MORTGAGE

     THIS MORTGAGE IS DATED FEBRUARY 6, 1997,  between 580 MARSHALL  STREET LLC,
whose address is 580 MARSHALL STREET,  PHILLIPSBURG,  NJ 08865-9999 (referred to
below as "Grantor");  and THE PHILLIPSBURG NATIONAL BANK & TRUST COMPANY,  whose
address is 115 SOUTH MAIN STREET,  P. 0. BOX 5360,  PHILLIPSBURG,  NJ 08865-5360
(referred to below as "Lender").

     GRANT OF  MORTGAGE.  For  valuable  consideration,  Grantor  mortgages  and
conveys to Lender all of  Grantor's  right,  title,  and  interest in and to the
following  described real property,  together with all existing or  subsequently
erected or affixed buildings,  improvements and fixtures; all easements,  rights
of way, and  appurtenances;  all water,  water  rights,  watercourses  and ditch
rights (including stock in utilities with ditch or irrigation  rights);  and all
other rights,  royalties,  and profits relating to the real property,  including
without  limitation  all minerals,  oil, gas,  geothermal  and similar  matters,
located in WARREN County, State of New Jersey (the "Real Property"):

     SEE ATTACHED SCHEDULE "A"

     The Real Property or its address is commonly known as 580 MARSHALL  STREET,
PHILLIPSBURG,  NJ  08865-9999.  The Real Property tax  identification  number is
BLOCK 1005 LOT 2.

     Grantor  presently  assigns to Lender all of Grantor's  right,  title,  and
interest in and to all leases of the Property  and all Rents from the  Property.
In  addition,  Grantor  grants  to  Lender a Uniform  Commercial  Code  security
interest in the Personal Property and Rents.

     DEFINITIONS.  The following  words shall have the  following  meanings when
used in this Mortgage.  Terms not otherwise  defined in this Mortgage shall have
the  meanings  attributed  to such terms in the  Uniform  Commercial  Code.  All
references  to dollar  amounts  shall mean amounts in lawful money of the United
States of America.

     Grantor.  The word "Grantor"  means 580 MARSHALL STREET LLC. The Grantor is
the mortgagor under this Mortgage.

     Guarantor.  The word "Guarantor" means and includes without limitation each
and all of the guarantors,  sureties,  and  accommodation  parties in connection
with the Indebtedness.

     Improvements. The word "Improvements" means and includes without limitation
all  existing  and future  improvements,  buildings,  structures,  mobile  homes
affixed on the Real  Property,  facilities,  additions,  replacements  and other
construction an the Real Property.



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     Indebtedness.  The word  "Indebtedness"  means all  principal  and interest
payable  under  the Note and any  amounts  expended  or  advanced  by  Lender to
discharge  obligations  of Grantor  or  expenses  incurred  by Lender to enforce
obligations  of Grantor  under this  Mortgage,  together  with  interest on Such
amounts as provided in this Mortgage.

     Lender.  The word  "Lender"  means THE  PHILLIPSBURG  NATIONAL BANK & TRUST
COMPANY,  its  successors  and assigns.  The Lender is the mortgagee  under this
Mortgage.

     Mortgage.  The word  "Mortgage"  means this  Mortgage  between  Grantor and
Lender,  and includes without  limitation all assignments and security  interest
provisions relating to the Personal Property and Rents.

     Note. The word "Note" means the promissory  note or credit  agreement dated
February 6, 1997, in the original  principal  amount of $287,600.00 from Grantor
to Lender,  together  with all renewals cf.  extensions  of,  modifications  of,
refinancings of, consolidations of, and substitutions for the promissory note or
agreement. NOTICE TO GRANTOR: THE NOTE CONTAINS A VARIABLE INTEREST RATE.

     Personal  Property.  The  words  "Personal  Property"  mean all  equipment,
fixtures,  and other  articles of personal  property now or  hereafter  owned by
Grantor, and now or hereafter attached or affixed to the Real Property; together
with all  accessions,  parts,  and  additions to, all  replacements  of, and all
substitutions  for,  any of  such  property;  and  together  with  all  proceeds
(including  without  limitation all insurance  proceeds and refunds of premiums)
from any sale or other disposition of the Property.

     Property.  The word "Property" means collectively the Real Property and the
Personal Property.

     Real Property.  The words "Real Property" mean the property,  interests and
rights described above in the "Grant of Mortgage" section.

     Related Documents.  The words "Related  Documents" mean and include without
limitation  all  promissory   notes,   credit   agreements,   loan   agreements,
environmental agreements,  guaranties, security agreements,  mortgages, deeds of
trust,  and all other  instruments,  agreements  and  documents,  whether now or
hereafter existing, executed in connection with the Indebtedness.

     Rents.  The word  "Rents"  means all present  and.future  rents,  revenues,
income,  issues,  royalties,  profits,  and  other  benefits  derived  from  the
Property.


                                       -2-

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     THIS MORTGAGE,  INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST
IN THE RENTS  AND  PERSONAL  PROPERTY,  IS GIVEN TO SECURE  (1)  PAYMENT  OF THE
INDEBTEDNESS  AND (2)  PERFORMANCE  OF ALL  OBLIGATIONS  OF  GRANTOR  UNDER THIS
MORTGAGE AND THE RELATED  DOCUMENTS.  THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE
FOLLOWING TERMS:

     PAYMENT AND  PERFORMANCE.  Except as otherwise  provided in this  Mortgage.
Grantor shall pay to Lender all amounts  secured by this Mortgage as they become
due,  and  shall  strictly  perform  all of  Grantor's  obligations  under  this
Mortgage.

     POSSESSION AND  MAINTENANCE OF THE PROPERTY.  Grantor agrees that Grantor's
possession  and  use  of  the  Property  shall  be  governed  by  the  following
provisions:

     Possession and Use. Until in default,  Grantor may remain in possession and
control of and  operate  and manage the  Property  and called the Rents from the
Property.

