CONSOLIDATION, EXTENSION AND MODIFICATION
AGREEMENT WORDS USED OFTEN IN THIS DOCUMENT

A)  "Agreement."  This document,  which is dated FEBRUARY 18, 1998, and exhibits
and riders attached to this document will be called the "Agreement".

B)  "Borrower."  STACY C.  CAMPBELL  and  JUDITH  A.  CAMPBELL,  will be  called
"Borrower"  and sometimes "I" or "me".  Borrower's  address is 604 BEACH AVENUE,
ROCHESTER, NEW YORK 14612.

C)  "Lender."  FIRST  NATIONAL  BANK OF  ROCHESTER  will be called  "Lender" and
sometimes  "Note Holder".  Lender is a corporation  or association  which exists
under the laws of United States of America. Lender's address is 35 State Street,
Rochester, New York 14614.

D)  "Mortgages."  The mortgages,  deeds of trust or other  security  instruments
identified below and any additional security  instruments and related agreements
identified in Exhibit A to this agreement will be called the "Mortgages".

1) The Mortgage given by STACY C. CAMPBELL and JUDITH A. CAMPBELL, and dated MAY
30, 1997 in favor of FIRST  NATIONAL  BANK OF  ROCHESTER  securing  the original
principal amount of U.S.  $166,250.00.  This Mortgage is on a Fannie Mae/Freddie
Mac Security  Instrument and [was recorded on MAY 30, 1997, in the Office of the
Clerk of the County of MONROE,  State of New York,  at LIBER 13335 OF MORTGAGES,
PAGE 315. [will be recorded together with this Agreement.]  (Strike and complete
as  appropriate.]  At this date, the unpaid  principal  balance  secured by this
Mortgage is U.S. $165,109.80. (Strike if not applicable.]

2) The  mortgage  given by STACY C.  CAMPBELL  and JUDITH A.  CAMPBELL and dated
OCTOBER  27,  1997 in  favor  of  NORMANDY  CORPORATION  securing  the  original
principal amount of U.S. $100,000.00.  This Mortgage was recorded on OCTOBER 31,
1997, in the office of the Clerk of the County of MONROE,  State of NEW YORK, at
Liber 13512 of Mortgages,  page 294. At this date, the unpaid principal  balance
secured by this Mortgage is U.S. $59,890.20

(E) "Note Holder."  Lender or anyone who succeeds to Lender's  rights under this
Agreement and who is entitled to receive the payments I agree to make under this
Agreement may be called the "Note Holder".

(F) "Notes." The Notes  identified  below and any  additional  Notes and related
obligations  identified  in  Exhibit  A to this  Agreement  will be  called  the
"Notes":  (1) The Note  secured by the  Mortgage  identified  in Section (D) (1)
above and dated MAY 30, 1997. (2) The Note secured by the Mortgage identified in
Section (D) (2) above and dated  OCTOBER 27,  1997.  (3) The Note secured by the
Mortgage identified in Section (D) (3) above and dated _________.

(G)  "Property."  The  property  which is  described  in the Mortgage (s) and in
Exhibit B to this Agreement,  will be called the "Property".  [Strike italics if
not applicable.] The property is located at:

      604 BEACH AVENUE, ROCHESTER, NEW YORK 14612
      (Street]                               [city]

      MONROE                          NEW YORK
      [County]                        [State and zip code]


Fannie Mae/Freddie Mac CONSOLIDATION,  EXTENSION AND MODIFICATION AGREEMENT -
Single Family Form 3172 7/86

<PAGE>

I. BORROWER'S AGREEMENT ABOUT OBLIGATIONS UNDER THE NOTES AND MORTGAGES

I agree to take over all of the  obligations  under the Notes and  Mortgages  as
consolidated and modified by this Agreement as Borrower.  This means that I will
keep all of the promises and agreements  made in the Notes and Mortgages even if
some other person made those promises and agreements before me. The total unpaid
principal balance of the Notes is U.S.  $225,000.00.  Of this amount, U.S. $0.00
was advanced to me (or for my account) immediately prior to this consolidation.

II. AGREEMENT TO COMBINE NOTES AND MORTGAGES

By signing this Agreement, Lender and I are combining into one set of rights and
obligations all of the promises and agreements stated in the Notes and Mortgages
including  any  earlier   agreements  which  combined  or  extended  rights  and
obligations  under  any of the  Notes  and  Mortgages.  This  means  that all of
Lender's  rights in the  Property  are combined so that under the law Lender has
one mortgage and I have one loan obligation which I will pay as provided in this
Agreement.

III. THE CONSOLIDATED NOTE AND THE CONSOLIDATED MORTGAGE

This  combining of notes and  mortgages is known as  "consolidation".  The Notes
together will be called the "Consolidated  Note". The Mortgages together will be
called the  "Consolidated  Mortgage".  The  Consolidated  Mortgage  secures  the
Consolidated  Note and is a single  lien upon the  Property.  I have no right of
set-off or counterclaim or defense to the obligations of the  Consolidated  Note
or the Consolidated Mortgage.

IV. AGREEMENT TO CHANGE TERMS OF THE CONSOLIDATED NOTE

Lender and I agree to change the terms of the Consolidated Note. The new terms
are:

1. Borrower's Promise to Pay Principal and Interest

I promise to pay the principal that has not yet been paid under the Consolidated
Note,  plus  interest,  to the order of Lender.  That  principal  amount is U.S.
$225,000.00.  Interest  will be charged on unpaid  principal as provided in this
Agreement  beginning  on the date of this  Agreement  until  the full  amount of
principal has been paid.

2. Payments

(A) Time and Place of Payments

I will pay principal and interest by making payments each month.

I will make my  monthly  payments  on the first day of each month  beginning  on
APRIL 1, 1998. I will make these  payments  every month until I have paid all of
the  principal  and  interest  and any other  charges  that I may owe under this
Agreement  and the  Consolidated  Note.  My monthly  payments will be applied to
interest before  principal.  If on MARCH 1, 2028, I still owe amounts under this
Agreement or the  Consolidated  Note,  I will pay those  amounts in full on that
date, which is called the "maturity date". I will make my monthly payments at 35
State  Street,  Rochester,  New York 14614 or at place if  required  by the Note
Holder.  Interest  Rate I will pay  interest  at a yearly  rate of  7.125%.  The
interest  rate  required by this Section 2(B) is the rate I will pay both before
and after any default described in Section 3 (B) of this  Consolidated  Note. An
Adjustable Rate Rider is recorded with this Agreement as Exhibit C and is a term
of this  Agreement.  The interest rate I will pay will change in accordance with
the rider.  [Strike italics if not  applicable.] (C) Monthly payments Each of my
monthly payments will be in the amount of U.S. $1,515,87.  An Adjustable Rate or
Graduated Payment of  ________________  Rider is recorded with this Agreement as
Exhibit C and is a term of this Agreement.  My monthly payment amount may change
in accordance with that Rider. (Strike italics is not applicable.]

3. Borrower's Failure to Pay as Required

(A) Late Charge for Overdue  Payments  If the Note Holder has not  received  the
full amount of any monthly payment by the end of 15 calendar days after the date
it is due, I will pay a late charge to the Note Holder. The amount of the charge
will be 2.0% of my overdue  payment of principal and  interest.  I will pay this
late charge promptly but only once on each late payment.

(B) Default

If I do not pay the full amount of each monthly payment on the date it is due, I
will be in default.  I will also be in default if I do not keep my promises  and
agreements  under this Agreement and the  Consolidated  Mortgage.

(C) Notice of Default If I am in default,  the Note Holder may send me a written
notice telling me that if I do not pay the overdue amount by a certain date, the
Note Holder may require me to pay immediately the full amount of principal which
has not been paid and all the interest that I owe on that amount. That date must
be at least 30 days after the date on which the notice is delivered or mailed to
me.

(D) No Waiver by Note Holder  Even if, at a time when I am in default,  the Note
Holder does not require me to pay  immediately in full as described  above,  the
Note  Holder  will  still  have the right to do so if I am in default at a later
time.

(E) Payment of Note Holder's Costs and Expenses

If the Note  Holder has  required  me to pay  immediately  in full as  described
above,  the Note Holder will have the right to be paid back by me for all of its
costs and  expenses  in  enforcing  this Note to the  extent not  prohibited  by
applicable law. Those expenses include, for example, reasonable attorneys' fees.

4. Borrower's Right to Prepay

(A) Borrower's Right to Make Prepayments

I have the right to make  payments of principal at any time before they are due.
A  payment  of  principal  only  is  known  as a  "prepayment".  When  I  make a
prepayment,  I will tell the Note  Holder in writing  that I am doing so. I will
make full  prepayment  or partial  prepayments  without  paying  any  prepayment
charge.  The Note Holder will use all of my  prepayments to reduce the amount of
principal that I owe under this Note. If I make a partial prepayment, there will
be no changes in the due dates or in the amount of my monthly payment unless the
Note Holder agrees in writing to those changes.

