CJL/02-16-99                                   PIDA #8259



                          CONSENT, SUBORDINATION AND
                             ASSUMPTION AGREEMENT



      THIS AGREEMENT is made this day of February 1998, effective as of February
18, 1999, by PIERCING PAGODA,  INC., a corporation with an address at 3910 Adler
Place,  P.O.  Box 25007,  Lehigh  Valley,  Pennsylvania  18002 (the  "Industrial
Occupant"),  and  NORTHAMPTON  COUNTY NEW JOBS CORP., a  Pennsylvania  nonprofit
corporation  with an address at One S. Third Street,  7th Floor,  P.O. Box 637 ,
Easton,  Pennsylvania  18044  (the  "Borrower"),  in favor  of THE  PENNSYLVANIA
INDUSTRIAL  DEVELOPMENT  AUTHORITY,  a public body corporate and politic with an
address at 480 Forum Building, Harrisburg, Pennsylvania 17120 ("PIDA").

                                   ARTICLE I
                                  Background

      Section 1.01. The Borrower has agreed, to sell to the Industrial  Occupant
certain  premises  situate  in  Northampton   County,   Pennsylvania,   as  more
particularly  described on Exhibit A attached hereto and made a part hereof (the
"Premises"),  subject to, and with the express  assumption  and agreement of the
Industrial  Occupant to pay and perform any and all  obligations of the Borrower
to PIDA under a certain second  mortgage from Borrower to PIDA,  effective as of
the same date as the  effective  date hereof and to be recorded in the Office of
the  Recorder of Deeds of the county  wherein  the  Premises  are  located  (the
"Mortgage"),  which Mortgage secures a loan in the amount of One Million Dollars
($1,000,000)  from PIDA to the Borrower (the  "Loan"),  evidenced by a note from
the  Borrower  to PIDA dated the same date as the  effective  date  hereof  (the
"Note")  and made  pursuant  to a Loan  Agreement  dated  the  same  date as the
effective  date hereof  between the  Borrower  and PIDA (the "Loan  Agreement"),
providing for the financing by PIDA of an industrial  development project on the
Premises to be occupied by the Industrial Occupant.
      Section 1.02.  The  Industrial  Occupant has reviewed  fully with separate
legal counsel for the Industrial Occupant the Loan Agreement,  Note and Mortgage
and consents  thereto and desires to assume all  obligations  and liabilities of
the  Borrower  thereunder  and  agrees  to pay to PIDA  for the  account  of the
Borrower the debt  evidenced by the Loan  Agreement  and Note and secured by the
Mortgage.


<PAGE>


      To  induce  PIDA  to make  the  Loan  and as a  material  and  substantive
inducement  to the Borrower to execute and deliver the Note,  for the account of
the Industrial  Occupant,  to borrow proceeds of the Loan for the benefit of and
for the account of the Industrial Occupant,  and to execute the Mortgage and the
Loan Agreement,  and for other good and valuable  consideration,  the receipt of
which is hereby acknowledged,  the Industrial Occupant,  intending to be legally
bound, represents and warrants to PIDA and the Borrower and agrees with PIDA and
the Borrower as follows:

                                  ARTICLE II
           Representations and Warranties of the Industrial Occupant

      The Industrial Occupant makes the following representations and warranties
to PIDA and the Borrower:
      Section 2.01.  Corporate  Organization.  The Industrial Occupant is a duly
organized and validly  existing  corporation  in good standing under the laws of
State of Delaware. If incorporated in a jurisdiction other than the Commonwealth
of  Pennsylvania,  Industrial  Occupant is duly qualified to conduct business in
the  Commonwealth  of  Pennsylvania  as a foreign  corporation.  The  Industrial
Occupant has full  corporate  power and authority to own its property and assets
and to transact  the  business in which it is engaged or  currently  proposes to
engage,  including without limitation the business and operations referred to in
the Application.
      Section  2.02.  Power  and  Authority.  The  Industrial  Occupant  has the
corporate power to execute and deliver, or to assume, as the case may be, and to
carry out, the terms and provisions  hereof and of each of the Loan Documents to
which it is a party or the terms of which it has assumed hereunder, and to carry
on the business and operations  referred to in the  Application.  The Industrial
Occupant has taken all  necessary  corporate  action  (including  obtaining  any
consent of  stockholders  required by law or by its Articles or  Certificate  of
Incorporation  or  bylaws) to  authorize  the  execution  and  delivery,  or the
assumption, as the case may be, and the performance, by the Industrial Occupant,
of this  Agreement and each of the Loan  Documents to which it is a party or the
terms of which the  Industrial  Occupant  has  assumed,  the  incurrence  of the
obligations  of the  Industrial  Occupant  hereunder  and  thereunder,  and  the
carrying on of the  business  and  operations  stated in the  Application.  This
Agreement and each of the Loan Documents to which the  Industrial  Occupant is a
party or the terms of which the Industrial  Occupant has assumed  constitute the
duly  authorized,  legal and valid and  binding  obligations  of the  Industrial
Occupant,  except as the  enforceability  thereof may be limited by  bankruptcy,
insolvency or other substantially  similar laws of general application  relating
to or affecting the enforcement of creditors' rights or by general principles of
equity.
      Section 2.03. Necessary Approvals.  Except such approvals,  if any, as are
listed or described in Exhibit 2.03  hereto,  which have been  obtained,  are in
full force and effect  and  evidence  of which has been  furnished  to PIDA,  no
approval is required to authorize,  or is otherwise required in connection with,
(i) the execution and delivery,  or the  assumption,  as the case may be, by the
Industrial Occupant of, (ii) the performance, by the Industrial Occupant, of, or
(iii) the legality, validity,


<PAGE>


      binding  effect or  enforceability  of the  obligations  of the Industrial
Occupant  under,  this  Agreement or the Loan  Documents to which the Industrial
Occupant  is a party or the  terms of which it has  assumed,  including  without
limitation the making of any of the payments provided for herein or therein, the
absence of which approval could have a material adverse effect on the ability of
the  Industrial  Occupant  to make  payments  or perform  and  observe its other
material  obligations  hereunder or thereunder.  The Industrial  Occupant is not
aware of any circumstances as a result of which any approval  heretofore granted
may be revoked or cancelled.


<PAGE>


      Section 2.04.  Loan  Documents  Consistent  With Law and  Agreements.  The
Industrial Occupant is not in default under any agreement to which it is a party
or by which it is bound which  default could have a material  adverse  effect on
the ability of the  Industrial  Occupant to make payments or perform and observe
its other material obligations under this Agreement or any of the Loan Documents
to  which it is a party or the  terms  of  which it has  assumed  or to carry on
operations  at the  Project  as stated in the  Application.  The  execution  and
delivery,  or the assumption,  as the case may be, and the  performance,  by the
Industrial  Occupant,  of this  Agreement  and the Loan  Documents  to which the
Industrial  Occupant  is a party  or the  terms of  which  it has  assumed,  the
consummation  of the  transactions  contemplated  in this Agreement and the Loan
Documents,  and the  compliance  by the  Industrial  Occupant with the terms and
provisions of this  Agreement  and the Loan  Documents to which it is a party or
the terms of which it has  assumed,  and the  carrying on of  operations  at the
Project as stated in the  Application,  do not (i)  contravene  any provision of
law, statute,  rule or regulation to which the Industrial Occupant is subject or
any judgment,  decree,  franchise,  order or permit applicable to the Industrial
Occupant  or (ii)  violate or conflict  with any  provision  of the  Articles or
Certificate of  Incorporation  or bylaws of the Industrial  Occupant or conflict
with,  or result in any breach of, any of the terms,  covenants,  conditions  or
provisions of, or constitute a material default under, or result in the creation
or  imposition  of (or the  obligation to create or impose) any lien upon any of
the assets or revenues of the Industrial  Occupant pursuant to the terms of, any
indenture,  mortgage,  deed of trust, agreement or other instrument to which the
Industrial  Occupant  is a party  or by  which it is bound or to which it may be
subject.
      Section  2.05.   Litigation.   There  are  no  court  actions,   suits  or
proceedings, and no proceedings before any arbitral tribunal or by or before any
governmental  commission,  board, bureau or other administrative agency, pending
or (to  the  knowledge  of  the  Industrial  Occupant)  threatened  against  the
Industrial  Occupant or any affiliate which could have a material adverse effect
on the  financial  condition or  operations  of the  Industrial  Occupant or the
ability  of the  Industrial  Occupant  to  perform  its  obligations  under this
Agreement or the Loan  Documents to which it is a party or the terms of which it
has  assumed,  or to  carry  on  operations  at the  Project  as  stated  in the
Application.
      Section 2.06. Project Agreements. The Industrial Occupant has furnished to
PIDA  originals or true and correct  copies of all material  written  agreements
relating to the acquisition, construction or financing of the Project (including
any  amendments  thereto)  (collectively,  the "Project  Documents")  or, to the
extent PIDA shall have permitted  summaries of Project Documents to be furnished
in lieu of the actual  documents,  fair and  accurate  summaries  of the Project
Documents.


<PAGE>


       All  Project  Documents  are in  full  force  and  effect.  There  are in
existence  no  agreements,   laws,  rules,   regulations,   orders,   judgments,
injunctions, decrees, resolutions,  determinations,  awards or other instruments
whatsoever  amending,  supplementing  or affecting,  or affecting the rights and
obligations of the Industrial  Occupant under, the Loan Documents or the Project
Documents, in a manner which could have a material adverse effect on the ability
of the Industrial  Occupant to make payments or to perform and observe its other
material  obligations  under,  this  Agreement,  or under the Project  Documents
and/or  Loan  Documents  to  which  it is a party or by which it is bound or the
terms of which it has assumed.
      Section 2.07.     Prepayments.  The Industrial  Occupant has not prepaid
any amount payable under the Premises Agreement.


<PAGE>


      Section  2.08. No Default For Borrowed  Money.  No default with respect to
any agreement  pursuant to which the  Industrial  Occupant has borrowed money or
(except for (i) endorsement of negotiable  instruments in the ordinary course of
business  or (ii)  guaranties  in the  ordinary  course of business of travel or
relocation  expenses  of  employees  in  non-material  amounts)  guaranteed  the
obligations of others has occurred and is continuing as of the date hereof.
      Section 2.09. Financial Statements and Financial Condition.  All financial
statements of the  Industrial  Occupant  (including  all related  notes) and all
supplementary  financial  information delivered to PIDA fairly present what they
purport  to  present  as of the  dates  and for the  respective  fiscal  periods
presented,  and were prepared in accordance with generally  accepted  accounting
principles   consistently  applied,   except  as  disclosed  in  such  financial
statements or in Exhibit 2.09 hereto.  The  Industrial  Occupant has no material
liabilities,  direct or indirect,  fixed or  contingent,  as of the date of such
financial  statements  which are not reflected  therein.  Except as disclosed in
Exhibit 2.09 hereto and consented to by PIDA there has been no material  adverse
change in the financial condition of the Industrial Occupant from that disclosed
in the most recent annual  financial  statements  delivered to PIDA prior to the
initial approval of the Loan by the PIDA Board.
      Section 2.10. Taxes. The Industrial Occupant has filed all tax returns and
reports  required  to be filed by it with the United  States of America  and the
Commonwealth  of  Pennsylvania,  and,  where the failure to file such returns or
reports may have a material adverse effect on the financial condition or results
of operations of the  Industrial  Occupant,  any other  jurisdiction  having the
power to require filing of such returns or reports,  through the date hereof and
is current in the  payment of all monies due to such  jurisdictions,  whether as
taxes or otherwise,  unless the  obligation to file such return or report or pay
such tax is being contested by an appropriate  administrative or judicial appeal
or proceeding being conducted diligently in good faith. With respect to any such
appeal or proceeding  to which the United States of America or the  Commonwealth
of Pennsylvania is a party,  the Industrial  Occupant has posted or caused to be
posted a bond or other  security  satisfactory  to PIDA in an amount which is at
least  equal to the sum  which  is the  subject  of the  appeal  or  proceeding,
together with all interest, costs, and charges relating thereto.
      Section 2.11.     Employee Benefits.
            (a) Any employee  pension benefit plans and employee welfare benefit
plans, collectively referred to as employee benefit plans, within the meaning of
the Employee Retirement Income Security Act of 1974, as amended


<PAGE>


            ("ERISA") maintained by the Industrial Occupant or any subsidiary of
the Industrial Occupant ("Subsidiary"), comply in all material respects with the
reporting and disclosure and fiduciary  responsibility  provisions of Title I of
ERISA.
            (b) Except as  disclosed  in Exhibit  2.11  hereto,  no  "prohibited
transaction" (as defined in either ERISA or Section 4975 of the Internal Revenue
Code  (the  "Code"))  potentially  having  a  material  adverse  effect  on  the
continuing  operations of the Industrial Occupant,  has occurred with respect to
any employee benefit plan sponsored or maintained by the Industrial  Occupant or
any Subsidiary or (except with respect to any multi-employer  pension or benefit
plan to which the Industrial Occupant or any Subsidiary contributes, as to which
no representation or warranty is expressed) to which the Industrial  Occupant or
any Subsidiary contributes,  nor is any person contractually bound to enter into
any such prohibited transaction.