     Duty to  Maintain.  Grantor  shall  maintain  the  Property  in  tenantable
condition  and  promptly  perform all  repairs,  replacements,  and  maintenance
necessary to preserve its value.

     Hazardous Substances.  The terms "hazardous waste," "hazardous  substance,"
"disposal," "release," and "threatened release," as used in this Mortgage, shall
have the same meanings as set forth in the Comprehensive Environmental Response,
Compensation,  and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et
seq. ("CERCLA"),  the Superfund Amendments and Reauthorization Act of 1986, Pub.
L. No. 99-499 ("SARA"),  the Hazardous  Materials  Transportation Act, 49 U.S.C.
Section 1801,  et seq.,  the Resource  Conservation  and Recovery Act, 42 U.S.C.
Section 6901, et seq., the New Jersey Industrial Site Recovery Act, NJSA Section
13:1K-6  ("ISRA"),  the New Jersey  Spill  Compensation  and Control  Act,  NJSA
58:10-23.11  et seq.,  or other  applicable  state or Federal  laws,  rules,  or
regulations  adopted  pursuant  to any of the  foregoing.  The terms  "hazardous
waste"  and  "hazardous  substance"  shall  also  include,  without  limitation,
petroleum  and  petroleum  by-products  or any  fraction  thereof and  asbestos.
Grantor  represents  and  warrants  to Lender  that:  (a)  During  the period of
Grantor's  ownership  of the  Property,  there  has  been  no  use,  generation,
manufacture,  storage, treatment, disposal, release or threatened release of any
hazardous  waste  or  substance  by any  person  on,  under,  about  or from the
Property;  (b) Grantor has no knowledge  of, or reason to believe that there has
been,  except as previously  disclosed to and acknowledged by Lender in writing,
(i) any use, generation,  manufacture, storage, treatment, disposal, release, or
threatened  release of any hazardous waste or substance on, under, about or from
the Property by any prior owners or occupants of the Property or (ii) any actual
or threatened litigation or claims of any kind by any

                                       -3-


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person relating to such matters;  and (c) except as previously  disclosed to and
acknowledged  by  Lender  in  writing,  (i)  neither  Grantor  nor  any  tenant,
contractor,  agent or other authorized user of the Property shall use, generate,
manufacture,  store,  treat,  dispose  of, or  release  any  hazardous  waste or
substance on, under, about or from the Property and (ii) any such activity shall
be conducted in compliance with all applicable  federal,  state, and local laws,
regulations   and  ordinances,   including   without   limitation   those  laws,
regulations,  and ordinances  described above. Grantor authorizes Lender and its
agents  to enter  upon the  Property  to make such  inspections  and  tests,  at
Grantor's expense, as Lender may deem appropriate to determine compliance of the
Property with this section of the  Mortgage.  Any  inspections  or tests made by
Lender shall be for Lender's  purposes only and shall not be construed to create
any responsibility or liability on the part of Lender to Grantor or to any other
person.  The  representations  and  warranties  contained  herein  are  based on
Grantor's due diligence in  investigating  the Property for hazardous  waste and
hazardous  substances.  Grantor hereby (a) releases and waives any future claims
against Lender for indemnity or contribution in the event Grantor becomes liable
for cleanup or other costs under any such laws,  and (b) agrees to indemnify and
hold harmless Lender against any and all claims, losses,  liabilities,  damages,
penalties,  and  expenses  which Lender may  directly or  indirectly  sustain or
suffer  resulting  from  a  breach  of  this  section  of the  Mortgage  or as a
consequence of any use, generation,  manufacture,  storage, disposal, release or
threatened  release  occurring  prior to Grantor's  ownership or interest in the
Property,  whether or not the same was or should have been known to Grantor. The
provisions  of  this  section  of the  Mortgage,  including  the  obligation  to
indemnify,  shall survive the payment of the  Indebtedness  and the satisfaction
and  reconveyance  of the lien of this  Mortgage  and shall not be  affected  by
Lender's acquisition of any interest in the Property,  whether by foreclosure or
otherwise.

     Nuisance,  Waste.  Grantor shall not cause,  conduct or permit any nuisance
nor commit, permit, or suffer any stripping of or waste on or to the Property or
any portion of the Property.  Without  limiting the generality of the foregoing,
Grantor  will not remove.  or grant to any other party the right to remove,  any
timber,  minerals (including oil and gas), soil, gravel or rock products without
the prior written consent of Lender.

     Removal  of  Improvements.   Grantor  shall  not  demolish  or  remove  any
improvements from the Real Property without the prior written consent of Lender.
As a condition to the removal of any improvements, Lender may require Grantor to
make  arrangements  satisfactory  to Lender to replace  such  improvements  with
improvements of at least equal value.


                                       -4-

<PAGE>



     Lender's  Right to Enter.  Lender and its agents  and  representatives  may
enter  upon the Real  Property  at all  reasonable  times to attend to  Lender's
interests and to inspect the Property for purposes of Grantor's  compliance with
the terms and conditions of this Mortgage.

     Compliance with  Governmental  Requirements.  Grantor shall promptly comply
with all laws, ordinances,  and regulations,  now or hereafter in effect, of all
governmental  authorities  applicable  to the use or occupancy of the  Property,
including without  limitation,  the Americans With Disabilities Act. Grantor may
contest  in good  faith any such law,  ordinance,  or  regulation  and  withhold
compliance  during any proceeding,  including  appropriate  appeals,  so long as
Grantor  has  notified  Lender in  writing  prior to doing so and so long as, in
Lender's sole opinion,  Lender's  interests in the Property are not jeopardized.
Lender  may  require  Grantor  to  post  adequate  security  or a  surety  bond,
reasonably satisfactory to Lender, to protect Lender's interest.

