Exhibit 10.28
                                                              -------------
                  AMENDED AND RESTATED MORTGAGE NOTE
                                
                                
$1,800,000.00                                     August 28, 1997


     For value received, TOUCHSTONE APPLIED SCIENCE ASSOCIATES,
INC., a Delaware corporation with its office for doing business at
Fields Lane, PO Box 382, Brewster, New York 10509-0382 (hereinafter
referred to as "Obligor"), promises to pay to the order of MSB BANK,
a federally chartered savings bank with its principal office at 35
Matthews Street, Goshen, New York 10924 (hereinafter referred to as
"Obligee"), or at such place as the holder hereof may from time to
time designate in writing, the principal sum of ONE MILLION EIGHT
HUNDRED THOUSAND and 00/100 ($1,800,000.00) DOLLARS, in lawful
money of the United States of America, with interest thereon to be
computed at the rate of 8.125% per annum to be paid as follows:

     (a)  Payment of interest only on September 15, 1997;

     (b)  A constant payment of $15,196.25 on the 15th day of
     October, 1997 and on the fifteenth day of each calendar month
     thereafter until September 15, 2007, when the entire remaining
     principal balance, plus accrued interest, shall become fully
     due and payable.  

     Interest on the principal sum of this Note shall be calculated
on the basis of the actual number of days elapsed in a three
hundred sixty (360) day year.  The constant payment required
hereunder is based on an amortization schedule of two hundred forty
(240) months.  All amounts due under this Note shall be payable
without setoff, counterclaim or any other deduction whatsoever.

     1.   This Amended and Restated Mortgage Note (hereinafter the
"Note") is evidence of that certain loan made by Obligor to Obligee
contemporaneously herewith (the "Loan").  This Note is secured by
(a) a Mortgage Consolidation and Modification Agreement of even
date herewith in the amount of this Note executed between Obligor
and Obligee covering the fee estate of Obligor in certain premises
as more particularly described therein (the "Mortgage"), (b) the
other Loan Documents (as hereinafter defined).  The term "Loan
Documents" as used in this Note relates collectively to this Note,
the Mortgage, and any and all other documents securing, evidencing,
or guaranteeing all or any portion of the Loan or otherwise
executed and/or delivered in connection with this Note and the
Loan.
     
     THIS NOTE IS INTENDED TO AMEND AND RESTATE IN THEIR ENTIRETY
ALL OF THE EXISTING NOTES, BONDS AND OTHER EVIDENCES OF THE LOAN
(COLLECTIVELY, THE "ORIGINAL NOTES") SECURED BY THE MORTGAGE,
HOWEVER, THIS NOTE IS NOT INTENDED TO CREATE ANY NEW INDEBTEDNESS
NOR TO CONSTITUTE A NOVATION AS TO MORTGAGOR S OBLIGATIONS UNDER
THE ORIGINAL NOTES.

     2.   If any sum payable under this Note is not paid within ten
(10) days of its due date, Obligor shall pay to Obligee an amount
equal to five percent (5%) of such unpaid sum in order to defray a
portion of the expenses incurred by Obligee in handling and
processing such delinquent payment and to compensate Obligee  for
the loss of the use of such delinquent payment.  If the day the
grace period expires is not a Business Day (as hereinafter
defined), then payment shall be due on the first Business Day
thereafter.  The term "Business Day" shall mean a day other than (i)
a Saturday or Sunday, or (ii) any day on which banking and savings
and loan institutions in New York are authorized or obligated by
law or executive order to be closed.
     
     3.   The whole of the principal sum of this Note, together
with all interest accrued and unpaid thereon and all other sums due
under the Loan Documents (all such sums hereinafter collectively
referred to as the "Debt"), or any portion thereof, shall without
notice become immediately due and payable at the option of the
Obligee if any payment required in this note is not paid within the
applicable grace period after it is due or upon the happening of
any other Event of Default (as defined in the Mortgage).  In the
event that it should become necessary to employ counsel to collect
or enforce the Debt or to protect or foreclose the security
therefor, Obligor also shall pay on demand all costs of collection
incurred by Obligee, including attorneys  fees and costs reasonably
incurred for the services of counsel whether or not suit be
brought.
     
     4.   Obligor does hereby agree that upon the occurrence of an
Event of Default (including upon the failure of Obligor to pay the
Debt in full on the Maturity Date), Obligee shall be entitled to
receive and Obligor shall pay interest on the entire unpaid
principal sum and any other amounts due at a rate (the "Default
Rate") equal to the lesser of (a) the maximum rate permitted by
applicable law, or (b) five percent (5%) above the interest rate
set forth in this Note.  The Default Rate shall be computed from
the occurrence of the Event of Default until the actual receipt and
collection of the Debt (or that portion thereof that is then due). 
This charge shall be added to the Debt and shall be secured by the
Mortgage.  This paragraph, however, shall not be construed as an
agreement or privilege to extend the date of the payment of the
Debt, nor as a waiver of any other right or remedy accruing to
Obligee by reason of the occurrence of any Event of Default.
     
     5.   The Obligor may prepay this Note at any time provided
that it notifies the Obligee within thirty (30) days of its intent
to do so and pays the following prepayment fees:
     
          (a)  Prepayment for years 1 through 3 of the Note (up to
36 months from the execution of the Note) the Obligor shall be
required to pay a prepayment fee of three (3%) percent of the
principal amount prepaid on the mortgage at the time of prepayment.
     
          (b)  Any prepayment after the third anniversary date of
the Mortgage until the maturity date of the Mortgage shall require
the Obligor to pay a prepayment fee of one (1%) percent of the
principal amount prepaid on the Mortgage at the time of pre-payment.
     
