CRUSADER HOLDING CORP, S-1/A, 1998-02-09

CRUSADER HOLDING CORP
S-1/A, 1998-02-09
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<PAGE>

As filed with the Securities and Exchange Commission via EDGAR on

February 9, 1998

Registration No. 333-42215

================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------

Amendment No. 2

to
FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
CRUSADER HOLDING CORPORATION
(Exact name of registrant as specified in its charter)

Pennsylvania
(State or other jurisdiction of incorporation or organization)

6749 23-2562545
(Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification No.)

1230 Walnut Street
Philadelphia, Pennsylvania 19107
(215) 893-1500
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)

Bruce A. Levy
President
Crusader Holding Corporation
1230 Walnut Street
Philadelphia, Pennsylvania 19107
(215) 893-1500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
Copies to:

<TABLE>
<CAPTION>
<S> <C>
Justin P. Klein, Esquire Mark K. Kessler, Esquire
Ballard Spahr Andrews & Ingersoll Richard A. Silfen, Esquire
1735 Market Street, 51st Floor Wolf, Block, Schorr and Solis-Cohen LLP
Philadelphia, Pennsylvania 19103 111 South 15th Street, 12th Floor
(215) 665-8500 Philadelphia, Pennsylvania 19102
(215) 977-2000
</TABLE>
Approximate date of commencement of proposed sale to public: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Secur-ities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
---------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Secur-ities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
================================================================================
<PAGE>

PURPOSE: The purpose of this Amendment No. 2 is to (i) file Exhibit 10.8(b),
First Amendment to Agreement, dated as of February 9, 1998, among the
Registrant, Crusader Savings Bank, FSB, Crusader Mortgage Corporation and
Jeffrey K. Rafsky; (ii) file Exhibit 10.12, Partnership Agreement, dated as of
December 19, 1996 by and between Ronald L. Caplan and Quest Holding Company;
and (iii) make additional changes to Part II as noted.

<PAGE>

PART II -- INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth the estimated amount of various expenses in
connection with the sale and distribution of the securities being registered:

SEC registration fee ...................... $ 5,428
NASD filing fee ........................... 2,340
Nasdaq National Market filing fee ......... 23,250
Printing and engraving expenses ........... 85,000
Legal fees and expenses
(including blue sky fees and expenses) ... 150,000
Accounting fees and expenses .............. 75,000
Transfer agent fees ....................... 5,000
Miscellaneous ............................. 53,982
--------
Total ..................................... $400,000
========
Item 14. Indemnification of Directors and Officers.

The Pennsylvania Business Corporation Law of 1988 authorizes the Company to
grant indemnities to directors and officers in terms sufficiently broad to
permit indemnification of such persons under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act of 1933. The Company's Bylaws include the following provisions:

Article VII

7.1 INDEMNIFICATION OF DIRECTORS, OFFICERS, AND OTHER PERSONS. The
Corporation shall indemnify any director, officer, employee or agent of the
Corporation or any of its subsidiaries who was or is an "authorized
representative" of the Corporation (which shall mean, for the purpose of this
Article, a director or officer of the Corporation, or a person serving at the
request of the Corporation as a director, officer, partner, fiduciary or trustee
of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise) and who was or is a "party" (which shall include for
purposes of this Article the giving of testimony or similar involvement) or is
threatened to be made a party to any "proceeding" (which shall mean for purposes
of this Article any threatened, pending or completed action, suit, appeal or
other proceeding of any nature, whether civil, criminal, administrative or
investigative, whether formal or informal, and whether brought by or in the
right of the Corporation, its shareholders or otherwise) by reason of the fact
that such person was or is an authorized representative of the Corporation to
the fullest extent permitted by law, including without limitation
indemnification against expenses (which shall include for purposes of this
Article attorneys' fees and disbursements), damages, punitive damages,
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such proceeding unless the
act or failure to act giving rise to the claim is finally determined by a court
to have constituted willful misconduct or recklessness. If an authorized
representative is not entitled to indemnification in respect of a portion of any
liabilities to which such person may be subject, the Corporation shall
nonetheless indemnify such person to the maximum extent for the remaining
portion of the liabilities.

7.2 ADVANCEMENT OF EXPENSES. The Corporation shall pay the expenses
(including attorneys' fees and disbursements) actually and reasonably incurred
in defending a proceeding on behalf of any person entitled to indemnification
under Section 7.1 in advance of the final disposition of such proceeding upon
receipt of an undertaking by or on behalf of such person to repay such amount if
it shall ultimately be determined that such person is not entitled to be
indemnified by the Corporation as authorized in this Article and may pay such
expenses in advance on behalf of any employee or agent on receipt of a similar
undertaking. The financial ability of such authorized representative to make
such repayment shall not be prerequisite to the making of an advance.

II-1
<PAGE>

7.3 EMPLOYEE BENEFIT PLANS. For purposes of this Article, the Corporation
shall be deemed to have requested an officer, director, employee or agent to
serve as fiduciary with respect to an employee benefit plan where the
performance by such person of duties to the Corporation also imposes duties on,
or otherwise involves services by, such person as a fiduciary with respect to
the plan; excise taxes assessed on an authorized representative with respect to
any transaction with an employee benefit plan shall be deemed "fines"; and
action taken or omitted by such person with respect to an employee benefit plan
in the performance of duties for a purpose reasonably believed to be in the
interest of the participants and beneficiaries of the plan shall be deemed to be
for a purpose which is not opposed to the best interests of the Corporation.

7.4 SECURITY FOR INDEMNIFICATION OBLIGATIONS. To further effect, satisfy or
secure the indemnification obligations provided herein or otherwise, the
Corporation may maintain insurance, obtain a letter of credit, act as
self-insurer, create a reserve, trust, escrow, cash collateral or other fund or
account, enter into indemnification agreements, pledge or grant a security
interest in any assets or properties of the Corporation, or use any other
mechanism or arrangement whatsoever in such amounts, at such costs, and upon
such other terms and conditions as the Board of Directors shall deem
appropriate.

7.5 RELIANCE UPON PROVISIONS. Each person who shall act as an authorized
representative of the Corporation shall be deemed to be doing so in reliance
upon the rights of indemnification provided by this Article.

7.6 AMENDMENT OR REPEAL. All rights of indemnification under this Article
shall be deemed a contract between the Corporation and the person entitled to
indemnification under this Article pursuant to which the Corporation and each
such person intend to be legally bound. Any repeal, amendment or modification
hereof shall be prospective only and shall not limit, but may expand, any rights
or obligations in respect of any proceeding whether commenced prior to or after
such change to the extent such proceeding pertains to actions or failures to act
occurring prior to such change.

7.7 SCOPE OF ARTICLE. The indemnification, as authorized by this Article,
shall not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any statute,
agreement, vote of shareholders or disinterested directors or otherwise, both as
to action in an official capacity and as to action in any other capacity while
holding such office. The indemnification and advancement of expenses provided
by, or granted pursuant to, this Article shall continue as to a person who has
ceased to be an officer, director, employee or agent in respect of matters
arising prior to such time, and shall inure to the benefit of the heirs,
executors and administrators of such person.