<PAGE>


            (c) Except as  disclosed  in Exhibit  2.11  hereto,  the  Industrial
Occupant  and its  Subsidiaries  have  filed  or  (except  with  respect  to any
multi-employer  pension or benefit plan to which the Industrial  Occupant or any
Subsidiary contributes,  as to which no representation or warranty is expressed)
caused to be filed on a timely basis all returns, reports, statements,  notices,
declarations,  and other documents required by any governmental agency,  whether
local,  state or federal  (including  without  limitation  the Internal  Revenue
Service,  the Department of Labor, the Pension Benefit Guaranty  Corporation and
the Securities and Exchange  Commission)  with respect to each employee  benefit
plan sponsored or maintained by the Industrial  Occupant or any Subsidiary or to
which the Industrial Occupant or any Subsidiary contributes,  where a failure to
file may potentially have a material adverse effect on the continuing operations
of the Industrial Occupant.
            (d) Except as described  in Exhibit 2.11 hereto,  and except for any
multi-employer pension or benefit plan not maintained or sponsored by Industrial
Occupant  or  its  Subsidiaries   but  to  which  Industrial   Occupant  or  its
Subsidiaries  contributes,   as  to  which  no  representation  or  warranty  is
expressed, (i) all employee pension benefit plans maintained or sponsored by the
Industrial Occupant and each Subsidiary,  or to which the Industrial Occupant or
any Subsidiary  contributes,  meet, as of the date hereof,  the minimum  funding
standards  of  Section  302 of ERISA and  Section  412 of the Code,  and (ii) no
"reportable  event", as defined in Section 4043 of ERISA,  potentially  having a
material adverse effect on the continuing operations of the Industrial Occupant,
has occurred with respect to any such plan.
            (e) The foregoing  representations  and warranties of the Industrial
Occupant  as to  itself  and its  Subsidiaries  set  forth in this  Section  are
accurate not only with respect to the  Industrial  Occupant and each  Subsidiary
but with respect to each other member of any "controlled  group of corporations"
or any "group of trades or businesses  under common  control" (as such terms are
defined  in Section  414 of the Code) of which the  Industrial  Occupant  or any
Subsidiary is a member.
      Section 2.12.  Environmental  Matters.  With respect to the Premises,  and
with respect to any other facility as defined in The Comprehensive Environmental
Response,  Compensation  and Liability  Act of 1980,  as amended,  ("CERCLA") (a
"facility")  where  a  breach  of  any  of the  representations  and  warranties
contained in this section could  potentially  have a material  adverse effect on
the financial condition or operations of the Industrial Occupant:


<PAGE>


            (a)  Except  as  described  in  Exhibit  2.12  hereto,  to the  best
knowledge of Industrial Occupant after Due Inquiry,  neither Industrial Occupant
nor any of its  Affiliates  (as defined  below) is in violation  of CERCLA,  the
Superfund Amendments and Reauthorization Act of 1986, The Resource  Conservation
and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments
of 1984,  The Clean Water Act, The Toxic  Substances  Control Act, The Clean Air
Act, the Pennsylvania  Hazardous Sites Cleanup Act, the Pennsylvania Solid Waste
Management  Act, the  Pennsylvania  Storage Tank and Spill  Prevention  Act, the
Pennsylvania  Worker and  Community  Right to Know Act, the  Pennsylvania  Clean
Streams  Law,  or any  rule or  regulation  promulgated  pursuant  to any of the
foregoing statutes,  or any other applicable law, statute,  rule,  regulation or
ordinance regulating the manufacture, use, possession,  discharge or disposal of
substances  injurious to the natural  environment  or to human  health,  whether
federal,  state  or  local  (collectively,  as from  time to time  amended,  the
"Environmental Laws");


<PAGE>


            (b)  Except  as  described  in  Exhibit  2.12  hereto,  to the  best
knowledge  of  Industrial  Occupant  after Due Inquiry,  neither the  Industrial
Occupant  nor  any  Affiliate,  or  officer,   employee,  agent  or  independent
contractor of the Industrial  Occupant has arranged,  by contract,  agreement or
otherwise,  (i) for the disposal or treatment of, or (ii) with a transporter for
the transport for disposal or treatment of, any Hazardous  Material owned,  used
or  possessed by the  Industrial  Occupant or any  Affiliate,  in a manner which
violates any applicable Environmental Laws;
            (c)  Except  as  described  in  Exhibit  2.12  hereto,  to the  best
knowledge of the Industrial  Occupant after Due Inquiry,  there are no Hazardous
Materials  now present on the Premises  that may require  remediation  under any
Environmental Laws;
            (d) Except as  described  in Exhibit  2.12  hereto,  neither (i) the
Industrial Occupant nor (ii) in connection with the operations of the Industrial
Occupant,  any Affiliate of the Industrial Occupant, is an "operator" or, to the
best knowledge of Industrial  Occupant  after Due Inquiry,  an "owner," (each as
defined in CERCLA) of a facility at which Hazardous Materials were disposed of;
            (e)  Except  as  described  in  Exhibit  2.12  hereto,  to the  best
knowledge of Industrial  Occupant after Due Inquiry,  neither (i) the Industrial
Occupant nor (ii) in connection with the operations of the Industrial  Occupant,
any Affiliate of the Industrial  Occupant,  "owned" or "operated" (as defined in
CERCLA) any facility  containing  Hazardous Materials at the time such Hazardous
Materials were disposed of; and
            (f) For  purposes  of this  Agreement:  "Affiliate"  shall  mean any
individual,  corporation,  partnership,  joint venture, trust, or unincorporated
organization,  or a government  or any agency or political  subdivision  thereof
(collectively,  a  "Person")  which  directly  or  indirectly  controls,  or  is
controlled  by, or is under  common  control,  with,  the  Industrial  Occupant,
including,  without limitation, any record or beneficial holder of more than 25%
of any class of the Industrial  Occupant's  equity  securities and any executive
officer  or person  employed  or  engaged  in a senior  management  capacity  of
Industrial   Occupant.   "Control"  shall  mean  the  possession,   directly  or
indirectly, of the power to direct or cause


<PAGE>


the  direction of the  management or policies of a Person,  whether  through the
ownership of voting  securities,  by contract or otherwise.  "Due Inquiry" shall
mean that the Industrial Occupant,  consistent with good commercial or customary
practice,  has  caused  to be made by a  responsible  officer  or  agent  of the
Industrial  Occupant  appropriate  inquiry  among  those  directors,   officers,
employees,  agents,  accountants  and attorneys for the Industrial  Occupant who
might  reasonably be expected to have  knowledge of the  particular  matter and,
when such matter includes the condition of the Premises or other  facility,  has
further undertaken appropriate inquiries into the present and past ownership and
uses thereof. "Hazardous Materials", shall include, without limitation, asbestos
(including  asbestos  in friable  form),  polychlorinated  biphenyls,  petroleum
products,  flammable or explosive materials,  radioactive  materials,  hazardous
materials,  hazardous waste, hazardous or toxic substances or related materials,
each as defined under or pursuant to any Environmental Law.


<PAGE>


      Section 2.13. Bankruptcy, etc. Except as disclosed in Exhibit 2.13 hereto,
neither Industrial  Occupant nor any Affiliate of Industrial Occupant has within
seven (7) years prior to the date hereof (i) filed any  voluntary  petition  for
relief under the U.S.  Bankruptcy Code or any state insolvency law or any law of
similar import of any nation or political  subdivision  thereof (any such law, a
"Bankruptcy Law"); (ii) had any involuntary  petition filed against it under any
Bankruptcy Law which was not dismissed  within 60 days  subsequent to the filing
thereof;  (iii) was adjudicated  bankrupt or insolvent under any Bankruptcy Law;
(iv) entered into any  assignment or  composition  for the benefit of creditors;
(v)  entered  into  any  transaction   voidable  under  the  Uniform  Fraudulent
Conveyance Act or any law of similar import;  (vi) admitted its inability to pay
its debts as such  debts  come due;  or (vii)  sought to take  advantage  of any
moratorium law then in effect.
      Section 2.14.  Criminal  Convictions.  Except as disclosed in Exhibit 2.14
hereto, neither Industrial Occupant, nor to Industrial Occupant's best knowledge
after Due Inquiry,  any  controlling  shareholder  (if Industrial  Occupant is a
corporation required to file periodic reports under the U.S. Securities Exchange
Act of 1934, as amended from time to time (the "Exchange  Act")),  or any record
or  beneficial  holder of more than 10% of any  class of  Industrial  Occupant's
equity  securities  (if  Industrial  Occupant is not  required to file  periodic
reports under the Exchange Act), director, officer or person employed or engaged
by  Industrial  Occupant  in a senior  management  capacity  or as a manager  or
comptroller of the Project, has been convicted by any court of any felony or any
misdemeanor  involving  theft,  dishonesty,  deception,  false swearing,  or the
filing or  submission of any false or  misleading  information  to any agency of
government.
      Section 2.15.  Occupancy  Agreements.  Except for the agreements listed on
Exhibit 2.15 hereto,  there exist no agreements between the Industrial  Occupant
and any other person,  corporation or other entity regarding use or occupancy of
any portion of the Premises.  The Industrial Occupant has requested the Borrower
to acquire title to the Premises and convey the Premises to Industrial  Occupant
as of the date hereof by the Deed solely for the purpose of obtaining  the Loan,
all benefit of which will be received by the Industrial Occupant.  Such title as
the Borrower holds to the Premises is solely as security for the Loan being made
by PIDA to Borrower and for that certain loan in the principal sum of $1,980,000
given by CORESTATES BANK, N.A. to the Borrower/Industrial Occupant, dated
                                 ,  exclusively   for  Industrial   Occupant's
benefit.  Borrower  has not had,  does not have,  and will not have any right to
occupy or access to the  Premises  or  control  or right to  control  any of the
operations of Industrial Occupant thereon.


<PAGE>


      Section 2.16. Permits.  The construction of the Project as provided in the
Application,  the use of the Project for the purposes stated in the Application,
and the operation of the Project,  comply in all respects  with, and are lawful,
permitted and conforming  uses under,  all applicable  building,  fire,  safety,
subdivision,  zoning, sewer,  environmental,  securities,  health, insurance and
other laws, ordinances,  rules,  regulations and plan approval conditions of any
governmental,  public or other body or authority  having  jurisdiction  over the
Project  except  where  failure to so comply  will not have a  material  adverse
effect on operations to be carried on at the Project.
            Except for (i) a permit for occupancy of the Project to be issued by
the  Pennsylvania  Department  of Labor and  Industry  (where the Project is not
complete as of the date hereof) and (ii) the permits specifically  identified in
Exhibit  2.16  hereto,  the  Industrial   Occupant  has  received  all  material
administrative  permits  required  for the  operations  to be  carried on at the
Project,  including  without  limitation  zoning  permits and permits  under all
Environmental  Laws.  Except as specifically  identified on Exhibit 2.16 hereof,
the Industrial  Occupant,  after Due Inquiry,  has no reason to believe that any
required  permits not yet  obtained  will not be timely  issued in the  ordinary
course of business of the issuing agency.