(B) Cancellation of Other Prepayment Terms

Any terms contained in the Consolidated  Note about my right to make prepayments
which do not agree with this Section 4 are canceled by this Agreement.  My right
to make prepayments  under the  Consolidated  Note is governed only by the terms
contained in this Section 4.

5. Loan Charges

If a law,  which  applies to this loan and which set maximum  loan  charges,  is
finally  interpreted so that the interest or other loan charges  collected or to
be collected in connection with this loan exceed the permitted limits, then: (i)
any such loan  charges  shall be reduced by the amount  necessary  to reduce the
charge to the permitted limit; and (ii) any sums already collected from me which
exceeded  permitted limits will be refunded to me. The Lender may choose to make
this refund by reducing the principal I owe under this  Consolidated  Note or by
making a direct payment to me. If a refund reduces principal, the reduction will
be treated as a partial prepayment.

6. Giving of Notices

Any notice that must be give to me under this Consolidated Note will be given as
provided in the Consolidated Mortgage.

7. Waivers

I and any other person who has obligations  under this  Consolidated  Note waive
the rights of presentment and notice of dishonor.  "Presentment" means the right
to require the Lender to demand  payment of amounts  due.  "Notice of  dishonor"
means the right to  require  the  Lender to give  notice to other  persons  that
amounts due have not been paid.

8. Unchanged Terms of Consolidated Note in Full Effect

All of the terms of the Consolidated Note that are not changed in this Agreement
remain in full effect as if there were stated in this Agreement.

V. AGREEMENT ON TERMS OF THE CONSOLIDATED MORTGAGE

Lender and I agree to change  the terms of the  Consolidated  Mortgage.  The new
terms of this Consolidated  Mortgage are the security  instrument terms that are
set out in Exhibit D to this Agreement.  However,  the terms of the Consolidated
mortgage  prior to this  change  that  are not  inconsistent  with the  security
instrument terms set out in Exhibit D shall also continue in effect.

VI. BORROWER'S INTEREST IN THE PROPERTY

I promise that I am the lawful owner occupying the Property. I promise that I am
a lawful tenant occupying the Property. [Strike inapplicable sentence.)

VII. WRITTEN TERMINATION CHANGE OF THIS AGREEMENT

This  Agreement may not be terminated,  changed,  or amended except by a written
agreement  signed by the party whose rights or obligations  are being changes by
that agreement.

VIII. OBLIGATIONS OF BORROWERS AND OF PERSONS TAKING OVER BORROWER'S OR LENDER'S
RIGHTS OR OBLIGATIONS

If more than one person signs this  Agreement  as Borrower,  each of us is fully
and  personally  obligated to keep all of  Borrower's  promises and  obligations
contained in this  Agreement.  The Note Holder may enforce its rights under this
Agreement against each of us individually or against all of us together.  Lender
and I agree that any person who takes over my rights or  obligations  under this
Agreement  will have all of my rights  and will be  obligated  to keep all of my
promises and agreements made in this Agreement.  Similarly, any person who takes
over  Lender's  rights or  obligations  under  this  Agreement  will have all of
Lender's rights and will be obligated to keep all of Lender's agreements made in
this  Agreement.  By signing  this  Agreement,  Lender and I agree to all of the
above.

First National Bank of Rochester

(Lender )                          s\ STACY C. CAMPBELL     (Borrower)



                                    s\ JUDITH A. CAMPBELL     (Borrower)


  ------------- [Space Below This Line for Acknowledgments -----------------


STATE OF NEW YORK, COUNTY OF MONROE, ss.:

On FEBRUARY 18, 1998,  before me personally came MELODY ANN PURSEL, to me known,
who by me duly sworn,  did depose and that the deponent is the VICE PRESIDENT of
First  National Bank of Rochester,  the  corporation  described in the foregoing
Agreement,  and  (s)he  signed  his(her)  name  by  order  of the  Board  of the
corporation


                                    s\  Patricia M. Falkoff
                                    ---------------------------
                                        PATRICIA M. FALKOFF
                                        Notary Public, State of New York

                                        Qualified in Monroe County
                                        My Commission Expires Feb.13 1999


STATE OF NEW YORK, COUNTY OF MONROE, ss.:

On FEBRUARY 18, 1998,  before me personally came STACY C. CAMPBELL and JUDITH A.
CAMPBELL,  to me known and known to me to be the  individuals  described in, and
who executed the  foregoing  Agreement,  and duly  acknowledged  to me that they
executed the same.


                                    s\   W. Stephen Tierney
                                    -------------------------
                                         W. STEPHEN TIERNEY
                                         Notary Public, State of New York

                                         Oualified in Monroe County
                                         Commission Expires Feb. 28, 1998

<PAGE>

                            SCHEDULE A

Premises: 604 Beach Avenue Boat Lots 82-89

County    Town/City   District Sec    Block     Lot 
Monroe    Rochester   Rochester       047.21    1        31

ALL THAT  TRACT OR PARCEL OF LAND  situate in the City of  Rochester,  County of
Monroe and State of New York,  known and  described as follows:  Commencing at a
point on the north line of Beach Avenue as now laid out and forty (40) feet east
from the intersection of said north line with the east line of what was formerly
Oak Street; thence westerly along the north line of Beach Avenue sixty-five (65)
feet to the center of what was formerly Oak Street;  thence northerly along said
center line extended  northerly to the north line of the "Terrace" as shown on a
map of "Guilford Bluff" filed in Monroe County Clerk's Office in Liber 7 of Maps
at page 12; thence  easterly along the north line of said  "Terrace"  sixty-five
(65) feet more or less; thence southerly to the place of beginning.

Also boat lots  numbers  82,  83,  84, 86, 87, 88 and 89 as shown on said map of
"Guilford Bluff

ALL THAT TRACT OR PARCEL OF LAND,  situate in the City of  Rochester,  County of
Monroe,  State of New York,  known and  distinguished  as Bath or Boat House Lot
Number Eighty-Five (85) as shown on a map of Guilford Bluff, so called,  made by
R. J. Smith,  Surveyor,  and filed in Monroe County Clerk's Office in Liber 7 of
Maps, at page 12. - 7

Said Bath or Boat House Lot  Eighty-Five  (85)  located on the north side of the
Terrace, on said Guilford Bluff, reference had to said Map, and each lot extends
to a point eight (8) feet from the north line of the Protection Dock, and is ten
(10) feet wide front and rear and about twenty (20) feet

Together  with a right of way in common with other  parties over a strip of land
twenty feet in width  taken from the west end of Lots 58 and 59 of the  Guilford
Bluff Tract which was conveyed by Halbert S.  Greenleaf  and wife to the Village
of Charlotte  by Deed dated August 29, 1901 and recorded  June 3, 1902 in Monroe
County Clerk's Office in Liber 651 of Deeds at page 429.

Together  with all the  right,  title and  interest  of said Leo V.  Lyons,  and
Katharine A. Lyons,  his wife,  in the strip of land  described in an instrument
recorded in said Clerk's  Office in Liber 599 of Deeds at page 280,  lying north
of Beach Avenue and south of the Bath or Boat House Lots in said tract.

For Conveyancing Only

Together with all right,  title and interest of, in and to any streets and roads
abutting the above described premises.

<PAGE>


  MORTGAGE

WORDS USED OFTEN IN THIS DOCUMENT

(A) "Security Instrument".  This document,  which is dated May 30, 1997, will be
called the "Security Instrument".

(B) "Borrower". STACY C. CAMPBELL and JUDITH A. CAMPBELL

sometimes will be called "Borrower" and sometimes simply "I" or "me".

(C) "Lender". First National Bank of Rochester

will be called  "Lender".  Lender is a corporation or  association  which exists
under the laws of the United States of America.

Lender's address is 35 State Street, Rochester, New York 14614

(D) "Note".  The note signed by Borrower and dated May 30, 1997,  will be called
the "Note." The Note shows that I owe Lender ONE HUNDRED SIXTY-SIX  THOUSAND TWO
HUNDRED  FIFTY and 00/100  Dollars  (U.S.  $166,250.00)  plus  interest.  I have
promised  to pay this debt in  monthly  payments  and to pay the debt in full by
June 1, 2027.

(E)  "Property".  The  property  that is described  below in the section  titled
"Description of the Property", will be called the "Property".

(F)  "Sums  Secured".   The  amounts  described  below  in  the  section  titled
"Borrower's  Transfer  to Lender of Rights in the  Property"  sometimes  will be
called  the  "Sums  Secured".