     Duty to Protect. Grantor agrees neither to abandon nor leave unattended the
Property.  Grantor  shall do all other acts, in addition to those acts set forth
above in this  section,  which from the  character  and use at the  Property are
reasonably necessary to protect and preserve the Property.

     DUE ON SALE -  CONSENT  BY  LENDER.  Lender  may,  at its  option,  declare
immediately  due and payable all sums secured by this  Mortgage upon the sale or
transfer,  without the Lenders prior written consent,  of all or any part of the
Real Property,  or any interest in the Real Property. A "sale or transfer" means
the conveyance of Real Property or any right, title or interest therein; whether
legal,  beneficial or equitable;  whether  voluntary or involuntary;  whether by
outright sale,  deed,  installment  sale contract,  land contract,  contract for
deed, leasehold interest with a term greater than three (3) years,  lease-option
contract, or by sale,  assignment,  or transfer of any beneficial interest in or
to any land trust holding title to the Real Property,  or by any other method of
conveyance  of  Real  Property  interest.  If  any  Grantor  is  a  corporation,
partnership or limited liability  company,  transfer also includes any change in
ownership  of  more  than  twenty-five   percent  (25%)  of  the  voting  stock,
partnership  interests or limited liability company  interests,  as the case may
be, of Grantor.  However,  this option  shall not be exercised by Lender if such
exercise is prohibited by federal law or by New Jersey law.

     TAXES AND LIENS. The following  provisions  relating to the taxes and liens
on the Property are a part of this Mortgage.

     Payment.   Grantor  shall  pay  when  due  (and  in  all  events  prior  to
delinquency) all taxes, payroll taxes, special taxes, assessments, water charges
and sewer service charges

                                       -5-


<PAGE>



levied against or on account of the Property,  and shall pay when due all claims
for work done on or for services rendered or material furnished to the Property.
Grantor shall  maintain the Property  free of all liens having  priority over or
equal to the  interest  of Lender  under this  Mortgage,  except for the lien of
taxes and assessments not due, and except as otherwise provided in the following
paragraph.

     Right To Contest.  Grantor may withhold payment of any tax, assessment,  or
claim in  connection  with a good faith  dispute over the  obligation to pay, as
long as Lender's  interest in the Property is not jeopardized.  If a lien arises
or is filed as a result of  nonpayment,  Grantor shall within  fifteen (15) days
after the lien  arises or, if a lien is filed,  within  fifteen  (15) days after
Grantor  has notice of the  filing,  secure  the  discharge  of the tier,  or if
requested by Lender,  deposit with Lender cash or a sufficient  corporate surety
bond or other  security  satisfactory  to  Lender  in an  amount  sufficient  to
discharge  the lien plus any costs and  attorneys'  fees or other  charges  that
could  accrue  as a result of a  foreclosure  or sale  under  the  lien.  In any
contest,  Grantor  shall defend  itself and Lender and shall satisfy any adverse
judgment before enforcement  against the Property.  Grantor shall name Lender as
an  additional   obligee  under  any  surety  bond   furnished  in  the  contest
proceedings.

     Evidence  of  Payment.   Grantor  shall  upon  demand   furnish  to  Lender
satisfactory evidence of payment of the taxes or assessments and shall authorize
the appropriate governmental official to deliver to Lender at any time a written
statement of the taxes and assessments agaInst the Property.

     Notice of  Construction.  Grantor shall notify Lender at least fifteen (15)
days before any work is commenced,  any services are furnished, or any materials
are  supplied to the  Property,  if any  constructIon  lion could be asserted on
account of the work, services, or materials. Grantor will upon request of Lender
furnish to Lender advance assurances satisfactory to Lender that Grantor can and
will pay the cost of such improvements.

     No Claim For Credit  For Taxes.  Grantor  will not make  deduction  from or
claim credit an the principal or interest  secured by this Mortgage by reason of
any  governmental  taxes,  assessments  or charges.  Grantor  will not claim any
deduction from the taxable value of the Property by reason of this Mortgage.

     PROPERTY DAMAGE INSURANCE.  The following  provisions  relating to insuring
the Property are a part of this Mortgage.

     Maintenance  of Insurance.  Grantor shall procure and maintain  policies of
fire insurance with standard  extended  coverage  endorsements  on a replacement
basis  for the  full  insurable  value  covering  all  improvements  on the Real
Property in

                                       -6-


<PAGE>



an amount sufficient to avoid application of any coinsurance  clause, and with a
standard  mortgagee  clause in favor of Lender.  Grantor  shall also procure and
maintain  comprehensive  general liability insurance in such coverage amounts as
Lender may  request  with  Lender  being  named as  additional  insureds in such
liability  insurance policies.  Additionally,  Grantor shall maintain such other
insurance, including but not limited to hazard, business interruption and boiler
insurance as Lender may  require.  Policies  shall be written by such  insurance
companies  and in such form as may be reasonably  acceptable to Lender.  Grantor
shall deliver to Lender  certificates of coverage from each insurer containing a
stipulation that coverage will not be cancelled or diminished  without a minimum
of ten (10)  days'  prior  written  notice  to  Lender  and not  containing  any
disclaimer  of the  insurer's  liability  for failure to give such notice.  Each
insurance  policy also shall include an  endorsement  providing that coverage in
favor of Lender will not be impaired in any way by any act,  omission or default
of Grantor or any other  person.  Should the Real  Property  at any time  become
located  in an  area  designated  by  the  Director  of  the  Federal  Emergency
Management  Agency as a special flood hazard area,  Grantor agrees to obtain and
maintain  Federal Flood Insurance for the full unpaid  principal  balance of the
loan,  up to the maximum  policy limits set under the National  Flood  Insurance
Program,  or as otherwise required by Lender, and to maintain such insurance for
the term of the loan.