<PAGE>


      Section 2.17. Necessary Technology,  etc. Except as stated in Exhibit 2.17
hereto, to the best knowledge of the Industrial Occupant after Due Inquiry,  the
Industrial  Occupant has  possession of or ready access to all resources it will
require for  operations at the Project,  including  without  limitation  working
capital,  raw  materials,   labor  (possessing  necessary  skills),   machinery,
equipment,   technology,   communications,   patents,   trademarks   and   other
intellectual property.
      Section 2.18. No Violation. Except as disclosed in Exhibit 2.18 hereto, to
the best  knowledge of the  Industrial  Occupant  after Due Inquiry  there is no
violation,  nor is there notice or other record of any violation, of any zoning,
subdivision,  environmental,  building or other statute, ordinance,  regulation,
restrictive covenant or other restriction applicable to the Project.
      Section  2.19.  No  Liens.  There  exist no liens,  encumbrances  or other
charges against the Project  (including  statutory and other liens of mechanics,
workers, contractors, subcontractors, suppliers, taxing authorities and others),
except  the  Mortgage  and the liens  listed on  Exhibit  2.19  hereto;  and the
Industrial  Occupant  has not made a contract or  arrangement  of any kind,  the
performance of which by the other party thereto could give rise to a lien on the
Project by operation of law or otherwise except such as are adequately and fully
covered by PIDA's title insurance insuring the lien of the Mortgage.
      Section 2.20.  Utilities and Access.  All utility  services  necessary for
construction  and operation of the Project,  including  water supply,  storm and
sanitary sewer  facilities,  gas,  electricity and telephone  facilities are, or
prior to the projected  Project  completion date will be,  available  within the
boundaries of the Project;  and all roads necessary for the full  utilization of
the Project  for their  intended  purposes  either  have been  completed  or the
necessary   rights-of-way   therefor  have  been  acquired  by  the  appropriate
governmental  authority or others or have been or will,  prior to the  projected
date of  occupancy  of the  Project,  be dedicated to public use and accepted by
such  governmental  authority,  and all  necessary  steps have been taken by the
Industrial  Occupant  and all such  governmental  authority  or others to assure
complete  construction  and  installation  thereof  by  the  projected  date  of
occupancy of the Project.


<PAGE>


      Section 2.21.  Information  Furnished  Accurate.  To the best knowledge of
Industrial  Occupant after Due Inquiry,  all  information  supplied  directly or
indirectly  by the  Industrial  Occupant to PIDA on or prior to the date hereof,
including without limitation the Application, as of the respective dates of such
materials were, and as of the date hereof, are true and accurate in all material
respects and did not and do not contain any untrue  statement of a material fact
or omit to state any material fact necessary to make the statements  therein not
misleading,  provided that (i) the statements therein  describing  documents and
agreements  are summaries  only and such summaries are qualified by reference to
such documents and agreements,  (ii) financial  statements and other  statements
expressly effective as of a particular date prior to the date when furnished are
warranted only to be true and accurate or (in the case of financial  statements)
fairly to  present  what  they  purport  to  present,  in either  case as of the
effective  date thereof,  and (iii) to the extent any such  information  therein
provided by the  Industrial  Occupant was based upon or  constitutes a forecast,
projection  or other  data  which by its  nature is  uncertain,  the  Industrial
Occupant  represents  only  that it acted in good  faith  and  utilized  due and
careful  consideration and the best information known to it after Due Inquiry in
the preparation of such information

                                     ARTICLE III
                                  Assumption Of Obligations

      Section  3.01.  Assumption of  Obligations.  The  Industrial  Occupant for
itself,  its successors and assigns:  (i) hereby assumes all  obligations of the
Borrower to make  payments and discharge all  obligations,  expenses,  costs and
liabilities  of the Borrower in accordance  with the terms and conditions of the
Note, the Mortgage and the Loan Agreement,  as if the Industrial Occupant itself
had executed the Note, the Mortgage,  and the Loan Agreement;  (ii) consents and
agrees that its liability to pay and perform in accordance with the terms of the
Note,  the  Mortgage  and the Loan  Agreement  shall  continue  until  the Loan,
together with any and all interest, penalties and costs thereon, is paid in full
and all  obligations  are  performed;  (iii)  consents  and agrees that PIDA may
enforce against the Industrial  Occupant the obligations of the Borrower assumed
hereby  without any  restriction or limitation (A) arising from any provision of
the Note restricting  enforcement of certain liabilities  thereunder (including,
without limitation,  indemnification  obligations arising under Sections 4.07 or
4.20 hereof)  against assets of the Borrower other than the Borrower's  interest
in the Premises,  or (B) arising from the Loss Sharing Agreement effective as of
June 4, 1980 between the Borrower and PIDA,  under which PIDA has agreed,  among
other  things,  to exhaust  remedies  against the  Industrial  Occupant  and any
Guarantor before pursuing remedies against the assets of the Borrower other than
the Premises; and (iv) assumes and covenants to perform any and all obligations,
promises and covenants of the Borrower  contained in the Note,  the Mortgage and
the Loan Agreement,  as if the Industrial Occupant itself had executed the Note,
the Mortgage,  and the Loan Agreement,  except those  obligations,  promises and
covenants  which  relate  to  the  internal  organization  of the  Borrower  and
therefore, by their nature, can only be performed by the Borrower.


<PAGE>


      Section 3.02.  Subordination of Interest.  The Industrial  Occupant hereby
consents for itself, its successors and assigns to the Loan Agreement, Note, and
Mortgage,  agrees  that the  terms and  provisions  hereof  (including,  without
limitation, each of the representations,  warranties and covenants of Industrial
Occupant  herein)  shall be  deemed  included  in the Loan  Agreement,  Note and
Mortgage and shall be enforceable under the Loan Agreement, Note and Mortgage as
though  Industrial  Occupant had executed the Loan Agreement,  Note and Mortgage
and the  terms  and  provisions  hereof  were  expressly  set  forth in the Loan
Agreement, Note and Mortgage, and agrees that whatever right, title and interest
which it, its  successors  and assigns may have in and to the Premises under the
Agreement or otherwise shall be, and the same are hereby  expressly made subject
and  subordinate  to the lien of the  Mortgage and any other  judgment,  lien or
encumbrance pursuant to the Note or Loan Agreement.

                                  ARTICLE IV
                 Special Covenants of the Industrial Occupant

      The Industrial Occupant covenants and agrees as follows:
      Section 4.01.     Necessary  Machines.   The  Industrial  Occupant  will
supply or cause to be supplied all machinery  and/or  equipment  necessary for
the operation of the Project.


<PAGE>


      Section 4.02. No Removal of Jobs. The  establishment of the Project by the
Borrower and the Industrial  Occupant at the Premises will not cause the removal
of an industrial or manufacturing  plant or facility or research and development
facility or  agricultural  enterprise  controlled  directly or indirectly by the
Industrial  Occupant  or any  Affiliate  from  one area of the  Commonwealth  of
Pennsylvania to another area of the Commonwealth, nor result in the reduction of
the number of employees at any other plant controlled by the Industrial Occupant
or any Affiliate currently located in the Commonwealth of Pennsylvania.
      Section 4.03.  Operations and Number of Jobs. The Industrial Occupant will
create,  or retain,  as the case may be, at the Premises within three years from
the  date  of the  grant  of a  permit  for  occupancy  of the  Premises  by the
Department of Labor and Industry,  no less than the number of jobs  specified to
be created or retained in the Application.
      Section 4.04.  Certificate re Jobs. The Industrial  Occupant will annually
provide PIDA with a certificate  executed by an authorized officer setting forth
the number of employees,  and their  respective  job  classifications  (skilled,
semi-skilled  and  unskilled),  employed  by  the  Industrial  Occupant  or  any
subsidiary  during the previous  year at the Project,  together  with such other
related information as PIDA may request.
      Section 4.05.     Nondiscrimination.  The  Industrial  Occupant  and its
subsidiaries  will not  discriminate  against  any  employee  or  against  any
applicant  for  employment  because  of  race,  religion,   color,   handicap,
ancestry,  national  origin,  sex or age,  in any  manner,  including  but not
limited  to the  following  activities:  employment;  upgrading,  demotion  or
transfer;


<PAGE>


recruitment or recruitment advertising;  layoff or termination;  rates of pay or
other  forms  of   compensation;   and   selection   for   training,   including
apprenticeship. The Industrial Occupant hereby accepts and agrees to be bound by
the  nondiscrimination  provisions  set forth in Exhibit 4.05  hereto,  and will
cause  comparable  nondiscrimination  provisions to be inserted into all Project
contracts.
      Section 4.06.  Employee  Benefit Plans.  The  Industrial  Occupant and its
Subsidiaries shall: (i) fund all of their employee pension benefit plans, to the
extent required, in accordance with the minimum funding standards of Section 302
of ERISA and  Section 412 of the Code,  except  where the failure to do so would
not  have  a  material  adverse  effect  on  the  continuing  operations  of the
Industrial  Occupant;  (ii) make all payments of  contributions  to all employee
benefit plans within the time periods  established in ERISA and the Code, except
where the  failure  to do so would  not have a  material  adverse  effect on the
continuing  operations of the Industrial Occupant;  (iii) furnish PIDA, upon its
request,  with copies of all reports or other  statements  filed with the United
States  Department of Labor, the Internal Revenue Service or the Pension Benefit
Guaranty Corporation,  or any other agencies,  whether federal, state, or local,
with respect to all employee benefit plans;  (iv) advise PIDA within ten days of
the occurrence of any "reportable event" or "prohibited transaction," within the
respective  meanings of these terms in ERISA and the Code,  with  respect to any
employee  benefit  plan to  which  the  Industrial  Occupant  or any  Subsidiary
contributes,  potentially  having a material  adverse  effect on the  continuing
operations of the Industrial Occupant; and (v) promptly advise PIDA of any audit
or  investigation  of any employee benefit plans by the Internal Revenue Service
or Department  of Labor or any other  governmental  agency or any  threatened or
proposed action by any such agency affecting the status of, and deductibility of
contributions  to, any employee  benefit plans,  potentially  having in any such
case a  material  adverse  effect on the  continuing  operations  of  Industrial
Occupant.


<PAGE>


      Section 4.07.     Environmental Compliance.
            (a) Except as described on Exhibit 2.12 hereto,  the Project and the
Industrial   Occupant's  operations  at  the  Premises  shall  comply  with  all
Environmental Laws in all material respects (including,  without limitation,  in
all  respects  having a  significant  effect on the quality of air or surface or
ground water in the vicinity of the Premises).
            (b) Without limiting the generality of the foregoing, the Industrial
Occupant shall keep the Project and Premises free of Hazardous  Materials except
to the extent that such Hazardous Materials are stored and/or used in compliance
with all Environmental  Laws. The Industrial Occupant shall not suffer or permit
the  Premises to be used to generate,  manufacture,  refine,  transport,  treat,
dispose of, transfer, produce or process Hazardous Materials in violation of any
Environmental Laws. In addition,  Industrial Occupant shall not suffer or permit
any tenant,  subtenant or occupant to release any Hazardous  Materials  onto the
Premises or onto adjacent property in violation of any Environmental Laws.
            (c)  The  Industrial   Occupant  shall  immediately  upon  obtaining
knowledge of any of the following  notify the appropriate  regulatory  agency in
writing, with a copy to PIDA:
                  (i)  the  release  of any  Hazardous  Material  or  any  other
substance regulated by the Environmental Laws, from, on or about the Premises in
violation of any Environmental Law;


<PAGE>


                  (ii)  receipt  by the  Industrial  Occupant,  or  any  tenant,
subtenant or occupant of the Premises,  of any notice concerning the Premises of
any violation of any applicable Environmental Law;
                  (iii) any  violation  affecting  the Project or the Premises
of any applicable Environmental Law; and
                  (iv) any claim or claims made against the Industrial  Occupant
relating to the Project or the Premises relating to damage,  contribution,  cost
of recovery,  compensation, loss or injury resulting from any Hazardous Material
or any other substance  regulated by any applicable  Environmental Law; provided
that notice to PIDA shall not be required  pursuant to this Section 4.07 so long
as (A) the  business of  Industrial  Occupant  carried on at the Project is of a
character  that,  notwithstanding  exercise of all possible  care on the part of
Industrial  Occupant,  routinely produces discharges  regulated under applicable
Environmental Laws, (B) such release,  claim or violation relates to a discharge
of the character referred to in clause (A) hereof,  and (C) such release,  claim
or violation will not have a material  adverse  effect on the  operations  being
carried on at the  Project  or the  operations  or  financial  condition  of the
Industrial Occupant.
            (d) The Industrial Occupant, at its sole expense,  shall conduct and
complete all investigations,  studies, sampling and testing, and all removal and
other  actions  necessary  to clean up and remove all  Hazardous  Materials  on,
under,  from or  affecting  the  Project or the  Premises  if required by and in
accordance with all applicable federal, state and local laws, ordinances, rules,
regulations  and policies,  in accordance  with the orders and directives of all
federal,   state  and  local   governmental   authorities,   to  the  reasonable
satisfaction  of PIDA.  The  Industrial  Occupant  shall at all  times  keep the
Project and the Premises free of any lien imposed pursuant to any  Environmental
Law  including,  without  limitation,  any  Environmental  Law  relating  to any
Hazardous Material.