BORROWER'S  TRANSFER TO LENDER OF RIGHTS IN THE  PROPERTY I mortgage,  grant and
convey the Property to Lender subject to the terms of this Security  Instrument.
This means that, by signing this Security  Instrument,  I am giving Lender those
rights that are stated in this  Security  Instrument  and also those rights that
the law gives to Lenders who hold mortgages on real property. I am giving Lender
these rights to protect Lender from possible  losses that might result if I fail
to: (A) Pay all the amounts  that I owe Lender as stated in this Note;  (B) Pay,
with interest,  any amounts that Lender spends under  Paragraphs 2 and 7 of this
Security  Instrument to protect the value of the Property and Lender's rights in
the Property;  and (C) Keep all of my other promises and  agreements  under this
Security Instrument;

NEW YORK--Single  Family-- Fannie  Mae/Freddie Mac UNIFORM  INSTRUMENT form 3033
10/91 I Item 1930 (9111) (Page 1 of 12 pages)

Initials:_________

DESCRIPTION OF PROPERTY

<PAGE>

I give Lender rights in the Property described in (A) through (G) below:

(A) The Property which is located at 604 Beach Avenue
                                        [Street]

   Rochester, New York            14612           This property is in
   [City]                         [Zip Code]

       MONROE County.  It has the following legal description:

SEE SCHEDULE "A" ATTACHED HERETO AND MADE A PART HEREOF.

Mortgagors  covenant  that  the  within  described  premises  is a  dwelling  or
residence for not more than two families.

(B) All  buildings  and other  improvements  that are  located  on the  Property
described in subparagraph (A) of this section;

(C) All rights in other property that I have as owner of the Property  described
in  subparagraph  (A) of this section.  These rights are known as "easements and
appurtenances attached to the Property";

(D) All rights  that I have in the land  which  lies in the  streets or roads in
front  of,  or next to,  the  Property  described  in  subparagraph  (A) of this
section;

(E) All fixtures that are now or in the future will be on the Property described
in subparagraph (A) and (B) of this section;

(F) All of the rights and property described in subparagraphs (B) through (E) of
this  section  that I acquire  in the  future;  and (G) All  replacements  of or
additions to the Property  described  in  subparagraphs  (B) through (F) of this
section.

BORROWERS'  RIGHT TO MORTGAGE THE PROPERTY AND  BORROWER'S  OBLIGATION TO DEFEND
OWNERSHIP OF THE PROPERTY

I  promise  that:  (A) I  lawfully  own the  Property;  (B) I have the  right to
mortgage,  grant  and  convey  the  Property  to  Lender;  and (C) there are not
outstanding  claims or charges against the Property,  except for those which are
of public record.

I give a general  warranty  of title to Lender.  This means that I will be fully
responsible  for any losses  which Lender  suffers  because  someone  other than
myself has some of the rights in the  Property  which I promise  that I have.  I
promise that I will defend my  ownership  of the Property  against any claims of
such rights.

PLAIN LANGUAGE SECURITY INSTRUMENT

This Security  Instrument contains promises and agreements that are used in real
property  security  instruments  all over the country.  It also  contains  other
promises and agreements  that vary, to a limited  extent,  in different parts of
the country. My promises and agreements are stated in "plain language".

initials: ______ (Page 2 of 11 pages) Form 3033 10/91

<PAGE>
                             COVENANTS


I promise and I agree with Lender as follows:

1. BORROWER'S PROMISE TO PAY

I will pay to Lender on time  principal  and interest due under the Note and any
prepayment and late charges due under the Note.

2. MONTHLY PAYMENTS FOR TAXES AND INSURANCE

(A) Borrower's Obligation

I will pay to Lender all amounts necessary to pay for taxes, assessments,  water
frontage charges and other similar charges,  sewer rents,  leasehold payments or
ground rents (if any), hazard or property insurance  covering the Property,  and
flood insurance (if any). If Lender required  mortgage  insurance as a condition
of making the loan that I promise to pay under the Note,  (i) I also will pay to
Lender all amounts necessary to pay for mortgage  insurance,  and (ii) if, under
Paragraph 8 below, instead of paying for mortgage insurance I am required to pay
Lender an amount equal to the cost of mortgage insurance, I will pay this amount
to Lender.  I will pay all of these amounts to Lender unless Lender tells me, in
writing,  that I do not have to do so, or unless the law required  otherwise.  I
will make these  payments on the same day that my monthly  payments of principal
and interest are due under the Note.

My payments  under this  Paragraph 2 will be for the items listed in (i) through
(iv) below, which are called "Escrow Items":

(i) The estimated  yearly taxes,  assessments,  water frontage charges and other
similar  charges,  and sewer  rents on the  Property  which under the law may be
superior  to this  Security  Instrument  as a lien on the  Property.  Any claim,
demand or charge that is made against  Property  because an  obligation  has not
been fulfilled is known as a "lien".

(ii) The estimated yearly leasehold payments or ground rents on the Property (if
any);

(iii) The estimated yearly premium for hazard or property insurance covering the
Property:

(iv) The estimated yearly premium for flood insurance  covering the Property (if
any);

(v) The estimated yearly premium for mortgage insurance (if any); and

(vi) The estimated yearly amount I may be required to pay Lender under Paragraph
8 below  instead of the payment of the  estimated  yearly  premium for  mortgage
insurance (if any).

Lender will  estimate from time to time the amount I will have to pay for Escrow
Items by using existing  assessments  and bills and reasonable  estimates of the
amount  I will  have to pay for  Escrow  Items  in the  future,  unless  the law
requires  Lender to use another method for  determining  the amount I am to pay.
The amounts that I pay to Lender for Escrow Items under this Paragraph 2 will be
called the "Funds".  The Funds are pledged as  additional  security for all Sums
Secured.

The law puts limits on the total  amount of Funds Lender can at any time collect
and hold.  This total amount cannot be more than the maximum amount a lender for
a  "federally  related  mortgage  loan" could  require me to place in an "escrow
account" under the federal law called the "Real Estate Settlement Procedures Act
of 1974",  as that law may be amended from time to time. If there is another law
that  imposes a lower limit on the total  amount of Funds Lender can collect and
hold, Lender will be limited to the lower amount.

(B) Lender's Obligation

Lender  will keep the Funds in a savings  or banking  institution  which has its
deposits  insured by a federal  agency,  instrumentality,  or entity,  or in any
Federal  Home Loan Bank.  If Lender is such a savings  or  banking  institution,
Lender may hold the Funds.  Except as described in this Paragraph 2, Lender will
use the Funds to pay the Escrow Items.  Lender will give to me, without  charge,
an annual  accounting of the Funds.  That  accounting must show all additions to
and deductions from the Funds and the reason for each deduction.

Lender may not charge me for holding or keeping  the Funds,  for using the Funds
to pay Escrow Items,  for making a yearly analysis of my payment of Funds or for
receiving, verifying and totaling assessments and making a yearly analysis of my
payments  of Funds or fore  receg  assessments  and bills.  However,  Lender may
charge me for the  services  if Lender  pays me interest on the Funds and if the
law  permits  Lender to make such a charge.  Lender also may require me to pay a
one-time  charge for an  independent  real estate tax reporting  service used by
Lender in connection with my loan, unless the law does not permit Lender to make
such a charge. Lender will not be required to pay me any interest or earnings on
the Funds  unless  either (i) Lender and I agree in writing,  at the time I sign
this Security  Instrument,  that Lender will pay interest on the Funds;  or (ii)
the law requires Lender to pay interest on the Funds.

(C) Adjustments to the Funds

Under the law,  there is a limit on the amount of Funds Lender may hold.  If the
amount of Funds held by Lender exceeds this limit,  then the law requires Lender
to account to me in a special manner for the excess amount of Funds.  There will
be an excess amount if, at any time, the amount of Funds which Lender is holding
or keeping is greater  than the amount of Funds  Lender is allowed to hold under
the law.

If, at any time,  Lender has not  received  enough Funds to make the payments of
Escrow Items when the  payments  are due,  Lender may tell me in writing that an
additional amount is necessary.  I will pay to Lender whatever additional amount
is necessary to pay the Escrow Items in full.  Lender will  determine the number
of  monthly  payments  I have in which to pay that  additional  amount,  but the
number of payments will not be more than twelve.

When I have paid all of the Sums Secured,  Lender will promptly refund to me any
Funds that are then being held by Lender.  If under  Paragraph 21 below,  Lender
either  acquires or sells the  Property,  then before the  acquisition  or sale,
Lender will use any Funds which Lender is holding at the time of the acquisition
or sale to reduce the Sums Secured.

