THIRD MODIFICATION AGREEMENT

     THIS Third Modification  Agreement (the "Third  Modification"),  made as of
the 16th day of December,  1998,  between  FLEET BANK,  N.A.  (formerly  know as
NatWest Bank N.A.), a national banking  association,  having a banking office at
208  Harristown  Road,  Glen Rock,  New Jersey  07452 (the  "Bank")  and SUPREMA
SPECIALTIES, INC., a New Jersey corporation with its principal office located at
510 East 35th Street, Paterson, New Jersey 07543-0780 (the "Borrower").

                              W I T N E S S E T H:

     WHEREAS,  on March 29,  1996,  the Bank loaned to the  Borrower  the sum of
$1,050,000  and the Borrower  executed and delivered to the Bank its  promissory
note in the sum of ONE  MILLION  AND FIFTY  THOUSAND  AND  00/100  DOLLARS  (the
"Mortgage Note"), payable as more particularly set forth therein; and

     WHEREAS, the Borrower,  to secure said indebtedness,  on the aforesaid date
made,  executed and delivered to the Bank a certain mortgage  covering lands and
premises situate, lying and being in the City of Paterson, County of Passaic and
State of New Jersey (the "Premises"),  which mortgage was recorded in the Office
of the Register of Passaic  County on April 17, 1996, in Volume V159,  Page 053,
et seq. (the "Original Mortgage"); and

     WHEREAS, pursuant to a Modification Agreement dated as of October 31, 1996,
which  modification was recorded in the Office of the Register of Passaic County
on January 17, 1997, in Volume 254 Page 195, et seq., the Original  Mortgage was
modified,  inter alia,  to provide  that it secured a portion of a certain  term
loan dated  October 31, 1996 made by the Bank to the Borrower (the "Term Loan");
and

     WHEREAS, pursuant to a Second Modification Agreement dated as of January 5,
1998,  which  modification was recorded in the Office of the Register of Passaic
County on January 30, 1998 in Volume 267 Page 160 et seq., the Original Mortgage
was modified,  inter alia, to (i) delete all references in the Original Mortgage
to the Term  Loan and the term  note  (which  had been  paid  off);  and (ii) to
provide  that the  Original  Mortgage  secured  (a) a certain  bridge  loan (the
"Bridge  Loan") in the principal  amount of up to  $10,000,000,  and (b) certain
revolving credit loans (the "Revolving Credit Loans") in the aggregate principal
amount of up to $25,000,000; and

     WHEREAS,  the Bank and the  Borrower  have  agreed to  further  modify  the
Original Mortgage to (i) delete all references in the


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Original  Mortgage  to the  Bridge  Loan  (which  has been  paid  off),  and the
Revolving  Credit Loans (which is being modified and will be secured pursuant to
a certain (second)  mortgage and security  agreement  executed the date hereof),
and (ii) to provide that the Original  Mortgage  also secures the  reimbursement
and repayment  obligations of the Borrower under a certain irrevocable letter of
credit (letter of credit #JS167748) in the face amount of $400,000 issued by the
Bank for the account of the Borrower (the "Letter of Credit"); and

     WHEREAS,  the  Original  Mortgage  as  modified  through the date hereof is
referred to herein as the "Mortgage"; and

     WHEREAS,  the Borrower represents that its execution of this Agreement will
inure to its  economic  benefit and will be in  furtherance  of its  established
purpose;

     NOW,  THEREFORE,  in  consideration  of the  premises,  and  the sum of One
($1.00) Dollar paid by each of the parties to the other,  the receipt whereof is
hereby acknowledged, and for other good and valuable consideration,  the parties
hereto covenant and agree as follows:

     1. Modifications. The Borrower and the Bank agree to modify the Mortgage as
follows:

     (a)  The second recital in the Mortgage shall be amended in its entirety as
          follows:

          "WHEREAS,  the Mortgagee has made available to the Mortgagor a certain
          irrevocable  letter of credit (letter of credit #JS167748) in the face
          amount of  $400,000  issued by the  Mortgagee  for the  account of the
          Mortgagor (the "Letter of Credit");