<PAGE>


            (e)  The  Industrial  Occupant  shall  indemnify,  defend  and  hold
harmless the Borrower,  PIDA, and the  Commonwealth  of  Pennsylvania  and their
respective  employees,  agents,  officers  and  directors,   including,  without
limitation,  any engineer or  environmental  consultant  retained by Borrower or
PIDA (such parties collectively,  "Indemnified  Parties"),  from and against any
claims, demands, penalties, fines, liabilities,  settlements,  damages, costs or
expenses of whatever kind or nature, known or unknown,  contingent or otherwise,
including  without  limitation  reasonable  attorney fees, fees of environmental
consultants  and  laboratory  fees,  arising out of or in any way related to the
following matters: (i) the presence,  disposal, release or threatened release of
any Hazardous  Materials,  on, over, under, from or affecting the Project or the
Premises or the soil, water, vegetation,  buildings,  personal property, persons
or animals  thereon;  (ii) any personal  injury  (including  wrongful  death) or
property  damage (real or personal)  arising out of or related to any  Hazardous
Materials  on,  over,  under,  released  from or  affecting  the  Project or the
Premises;  (iii) any  lawsuit  brought  or  threatened,  settlement  reached  or
governmental  order  relating to such  Hazardous  Materials  with respect to the
Project  or the  Premises;  (iv) any  violation  of laws,  orders,  regulations,
requirements or demand of government authorities, which are based upon or in any
way  related to any  Hazardous  Materials  on,  over,  under,  released  from or
affecting  the Project or the  Premises;  and/or (v) the breach of any warranty,
representation  or  covenant  of  the  Industrial  Occupant  contained  in  this
Agreement relating to the Environmental Laws.


<PAGE>


            (f) (i) In the event  PIDA shall  have  reasonable  cause to suspect
that the  Industrial  Occupant  has  failed  to  comply  with the  terms of this
Agreement,  or shall  have  reasonable  cause  to  suspect  that  any  Hazardous
Materials exist on the Premises in violation of any Environmental Laws, PIDA may
direct the Industrial  Occupant to obtain,  or if the Industrial  Occupant shall
have  failed or refused to so obtain  after  thirty  (30) days notice from PIDA,
PIDA may obtain, an environmental audit of the Premises,  at the sole expense of
the Industrial  Occupant;  (ii) the nature and scope of the environmental  audit
shall be determined by PIDA, in its  reasonable  judgment;  (iii) the Industrial
Occupant shall permit PIDA and PIDA's agents and employees access to the Project
and the Premises for the purpose of monitoring or conducting  the  environmental
audit, as the case may be, and shall otherwise  reasonably cooperate and provide
such  additional  information  as may be  requested  by PIDA or its  agents  and
employees;  (iv) the  Industrial  Occupant  shall  comply  with  all  reasonable
recommendations  relating to amelioration of violation of any Environmental Laws
contained  in the  environmental  audit,  including,  but not  limited  to,  any
recommendations  for  additional  testing or studies to detect the  presence  of
Hazardous Materials or contamination caused by Hazardous Materials,  at the sole
cost and expense of the  Industrial  Occupant;  (v) in the event the  Industrial
Occupant  fails to pay for the cost of the  environmental  audit or any remedial
actions or additional testing recommended  thereby,  relating to amelioration of
violation  of any  Environmental  Laws,  PIDA may pay for  same;  and (vi)  each
payment  made by PIDA shall become a part of the  indebtedness  evidenced by the
Note and secured by the  Mortgage,  shall be due and payable  upon  demand,  and
shall bear  interest at the default  rate of interest  established  in the Note,
until paid in full by the Industrial Occupant.


<PAGE>


            (g) The liability under this Section 4.07 shall in no way be limited
or impaired by (i) any extension of time for performance  required by any of the
Loan Documents, (ii) any sale, assignment or foreclosure of the Note or any sale
or transfer of all or part of the Project or the  Premises,  (iii) the discharge
of the  Note,  (iv) any  exculpatory  provisions  in any of the  Loan  Documents
limiting PIDA's  recourse to any other security,  (v) the accuracy or inaccuracy
of the representations and warranties made by the Industrial Occupant;  (vi) the
release of the  Industrial  Occupant  or any other  person from  performance  or
observance of any of the agreements, covenants, terms or conditions contained in
any of the Loan Documents by operation of law, PIDA's  voluntary act (other than
the execution  and delivery by PIDA of an  instrument  of release  expressly and
specifically referring to Industrial Occupant's indemnification obligations), or
otherwise, (vii) the release or substitution in whole or in part of any security
for the Note;  or (viii)  PIDA's  failure to file any mortgage or UCC  financing
statements (or PIDA's improper  filing of any thereof) or to otherwise  perfect,
protect,  secure or insure  any  mortgage,  security  interest  or lien given as
security for the Note; and, in any such case,  whether with or without notice to
the Industrial Occupant and with or without consideration.
            (h) The indemnity  provisions  contained in this Section 4.07 hereof
shall survive any judicial  foreclosure,  foreclosure by power of sale,  deed in
lieu of  foreclosure,  transfer of the  property by the  Industrial  Occupant or
PIDA, and payment of the Loan in full,  provided,  however,  that such indemnity
provisions  shall at no time accrue to, or be  construed  to benefit,  any other
third-party  entity (other than an Indemnified  Party or a successor in interest
or assign of PIDA) no matter how such other third-party  entity obtains title or
any interest in the Project or Premises.


<PAGE>


            The liability covered by the indemnity provision shall include,  but
not be limited to,  losses  sustained  by an  Indemnified  Party for (i) amounts
owing  under  the Loan and the  Loan  Documents,  (ii)  amounts  arising  out of
personal injury or death claims, (iii) amounts charged to such Indemnified Party
for any environmental or Hazardous Materials clean up costs and expenses, liens,
or other such  charges or  impositions,  (iv)  payment  for fees,  court  costs,
environmental  tests and design  studies,  and (v) any other amounts  reasonably
expended by any such Indemnified Party.
      Section 4.08. Compliance with Agreements and Laws; Payment of Obligations.
The Industrial  Occupant will act in accordance with all applicable  agreements,
laws, rules, regulations, orders, judgments,  injunctions, decrees, resolutions,
permits,   franchises,   determinations  or  awards  of  any  administrative  or
governmental   authority  or   administrative   or  governmental   organization,
non-compliance with which could have a material adverse effect on the ability of
the Industrial  Occupant to carry on the operations at the Project  contemplated
in the  Application  or make payments or perform and observe its other  material
obligations under any of the Loan Documents.
            The Industrial Occupant will pay and discharge all bills, claims and
charges relating to the Project or the Premises,  including  without  limitation
claims   for  taxes  and  claims  of   laborers,   mechanics   and   materialmen
(collectively,  "Project  Claims"),  prior to the time the holder of any Project
Claim lawfully may cause any judgment or writ of execution to be filed or lodged
against the Premises as a result of such Project Claim.
      Section  4.09.  Maintenance  and  Operations  of Project.  The  Industrial
Occupant  will  maintain  and  diligently  operate  the  Project  in a good  and
workmanlike  manner  consistent with sound operating  procedures,  and cause all
machinery, equipment and facilities of any kind now or hereafter forming part of
the  Project  or  necessary  for the  development  thereof or the  operation  or
maintenance of the Project,  to be provided and to be kept in good and efficient
operating condition, and all repairs,  replacements,  additions and improvements
thereto required to such end to be promptly made.


<PAGE>


            The  Industrial  Occupant  will not  permit,  commit or  suffer  any
material  waste with  respect to the  Project,  nor use or permit the use of the
Project  for any  unlawful  purpose or any  purpose  other than (i) the  purpose
stated  in  the  Application  or  (ii)  a  purpose  eligible,  at  the  time  of
commencement  thereof,  for  financing by PIDA under the PIDA Act,  regulations,
statements of policy, guidelines and interpretations of the PIDA Board and staff
as in effect from time to time ("PIDA-Eligible") or permit any nuisance to exist
on the Premises,  and not sell, transfer,  lease,  mortgage,  pledge,  convey or
otherwise dispose of the Project or Premises or any interest therein except with
the written consent of PIDA.
            The Industrial  Occupant will carry on in good faith at the Premises
substantial PIDA-Eligible manufacturing, industrial or other activities.
      Section  4.10.  Preservation  of  Corporate  Existence,   etc.  Except  as
otherwise  permitted in Section 4.21, the Industrial  Occupant will (a) maintain
and preserve its corporate existence and the right to carry on its business with
respect  to the  Project,  and (b)  duly  procure  and  maintain  all  necessary
licenses,  franchises,  permits and other documents  necessary or appropriate in
connection therewith and all necessary renewals and extensions thereof.


<PAGE>


      Section  4.11.  Inspection.   The  Industrial  Occupant  will  allow  upon
reasonable  prior  written  notice  by  PIDA  to the  Industrial  Occupant,  any
representative  of PIDA to visit and  inspect  the Project and all or any of the
facilities or operations  thereof,  all at such reasonable times and as often as
PIDA or any such representative may request.
      Section 4.12.     Financial  Statements.  During  the term of the  Loan,
the Industrial Occupant will provide PIDA with:
            (a) financial  statements  for the  Industrial  Occupant  within one
hundred twenty (120) days after the close of each fiscal year including  balance
sheets,  statements of income and  reconciliations of equity, in accordance with
generally accepted accounting  principles,  reviewed by an independent certified
public accountant satisfactory to PIDA, provided that if the Industrial Occupant
is a corporation subject to the reporting  requirements of the Exchange Act, the
Industrial  Occupant's  obligation  under this  paragraph  shall be satisfied by
delivery  to  PIDA of the  financial  statements  required  to be  filed  by the
Industrial Occupant under the Exchange Act in its annual reports;
            (b) with reasonable  promptness,  such other information  respecting
the  business,   operations  and  condition  (financial  or  otherwise)  of  the
Industrial Occupant as PIDA may from time to time reasonably request,  including
information relating to the Project; and
            (c)  with  reasonable  promptness,  after  it  becomes  known to the
Industrial  Occupant,   reasonably  complete  information  on  material  adverse
developments  which may  reasonably  be expected to threaten the  completion  or
continued operation of the Project.
      Section  4.13.  Compliance  Certificates.  If PIDA shall so  request,  the
Industrial  Occupant  will  provide  PIDA with  annual  Compliance  Certificates
executed by officers  authorized to execute and deliver the same within 120 days
of each fiscal year's end reciting compliance with  representations,  warranties
and covenants.
      Section 4.14.     Insurance.  The Industrial  Occupant will maintain the
insurance required by the Mortgage.