3. APPLICATION OF BORROWER'S PAYMENTS

Unless the law requires  otherwise,  Lender will apply each of my payments under
the Note and under  Paragraphs 1 and 2 above in the following  order and for the
following  purposes:  First,  to pay any prepayment  charges due under the Note;
Next,  to pay  amounts  due to Lender  under  Paragraph  2 above;  Next,  to pay
interest due; Next, to pay principal d late charges due under the Note.

4. BORROWER'S OBLIGATION TO PAY CHARGES, ASSESSMENTS AND CLAIMS

I will pay taxes, assessments, water frontage charges and other similar charges,
sewer rents, and any other charges and fines that may be imposed on the Property
and that may be superior to this Security Instrument.  I will also make payments
due under my lease if I am a tenant on the  Property and I will pay ground rents
(if any) due on the  Property.  I will do this either by making the  payments to
Lender that are  described in Paragraph 2 above or, if I am not required to make
payments  under  Paragraph 2, by making the payments on time to the person owned
them.  (In  this  Security  Instrument,  the word  "person"  means  any  person,
organization, governmental authority or other party). If I make direct payments,
then  promptly  after making any of those  payments I will give Lender a receipt
which shows that I have done so. If I make payment to Lender under  Paragraph 2,
I will give Lender all notices or bills that I receive for the amounts due under
this Paragraph 4.

I will  promptly  pay or satisfy  all liens  against  the  Property  that may be
superior to this Security Instrument. However, this Security Instrument does not
require me to satisfy a superior  lien if: (A) I agree,  in writing,  to pay the
obligation  which gave rise to the superior lien and Lender  approves the way in
which I agree to pay that  obligation;  or (B) in good faith,  I argue or defend
against  the  superior  lien in a  lawsuit  so that,  during  the  lawsuit , the
superior lien may not be enforced; or (C) I secure from the holder of that other
lien an agreement, approved in writing by Lender, that the lien of this Security
Instrument  is superior to the lien held by that  person.  If Lender  determines
that any part of the  Property  is subject to a superior  lien,  Lender may give
Borrower a notice  identifying the superior lien.  Borrower shall pay or satisfy
the  superior  lien or take one or more of the actions set forth above within 10
days of the

5. BORROWER'S OBLIGATION TO MAINTAIN HAZARD INSURANCE OR PROPERTY INSURANCE

I will obtain  hazard or property  insurance  to cover all  buildings  and other
improvements that now are or in the future will be located on the Property.  The
insurance must cover loss or damage caused by fire,  hazards normally covered by
"extended coverage" hazard insurance policies and other hazards for which Lender
requires coverage,  including floods and flooding.  The insurance must be in the
amounts  and for the  periods  of time  required  by  Lender.  I may  choose the
insurance company, but my choice is subject to Lender's approval. Lender may not
refuse to  approve  my choice  unless the  refusal  is  reasonable.  If I do not
maintain the insurance  coverage  described  above,  Lender may obtain insurance
coverage to protect Lender's rights in the property in accordance with paragraph
7 below.

All of the insurance  policies and renewals of those  policies must include what
is known as a  "standard  mortgage  clause" to protect  Lender.  The form of all
policies and renewals must be  acceptable to Lender.  Lender will have the right
to hold the policies and  renewals.  if Lender  requires,  I will  promptly give
Lender all receipts of paid premiums and renewals notices that I receive.

If there  is a loss or  damage  to the  Property,  I will  promptly  notify  the
insurance  company  and  Lender.  If I do not  promptly  prove to the  insurance
company that the loss or damage occurred, then Lender may do so. The amount paid
by the  insurance  company is called  "proceeds".  The proceeds  will be used to
repair or to restore the damages  Property  unless:  (A) if is not  economically
feasible to make the repairs or to  restoration;  or (B) the use of the proceeds
for that purpose  would lessen the  protection  given to Lender by this Security
Instrument;  or (C) Lender and I have agreed in writing not to use the  proceeds
for that purpose.  If the repair or restoration is not economically  feasible or
if it would lessen Lender's protection under this Security Instrument,  then the
proceeds  will be used to reduce the amount that I owe to Lender  under the Note
and under this  Security  Instrument.  If any of the  proceeds  remain after the
amount that I owe to Lender has been paid in full,  the remaining  proceeds will
be paid to me.

If I abandon the Property,  or if I do not answer, within 10 days, a notice from
Lender stating that the insurance company has offered to settle a claim,  Lender
may collect the  proceeds.  Lender may use the proceeds to repair or restore the
Property or to pay the Sums Secured. The 3-day period will begin when the notice
is given.

If any proceeds are used to reduce the amount of principal which I owe to Lender
under the Note, that use will not delay the due date or change the amount of any
of my  monthly  payments  under  the Note and  under  Paragraphs  1 and 2 above.
However, Lender and I may agree in writing to those delays or changes.

If Lender  acquires the Property under  Paragraph 21 below,  all of my rights in
the  insurance  policies  will belong to Lender.  Also,  all of my rights in any
proceeds  which are paid  because  of damage  occurred  before the  property  is
acquired by Lender or sold will belong to Lender.  However,  Lender's  rights in
those proceeds will not be greater than the Sums Secured  immediately before the
Property is acquired by Lender or sold.

6.  BORROWER'S  OBLIGATION TO OCCUPY THE  PROPERTY,  TO MAINTAIN AND PROTECT THE
    PROPERTY, AND TO FULFILL ANY LEASE OBLIGATIONS; BORROWER'S LOAN APPLICATION

(A) Borrower's Obligations to Occupy the Property

I will occupy the Property and use the Property as my principal residence within
sixty days after I sign this Security Instrument.  I will continue to occupy the
Property  and to use the  Property as my  principal  residence  for at least one
year. The one-year period will begin when I first occupy the Property.  However,
I will not have to occupy the  Property  and use the  Property  as my  principal
residence  within the time  frames set forth  above if Lender  agrees in writing
that I do not have to do so.  Lender may not refuse to agree  unless the refusal
is reasonable.  I also will not have to occupy the Property and use the Property
as my  principal  residence  within  the time  set  forth  above if  extenuating
circumstances exist which are beyond by control.

(B) Borrower's Obligations to Maintain and Protect the Property]

  
I will keep the Property in good repair. I will not destroy,  damage or harm the
Property, and
I    will not allow the Property to deteriorate.

I will be "in  default"  under this  Security  Instrument  if I fail to keep any
promise or ruling agreement made in this Security Instrument.  I also will be in
default  under  this  Security  Instrument  if any civil or  criminal  action or
proceeding  for  "forfeiture"  (that is, a legal action or proceeding to require
the Property,  or any part of the Property,  to be given up) is begun and Lender
determines,  in good faith,  that this action or  proceeding  could  result in a
court  ruling (i) that would  require  forfeiture  of the  Property or (ii) that
would materially  impair the lien of the Security  Instrument or Lender's rights
in the  Property.  I may correct the  default by  obtaining a court  ruling that
dismisses the legal action or proceeding,  if Lender determines,  in good faith,
that this court ruling  prevents  forfeiture of my interests in the Property and
also  prevents any material  impairment of (i) the lien created by this Security
Instrument or (ii) Lender's rights in the Property.  If I correct the default, I
will  have  the  right  to  have   enforcement   of  this  Security   Instrument
discontinued,  as provided in  Paragraph  18 below,  even if Lender has required
immediate payment in full.

Borrower's Obligation to Fulfill Any Lease Obligations

If I do not  own  but  am a  tenant  on the  Property,  I  will  fulfill  all my
obligations under my lease. I also agree that, if I acquire the fee title to the
Property,  my lease  interest  and the fee title  will not merge  unless  Lender
agrees to the merger in writing.

(D) Borrower's Loan Application

If, during the application  process for the loan that I promise to pay under the
Note,  I made  false  or  inaccurate  statements  to  Lender  about  information
important to Lender in  determining  my  eligibility  for the loan,  Lender will
treat  my  actions  as a  default  under  this  Security  Instrument.  False  or
inaccurate  statements about information important to the Lender would include a
misrepresentation  of my  intentions  to  occupy  the  Property  as a  principal
residence.  This is just one  example  of a false  or  inaccurate  statement  of
important information.  Also, if during the loan application process I failed to
provide  Lender  with   information   important  to  Lender  in  determining  my
eligibility  for the  loan,  Lender  will  treat  this as a default  under  this
Security Instrument.

7. LENDER'S RIGHT TO PROTECT ITS RIGHTS IN THE PROPERTY

If:  (A) I do not  keep  my  promises  and  agreements  made  in  this  Security
Instrument, or (B) someone,  including me, brings an legal proceeding that m may
significantly affect Lender's rights in the property (such as a legal proceeding
in bankruptcy, in probate, for condensation or forfeiture, or to enforce laws or
regulations),  Lender may do and pay for  whatever is  necessary  to protect the
value of the Property and Lender's rights in the Property.  Lender's actions may
include appearing in court,  paying  reasonable  attorneys' fees and entering on
the  Property  to make  repairs.  Although  Lender  may take  action  under this
Paragraph 7, Lender does not have to do so.

