth herein, intending to be legally bound, the parties
hereto hereby agree as follows:

         Section 1. Termination of Employment; Benefits.

                  (1) Termination of Employment. The Employee's employment with
the Company has terminated as of the close of business on December 31, 2000 (the
"Separation Date").

                  (2) Benefits. In consideration for the Employee's agreement to
be bound by the terms of this Agreement and subject to Section 13(a) hereof, the
Employee shall be entitled to receive from the Company the payments and benefits
set forth in subparagraphs (i) through (iv) of this Section 1(b).

                           (i)      The Company agrees to pay the Employee (or
                                    has paid, as the case may be):

                                    a. $7,000 on February 1, 2001;

                                    b. $6,000 on March 1, 2001;

                                    c. $5,000 on April 1, 2001;

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                                    d. $5,000 on May 1, 2001;

                                    e. $5,000 on June 1, 2001;

                                    f. $4,000 on July 1, 2001;

                                    g. $4,000 on August 1, 2001;

                                    h. $4,000 on September 1, 2001; and

                                    i. $4,000 on October 1, 2001.

                  All payments pursuant to this Section 1(b)(i) shall be made by
check of the Company mailed to the Employee at the address set forth in Section
12 hereof or by wire transfer on the dates specified above; provided, however,
that if any such date is not a Business Day, then payment shall be made on the
next succeeding Business Day; provided, further, that interest shall accrue at
an annual rate of three percent (3%) on any payment obligation pursuant to this
Section 1(b)(i) which remains unpaid by the Company more than 10 days following
the due date for such payment obligation; provided, further, that to the extent
any such payment obligation remains unpaid by the Company for five Business Days
after written notice is given by the Employee to the Company not less than 20
days following the due date for such payment obligation, all payment obligations
pursuant to this Section 1(b)(i) that are then unpaid shall become immediately
due and payable on the day following such fifth Business Day. "Business Day"
shall mean any day, other than a Saturday, Sunday or a day on which banking
institutions in the City of New York are authorized or obligated by law or
Employee order to close.

                  (ii) The Company shall grant the Employee an option (the
"Option") to purchase 150,000 shares of the Company's common stock, $.001 par
value per share (the "Common Stock"), at an exercise price equal to the closing
price of the Company's Common Stock on the date hereof. The Option shall vest as
follows: 75,000 options shall vest immediately upon signing of this Agreement,
35,000 options shall vest after the one-year anniversary of the signing of this
Agreement, 10,000 options shall vest upon the two-year anniversary of the
signing of this Agreement, 10,000 options shall vest upon the three-year
anniversary of the signing of this Agreement, 10,000 shall vest upon the
four-year anniversary of the signing of this Agreement and 10,000 options shall
vest upon the five-year anniversary of the signing of this Agreement.

                  (iii) Payment of the Employee's outstanding indebtedness to
the Company in the amount of $76,417.89 is deferred until January 1, 2002. At
this time, Employee will begin payment to the Company, in semi-monthly
installments, of forty-eight (48) payments in the amounts scheduled in the
amortization schedule attached hereto as Exhibit B.

                  (iv) The Company shall assign the NAICS patent to the
Employee.

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                  (3) Termination of Employment Agreement. That certain
employment agreement among Reynard Service Bureau, Inc., a Florida corporation,
the Company and the Employee, dated January 18, 1999, is null and void and shall
have no further effect hereafter whatsoever.

         Section 2. Mutual Release.

                  (1) Release by the Employee.