The Company maintains a policy of directors' and officers' liability
insurance.

Item 15. Recent Sales of Unregistered Securities.

Since December 1, 1994, the Registrant has issued and sold the following
unregistered securities:

1. On March 1, 1996, the Company issued an amended and restated
promissory note in the principal amount of $2,044,622 and authorized the
issuance of 675,000 shares of Common Stock to Thomas J. Knox, Chairman of the
Board and Chief Executive Officer of the Company. Such shares were issued on
January 8, 1997 in connection with a twenty-eight-for-one split of the Common
Stock, effected in the form of a stock dividend.

2. On March 1, 1996, the Company issued an amended and restated
promissory note in the principal amount of $876,267 and authorized the
issuance of 300,000 shares of Common Stock to Bruce A. Levy, President and a
director of the Company. Such shares were issued on January 8, 1997 for an
aggregate price of $1,318,000.

3. On December 31, 1996, the Company authorized the issuance of 42,000
shares of Common Stock to Thomas J. Knox, for an aggregate price of $140,000,
which shares were issued on January 8, 1997.

4. On December 31, 1996, the Company authorized the issuance of 18,000
shares of Common Stock to Bruce A. Levy, for an aggregate price of $60,000,
which shares were issued on January 8, 1997.

5. On January 31, 1997, the Company issued five exchangeable promissory
notes, each in the principal amount of $13,800, and issued 5,000 shares of
Common Stock, to each of Ronald L. Caplan, D. Walter Cohen, D.D.S., Daniel
DiLella, Joel S. Lawson III and Brian McAdams, each of whom is a director of the
Company. The aggregate price received by the Registrant from each such director
was $25,000.

II-2
<PAGE>

6. On September 30, 1997, the Company issued a promissory note in the
principal amount of $173,606 and issued 63,000 shares of Common Stock to Thomas
J. Knox, for an aggregate price of $350,000 and the Company issued a promissory
note in the principal amount of $74,403 and issued 27,000 shares of Common Stock
to Bruce A. Levy, for an aggregate price of $150,000.

7. Effective November 30, 1997, the Company issued 150,000 shares of its
Common Stock to Jeffrey K. Rafsky in exchange for 50 shares of CMC stock.

8. On December 8, 1997, the Company granted options to purchase an
aggregate of 20,000 shares of Common Stock at an exercise price of $12.00 per
share to Joseph T. Crowley, President of the Bank.

The Company believes that the transactions described above were exempt from
registration under Sections 3(a)(9), 3(b) or 4(2) of the Securities Act because
the subject securities were, respectively, either (i) exchanged by the issuer
with its existing security holders exclusively, with no commission or other
remuneration being paid or given directly or indirectly for soliciting such
exchange; (ii) issued pursuant to a compensatory benefit plan pursuant to Rule
701 under the Securities Act; or (iii) sold to a limited group of persons, each
of whom was believed to have been a sophisticated investor or had a pre-existing
business or personal relationship with the Company or its management and was
purchasing for investment without a view to further distribution. Restrictive
legends were placed on stock certificates evidencing the shares and/or
agreements relating to the right to purchase such shares described above.

Item 16. Exhibits and Financial Statement Schedules.

<TABLE>
<CAPTION>
Exhibit
No. Exhibit
- ------------- -----------------------------------------------------------------------------------------------------
<S> <C>
1 Form of Underwriting Agreement.*
3.1 Amended and Restated Articles of Incorporation of the Registrant.*
3.2 Amended and Restated Bylaws of the Registrant.*
4.1 Form of certificate evidencing Common Stock of the Registrant.*
4.2(a) Subscription and Shareholders' Agreement, dated as of March 1, 1996, by and among the
Registrant, Thomas J. Knox and Bruce A. Levy.*
4.2(b) Amendment of Shareholders' Agreement, dated January 31, 1997, among the Registrant,
Thomas J. Knox, Bruce A. Levy, Daniel DiLella, Joel S. Lawson III, Brian McAdams and
Ronald Caplan.*
4.2(c) Joinder among the Registrant and D. Walter Cohen, dated January 31, 1997, to Subscription
and Shareholders' Agreement dated March 1, 1996, as amended by Amendment of Shareholders'
Agreement dated January 31, 1997.*
4.2(d) Second Amendment of Shareholders' Agreement, dated as of January 9, 1998, among the
Registrant, Thomas J. Knox, Bruce A. Levy, Daniel DiLella, Joel S. Lawson III, Brian
McAdams, Ronald Caplan, D. Walter Cohen, Jeffrey K. Rafsky and Satellite Mortgage
Corporation.*
4.3 Amended and Restated Promissory Note, dated as of March 1, 1996, issued to Thomas J.
Knox.*
4.4 Amended and Restated Promissory Note, dated as of March 1, 1996, issued to Bruce A.
Levy.*
4.5 Exchangeable Promissory Note, dated as of January 31, 1997, issued to Daniel DiLella.*
4.6 Exchangeable Promissory Note, dated as of September 30, 1997, issued to Thomas J. Knox.*
4.7 Exchangeable Promissory Note, dated as of September 30, 1997, issued to Bruce A. Levy.*
5 Opinion of Ballard Spahr Andrews & Ingersoll, LLP regarding legality of securities being
registered.*
10.1 Directors' Stock Option Plan.*+
10.2 Employees Stock Option Plan.*+
10.3 Employment Agreement, dated as of March 1, 1996, between the Registrant and Bruce A.
Levy.*+
10.4 Employment Agreement, dated as of December 11, 1997, between Crusader Savings Bank, FSB
and Joseph T. Crowley.*+
10.5 Management Agreement, dated as of March 1, 1996, between the Registrant and Crusader
Savings Bank, FSB.*
10.6 Lease Agreement and Indenture of Lease, dated as of April 30, 1994, by Walnut Square
Partners and Crusader Savings Bank, FSB.*
10.7 Lease Agreement, dated as of July 1, 1984, by Goldie Sabel and Crusader Savings Bank,
FSB.*
</TABLE>