I will pay to Lender any amounts, with interest,  which Lender spends under this
Paragraph  7. I will pay those  amounts to Lender when Lender  sends me a notice
requesting  that I do so. I will also pay interest on those  amounts at the Note
rate. Interest on each amount will begin on the date that the amount is spent by
Lender.  However, Lender and I may agree in writing to terms of payment that are
different from those in this  paragraph.  This Security  Instrument will protect
Lender in case I do not keep this promise to pay those amounts with interest.

8. MORTGAGE INSURANCE

If Lender  required  mortgage  insurance  as a  condition  of making  the loan I
promise  to pay  under  the  Note,  I will  pay the  premiums  for the  mortgage
insurance.  If, for any reason, the mortgage insurance coverage lapses or ceases
to be in effect, I will pay the premiums for substantially  equivalent  mortgage
insurance coverage.  However,  the cost of this mortgage insurance coverage must
be substantially equivalent to the cost to me of the previous mortgage insurance
coverage, and the alternate mortgage insurer must be approved by Lender.

If  substantially  equivalent  mortgage  coverage is not available,  Lender will
establish a "loss reserve" as a substitute for the mortgage insurance  coverage.
I will pay to Lender  each month an amount  equal to  one-twelfth  of the yearly
mortgage  insurance  premium (as of the time the coverage lapsed or ceased to be
in effect).  Lender will retain these  payments,  and will use these payments to
pay for losses that the mortgage insurance would have covered. Lender may choose
to no longer require loss reserve payments, if mortgage insurance coverage again
becomes available and is obtained.  The mortgage  insurance  coverage must be in
the amount  and for the  period of time  required  by  Lender.  The Lender  must
approve the insurance company providing coverage.

I will pay the mortgage insurance premiums, or the loss reserve payments,  until
the  requirement for mortgage  insurance ends according to my written  agreement
with Lender or according to law.  Lender may require me to pay the premiums,  or
the loss reserve payments, in the manner described in Paragraph 2 above.

9. LENDER'S RIGHT TO INSPECT THE PROPERTY

Lender,  and others authorized by Lender, may enter on and inspect the Property.
They must do so in a reasonable manner and at reasonable times. Before or at the
time an  inspection  is made,  Lender must give me notice  stating a  reasonable
purpose for the inspection.

Initials: ________ (Page 6 of 11 pages)

10. AGREEMENTS ABOUT CONDEMNATION OF THE PROPERTY

A taking of property by any governmental authority by eminent domain is known as
"condemnation".  I give to Lender my right:  (A) to  proceeds  of all  awards or
claims for damages resulting from condemnation or other  governmental  taking of
the  Property;  and (B) to proceeds  from a sale of the Property that is made to
avoid condemnation. All of those proceeds will be paid to Lender.

If all of the Property is taken,  the  proceeds  will be used to reduce the Sums
Secured. If any of the proceeds remain after the amount that I owe to Lender has
been paid in full, the remaining proceeds will be paid to me.

Unless Lender and I agree  otherwise in writing,  if only a part of the Property
is taken,  and the fair  market  value of the  Property  immediately  before the
taking  either is equal to, or  greater  than,  the  amount of the Sums  Secured
immediately  before the taking, the amount that I owe the Lender will be reduced
only by the amount of proceeds  multiplied  by a fraction;  That  fraction is as
follows: (A) the total amount of the Sums Secured immediately before the taking,
divided by (B) the fair  market  value of the  Property  immediately  before the
taking. The remainder of the proceeds will be paid to me.

Unless  Lender and I agree  otherwise  in  writing  or unless  the law  requires
otherwise, if only a part of the Property is taken, and the fair market value of
the Property  immediately  before the taking is less than the amount of the Sums
Secured  immediately  before the taking, the proceeds will be used to reduce the
Sums Secured.

If I abandon the Property,  or is I do not answer, within 30 days, a notice from
Lender stating that a governmental authority has offered to make a payment or to
settle a claim for damages,  Lender has the  authority to collect the  proceeds.
Lender may then use the  proceeds to repair or restore the Property or to reduce
the Sums Secured. The 30-day period will begin when the notice is given.

If any proceeds are used to reduce the amount of principal which I owe to Lender
under the Note, that use will not delay the due date or change the amount of any
of my  monthly  payments  under  the Note and  under  Paragraphs  1 and 2 above.
However, Lender and I may agree in writing to those delays or changes.

11.  CONTINUATION  OF  BORROWER'S  OBLIGATION  AND OF  LENDER'S  RIGHTS

(A) Borrower's Obligation

Lender may allow a person who takes over my rights and  obligations  to delay or
to change the amount of the monthly payments of principal and interest due under
the Note or under this Security  Instrument.  Even if Lender does this, however,
that  person and I will both still be fully  obligated  under the Note and under
this Security Instrument.

Lender may allow  those  delays or changes for a person who takes over my rights
and  obligations,  even if Lender is required  not to do so.  Lender will not be
required to bring a lawsuit against such a person for not fulfilling obligations
under the Note or under this Security Instrument, even if Lender is requested to
do so.

(B) Lender's Rights

Even if Lender  does not  exercise  or  enforce  any right of Lender  under this
Security  Instrument  or under the law,  Lender will still have all those rights
and may  exercise  and  enforce  them in the  future.  Even  if  Lender  obtains
insurance,  pays  taxes,  or pays other  claims,  charges or liens  against  the
Property,  Lender will have the right under  Paragraph 21 below to demand that I
make immediate payment in full of the amount that I owe to Lender under the Note
and under this Security Instrument.

12.  OBLIGATIONS  OF BORROWER AND OF PERSONS  TAKING OVER  BORROWER'S  RIGHTS OR
     OBLIGATIONS

Any  person  who  takes  over my  rights  or  obligations  under  this  Security
Instrument  will have all of my rights and will be  obligated  to keep all of my
promises and agreements made in this Security Instrument.  Similarly, any person
who takes over Lender's  rights or  obligations  under this Security  Instrument
will have all of Lender's  rights and will be  obligated to keep all of Lender's
agreements made in this Security Instrument.

If more than one person signs this Security  Instrument as Borrower,  each of us
is fully obligated to keep all of Borrower's promises and obligations  contained
in this  Security  Instrument.  Lender may enforce  Lender's  rights  under this
Security  Instrument  against  each  of us  individually  or  against  all of us
together.  This means that any one of us may be  required to pay all of the Sums
Secured.  However,  if one of us does not  sign the  Note:  (A) that  person  is
signing  this  Security  Instrument  only to give  that  person's  rights in the
Property to Lender  under the terms of this  Security  Instrument;  and (B) that
person is not personally  obligated to pay the Sums Secured; and (C) that person
agrees that Lender may agree with the other  Borrowers to delay enforcing any of
Lender's rights or to modify or make any accommodations with regard to the terms
of this Security Instrument or the Note without the person's consent.

Initials: _______ (Page 7 of 11 pages)

13. LOAN CHARGES

If the loan secured by this  Security  Instrument is subject to a law which sets
maximum loan charges,  and that law is finally  interpreted so that the interest
or other loan charges  collected or to be collected in connection  with the loan
exceed permitted limits: (A) any such loan charge shall be reduced by the amount
necessary to reduce the charge to the permitted  limit; and (B) any sums already
collected  from Borrower  which  exceeded  permitted  limits will be refunded to
Borrower.  Lender may choose to make this refund by reducing the principal owned
under the Note or by making a direct  payment to Borrower.  If a refund  reduces
principal,  the reduction  will be treated as a partial  prepayment  without any
prepayment charge under the Note.

14. NOTICES REQUIRED UNDER THIS SECURITY INSTRUMENT

A notice that must be given tome under this Security Instrument will be given by
delivering  it or by  mailing  it by first  class  mail  unless  applicable  law
requires  use of another  method.  The  notice  will be  addressed  to me at the
address stated in the section above titled  "Description of Property".  A notice
will be given  to me at a  different  address  if I give  Lender a notice  of my
different  address.  Any notice that must be given to Lender under this Security
Instrument  will  be  given  by  mailing  it  to  Lender's   address  stated  in
subparagraph  (C)  of the  section  above  titled  "Words  Used  Often  In  This
Document".  A notice will be mailed to Lender at a  different  address if Lender
gives me a notice of a different  address.  A notice  required by this  Security
Instrument  is given when it is mailed or when it is delivered  according to the
requirements of this Paragraph 14 or of applicable law.

