LOAN AND SECURITY AGREEMENT

                             [LOGO] FIRST PENN BANK

                                 LOAN AGREEMENT

      This Loan Agreement ("Agreement") made on June 5, 2006, is by and among
DVL, Inc. (the "Borrower"), with an address of 70 East 55th Street, 7th Floor,
New York, NY 10022 and First Penn Bank ("Bank"), with an address of 1835 Market
Street, Suite 2601, Philadelphia, Pennsylvania 19103.

                              W I T N E S S E T H:

      WHEREAS, the Borrower desires to borrow from Bank the principal sum of One
Million Five Hundred Thousand Dollars ($1,500,000.00) ("Loan") in accordance
with the terms and conditions of this Agreement, the Note, the Pledge and
Security Agreement, the financing statements, and any and all other documents,
certificates and instruments executed and delivered by the Borrower in
connection herewith to or for the benefit of the Bank ("Loan Documents"); and

      NOW THEREFORE, in consideration for the Loan, the mutual agreements,
covenants, representations, warranties and obligations contained herein, the
parties hereto agree as follows:

                                    ARTICLE 1

1. Representations and Warranties.

      1.1. Capacity. DVL, Inc. and S2 Holdings, Inc. are Delaware corporations,
both duly formed and validly existing under the laws of the State of Delaware
and are duly qualified to transact business in the State of Delaware and each
and every other state in which they transact business except where the failure
to be so qualified does not have a material adverse effect on such Borrower.

      1.2. Authority. Borrower has the full power, authority and legal right to
execute and deliver, and to perform and observe the provisions of the Loan
Documents. This Agreement and the Loan Documents are, or will be when delivered,
the legal, valid and binding obligations of the Borrower enforceable against
Borrower in accordance with their respective terms and conditions.

      1.3. Compliance. The execution and delivery of the Loan Documents will not
result in the breach or default under the terms, conditions or provisions of any
agreement to which either Borrower is a party or by which Borrower is bound.

      1.4. Litigation and Approvals. There is no action, litigation, proceeding
or investigation pending or threatened against the Borrower which if successful
would have a material adverse effect on the Borrower's financial condition.

      1.5. Financial Statements. All financial information and other data
supplied by Borrower to Bank, whether or not supplied by the Borrower or
Borrower's accountant, is true, correct and complete in all material respects as
of the date of this Agreement, and the Borrower acknowledges that the Bank has
relied upon such financial statements in its decision to make the Loan.

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       1.6. Title to the Collateral. The Borrower has good and marketable title
to the Collateral (as defined hereafter) free and clear of all liens and
encumbrances.

      1.7. Taxes. Borrower has filed returns for and paid in full all federal,
state and local taxes to the extent such filings and payments were required
prior to the date of this Agreement. To Borrower's knowledge, all of such
returns are true, correct and complete in all material respects.

      1.8. Broker's Commissions. No person is entitled to receive any loan
broker's commission, finder's fee or similar fee or payment in connection with
the consummation of the transactions contemplated by this Agreement.

      1.9. Solvency. As of the date hereof and after giving effect to the
transactions contemplated by the Loan Documents, (i) the aggregate value of the
Borrower's assets will exceed its liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities), (ii) the Borrower will
have sufficient cash flow to enable it to pay its debts as they mature, and
(iii) the Borrower will not have unreasonably small capital for the business in
which it is engaged.

      1.10. Prohibited Use of Loan. Borrower is not engaged principally in, nor
has as an important activity, the business of extending credit for the purpose
of purchasing or carrying any "margin stock" as defined by Regulation U of the
Board of Governors of the Federal Reserve System ["BGFRS"] nor will any part of
the proceeds of the Loan be used, now or ultimately, to purchase or carry such
stock or extend such credit or violate in any way Regulations G, T, U, or X of
the BGFRS.

                                    ARTICLE 2

2. The Loan and Collateral.

      2.1. The Loan. Subject to the terms and conditions and for the purposes
hereinafter set forth, the Bank hereby agrees to make the Loan to the Borrower.
The Loan shall be evidenced by, shall be repaid in accordance with, and shall
bear interest as provided for in the Loan Documents.

      2.2. Security. As security for the due and punctual payment of the Note,
performance under the Loan Documents, and to secure any and all other loans and
credit accommodations made by the Bank to the Borrower (hereinafter the
"Obligations") the Borrower hereby grants to the Bank a security interest in all
property described in the Assignment, Pledge and Security Agreement and
Assignment and Security Agreement of even date with this Agreement (the
"Collateral"). All payments due and owing on the Collateral will be made
directly to the Bank and, after deduction of the amounts due and owing on the
Loan, the remainder, if any, will be credited to the account of the Borrower
with the Bank.

                                    ARTICLE 3

      3. Conditions for Closing. On the Closing Date, the Bank shall make the
Loan to the Borrower, provided that each Borrower shall deliver to Bank (i) the
Loan Documents executed by such Borrower; and (ii) such other documents as may
reasonably be required by the Bank and its counsel.


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                                    ARTICLE 4

4. Affirmative Covenants. Borrower agrees that so long as the Loan or any other
obligations of any Borrower to the Bank under the Loan Documents (the
"Obligations") is outstanding, Borrower shall:

      4.1. Books and Records. Maintain books and records in accordance with GAAP
and give representatives of the Bank access thereto at all reasonable times,
including permission to examine, copy and make abstracts from any of such books
and records and such other information as the Bank may from time to time
reasonably request, and the Borrower will make available to the Bank for
examination copies of any reports, statements or returns which the Borrower may
make to or file with any governmental department, bureau or agency, federal or
state.

      4.2. Financial Information. Furnish the Bank the following financial
information for DVL:

            4.2.1. Annual audited financial statements prepared by a certified
public accountant in accordance with generally accepted accounting principles
("GAAP") to include footnotes of all borrowing entities with intercompany
eliminations within one hundred twenty (120) days of fiscal year end.

            4.2.2. So long as DVL, Inc. is required to file periodic reports
with the Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934, its Annual Report on Form 10K or 10KSB, as applicable, and
Quarterly Reports on Form 10Q or 10QSB, as applicable.

            4.2.3.

       4.3. Payment of Taxes and Other Charges. Pay an