<PAGE>


      Section 4.15.  Assignment and Subleases.  Except as expressly permitted in
writing  by PIDA,  the  Industrial  Occupant  shall not assign or  sublease  any
portion of the  Premises,  and shall not lease any portion of the Premises to or
permit any portion  thereof to be occupied by any person  other than  Industrial
Occupant,  and in no event shall the portion of the Project  occupied by persons
other  than the  Industrial  Occupant  exceed 30% of the  leasable  space of the
Project.  In the event any  portion  of the  Project  is  leased,  subleased  or
assigned  to or  otherwise  occupied  by any person  other  than the  Industrial
Occupant,  the Industrial  Occupant shall pay to PIDA as a prepayment  under the
Note,  in addition to any other  payments  required  thereunder,  50% of (i) the
gross rent or equivalent charges received by the Industrial Occupant relating to
such occupancy, less only (ii) the proportionate amount of taxes, insurance, and
utilities allocable to the portion of the Premises being so leased, subleased or
assigned.
      Section 4.16.     Direct  Payment.  The  Industrial  Occupant  will make
all payments  assumed by it pursuant to Section 3.01 hereof  directly to PIDA,
at such address as PIDA may specify from time to time.


<PAGE>


      Section 4.17.  Accuracy of Information  Supplied.  The Industrial Occupant
will  ensure  that all  information  prepared  by the  Industrial  Occupant  and
supplied to PIDA or any third party under the  provisions of this  Agreement for
the purpose of any report or  certificate  to be furnished to PIDA in connection
with this Agreement or any of the Loan Documents will at the time it is supplied
be true and  accurate  in all  material  respects,  except  that  (i)  financial
statements  and other  statements  expressly  effective as of a particular  date
prior to the date when  furnished  are required  only to be true and accurate or
(in the case of  financial  statements)  fairly to present  what they purport to
present, in either case as of the effective date thereof, and (ii) to the extent
any such  information  is based upon or  constitutes  a forecast,  projection or
other  data  which by its  nature  is  uncertain,  the  Industrial  Occupant  is
committed  only to act in good faith and utilize  due and careful  consideration
and the best  information then known to it in preparing such  information.  With
respect  to all  information  prepared  by third  parties  and  supplied  by the
Industrial  Occupant to PIDA and/or any third party under the provisions  hereof
for  the  purpose  of any  report  or  certificate  to be  furnished  to PIDA in
connection  with this  Agreement or any of the Loan  Documents,  the  Industrial
Occupant  shall  deliver a  written  notice  to PIDA as soon as  possible  if it
believes  that such  information  is not  complete  and accurate in all material
respects, which written notice shall include the basis for such belief.
      Section 4.18. Notice of Defaults. The Industrial Occupant will give prompt
notice  to PIDA of the  occurrence  of any  Event  of  Default  under  the  Loan
Documents  either  on its  part,  or on the part of the  Borrower  of which  the
Industrial Occupant becomes aware.
      Section  4.19.  Further  Assurances.  The  Industrial  Occupant will make,
execute or endorse,  and  acknowledge  and deliver or file,  all such  vouchers,
invoices,  notices and certifications and additional  agreements,  undertakings,
conveyances,   transfers,   assignments,   financing  statements,   continuation
statements or further  assurances,  and take any and all such other actions,  as
PIDA may reasonably  deem necessary or advisable from time to time in connection
with the Loan or the Loan Documents to assure or confirm to PIDA and perfect all
or any  part of the  security  for the  Loan and any  other  obligations  of the
Industrial Occupant.


<PAGE>


      Section 4.20. Indemnification.  To the extent permitted by applicable law,
the Industrial  Occupant  hereby  indemnifies and holds harmless the Indemnified
Parties from and against any and all claims, damages, losses, liabilities, costs
or  expenses  (including  all  reasonable  fees or expenses  resulting  from the
settlement  of  any  claims  or  liabilities  and  reasonable  attorneys'  fees)
(collectively,  "Indemnified Claims") whatsoever which the Indemnified Party may
incur (or which may be claimed  against the  Indemnified  Party by any person or
entity  whatsoever)  by reason of or in connection  with (a) the issuance of the
Loan, (b) any breach by the Industrial Occupant of any representation, warranty,
covenant,  term or condition in, or the  occurrence of any default  under,  this
Agreement or the Loan Documents, and (c) involvement of the Indemnified Party in
any legal suit, investigation,  proceeding,  inquiry or action as a consequence,
direct or indirect,  of PIDA's  issuance of the Loan,  PIDA's or the  Borrower's
entering into this  Agreement or any of the Loan Documents or any other event or
transaction  contemplated by any of the foregoing;  provided,  however, that (i)
the Indemnified Party shall within sixty (60) days of


<PAGE>


becoming  aware of (A) its actual or  potential  liability  for any  Indemnified
Claim or (B) the formal  assertion  against  it in  writing  of any  Indemnified
Claim,  have  notified the  Industrial  Occupant of such  Indemnified  Claim and
tendered to the  Industrial  Occupant  the  defense of such claim;  (ii) that no
Indemnified  Claim  shall be paid or  compromised  without  the  consent  of the
Industrial  Occupant,  which shall not  unreasonably  be  withheld  and shall be
deemed given if the Industrial  Occupant does not object, by a notice in writing
to the Indemnified Party, to the payment or compromise of such Indemnified Claim
within 10 calendar days after the Indemnified  Party has given to the Industrial
Occupant  notice of the proposed  payment or compromise  thereof,  and (iii) the
Industrial  Occupant  shall not be required to  indemnify an  Indemnified  Party
hereunder for any claims, damages, losses, liabilities, costs or expenses to the
extent,  but only to the  extent,  caused by the  gross  negligence  or  willful
misconduct of such Indemnified Party.
            The liability  under this Section 4.20 shall in no way be limited or
impaired by (i) any  extension  of time for  performance  required by any of the
Loan Documents, (ii) any sale, assignment or foreclosure of the Note or any sale
or transfer of all or part of the Project or the  Premises,  (iii) the discharge
of the  Note,  (iv) any  exculpatory  provisions  in any of the  Loan  Documents
limiting PIDA's  recourse to any other security,  (v) the accuracy or inaccuracy
of the representations and warranties made by the Industrial Occupant;  (vi) the
release of the  Industrial  Occupant  or any other  person from  performance  or
observance of any of the agreements, covenants, terms or conditions contained in
any of the Loan Documents by operation of law, PIDA's  voluntary act (other than
the execution  and delivery by PIDA of an  instrument  of release  expressly and
specifically referring to Industrial Occupant's indemnification obligations), or
otherwise, (vii) the release or substitution in whole or in part of any security
for the Note;  or (viii)  PIDA's  failure to file any mortgage or UCC  financing
statements (or PIDA's improper  filing of any thereof) or to otherwise  perfect,
protect,  secure or insure  any  mortgage,  security  interest  or lien given as
security for the Note; and, in any such case,  whether with or without notice to
the Industrial Occupant and with or without consideration.
            The indemnity provisions contained in this Section 4.20 hereof shall
survive any judicial foreclosure,  foreclosure by power of sale, deed in lieu of
foreclosure,  transfer of the property by the  Industrial  Occupant or PIDA, and
payment of the Loan in full, provided,  however,  that such indemnity provisions
shall at no time accrue to, or be  construed to benefit,  any other  third-party
entity (other than an Indemnified  Party or a successor in interest or assign of
PIDA) no matter how such other third-party  entity obtains title or any interest
in the Project or Premises.
            The liability covered by the indemnity provision shall include,  but
not be limited to,  losses  sustained  by an  Indemnified  Party for (i) amounts
owing  under  the Loan and the  Loan  Documents,  (ii)  amounts  arising  out of
personal injury or death claims,  (iii) amounts charged to an Indemnified  Party
for any environmental or Hazardous Materials clean up costs and expenses, liens,
or other such  charges or  impositions,  (iv)  payment  for fees,  court  costs,
environmental  tests and design  studies,  and (v) any other amounts  reasonably
expended by an Indemnified Party.


<PAGE>


      Section 4.21.     Negative Covenants.
            (a)  Without  the prior  written  consent  of PIDA,  the  Industrial
Occupant  shall  not  permit,  allow or suffer  to  exist,  any lien,  judgment,
mortgage,  or  encumbrance  to be placed  against the  Premises or any  interest
therein, or enter into any agreement  requiring,  contemplating or providing for
placement  of any such  judgment,  mortgage,  lien or  encumbrance,  except  (i)
mortgages,  liens and encumbrances  expressly provided for in the Application to
which PIDA shall not have  objected in writing,  and (ii) that the terms of this
Section 4.21(b) shall not be deemed to prohibit  execution of any note or credit
instrument  not  providing  for any  specific  lien  against  the  Premises  but
permitting  confession of judgment against the Industrial Occupant subsequent to
an event of default thereunder so long as judgment is not confessed thereunder.
            (b) The Industrial  Occupant will not change its name without notice
to PIDA.
            (c)  Without  the prior  written  consent  of PIDA,  the  Industrial
Occupant  shall  not  (i)  merge,  consolidate  or  divide,  whether  or not the
Industrial Occupant is the surviving corporation,  (ii) sell, transfer,  assign,
lease,  mortgage,  lien,  pledge or  otherwise  convey or  dispose of all or any
material part of its assets,  except in the ordinary  course of business,  (iii)
effect a reorganization,  recapitalization  or  reclassification  of its capital
stock or equity  securities the effect of which is materially to reduce tangible
net assets or shareholders' equity of Industrial  Occupant,  (iv) issue, redeem,
purchase or retire any of its  capital  stock or equity  securities  or grant or
issue  any  warrant,  right or  option  pertaining  thereto  or  other  security
convertible into any of the foregoing,  except pro rata among existing  security
holders the effect of which is not  materially to reduce  tangible net assets or
shareholders' equity, or (v) permit any change in ownership of its capital stock
or equity  securities from that previously  disclosed to PIDA in connection with
the Loan.


                                   ARTICLE V
                            Confession of Judgment



<PAGE>


      Section 5.01. THE FOLLOWING PARAGRAPHS SET FORTH WARRANTS OF AUTHORITY FOR
AN ATTORNEY TO CONFESS  JUDGMENT  AGAINST THE INDUSTRIAL  OCCUPANT.  IN GRANTING
THIS WARRANT OF ATTORNEY TO CONFESS  JUDGMENT  AGAINST THE INDUSTRIAL  OCCUPANT,
THE INDUSTRIAL OCCUPANT HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, AND, ON
THE ADVICE OF THE SEPARATE COUNSEL OF THE INDUSTRIAL  OCCUPANT,  UNCONDITIONALLY
WAIVES  ANY AND ALL  RIGHTS  THE  INDUSTRIAL  OCCUPANT  HAS OR MAY HAVE TO PRIOR
NOTICE AND AN  OPPORTUNITY  FOR HEARING UNDER THE RESPECTIVE  CONSTITUTIONS  AND
LAWS OF THE  UNITED  STATES  AND THE  COMMONWEALTH  OF  PENNSYLVANIA,  EXCEPT AS
EXPRESSLY SET FORTH HEREIN AND IN THE RULES OF THE  PENNSYLVANIA  RULES OF CIVIL
PROCEDURE PERTAINING TO CONFESSED JUDGMENTS, AS FROM TIME TO TIME IN EFFECT.