     Application of Proceeds.  Grantor shall promptly  notify Lender of any loss
or damage to the Property.  Lender may make proof of loss if Grantor fails to do
so within fifteen (15) days of the casualty. Whether or not Lender's security is
impaired,  Lender may, at its  election,  apply the proceeds to the reduction of
the Indebtedness, payment of any lien affecting the Property, or the restoration
and  repair  of the  Property.  If  Lender  elects  to  apply  the  proceeds  to
restoration and repair, Grantor shall repair or replace the damaged or destroyed
improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory
proof of such  expenditure,  pay or reimburse  Grantor from the proceeds for the
reasonable cost of repair or restoration if Grantor is not in default hereunder.
Any proceeds which have not been  disbursed  within 180 days after their receipt
and which Lender has not committed to the repair or  restoration of the Property
shall be used first to pay any amount owing to Lender under this Mortgage,  then
to prepay accrued interest,  and the remainder,  if any, shall be applied to the
principal  balance  of the  Indebtedness.  If Lender  holds any  proceeds  after
payment in full of the Indebtedness, such proceeds shall be paid to Grantor.

     Unexpired  Insurance at Sale.  Any unexpired  insurance  shall inure to the
benefit of, and pass to, the purchaser of the Property  covered by this Mortgage
at any

                                       -7-


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trustee's sale or other sale held under the  provisions of this Mortgage,  or at
any foreclosure sale of such Property.

     Grantees Report on Insurance. Upon request of Lender, however not more then
once a year, Grantor shall furnish to Lender a report on each existing policy of
insurance showing:  (a) the name of the insurer;  (b) the risks insured; (c) the
amount of the policy;  (d) the property  insured,  the then current  replacement
value of such property,  and the manner of determining  that value;  and (e) the
expiration date of the policy.  Grantor shall,  upon request of Lender,  have an
independent   appraiser   satisfactory  to  Lender   determine  the  cash  value
replacement cost of the Property.

     EXPENDITURES  BY LENDER.  If Grantor  fails to comply with any provision of
this Mortgage, or if any action or proceeding is commenced that would materially
affect  Lender's  interests in the Property,  Lender on Grantees behalf may, but
shall not be required  to, take any action that Lender  deems  appropriate.  Any
amount that Lender  expends in so doing will bear  interest at the rate provided
for in the  Note  from  the  date  incurred  or paid by  Lender  to the  date of
repayment by Grantor. All such expenses, at Lender's option, will (a) be payable
on demand,  (b) be added to the balance of the Note and be apportioned among and
to payable  with any  installment  payments to become due during  either (i) the
term of any applicable  insurance policy or (ii) the remaining term of the Note,
or (c) be treated  as a balloon  payment  which  will be due and  payable at the
Note's  maturity.  This Mortgage also will secure payment of these amounts.  The
rights  provided for in this paragraph  shall be in addition to any other rights
or any remedies to which  Lender may be entitled an account of the default.  Any
such action by Lender  shall not be construed as curIng the default so as to bar
Lender from any remedy that it otherwise would have had.

     WARRANTY;  DEFENSE OF TITLE. The following provisions relating to ownership
of the Property are a part of this Mortgage.

     Title.  Grantor  warrants that: (a) Grantor holds good and marketable title
of  record  to the  Property  in fee  simple,  free and  clear of all  liens and
encumbrances  other than those set forth in the Real Property  description or in
any title insurance policy, title report, or final title opinion issued in favor
of, and accepted by, Lender in connection  with this  Mortgage,  and (b) Grantor
has the full right, power, and authority to execute and deliver this Mortgage to
Lender.

     Defense of Title.  Subject to the exception in the paragraph above, Grantor
warrants  and will forever  defend the title to the Property  against the lawful
claims of all persons.  In the event any action or proceeding is commenced  that
questions Grantor's title or the interest of Lender under this Mortgage,

                                       -8-

<PAGE>



Grantor shall defend the action at Grantor's expense. Grantor may be the nominal
party in such  proceeding,  but Lender shall be entitled to  participate  in the
proceeding  and to be  represented  in the proceeding by counsel of Lender's own
choice,  and Grantor  will  deliver,  or cause to be  delivered,  to Lender such
instruments   as  Lender  may   request   from  time  to  time  to  permit  such
participation.

     Compliance With Laws.  Grantor warrants that the Property and Grantor's use
of the Property  complies with all existing  applicable  laws,  ordinances,  and
regulations of governmental authorities.

     CONDEMNATION.  The following  provisions  relating to  condemnation  of the
Property are a part of this Mortgage.

     Application  of  Net  Proceeds.  If  all or any  part  of the  Property  is
condemned by eminent domain proceedings or by any proceeding or purchase in lieu
of  condemnation,  Lender may at its election require that all or any portion of
the net  proceeds of the award be applied to the  Indebtedness  or the repair or
restoration of the Property.  The net proceeds of the award Shall mean the award
after payment of all reasonable costs, expenses, and attorneys' fees incurred by
Lender in connection with the condemnation.

     Proceedings.  If any  proceeding in  condemnation  is filed,  Grantor shall
promptly notify Lender in writing, and Grantor shall promptly take such steps as
may be necessary  to defend the action and obtain the award.  Grantor may be the
nominal party in such proceeding, but Lender shall be entitled to participate in
the  proceeding  and to be  represented  in the proceeding by counsel of its own
choice,  and  Grantor  will  deliver  or cause to be  delivered  to Lender  such
instruments  as may be  requested  by it  from  time  to  time  to  permit  such
participation.

     IMPOSITION  OF TAXES,  FEES AND CHARGES BY  GOVERNMENTAL  AUTHORITIES.  The
following provisions relating to governmental taxes, fees and charges are a part
of this Mortgage:

     Current  Taxes,  Fees and Charges.  Upon request by Lender,  Grantor  shall
execute such  documents in addition to this  Mortgage  and take  whatever  other
action is requested by Lender to perfect and continue  Lender's lien an the Real
Property.  Grantor shall  reimburse  Lender for all taxes,  as described  below,
together with all expenses incurred in recording,  perfecting or continuing this
Mortgage,  including without limitation all taxes, fees, documentary stamps, and
other charges for recording or registering this Mortgage.

