8-K

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    FORM 8-K


                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

        Date of Report (Date of earliest event reported) October 1, 2004
                                                         ---------------

                             THE QUIGLEY CORPORATION
               (Exact Name of Registrant as Specified in Charter)


            Nevada                      0-21617                  23-2577138
            ------                      -------                  ----------
(State or Other Jurisdiction         (Commission             (IRS Employer
        of Incorporation)            File Number)            Identification No.)


   Kells Building, 621 Shady Retreat Road, P.O. Box 1349, Doylestown, PA 18901
   ---------------------------------------------------------------------------
               (Address of Principal Executive Offices)              (Zip Code)


        Registrant's telephone number, including area code (215) 345-0919
                                                           --------------

                                       N/A
          -------------------------------------------------------------
          (Former Name or Former Address, if Changed Since Last Report)


     Check the  appropriate  box below if the Form 8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

     |_| Written  communications  pursuant to Rule 425 under the  Securities Act
(17 CFR 230.425)

     |_| Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)

     |_|  Pre-commencement  communications  pursuant to Rule 14d-2(b)  under the
Exchange Act (17 CFR 240.14d-2(b))

     |_|  Pre-commencement  communications  pursuant to Rule 13e-4(c)  under the
Exchange Act (17 CFR 240.13e-4(c))





ITEM 1.01   ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

     In  connection  with the closing on October 1, 2004 (the  "Closing") of the
previously  announced  purchase by The Quigley  Corporation  (the  "Company") of
substantially all of the assets of JOEL, Inc. ("JOEL"), the Company entered into
an addendum (the  "Addendum") with JOEL to the asset purchase and sale agreement
by and between JOEL and the Company dated August 18, 2004 (the "Agreement"). The
Addendum  primarily sets forth the procedure for  determining  the allocation of
the purchase price among certain assets in the event JOEL elects to question the
allocation established by the Company's independent appraisals.

     In connection with the Closing, the Company also executed a Term Note dated
October 1, 2004 in the  amount of $3.0  million  payable  to PNC Bank,  National
Association (the "Note"). As collateral,  the Note is secured by (i) an Open-End
Mortgage and Security  Agreement dated October 1, 2004 on real property  located
in Lebanon,  Pennsylvania (the "Lebanon Mortgage") and (ii) an Open-End Mortgage
and  Security  Agreement  dated  October  1, 2004 on real  property  located  in
Elizabethtown, Pennsylvania (the "Elizabethtown Mortgage").

     In  addition,  concurrently  with the Closing,  the Company  entered into a
Registration  Rights  Agreement with the  stockholders  of JOEL dated October 1,
2004 (the  "Registration  Rights  Agreement")  to register the resale of 113,097
shares of the Company's common stock that were issued to such  stockholders (the
"Shares").  The  Registration  Rights  Agreement  requires the Company to file a
registration  statement with the Securities and Exchange  Commission (the "SEC")
for the resale of the Shares by such stockholders  within twenty days of October
1, 2004 and to have such registration  statement  declared  effective within 120
days of October 1, 2004.

     On October 1, 2004 and in connection with the Closing, the Company's wholly
owned subsidiary,  Quigley  Manufacturing  Inc.,  entered into (i) an employment
agreement  with David B.  Deck,  the former  [president]  of JOEL,  at an annual
salary of $125,000 and (ii) an employment  agreement with David Hess, the former
[chief   operating   officer]  of  JOEL,   at  an  annual   salary  of  $104,000
(collectively,  the "Employment Agreements") for the period from October 1, 2004
through December 31, 2006. The payment and performance of Quigley  Manufacturing
Inc.  under  the  Employment   Agreements  is  unconditionally  and  irrevocably
guaranteed by the Company.

     The foregoing  summary of the terms of the Addendum,  the Note, the Lebanon
Mortgage,  the  Elizabethtown  Mortgage,  the  Registration  Statement  and  the
Employment  Agreements  does not purport to be complete  and is qualified in its
entirety by reference to the full text of such  agreements,  copies of which are
attached  hereto as Exhibits 10.1,  10.2,  10.3,  10.4,  10.5, 10.6 and 10.7 and
incorporated herein by reference.

ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.

     On October 5, 2004,  the Company  issued a press release  announcing it had
closed the previously  announced  purchase of substantially all of the assets of
JOEL for  approximately  $5.1 million,  which  includes $4.1 million in cash and
$1.0 million of the Company's  common stock, on October 1, 2004. The transaction
was completed  pursuant to an asset  purchase and sale  agreement by and between
JOEL  and the  Company  dated  August  18,  2004  (the  "Agreement")  which  was





previously  filed as Exhibit 10.1 to the  Company's  Current  Report on Form 8-K
dated August 18, 2004 and filed with the Securities  and Exchange  Commission on
August 20, 2004.

     The Company funded the $4.1 million cash portion of the purchase price with
proceeds from the Note and through its current working  capital.  To satisfy the
common stock component of the purchase price,  the Company issued 113,097 shares
of its common stock to the stockholders of JOEL. Pursuant to the Agreement,  the
number of shares to be issued was determined by the average closing price of the
Company's common stock for the period September 23, 2003 to September 23, 2004.

     Pursuant to the Agreement,  the Company acquired  substantially  all of the
assets of JOEL, including inventory and land, buildings, machinery and equipment
of  two  manufacturing   facilities   located  in  Lebanon  and   Elizabethtown,
Pennsylvania.

     JOEL is a FDA approved  contract  manufacturer  of lozenges and other candy
food  products  that  has  been  the  exclusive  manufacturer  of the  Company's
Cold-Eeze(R) Lozenge since its launch in 1995. The terms of the transaction were
determined  by  arms-length  negotiations  between  the  Company,  JOEL  and the
stockholders of JOEL.

     A copy  of the  Company's  press  release  announcing  the  closing  of the
acquisition  of  substantially  all of the assets of JOEL is attached  hereto as
Exhibit 99.1 and is incorporated herein by reference.

ITEM 2.03  CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION  UNDER  AN
           OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.

     On October 1, 2004, the Company incurred a direct  financial  obligation in
the amount of $3.0 million payable to PNC Bank,  National  Association  that was
used to  finance  the  majority  of the cash  portion of the  purchase  price of
substantially  all of the assets of JOEL. As collateral,  the Note is secured by
mortgages  on  real  property  located  in  each of  Lebanon,  Pennsylvania  and
Elizabethtown,  Pennsylvania.  Depending on the  Company's  election of interest
rate  options  for each one,  two,  three or six month  period,  the loan  bears
interest  at either the Prime Rate or LIBOR plus 200 basis  points.  The loan is
payable in eighty four equal monthly  principal  payments of $35,714  commencing
November  1, 2004.  Accrued  interest  is payable  monthly  under the Prime Rate
option or at the end of the one, two,  three or six month period  elected by the
Company for the LIBOR plus 200 basis points option.

     The foregoing  summary of the terms of the Note,  the Lebanon  Mortgage and
the  Elizabethtown  Mortgage does not purport to be complete and is qualified in
its entirety by reference to the full text of such  agreements,  copies of which
are attached hereto as Exhibits 10.2, 10.3 and 10.4 and  incorporated  herein by
reference.

ITEM 9.01  FINANCIAL STATEMENTS AND EXHIBITS.

     (a)  Financial Statements of Businesses Acquired.





          It is  currently  impractical  to  provide  the  financial  statements
          required  by Rule  3.05 of  Regulation  S-X.  The  required  financial
          statements will be filed as soon as they are available,  but not later
          than 71 calendar  days after the date on which this Current  Report on
          Form 8-K must be filed.

     (b)  Pro Forma Financial Information.

          It is  currently  impractical  to  provide  the  pro  forma  financial
          information  required by Article 11 of  Regulation  S-X. The pro forma
          financial  information  will be filed as soon as it is available,  but
          not later than 71 calendar  days after the date on which this  Current
          Report on Form 8-K must be filed.

     (b)  Exhibits.

          EXHIBIT NO.             DESCRIPTION

          10.1                    Addendum  dated October 1, 2004 by and between
                                  the Company and JOEL to the asset purchase and
                                  sale agreement dated August 18, 2004.

          10.2                    Term Note dated  October 1, 2004 in the amount
                                  of $3.0  million  executed  by the  Company in
                                  favor of PNC Bank, National Association.

          10.3                    Open-End Mortgage and Security Agreement dated
                                  October  1, 2004 on real  property  located in
                                  Lebanon,   Pennsylvania  executed  by  Quigley
                                  Manufacturing  Inc.  in  favor  of  PNC  Bank,
                                  National Association.

          10.4                    Open-End Mortgage and Security Agreement dated
                                  October  1, 2004 on real  property  located in
                                  Elizabethtown,    Pennsylvania   executed   by
                                  Quigley  Manufacturing  Inc.  in  favor of PNC
                                  Bank, National Association.

          10.5                    Registration Rights Agreement dated October 1,
                                  2004  by  and  among  the   Company   and  the
                                  shareholders signatory thereto.

          10.6                    Employment  Agreement  dated  October  1, 2004
                                  between Quigley  Manufacturing  Inc. and David
                                  B. Deck.