      (A)   (i) IF ANY  REPRESENTATION  OR  WARRANTY  MADE BY THE  INDUSTRIAL
OCCUPANT HEREUNDER SHALL PROVE TO HAVE BEEN INCORRECT IN ANY MATERIAL RESPECT
WHEN


<PAGE>


MADE; (ii) IF INDUSTRIAL OCCUPANT SHALL FAIL, AFTER EXPIRATION OF ANY APPLICABLE
GRACE,  NOTICE  AND/OR  CURE  PERIODS,  TIMELY  TO MAKE ANY OF THE  PAYMENTS  OR
DISCHARGE  ANY  OF  THE  DUTIES  OF  BORROWER  ASSUMED  BY  INDUSTRIAL  OCCUPANT
HEREUNDER; OR (iii) IF INDUSTRIAL OCCUPANT SHALL FAIL IN ANY MATERIAL RESPECT TO
CARRY OUT ANY OF THE COVENANTS OF INDUSTRIAL  OCCUPANT HEREUNDER OR UNDER ANY OF
THE LOAN  DOCUMENTS  EXECUTED AND DELIVERED BY, OR THE  OBLIGATIONS  UNDER WHICH
WERE ASSUMED BY,  INDUSTRIAL  OCCUPANT,  THE BENEFITS OF WHICH WERE  ASSIGNED TO
PIDA AS SECURITY FOR THE LOAN, AND SUCH FAILURE SHALL CONTINUE IN EFFECT,  AFTER
NOTICE OF SUCH  FAILURE  TO  INDUSTRIAL  OCCUPANT  HEREUNDER,  FOR NOT LESS THAN
THIRTY  DAYS:  THEN,  IN ANY SUCH EVENT (OF WHICH AN AFFIDAVIT ON BEHALF OF PIDA
SHALL BE SUFFICIENT EVIDENCE) INDUSTRIAL OCCUPANT HEREBY IRREVOCABLY  AUTHORIZES
AND  EMPOWERS  ANY  ATTORNEY  OF ANY  COURT OF  RECORD  IN THE  COMMONWEALTH  OF
PENNSYLVANIA,  OR  ELSEWHERE,  TO APPEAR FOR AND TO ENTER AND  CONFESS  JUDGMENT
AGAINST THE  INDUSTRIAL  OCCUPANT,  AT ANY TIME OR TIMES AND AS OF ANY TERM, FOR
ANY AND ALL  SUMS DUE AND  OWING  TO PIDA BY  VIRTUE  OF  INDUSTRIAL  OCCUPANT'S
ASSUMPTION  OF THE  BORROWER'S  OBLIGATIONS  UNDER THE NOTE,  MORTGAGE  AND LOAN
AGREEMENT  AND/OR  INDUSTRIAL  OCCUPANT'S  OBLIGATIONS  UNDER  ANY OF  THE  LOAN
DOCUMENTS EXECUTED AND DELIVERED BY, OR THE OBLIGATIONS UNDER WHICH WERE ASSUMED
BY, INDUSTRIAL OCCUPANT, THE BENEFITS OF WHICH WERE ASSIGNED TO PIDA AS SECURITY
FOR THE LOAN,  WITH OR WITHOUT  DECLARATION,  WITH  INTEREST  AND COSTS OF SUIT,
WITHOUT STAY OF EXECUTION,  AND WITH REASONABLE  ATTORNEY'S FEES. THE INDUSTRIAL
OCCUPANT  AGREES THAT ANY OF ITS  PROPERTY  MAY BE LEVIED  UPON TO COLLECT  SAID
JUDGMENT  AND MAY BE SOLD  UPON A WRIT  OF  EXECUTION,  AND  HEREBY  WAIVES  AND
RELEASES  ALL  LAWS,   NOW  OR  HEREAFTER  IN  FORCE,   RELATING  TO  EXEMPTION,
APPRAISEMENT  OR STAY OF  EXECUTION.  THE  AUTHORITY  HEREBY  GRANTED TO CONFESS
JUDGMENT SHALL NOT BE EXHAUSTED BY ANY EXERCISE THEREOF, BUT SHALL CONTINUE FROM
TIME TO TIME AND AT ALL TIMES UNTIL THE  INDUSTRIAL  OCCUPANT  HAS PAID ALL SUMS
REQUIRED TO BE PAID BY THE  INDUSTRIAL  OCCUPANT  AND HAS  PERFORMED  ALL OF THE
OTHER OBLIGATIONS REQUIRED OF INDUSTRIAL OCCUPANT HEREUNDER.
            (B) IN CASE OF ANY  BREACH  OF THE TERMS OF  SUBSECTION  (A) OF THIS
SECTION, (OF WHICH AN AFFIDAVIT ON BEHALF OF PIDA SHALL BE SUFFICIENT EVIDENCE),
THEN, AND IN ANY SUCH EVENT, ANY ATTORNEY OF ANY COURT OF RECORD OF PENNSYLVANIA
OR ELSEWHERE IS HEREBY  AUTHORIZED  AND  EMPOWERED TO APPEAR FOR THE  INDUSTRIAL
OCCUPANT AND ALL PERSONS CLAIMING UNDER OR THROUGH THE INDUSTRIAL OCCUPANT,  AND
AS  ATTORNEY  FOR THE  INDUSTRIAL  OCCUPANT  AND ALL PERSONS  CLAIMING  UNDER OR
THROUGH THE INDUSTRIAL  OCCUPANT,  TO SIGN AN AGREEMENT FOR ENTERING AN AMICABLE
ACTION OF EJECTMENT FOR

POSSESSION OF THE PREMISES OR ANY PART THEREOF AND TO CONFESS  JUDGMENT  THEREIN
AGAINST  THE  INDUSTRIAL  OCCUPANT,  IN  FAVOR  OF  PIDA,  WHEREUPON  A WRIT  OF
POSSESSION MAY IMMEDIATELY ISSUE FOR THE POSSESSION OF THE PREMISES, WITHOUT ANY
PRIOR COMPLAINT, WRIT OR PROCEEDING WHATSOEVER; AND FOR SO DOING THIS AGREEMENT,
OR A COPY HEREOF VERIFIED BY AFFIDAVIT,  SHALL BE HIS SUFFICIENT  WARRANT.  THIS
POWER MAY BE EXERCISED AS OFTEN AS PIDA SHALL REQUIRE AND SHALL NOT BE EXHAUSTED
BY ONE OR MORE OR BY ANY IMPERFECT EXERCISE THEREOF.
            IF FOR ANY REASON AFTER ANY SUCH ACTION HAS BEEN  COMMENCED THE SAME
SHALL BE  DISCONTINUED  OR  POSSESSION  OF THE  PREMISES  SHALL  REMAIN IN OR BE
RESTORED  TO THE  INDUSTRIAL  OCCUPANT,  PIDA  SHALL HAVE THE RIGHT FOR THE SAME
DEFAULT OR ANY SUBSEQUENT  DEFAULT TO BRING ONE OR MORE FURTHER AMICABLE ACTIONS
AS ABOVE  PROVIDED TO COLLECT ALL SUMS DUE AND/OR TO RECOVER  POSSESSION  OF THE
PREMISES.  PIDA MAY BRING ANY SUCH AMICABLE ACTION IN EJECTMENT  BEFORE OR AFTER
JUDGMENT ON THE MORTGAGE OR ON THE NOTE,  OR AFTER A SALE OF THE PREMISES BY THE
SHERIFF. IF AFTER EXECUTION AND RETURN OF THE WRIT OF POSSESSION, THE INDUSTRIAL
OCCUPANT SHALL REENTER INTO POSSESSION OF THE PREMISES,  THE PROTHONOTARY,  UPON
PRAECIPE AND  AFFIDAVIT  SETTING  FORTH THE FACTS FILED WITHIN THREE YEARS AFTER
THE RETURN OF THE WRIT UPON WHICH  EXECUTION  WAS  COMPLETED,  SHALL ISSUE A NEW
WRIT OF POSSESSION.


<PAGE>


            (C)  IF  INDUSTRIAL   OCCUPANT  WISHES  TO  CHALLENGE  ANY  JUDGMENT
CONFESSED PURSUANT TO THIS SECTION,  IT SHALL DO SO ONLY BY FILING A PETITION TO
OPEN THE JUDGMENT  PURSUANT TO PENNSYLVANIA  RULES OF CIVIL PROCEDURE RULE 2959,
AS IN EFFECT FROM TIME TO TIME, ("RULE 2959") AND SHALL NOT OTHERWISE  INTERFERE
(BY FILING ANY CIVIL ACTION BILL IN EQUITY,  OR OTHERWISE) WITH THE OPERATION OF
THIS JUDGMENT GRANTED PURSUANT TO THIS SECTION.  INDUSTRIAL  OCCUPANT  EXPRESSLY
ACKNOWLEDGES  THAT THE PROCEDURE  AVAILABLE TO IT THROUGH RULE 2959 WILL PROVIDE
IT WITH A FULL AND FAIR  OPPORTUNITY  TO BE HEARD AS TO ANY REASON WHY  JUDGMENT
SHOULD NOT BE ENTERED AGAINST IT.
            THE INDUSTRIAL OCCUPANT ACKNOWLEDGES THAT IT UNDERSTANDS THE MEANING
AND  EFFECT  OF  THE   CONFESSION   CONTAINED  IN  THE   FOREGOING   PARAGRAPHS.
SPECIFICALLY, THE INDUSTRIAL OCCUPANT UNDERSTANDS AMONG OTHER THINGS THAT (1) IT
IS  RELINQUISHING  THE RIGHT TO HAVE THE BURDEN OF PROOF OF DEFAULT REST ON PIDA
PRIOR TO THE ENTRY OF  JUDGMENT,  (2) THE ENTRY OF JUDGMENT MAY RESULT IN A LIEN
ON ITS  PROPERTY,  (3) IT WILL BEAR THE BURDEN  AND  EXPENSE  OF  ATTACKING  THE
JUDGMENT AND CHALLENGING  EXECUTION ON THE LIEN AND SALE OF THE PROPERTY COVERED
THEREBY,  AND (4)  ENOUGH  OF ITS  PROPERTY  MAY BE TAKEN  TO PAY THE  PRINCIPAL
AMOUNT, INTEREST COSTS AND ATTORNEY'S FEES.



                                    ARTICLE VI
                                    Miscellaneous

      Section 6.01. Obligations Unconditional. The obligations of the Industrial
Occupant to PIDA under this  Agreement and each of the Loan  Documents  shall be
absolute and  unconditional  without defense or set-off by reason of any default
by the contractors under the contracts relating to the Project or by Borrower or
by PIDA  under this  Agreement,  any of the Loan  Documents,  or under any other
agreement  between  the  Borrower  and the  Industrial  Occupant  or between the
Industrial  Occupant  and  PIDA,  or for any  other  reason,  including  without
limitation  failure to complete the Project,  any acts or circumstances that may
constitute  failure of  consideration,  destruction of or damage to the Project,
commercial frustration of purpose, or failure of the Borrower or PIDA to perform
and observe any agreement, whether express or implied, or any duty, liability or
obligation  arising out of or connected with the Loan, it being the intention of
the parties that the payments required by Industrial  Occupant under each of the
Loan  Documents  will be paid in full when due without  any delay or  diminution
whatsoever.  Payments  and  additional  sums  required to be paid by  Industrial
Occupant  to PIDA under any of the Loan  Documents  shall be received by PIDA as
net  sums  and the  Industrial  Occupant  agrees  to pay or cause to be paid all
charges  against or which might  diminish such net sums.  The provisions of this
Section  shall not impair the  ability of the  Industrial  Occupant or any other
person to bring an independent  action against PIDA with respect to any cause of
action which such person may have against PIDA.
      Section 6.02. Provisions  Complementary.  The provisions of this Agreement
shall be in addition to those of any other Loan Document. All of such provisions
shall be construed as  complementary  to each other.  Nothing  contained  herein
shall prevent PIDA from  enforcing any and all of such  provisions in accordance
with their respective terms.


<PAGE>


      Section  6.03.  Rights and  Remedies.  The terms hereof and of each of the
Loan Documents  shall be liberally  construed in favor of PIDA to effectuate the
purposes  hereof.  No delay or  failure  on the part of PIDA in  exercising  any
right,  power or  privilege  under any of the Loan  Documents  shall affect such
right,  power or privilege;  nor shall any single or partial exercise thereof or
any abandonment,  waiver,  or  discontinuance  of steps to enforce such a right,
power or  privilege  preclude  any other or  further  exercise  thereof,  or the
exercise of any other right, power or privilege. The rights and remedies of PIDA
under any of the Loan  Documents are cumulative and concurrent and not exclusive
of any rights or remedies  which it might  otherwise  have.  PIDA shall have the
right at all times to  enforce  the  provisions  of the Loan  Documents  and all
related   documentation   in   strict   accordance   with  the   terms   hereof,
notwithstanding  any conduct or custom on the part of PIDA in refraining from so
doing at any time or times.  The failure of PIDA at any time or times to enforce
its rights under such  provisions,  strictly in accordance with the same,  shall
not be  construed  as having  created a custom in any way or manner  contrary to
specific provisions of such Loan Document or any such documentation or as having
in any way or manner  modified  or waived the same.  All rights and  remedies of
PIDA are cumulative and concurrent and the exercise of one right or remedy shall
not be deemed a waiver or release of any other right or remedy.