     Taxes.  The following shall constitute taxes to which this section applies:
(a) a  specific  tax upon this type of  Mortgage  or upon all or any part of the
Indebtedness secured by

                                       -9-


<PAGE>



this  Mortgage;  (b) a specific tax on Grantor  which  Grantor is  authorized or
required to deduct from  payments  on the  Indebtedness  secured by this type of
Mortgage;  (c) a tax an this type of Mortgage  chargeable  against the Lender or
the  holder of the Note;  and (d) a  specific  tax on all or any  portion of the
Indebtedness or on payments of principal and interest made by Grantor.

     Subsequent  Taxes.  If any tax to which  this  section  applies  is enacted
subsequent to the date of this  Mortgage,  this event shall have the same effect
as an Event of Default (as defined below), and Lender may exercise any or all of
its available  remedies for an Event of Default as provided below unless Grantor
either (a) pays the tax before it becomes delinquent, or (b) contests the tax as
provided above in the Taxes and Liens section and deposits with Lender cash or a
sufficient corporate surety bond or other security satisfactory to Lender.

     SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating
to this Mortgage as a security agreement are a part of this Mortgage.

     Security  Agreement.  This instrument shall constitute a security agreement
to the  extent  any of the  Property  constitutes  fixtures  or  other  personal
property,  and Lender shall have all of the rights of a secured  party under the
Uniform Commercial Code as amended from time to time.

     Security Interest.  Upon request by Lender, Grantor shall execute financing
statements  and take whatever  other acton is requested by Lender to perfect and
continue  Lender's  security  interest in the Rents and  Personal  Property.  In
addition to recording this Mortgage in the real property records, Lender may, at
any  time  and  without  further   authorization  from  Grantor,  file  executed
counterparts, copies or reproductions of this Mortgage as a financing statement.
Grantor  shall  reimburse  Lender for all  expenses  incurred in  perfecting  or
continuing  this security  interest.  Upon default,  Grantor shall  assemble the
Personal  Property in a manner and at a place  reasonably  convenient to Grantor
and Lender and make it available to Lender  within three (3) days after  receipt
of written demand from Lender.

     Addresses.  The mailing  addresses of Grantor  (debtor) and Lender (secured
party), from which information  concerning the security interest granted by this
Mortgage may be obtained (each as required by the Uniform  Commercial Code), are
as stated on the first page of this Mortgage.

     FURTHER ASSURANCES;  ATTORNEY-IN-FACT. The following provisions relating to
further assurances and attorney-in-fact are a part of this Mortgage.


                                      -10-


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     Further  Assurances.  At any time,  and from time to time,  upon request of
Lender,  Grantor  will  make,  execute  and  deliver,  or will cause to be made,
executed or delivered,  to Lender or to Lender's designee, and when requested by
Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be,
at such times and in such offices and places as Lender may deem appropriate, any
and all such mortgages,  deeds of trust,  security deeds,  security  agreements,
financing statements, continuation statements, instruments of further assurance,
certificates,  and other  documents  as may, in the sole  opinion of Lender,  be
necessary or desirable in order to effectuate,  complete,  perfect, continue, or
preserve (a) the obligations of Grantor under the Note,  this Mortgage,  and the
Related  Documents,  and (b) the liens and  security  interests  created by this
Mortgage  as  first  and  prior  liens on the  Property,  whether  now  owned or
hereafter  acquired  by  Grantor.  Unless  prohibited  by law or  agreed  to the
contrary by Lender in writing,  Grantor shall reimburse Lender for all costs and
expenses incurred in connection with the matters referred to in this paragraph.

     Attorney-in-Fact.  If Grantor falls to do any of the things  referred to in
the preceding paragraph,  Lender may do so for and in the name of Grantor and at
Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender
as Grantor's attorney-in-fact for the purpose of making, executing,  delivering,
filing,  recording, and doing all other things as may be necessary or desirable,
in Lender's sole opinion, to accomplish the matters referred to in the preceding
paragraph.

     FULL  PERFORMANCE.  If  Grantor  pays all the  Indebtedness  when due,  and
otherwise performs all the obligations imposed upon Grantor under this Mortgage,
Lender  shall  execute  and deliver to Grantor a suitable  satisfaction  of this
Mortgage and suitable  statements of termination  of any financing  statement on
file  evidencing  Lender's  security  interest  in the  Rents  and the  Personal
Property.  Grantor  will pay, if  permitted by  applicable  law, any  reasonable
termination fee as determined by Lender from time to time.

     DEFAULT.  Each of the following,  at the option of Lender, shall constitute
an event of default ("Event of Default") under this Mortgage:

     Default On Indebtedness. Failure of Grantor to make any payment when due on
the Indebtedness.

     Default on Other  Payments.  Failure of Grantor within the time required by
this Mortgage to make any payment for taxes or  insurance,  or any other payment
necessary to prevent filing of or to effect discharge of any lien.


                                      -11-

<PAGE>



     Compliance  Default.  Failure  of Grantor  to comply  with any other  term,
obligation, covenant or condition contained in this Mortgage, the Note or in any
of the Related Documents.

     False  Statements.  Any  warranty,  representation  or  statement  made  or
furnished to Lender by or on behalf of Grantor under this Mortgage,  the Note or
the Related Documents is false or misleading in any material respect, either now
or at the time made or furnished.

     Defective Collateralization.  This Mortgage or any of the Related Documents
ceases to be in full  force and  affect  (including  failure  of any  collateral
documents to create a valid and perfected security interest or lien) at any time
and for any reason.