          10.7                    Employment  Agreement  dated  October  1, 2004
                                  between Quigley  Manufacturing  Inc. and David
                                  Hess.

          99.1                    Press Release dated October 5, 2004.





                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.



                                       THE QUIGLEY CORPORATION
                                             (Registrant)

Date:       October 7, 2004
                                       By: /s/ George J. Longo
                                          --------------------------------------
                                          Name:  George J. Longo
                                          Title: Vice President and Chief
                                                 Financial Officer





                                  EXHIBIT INDEX

EXHIBIT NO.       DESCRIPTION

10.1              Addendum  dated October 1, 2004 by and between the Company and
                  JOEL to the asset purchase and sale agreement dated August 18,
                  2004.

10.2              Term Note dated  October 1, 2004 in the amount of $3.0 million
                  executed  by  the  Company  in  favor  of PNC  Bank,  National
                  Association.

10.3              Open-End Mortgage and Security Agreement dated October 1, 2004
                  on real property located in Lebanon,  Pennsylvania executed by
                  Quigley  Manufacturing  Inc.  in favor of PNC  Bank,  National
                  Association.

10.4              Open-End Mortgage and Security Agreement dated October 1, 2004
                  on  real  property  located  in  Elizabethtown,   Pennsylvania
                  executed by Quigley  Manufacturing  Inc. in favor of PNC Bank,
                  National Association.

10.5              Registration  Rights  Agreement  dated  October 1, 2004 by and
                  among the Company and the shareholders signatory thereto.

10.6              Employment  Agreement  dated  October 1, 2004 between  Quigley
                  Manufacturing Inc. and David B. Deck.


10.7              Employment  Agreement  dated  October 1, 2004 between  Quigley
                  Manufacturing Inc. and David Hess.

99.1              Press Release dated October 5, 2004.

EX-10

                                                                    Exhitit 10.1

                      ADDENDUM TO ASSET PURCHASE AGREEMENT


     This Addendum is made the 1st day of October 2004 by and between THE
QUIGLEY CORPORATION ("Buyer") and JOEL, INC. ("Seller") with respect to the
Asset Purchase Agreement between the parties dated August 18, 2004 ("APA"):

     1. The parties wish to confirm that (i) the entire consideration referenced
in section 3.1.2 of the APA is due and payable to Seller, (ii) the shares of
Buyer's stock referenced in section 3.1.2 of the APA are being issued to
Seller's shareholders directly, at Seller's request, as part of Seller's plan of
liquidation, and (iii) Seller will assign its right to receive stock of Buyer to
Seller's shareholders on or before the Closing Date.

     2. The parties agree to add the following paragraphs collectively as
paragraph 3.2.1 to the APA:

          3.2.1. Buyer has obtained qualified independent appraisals of land for
$528,000, building and improvements for $1,342,000, and machinery and equipment
including laboratory equipment and office furniture for $4,086,000. Buyer
proposes allocation of purchase price of $1,318,670 for land, building, and
improvements and $2,881,330 for machinery and equipment as defined above.
Inventory remains at $900,000. The above would constitute the allocation of
purchase price based upon Buyer's appraisals under Paragraph 3.2. Buyer shall
provide to Seller a memorandum by October 11, 2004 by fax and/or e-mail
outlining Buyer's method of allocation of the purchase price. Buyer's memorandum
shall include an analysis of the statutes and/or regulations requiring
appraisals as a condition of Buyer's acquiring the assets purchased under this
Agreement. Buyer shall also provide an analysis of why machinery and equipment
is valued on the basis of continued use as opposed to the valuation provided by
American Appraisal Associates dated August 19, 2004 and reflecting a valuation
amount of $1,958,000 (liquidation value). Buyer shall also provide an analysis
as to the methodology by which real estate was valued under its appraisals, and
Buyer will provide an analysis as to why Buyer must use the same valuations for
reporting to the Internal Revenue Service as it uses for its Audited Financials
as a Public Company under the Securities Exchange Commission Rules and
Regulations and the Requirements of the Sarbanes-Oxley Act.

          Buyer and Seller agree that at Seller's expense Seller may elect to
obtain qualified independent appraisals for land, building and improvements
and/or machinery and equipment. Seller's election to obtain such appraisals must
be made by October 20, 2004. In the event Seller fails to elect to obtain such
appraisals by October 20, 2004, the allocations set forth above will be the
final allocations under Paragraph 3.2.





          Should Seller at its own expense elect to conduct the appraisals the
appraisals must be completed on or before November 22, 2004. If the appraisals
vary from the appraisals obtained by Buyer, Buyer's and Seller's appraisers
shall meet and determine whether they can agree on valuations for land, building
and equipment and machinery and equipment as set forth above by November 29,
2004. If they can agree on such valuations, Seller and Buyer shall be bound by
such agreement. In the event that the appraisers cannot agree on such
valuations, the appraisers shall appoint a qualified independent appraiser to
determine valuations for land, building and/or equipment and machinery. Buyer
and Seller agree that the appraisers shall select this third appraiser by
October 20, 2004 whose fees and costs will be as follows: $100.00 by the Seller
and the remainder by the Buyer.

          The third appraiser shall appraise the assets referenced above and
such appraisal shall be completed by November 30, 2004. Buyer and Seller shall
be bound by this appraisal in the event that Buyer's and Seller's appraisers
referenced in the preceding paragraph fail to agree on valuations.

          In the event Buyer does not provide its memorandum to Seller by
October 11, 2004, all other dates shall be extended, day for day, by the number
of days beyond October 11, 2004, which pass before delivery of the memorandum.

     3. The parties agree that the APA shall otherwise remain unchanged and in
full force and effect.


                                                THE QUIGLEY CORPORATION


                                                By: /s/ Guy J. Quigley
                                                   -----------------------------


                                                JOEL, INC.


                                                By: /s/ David B. Deck
                                                   -----------------------------

EX-10

                                                                    Exhibit 10.2


TERM NOTE                                                      [GRAPHIC OMITTED]

$3,000,000                                                       October 1, 2004

FOR VALUE RECEIVED, THE QUIGLEY CORPORATION (the "BORROWER"), with an address at
621 N. Shady Retreat Road, Doylestown, PA 18901, promises to pay to the order of
PNC BANK,  NATIONAL  ASSOCIATION  (the  "BANK"),  in lawful  money of the United
States of America in immediately  available funds at its offices located at 1600
Market Street, Philadelphia, PA 19103, or at such other location as the Bank may
designate  from  time to  time,  the  principal  sum of  THREE  MILLION  DOLLARS
($3,000,000),  together  with  interest  accruing on the  outstanding  principal
balance from the date hereof, all as provided below.

1. RATE OF INTEREST. Amounts outstanding under this Note will bear interest at a
rate or rates per annum as may be selected by the Borrower from the interest
rate options set forth below (each, an "OPTION"):

     (i) BASE RATE  OPTION.  A rate of interest  per annum which is at all times
equal to the Prime Rate ("BASE  RATE").  For  purposes  hereof,  the term "PRIME
RATE" shall mean the rate  publicly  announced  by the Bank from time to time as
its prime rate. The Prime Rate is determined  from time to time by the Bank as a
means of pricing some loans to its borrowers.  The Prime Rate is not tied to any
external rate of interest or index, and does not necessarily  reflect the lowest
rate of  interest  actually  charged  by the  Bank to any  particular  class  or
category of customers.  If and when the Prime Rate changes, the rate of interest
with  respect to any amounts to which the Base Rate Option  applies  will change
automatically without notice to the Borrower,  effective on the date of any such
change.  There are no required  minimum  interest  periods  for amounts  bearing
interest under the Base Rate Option.

     (ii) LIBOR OPTION. A rate per annum equal to (A) LIBOR PLUS (B) two hundred
(200) basis points (2%), for the applicable LIBOR Interest Period.

For purposes hereof, the following terms shall have the following meanings:

     "BUSINESS  DAY" shall  mean any day other  than a  Saturday  or Sunday or a
     legal holiday on which  commercial  banks are authorized or required by law
     to be closed for business in Philadelphia, Pennsylvania.

     "LIBOR"  shall mean,  with  respect to any amount to which the LIBOR Option
     applies for the  applicable  LIBOR Interest  Period,  the interest rate per
     annum  determined by the Bank by dividing (the resulting  quotient  rounded
     upwards,  if  necessary,  to the  nearest  1/16th  of 1%) (i)  the  rate of
     interest  determined  by the Bank in accordance  with its usual  procedures
     (which  determination  shall be conclusive absent manifest error) to be the
     eurodollar  rate two (2) Business Days prior to the first day of such LIBOR
     Interest  Period for such amount and having a borrowing date and a maturity
     comparable  to such LIBOR  Interest  Period by (ii) a number  equal to 1.00
     minus the LIBOR Reserve Percentage.