II-3
<PAGE>

<TABLE>
<CAPTION>
<S> <C>
10.8(a) Agreement, dated as of November 30, 1997, among the Registrant, Crusader Savings Bank,
FSB, Crusader Mortgage Corporation and Jeffrey K. Rafsky.*
10.8(b) First Amendment to Agreement, dated as of February 9, 1998, among the Registrant, Crusader
Savings Bank, FSB, Crusader Mortgage Corporation and Jeffrey K. Rafsky.**
10.9(a) Letter Agreement, dated as of July 8, 1996, among Crusader Savings Bank, FSB and Robert
W. Stein.*
10.9(b) Letter Agreement, dated as of September 13, 1996, among Crusader Savings Bank, FSB and
Gary Snyder.*
10.9(c) Shareholders' Agreement, dated as of October 2, 1996, by and among Crusader Savings Bank,
FSB, Robert H. Stein, Gary Snyder and Crusader Servicing Corporation.*
10.10(a) Letter Agreement, dated as of July 31, 1997, among Crusader Savings Bank, FSB and Michael
D. Kushner and Gregory K. Kushner.*
10.10(b) Subscription and Shareholders' Agreement, dated as of September 16, 1997, by and among
Crusader Savings Bank, FSB, Michael D. Kushner, Gregory K. Kushner and Crusader Mortgage
Corporation of Delaware.*
10.11(a) Letter Agreement, dated as of November 7, 1997, among Crusader Savings Bank, FSB and
Haiching Zhao, Ph.D.*
10.11(b) Subscription and Shareholders' Agreement, dated as of December 11, 1997, by and among
Crusader Savings Bank, FSB, Haiching Zhao, Ph.D. and National Chinese Mortgage
Corporation.*
10.12 Partnership Agreement, dated as of December 19, 1996 by and between Ronald L. Caplan
and Quest Holding Company.**
21 Subsidiaries of the Registrant.*
23.1 Consent of Grant Thornton LLP.**
23.2 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included in Exhibit 5).*
24 Power of Attorney (included in signature page).*
27 Financial Data Schedule.*
</TABLE>

- ---------------------
+Constitutes a management contract or compensatory plan.
*Previously filed.

**Filed herewith.

Item 17. Undertakings.

The Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

The Registrant hereby undertakes to provide to the underwriter at the
closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names required by the underwriter to permit
prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 2 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized in the City of
Philadelphia, Commonwealth of Pennsylvania, on February 9, 1998.

CRUSADER HOLDING CORPORATION

By: /s/ Bruce A. Levy
-------------------------------
Bruce A. Levy
President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Bruce A. Levy President and Director February 9, 1998
- --------------------- (principal executive officer)
Bruce A. Levy

* Chairman and Director February 9, 1998
- --------------------- (principal executive officer)
Thomas J. Knox

* Vice President, Secretary and February 9, 1998
- --------------------- Treasurer (principal financial
Joseph T. Crowley and accounting officer)

* Director February 9, 1998
- ---------------------
Paul Bachow

* Director February 9, 1998
- ---------------------
Ronald L. Caplan

* Director February 9, 1998
- ---------------------
D. Walter Cohen

* Director February 9, 1998
- ---------------------
Daniel DiLella

* Director February 9, 1998
- ---------------------
Linda R. Knox

* Director February 9, 1998
- ---------------------
Joel S. Lawson III

* Director February 9, 1998
- ---------------------
Brian McAdams

*By /s/ Bruce A. Levy
------------------
Bruce A. Levy
Attorney-in-Fact
</TABLE>

II-5
<PAGE>

EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description Page
- ------------- ------------- ----
<S> <C> <C>
1 Form of Underwriting Agreement.*
3.1 Amended and Restated Articles of Incorporation of the Registrant.*
3.2 Amended and Restated Bylaws of the Registrant.*
4.1 Form of certificate evidencing Common Stock of the Registrant.*
4.2(a) Subscription and Shareholders' Agreement, dated as of March 1, 1996, by and among the
Registrant, Thomas J. Knox and Bruce A. Levy.*
4.2(b) Amendment of Shareholders' Agreement, dated January 31, 1997, among the Registrant,
Thomas J. Knox, Bruce A. Levy, Daniel DiLella, Joel S. Lawson III, Brian McAdams and
Ronald Caplan.*
4.2(c) Joinder among the Registrant and D. Walter Cohen, dated January 31, 1997, to Subscription
and Shareholders' Agreement dated March 1, 1996, as amended by Amendment of Shareholders'
Agreement dated January 31, 1997.*
4.2(d) Second Amendment of Shareholders' Agreement, dated as of January 9, 1998, among the
Registrant, Thomas J. Knox, Bruce A. Levy, Daniel DiLella, Joel S. Lawson III, Brian
McAdams, Ronald Caplan, D. Walter Cohen, Jeffrey K. Rafsky and Satellite Mortgage
Corporation.*
4.3 Amended and Restated Promissory Note, dated as of March 1, 1996, issued to Thomas J.
Knox.*
4.4 Amended and Restated Promissory Note, dated as of March 1, 1996, issued to Bruce A.
Levy.*
4.5 Exchangeable Promissory Note, dated as of January 31, 1997, issued to Daniel DiLella.*
4.6 Exchangeable Promissory Note, dated as of September 30, 1997, issued to Thomas J. Knox.*
4.7 Exchangeable Promissory Note, dated as of September 30, 1997, issued to Bruce A. Levy.*
5 Opinion of Ballard Spahr Andrews & Ingersoll, LLP regarding legality of securities being
registered.*
10.1 Directors' Stock Option Plan.*+
10.2 Employees Stock Option Plan.*+
10.3 Employment Agreement, dated as of March 1, 1996, between the Registrant and Bruce A.
Levy.*+
10.4 Employment Agreement, dated as of December 11, 1997, between Crusader Savings Bank, FSB
and Joseph T. Crowley.*+
10.5 Management Agreement, dated as of March 1, 1996, between the Registrant and Crusader
Savings Bank, FSB.*
10.6 Lease Agreement and Indenture of Lease, dated as of April 30, 1994, by Walnut Square
Partners and Crusader Savings Bank, FSB.*
10.7 Lease Agreement, dated as of July 1, 1984, by Goldie Sabel and Crusader Savings Bank,
FSB.*
</TABLE>

<PAGE>

- ---------------------
+Constitutes a management contract or compensatory plan.
*Previously filed.

**Filed herewith.

<PAGE>

FIRST AMENDMENT TO AGREEMENT

THIS FIRST AMENDMENT (the "Amendment") to the Agreement is made as of
the 9th day of February, 1998, by and among Crusader Holding Corporation (the
"Company"), Crusader Savings Bank, FSB and its subsidiaries (the "Bank"), and
Crusader Mortgage Corporation ("Mortgage") (collectively "Crusader"), on the
one hand, and Jeffrey K. Rafsky (the "Executive") and Satellite Mortgage
Corporation ("Satellite"), on the other hand.

WHEREAS, the Company, the Bank, Mortgage, the Executive and Satellite
are parties to that certain Agreement, dated as of November 30, 1997, by and
among the Company, the Bank, Mortgage, the Executive and Satellite (the
"Agreement"); and

WHEREAS, the parties to the Agreement desire to amend the Agreement
to provide for an irrevocable proxy, to remove the provision which creates
consulting and certain other benefits in favor of the Executive and to make
such other changes as are set forth in this First Amendment;

NOW, THEREFORE, in consideration of the premises, the mutual
covenants of the Company, the Bank, Mortgage, the Executive and Satellite
contained in this First Amendment and the Agreement as so amended, and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company, the Bank, Mortgage, the Executive and
Satellite, intending to be legally bound, hereby agree as follows:

1. Capitalized terms not otherwise defined in the First Amendment
shall have the meanings ascribed to them in the Agreement.