     Death or Insolvency.  The  dissolution  (regardless of whether  election to
continue is made), any member withdraws from the limited liability  company,  or
any other termination of Grantor's existence as a going business or the death of
any member,  the  insolvency of Grantor,  the  appointment of a receiver for any
part of Grantor's  property,  any assignment  for the benefit of creditors,  any
type of  creditor  workout,  or the  commencement  of any  proceeding  under any
bankruptcy or insolvency laws by or against Grantor.

     Foreclosure,  Forfeiture,  etc.  Commencement  of foreclosure or forfeiture
proceedings,  whether by judicial  proceeding,  self-help,  repossession  or any
other method,  by any creditor of Grantor or by any governmental  agency against
any of the Property.  However, this subsection shall not apply in the event of a
good faith dispute by Grantor as to the validity or  reasonableness of the claim
which is the basis of the  foreclosure or forfeiture  proceeding,  provided that
Grantor gives Lender  written  notice of such claim and furnishes  reserves or a
surety bond for the claim satisfactory to Lender.

     Breach of Other  Agreement.  Any breach by  Grantor  under the terms of any
other agreement between Grantor and Lender that is not remedied within any grace
period provided therein,  including without limitation any agreement  concerning
any indebtedness or other obligation of Grantor to Lender,  whether existing now
or later.

     Events Affecting Guarantor. Any of the preceding events occurs with respect
to any Guarantor of any of the  Indebtedness  or any  Guarantor  dies or becomes
incompetent,  or revokes or disputes the validity  of, or liability  under,  any
Guaranty  of the  Indebtedness.  Lender,  at its option,  may,  but shall not be
required  to,  permit  the  Guarantor's  estate  to assume  unconditionally  the
obligations  arising under the guaranty in a manner satisfactory to Lender, and,
in doing so, cure the Event of Default.

                                      -12-


<PAGE>




     Adverse  Change.  A material  adverse change occurs in Grantor's  financial
condition,  or Lender  believes  the prospect of payment or  performance  of the
Indebtedness is impaired.

     Right to Cure.  If such a failure  is curable  and if Grantor  has not bean
given a notice of a breach of the same  provision  of this  Mortgage  within the
preceding twelve (12) months, it may be cured (and no Event of Default will have
occurred) if Grantor,  after Lender sends written notice  demanding cure of such
failure,  (a) cures the  failure  within  thirty  (30) days;  or (b) if the cure
requires more than thirty (30) days,  immediately  initiates steps sufficient to
cure the failure and  thereafter  continues  and completes  all  reasonable  and
necessary  steps  sufficient  to  produce  compliance  as  scion  as  reasonably
practical.

     RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default
and at any time thereafter,  Lender, at its option, may exercise any one or more
of the  following  rights  and  remedies,  in  addition  to any other  rights or
remedies provided by law:

     Accelerate Indebtedness.  Lender shall have the right at its option without
notice to  Grantor  to  declare  the  entire  Indebtedness  immediately  due and
payable,  including  any  prepayment  penalty which Grantor would be required to
pay.

     UCC  Remedies.  With respect to all or any part of the  Personal  Property,
Lender  shall have all the  rights and  remedies  of a secured  party  under the
Uniform Commercial Code.

     Lender In Possession.  Upon acceleration of the Indebtedness or abandonment
of the  Property,  Lender  (in  person,  by  agent  or by  judicially  appointed
receiver)  shall be entitled to enter upon,  take  possession  of and manage the
Property and to collect the Rents, including those past due. Any Rents collected
by Lender or the  receiver  shall be  applied  first to  payment of the costs of
management at the Property and collection of Rents, including but not limited to
receiver's fees, premiums an the receiver's bonds and reasonable attorneys' fees
and then to the other Indebtedness secured by this Mortgage.

     Appoint Receiver.  Lender shall have the right to have a receiver appointed
to take possession of all or any part at the Property, with the power to protect
and preserve the  Property,  to operate the Property  preceding  foreclosure  or
sale,  and to collect the Rents from the Property and apply the  proceeds,  over
and above the cost of the receivership,  against the Indebtedness.  The receiver
may serve without bond if permitted by law. Lender's right to the appointment of
a receiver shall exist whether or not the apparent value of the Property exceeds
the  Indebtedness  by a  substantial  amount.  Employment  by  Lender  shall not
disqualify a person from serving as a receiver.

                                      -13-


<PAGE>




     Judicial  Foreclosure.  Lender  may obtain a  judicial  decree  foreclosing
Grantor's interest in all or any part of the Property.

     Nonjudicial  Sale.  If permitted by  applicable  law,  Lender may foreclose
Grantor's  interest in all or in any part of the  Personal  Property or the Real
Property by nonjudicial sale.

     Tenancy at  Sufferance.  If Grantor  remains in  possession of the Property
after  the  Property  is sold as  provided  above or  Lender  otherwise  becomes
entitled to possession  of the Property  upon default of Grantor,  Grantor shall
become a tenant at  sufferance  of Lender or the  purchaser  of the Property and
shall, at Lender's option, either (a) pay a reasonable rental for the use of the
Property, or (b) vacate the Property immediately upon the demand of Lender.

     Other Remedies. Lender shall have all other rights and remedies provided in
this Mortgage or the Note or available at law or in equity.

     Sale of the Property.  To the extent  permitted by applicable law,  Grantor
hereby waives any and all right to have the property  marshalled.  In exercising
its rights  and  remedies,  Lender  shall be free to sell all or any part of the
Property together or separately,  in one sale or by separate sales. Lender shall
be entitled to bid at any public sale on all or any portion of the Property.

     Notice of Sale. Lender shall give Grantor reasonable notice of the time and
place of any public sale of the Personal Property or of the time after which any
private safe or other  intended  disposition  at the Personal  Property is to be
made.  Reasonable  notice  shall mean notice given at least ten (10) days before
the time of the sale or disposition.