     "LIBOR INTEREST PERIOD" shall mean, with respect to any amount to which the
     LIBOR Option applies,  the period of one (1), two (2), three (3) or six (6)
     months as selected  by the  Borrower  on the date of  disbursement  of such
     amount (or the date of conversion of any amount to the LIBOR Option, as the
     case  may  be)  and  each  successive   period  selected  by  the  Borrower
     thereafter;  PROVIDED THAT,  (i) if a LIBOR Interest  Period would end on a
     day  which  is not a  Business  Day,  it shall  end on the next  succeeding





     Business Day unless such day falls in the next succeeding calendar month in
     which  case the  LIBOR  Interest  Period  shall  end on the next  preceding
     Business Day, (ii) the Borrower may not select a LIBOR Interest Period that
     would end on a day after the Maturity Date (as  hereinafter  defined),  and
     (iii) any LIBOR  Interest  Period that begins on the last Business Day of a
     calendar  month (or a day for which there is no  numerically  corresponding
     day in the last calendar month of such LIBOR Interest  Period) shall end on
     the last  Business Day of the last  calendar  month of such LIBOR  Interest
     Period.

     "LIBOR RESERVE  PERCENTAGE" shall mean the maximum effective  percentage in
     effect on such day as  prescribed  by the Board of Governors of the Federal
     Reserve System (or any successor) for determining the reserve  requirements
     (including,  without  limitation,   supplemental,  marginal  and  emergency
     reserve  requirements)  with  respect to  eurocurrency  funding  (currently
     referred to as "Eurocurrency liabilities").

LIBOR shall be adjusted  with  respect to any amounts to which the LIBOR  Option
applies  on and as of the  effective  date of any  change in the  LIBOR  Reserve
Percentage.  The Bank  shall  give  prompt  notice to the  Borrower  of LIBOR as
determined  or adjusted in accordance  herewith,  which  determination  shall be
conclusive absent manifest error.

If the Bank determines (which determination shall be final and conclusive) that,
by reason of circumstances  affecting the eurodollar market generally,  deposits
in dollars (in the  applicable  amounts)  are not being  offered to banks in the
eurodollar  market for the  selected  term,  or adequate  means do not exist for
ascertaining  LIBOR,  then the Bank shall give notice  thereof to the  Borrower.
Thereafter,  until the Bank notifies the Borrower that the circumstances  giving
rise to such  suspension  no longer  exist,  (a) the  availability  of the LIBOR
Option  shall be  suspended,  and (b) the  interest  rate for all  amounts  then
bearing  interest under the LIBOR Option shall be converted at the expiration of
the then current LIBOR Interest Period(s) to the Base Rate.

In addition,  if, after the date of this Note, the Bank shall  determine  (which
determination shall be final and conclusive) that any enactment, promulgation or
adoption of or any change in any  applicable  law,  rule or  regulation,  or any
change  in  the  interpretation  or  administration  thereof  by a  governmental
authority,  central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank with any guideline, request or
directive  (whether  or not  having  the  force of law) of any  such  authority,
central bank or comparable  agency shall make it unlawful or impossible  for the
Bank to make or maintain or fund loans based on LIBOR, the Bank shall notify the
Borrower. Upon receipt of such notice, until the Bank notifies the Borrower that
the  circumstances  giving rise to such  determination  no longer apply, (a) the
availability  of the LIBOR Option shall be suspended,  and (b) the interest rate
on all amounts then bearing  interest  under the LIBOR Option shall be converted
to the Base Rate either (i) on the last day of the then current  LIBOR  Interest
Period(s) if the Bank may  lawfully  continue to maintain or fund loans based on
LIBOR to such day, or (ii) immediately if the Bank may not lawfully  continue to
maintain or fund loans based on LIBOR.

The foregoing  notwithstanding,  it is  understood  that the Borrower may select
different Options to apply simultaneously to different portions of this Note and
may select up to three (3) different interest periods to apply simultaneously to
different  portions  of this Note  bearing  interest  under  the  LIBOR  Option.
Interest  hereunder  will be calculated  based on the actual number of days that
principal is  outstanding  over a year of 360 days. In no event will the rate of
interest hereunder exceed the maximum rate allowed by law.

2. INTEREST RATE ELECTION.  Subject to the terms and conditions of this Note, at
the end of  each  interest  period  applicable  to any  amounts  hereunder,  the
Borrower may renew the Option applicable to such amounts or convert such amounts
to a different  Option;  PROVIDED THAT,  during any period in which any Event of
Default (as  hereinafter  defined) has occurred and is  continuing,  any amounts
bearing interest under the LIBOR Option shall, at the Bank's sole discretion, be

                                       2




converted at the end of the applicable  LIBOR  Interest  Period to the Base Rate
and the LIBOR  Option  will not be  available  to Borrower  with  respect to the
conversion  or renewal of any other amounts until such Event of Default has been
cured by the Borrower or waived by the Bank.  The Borrower shall notify the Bank
of each election of an Option,  each conversion from one Option to another,  the
amount of the  portions  hereunder  to be  allocated  to each  Option  and where
relevant the interest periods  therefor.  In the case of converting to the LIBOR
Option, such notice shall be given at least three (3) Business Days prior to the
commencement of any LIBOR Interest Period. If no interest period is specified in
any such notice for an amount that is to bear  interest  under the LIBOR Option,
the Borrower  shall be deemed to have  selected a LIBOR  Interest  Period of one
month's  duration.  If no notice of  election,  conversion  or renewal is timely
received by the Bank with respect to any amount hereunder, the Borrower shall be
deemed to have elected the Base Rate Option therefor. Any such election shall be
promptly confirmed in writing by such method as the Bank may require.

3. PAYMENT OF INTEREST.  The Borrower  shall pay accrued  interest on the unpaid
principal  balance of this Note in arrears:  (a) for amounts  hereunder  bearing
interest  under the Base Rate Option,  on the first day of each month during the
term hereof,  (b) for amounts hereunder bearing interest under the LIBOR Option,
on the last day of the respective LIBOR Interest Period for such amounts, (c) if
any LIBOR  Interest  Period is longer  than three (3)  months,  then also on the
three (3) month  anniversary of such interest  period and every three (3) months
thereafter,  and  (d) for all  outstanding  amounts,  at  maturity,  whether  by
acceleration of this Note or otherwise, and after maturity, on demand until paid
in full.

4. PAYMENT OF PRINCIPAL. Principal shall be due and payable in eighty-three (83)
equal  consecutive  monthly  installments  in the  amount  of  $35,714.29  each,
commencing  on  November 1, 2004 and  continuing  on the first day of each month
thereafter,  and a final  installment  of  $35,713.93  on October  1, 2011.  Any
outstanding  principal and accrued  interest shall be due and payable in full on
October 1, 2011 (the "MATURITY DATE").

If any payment under this Note shall become due on a Saturday,  Sunday or public
holiday under the laws of the State where the Bank's office  indicated  above is
located, such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in  computing  interest in  connection  with
such payment.  The Borrower hereby  authorizes the Bank to charge the Borrower's
deposit  account  at the  Bank for any  payment  when  due  hereunder.  Payments
received  will be applied to charges,  fees and expenses  (including  attorneys'
fees),  accrued interest and principal in any order the Bank may choose,  in its
sole discretion.

5. LATE  PAYMENTS;  DEFAULT RATE.  If the Borrower  fails to make any payment of
principal,  interest or other amount  coming due pursuant to the  provisions  of
this Note within  fifteen (15)  calendar  days of the date due and payable,  the
Borrower  also shall pay to the Bank a late  charge  equal to the lesser of five
percent (5%) of the amount of such payment or $100.00 (the "LATE CHARGE").  Such
fifteen (15) day period shall not be construed in any way to extend the due date
of  any  such  payment.  Upon  maturity,  whether  by  acceleration,  demand  or
otherwise,  and at the Bank's option upon the occurrence of any Event of Default
(as hereinafter defined) and during the continuance thereof, amounts outstanding
under  this Note shall bear  interest  at a rate per annum  (based on the actual
number of days that  principal  is  outstanding  over a year of 360 days)  which
shall be three  percentage  points (3%) in excess of the interest rate in effect
from time to time under this Note but not more than the maximum  rate allowed by
law (the "DEFAULT  RATE").  The Default Rate shall  continue to apply whether or
not judgment shall be entered on this Note. Both the Late Charge and the Default
Rate are imposed as  liquidated  damages for the purpose of defraying the Bank's
expenses  incident to the handling of delinquent  payments,  but are in addition
to,  and  not in lieu  of,  the  Bank's  exercise  of any  rights  and  remedies
hereunder,  under the other Loan Documents or under applicable law, and any fees
and expenses of any agents or attorneys which the Bank may employ.  In addition,

                                       3




the Default Rate  reflects the  increased  credit risk to the Bank of carrying a
loan that is in default.  The  Borrower  agrees that the Late Charge and Default
Rate are reasonable  forecasts of just  compensation  for anticipated and actual
harm incurred by the Bank,  and that the actual harm incurred by the Bank cannot
be estimated with certainty and without difficulty.

6. PREPAYMENT.  The Borrower shall have the right to prepay any amount hereunder
at any time and from time to time,  in whole or in part;  subject,  however,  to
payment of any break funding indemnification amounts owing pursuant to paragraph
7 below.