2. Section 2 of the Agreement is hereby amended to add the following
as the second sentence of such Section 2:

"Executive further agrees not to purchase or otherwise become the
beneficial owner of any additional Company Shares without the prior
written consent of the President of the Company."

3. Section 3 of the Agreement is hereby amended to delete the words
"Consulting and" in the title of such Section 3 and to delete the second
sentence of such Section 3.

4. Section 4 of the Agreement is hereby amended and restated to read
in its entirety as follows:

"Resignation from Offices; Irrevocable Proxy. The Executive agrees
that as of the Effective Date he shall have resigned from all offices
and positions with Crusader. The Executive further agrees that he
will deliver to the Bank a duly executed irrevocable proxy, in the
form attached hereto as Exhibit A, in favor of USA Capital, Inc.,
providing for it to vote all of Executive's Company Shares in the
proportion in which other outstanding shares of common stock of the
Company are voted with respect to any and all matters which may be
presented to the shareholders for action, which irrevocable proxy
shall be delivered on or before the effective date of the Company's
initial public offering."
<PAGE>

5. Section 12 of the Agreement is hereby amended to be renumbered as
Section 13 of the Agreement.

6. The Agreement is hereby amended to add the following as Section 12
of the Agreement:

"Fees and Expenses. The Escrow Agent's fees and expenses shall be
shared equally by Crusader and the Executive and shall be paid
promptly upon receipt of an invoice from the Escrow Agent."

7. Except as amended by the First Amendment, all terms of the
Agreement shall remain in full force and effect and references in the
Agreement to "this Agreement," "herein" and "hereunder" shall mean the
Agreement as amended by the First Amendment.

8. This First Amendment may be executed in counterparts, each of
which shall be deemed an original and all of which shall constitute together
one and the same instrument.

[SIGNATURES BEGIN ON NEXT PAGE]

-2-

<PAGE>

IN WITNESS WHEREOF, each of the parties hereto has fully executed
this Amendment No. 1 all as of the day and year first above written.

CRUSADER: CRUSADER HOLDING CORPORATION

By /s/ Bruce A. Levy
------------------------------------

Its President
------------------------------------

CRUSADER SAVINGS BANK, FSB

By /s/ Joseph T. Crowley
------------------------------------

Its President
------------------------------------

CRUSADER MORTGAGE CORPORATION

By /s/ Bruce A. Levy
------------------------------------

Its President
------------------------------------

EXECUTIVE: /s/ Jeffrey K. Rafsky
------------------------------------
Jeffrey K. Rafsky

SATELLITE MORTGAGE CORPORATION

By /s/ Jeffrey K. Rafsky
------------------------------------

Its President
------------------------------------

-3-

<PAGE>

EXHIBIT A
---------

CRUSADER HOLDING CORPORATION
----------------------------

IRREVOCABLE PROXY
-----------------

The undersigned, being the legal and beneficial owner of the number
of shares of the voting Common Stock of Crusader Holding Corporation, a
Pennsylvania corporation (the "Company"), set forth below (the "Shares"),
hereby appoints USA Capital, Inc. in its capacity as the undersigned's true
and lawful proxy, with full power of substitution, (i) to attend any and all
meetings of the shareholders of the Company, whether annual or special, and
all adjournments and postponements thereof, which may be held at any time
after the date of this Proxy, and to vote the Shares in the proportion in
which other outstanding shares of the Company's common stock are voted on any
and all matters which may be presented to the shareholders for action at such
shareholder meetings, and (ii) to exercise all other voting rights and powers
in respect of the Shares, including without limitation the calling of
shareholder meetings and the giving of consents and approvals on any and all
matters on which the shareholders of the Company may act.

The undersigned hereby affirms that this Proxy is coupled with an
interest and shall be irrevocable to the fullest extent permitted by law.

The undersigned hereby revokes all proxies which he may have
previously executed with respect to the Shares.

IN WITNESS WHEREOF, this Proxy has been executed and delivered as of
this 9th day of February, 1998.

/s/ Bruce A. Levy /s/ Jeffrey K. Rafsky
- -------------------------- ---------------------------------------
Witness Jeffrey K. Rafsky

Number of Shares:
150,000 Shares
---------------------------------------

-4-

<PAGE>

PARTNERSHIP AGREEMENT

THIS AGREEMENT is made as of the 19th day of December, 1996, by and
between RONALD L. CAPLAN, ("Managing General Partner"), and QUEST HOLDING
COMPANY ("General Partner"). The Managing General Partner and the General
Partner are sometimes individually referred to herein as a "Partner" and
collectively as "Partners."

WHEREAS, the Managing General Partner and the General Partner desire
to form a general partnership.

NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby form a general partnership (the "Partnership") pursuant to the
provisions of the Act, and agree as follows:

1. The Partnership.

1.1 Name. The name of the Partnership is "1334 Walnut
Street Partners."

1.2 Principal Office. The principal office and place of business of
the Partnership shall be located at 1228 Spruce Street, Philadelphia,
Pennsylvania 19107, or at such other place as the Managing General Partner may
designate from time to time. The Managing General Partner shall notify the
General Partner promptly of any change in the location of the principal office
and place of business.

1.3 Purpose. The purpose and character of the Partnership
business is to:

1.3.1 Acquire, lease, own, and dispose of real and personal
property for investment and income (including, without limitation, the
property located at 1334-36 Walnut, Philadelphia, Pennsylvania (the
"Property")) and in connection therewith, to manage, mortgage, develop,
operate, lease or otherwise deal in such property.

1.3.2 Do all things necessary or advisable to carry out the
foregoing.

2. Definitions. As used in this Agreement, the following terms shall have the
following meanings:

2.1 Affiliate means, with respect to any Person, (i) any Person
directly or indirectly controlling, controlled by or under common control with
such Person, (ii) any Person owning 10% or more of the outstanding voting
securities of such Person, (iii) any officer, director, or general partner of
such Person or (iv) any Person who is an officer, director, general partner,
trustee

<PAGE>

or holder of 10% or more of the voting securities of any Person described in
clauses (i) through (iii) of this sentence.

2.2 Agreement or Partnership Agreement means this Partnership
Agreement, as amended from time to time.

2.3 Capital Account means the bookkeeping account maintained for each
Partner in accordance with Treasury Regulations issued under Section 704(b) of
the Code, pursuant to Section 3 of this Agreement.

2.4 Capital Contribution or Contributions means, with respect to any
Partner, the amount of money and the initial Gross Asset Value of any property
(other than money) contributed to the Partnership as determined by a current
appraisal or as mutually agreed upon by the Partner.

2.5 Code means the Internal Revenue Code of 1986, as amended from
time to time (or any corresponding provisions of any succeeding law).