                           (i) The Employee knowingly and voluntarily releases
and forever discharges the Company and the Company's parents, subsidiaries and
affiliates, together with all of their respective past and present directors,
managers, officers, partners, employees and attorneys, and each of their
predecessors, successors and assigns, and any of the foregoing in their capacity
as a shareholder or agent of the Company (collectively, "Releasees") from any
and all claims, charges, complaints, promises, agreements, controversies, liens,
demands, causes of action, obligations, damages and liabilities of any nature
whatsoever, known or unknown, suspected or unsuspected, which against them the
Employee or her executors, administrators, successors or assigns ever had, now
have, or may hereafter claim to have against any of the Releasees by reason of
any matter, cause or thing whatsoever arising on or before the Separation Date
and whether or not previously asserted before any state or federal court or
before any state or federal agency or governmental entity (the "Release"). The
Release includes, without limitation, any rights or claims relating in any way
to the Employee's employment relationship with the Company or any of the
Releasees, or the termination thereof, or arising under any statute or
regulation, including the Age Discrimination in Employment Act of 1967, Title
VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans
with Disabilities Act of 1990, the Employee Retirement Income Security Act of
1974, and the Family Medical Leave Act of 1993, each as amended, or any other
federal, state or local law, regulation, ordinance or common law, or under any
policy, agreement, understanding or promise, whether written or oral, formal or
informal, between any of the Releasees and the Employee.

                           (ii) Nothing herein shall be deemed to release any of
the Employee's rights under this Agreement.

                           (iii) The Employee represents that the Company has
advised her to consult with an attorney of her choosing prior to signing this
Agreement. The Employee further represents that she understands and agrees that
she has the right and has in fact reviewed this Agreement and, specifically, the
Release, with an attorney of the Employee's choice. The Employee further
represents that she understands and agrees that the Company is under no
obligation to offer her this Agreement, and that the Employee is under no
obligation to consent to the Release, and that she has entered into this
Agreement freely and voluntarily.

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                           (iv) The Employee shall have 21 days to consider this
Agreement and once she has signed this Agreement, the Employee shall have seven
(7) additional days from the date of execution to revoke her consent to the
Release set forth above. Any such revocation shall be made by delivering written
notification to the Chairman of the Board of Directors of the Company. In the
event that the Employee revokes her Release, all the terms of the other sections
and subsections of this Agreement, other than Section 1(a) hereof, shall be null
and void and shall not become effective. If no such revocation occurs, the
Release and this Agreement shall become effective as of the eighth day after the
date the Employee signs this Agreement.

                  (2) Release by the Company. Except as provided below, as a
material inducement to enter into this Agreement, the Company, on its behalf and
that of its affiliates and their officers and directors, agents, employees,
successors and assigns (solely in their capacity as officers or directors of the
Company) hereby knowingly and voluntarily releases and forever discharges the
Employee and her agents, employees, successors, heirs, beneficiaries or assigns
(the "Employee Released Parties") from any and all claims, charges, complaints,
promises, agreements, controversies, liens, demands, causes of action,
obligations, damages and liabilities of any nature whatsoever that it had, now
has, or may hereafter claim to have against the Employee Released Parties
arising out of or relating in any way to the Employee's employment relationship
with the Company, whether or not previously asserted before any state or federal
court or before any state, federal or regulatory agency or governmental entity;
provided, however, that neither the Employee nor any of the Employee Released
Parties shall be released or discharged from any such claim, charge, complaint,
promise, agreement, controversy, lien, demand, cause of action, obligation,
damage or liability which arises in whole or in part out of or relates in any
way to the willful misconduct or gross negligence of the Employee or any of the
Employee Released Parties.

         Section 3. Mutual Non-Disparagement. The Employee agrees that she will
not make or publish any statement which is, or may reasonably be considered to
be, disparaging of the Company, the Company's subsidiaries or affiliates, or
directors, officers or Employees of the businesses of the Company or any of the
Company's subsidiaries or affiliates. The Company agrees that it will not make
or publish any statement which is, or may reasonably be considered to be,
disparaging of the Employee.

         Section 4. Confidentiality; Intellectual Property; Disclosure.