     (b)  The third  recital  shall be  deleted in its  entirety  and the fourth
          recital in the Mortgage  shall  become the third  recital and shall be
          amended in its entirety to read as follows:

          "WHEREAS,  this  Mortgage  is given and made by the  Mortgagor  to the
          Mortgagee as security for (i) the repayment of the indebtedness of the
          Mortgagor to the Mortgagee  evidenced by the Mortgage  Note,  (ii) the
          reimbursement and repayment and all other obligations under the Letter
          of  Credit  by the  Mortgagor,  (iii) the  performance  of the  terms,
          conditions  and  covenants of the  Mortgagor set forth in the Mortgage
          Note, the Letter of


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          Credit,  and the other loan documents  executed in connection with any
          of the foregoing  (hereinafter  collectively  referred to as the "Loan
          Documents"), and (iii) the payment of all other indebtedness, monetary
          obligations,  liabilities  and  duties  of  the  Mortgagor  under  the
          Mortgage Note, this Mortgage and the other Loan Documents;"

     (c)  Section 8 of Article III of the Mortgage  relating to the Term Loan is
          hereby deleted in its entirety.

     2. Existing  Documentation.  All terms and provisions of the Mortgage shall
remain in full force and effect, except as herein modified.

     3. Miscellaneous.  This Agreement and the terms and provisions hereof shall
(i) inure to the benefit of and be binding upon the  respective  parties,  their
heirs,  successors  and assigns and shall (ii) be governed by and  construed  in
accordance with the laws of the State of New Jersey.

     IN WITNESS  WHEREOF,  the parties hereto have set their hands and seals the
day and year first above  written or have cause  these  presents to be signed by
their proper corporate officers and their corporate seals hereto affixed the day
and year first above written.

ATTEST:                                           SUPREMA SPECIALTIES, INC.



By:      _______________________                  By:  _________________________
         Steven Venechanos,                            Mark Cocchiola,
         Secretary                                     President

                                                  FLEET BANK, N.A.



                                                  By:  _________________________
                                                       Edward J. Waterfield,
                                                       Senior Vice President
Record and Return to:
Windels, Marx, Davies & Ives
120 Albany Street Plaza
New Brunswick, New Jersey  08901
Attn: Howard P. Lakind, Esq.


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STATE OF NEW JERSEY                 :
                                    :ss:
COUNTY OF MIDDLESEX                 :


     BE IT REMEMBERED,  that on this 16th day of December,  1998, before me, the
subscriber,  an officer  duly  authorized  pursuant to N.J.S.A.  46:14-6 to take
acknowledgments  for use in the State of New Jersey,  personally appeared Edward
J.  Waterfield,  who I am  satisfied  is the  person  who  executed  the  within
Modification  Agreement  as a Senior Vice  President  of Fleet Bank,  N.A.,  the
banking  association  named therein,  and he did thereupon  acknowledge that the
said Modification  Agreement made by the said banking  association and delivered
by  him as  such  officer,  is the  voluntary  act  and  deed  of  said  banking
association,  made by virtue of authority  from its Board of Directors,  for the
uses and purposes therein expressed.



                                                  ______________________________
                                                  Howard P. Lakind, an attorney
                                                  at law of the State of New
                                                  Jersey


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<PAGE>


STATE OF NEW JERSEY                 :
                                    :ss:
COUNTY OF MIDDLESEX                 :


     BE IT REMEMBERED,  that on this 16th day of December,  1998, before me, the
subscriber,  an officer  duly  authorized  pursuant to N.J.S.A.  46:14-6 to take
acknowledgments  for use in the State of New Jersey,  personally  appeared  Mark
Cocchiola, who I am satisfied is the person who executed the within Modification
Agreement as President  of Suprema  Specialties,  Inc.,  the  corporation  named
therein, and he did thereupon  acknowledge that the said Modification  Agreement
made by the  said  corporation  and  delivered  by him as such  officer,  is the
voluntary act and deed of said corporation, made by virtue of authority from its
Board of Directors, for the uses and purposes therein expressed.



                                                  ______________________________
                                                  Notary Public



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