     6.   It is expressly stipulated and agreed to be the intent of
the Obligor and Obligee at all times to comply with applicable
state law or applicable United States federal law (to the extent
that it permits Obligee to contract for, charge, take, reserve, or
receive a greater amount of interest than under state law) and that
this paragraph shall control every other covenant and agreement in
this Note and the other Loan Documents.  If the applicable law
(state or federal) is ever judicially interpreted so as to render
usurious any amount called for under this Note or under any of the
other Loan Documents, or contracted for, charged, taken, reserved,
or received with respect to the Debt, or of Obligee s exercise of
the option to accelerate the Maturity Date, then it is Obligee s
express intent that all excess amounts theretofore collected by
Obligee shall be credited on the principal balance of this Note and
all other Debt and the provisions of this Note and the other Loan
Documents immediately be deemed reformed and the amounts thereafter
collectible hereunder and thereunder reduced, without the necessity
of the execution of any new documents, so as to comply with the
applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder or thereunder.  All sums paid
or agreed to be paid to Obligee for the use, forbearance, or
detention of the Debt shall, to the extent permitted by applicable
law, be amortized, prorated, allocated, and spread throughout the
full stated term of the Debt until payment in full so that the rate
or amount of interest on account of the Debt does not exceed the
maximum lawful rate from time to time in effect and applicable to
the Debt for so long as the Debt is outstanding.  Notwithstanding
anything to the contrary contained herein or in any of the other
Loan Documents, it is not the intention of Obligee to accelerate
the maturity of any interest that has not accrued at the time of
such acceleration or to collect unearned interest at the time of
such acceleration.
     
     7.   This Note may not be modified, amended, waived, extended,
changed, discharged or terminated orally or by any act or failure
to act on the part of the Obligor or Obligee, but only by an
agreement in writing signed by the party against whom enforcement
of any modification, amendment, waiver, extension, change,
discharge or termination is sought.  Whenever used, the singular
number shall include the plural, the plural the singular, and the
words "Obligee" and "Obligor" shall include their respective
successors, assigns, heirs, executors and administrators.  If
Obligor consists of more than one person or party, the obligations
and liabilities of each such person or party shall be joint and
several.
     
     8.   Obligor and all others who may become liable for the
payment of all or any part of the Debt do hereby severally waive
presentment and demand for payment, notice of dishonor, protest,
notice of protest, notice of nonpayment, notice of intent to
accelerate the maturity hereof and of acceleration.  No release of
any security for the Debt or any person liable for payment of the
Debt, no extension of time for payment of this Note or any
installment hereof, and no alteration, amendment or waiver of any
provision of the Loan Documents made by agreement between Obligee
and any other person or party shall release, modify, amend, waive,
extend, change, discharge, terminate or affect the liability of
Obligor and any other person or party who may become liable under
the Loan Documents for the payment of all or any part of the Debt.
     
     9.   Obligor (and the undersigned representative of Obligor,
if any) represents that Obligor has full power, authority and legal
right to execute, deliver and perform its obligations pursuant to
this Note, the Mortgage and the other Loan Documents and that this
Note, the Mortgage and the other Loan Documents constitute valid
and binding obligations of Obligor.
     
     10.  All notices or other communications required or permitted
to be given pursuant hereto shall be given in the manner specified
in the Mortgage directed to the parties at their respective
addresses as provided herein.
     
     11.  Events of Default:

          (a)   Failure of Obligor to make any payment of interest
or principal on the day after it becomes due as herein provided.

          (b)   Failure of Obligor to comply with or the
occurrence of an event of default under the terms, conditions and
requirements of this note for the repayment of the indebtedness
evidenced hereby and the expiration of any applicable grace period
contained therein; or

          (c)   The default of any of the terms and conditions
of the term loan agreement executed by Obligor to the Holder to be
executed contemporaneously herewith and the expiration of any
applicable cure periods contained therein.

          (d)   Any event of default shall be automatically
deemed to be a demand for payment by the Obligee and the entire
remaining principal balance plus accrued interest shall become
dully due and payable.  Failure of the Holder to exercise said
right of acceleration on the due date of payment on the
indebtedness evidenced by, or indulgence granted by the Holder to
the Obligor from time to time shall in no event be considered or
otherwise construed as a waiver of such right of acceleration or in
any manner prohibit Holder from exercising such right.

          (e)   If Obligor shall be in default on any other loan or
obligation outstanding with the Obligee, including but not limited
to a certain loan in the sum of Three Hundred Thousand and 00/100
($300,000.00) Dollars executed simultaneously herewith and if the
Obligor shall make an assignment for the benefit of creditors or if
the Obligor shall generally not be paying its debts when they
become due.

          (f)   If Obligor shall continue to be in default under any
term, covenant or provision of this Note or any of the other Loan
Documents or other loan facilities granted by the Obligor to the
Obligee beyond applicable cure periods contained in those
documents.  

          (g)   Time is of the essence in this note and in the event
this note is collected by law through an attorney at law or under
advice therefrom, Obligor agrees to pay all costs of collection
including reasonable attorneys fees.

     12.  OBLIGOR HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY
ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM
OR OTHER ACTION ARISING IN CONNECTION THEREWITH.  THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY
OBLIGOR, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE
AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD
OTHERWISE ACCRUE.  OBLIGEE IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER BY OBLIGOR.
     
     13.  This Note shall be governed by and construed in
accordance with the laws of the State of New York in which the
Mortgaged Property is located and the applicable laws of the United
States of America.

     Obligor has duly executed this Note the day and year first
above written.


                                   OBLIGOR:

                                   TOUCHSTONE APPLIED SCIENCE
                                   ASSOCIATES, INC.



                                   BY:  /s/ ANDREW L. SIMON
                                        ---------------------
                                        ANDREW L. SIMON, PRESIDENT