15. LAW THAT GOVERNS THIS SECURITY INSTRUMENT

This Security  Instrument is governed by federal law and the law that applies in
the  place  where  the  property  is  located.  If any  terms  of this  Security
Instrument  or of the  Note  conflicts  with the law,  all  other  terms of this
Security  Instrument  and of the Note will still remain in effect if they can be
given effect  without the  conflicting  term.  This means that any terms of this
Security  Instrument  and of the  Note  which  conflicts  with  the  law  can be
separated  from the  remaining  terms,  and the  remaining  terms  will still be
enforced.

16. BORROWER'S COPY

I will be given one conformed copy of the Note and of this Security Instrument.

17. AGREEMENTS ABOUT LENDER'S RIGHTS IF THE PROPERTY IS SOLD OR
    TRANSFERRED 

Lender  may  require  immediate  payment  in full of ail  Sums  Secured  by this
Security  Instrument if all or any part of the Property,  or if any right in the
Property,  is sold or transferred  without  Lender's  prior written  permission.
Lender also may require  immediate  payment in full if a beneficial  interest in
Borrower is sold or transferred and Borrower is not a natural  person.  However,
Lender  shall not require  immediate  payment in full if this is  prohibited  by
federal  law on the  date  of  this  Security  Instrument.  If  Lender  requires
immediate  payment in full under this Paragraph 17, Lender will give me a notice
which states this requirement.  The notice will give me at least 30 days to make
the required  payment  during that period,  Lender may act to enforce its rights
under this Security  Instrument  without  giving me any further notice or demand
for payment.

18.  BORROWER'S RIGHT TO HAVE LENDER'S  ENFORCEMENT OF THIS SECURITY  INSTRUMENT
     DISCONTINUED

Even if Lender has required  immediate  payment in full, I may have the right to
have  enforcement  of this Security  Instrument  discontinued.  I will have this
right at any time before sale of the Property under any power of sale granted by
this  Security  Instrument  or any time  before  a  judgment  has  been  entered
enforcing this Security Instrument if I meet the following conditions: (A) I pay
to Lender the full amount that then would be due under this Security  Instrument
and the note as if immediate payment is full had never been required; and

(B) I correct my failure to keep any of other  promises  or  agreements  made in
this Security Instrument; and

(C) I pay  all of  Lender's  reasonable  expenses  in  enforcing  this  Security
Instrument including, for example, reasonable attorneys's fees; and

(D) I do whatever Lender  reasonably  requires to assure that Lender's rights in
the Property, Lender's rights under this Security Instrument, and my obligations
under the Note and under  this  Security  Instrument  continue  unchanged.  If I
fulfill  all of the  conditions  of this  Paragraph  18,  then the Note and this
Security  Instrument will remain in full effect as if immediate  payment in full
had never been  required.  However,  I will not have the right to have  Lender's
enforcement  of this  Security  Instrument  discontinued  if Lender has required
immediate payment in full under paragraph 17 above.

19. NOTE HOLDER'S RIGHT TO SELL THE NOTE OR AN INTEREST IN THE NOTE;  BORROWER'S
    RIGHT TO NOTICE OF CHANGE OF LOAN SERVICER

The Note, or an interest in the Note,  together  with this Security  Instrument,
may be sold one or more  times.  I may not  receive  any prior  notices of these
sales.  The entity that collects my monthly payments due under the Note and this
Security Instrument is called the "Loan Servicer".  There may be a change of the
Loan Servicer as a result of the sale of the Note; there also may be one or more
changes of the Loan Servicer  unrelated to a sale of the Note.  The law requires
that I be given written notice of any change of the Loan  Servicer.  The written
notice must be given in the manner  required under  Paragraph 14 above and under
applicable  law.  The  notice  will  state the name and  address of the new Loan
Servicer,  and also tell me the address to which I should make my payments.  The
notice also will contain any other information required by the law.

20. CONTINUATION OF BORROWER'S OBLIGATIONS TO MAINTAIN AND PROTECT THE PROPERTY

The federal laws and the laws of the jurisdiction  where the Property is located
that  relate  to  health,   safety  or   environmental   protection  are  called
"Environmental  Laws".  I will  not do  anything  affecting  the  Property  that
violates Environmental Laws, and I will not allow anyone else to do so.

Environmental Laws classify certain substances considered hazardous for purposes
of this  Paragraph 20. These are gasoline,  kerosene,  other  flammable or toxic
petroleum  products,   toxic  pesticides  and  herbicides,   volatile  solvents,
materials containing asbestos or formaldehyde,  and radioactive  materials.  The
substances  defined  as  toxic  or  hazardous  by  Environmental  Laws  and  the
substances  considered  hazardous  for purposes of this  Paragraph 20 are called
"Hazardous Substances".

I will not permit Hazardous Substances to be present on the Property. I will not
use or store Hazardous  Substances on the Property,  and I will not allow anyone
else to do so. I also will not dispose of Hazardous  Substances on the Property,
or release any Hazardous Substance on the Property,  and I will not allow anyone
else to do so.  However,  I may permit the  presence  on the  Property  of small
quantities of Hazardous  Substances that are generally recognized as appropriate
for normal  residential  use and  maintenance of the Property,  and I may use or
store these small quantities on the Property.  In addition,  unless law requires
removal or other action. the buildings, the improvements and the fixtures on the
Property are permitted to contain asbestos and asbestos-containing  materials if
the asbestos and asbestos-containing materials are undisturbed and "non-friable"
(that is, not easily crumbled by hand pressure).

If I know of any investigation,  claim, demand,  lawsuit or other action by the
government  or by a private  party  involving in the Property and any Hazardous
Substance or Environmental  Laws, I will promptly notify the Lender in writing.
If the  government  notifies me (or I otherwise  learn) that it is necessary to
remove a Hazardous  Substance  affecting the Property or to take other remedial
actions,  I will promptly take all  necessary  remedial  actions as required by
Environmental Laws.

21. LENDER'S RIGHTS IF BORROWER FAILS TO KEEP PROMISES AND AGREEMENTS

Except as provided in Paragraph 17 above,  if all of the conditions  stated in
subparagraphs (A), (B) and (C) of the Paragraph 21 are met, Lender may require
that I pay the entire  amount  remaining  unpaid under the Note and under this
Security Instrument.  Lender may do this without making any further demand for
payment. This requirement is called "immediate payment in full".

If Lender requires immediate payment in full, Lender may bring a lawsuit to take
away all of my remaining  rights in the Property and have the Property  sold. At
this sale Lender or another  person may acquire the  Property.  This is known as
"foreclosure  and sale". In any lawsuit for  foreclosure  and sale,  Lender will
have the right to collect all costs and disbursements and additional  allowances
allowed by law and will have the right to add all reasonable  attorneys' fees to
the amount I owe Lender, which fees shall become part of the Sums Secured.

Lender may require immediate payment in full under this Paragraph 21 only if all
of the following conditions are met:

(A) I fail to keep any promise or agreement  made in this  Security  Instrument,
including the promise to pay when due the Sums Secured.


Initials: _____    (Page 9 of 11 pages)

(B) Lender sends to me, in the manner  described in Paragraph 14 above, a notice
that states:

(i) The promise or agreement that I failed to keep;

(ii) The action that I must take to correct that default;

(iii) The date by which I must correct the default. That date must be at least
30 days  from the date on which the  notice  is  given;

(iv) That if I do not  correct  the  default by the date  stated in the  notice,
Lender may require  immediate  payment in full, and Lender or another person may
acquire the Property by means of foreclosure and sale;

(v) That if I meet the conditions  stated in Paragraph 18 above, I will have the
right to have Lender's enforcement of this Security Instrument  discontinued and
to have the Note and Security  Instrument remain fully effective as if immediate
payment in full had never been  required;  and (vi) That I have the right in any
lawsuit  for  foreclosure  and sale to argue  that I did  keep my  promises  and
agreements under the Note and under this Security Instrument, and to present any
other defense that I may have.

(C) I do not correct  the  default  stated in the notice from Lender by the date
stated in that notice.

22.  LENDER'S OBLIGATION TO DISCHARGE THIS SECURITY INSTRUMENT

When Lender has been paid all amounts due under the Note and Under this Security
Instrument,  Lender will  discharge  this  Security  Instrument  by delivering a
certificate stating that this Security Instrument has been satisfied. I will not
be  required  to pay  Lender  for the  discharge,  but I will  pay all  costs of
recording the discharge in the proper official records.

23. AGREEMENTS ABOUT NEW YORK LIEN  LAW

I will  receive  all  amounts  lent to me by Lender  subject  to the trust  fund
provisions  of Section  13 of the New York Lien Law.  This means that if, on the
date this  Security  Instrument is recorded,  construction  or other work on any
buildings or other  improvements  located on the Property has not been completed
for at least four months, I will: (A) hold all amounts which I receive and which
I have a right to receive from Lender under the Note as a "trust fund";  and (B)
use those amounts to pay for that construction or work before I use them for any
other purpose.  The fact that I am holding those amounts as a "trust fund" means
that for any  building  or other  improvement  located on the  Property I have a
special  responsibility  under the law to use the amount in the manner described
in this Paragraph 23.