                  (1) Following the Separation Date, the Employee shall keep
secret and retain in strictest confidence, any and all Confidential Information
(as hereinafter defined) relating to the Company. For purposes of this
Agreement, "Confidential Information" shall mean any confidential or proprietary
information including, without limitation, plans, specifications, models,
samples, data, customer lists and customer information, computer programs and
documentation, and other technical and/or business information, in whatever
form, tangible or intangible, printed, electronic or magnetic, that can be
communicated by whatever means available at such time, that relates to the
Company's business during the period the Employee served as an Employee officer
of the Company,

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products, services and/or developments, received from others that the Company is
obligated to treat as confidential or proprietary, and the Employee shall not
disclose such Confidential Information to any person other than the Company,
except as may be required by law or court or administrative order (in which
event the Employee shall so notify the Company as promptly as practicable). The
Employee shall promptly return to the Company reproductions and summaries of
Confidential Information in her possession or control and erase the same from
all media in her possession or control, and, if the Company so requests, shall
certify in writing that she has done so. All Confidential Information is and
shall remain the property of the Company, or in the case of information that the
Company receives from a third party which it is obligated to treat as
confidential, the property of such third party. Confidential Information shall
not include any confidential or proprietary information including, without
limitation, plans, specifications, models, samples, data, customer lists and
customer information, computer programs and documentation, and other technical
and/or business information, in whatever form, tangible or intangible, printed,
electronic or magnetic, that can be communicated by whatever means available at
such time, that relates to the telecommunication business of IG2.

                  (2) All Intellectual Property (as hereinafter defined)
created, developed, co-developed, obtained or conceived of by the Employee
during the period the Employee served as an Employee officer of the Company
shall be owned by and belong exclusively to the Company, provided that they
reasonably relate to any of the business of the Company on the date of such
creation, development, obtaining or conception, and the Employee shall (i)
promptly disclose any such Intellectual Property to the Company, and (ii)
promptly execute and deliver to the Company, without additional compensation,
such instruments as the Company may require from time to time to evidence its
ownership of any such Intellectual Property (the "Intellectual Property
Documents"). If the Company is unable because of the Employee's mental or
physical incapacity or for any other reason to secure the Employee's signature
for any Intellectual Property Document, then the Employee hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents
as her agent and attorney in fact, to act for and in her behalf and stead to
execute and file any Intellectual Property Document and to do all other lawfully
permitted acts to evidence or perfect the Company's ownership and rights of and
to any Intellectual Property or business opportunity with the same legal force
and effect as if executed by the Employee. For purposes of this Agreement, the
term "Intellectual Property" means any and all of the following and all
statutory and/or common law rights throughout the world in, arising out of, or
associated therewith, except the following arising out of the telecommunication
business of IG2: (i) all patents and applications therefor, including docketed
patent disclosures awaiting filing, reissues, divisions, renewals, extensions,
provisionals, continuations and continuations-in-part thereof; (ii) all
inventions (whether patentable or not), inventions disclosures and improvements,
all trade secrets, confidential business information (including ideas, research
and development, know-how, compositions, designs, specifications, pricing and
cost information and business and market plans and proposals), proprietary
information, manufacturing, engineering and technical drawings and
specifications, processes, designs and technology; (iii) all works of
authorship, "moral rights," copyrights (including derivative works thereof),
mask works, copyright and mask work registrations and applications therefor;
(iv) all trade

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names, trade dress, logos, product names, collective marks, collective
membership marks, trademarks certification marks and service marks, trademark
and service mark registrations and applications together with the goodwill of
the business symbolized by the names and the marks; (v) all data and related
documents, object code, databases, passwords, encryption technology, firmware,
development tools, files, records and data, and all media on which any of the
foregoing is recorded; (vi) any similar, corresponding or equivalent rights to
any of the foregoing; (vii) all documentation related to any of the foregoing;
and (viii) all goodwill associated with any of the foregoing.

         Section 6. Non-Competition; Non-Solicitation.

                           (1) During the period commencing on the Separation
Date and expiring two year following the Separation Date (the "Noncompetition
Period"), the Employee shall not, directly or indirectly, own, manage, operate,
control or participate in the ownership, management, operation or control of, or
be connected as an officer, employee, consultant, partner, or director with, any
business conducted anywhere in any State within the eastern half of the United
States of America which is or which becomes during the Noncompetition Period
directly or indirectly competitive with the Automotive Division of the Company
(as such division is described in the Company's Form 10K-SB for the Company's
fiscal year ended December 31, 1999), as the same is conducted as of the
Separation Date (each such business, a "Competitive Automotive Operation").