2.6 Depreciation means, for each Fiscal Year or other period, an
amount equal to the depreciation, amortization, or other cost recovery
deduction allowable for federal income tax purposes with respect to an asset
for such Fiscal Year or other period, except that if the Gross Asset Value of
an asset differs from its adjusted basis for federal income tax purposes at
the beginning of such Fiscal Year or other period, Depreciation shall be an
amount which bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization, or other cost recovery
deduction for such Fiscal Year or other period bears to such beginning
adjusted tax basis. In the event that the federal income tax depreciation,
amortization, or other cost recovery deduction is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method.

2.7 Fiscal Year means the twelve-month period ending December 31 in
each calendar year.

2.8 General Partner means Quest Holding Company, and any successor or
assign thereof permitted under the terms of this Agreement.

2.9 Gross Asset Value means with respect to any asset, the adjusted
basis of such asset for federal income tax purposes, except as follows:

2.9.1 The initial Gross Asset Value of any asset contributed
by a Partner to the Partnership shall be the gross

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fair market value of such asset, as determined by the
contributing Partner and the Partnership.

2.9.2 The Gross Asset Values of Partnership assets shall be
adjusted to reflect any revaluations made pursuant to Section 3.5 of this
Agreement.

2.9.3 The Gross Asset Value of any Partnership Asset
distributed to a Partner shall be the gross fair market value as determined by
a current appraisal or as mutually agreed upon by the Partners.

2.9.4 The Gross Asset Values of the Partnership assets shall
be increased (or decreased) to reflect any adjustments to the adjusted basis
of such assets pursuant to Sections 734(b) or 743(b) of the Code should the
Partnership make an election under Section 754 of the Code, but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m).

2.9.5 If the Gross Asset Value of an asset has been
determined or adjusted pursuant to Paragraphs 2.10.1 or 3.5 of this Agreement,
such Gross Asset Value shall thereafter be adjusted by the Depreciation taken
into account with respect to such asset for purposes of computing Profits and
Losses.

2.10 General Partner means any person who is referred to as such in
the first paragraph of this Agreement or has been admitted as an additional
General Partner pursuant to the terms of this Agreement, but only so long as
any such Person remains as a General Partner.

2.11 Managing General Partner means Ronald L. Caplan so long as he
remains as the Managing General Partner, and any successor or assign thereof
permitted under the terms of this Agreement.

2.12 Minimum Gain means and shall refer to, at any time, with respect
to all nonrecourse liabilities of the Partnership (within the meaning of
Treasury Regulations Section 1.704-2(b)(3) the aggregate amount of gain (of
whatever character), if any, that would be realized by the Partnership if it
disposed of (in a taxable transaction) all Partnership Property subject to
such liabilities in full satisfaction thereof, and as further defined in
Treasury Regulations Section 1.704-2(d).

2.13 Net Cash Flow means, for each Fiscal Year, the Partnership's
Profits (for this purpose any Losses shall be treated as negative Profits),
adjusted as follows:

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2.13.1 Increased by the following:

(a) Any receipts which are not included in
the computation of Profits (such as capital contributions, loan proceeds, and
withdrawals from reserves).

(b) Any deductions not involving cash
expenditures (such as depreciation, amortization and other cost
recovery deductions).

2.13.2 Decreased by the following:

(a) All expenditures which are not
deducted in determining Profits (such as expenditures for capital
improvements, tenant fit-out, asset acquisitions, and loan repayments).

(b) Contributions to any reserve
established by the Partnership, as mutually agreed upon by the Partners, for
anticipated working capital needs, improvements or for other purposes.

2.14 Net Cash Flow from Operations means, for each Fiscal Year, the
Partnership's revenues from the ongoing operation of the Property, less (i)
the Partnership's cash expenses and (ii) the Partnership's cash reserves
created in accordance with paragraphs 2.13.2 above.

2.15 Nonrecourse Deductions has the meaning set forth in Treasury
Regulations Section 1.704-2(c).

2.16 Partner means the Managing General Partner or the General
Partner, where no distinction is required by the context in which the term is
used herein.

2.17 Partner Nonrecourse Debt means nonrecourse indebtedness of the
Partnership with respect to which any Partner has a direct or indirect risk of
loss, as more fully defined in Treasury Regulations Section 1.704-2(b)(4).

2.18 Partnership means the partnership formed pursuant to this
Agreement and the partnership continuing the business of the Partnership in
the event of dissolution as herein provided.

2.19 Partnership Property means all real and personal property
acquired by the Partnership and any improvements thereto, and shall include
both tangible and intangible property.

2.20 Person means any individual, partnership, corporation, trust, or
other entity.

<PAGE>

2.21 Profits and Losses means, for each Fiscal Year or other period,
an amount equal to the Partnership's taxable income or loss for such Fiscal
Year or other period, determined in accordance with Section 703(a) of the Code
(for this purpose, all items of income, gain, loss or deduction required to be
stated separately pursuant to Section 703(a)(1) of the Code shall be included
in taxable income or loss) with the following adjustments:

2.21.1 Income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Profits and
Losses shall be added to such taxable income or loss.

2.21.2 Expenditures of the Partnership described in Section
705(a)(2)(B) of the Code or treated as such expenditures pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(1), and not otherwise taken into account
in computing Profits and Losses shall be subtracted from such taxable income
or loss.

2.21.3 Gain or loss resulting from any disposition of
Partnership Property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross Asset
Value of the property disposed of, notwithstanding that the adjusted tax basis
of such property differs from its Gross Asset Value.

2.21.4 In lieu of the depreciation, amortization, and other
cost recovery deductions taken into account in computing taxable income or
loss, there shall be taken into account Depreciation for such Fiscal Year or
other period.

2.21.5 If the Gross Asset Value of any Partnership Property
is adjusted pursuant to Sections 2.9.2 or 2.10.3 above, the amounts of such
adjustment shall be taken into account as gain or loss from the disposition of
such asset for purposes of computing Profits or Losses.

2.21.6 Notwithstanding any other provision of this
definition, any items which are specially allocated pursuant to Section 4.1.2
below shall not be taken into account in computing Profits and Losses.

2.22 Property means that certain parcel of real property located at
1334-36 Walnut, Philadelphia, Pennsylvania, together
with all improvements thereon.

2.23 Treasury Regulations means the regulations promulgated under the
Code, as such regulations may be amended from time to time (including
temporary regulations and corresponding provisions of succeeding regulations).

<PAGE>

3. Capital, Capital Contributions and Accounts of Partners.

3.1 Capital Contributions; Partnership Interests. No Partner shall be
required to make additional Capital Contributions to the Partnership in excess
of its initial Capital Contribution except as may be otherwise required in
this Agreement. Each Partner's partnership interest ("Partnership Interest")
shall be that percentage set forth opposite its name in Exhibit A hereto,
subject to adjustment from time to time as set forth in this Agreement. No
Partner shall have the right to demand return of all or part of its Capital
Contributions during the term of the Partnership and any return of such
Capital Contributions shall be made solely from distributions to the Partners
as hereinafter set forth. Each Partner hereby waives its right to partition
any of the Partnership's assets and property. No Partner with a negative
balance in its Capital Account shall have any obligation to the Partnership or
to any Partner to restore such negative balance.