     Waiver;  Election  of  Remedies.  A waiver  by any  party of a breach  of a
provision of this  Mortgage  shall not  constitute a waiver of or prejudice  the
party's rights otherwise to demand strict  compliance with that provision or any
other  provision.  Election  by Lender to pursue  any remedy  shall not  exclude
pursuit of any other remedy, and an election to make expenditures or take action
to perform an obligation of Grantor under this Mortgage after failure of Grantor
to perform shall not affect Lender's right to declare a default and exercise its
remedies under this Mortgage.

     Attorneys'  Fees;  Expenses.  If  Lender  institutes  any suit or action to
enforce any of the terms of this  Mortgage,  Lender shall be entitled to recover
such sum as the court may adjudge  reasonable as attorneys' fees at trial and on
any appeal. Whether or not any court action is involved, all reasonable expenses
incurred by Lender that in Lender's opinion are

                                      -14-


<PAGE>



necessary at any time for the  protection of its interest or the  enforcement of
its rights shall become a part of the  Indebtedness  payable on demand and shall
bear interest from the date of expenditure until repaid at the rate provided for
in the Note.  Expenses covered by this paragraph  include,  without  limitation,
however subject to any limits under applicable law, Lender's attorneys' fees and
Lender's legal expenses whether or not there is a lawsuit,  including attorneys'
fees for  bankruptcy  proceedings  (including  efforts  to modify or vacate  any
automatic  stay  or  injunction),  appeals  and  any  anticipated  post-judgment
collection  services,  the cost of searching  records,  obtaining  title reports
(including  foreclosure  reports),  surveyors' reports,  and appraisal fees, and
title  insurance,  to the extent  permitted by applicable law. Grantor also will
pay any court costs, in addition to all other sums provided by law.

     NOTICES TO GRANTOR  AND OTHER  PARTIES.  Any  notice  under this  Mortgage,
including  without  limitation  any notice of default  and any notice of sale to
Grantor,  shall  be in  writing,  may be sent by  telefacsimile,  and  shall  be
effective  when  actually  delivered,   or  when  deposited  with  a  nationally
recognized  overnight  courier,  or, if mailed,  shall be deemed  effective when
deposited in the United States mail first class,  certified or registered  mail,
postage  prepaid,  directed to the  addresses  shown near the  beginning of this
Mortgage.  Any party may change its address for notices  under this  Mortgage by
giving formal written notice to the other parties,  specifying  that the purpose
of the  notice is to change  the  party's  address.  All  copies of  notices  of
foreclosure  from the holder of any lien which has priority  over this  Mortgage
shall be sent to Lender's address, as shown near the beginning of this Mortgage.
For notice  purposes,  Grantor  agrees to keep  Lender  informed at all times of
Grantor's current address.

     MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part
of this Mortgage:

     Amendments. This Mortgage, together with any Related Documents, constitutes
the entire  understanding  and  agreement  of the  parties as to the matters set
forth in this Mortgage.  No alteration of or amendment to this Mortgage shall be
effective  unless given in writing and signed by the party or parties  sought to
be charged or bound by the alteration or amendment.

     Annual  Reports.  If the Property is used for purposes other than Grantor's
residence,  Grantor shall furnish to Lender, upon request, a certified statement
of net operating  income  received from the Property during  Grantor's  previous
fiscal  year in such form and detail as Lender  shall  require.  "Net  operating
income"   shall  mean  all  cash  receipts  from  the  Property  less  all  cash
expenditures made in connection with the operation of the Property.

                                      -15-


<PAGE>


     Applicable  Law. This Mortgage has been delivered to Lender and accepted by
Lender  in the State of New  Jersey.  This  Mortgage  shall be  governed  by and
construed in accordance with the laws of the State of New Jersey.

     Caption  Headings.  Caption  headings in this Mortgage are for  convenience
purposes  only and are not to be used to interpret or define the  provisions  of
this Mortgage.

     Merger.  There shall be no merger of the interest or estate created by this
Mortgage  with any other  interest or estate in the Property at any time held by
or for the benefit of Lender in any  capacity,  without  the written  consent of
Lender.

     Multiple  Parties.  All obligations of Grantor under this Mortgage shall be
joint and  several,  and all  references  to  Grantor  shall mean each and every
Grantor.  This means that each of the persons  signing below is responsible  for
all obligations in this Mortgage.

     No Joint Venture or  Partnership.  The  relationship  of Grantor and Lender
created by this  Mortgage  is  strictly  that of  debtor-creditor,  and  nothing
contained in this Mortgage or in any of the Related Documents shall be deemed or
construed to create a partnership or joint venture between Grantor and Lender.

     Severability.  If a court of competent  jurisdiction finds any provision of
this Mortgage to be invalid or  unenforceable  as to any person or circumstance,
such finding shall not render that provision  invalid or unenforceable as to any
other persons or circumstances.  If feasible, any such offending provision shall
be deemed to be modified to be within the limits of  enforceability or validity;
however, if the offending provision cannot be so modified,  it shall be stricken
and all other  provisions  of this Mortgage in all other  respects  shall remain
valid and enforceable.

     Successors and Assigns.  Subject to the limitations stated in this Mortgage
on transfer of Grantor's interest, this Mortgage shall be binding upon and inure
to the benefit of the parties, their successors and assigns. If ownership of the
Property becomes vested in a person other than Grantor,  Lender,  without notice
to Grantor,  may deal with Grantor's  successors with reference to this Mortgage
and the  Indebtedness  by way of  forbearance  or  extension  without  releasing
Grantor  from  the   obligations  of  this  Mortgage  or  liability   under  the
Indebtedness.

     Time is of the Essence.  Time is of the essence in the  performance of this
Mortgage.