7. YIELD PROTECTION;  BREAK FUNDING  INDEMNIFICATION.  The Borrower shall pay to
the Bank on written demand  therefor,  together with the written evidence of the
justification  therefor, all direct costs incurred,  losses suffered or payments
made by Bank by reason of any change in law or regulation or its  interpretation
imposing any reserve,  deposit,  allocation of capital,  or similar  requirement
(including  without  limitation,  Regulation  D of the Board of Governors of the
Federal  Reserve  System)  on the  Bank,  its  holding  company  or any of their
respective  assets.  In  addition,  the Borrower  agrees to  indemnify  the Bank
against any liabilities, losses or expenses (including, without limitation, loss
of margin, any loss or expense sustained or incurred in liquidating or employing
deposits from third parties, and any loss or expense incurred in connection with
funds  acquired to effect,  fund or maintain any amounts  hereunder (or any part
thereof)  bearing  interest  under the LIBOR Option  which the Bank  sustains or
incurs as a consequence of either (i) the  Borrower's  failure to make a payment
on the due date thereof,  (ii) the Borrower's  revocation  (expressly,  by later
inconsistent  notices or  otherwise)  in whole or in part of any notice given to
Bank to request, convert, renew or prepay any amounts bearing interest under the
LIBOR Option, or (iii) the Borrower's payment or prepayment  (whether voluntary,
after  acceleration  of the maturity of this Note or otherwise) or conversion of
any  amounts  bearing  interest  under the LIBOR  Option on a day other than the
regularly  scheduled  due date  therefor.  A notice  as to any  amounts  payable
pursuant to this  paragraph  given to the  Borrower  by the Bank  shall,  in the
absence of manifest error,  be conclusive and shall be payable upon demand.  The
Borrower's  indemnification  obligations  hereunder shall survive the payment in
full of all amounts payable hereunder.

8.  OTHER  LOAN  DOCUMENTS.  This  Note is issued  in  connection  with a letter
agreement  or loan  agreement  between the  Borrower  and the Bank,  dated on or
before the date hereof,  and the other agreements and documents  executed and/or
delivered in connection therewith or referred to therein, the terms of which are
incorporated  herein by reference (as amended,  modified or renewed from time to
time,  collectively  the "LOAN  DOCUMENTS"),  and is secured by the property (if
any) described in the Loan Documents and by such other  collateral as previously
may have been or may in the future be granted to the Bank to secure this Note.

9. EVENTS OF DEFAULT.  The  occurrence  of any of the  following  events will be
deemed to be an "EVENT OF DEFAULT"  under this Note:  (i) the  nonpayment of any
principal  under  this Note when due or of any  interest  or other  indebtedness
under  this Note  within  three (3) days  following  the date when due;  (ii)the
Borrower's  failure to perform any of its other  obligations  hereunder and such
failure continues for twenty (20) days following notice thereof from the Bank to
the  Borrower;  (iii) any Event of Default  (as defined in any of the other Loan
Documents)  or any default under any of the other Loan  Documents  that does not
have a defined  set of "Events of  Default"  and the lapse of any notice or cure
period  provided  therein,  or any  Obligor's  failure to observe or perform any
covenant or other agreement,  under or contained in any other document now or in
the future  evidencing  or securing  any debt,  liability or  obligation  of any
Obligor to the Bank and the lapse of any notice or cure period provided therein;
(iv) the  filing by or against  any  Obligor of any  proceeding  in  bankruptcy,
receivership,  insolvency,  reorganization,   liquidation,   conservatorship  or
similar  proceeding (and, in the case of any such proceeding  instituted against
any Obligor,  such  proceeding  is not dismissed or stayed within 30 days of the
commencement  thereof,  provided that the Bank shall not be obligated to advance
additional  funds  hereunder  during such  period);  (v) any  assignment  by any

                                       4




Obligor for the benefit of creditors,  or any levy,  garnishment,  attachment or
similar  proceeding is instituted against any property of any Obligor held by or
deposited with the Bank;  (vi) a default with respect to any other  indebtedness
of any Obligor for borrowed  money, if the effect of such default is to cause or
permit the  acceleration of such debt; (vii) the commencement of any foreclosure
or  forfeiture  proceeding,  execution  or  attachment  against  any  collateral
securing the obligations of any Obligor to the Bank; (viii) the entry of a final
judgment  against any Obligor and the failure of such Obligor to  discharge  the
judgment  within ten (10) days of the entry thereof;  (ix) any material  adverse
change in any Obligor's  business,  assets,  operations,  financial condition or
results of operations; (x) any Obligor ceases doing business as a going concern;
or (xi) any  representation  or warranty  made by any Obligor to the Bank in any
Loan Document or any other documents now or in the future evidencing or securing
the obligations of any Obligor to the Bank, is false, erroneous or misleading in
any material respect.  As used herein, the term "OBLIGOR" means any Borrower and
any guarantor of, or any pledgor,  mortgagor or other person or entity providing
collateral  support for, the Borrower's  obligations to the Bank existing on the
date of this Note or arising in the future.

Upon  the  occurrence  of an Event of  Default:  (a) the Bank  shall be under no
further  obligation  to make  advances  hereunder;  (b) if an Event  of  Default
specified in clause (iii) or (iv) above shall occur,  the outstanding  principal
balance and accrued  interest  hereunder  together with any  additional  amounts
payable  hereunder shall be immediately due and payable without demand or notice
of any kind;  (c) if any other Event of Default  shall  occur,  the  outstanding
principal  balance and accrued interest  hereunder  together with any additional
amounts payable hereunder,  at the Bank's option and without demand or notice of
any kind, may be accelerated and become immediately due and payable;  (d) at the
Bank's option, this Note will bear interest at the Default Rate from the date of
the occurrence of the Event of Default;  and (e) the Bank may exercise from time
to time any of the rights and  remedies  available  under the Loan  Documents or
under applicable law.

10. RIGHT OF SETOFF.  In addition to all liens upon and rights of setoff against
the Borrower's money, securities or other property given to the Bank by law, the
Bank shall have,  with respect to the  Borrower's  obligations to the Bank under
this Note and to the extent permitted by law, a contractual  possessory security
interest in and a contractual  right of setoff against,  and the Borrower hereby
grants the Bank a security interest in, and hereby assigns,  conveys,  delivers,
pledges  and  transfers  to the Bank,  all of the  Borrower's  right,  title and
interest in and to, all of the Borrower's deposits, moneys, securities and other
property now or hereafter in the possession of or on deposit with, or in transit
to, the Bank or any other  direct or indirect  subsidiary  of The PNC  Financial
Services Group,  Inc.,  whether held in a general or special account or deposit,
whether  held  jointly with someone  else,  or whether held for  safekeeping  or
otherwise,  excluding,  however, all IRA, Keogh, and trust accounts.  Every such
security  interest and right of setoff may be exercised  without  demand upon or
notice to the Borrower.  Every such right of setoff shall be deemed to have been
exercised  immediately  upon the  occurrence  of an Event of  Default  hereunder
without any action of the Bank,  although  the Bank may enter such setoff on its
books and records at a later time.

11.  INDEMNITY.  The Borrower  agrees to indemnify each of the Bank,  each legal
entity,  if any, who controls,  is controlled by or is under common control with
the Bank, and each of their  respective  directors,  officers and employees (the
"INDEMNIFIED  PARTIES"),  and to hold each  Indemnified  Party harmless from and
against any and all claims, damages, losses, liabilities and expenses (including
all fees and charges of internal or external  counsel with whom any  Indemnified
Party may consult and all expenses of litigation and preparation therefor) which
any Indemnified Party may incur or which may be asserted against any Indemnified
Party by any person,  entity or governmental  authority (including any person or
entity claiming  derivatively on behalf of the Borrower),  in connection with or
arising out of or  relating  to the  matters  referred to in this Note or in the
other Loan  Documents or the use of any advance  hereunder,  whether (a) arising

                                       5




from or incurred in connection with any breach of a representation,  warranty or
covenant by the  Borrower,  or (b) arising  out of or  resulting  from any suit,
action, claim, proceeding or governmental investigation,  pending or threatened,
whether  based on  statute,  regulation  or  order,  or  tort,  or  contract  or
otherwise,  before any court or governmental authority;  PROVIDED, HOWEVER, that
the  foregoing  indemnity  agreement  shall  not apply to any  claims,  damages,
losses,  liabilities and expenses solely  attributable to an Indemnified Party's
gross negligence or willful  misconduct.  The indemnity  agreement  contained in
this Section shall survive the termination of this Note,  payment of any amounts
hereunder  and  the  assignment  of  any  rights  hereunder.  The  Borrower  may
participate at its expense in the defense of any such action or claim.