3.2 Loans. No Partner shall be required to make any loans to the
Partnership. If, however, any Partner does advance any funds to the
Partnership, such advance shall not increase such Partner's capital
contribution or percentage of Partnership Interest, but the amount thereof
shall be a debt due from the Partnership to such Partner to be repaid with
interest not to exceed an annual rate equal to one percent (1%) in excess of
the prime rate of interest announced from time to time by Crusader Bank, in
Philadelphia, Pennsylvania as its prime interest rate.

3.3 Capital Accounts.

3.3.1 The Partnership shall maintain a Capital Account for
each Partner in accordance with the Treasury Regulations issued under Section
704(b) of the Code to which there initially shall be credited each Partner's
Capital Contributions pursuant to Section 3.1 above. In addition, at the end
of each Fiscal Year, there shall be credited to each Capital Account each
Partner's distributive share of Profits and the amount of any Partnership
Liabilities assumed by such Partner or which are secured by any property of
the Partnership distributed to such Partner (but only to the extent such
liabilities are to be credited pursuant to such Treasury Regulations), and
there shall be debited the Partner's distributive share of all Partnership
Losses and all distributions made to it.

3.3.2 It is intended that the Capital Accounts shall be
determined and maintained throughout the full term of the Partnership in
accordance with the capital accounting rules of Treasury Regulations Section
1.704-1(b) promulgated under the Code and that all provisions in this
Partnership Agreement relating to the maintenance of Capital Accounts shall be

<PAGE>

interpreted and applied in a manner consistent with such Treasury Regulations.
In the event the Partners shall determine that it is prudent to modify the
manner in which the Capital Accounts, or any credits or charges thereto, are
computed in order to comply with such Treasury Regulations, the General
Partner shall make such modification, provided that it shall not have a
material effect on the amounts distributable to the Partner upon the
dissolution and liquidation of the Partnership.

3.4 Revaluation of Partnership Property. Upon the mutual agreement of
the Partners, the Capital Accounts of the Partners may be adjusted to reflect
a revaluation of the property of the Partnership (including intangible assets
such as goodwill) to its fair market value in accordance with Treasury
Regulations Section 1.704-1(b)(2)(iv)(f), at the following times: (a) in
connection with the acquisition of an interest in the Partnership by a new or
existing Partner for more than a de minimis capital contribution; (b) in
connection with a distribution of money or other property (other than a de
minimis amount) by the Partnership to a retiring or continuing Partner as
consideration for an interest in the Partnership; or (c) in connection with
the liquidation of the Partnership within the meaning of Treasury Regulations
Section 1.704-1(b)(2)(ii)(g). In the event of any revaluation of the property
of the Partnership hereunder, the Capital Accounts of the Partners shall be
adjusted, including adjustments for depreciation, to the extent provided in
Treasury Regulations Section 1.704-1(b)(2)(iv)(f) and (g).

4. Allocations and Distributions.

4.1 Allocations.

4.1.1 Profits and Losses for each Fiscal Year shall be
allocated among the Partners in proportion to their respective Partnership
Interests. If, in any Fiscal Year, any of the distributions or allocations to
any of the Partners respecting cash distributions are adjusted pursuant to the
terms of this Agreement or pursuant to applicable law, then the respective
shares of Profits and Losses of the Partners shall be automatically adjusted
in such Fiscal Year to be consistent with the actual distributions received by
the Partners in such Fiscal Year.

4.1.2 Notwithstanding Section 4.1.1 above, no item of
Partnership loss or deduction may be allocated to a Partner to the extent such
allocation would create or increase a deficit balance in such Partner's
Capital Account (in excess of any limited dollar amount of such deficit
balance that the Partner is considered obligated to restore under Treasury
Regulations Sections 1.704-2(g)(1) or 1.704-2(i)(5)) as of the end of the
Fiscal Year to which such allocation relates, taking into account

7
<PAGE>

for this purpose any adjustments, allocations and distributions described in
clauses (4), (5) and (6) of Treasury Regulations Section
1.704-1(b)(2)(ii)(d)). This provision is intended to be interpreted
consistently, and to comply, with Treasury Regulations Section
1.704-1(b)(2)(ii)(d). If this Section 4.1.2 applies to the Partner in a Fiscal
Year, all items of Partnership loss or deduction otherwise allocable to a
Partner for such Fiscal Year shall be reduced by the same proportion. Items of
Partnership loss or deduction (or portions thereof) which may not be allocated
to a Partner by reason of this Section 4.1.2 shall be reallocated to the other
Partner or Partners. If a Partner unexpectedly receives an adjustment,
allocation or distribution described in clause (4), (5) or (6) of Treasury
Regulations Section 1.704-1(b)(2)(ii)(d), such Partner will be allocated items
of Partnership income and gain (consisting of a pro rata portion of each item
of Partnership income, including gross income and gain for such year) in an
amount and manner sufficient to eliminate any deficit balance in such
Partner's Capital Account created by such adjustment, allocation or
distribution as quickly as possible.

4.2 Distributions. The Managing General Partner may from time to time
make cash distributions to the Partner other than liquidating distributions
which shall be governed by Section 11 below. To the extent available, the
Managing General Partner shall make distributions of Net Cash Flow From
Operations to the Partners not less than once annually. All such distributions
shall be made to the Partners in accordance with their respective Partnership
percentages, except as set forth below:

4.2.1 All distributions of Net Cash Flow From Operations
shall be distributed in the following order of priority:

4.2.1.1 First, beginning with the 1998 fiscal year
of the Partnership and in each fiscal year thereafter occurring until such
time as General Partner's capital contribution as set forth on Exhibit A
attached hereto has been fully repaid to General Partner, an amount equal to
Sixteen Thousand Five Hundred Dollars ($16,500.00). Such distribution
preference is cumulative, and to the extent not received in any given fiscal
year by General Partner the arrearage shall be added to the distribution
preference in any subsequent year. Such distributions shall be deemed to be a
return of the General Partners's capital contribution as set forth on Exhibit
A attached hereto and made a part hereof.

4.2.1.2 Second, to the General Partner until the
General Partner has received distributions equal to a return on the amount of
capital contributed to the Partnership by General Partner equal to nine
percent (9%) per annum. Such distribution

<PAGE>

preference is cumulative, and to the extent not received in any given fiscal
year by General Partner the arrearage shall be added to the distribution
preference in any subsequent year. Such distributions shall not be deemed to
be a return of the General Partners's capital contribution as set forth on
Exhibit A attached hereto and made a part hereof.