                           (2) During the period commencing on the Separation
Date and expiring three and one-half years following the Separation Date (the
"Nonsolicitation Period"), the Employee shall not, directly or indirectly,
solicit, interfere with, hire or offer to hire any person who is or was an
employee of the Company during the 12-month period prior to the Separation Date,
or induce such person to discontinue her or her relationship with the Company or
to accept employment by, or enter into a business relationship with, the
Employee or any other entity or person; provided, however, that the Employee may
offer employment to any person who was an employee of IG2, Inc. during the
Nonsolicitation Period. During the Nonsolicitation Period, the Employee shall
not, directly or indirectly, (i) solicit, interfere with, induce or entice away
any person or entity that is or was a client, customer or agent of the Company
during the 24-month period prior to the Separation Date, with respect to any
product or service which is directly or indirectly competitive with the
Automotive Division, as the same are conducted as of the Separation Date, or
(ii) in any manner persuade or attempt to persuade any such person or entity (A)
to discontinue a business relationship with the Company or (B) to enter into a
business relationship with the Employee or any other entity or person which
would be adverse to the interests of the Automotive Division.

                  In the event any restriction against engaging in a competitive
activity contained in this Section 5 shall be determined by any court of
competent jurisdiction to be unenforceable by reason of its extending for too
great a period of time or over too great a geographical area or by reason of its
being too extensive in any other respect, it shall be interpreted to extend only
over the maximum period of time for which it may be enforceable, over the
maximum geographical area as

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to which it may be enforceable and to the maximum extent in all other respects
as to which it may be enforceable, all as determined by such court in such
action.

         Section 7. Knowledge of Claims. The Employee represents and warrants
that, to the knowledge of the Employee, there is no reasonable basis for any
third party to assert any claim against the Company or any of the Company's
parents, subsidiaries or affiliates, or any of the past or present officers or
directors of any of the forgoing (including the Employee) acting in their
capacities as such, under federal, state or local law, including a breach of any
applicable duty under common law. Except as set forth on Exhibit A hereto, the
Employee further represents and warrants that, to the knowledge of the Employee,
there are no claims, actions, suits, investigations or proceedings threatened
against the Company or any of the Company's parents, subsidiaries or affiliates,
or any of the past or present officers or directors of any of the forgoing
(including the Employee) acting in their capacities as such, under any federal,
state or local law, including a breach of any applicable duty under common law.
The Employee further represents and warrants that there is no reasonable basis
for the Company to assert any claim against the Employee for violation of any
federal, state, or local law, or breach of any applicable duty under common law.

         Section 8. Cooperation. Subject to the provisions of Section 9 hereof,
the Employee agrees that she will fully cooperate in any litigation in which the
Company or any of the Company's parents, subsidiaries and affiliates may become
involved. Such cooperation shall include the Employee making himself available,
upon the request of the Company, for depositions, court appearances and
interviews by Company's counsel. To the maximum extent permitted by law, the
Employee agrees that she will notify the Chairman of the Board of Directors of
the Company and the Chairman of the Audit Committee of the Board of Directors of
the Company if she is contacted by any government agency or any other person
contemplating or maintaining any claim or legal action against the Company or
any of the Company's parents, subsidiaries and affiliates, or by any agent or
attorney of such person.

         Section 9. Proceedings. The Employee has not filed, and agrees not to
initiate or cause to be initiated on her behalf, any complaint, charge, claim or
proceeding against the Company before any local, state or federal agency, court
or other body relating to her employment or the separation or termination of her
employment, other than with respect to the obligations of the Company to the
Employee under this Agreement, (each individually, a "Proceeding"), and agrees
not to voluntarily participate or join in any Proceeding.

