CJL/02-16-99                              PIDA #8259

                       MORTGAGE SUBORDINATION AGREEMENT

      THIS  SUBORDINATION  AGREEMENT,  made this day of February,  1999,  by and
among NORTHAMPTON  COUNTY NEW JOBS CORP. (the "Borrower"),  FIRST UNION NATIONAL
BANK (the "Bank"), and PIERCING PAGODA, INC. (the "Industrial Occupant") and THE
PENNSYLVANIA INDUSTRIAL DEVELOPMENT AUTHORITY ("PIDA").

                                  WITNESSETH

      WHEREAS,  the Borrower is the owner of a certain  tract of land situate in
Northampton County, as more particularly  described on Exhibit A attached hereto
and made a part  hereof (the  "Premises")  upon which the  Borrower  proposes to
establish an Industrial  Development  Project (the  "Project") as defined in The
Pennsylvania Industrial Development Authority Act, as amended; and
      WHEREAS,  the  Premises  are  subject  to a Mortgage  from the  Industrial
Occupant to the Bank,  dated April 29,  1998,  and recorded in the Office of the
Recorder of Deeds for Northampton County in Mortgage Book Volume
                       ,         page         (the         "Bank         First
Mortgage"),  which mortgage is a lien upon the Premises;  and WHEREAS,  the Bank
      Mortgage was given as security for a note in the
original  principal  amount of Two  Million Six Hundred  Ninteen  Thousand  Nine
Hundred Fifty Four Dollars and Twenty Five Cents ($2,619,954.25), dated from the
Industrial Occupant to the Bank (the "Bank Note"); and
      WHEREAS,  the  Borrower  has  applied to PIDA for a loan in the  principal
amount  of  One  Million  Dollars  $1,000,000  (the  "PIDA  Loan")  to  be  used
exclusively to defray a portion of the cost of establishing the Project; and
      WHEREAS,  the PIDA Loan, together with interest thereon, is evidenced by a
note from the Borrower to PIDA,  dated of even date  herewith (the "PIDA Note");
and
      WHEREAS,  the PIDA Note is to be secured by a mortgage  dated of even date
herewith from the Borrower to PIDA,  which shall constitute a second lien on the
Premises (the "Project Mortgage").
      WHEREAS,  PIDA  has  conditioned  the  grant  of the  PIDA  Loan  upon the
subordination of that portion of the Bank Mortgage that exceeds  $1,980,000 (the
difference  between  $2,619,954.25  and $1,980,000)  (the "Bank Third Mortgage")
which  Bank  Third  Mortgage  shall  be in  the  original  principal  amount  of
$639,954.25, in the manner herein set forth.
      NOW, THEREFORE,  to induce PIDA to make the PIDA Loan and in consideration
of the premises  and mutual  covenants  herein  contained,  and  intending to be
legally bound hereby, the parties hereto agree as follows:


<PAGE>


      1. The lien of the Bank Mortgage to the extent that it exceeds  $1,980,000
is  hereby  subordinated  and  postponed  as to  lien,  right to  insurance  and
condemnation  proceeds  and right to  possession  to the lien of the Bank  First
Mortgage and the Project  Mortgage.  The Bank agrees for itself,  its successors
and  assigns  that PIDA,  its  successors  and  assigns  shall have the  rights,
benefits  and  priorities  to which it would have been  entitled had the Project
Mortgage been executed, delivered and recorded prior to the Bank Third Mortgage.
      2. The Bank agrees that without notice to the Bank PIDA may (a) compromise
or  release  the  liability  of any  party  or  parties  liable  for or upon the
obligations  secured by the  Project  Mortgage  from time to time in whole or in
part,  or (b) exchange or release any  collateral  for payment of the PIDA Note,
all without affecting the priorities set forth herein.
      3. Bank agrees that all payments made by the Industrial Occupant to reduce
the principal  balance of the Bank Note shall be applied to reduce the principal
balance of the Bank First Mortgage and, at the Bank's sole discretion, to reduce
the principal balance of the Bank Third Mortgage.
      4. From time to time,  the parties  hereto will  execute and deliver  such
additional  documents  as may  reasonably  be required to carry out the terms of
this Agreement.
      5. This Agreement may be executed in any number of  counterparts,  each of
which  shall  be  deemed  to be an  original,  but all of which  together  shall
constitute but one and the same instrument.
      6. This  Agreement  shall be binding  upon and inure to the benefit of the
parties and their respective successors and assigns.
      7. This  Agreement  shall be governed by the laws of the  Commonwealth  of
Pennsylvania without regard to the principles of conflicts of laws.