4.2.1.3 Third, to the Partners pro rata in
accordance with their Percentage Interests.

4.2.2 Net Capital Transaction Proceeds (as defined below)
shall be distributed in the following order of priority:

(i) First, to General Partner to the extent of any unpaid cumulative
preference due and owing to General Partner under Section 4.2.1.1 above;

(ii) Second, to General Partner to the extent of any unpaid
cumulative preference due and owing to General Partner under Section 4.2.1.2
above;

(iii) Third, until General Partner's remaining capital contribution
as set forth on Exhibit A has been repaid in full;

(iv) Fourth, to the Partners in accordance with their Percentage
Interests.

"Net Capital Transaction Proceeds" equal the net proceeds from any
sale of the Property in whole or in part, the financing or refinancing of the
same, the sale of any material asset of the Partnership, including without
limitation, intangibles, or insurance or condemnation proceeds respecting the
Property, remaining after payment of (a) all costs (other than taxes imposed
on Partners as a result of such capital transaction) of the Partnership in
connection with such transaction, (b) any capital expenditures or other debts
or liabilities of the Partnership, or loans or debts which are assumed by the
Partnership, which are being refinanced, discharged or paid off with such
proceeds, and after setting aside sufficient reserves for the wind-up or
continued operation of the Partnership, as applicable, following such
transaction.

4.3 Allocations Upon Assignment. In the event a Partner assigns or
otherwise transfers its Partnership Interest in accordance with the applicable
provisions of this Agreement, then the distributive share (in respect of the
assigned Partnership Interest) of Profits and Losses for the Fiscal Year in
which such assignment occurs shall be allocated between the assignor Partner
and the assignee Partner on a daily, monthly or other basis, as determined by
the Managing General Partner, using any permissible method under the Code and
the Treasury Regulations.

<PAGE>

5. Rights and Powers of General Partner.

5.1 Powers Not Requiring Consent. Except as limited by Section 5.2
below, the building operations shall be managed, and the conduct of its
business shall be controlled, by the Managing General Partner in accordance
with the terms and conditions of this Agreement, and the Managing General
Partner shall possess all of the rights and powers of a general partner and
may on behalf of the Partnership enter into and carry out contracts, bring and
defend actions at law and in equity and perform all things as may be in
furtherance of the purpose and business of the Partnership. The Managing
General Partner shall be the tax matters partner for purposes of the Code and
shall be responsible for dealing with the Internal Revenue Service in
connection with all tax obligations, inquiries and notices relating to the
Partnership. The Managing General Partner shall be responsible for providing
the Partners with K-1 partnership tax returns or such other evidence of their
individual tax responsibilities respecting the Partnership as shall enable
them to file their individual tax returns in a timely fashion. Each Partner
shall, upon request, supply the information necessary to properly give effect
to such election. The Partnership also may enter into contracts with
Affiliates of the Partnership (including, without limitation, the General
Partner) and such contracts may cover any matter deemed by the General Partner
to be necessary or desirable to the conduct of Partnership business including,
without limitation, architectural, legal, engineering or construction
contracts.

5.2 Powers Requiring Consent. The Managing General Partner
shall not have power, without the prior approval of the General
Partner, to:

5.2.1 admit any additional general partners into the
Partnership, establish any additional classes of partners or establish or sell
any additional Partnership Interests;

5.2.2 file or consent to the filing of a petition under any
federal or state bankruptcy, insolvency or reorganization act with respect to
the Partnership; or

5.2.3 perform any action which would impair or make
impossible the ordinary conduct of the Partnership business;

5.2.4 possess Partnership Property or assign its rights in
Partnership Property for other than for Partnership purposes; or

5.2.5 sell or place any financing the Property.

<PAGE>

5.3 Time Devoted. The Managing General Partner shall devote such time
to the Partnership business as in its reasonable discretion, is necessary to
run the same in a commercially responsible fashion.

5.4 Compensation. The Managing General Partner, at its option, may
receive compensation for its conduct of the business of the Partnership as
described in this Agreement in the amount of five percent (5%) of the annual
gross revenues of the Partnership, to be paid in such installments as the
Managing General Partner shall desire, and shall be entitled to reimbursement
for out of pocket expenses incurred on behalf of the Partnership in carrying
out the daily building operations. Notwithstanding anything contained herein
to the contrary, the Managing General Partner shall not be entitled to a
management fee during the first year of operation and compensation for
management fees in any subsequent year shall not be paid unless and until the
General Partner has received its priority distributions for such year as set
forth in Section 4.2.1.1 and 4.2.1.2 hereof.

5.5 Indemnification. The Managing General Partner shall be
indemnified by the Partnership against expenses (including, without
limitation, reasonable attorneys' fees) actually and necessarily incurred by
it in connection with the defense or settlement of any action, suit or
proceeding brought or threatened in which it is or may be made a party by
reason of its being a Partner, unless it is adjudged to be liable for gross
negligence or malfeasance in the performance of its duties. The General
Partner shall not be liable to the Partnership or the Managing General Partner
for any loss or liability suffered by the Partnership, except where incurred
as a result of its willful misconduct or gross negligence. Such
indemnification will be made only to the extent of assets of the Partnership.
Any obligations to the Managing General Partner owed by the Partnership under
this Section 5.5 will be deemed, until paid, a debt of the Partnership to the
Managing General Partner for purposes of this Agreement and will be repaid in
full before any distributions are made to the Partners pursuant to the
provisions of this Agreement.

6. Rights and Obligations of the General Partner.

6.1 No Management or Control. The General Partner shall not take part
in the daily building management.

7. Bank Accounts. All Partnership funds shall be deposited in such Partnership
bank account or accounts at Crusader Bank as the Managing General Partner
shall designate. Withdrawals from any such bank account or accounts shall be
made only upon the signature of an authorized officer of the Managing General

<PAGE>

Partner or such other Person as may be designated by the Managing General
Partner from time to time.

8. Books of Account and Financial Reports.

8.1 Books.

8.1.1 At all times during the continuance of the
Partnership, the Managing General Partner shall keep or cause to be kept, in
accordance with generally accepted accounting practices, full and true books
of account in which the transactions of the Partnership shall be entered fully
and accurately.

8.1.2 All of the books of account of the Partnership, shall
be maintained at all times at the principal office of the Partnership and
shall be open to the reasonable inspection and examination of the Partners or
their representatives.

8.2 Fiscal Year: Financial Reports. The fiscal year of the
Partnership shall end on December 31 in each year. Within ninety (90) days
after the expiration of each Fiscal Year, the Managing General Partner shall
deliver to the Partners a financial report of the Partnership including a
balance sheet, a profit and loss statement, and a statement for such Fiscal
Year showing allocations and distributions to the Partners of the
Partnership's net income or net loss, net capital gain or net capital loss,
deductions and credits.

9. Transfers of Interest.

9.1 General Partners. The Partnership Interest of the Partners shall
not be assigned or transferred, and no transferee shall be admitted as a
substituted general partner, except with the written consent of all Partners,
which consent may be withheld for any reason or for no reason.