12. MISCELLANEOUS. All notices, demands, requests, consents, approvals and other
communications  required or permitted  hereunder  ("NOTICES") must be in writing
(except as may be agreed otherwise above with respect to borrowing requests) and
will be effective upon receipt.  Notices may be given in any manner to which the
parties may separately agree,  including  electronic mail.  Without limiting the
foregoing,  first-class  mail,  facsimile  transmission  and commercial  courier
service  are  hereby  agreed  to  as  acceptable  methods  for  giving  Notices.
Regardless  of the manner in which  provided,  Notices  may be sent to a party's
address as set forth above or to such other address as any party may give to the
other for such purpose in accordance with this  paragraph.  No delay or omission
on the Bank's part to exercise any right or power arising  hereunder will impair
any such  right or power or be  considered  a waiver of any such right or power,
nor will the Bank's  action or  inaction  impair  any such  right or power.  The
Bank's  rights and remedies  hereunder are  cumulative  and not exclusive of any
other rights or remedies which the Bank may have under other agreements,  at law
or in  equity.  No  modification,  amendment  or waiver  of, or  consent  to any
departure by the  Borrower  from,  any  provision of this Note will be effective
unless  made in a writing  signed by the Bank,  and then such  waiver or consent
shall be effective  only in the specific  instance and for the purpose for which
given. The Borrower agrees to pay on demand, to the extent permitted by law, all
costs and expenses incurred by the Bank in the enforcement of its rights in this
Note and in any security therefor,  including without limitation reasonable fees
and expenses of the Bank's counsel. If any provision of this Note is found to be
invalid,  illegal or  unenforceable  in any  respect  by a court,  all the other
provisions  of this Note will remain in full force and effect.  The Borrower and
all other makers and indorsers of this Note hereby  forever  waive  presentment,
protest, notice of dishonor and notice of non-payment.  The Borrower also waives
all defenses  based on suretyship or impairment of  collateral.  If this Note is
executed by more than one Borrower,  the obligations of such persons or entities
hereunder  will be joint and several.  This Note shall bind the Borrower and its
heirs,  executors,  administrators,  successors  and  assigns,  and the benefits
hereof  shall inure to the benefit of the Bank and its  successors  and assigns;
PROVIDED,  HOWEVER,  that the  Borrower  may not assign this Note in whole or in
part without the Bank's written consent and the Bank at any time may assign this
Note in whole or in part.

This Note has been  delivered  to and accepted by the Bank and will be deemed to
be made in the State where the Bank's office  indicated  above is located.  THIS
NOTE WILL BE  INTERPRETED  AND THE  RIGHTS AND  LIABILITIES  OF THE BANK AND THE
BORROWER  DETERMINED  IN  ACCORDANCE  WITH  THE  LAWS  OF  THE  COMMONWEALTH  OF
PENNSYLVANIA,  EXCLUDING  ITS  CONFLICT  OF  LAWS  RULES.  The  Borrower  hereby
irrevocably consents to the exclusive jurisdiction of any state or federal court
in Philadelphia  County,  Pennsylvania;  provided that nothing contained in this
Note will  prevent the Bank from  bringing  any action,  enforcing  any award or
judgment or exercising any rights against the Borrower individually, against any
security or against any property of the Borrower within any other county,  state
or other foreign or domestic jurisdiction.  The Borrower acknowledges and agrees
that the venue provided above is the most convenient forum for both the Bank and
the Borrower. The Borrower waives any objection to venue and any objection based
on a more convenient forum in any action instituted under this Note.

                                       6




13.  AUTHORIZATION TO OBTAIN CREDIT REPORTS. By signing below, each Borrower who
is an individual provides written authorization to the Bank or its designee (and
any assignee or potential  assignee  hereof) to obtain the  Borrower's  personal
credit  profile from one or more national  credit  bureaus.  Such  authorization
shall  extend  to  obtaining  a credit  profile  in  considering  this  Note and
subsequently for the purposes of update,  renewal or extension of such credit or
additional credit and for reviewing or collecting the resulting account.

14. WAIVER OF JURY TRIAL. THE BORROWER IRREVOCABLY WAIVES ANY AND ALL RIGHTS THE
BORROWER MAY HAVE TO A TRIAL BY JURY IN ANY ACTION,  PROCEEDING  OR CLAIM OF ANY
NATURE  RELATING TO THIS NOTE,  ANY DOCUMENTS  EXECUTED IN CONNECTION  WITH THIS
NOTE OR ANY  TRANSACTION  CONTEMPLATED  IN ANY OF SUCH  DOCUMENTS.  THE BORROWER
ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

THE BORROWER  ACKNOWLEDGES THAT IT HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE,  INCLUDING THE WAIVER OF JURY TRIAL,  AND HAS BEEN ADVISED BY COUNSEL
AS NECESSARY OR APPROPRIATE.

WITNESS the due execution  hereof as a document under seal, as of the date first
written above, with the intent to be legally bound hereby.


                                                THE QUIGLEY CORPORATION


                                                By: /s/ Guy J. Quigley
                                                   -----------------------------
                                                                          (SEAL)
                                                Print Name: Guy J. Quigley
                                                           ---------------------
                                                Title: President/CEO
                                                      --------------------------

                                                By: /s/ George J. Longo
                                                   -----------------------------
                                                   George J. Longo
                                                   V.P. - CFO
                                       7

EX-10

                                                                    Exhibit 10.3


                                                                   (Lebanon Co.)
OPEN-END MORTGAGE
AND SECURITY AGREEMENT                                          [OBJECT OMITTED]
(THIS MORTGAGE SECURES FUTURE ADVANCES)


     THIS OPEN-END MORTGAGE AND SECURITY  AGREEMENT (this "MORTGAGE") is made as
October 1, 2004,  by QUIGLEY  MANUFACTURING  INC., a Delaware  corporation  (the
"Mortgagor"), with an address at 621 N. Shady Retreat Road, Doylestown, PA 18901
in favor of PNC BANK, NATIONAL ASSOCIATION (the "MORTGAGEE"), with an address at
1600 Market Street, Philadelphia, PA 19103.

     WHEREAS,  the  Mortgagor is the owner of a certain  tract or parcel of land
described in Exhibit A attached hereto and made a part hereof, together with the
improvements now or hereafter erected thereon; and

     WHEREAS,  the  Mortgagor  is  providing a guaranty  of a  borrowing  by The
Quigley  Corporation  (the  "BORROWER")  from the  Mortgagee in an amount not to
exceed Three Million Dollars ($3,000,000) (the "LOAN"),  which Loan is evidenced
by one or more promissory notes in favor of the Mortgagee (the "NOTE");

     NOW, THEREFORE,  for the purpose of securing the payment and performance of
the following obligations (collectively called the "OBLIGATIONS"):

     (A) The Loan, the Note and all other loans, advances,  debts,  liabilities,
obligations,  covenants  and duties owing by the Mortgagor or by the Borrower to
the Mortgagee or to any other direct or indirect subsidiary of The PNC Financial
Services Group,  Inc., of any kind or nature,  present or future  (including any
interest accruing thereon after maturity, or after the filing of any petition in
bankruptcy,  or the  commencement  of any  insolvency,  reorganization  or  like
proceeding relating to the Mortgagor,  whether or not a claim for post-filing or
post-petition  interest  is  allowed  in such  proceeding),  whether  direct  or
indirect (including those acquired by assignment or participation),  absolute or
contingent,  joint or several,  due or to become due,  now existing or hereafter
arising, whether or not (i) evidenced by any note, guaranty or other instrument,
(ii) arising under any agreement,  instrument or document, (iii) for the payment
of money, (iv) arising by reason of an extension of credit,  opening of a letter
of  credit,  loan,  equipment  lease or  guarantee,  (v) under any  interest  or
currency  swap,  future,  option or other  interest  rate  protection or similar
agreement, (vi) under or by reason of any foreign currency transaction, forward,
option or other similar  transaction  providing for the purchase of one currency
in exchange for the sale of another  currency,  or in any other manner, or (vii)
arising out of  overdrafts  on deposit or other  accounts  or out of  electronic
funds transfers  (whether by wire transfer or through automated  clearing houses
or  otherwise) or out of the return unpaid of, or other failure of the Mortgagee
to receive  final  payment for, any check,  item,  instrument,  payment order or
other deposit or credit to a deposit or other account, or out of the Mortgagee's
non-receipt  of or inability to collect  funds or otherwise not being made whole
in connection with depository or other similar arrangements; and any amendments,
extensions,  renewals and increases of or to any of the foregoing, and all costs
and  expenses  of the  Mortgagee  incurred  in the  documentation,  negotiation,
modification,  enforcement,  collection and otherwise in connection  with any of
the foregoing, including reasonable attorneys' fees and expenses.





     (B) Any sums advanced by the  Mortgagee or which may  otherwise  become due
pursuant to the provisions of the Note or this Mortgage or pursuant to any other
document or  instrument  at any time  delivered to the  Mortgagee to evidence or
secure  any  of  the  Obligations  or  which  otherwise  relate  to  any  of the
Obligations  (as the same may be amended,  supplemented or replaced from time to
time, the "LOAN DOCUMENTS").