         Section 10. Indemnification. From and after the Separation Date, the
Company shall indemnify, defend and hold harmless the Employee against all costs
or expenses (including reasonable attorneys' fees), judgments, fines, losses,
claims, damages or liabilities (collectively, "Costs") incurred in connection
with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of actions or omissions
of the Employee occurring prior to the Separation Date, which is based upon or
relates to the Employee's capacity as an employee or director of the Company, to
the fullest extent the Employee is permitted to be

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indemnified under the Company's Articles of Incorporation and Bylaws as in
effect on the date of this Agreement. In the event of any such threatened or
actual claim, action, suit, proceeding or investigation (whether asserted or
arising before or after the Separation Date), the Employee may retain counsel
reasonable satisfactory to the Employee and the Company; provided, however, that
(1) the Company shall have the right to assume the defense thereof and upon such
assumption the Company shall not be liable to the Employee for any legal
expenses of other counsel or any other expenses subsequently incurred by the
Employee in connection with the defense thereof, except that if the Company
elects not to assume such defense, or counsel for the Employee reasonably
advises the Employee that there are issues which raise conflicts of interest
between the Company and the Employee, the Employee may retain counsel reasonably
satisfactory to the Employee and the Company, and the Company shall pay the
reasonable fees and expenses of such counsel for the Employee and (2) the
Company shall not be liable for any settlement effected without its prior
written consent; provided, further, that nothing in this Section 10 shall
prevent the Employee from retaining separate counsel with the prior written
consent of the Company which consent shall not be unreasonably withheld. If the
Employee wishes to claim indemnification under this Section 10, upon learning of
any such claim, action, suit, proceeding or investigation, the Employee shall
promptly notify the Company thereof, provided that the failure to notify shall
not affect the obligation of the Company under this Section 10 except to the
extent such failure to notify materially prejudices the Company. The Company's
obligations under this Section 10 shall continue in full force and effect for a
period of six years after the Separation Date; provided that all rights to
indemnification in respect of any claim, action, suit, proceeding or
investigation made, asserted or commenced with such six year period shall
continue until the final disposition of such claim, action, suit, proceeding or
investigation.

         Section 11. Notice. For purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid as follows:

                  If to the Company:

                  Fidelity Holdings, Inc.
                  80-02 Kew Gardens Road, 4th Floor
                  Kew Gardens, New York 11415
                  Attention: Bruce Bendell, Chairman of the Board of Directors

                  If to the Employee:

                  Kimberly Peacock
                  Global Communications of NY, Inc.
                  50-18 196th Street
                  Kew Gardens, NY 11415

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                  Fax:  (917) 229-0550

                  With a copy to:

                  Gargill, Sassoon & Rudolph LLP
                  92 State Street
                  Boston, MA 02109
                  Attention: Lewis A. Sassoon, Esq.
                  Fax: (617) 227-0313

or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

         Section 12. Miscellaneous.

                  (1) Enforcement; Governing Law; Jurisdiction. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York without regard to its conflicts of law principles. The Company shall
have the right, without prejudice to any other rights or remedies it might have
under the law which are reserved, to obtain injunctive relief to restrain any
breach or threatened breach by the Employee of this Agreement or otherwise to
specifically enforce any provision of this Agreement; provided, however, that
such right to injunctive relief does not preclude the Company from seeking
monetary damages for a breach by the Employee of this Agreement; provided,
further, that in the event of a breach by the Employee of any representation,
warranty, covenant or agreement contained in this Agreement, the Company shall
be entitled to suspend any payments and benefits set forth in Section 1(b) above
not yet paid or provided to the Employee after providing the Employee notice of
such breach and the Company shall be permanently relieved of the Company's
obligations under Section 1(b) above if the Employee does not cure such breach
within 30 days of the date the Company provided such notice to the Employee; and
provided, further, that in the event the Company's obligations under Section
1(b) above are suspended or relieved pursuant to the preceding proviso, the
Company shall not be precluded from seeking monetary damages from the Employee
that exceed the amount of the Company's obligations under Section 1(b) above
that are suspended or relieved pursuant to the preceding proviso.

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

                  (3) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

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                  (4) Entire Agreement. This Agreement constitutes the entire
agreement, and supersedes any and all prior agreements, and understandings, both
written and oral, between the parties hereto with respect to the subject matter
hereof except as otherwise provided herein.

                  (5) Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect.