9.2 Right of Purchase. If the Managing General Partner or the General
Partner become insolvent, makes an assignment for the benefit of creditors, or
desire to assign or otherwise transfer their respective interests, the
remaining Partner shall have the right to purchase his or its interest, as the
case may be interest. The purchase price shall be the fair market value of the
Partner's interest as determined by an appraisal or as mutually agreed upon by
the Partners.

9.3 Amendment of Partnership Agreement. Upon compliance
with the provisions of Section 9.2 above, the Partners shall
execute an amendment to this Agreement setting forth the name and
Partnership Interest of the Managing Partner and containing such

<PAGE>

other provision as the General Partner shall reasonably deem
necessary.

10. Retirement, Death, Incompetency, Insanity, Insolvency or
Bankruptcy of a Partner.

10.1 General Partners. The bankruptcy or dissolution of either
Partner shall dissolve the Partnership; provided, however, that in any of such
events, the remaining Partner may continue the Partnership and its business by
and appointing a new General Partner. Neither Partner shall be permitted to
retire from the Partnership without the prior written consent of the other
Partner.

11. Dissolution.

11.1 Distributions. Upon the dissolution of the Partnership (unless
the Partnership is continued pursuant to the terms of this Agreement) the
Partnership's affairs shall be wound up and, the Partnership shall be
terminated. The Managing General Partner shall distribute the assets of the
Partnership, and any income and/or net capital gain, in the following manner
and in the following order of priority:

11.1.1 The Managing General Partner shall pay, in cash, the
debts and liabilities of the Partnership (other than those to Partners) and
the liquidation expenses. Subject to provisions of law, the Managing General
Partner may designate the order in which said debts and liabilities are
satisfied to minimize the personal liability of any Partner.

11.1.2 The Managing General Partner shall establish such
cash reserves as it may deem reasonably necessary for any contingent or
unforeseen liabilities or obligations of the Partnership arising out of, or in
connection with, the Partnership. The Managing General Partner shall transfer
such reserves to an escrow agent not affiliated with any Partner, to be held
by such person (or designated successor) for the purpose of disbursing such
reserves in payment of any of the aforesaid contingencies.

11.1.3 The Managing General Partner shall repay, in cash
(either in whole or pro rata from the amount available), any loans or other
advances that may have been made by any of the Partners to the Partnership.

11.1.4 The Managing General Partner shall distribute the
remaining assets of the Partnership to the Partners, in accordance with their
respective Capital Accounts, as determined after adjustment to reflect all
allocations and distributions

<PAGE>

under this Agreement for the Fiscal Year during which such winding up and
termination of the Partnership occurs.

11.1.5 Upon dissolution, if there is a shortfall in the
return of the General Partner's Capital Contribution the Managing General
Partner shall pay fifty-percent (50%) of such shortfall to the General
Partner.

11.2 Actions of General Partner. During the period of liquidation,
the Managing General Partner, as trustee for the benefit of all of the
Partners as tenants in common, shall be authorized to take any and all action
necessary or appropriate to complete such dissolution and distribution as
provided herein.

11.3 Financial Reports. As promptly as is reasonably possible after
the date of termination, the Managing General Partner shall prepare a final
statement of the accounts of the Partnership as of the date of termination and
shall deliver a copy thereof to each Partner. Such statement shall set forth
the actual or contemplated application and distribution of the assets of the
Partnership pursuant to the provisions of this Agreement.

12. Other Interest of Partners. The Partners may engage or participate, either
independently or with others, in other business ventures of every nature and
description, including, but not limited to the ownership, management,
operation, financing, leasing and development of real and personal property of
all kinds. Neither the Partnership nor any Partner shall have any rights by
virtue of either this Agreement or the existence of this Partnership in or to
any such independent ventures or the income or profits derived therefrom.

13. Amendment. This Agreement may be amended only by a written instrument
signed by the Partners.

14. Miscellaneous.

14.1 Address and Notice. The address of each Partner for all purposes
will be as set forth under such Partner's name in Exhibit A hereto or such
other address of which each Partner has received written notice. Any notice,
demand or request required or permitted to be given or made to a Partner under
this Agreement will be deemed given or made when delivered or mailed to such
Partner at such address by registered mail, postage prepaid, return receipt
requested.

14.2 Computation of Time. In computing any period of time pursuant to
this Agreement, the day of the act or event of default from which the
designated period of time begins to run shall not be included. The last day of
the period so computed shall be included, unless it is a Saturday, Sunday or
legal
14

<PAGE>

holiday in the Commonwealth of Pennsylvania, in which event the period runs
until the end of the next day that is not a Saturday, Sunday or such a legal
holiday.

14.3 Exhibits. Each Exhibit referred to herein is incorporated into
this Agreement by such reference.

14.4 Number and Gender. Words of number or gender may be read as
singular or plural, and as masculine, feminine, or neuter, as required by
context.

14.5 Section Headings. The section headings herein have been inserted
for convenience of reference only and shall in no way modify or restrict any
of the terms or provisions hereof.

14.6 Arbitration. Any controversy or claim arising out of or related
to this Agreement, or a breach thereof, shall be settled by arbitration in
accordance with the then current rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator or
arbitrators may be entered in any court having jurisdiction thereof.

14.7 Entire Agreement. This Agreement contains the entire
understanding between the parties and supersedes any prior understandings and
agreements between them respecting this Agreement's subject matter.

14.8 Agreement Binding. This Agreement shall be binding
upon the heirs, executors, administrators, successors and assigns
of the parties hereto.

14.9 Applicable Law. This Agreement shall be construed and
enforced with the laws of the State of Pennsylvania.

14.10 Counterpart Execution. This Agreement may be executed in any
number of counterparts with the same effect as if all of the Partners had
signed the same document. All counterparts shall be construed together and
shall constitute one Agreement.

<PAGE>

IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first shown above by the following:

WITNESS:

/s/ Susan E. Rippey /s/ Ronald L. Caplan
- --------------------------- -------------------------------------
RONALD L. CAPLAN
Managing General partner

ATTEST: QUEST HOLDING CO., a
Pennsylvania corporation

By: /s/ Joseph T. Crowley
------------------------------
Name: Joseph T. Crowley
------------------------------
Title: President
------------------------------

<PAGE>

Exhibit A

Schedule of Partnership Interests

Initial Percentage of
Capital Partnership
Partner Contribution Interest
------- ------------ --------

Ronald L. Caplan 0 50%
1228 Spruce Street
Philadelphia, PA 19107

Quest Holding Co. $410,000 50%
1230 Walnut Street
Philadelphia, PA 19107

<PAGE>

Exhibit 23

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our report dated December 9, 1997 accompanying the
consolidated financial statements of Crusader Holding Company contained in
Amendment No. 2 to the Registration Statement and Prospectus (File No.
333-422150). We consent to the use of the aforementioned report in the
Registration Statement and Prospectus, and to the use of our name as it
appears under the caption "Experts."

GRANT THORNTON LLP

Philadelphia, Pennsylvania
February 9, 1998