The Mortgagor,  for good and valuable consideration,  receipt of which is hereby
acknowledged, and intending to be legally bound hereby, does hereby give, grant,
bargain, sell, convey, assign, transfer, mortgage, hypothecate, pledge, set over
and confirm unto the Mortgagee  and does agree that the  Mortgagee  shall have a
security  interest in the  following  described  property,  all  accessions  and
additions  thereto,  all  substitutions  therefor and  replacements and proceeds
thereof, and all reversions and remainders of such property now owned or held or
hereafter acquired (the "PROPERTY"), to wit:

          (a) All of the Mortgagor's estate in the premises described in Exhibit
A, together with all of the  easements,  rights of way,  privileges,  liberties,
hereditaments,  gores, streets, alleys,  passages,  ways, waters,  watercourses,
rights and  appurtenances  thereunto  belonging or appertaining,  and all of the
Mortgagor's estate, right, title, interest,  claim and demand therein and in the
public  streets  and ways  adjacent  thereto,  either in law or in  equity  (the
"LAND");

          (b) All the buildings,  structures and  improvements of every kind and
description now or hereafter  erected or placed on the Land, and all facilities,
fixtures,  machinery,  apparatus,  appliances,   installations,   machinery  and
equipment,  including  all  building  materials  to be  incorporated  into  such
buildings and all electrical,  heating,  air conditioning and plumbing equipment
necessary for the  operation of such  buildings,  now or hereafter  attached to,
located in or used in  connection  with  those  buildings,  structures  or other
improvements (the "IMPROVEMENTS");

          (c) All rents, issues and profits arising or issuing from the Land and
the Improvements  (the "RENTS")  including the Rents arising or issuing from all
leases,  licenses,  subleases  or any other use or  occupancy  agreement  now or
hereafter  entered into  covering  all or any part of the Land and  Improvements
(the  "LEASES"),  all of which  Leases  and Rents  are  hereby  assigned  to the
Mortgagee by the  Mortgagor.  The foregoing  assignment  shall include all fees,
charges,  accounts or other payments for the use or occupancy of rooms and other
public facilities in hotels,  motels, or other lodging properties,  and all cash
or securities  deposited under Leases to secure  performance of lessees of their
obligations thereunder, whether such cash or securities are to be held until the
expiration of the terms of such leases or applied to one or more installments of
rent coming due prior to the expiration of such terms. The foregoing  assignment
extends to Rents  arising both before and after the  commencement  by or against
the Mortgagor of any case or proceeding  under any Federal or State  bankruptcy,
insolvency  or similar  law, and is intended as an absolute  assignment  and not
merely the granting of a security interest. The Mortgagor, however, shall have a
license to collect retain and use the Rents so long as no Event of Default shall
have occurred and be continuing or shall exist.  The Mortgagor  will execute and
deliver to the Mortgagee, on demand, such additional assignments and instruments
as the Mortgagee may require to  implement,  confirm,  maintain and continue the
assignment of Rents hereunder; and

          (d) All proceeds of the conversion,  voluntary or involuntary,  of any
of the foregoing into cash or liquidated claims.

          To have and to hold the same unto the  Mortgagee,  its  successors and
assigns, forever.

          Provided,  however,  that if the Mortgagor  shall pay to the Mortgagee
the  Obligations,  and if the Mortgagor shall keep and perform each of its other
covenants,  conditions  and  agreements  set forth  herein and in the other Loan
Documents, then, upon the termination of all obligations, duties and commitments

                                      -2-




of the Mortgagor  under the  Obligations  and this Mortgage,  and subject to the
provisions of the paragraph  entitled  "Survival;  Successors and Assigns",  the
estate hereby granted and conveyed shall become null and void.

          This Mortgage is an "Open-End  Mortgage" as set forth in 42 Pa. C.S.A.
ss.8143 and secures obligations up to a maximum principal amount of indebtedness
outstanding  at any time  equal to double  the face  amount  of the  Note,  plus
accrued and unpaid  interest,  including  advances  for the payment of taxes and
municipal assessments,  maintenance charges,  insurance premiums, costs incurred
for the  protection  of the  Property  or the  lien of this  Mortgage,  expenses
incurred  by the  Mortgagee  by  reason  of a default  or Event of  Default  (as
hereinafter  defined) by the Mortgagor  under this Mortgage and advances for the
construction, alteration or renovation on the Property or for any other purpose,
together with all other sums due hereunder or secured hereby.  All notices to be
given to the Mortgagee  pursuant to 42 Pa. C.S.A.  ss.8143 shall be given as set
forth in Section 18.

          1.  REPRESENTATIONS  AND  WARRANTIES.  The  Mortgagor  represents  and
warrants to the Mortgagee that (i) the Mortgagor has good and  marketable  title
to an estate in fee simple  absolute  in the Land and  Improvements  and has all
right,  title and  interest  in all other  property  constituting  a part of the
Property,  in each case free and clear of all liens and encumbrances,  except as
may  otherwise  be set forth on an Exhibit B hereto  and (ii) its name,  type of
organization,  jurisdiction of organization  and chief executive office are true
and complete as set forth in the heading of this  Mortgage.  This  Mortgage is a
valid and enforceable first lien on the Property (except as set forth on Exhibit
B) and the Mortgagee shall, subject to the Mortgagor's right of possession prior

to an Event of Default,  quietly enjoy and possess the  Property.  The Mortgagor
shall preserve such title as it warrants herein and the validity and priority of
the lien hereof and shall  forever  warrant and defend the same to the Mortgagee
against the claims of all persons.

     2.  AFFIRMATIVE  COVENANTS.  Until all of the  Obligations  shall have been
fully paid, satisfied and discharged the Mortgagor shall:

          (a) PAYMENT AND  PERFORMANCE OF  OBLIGATIONS.  Pay or cause to be paid
and perform all Obligations when due as provided in the Loan Documents.

          (b)  LEGAL  REQUIREMENTS.  Promptly  comply  with and  conform  to all
present and future laws, statutes, codes, ordinances, orders and regulations and
all  covenants,  restrictions  and  conditions  which may be  applicable  to the
Mortgagor or to any of the Property (the "LEGAL REQUIREMENTS").

          (c)  IMPOSITIONS.  Before  interest or  penalties  are due thereon and
otherwise when due, the Mortgagor  shall pay all taxes of every kind and nature,
all charges for any easement or agreement  maintained  for the benefit of any of
the Property,  all general and special assessments (including any condominium or
planned unit development assessments,  if any), levies, permits,  inspection and
license fees,  all water and sewer rents and charges,  and all other charges and
liens,  whether of a like or different nature,  imposed upon or assessed against
the  Mortgagor or any of the Property  (the  "IMPOSITIONS").  Within thirty (30)
days after the payment of any  Imposition,  the  Mortgagor  shall deliver to the
Mortgagee  written  evidence  acceptable to the  Mortgagee of such payment.  The
Mortgagor's  obligations to pay the  Impositions  shall survive the  Mortgagee's
taking  title  to  (and  possession  of)  the  Property   through   foreclosure,
deed-in-lieu or otherwise, as well as the termination of the Mortgage including,
without limitation, by merger into a deed.

          (d)  MAINTENANCE  OF  SECURITY.  Use,  and permit  others to use,  the
Property  only for its present use or such other uses as permitted by applicable
Legal Requirements and approved in writing by the Mortgagee. The Mortgagor shall

                                      -3-




keep the Property in good  condition and order and in a rentable and  tenantable
state of repair and will make or cause to be made,  as and when  necessary,  all
repairs, renewals, and replacements,  structural and nonstructural, exterior and
interior,  foreseen  and  unforeseen,  ordinary  and  extraordinary,   provided,
however,  that no structural  repairs,  renewals or  replacements  shall be made
without the Mortgagee's  prior written consent.  The Mortgagor shall not remove,
demolish or alter the Property nor commit or suffer waste with respect  thereto,
nor permit the Property to become deserted or abandoned. The Mortgagor covenants
and agrees not to take or permit any action with respect to the  Property  which
will in any  manner  impair  the  security  of this  Mortgage  or the use of the
Property as set forth in the Loan Documents.

     3. LEASES.  The Mortgagor  shall not (a) execute an assignment or pledge of
the Rents or the  Leases  other than in favor of the  Mortgagee;  (b) accept any
prepayment  of an  installment  of any  Rents  prior  to the  due  date  of such
installment;  or (c) enter  into or amend any of the terms of any of the  Leases
without the Mortgagee's prior written consent. Any or all leases or subleases of
all or any  part  of the  Property  shall  be  subject  in all  respects  to the
Mortgagee's prior written consent, shall be subordinated to this Mortgage and to
the Mortgagee's  rights and, together with any and all rents,  issues or profits
relating thereto, shall be assigned at the time of execution to the Mortgagee as
additional collateral security for the Obligations,  all in such form, substance
and detail as is satisfactory to the Mortgagee in its sole discretion.

     4. DUE ON SALE CLAUSE.  The Mortgagor  shall not sell,  convey or otherwise
transfer any interest in the Property  (whether  voluntarily  or by operation of
law),  or  agree  to do so,  without  the  Mortgagee's  prior  written  consent,
including (a) any sale, conveyance,  encumbrance,  assignment, or other transfer
of  (including  installment  land sale  contracts),  or the grant of a  security
interest  in, all or any part of the legal or equitable  title to the  Property,
except as otherwise permitted hereunder;  (b) any lease of all or any portion of
the Property; or (c) any sale,  conveyance,  encumbrance,  assignment,  or other
transfer  of, or the grant of a security  interest in, any share of stock of the
Mortgagor,  if a corporation or any partnership interest in the Mortgagor,  if a
partnership,  or any membership interest,  if a limited liability entity, except
in favor of the  Mortgagee.  Any  default  under  this  Section  shall  cause an
immediate acceleration of the Obligations without any demand by the Mortgagee.