24.  RIDERS TO THIS SECURITY INSTRUNENT

If one or more riders are signed by Borrower  and  recorded  together  with this
Security Instrument,  the promises and agreements of each rider are incorporated
as a part of this Security Instrument. [Check applicable box (es)]

X-Adjustable Rate Rider   -Condominium Rider              -1-4 Family
Rider

-Graduated Payment Rider  -Planned Unit Development Rider   -Biweekly Payment 
                                                             Rider

-Balloon Rider            -Rate Improvement Rider           -Second Home
Rider
X Other(s) [Specify   -VA Rider  X Due-on-Transfer   X Mortgage Rider
Schedule "A"

BY SIGNING BELOW, I accept and agree to the promises and agreements contained in
pages 1 through 12 of this Security  Instrument and in any rider(s) signed by me
and recorded with it.


s\ Stacy C. Campbell
_______________________|   (Seal)
STACY C. CAMPBELL           Borrower


Initials:  ________                              (Page 10 of 11 pages)


s\  Judith A. Campbell   (Seal)
________________________
JUDITH A. CAMPBELL          Borrower


Initials :________                 (Page 11 of 11 pages)  Form  3033   10/91


<PAGE>

                                                      MORTGAGE RIDER

I further agree with the Lender as follows:

1. RIDER NOT APPLICABLE IF MORTGAGE IS ASSIGNED TO GOVERNMENT AGENCY

That this Rider  shall  replace  those  clauses in the Note and in the  Mortgage
executed by me which are  inconsistent  with this Rider  unless the  Mortgage is
assigned to the Federal Home Loan Mortgage Corporation,  the Government National
Mortgage Association or the Federal National Mortgage Association,  or any other
federal  or state  governmental  agency,  in which  event  this  Rider  shall be
inapplicable and unenforceable.

2. REIMBURSEMENT FOR UNPAID INSURANCE PREMIUMS

That I will  reimburse  the Lender for any  premiums  paid for  insurance by the
Lender after my failure to do so.

3. ADDITIONAL EVENTS CAUSING POSSIBLE IMMEDIATE PAYMENT IN FULL

That the  Lender may  require  Immediate  Payment in Full,  at the option of the
Lender,  a. upon my failure to pay any  installment  of principal or of interest
for thirty (30) days, or

b. upon my failure to pay any tax,  water rates,  or assessment  for thirty (30)
days after a notice and demand has been mailed or delivered to me by the Lender,
or

c. after my failure to reimburse  the Lender for premiums paid for fire or flood
insurance, or

d. after my failure, when requested by the Lender, to furnish a statement of the
amount due on the  mortgage  and whether I have any offsets or defenses  against
the amounts that I owe this Lender under the Note, Mortgage, or this Rider.

4. INTEREST RATE AFTER FORECLOSURE IS BEGUN

That in the  event  the  Lender  requires  Immediate  Payment  in Full  and then
commences an action to foreclose the Mortgage,  I shall pay interest  thereafter
at the rate set forth in the Note or at the highest legal rate permitted by law,
whichever is higher.

5. AMOUNT OF "FUNDS" NEEDED AND REPAID ON DEMAND

That I will pay to the Lender at the time I sign this Mortgage a lump sum in the
amount of  "Funds"  due each month for taxes and  insurance  times the number of
months  that  have  gone by since  the last due date of the  taxes or  insurance
premiums;  that I also agree that any excess  amount of "Funds" on deposit  that
shall be repaid or  credited to me on demand  shall be that  amount  shown as an
excess as of the last annual accounting of the "Funds".

6. ATTORNEY FEES AFTER FORECLOSURE IS BEGUN

That if the Lender  commences an auction to foreclose the  Mortgage,  the Lender
may recover  reasonable  attorney  fees in the amount up to five percent (5%) of
the  balance  due on the  Mortgage,  and  these  fees  shall be  secured  by the
Mortgage.

7. ADDITIONAL EVENTS CAUSING POSSIBLE IMMEDIATE PAYMENT IN FULL AFTER NOTICE

That the Lender may  require  Immediate  Payment  in Full,  at the option of the
Lender upon thirty (30) days notice to me.,

a. if any structure or fixture on the Property shall be removed,  demolished, or
substantially altered;

b. if I shall convey the Property or any part thereof;

c. if I fail to comply  with any  requirements  of federal,  state or  municipal
authorities (the Lender, however, may comply and add the expense to the mortgage
debt); or

d. if the Property becomes vacant or non-owner occupied.

8. RETENTION OF INSURANCE PROCEEDS

That the Lender may retain proceeds received from an insurance company following
a loss or damage to the Property and may apply them to reduce the mortgage debt,
or, at the Lender's option, it may pay the proceeds, in whole or part, to me for
the repair or replacement of the loss or damage.

9. APPOINTMENT OF A RECEIVER

That the  Lender  shall be  entitled  to the  appointment  of a  court-appointed
receiver  without notice to me and without regard to whether the Property itself
is adequate security for the mortgage debt.

10. OPTIONAL DISCONTINUANCE OF FORECLOSURE AFTER PAYMENT OF AMOUNT DUE

That in the event the Lender requires  Immediate Payment in Full, the Lender may
discontinue  any lawsuit  brought for foreclosure and sale, but it does not have
to do so. The Lender may elect to continue  to  judgment  despite an offer on my
part to pay the full amount that would have been due (any  attempted  payment by
me would be returned)  and despite my  correction of a failure to keep any of my
other promises or agreements made in the Mortgage.

11. LATE CHARGE ON TOTAL MONTHLY PAYMENT

Any late charge owing under the terms of the Note and Mortgage shall be computed
at the rate of two cents  ($.02) for each  dollar  ($1.00) to the total  monthly
payment that is overdue.


Date:   May 30, 1997
 

                                              s\ Stacy C. Campbell
                                              ________________________
                                              Stacy C. Campbell


                                              s\ Judith A. Campbell
                                              _________________________
                                              Judith A. Campbell

<PAGE>


                            ADJUSTABLE RATE RIDER
                       (3 Year Treasury Index-Rate Caps)

THIS  ADJUSTABLE  RATE RIDER is made this day of May, 1997, and is  incorporated
into and shall be deemed to amend and supplement the Mortgage,  Deed of Trust or
Security  Deed  (the  "Security  Instrument")  of the  same  date  given  by the
undersigned  (the  "Borrower") to secure  Borrower's  Adjustable  Rate Note (the
"Note") to First  National Bank of Rochester (the "Lender") of the same date and
covering the property described in the Security Instrument and located at:

                    604 BEACH AVENUE, ROCHESTER, NEW YORK 14614
                                 (Property Address)

THE NOTE CONTAINS  PROVISIONS  ALLOWING FOR CHANGES IN THE INTEREST RATE AND THE
MONTHLY  PAYMENT.  THE NOTE LIMITS THE AMOUNT THE  BORROWER'S  INTEREST RATE CAN
CHANGE AT ANY ONE TIME AND THE MAXIMUM RATE THE BORROWER'S MUST PAY.

ADDITIONAL  COVENANTS.  In addition to the covenants and agreements  made in the
Security Instrument, Borrower and Lender further covenant and agree as follows:

A. INTEREST RATE AND MONTHLY PAYMENT CHANGES

The Note provides for an initial interest rate of 6.875%.  The Note provides for
changes in the interest rate and the monthly payments, as follows:

4. INTEREST RATE AND MONTHLY PAYMENT CHANGES

(A) Change Dates

The interest rate I will pay may change on the first day of JUNE,  2000,  and on
that day every 36th month thereafter.  Each date on which my interest rate could
change is called a "Change Date."

(B) The Index

Beginning  with the first  Change  Date,  my  interest  rate will be based on an
Index.  The  "Index"  is the  weekly  average  yield on United  States  Treasury
securities  adjusted to a constant  maturity of 3 years, as made availability by
the Federal Reserve Board. The most recent Index figure available as of the date
45 days before each Change Date is called the "Current Index".

If the Index is no longer  available,  the Note  Holder  will choose a new index
that is based upon comparable  information.  The Note Holder will give me notice
of this choice.

(C) Calculation of Changes

Before each Change Date,  the Note Holder will calculate my new interest rate by
adding two and eight hundred seventy five thousandths percentage points (2.875%)
to the  Current  Index.  The Note  Holder  will then  round  the  result of this
addition to the nearest one-eighth of one percentage point (0.125%).  Subject to
the limits  stated in Section 4 (D) below,  this  rounded  amount will be my new
interest rate until the next Change Date.