<PAGE>


      Section 6.04.  Offset  Clause.  The  Industrial  Occupant  agrees that the
Commonwealth of  Pennsylvania  may set off the amount of any state tax liability
or other debt of the Industrial Occupant or its respective  subsidiaries that is
owed to the  Commonwealth and not being contested on appeal against any payments
due  the  Industrial  Occupant  under  this  or  any  other  contract  with  the
Commonwealth.
      Section 6.05.     Contractor  Responsibility  Provisions.   Included  in
and made a part of this  Agreement  is Exhibit  6.05, a clause  pertaining  to
Contractor Responsibility.
      Section 6.06. Contractor Integrity. The Industrial Occupant covenants that
it  presently  has no interest  and shall not acquire  any  interest,  direct or
indirect,  which would conflict in any manner or degree with the  performance of
its  obligations  hereunder.  Included in and made a part of this  Agreement  is
Exhibit 6.06, a clause pertaining to Contractor Integrity.
      Section 6.07.     Americans with  Disabilities Act Provisions.  Included
in and made a part of this  Agreement is Exhibit 6.07, a clause  pertaining to
compliance with the Americans with Disabilities Act.
      Section 6.08.  Assignment;  Beneficiaries.  This Agreement and each of the
Loan  Documents  shall inure to the benefit of, and shall be binding  upon,  the
respective successors and assigns of PIDA and the Industrial Occupant.  Although
PIDA has no present  intention to convey,  pledge or otherwise assign its rights
under the Loan Documents,  it may nevertheless do so in whole or in part without
notice to any person (including,  without limitation,  the Industrial Occupant).
The Industrial  Occupant has no right to assign any of its rights or obligations
hereunder or under any of the Loan Documents  without the prior written  consent
of PIDA, and any such assignment without the prior written consent of PIDA shall
be void.
            The  Industrial  Occupant and PIDA intend that no person (other than
Borrower and any Indemnified  Party) shall have any claim or interest under this
Agreement or any of the Loan Documents or right of action thereunder.
      Section 6.09.  Amendments.  This  Agreement and the Loan  Agreement may be
modified or amended  only by a written  instrument  duly  executed by PIDA,  the
Borrower, and the Industrial Occupant.  Each of the remaining Loan Documents may
be modified only by a written instrument duly executed by PIDA and the remaining
parties to the particular Loan Document.


<PAGE>


      Section 6.10. Notices.  Notices required hereunder,  or any correspondence
concerning this Agreement shall be directed to the following addresses and shall
be deemed  properly  given (i) if delivered  by hand,  (ii) if sent by certified
mail,  return receipt  requested,  postage prepaid,  or by recognized  overnight
courier service (including, without limitation, Federal Express or United Parcel
Service overnight service), charges prepaid; or (iii) if sent by facsimile, with
a copy sent by first class U.S. Mail, postage prepaid.

            (a)   If PIDA:

                  THE   PENNSYLVANIA   INDUSTRIAL   DEVELOPMENT   AUTHORITY  c/o
                  Department  of Community  and Economic  Development  Room 480,
                  Forum Building Harrisburg, Pennsylvania 17120
                  FAX:  (717) 772-2890

                       Attention:  Administrator

            (b)   If Industrial Occupant:

                  PIERCING PAGODA, INC.
                  3910 Adler Place, P.O. Box 25007
                  Lehigh Valley, Pennsylvania  18002

            (c)   If Borrower:

                  NORTHAMPTON COUNTY NEW JOBS CORP.
                  One S. Third Street, 7th Floor, P.O. Box 637
                  Easton, Pennsylvania  18044


Notices and  communications  hereunder shall be deemed  sufficiently  given when
dispatched  pursuant to the  foregoing  provisions.  Notices and  communications
delivered by hand shall be effective  upon receipt;  notices and  communications
sent by fax,  with a copy by first  class U.S.  Mail,  shall be  effective  upon
dispatch;  notices  and  communications  sent by  recognized  overnight  courier
service shall be effective on the business day following  dispatch;  and notices
sent by certified  mail shall be effective on the third  business day  following
dispatch.  The parties  hereto may, by a notice given  hereunder,  designate any
further or different  addresses to which any subsequent  notice or communication
hereunder shall be sent.
      Section  6.11.  Delivery  to  PIDA.  Any  materials  delivered  to  PIDA's
independent  engineer  or  financial  consultant  shall be  deemed  to have been
delivered to PIDA,  provided that any  amendment or  supplement  to  information
delivered  shall be deemed  effectively  delivered only if delivered to the same
entity as received the original information.Section 6.12. Severability; Interest
Limitation. If any provision hereof or of the Loan Documents is found by a court
of competent jurisdiction to be prohibited or unenforceable in any jurisdiction,
it shall be  ineffective  as to such  jurisdiction  only to the  extent  of such
prohibition or unenforceability,  and such prohibition or unenforceability shall
not  invalidate  the balance of such  provision as to such  jurisdiction  to the
extent it is not prohibited or  unenforceable,  nor invalidate such provision in
any other jurisdiction, nor invalidate the other provisions hereof, all of which
shall be liberally  construed in favor of PIDA in order to effect the provisions
of this Agreement.  Notwithstanding  anything to the contrary herein  contained,
the total liability of the Industrial  Occupant for payment of interest pursuant
to the Loan  Documents  shall not exceed the  maximum  amount,  if any,  of such
interest  permitted by applicable law to be contracted for, charged or received,
and if any  payments  by the  Industrial  Occupant to PIDA  include  interest in
excess of such a maximum  amount,  PIDA shall apply such excess to the reduction
of the unpaid  principal  amount due pursuant  hereto,  or if none is due,  such
excess  shall be refunded to the  Industrial  Occupant;  provided  that,  to the
extent  permitted by applicable law, in the event the interest is not collected,
is applied to  principal or is refunded  pursuant to this  sentence and interest
thereafter payable pursuant hereto shall be less than such maximum amount,  then
such interest thereafter so payable shall be increased up to such maximum amount
to the extent necessary to recover the amount of interest,  if any,  theretofore
uncollected,  applied to principal or refunded  pursuant to this  sentence.  Any
such  application  or refund  shall not cure or waive any Event of  Default.  In
determining whether or not any interest payable under the Loan Documents exceeds
the highest rate permitted by law, any  nonprincipal  payment  (except  payments
specifically  stated to be "interest")  shall be deemed, to the extent permitted
by  applicable  law,  to be an  expense,  fee,  premium or penalty  rather  than
interest.
      Section 6.13. Complete Agreement. The Loan Documents constitute the entire
agreement between PIDA and the Industrial Occupant. The Loan Documents supersede
and  replace  all  prior  agreements  related  to  the  subject  matter  thereof
including,  without limitation, the Commitment,  except to the extent such prior
agreements are expressly incorporated by reference or otherwise referred to.
      Section 6.14.  Consent to  Jurisdiction;  Venue.  The Industrial  Occupant
hereby  irrevocably (a) agrees that any suit,  action or other legal  proceeding
arising  out of or  relating  to this  Agreement  or the Loan  Documents  may be
brought in any  federal or state  court  located in or whose  district  includes
Harrisburg,  Pennsylvania  or the county  wherein  the  Project  is located  and
consents  to the  jurisdiction  of  such  court  in any  such  suit,  action  or
proceeding,  and (b)  waives  any  objection  which it may have to the laying of
venue of any such  suit,  action or  proceeding  in any such court and any claim
that any such suit,  action or  proceeding  has been brought in an  inconvenient
forum. The Industrial Occupant hereby irrevocably consents to the service of any
and all process in any such suit,  action or  proceeding by mailing of copies of
such  process  to the  Industrial  Occupant  at its  address  provided  under or
pursuant to Section 6.10. The Industrial  Occupant  agrees that a final judgment
in any such  action or  proceeding  shall be  conclusive  and may be enforced in
other  jurisdictions  by suit on the judgment or in any other manner provided by
law. All mailings  under this section shall be by certified or registered  mail,
return receipt requested. Nothing in this section shall affect the right of PIDA
to serve legal process in any other manner  permitted by law or affect the right
of PIDA to bring any suit, action or proceeding against the Industrial  Occupant
or its property in the courts of any other jurisdiction.
      Section 6.15.     Governing  Law. This  Agreement  shall be governed by,
and  construed  in  accordance   with,  the  laws  of  the   Commonwealth   of
Pennsylvania without reference to its principles of conflicts of law.
      Section 6.16. Survival of Covenants.  All covenants made or assumed by the
Industrial  Occupant in any of the Loan Documents  shall survive the delivery of
this  Agreement  and the Loan  Documents  and until the Loan is prepaid in full,
unless a longer term is expressly  provided therein,  in which event such longer
term shall apply.
      Section 6.17.  Accounting  Terms.  Each accounting term not defined herein
and each  accounting  term  partly  defined  herein,  to the extent not  defined
herein,  shall have the meaning  given it under  generally  accepted  accounting
principles  as in effect  from  time to time in the  United  States of  America,
consistently applied.
      Section 6.18. Rules of Construction.  In this Agreement,  unless otherwise
indicated,  (i) defined  terms may be used in the singular or the plural and the
use of any gender  includes all  genders,  (ii) the words,  "hereof",  "herein",
"hereto",  "hereby" and "hereunder" refer to this entire Agreement and (iii) all
references to particular  Articles or Sections are references to the Articles or
Sections of this Agreement.
      Section 6.19.     Defined  Terms.  All  capitalized  terms  not  defined
herein shall have the  meanings  ascribed to them in the Loan  Agreement.  The
Industrial  Occupant  shall be referred  to as  Contractor  in Exhibits  4.05,
6.05, 6.06 and 6.07.
      Section 6.20.     Exhibits.   All   exhibits  to  this   Agreement   are
incorporated within this Agreement and constitute a part thereof.
      Section 6.21.     Descriptive  Headings.  Descriptive  headings  of  the
several  Articles and Sections of this Agreement are intended for  convenience
only and shall not  control or affect the  meaning or  construction  of any of
the provisions hereof.
      Section 6.22.     Counterparts.  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.  All
signatures need not appear on the same copy hereof.
      Section 6.23.     Seal.  This  Agreement  is  intended to take effect as
an instrument under seal.

      IN WITNESS WHEREOF, the Industrial Occupant, intending to be legally bound
hereby,  has caused this Consent,  Subordination and Assumption  Agreement to be
executed  on its behalf by the  undersigned  duly  authorized  officers  and its
corporate seal to be affixed hereto as of the day and year first above written.

ATTEST:                                   PIERCING PAGODA, INC.




By
Secretary                                      President

(CORPORATE SEAL)


The terms and conditions of the foregoing Consent,  Subordination and Assumption
Agreement are hereby approved and agreed to, with the express understanding that
the undersigned's  obligations  under the Loan Agreement,  Note and Mortgage are
not relieved or in any way  diminished  by virtue of the  Industrial  Occupant's
execution of this Agreement.

ATTEST:                                   NORTHAMPTON COUNTY NEW JOBS CORP.



By
Secretary                                      President

(CORPORATE SEAL)




                                  EXHIBIT "A"

                                 THE PREMISES




<PAGE>


                                 EXHIBIT 2.03

                              NECESSARY APPROVALS

NONE


                                 EXHIBIT 2.09

                     LIABILITIES NOT PREVIOUSLY DISCLOSED

NONE


                                 EXHIBIT 2.11

                               ERISA DISCLOSURES

NONE


                                 EXHIBIT 2.12

                           ENVIRONMENTAL DISCLOSURES

NONE


                                 EXHIBIT 2.13

                              ACTS OF BANKRUPTCY

NONE


                                 EXHIBIT 2.14

                             CRIMINAL CONVICTIONS

NONE


                                 EXHIBIT 2.15

                             OCCUPANCY AGREEMENTS

NONE


                                 EXHIBIT 2.16

                               NECESSARY PERMITS

NONE


<PAGE>


                                 EXHIBIT 2.17

                          NECESSARY TECHNOLOGY, ETC.