     5. INSURANCE.  The Mortgagor shall keep the Property  continuously insured,
in an amount not less than the cost to  replace  the  Property  or an amount not
less than eighty  percent  (80%) of the full  insurable  value of the  Property,
whichever  is  greater,  covering  such risks and in such  amounts and with such
deductibles  as are  satisfactory  to the Mortgagee  and its counsel  including,
without  limitation,  insurance  against loss or damage by fire,  with  extended
coverage  and  against  other  hazards  as the  Mortgagee  may from time to time
require. With respect to any property under construction or reconstruction,  the
Mortgagor  shall maintain  builder's risk  insurance.  The Mortgagor  shall also
maintain  comprehensive general public liability insurance,  in an amount of not
less than One  Million  Dollars  ($1,000,000)  per  occurrence  and Two  Million
Dollars ($2,000,000) general aggregate per location,  which includes contractual
liability  insurance  for the  Mortgagor's  obligations  under the  Leases,  and
worker's compensation insurance. All property and builder's risk insurance shall
include  protection  for  continuation  of income  for a period  of twelve  (12)
months,  in the event of any damage caused by the perils referred to above.  All
policies,  including  policies for any amounts carried in excess of the required
minimum and policies not specifically  required by the Mortgagee,  shall be with
an insurance  company or companies  satisfactory  to the Mortgagee,  shall be in
form satisfactory to the Mortgagee,  shall meet all coinsurance  requirements of
the Mortgagee,  shall be maintained in full force and effect,  shall be assigned
to the Mortgagee,  with premiums prepaid,  as collateral security for payment of
the Obligations,  shall be endorsed with a standard mortgagee clause in favor of
the  Mortgagee  and  shall  provide  for at least  thirty  (30)  days  notice of
cancellation  to the Mortgagee.  Such insurance shall also name the Mortgagee as
an additional  insured under the  comprehensive  general public liability policy
and the Mortgagor  shall also deliver to the Mortgagee a copy of the replacement
cost coverage endorsement.  If the Property is located in an area which has been


                                      -4-




identified by any governmental agency,  authority or body as a flood hazard area
or the like, then the Mortgagor shall maintain a flood insurance policy covering
the  Property in an amount not less than the  original  principal  amount of the
Loan or the maximum  limit of  coverage  available  under the  federal  program,
whichever amount is less.

     6. RIGHTS OF  MORTGAGEE TO INSURANCE  PROCEEDS.  In the event of loss,  the
Mortgagee shall have the exclusive  right to adjust,  collect and compromise all
insurance claims, and the Mortgagor shall not adjust,  collect or compromise any
claims under said policies without the Mortgagee's  prior written consent.  Each
insurer is hereby  authorized  and directed to make payment under said policies,
including return of unearned  premiums,  directly to the Mortgagee instead of to
the  Mortgagor  and the  Mortgagee  jointly,  and  the  Mortgagor  appoints  the
Mortgagee as the Mortgagor's attorney-in-fact to endorse any draft therefor. All
insurance proceeds may, at the Mortgagee's sole option, be applied to all or any
part of the Obligations and in any order  (notwithstanding that such Obligations
may not then  otherwise be due and payable) or to the repair and  restoration of
any of the Property under such terms and conditions as the Mortgagee may impose.

     7.  INSTALLMENTS  FOR  INSURANCE,   TAXES  AND  OTHER  CHARGES.   Upon  the
Mortgagee's request, the Mortgagor shall pay to the Mortgagee monthly, an amount
equal to one-twelfth  (1/12) of the annual  premiums for the insurance  policies
referred to hereinabove  and the annual  Impositions and any other item which at
any time may be or become a lien upon the Property (the "ESCROW  CHARGES").  The
amounts so paid  shall be used in  payment  of the Escrow  Charges so long as no
Event of Default shall have occurred.  No amount so paid to the Mortgagee  shall
be  deemed to be trust  funds,  nor  shall  any sums  paid  bear  interest.  The
Mortgagee shall have no obligation to pay any insurance premium or Imposition if
at any time the funds being held by the Mortgagee for such premium or Imposition
are insufficient to make such payments. If, at any time, the funds being held by
the Mortgagee for any insurance  premium or Imposition are exhausted,  or if the
Mortgagee  determines,  in  its  sole  discretion,   that  such  funds  will  be
insufficient  to pay in full any insurance  premium or Imposition  when due, the
Mortgagor shall promptly pay to the Mortgagee,  upon demand, an amount which the
Mortgagee  shall  estimate as  sufficient  to make up the  deficiency.  Upon the
occurrence of an Event of Default,  the Mortgagee  shall have the right,  at its
election, to apply any amount so held against the Obligations due and payable in
such order as the Mortgagee may deem fit, and the Mortgagor hereby grants to the
Mortgagee a lien upon and security interest in such amounts for such purpose.

     8. CONDEMNATION. The Mortgagor, immediately upon obtaining knowledge of the
institution of any proceedings for the  condemnation or taking by eminent domain
of any of the  Property,  shall  notify the  Mortgagee  of the  pendency of such
proceedings.  The  Mortgagee may  participate  in any such  proceedings  and the
Mortgagor  shall  deliver to the Mortgagee  all  instruments  requested by it to
permit such  participation.  Any award or compensation for property taken or for
damage to property not taken, whether as a result of such proceedings or in lieu
thereof,  is hereby assigned to and shall be received and collected  directly by
the  Mortgagee,  and  any  award  or  compensation  shall  be  applied,  at  the
Mortgagee's   option,   to  any  part  of  the  Obligations  and  in  any  order
(notwithstanding  that any of such  Obligations may not then be due and payable)
or to the repair and  restoration  of any of the  Property  under such terms and
conditions as the Mortgagee may impose.

     9.  ENVIRONMENTAL  MATTERS.  (a) For  purposes of this  Section 9, the term
"ENVIRONMENTAL LAWS" shall mean all federal,  state and local laws,  regulations
and orders,  whether now or in the future  enacted or issued,  pertaining to the
protection of land,  water,  air, health,  safety or the  environment.  The term
"REGULATED  SUBSTANCES"  shall mean all  substances  regulated by  Environmental
Laws,  or which are known or considered to be harmful to the health or safety of
persons,  or the presence of which may require  investigation,  notification  or
remediation under the Environmental  Laws. The term  "CONTAMINATION"  shall mean

                                      -5-




the discharge, release, emission, disposal or escape of any Regulated Substances
into the environment.

          (b) The Mortgagor represents and warrants (i) that no Contamination is
present at, on or under the Property and that no  Contamination  is being or has
been emitted onto any surrounding  property;  (ii) all operations and activities
on the  Property  have  been and are  being  conducted  in  accordance  with all
Environmental  Laws,  and the  Mortgagor  has all permits and licenses  required
under the Environmental  Laws; (iii) no underground or aboveground storage tanks
are or have  been  located  on or  under  the  Property;  and  (iv) no  legal or
administrative proceeding is pending or threatened relating to any environmental
condition,  operation or activity on the  Property,  or any violation or alleged
violation of Environmental  Laws. These  representations and warranties shall be
true as of the date hereof, and shall be deemed to be continuing representations
and warranties  which must remain true,  correct and accurate  during the entire
duration of the term of this Mortgage.

          (c) The Mortgagor shall ensure, at its sole cost and expense, that the
Property and the conduct of all  operations  and  activities  thereon comply and
continue to comply with all  Environmental  Laws. The Mortgagor shall notify the
Mortgagee  promptly  and in  reasonable  detail in the event that the  Mortgagor
becomes  aware of any  violation  of any  Environmental  Laws,  the  presence or
release of any Contamination  with respect to the Property,  or any governmental
or third party claims relating to the environmental condition of the Property or
the conduct of operations or activities  thereon.  The Mortgagor also agrees not
to permit or allow  the  presence  of  Regulated  Substances  on any part of the
Property,  except  for  those  Regulated  Substances  (i)  which are used in the
ordinary course of the Mortgagor's business,  but only to the extent they are in
all cases used in a manner which complies with all Environmental  Laws; and (ii)
those Regulated  Substances which are naturally  occurring on the Property.  The
Mortgagor agrees not to cause, allow or permit the presence of any Contamination
on the Property.

          (d) The  Mortgagee  shall not be liable for, and the  Mortgagor  shall
indemnify,  defend  and hold  the  Mortgagee  and the  Indemnified  Parties  (as
hereinafter defined) and all of their respective successors and assigns harmless
from and  against  all  losses,  costs,  liabilities,  damages,  fines,  claims,
penalties  and  expenses  (including  reasonable  attorneys',  consultants'  and
contractors' fees, costs incurred in the  investigation,  defense and settlement
of claims,  as well as costs  incurred  in  connection  with the  investigation,
remediation or monitoring of any Regulated Substances or Contamination) that the
Mortgagee or any Indemnified  Party may suffer or incur  (including as holder of
the  Mortgage,  as  mortgagee in  possession  or as successor in interest to the
Mortgagor as owner of the Property by virtue of a foreclosure or acceptance of a
deed in lieu of  foreclosure)  as a  result  of or in  connection  with  (i) any
Environmental  Laws  (including  the assertion that any lien existing or arising
pursuant  to  any  Environmental  Laws  takes  priority  over  the  lien  of the
Mortgage);  (ii)  the  breach  of  any  representation,  warranty,  covenant  or
undertaking  by the  Mortgagor  in this  Section 9; (iii) the presence on or the
migration of any Contamination or Regulated  Substances on, under or through the
Property;  or (iv) any  litigation  or claim by the  government  or by any third
party in  connection  with the  environmental  condition  of the Property or the
presence or migration of any Regulated Substances or Contamination on, under, to
or from the Property.