<PAGE>

The Note Holder will then determine the amount of the monthly payment that would
be  sufficient  to repay the unpaid  principal  that I am expected to owe at the
Change  Date  in  full  on  the  maturity  date  at  my  new  interest  rate  in
substantially  equal payments.  The result of this  calculation  will be the new
amount of my monthly payment.

(D) Limits on Interest Rate Changes

The  Interest  rate I am  required  to pay at the first  Change Date will not be
greater than 8.875% or less than 4.875%. Thereafter, my interest rate will never
be increased or decreased on any single Change Date by more than two  percentage
points  (2.0%) from the rate of interest I have been paying for the preceding 36
months. My interest rate will never be greater than 11.875%.

(E) Effective Date of Change

My new interest  rate will become  effective on each Change Date. I will pay the
new amount of my new monthly payment beginning on the first monthly payment date
after the change date until the amount of my monthly payment changes again.

(F) Notice of Changes

The Note  Holder  will  deliver  or mail to me a  notice  of any  changes  in my
interest rate and the amount of my monthly  payment before the effective date of
any change. The notice will include  information  required by law to be given me
and also  the  title  and  telephone  number  of a person  who will  answer  any
questions I may have regarding the notice.

B. TRANSFER OF THE PROPERTY OR A BENEFICIAL INTEREST IN BORROWER

Uniform  Covenant 17 of the Security  Instrument  is amended to read as follows:
Transfer of the  Property or a Beneficial  Interest in  Borrower.  If all or any
part of the  Property  or any  interest  in it is sold or  transferred  (or if a
beneficial  interest in Borrower is sold or  transferred  and  Borrower is not a
natural  person)  without  Lender's  prior written  consent,  Lender may, at its
option,  require  immediate payment in full of all sums secured by this Security
Instrument. However, this option shall not be exercised by Lender if exercise is
prohibited  by federal law as of the date of this  Security  Instrument.  Lender
also shall not exercise  this option if: (a) Borrower  causes to be submitted to
Lender information  required by Lender to evaluate the intended transferee as if
a new  loan  were  being  made  to the  transferee;  and (b)  Lender  reasonably
determines  that Lender's  security will not be impaired by the loan  assumption
and that the risk of a breach of any  covenant  or  agreement  in this  Security
Instrument is acceptable to Lender.

To the extent permitted by applicable law, Lender may charge a reasonable fee as
a condition to Lender's consent to the loan assumption.  Lender may also require
the transferee to sign an assumption  agreement that is acceptable to Lender and
that obligates the  transferee to keep all the promises and  agreements  made in
the Note and in this  Security  Instrument  unless Lender  releases  Borrower in
writing.

If Lender  exercises  the option to require  immediate  payment in full,  Lender
shall give Borrower notice of acceleration. The notice shall provide a period of
not less than 30 days from the date the  notice is  delivered  or mailed  within
which  Borrower  must pay all  sums  secured  by this  Security  Instrument.  If
Borrower fails to pay these sums prior to the expiration of this period,  Lender
may invoke any remedies  permitted by this Security  Instrument  without further
notice or demand on Borrower.

BY  SIGNING  BELOW,  Borrower  accepts  and  agrees to the  terms and  covenants
contained in this  Adjustable Rate Rider.

s\ Stacy C. Campbell      (Seal)
__________________________
STACY C. CAMPBELL                       Borrower

s\ Judith A. Campbell     (Seal)
__________________________
JUDITH A. CAMPBELL                      Borrower


MULTISTATE ADJUSTABLE RATE RIDER - 3 YEAR ARM Single Family - Fannie Mae/Freddie
Mac Form 3114


                                 DUE ON TRANSFER RIDER


This rider,  is dated May 30, 1997, and is a part of and changes the Mortgage of
same date  which I have  given to secure  my Note of this date (the  "Note")  to
FIRST  NATIONAL  BANK OF  ROCHESTER  (the  "Lender") . The  Mortgage  covers the
property described in the Mortgage and located at:

                 604 Beach Avenue, Rochester, New York 14612
                                  (Address)


NOTICE:  This Rider adds a  provision  to the  Mortgage  allowing  the Lender to
require repayment of the Note in full upon the sale or transfer of the property.

AMENDED PROMISE.

Lender and I agree that Uniform Promise 17 of the Mortgage is changed to read as
follows:

17. AGREEMENTS ABOUT LENDER'S RIGHTS IF THE PROPERTY IS SOLD OR TRANSFERRED.

Lender  may  require  Immediate  Payment in Full,  as that  phrase is defined in
Paragraph 18 below,  if all or any part of the Property,  or if any right in the
property,  is sold or transferred  without  Lender's  prior written  permission.
Lender also may require  Immediate  Payment in Full is a beneficial  interest in
Borrower is sold or transferred and Borrower is not a natural  person.  However,
Lender shall not require  Payment in Full if it is not authorized by Federal Law
to do so.

If Lender chooses to require  immediate Payment in Full under this Paragraph 17,
Lender will send me a notice,  in the manner  described  in  Paragraph 14 above,
which states this requirement.  The notice will give me at least 30 days to make
the required payment.  The 30 day grace period will begin on the date the notice
is mailed or delivered.  If I do not make the payment during that period, Lender
may bring a lawsuit for  "foreclosure and sale" under Paragraph 19 below without
giving me any further notice or demand for payment.

I will continue to be responsible  for all of my promises and  agreements  under
the Note and Mortgage  even if I sell or transfer the Property to someone  else,
unless the Lender releases me in writing from my promises and agreements.

By signing this Rider, I agree to all of the above.

                                    s|  Stacy C. Campbell
                                    ______________________
                                    STACY C. CAMPBELL


                                    s\  Judith A. Campbell
                                    _______________________     
                                    JUDITH A. CAMPBELL


DUE-ON-TRANSFER RIDER - New York - 1-4 Family 3/83 FNMA/FHLMC Plain Language


<PAGE>


                               SCHEDULE A

Premises:  604 Beach Avenue Boat Lots 82-89

County  Town/City District    Sec          Block     Lot
Monroe  Rochester             Rochester              047.21      1        31

ALL THAT  TRACT OR PARCEL OF LAND  situate in the City of  Rochester,  County of
Monroe and State of New York,  known and  described as follows:  Commencing at a
point on the north line of Beach Avenue as now laid out and forty (40) feet east
from the intersection of said north line with the east line of what was formerly
Oak Street; thence westerly along the north line of Beach Avenue sixty-five (65)
feet to the center of what was formerly Oak Street;  thence northerly along said
center line extended  northerly to the north line of the "Terrace" as shown on a
map of "Guilford Bluff" filed in Monroe County Clerk's Office in Liber 7 of Maps
at page 12; thence  easterly along the north line of said  "Terrace"  sixty-five
(65) feet more or less; thence southerly to the place of beginning.

Also boat lots  numbers  82,  83,  84, 86, 87, 88 and 89 as shown on said map of
"Guilford Bluff

ALL THAT TRACT OR PARCEL OF LAND,  situate in the City of  Rochester,  County of
Monroe,  State of New York,  known and  distinguished  as Bath or Boat House Lot
Number Eighty-Five (85) as shown on a map of Guilford Bluff, so called,  made by
R. J. Smith,  Surveyor,  and filed in Monroe County Clerk's Office in Liber 7 of
Maps, at page 12. - 7

Said Bath or Boat House Lot  Eighty-Five  (85)  located on the north side of the
Terrace, on said Guilford Bluff, reference had to said Map, and each lot extends
to a point eight (8) feet from the north line of the Protection Dock, and is ten
(10) feet wide front and rear and about twenty (20) feet

Together  with a right of way in common with other  parties over a strip of land
twenty feet in width  taken from the west end of Lots 58 and 59 of the  Guilford
Bluff Tract which was conveyed by Halbert S.  Greenleaf  and wife to the Village
of Charlotte  by Deed dated August 29, 1901 and recorded  June 3, 1902 in Monroe
County Clerk's Office in Liber 651 of Deeds at page 429.

Together  with all the  right,  title and  interest  of said Leo V.  Lyons,  and
Katharine A. Lyons,  his wife,  in the strip of land  described in an instrument
recorded in said Clerk's  Office in Liber 599 of Deeds at page 280,  lying north
of Beach Avenue and south of the Bath or Boat House Lots in said tract.

For Conveyancing Only

Together with all right,  title and interest of, in and to any streets and roads
abutting the above described premises.

Our policies of title insurance include such buildings and improvements  thereon
which by law constitutes real property,  unless  specifically  excepted therein.
Now is the time to  determine  whether we have  examined all of the property and
easements which you desire to be insured: if there are appurtenant  easements to
be insured,  please  request  such  insurance.  In some  cases,  our rate manual
provides for an additional charge for such insurance.