                  (6) Successors. This Agreement shall be binding upon and shall
inure to the benefit of each of the parties hereto, and their respective heirs,
legatees, executors, administrators, legal representatives, successors and
assigns. The provisions of Section 2(a) hereof are intended to be for the
benefit of, and shall be enforceable by, each Releasee and his, her or its,
heirs and representatives.

                  (7) Withholding. All payments made by the Company to the
Employee pursuant to Section 1(b) of this Agreement shall be reduced by all
federal, state, city or other taxes that are required to be withheld pursuant to
any law or governmental regulation.

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

                                   FIDELITY HOLDINGS, INC.

                                   --------------------------------------
                                   Bruce Bendell, Chief Executive Officer

                                   --------------------------------------
                                   KIMBERLY PEACOCK

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                                    EXHIBIT A

         The following could be construed as threatened claims:

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                                    EXHIBIT B

                              AMORTIZATION SCHEDULE

                                       13<PAGE>   1
                                                                   Exhibit 10.86

                ROBINSON SILVERMAN PEARCE ARONSOHN & BERMAN LLP

                          1290 AVENUE OF THE AMERICAS

                            NEW YORK, NEW YORK 10104

                                 (212) 541-2000

                           FACSIMILE: (212) 541-4630

                         WEB: www.robinsonsilverman.com

                               November 21, 2000

                                                         WRITER'S DIRECT NUMBER:
                                                                    212-541-2275
                                                      WRITER'S DIRECT FACSIMILE:
                                                                    212-541-1357
                                                        WRITER'S E-MAIL ADDRESS:
                                                              henderso@rspab.com

VIA FACSIMILE

Fidelity Holdings, Inc.
80-02 Kew Gardens Road, Suite 5000
Kew Gardens, New York 11415
Attn: Bruce Bendell, Chairman

     Re: Promissory Notes, dated September 11, 2000, of Fidelity Holdings, Inc.
         (the "Company"), in favor of Strong River Investments, Inc. and
         Montrose Investments Ltd. (the "Investors"), each in the principal
         amount of $1,375,000.00 (the "Notes").

Gentlemen:

         The Company is in breach of its obligations under the Notes and the
Investors have given to the Company notice of such breach. However, the Company
has requested that the Investors agree that if the Company timely makes each of
the following payments to each of the Investors, the default should have been
cured and the Notes shall be deemed paid in full:

         An initial payment of $416,666 to both Investors will be made by not
later than 4:00 PM (New York time) on the date of this letter (the "Initial
Payment"). A second payment of $416,666 to both Investors will be made by not
later than 4:00 PM (New York time) on December 21, 2000 and additional six
payments of $250,000 to both Investors on each of the following dates: December
29, 2000, February 21, 2001, March 21, 2001, April 20, 2001, May 21, 2001 and
June 21, 2001 (each, a "Payment Due Date").

         Payments shall be deemed as paid only upon receipt of wire transfers to
the Investors accounts attached hereto by 4:00 PM (New York time) on a Payment
Due Date.

         The Investors shall not take any action on account of the existing
defaults by the Company as long as the Company makes the Initial Payment and all
subsequent payments timely and in accordance with this letter, provided, that if
any other default occurs under the Notes, the Investors may take such action as
they deem appropriate without regard to the terms of this letter. If the Company
fails to timely make the Initial Payment to each of the Investors, or any of the

<PAGE>   2
ROBINSON SILVERMAN PEARCE ARONSOHN & BERMAN LLP

Fidelity Holdings, Inc.
November 21, 2000
Page 2

subsequent payments, the Company shall be in default and the Notes shall be due
and payable immediately without further action on the part of the Investors,
and this letter shall serve as written notice of such default.

         This letter shall not constitute waiver of any of the Investors' rights
under the Notes or any applicable law, nor shall it diminish any of the
Company's obligations under the Notes, which are absolute in accordance with
their terms.

                                        Sincerely,

                                        /s/ Kenneth L. Henderson
                                            Kenneth L. Henderson

AGREED AND ACCEPTED

-----------------------
FIDELITY HOLDINGS, INC.

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