NONE


                                 EXHIBIT 2.18

                                  VIOLATIONS

NONE


                                 EXHIBIT 2.19

                                PERMITTED LIENS

      A First Mortgage in the amount of $1,980,000 to the CoreStates  Bank, N.A.
dated , 1998.



<PAGE>


                                 EXHIBIT 4.05

                           NONDISCRIMINATION CLAUSE


      During the term of this contract, Contractor agrees as follows:

      1. Contractor shall not discriminate  against any employee,  applicant for
employment,  independent  contractor or any other person because of race, color,
religious creed,  ancestry,  national origin, age or sex.  Contractor shall take
affirmative action to insure that applicants are employed, and that employees or
agents are treated  during  employment,  without  regard to their  race,  color,
religious  creed,  handicap,   ancestry,  national  origin,  age  or  sex.  Such
affirmative action shall include, but is not limited to: employment,  upgrading,
demotion  or  transfer,  recruitment  or  recruitment  advertising;   layoff  or
termination;  rates of pay or other forms of  compensation;  and  selection  for
training.  Contractor shall post in conspicuous places,  available to employees,
agents,  applicants for employment and other persons, a notice to be provided by
the  contracting  agency setting forth the provisions of this  nondiscrimination
clause.

      2. Contractor shall in advertisements or requests for employment placed by
it  or  on  its  behalf,  state  that  all  qualified  applicants  will  receive
consideration  for employment  without regard to race,  color,  religious creed,
handicap, ancestry, national origin, age, or sex.

      3. Contractor shall send each labor union or workers'  representative with
which  it  has  a  collective   bargaining   agreement  or  other   contract  or
understanding,  a notice advising said labor union or workers' representative of
its commitment to this nondiscrimination clause. Similar notice shall be sent to
every other source of recruitment regularly utilized by Contractor.

      4. It  shall  be no  defense  to a  finding  of  noncompliance  with  this
nondiscrimination  clause that  Contractor  had delegated some of its employment
practices to any union,  training  program or other source of recruitment  which
prevents it from meeting its  obligations.  However,  if the evidence  indicates
that the Contractor was not on notice of the third-party  discrimination or made
a good faith effort to correct it, such factor shall be considered in mitigation
in determining appropriate sanctions.

      5.  Where the  practices  of a union or of any  training  program or other
source of recruitment will result in the exclusion of minority group persons, so
that   Contractor   will  be  unable  to  meet  its   obligations   under   this
nondiscrimination  clause,  Contractor  shall  then  employ  and fill  vacancies
through other nondiscriminatory employment procedures.

      6.  Contractor  shall comply with all state and federal  laws  prohibiting
discrimination  in  hiring  or  employment   opportunities.   In  the  event  of
Contractor's noncompliance with the nondiscrimination clause of this contract or
with any such laws, this contract may be terminated or suspended, in whole or in
part,  and  Contractor  may  be  declared  temporarily  ineligible  for  further
Commonwealth contracts, and other sanctions may be imposed and remedies invoked.

      7. Contractor shall furnish all necessary employment documents and records
to, and permit  access to its books,  records and accounts  by, the  contracting
agency for purposes of investigation to ascertain compliance with the provisions
of this clause. If Contractor does not possess  documents or records  reflecting
the  necessary  information  requested,  it shall  furnish such  information  on
reporting forms supplied by the contracting agency.

      8. Contractor  shall actively recruit  minority  subcontractors  and women
subcontractors or subcontractors with substantial minority  representation among
their employees.

      9.  Contractor  shall  include the  provisions  of this  nondiscrimination
clause in every  subcontract,  so that such provisions will be binding upon each
subcontractor.


<PAGE>


      10.   Contractor   obligations  under  this  clause  are  limited  to  the
Contractor's  facilities  within  Pennsylvania  or,  where the  contract  is for
purchase of goods manufactured outside of Pennsylvania,  the facilities at which
such goods are actually produced.


<PAGE>


Revised 2/96                     EXHIBIT 6.05

                     CONTRACTOR RESPONSIBILITY PROVISIONS


      1. The Contractor  certifies that it is not currently under  suspension or
debarment by the Commonwealth,  any other state, or the federal government,  and
if the  Contractor  cannot so certify,  then it agrees to submit  along with the
bid/proposal a written explanation of why such certification cannot be made.

      2. If the Contractor  enters into any  subcontracts  or employs under this
contract any  subcontractors/individuals who are currently suspended or debarred
by the  Commonwealth  or the  federal  government  or who  become  suspended  or
debarred  by the  Commonwealth  or  federal  government  during the term of this
contract or any extensions or renewals thereof,  the Commonwealth shall have the
right to require the Contractor to terminate such subcontracts or employment.

      3. The Contractor  agrees to reimburse the Commonwealth for the reasonable
costs  of  investigation  incurred  by  the  Office  of  Inspector  General  for
investigations  of the  Contractor's  compliance with terms of this or any other
agreement  between  the  Contractor  and the  Commonwealth  which  result in the
suspension or debarment of the Contractor.  Such costs shall include, but not be
limited to, salaries of investigators,  including  overtime;  travel and lodging
expenses;  and expert witness and documentary  fees. The Contractor shall not be
responsible for investigative  costs for  investigations  which do not result in
the Contractor's suspension or debarment.

      4. The  Contractor  may obtain the current list of suspended  and debarred
contractors by contacting the:

                              Department of General Services
                              Office of Chief Counsel
                              603 North Office Building
                              Harrisburg, PA 17125
                              Telephone No. (717) 783-6472
                              Fax No. (717) 787-9138





<PAGE>


Revised 6/96                      EXHIBIT 6.06

                        CONTRACTOR INTEGRITY PROVISIONS


      1.    Definitions.

      a.   Confidential   information  means  information  that  is  not  public
knowledge, or available to the public on request, disclosure of which would give
an unfair,  unethical, or illegal advantage to another desiring to contract with
the Commonwealth.

      b. Consent means written permission signed by a duly authorized officer or
employee of the  Commonwealth,  provided that where the material facts have been
disclosed, in writing, by prequalification, bid, proposal, or contractual terms,
the  Commonwealth  shall be deemed to have  consented  by virtue of execution of
this Agreement.

      c.  Commonwealth  means the  Commonwealth  of  Pennsylvania  Acting by and
Through its  Department of Community and Economic  Development  and any agencies
and  instrumentalities  of  the  Commonwealth  of  Pennsylvania  for  which  the
Department  of  Community  and  Economic  Development  provides  staff  services
(including without limitation the Pennsylvania Industrial Development Authority,
Pennsylvania  Economic  Development  Financing  Authority,  Pennsylvania  Energy
Development   Authority,   and  Pennsylvania   Minority   Business   Development
Authority).

      d.  Contractor  means the  individual  or entity that has entered  into an
agreement  with the  Commonwealth,  assumed the  obligations of another to repay
moneys to the Commonwealth, or is the intended beneficiary of, and has knowingly
received  benefits under, an agreement  between the Commonwealth and a financial
intermediary  or  educational   institution,   including  directors,   officers,
partners, managers, key employees, and owners of more than a 5% interest.

      e.    Financial Interest means:

            (1)   ownership of more than a 5% interest in any business; or

            (2) holding a position as an officer,  director,  trustee,  partner,
      employee, or the like, or holding any position of management.

      f. Gratuity  means any payment of more than nominal  monetary value in the
form  of  cash,   travel,   entertainment,   gifts,   meals,   lodging,   loans,
subscriptions,  advances, deposits of money, services,  employment, or contracts
of any kind.

      2. The  Contractor  shall take no action in  violation of state or federal
laws,  regulations,  or other  requirements  that  govern  contracting  with the
Commonwealth.

      3.  The  Contractor  shall  not,  in  connection  with  this or any  other
agreement with the Commonwealth,  directly or indirectly offer, confer, or agree
to confer any  pecuniary  benefit on anyone as  consideration  for the decision,
opinion,  recommendation,  vote, other exercise of discretion, or violation of a
known legal duty by any officer or employee of the Commonwealth.

      4.  The  Contractor  shall  not,  in  connection  with  this or any  other
agreement with the Commonwealth, directly or indirectly offer, give, or agree or
promise to give to anyone any gratuity for the benefit of or at the direction or
request of any officer or employee of the Commonwealth.

      5. Except with the consent of the  Commonwealth,  the Contractor shall not
have a financial  interest in any other contractor,  subcontractor,  or supplier
providing services, labor, or material on this project.


<PAGE>


      6.  The  Contractor,  upon  being  informed  that any  violation  of these
provisions has occurred or may occur,  shall immediately notify the Commonwealth
in writing.

      7. The Contractor, by execution of this Agreement and by the submission of
any bills or invoices for payment  pursuant  thereto,  certifies and  represents
that he has not violated any of these provisions.

      8. The Contractor, upon the inquiry or request of the Inspector General of
the  Commonwealth or any of that  official's  agents or  representatives,  shall
provide,  or if appropriate,  make promptly available for inspection or copying,
any information of any type or form relevant to the Contractor's compliance with
this  Agreement  (including  without  limitation  these  provisions  relating to
Contractor integrity).  Such information shall be retained by the Contractor for
a period of three years beyond the  termination of the contract  unless provided
by law.

      9. For  violation of any of the above  provisions,  the  Commonwealth  may
declare an event of default  hereunder,  subject to  applicable  notice and cure
provisions,  and debar and suspend the  Contractor  from doing business with the
Commonwealth,  including  without  limitation  participation  in  its  financial
assistance  programs.  These rights and remedies are cumulative,  and the use or
nonuse of any one shall not preclude  the use of all or any other.  These rights
and  remedies  are in  addition  to those the  Commonwealth  may have under law,
statute, regulation, or otherwise.


<PAGE>


                                 EXHIBIT 6.07

                  AMERICANS WITH DISABILITIES ACT PROVISIONS


      During the term of this contract, the Contractor agrees as follows:

      1. Pursuant to federal regulations  promulgated under the authority of The
Americans With  Disabilities  Act, 28 C.F.R.  ss. 35.101 et seq., the Contractor
understands and agrees that no individual with a disability  shall, on the basis
of the  disability,  be excluded  from  participation  in this  contract or from
activities  provided for under this  contract.  As a condition of accepting  and
executing  this  contract,  the  Contractor  agrees to comply with the  "General
Prohibitions  Against  Discrimination,"  28  C.F.R.  ss.  35.130,  and all other
regulations  promulgated  under Title II of The Americans With  Disabilities Act
which  are  applicable  to the  benefits,  services,  programs,  and  activities
provided by the  Commonwealth  of  Pennsylvania  through  contracts with outside
contractors.

      2. The  Contractor  shall be  responsible  for and agrees to indemnify and
hold  harmless  the  Commonwealth  of  Pennsylvania  from all  losses,  damages,
expenses,  claims,  demands, suits, and actions brought by any party against the
Commonwealth of Pennsylvania as a result of the  Contractor's  failure to comply
with the provisions of paragraph 1 above.



<PAGE>


COMMONWEALTH OF PENNSYLVANIA        :
                                    :     SS
COUNTY OF NORTHAMPTON               :


      ON THIS, the day of February,  1999,  before me, the undersigned  officer,
personally  apperared  John F.  Eureyecko,  who  acknowledged  himself to be the
President  of  Piercing  Pagoda,  Inc.,  a  corporation  and  the  within  named
Industrial  Occupant,  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  Robert J.  Bergren,  who  acknowledged  himself  to be the
President of Northampton County New Jobs Corp., a nonprofit  corporation and the
within named  Borrower,  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>


                       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 the  Recording  of Deeds,  in and for the County of
Northampton,              in             Book             Volume             ,
page                       .




                                          (Title)