      IN WITNESS  WHEREOF,  the parties  hereto,  intending to be legally  bound
hereby,  have caused this instrument to be executed and their  respective  seals
set hereto the day and year first above written.

ATTEST:                                   NORTHAMPTON COUNTY NEW JOBS CORP.


By
Secretary                                      President

(CORPORATE SEAL)

ATTEST:                                   CORESTATES BANK, N.A.


By
Title:                                               Title:
(CORPORATE SEAL)

ATTEST:                                   THE PENNSYLVANIA INDUSTRIAL
                                          DEVELOPMENT AUTHORITY

By
Assistant Secretary                                  Administrator
(CORPORATE SEAL)


<PAGE>


                                  EXHIBIT "A"

                                 THE PREMISES





<PAGE>


COMMONWEALTH OF PENNSYLVANIA        :
                                    :     SS
COUNTY OFNORTHAMPTON                :


      ON THIS, the day of February,  1999,  before me, the undersigned  officer,
personally  appeared  Robert J.  Bergren,  who  acknowledged  himself  to be the
President  of  Northampton  County  New  Jobs  Corp.,  a  nonprofit  corporation
organized and existing under the laws of the Commonwealth of  Pennsylvania,  and
that he as such  officer  being  authorized  to do so,  executed  the  foregoing
instrument  for  the  purpose  therein  contained  by  signing  the  name of the
corporation by himself as such officer.

      IN WITNESS WHEREOF, I have hereunto set my hand and official seal.




                                                Notary Public


                                                My Commission Expires:












COMMONWEALTH OF PENNSYLVANIA        :
                                    :     SS
COUNTY OF NORTHAMPTON               :


      ON     THIS,     the    day    of     February,     1999    ,     before
me,       the       undersigned       officer,       personally       appeared
                        , who acknowledged himself to be
the of First Union  National  Bank, a Bank,  and that he as such  officer  being
authorized to do so,  executed the foregoing  instrument for the purpose therein
contained by signing the name of the corporation by himself as such officer.

      IN WITNESS WHEREOF, I have hereunto set my hand and official seal.




                                                Notary Public


                                                My Commission Expires:


<PAGE>


COMMONWEALTH OF PENNSYLVANIA        :
                                    :     SS
COUNTY OF DAUPHIN                   :


      ON THIS, the day of February,  1999,  before me, the undersigned  officer,
personally  appeared  Marguerite  Harris,  who  acknowledged  herself  to be the
Administrator  of  The  Pennsylvania   Industrial   Development   Authority,   a
corporation,  and that she as such officer being  authorized to do so,  executed
the foregoing  instrument for the purpose therein  contained by signing the name
of the corporation by herself as such officer.

      IN WITNESS WHEREOF, I have hereunto set my hand and official seal.




                                                Notary Public


                                                My Commission Expires:










                       Certificate of Residence of PIDA


      I hereby  certify  that the precise  residence  and  complete  post office
address of The Pennsylvania Industrial Development Authority is: Room 480, Forum
Building,  c/o  Department  of Community and Economic  Development,  Harrisburg,
Pennsylvania 17120.




                                          Claude  J.   Lewis,   Deputy   Chief
Counsel
                                          Attorney for PIDA




RECORDED  in the  Office  for  Recording  of  Deeds,  in and for the  County  of
Northampton, Mortgage Book Volume , Page .




                                          (Title)