     Waivers and Consents.  Lender shall not be deemed to have waived any rights
under this  Mortgage (or under the Related  Documents)  unless such waiver is in
writing and signed by

                                      -16-


<PAGE>



Lender. No delay or omission on the part of Lender in exercising any right shall
operate as a waiver of such right or any other right. A waiver by any party of a
provision of this  Mortgage  shall not  constitute a waiver of or prejudice  the
party's right  otherwise to demand strict  compliance with that provision or any
other  provision.  No prior waiver by Lender,  nor any course of dealing between
Lender and Grantor,  shall  constitute a waiver of any of Lender's rights or any
of Grantor's  obligations  as to any future  transactions.  Whenever  consent by
Lender is required in this  Mortgage,  the granting of such consent by Lender in
any instance shall not  constitute  continuing  consent to subsequent  instances
where such consent is required.

     GRANTOR  ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE,  AND
GRANTOR AGREES TO ITS TERMS. GRANTOR ACKNOWLEDGES RECEIPT,  WITHOUT CHARGE, OF A
TRUE AND CORRECT COPY OF THIS MORTGAGE.

GRANTOR:

580 MARSHALL STREET LLC


By: _________________________(SEAL)            By: _______________________(SEAL)
    RICHARD MALAVARCA, Manager                     THOMAS J. LIVELLI, Member

Signed, acknowledge and delivered in the presence of:


X _________________________
 Witness

X _________________________
 Witness

                                      -17-


<PAGE>


                    LIMITED LIABILITY COMPANY ACKNOWLEDGMENT

STATE OF                            )
                                    )ss
COUNTY OF                           )


     BE IT REMEMBERED that on this ___ day of ____________, 19__, before me, the
subscribers,  personally  appeared  RICHARD  MALAVARCA,  Member of 580  MARSHALL
STREET LLC; and THOMAS J. LIVELLI,  Member of 580 MARSHALL  STREET LLC who, I am
satisfied,  are  the  persons  who  signed  the  within  instrument,   and  they
acknowledged  that  they  signed  the  within  instrument,  and that the  within
instrument is the voluntary act and deed of such limited liability company.


                                                  ___________________________
                                                       Notary Public

                                      -18-



<PAGE>

                                   Schedule A


     All that certain tract,  lot and parcel of land lying and being in the Town
of  Phillipsburg,  County  of  Warren,  and  State  of New  Jersey,  being  more
particularly described as follows:

     BEGINNING AT A POINT IN THE NORTHERLY RIGHT OF WAY OF HECKMAN STREET,  SAID
POINT BEING THE SOUTHEASTERLY  CORNER OF BLOCK 1005, LOT 3 LANDS NOW OR FORMERLY
OF THE  NORTON  PARTNERSHIP  AND THE POINT OF  BEGINNING  REFERRED  TO IN A DEED
BETWEEN WILLIAM M. NORTON,  JR. , AND WILLIAM M. NORTON,  DATED NOVEMBER 6, 1985
RECORDED  IN  BOOK  938  PAGE  115  AND  BEING  ALSO  DISTANT  367.33  FEET IN A
NORTHEASTERLY DIRECTION ALONG THE NORTHWESTERLY SIDE LINE OF HECKMAN STREET FROM
ITS INTERSECTION WITH THE NORTHEASTERLY SIDE LINE OF ANDERSON STREET AND RUNNING
THENCE

     (1)  ALONG  THE  EASTERLY  LINE  OF  LOT  3,  NORTH  THIRTY-SEVEN  DEGREES,
FIFTY-THREE  MINUTES,  TWENTY-SEVEN  SECONDS  WEST (N.  37(degree)  53'  270") A
DISTANCE OF ONE HUNDRED NINETY-FIVE AND TWENTY-NINE HUNDREDTHS FEET (195.29') TO
A  POINT  IN  THE  SOUTHERLY  RIGHT  OF  WAY  OF  MARSHALL  STREET,   BEING  THE
NORTHEASTERLY CORNER OF LOT 3 THENCE

     (2) ALONG THE SOUTHERLY RIGHT OF WAY OF MARSHALL STREET,  NORTH SIXTY-EIGHT
DEGREES, FORTY-NINE MINUTES, NO SECONDS EAST (N. 68(degree) 49' 00"), A DISTANCE
OF ONE HUNDRED THIRTY-FIVE AND NINETY-FOUR HUNDREDTHS FEET (135.94') TO A POINT,
BEING THE  NORTHWESTERLY  CORNER OF BLOCK  1005,  LOT 1 LANDS NOW OR FORMERLY OF
WILLIAM M. NORTON, THENCE

     (3)  ALONG  THE  WESTERLY  LINE  OF  LOT  1,  SOUTH  THIRTY-EIGHT  DEGREES,
THIRTY-EIGHT  MINUTES,  FIFTY-THREE  SECONDS  EAST  (S.  38(degree)  38'  53") A
DISTANCE OF ONE HUNDRED  FIFTY-EIGHT AND SEVENTY-FOUR  HUNDREDTHS FEET (158.74')
TO A  POINT  IN THE  NORTHERLY  RIGHT  OF  WAY  OF  HECKMAN  STREET,  BEING  THE
SOUTHWESTERLY CORNER OF LOT 1 THENCE

     (4) ALONG THE NORTHERLY RIGHT OF WAY OF HECKMAN STREET,  SOUTH  FIFTY-THREE
DEGREES,  TWELVE MINUTES,  NO SECONDS WEST (S. 53(degree) 12' 00") A DISTANCE OF
ONE HUNDRED THIRTY-TWO AND THIRTY-TWO HUNDREDTHS FEET (132.32') TO THE POINT AND
PLACE OF BEGINNING

     ALL IN ACCORDANCE WITH A SURVEY PREPARED BY WILLIAM ASSOCIATES, INC., L.S.,
DATED DECEMBER 23, 1996.

     (NOTE: SAID TAX LOT AND BLOCK REPORTED FOR INFORMATION ONLY)


                                      -19-