          (e) Upon the  Mortgagee's  request,  the  Mortgagor  shall execute and
deliver an Environmental  Indemnity Agreement satisfactory in form and substance
to the  Mortgagee,  to  more  fully  reflect  the  Mortgagor's  representations,
warranties, covenants and indemnities with respect to the Environmental Laws.

     10. INSPECTION OF PROPERTY. The Mortgagee shall have the right to enter the
Property  at any  reasonable  hour for the  purpose  of  inspecting  the  order,
condition and repair of the buildings and improvements  erected thereon, as well
as the conduct of operations and  activities on the Property.  The Mortgagee may

                                      -6-




enter the Property (and cause the Mortgagee's employees,  agents and consultants
to enter the Property),  upon prior written notice to the Mortgagor,  to conduct
any and all  environmental  testing  deemed  appropriate by the Mortgagee in its
sole  discretion.  The  environmental  testing shall be accomplished by whatever
means the Mortgagee may deem  appropriate,  including the taking of soil samples
and the  installation  of  ground  water  monitoring  wells or  other  intrusive
environmental  tests.  The  Mortgagor  shall  provide  the  Mortgagee  (and  the
Mortgagee's  employees,  agents and consultants)  reasonable rights of access to
the  Property as well as such  information  about the  Property  and the past or
present  conduct of operations  and  activities  thereon as the Mortgagee  shall
reasonably request.

     11. EVENTS OF DEFAULT.  The  occurrence of any one or more of the following
events  shall  constitute  an "EVENT  OF  DEFAULT"  hereunder:  (a) any Event of
Default (as defined in any of the Obligations); (b) any default under any of the
Obligations  that does not have a defined  set of  "Events of  Default"  and the
lapse of any notice or cure period provided in such  Obligations with respect to
such default; (c) demand by the Mortgagee under any of the Obligations that have
a demand feature;  (d) the Mortgagor's failure to perform any of its obligations
under this Mortgage or under any Environmental  Indemnity Agreement executed and
delivered  pursuant to Section 9(e); (e) falsity,  inaccuracy or material breach
by the Mortgagor of any written  warranty,  representation  or statement made or
furnished to the  Mortgagee by or on behalf of the  Mortgagor;  (f) an uninsured
material loss,  theft,  damage,  or  destruction to any of the Property,  or the
entry of any judgment against the Mortgagor or any lien against or the making of
any levy,  seizure or  attachment  of or on the  Property;  (g) the  Mortgagee's
failure to have a mortgage lien on the Property with the priority required under
Section 1; (h) any  indication or evidence  received by the  Mortgagee  that the
Mortgagor may have  directly or indirectly  been engaged in any type of activity
which,  in the  Mortgagee's  discretion,  might result in the  forfeiture of any
property of the Mortgagor to any governmental entity,  federal,  state or local;
(i) foreclosure  proceedings are instituted  against the Property upon any other
lien or claim,  whether  alleged  to be  superior  or junior to the lien of this
Mortgage;  (j) the failure by the Mortgagor to pay any  Impositions  as required
under  Section  2(c),  or to  maintain  in full force and  effect any  insurance
required under Section 5; or (k) the Mortgagor or any other obligor or guarantor
of any of the Obligations, shall at any time deliver or cause to be delivered to
the Mortgagee a notice  pursuant to 42 Pa.  C.S.A.  ss.8143 (or any successor or
similar law, rule or regulation)  electing to limit the indebtedness  secured by
this Mortgage.

     12. RIGHTS AND REMEDIES OF MORTGAGEE.  If an Event of Default  occurs,  the
Mortgagee may, at its option and without demand, notice or delay, do one or more
of the following:

          (a) The Mortgagee may declare the entire unpaid  principal  balance of
the  Obligations,  together  with all  interest  thereon,  to be due and payable
immediately.

          (b) The Mortgagee may (i) institute and maintain an action of mortgage
foreclosure  against the Property and the  interests of the  Mortgagor  therein,
(ii)  institute  and  maintain  an  action  on any  instruments  evidencing  the
Obligations or any portion  thereof,  and (iii) take such other action at law or
in equity for the enforcement of any of the Loan Documents as the law may allow,
and in each such action the Mortgagee shall be entitled to all costs of suit and
attorneys fees.

          (c) The  Mortgagee  may,  in its sole  and  absolute  discretion:  (i)
collect any or all of the Rents,  including any Rents past due and unpaid,  (ii)
perform any  obligation or exercise any right or remedy of the  Mortgagor  under
any Lease, or (iii) enforce any obligation of any tenant of any of the Property.
The Mortgagee may exercise any right under this subsection  (c),  whether or not
the Mortgagee  shall have entered into  possession  of any of the Property,  and
nothing  herein  contained  shall be construed as  constituting  the Mortgagee a
"mortgagee  in  possession",  unless the  Mortgagee  shall have entered into and
shall continue to be in actual possession of the Property.  The Mortgagor hereby
authorizes  and directs each and every  present and future  tenant of any of the
Property  to pay all Rents  directly to the  Mortgagee  and to perform all other


                                      -7-




obligations of that tenant for the direct  benefit of the  Mortgagee,  as if the
Mortgagee were the landlord under the Lease with that tenant,  immediately  upon
receipt  of a demand by the  Mortgagee  to make such  payment  or  perform  such
obligations.  The Mortgagor hereby waives any right,  claim or demand it may now
or hereafter  have against any such tenant by reason of such payment of Rents or
performance of obligations to the Mortgagee, and any such payment or performance
to the  Mortgagee  shall  discharge the  obligations  of the tenant to make such
payment or performance to the Mortgagor.

          (d) The  Mortgagee  shall  have  the  right,  in  connection  with the
exercise of its remedies  hereunder,  to the  appointment  of a receiver to take
possession  and control of the Property or to collect the Rents,  without notice
and without regard to the adequacy of the Property to secure the Obligations.  A
receiver  while in  possession  of the  Property  shall  have the  right to make
repairs and to make improvements necessary or advisable in its or his opinion to
preserve the Property,  or to make and keep them rentable to the best advantage,
and the Mortgagee may advance moneys to a receiver for such purposes. Any moneys
so expended or advanced by the Mortgagee or by a receiver  shall be added to and
become a part of the Obligations secured by this Mortgage.

     13. APPLICATION OF PROCEEDS.  The Mortgagee shall apply the proceeds of any
foreclosure  sale of, or other  disposition  or  realization  upon,  or Rents or
profits  from,  the  Property  to  satisfy  the  Obligations  in such  order  of
application as the Mortgagee shall determine in its exclusive discretion.

     14.  CONFESSION OF JUDGMENT IN EJECTMENT.  At any time after the occurrence
of an Event of  Default,  without  further  notice,  regardless  of whether  the
Mortgagee  has asserted any other right or exercised any other remedy under this
Mortgage or any of the other Loan Documents, it shall be lawful for any attorney
of any court of record as  attorney  for the  Mortgagor  to confess  judgment in
ejectment against the Mortgagor and all persons claiming under the Mortgagor for
the recovery by the  Mortgagee of possession of all or any part of the Property,
for which this  Mortgage  shall be sufficient  warrant.  If for any reason after
such  action  shall  have  commenced  the  same  shall be  discontinued  and the
possession of the Property shall remain in or be restored to the Mortgagor,  the
Mortgagee shall have the right upon any subsequent  default or defaults to bring
one or more  amicable  action or  actions as  hereinbefore  set forth to recover
possession of all or any part of the Property.

     15.  MORTGAGEE'S  RIGHT  TO  PROTECT  SECURITY.  The  Mortgagee  is  hereby
authorized to do any one or more of the  following,  irrespective  of whether an
Event of Default has occurred: (a) appear in and defend any action or proceeding
purporting  to affect the security  hereof or the  Mortgagee's  rights or powers
hereunder;  (b) purchase such insurance policies covering the Property as it may
elect if the  Mortgagor  fails  to  maintain  the  insurance  coverage  required
hereunder;  and (c) take such  action as the  Mortgagee  may  determine  to pay,
perform or comply with any Impositions or Legal Requirements, to cure any Events
of Default and to protect its security in the Property.

     16. APPOINTMENT OF MORTGAGEE AS ATTORNEY-IN-FACT.  The Mortgagee, or any of
its officers, is hereby irrevocably appointed attorney-in-fact for the Mortgagor
(without  requiring any of them to act as such),  such appointment being coupled
with an interest, to do any or all of the following: (a) collect the Rents after
the occurrence of an Event of Default;  (b) settle for,  collect and receive any
awards  payable under Section 8 from the  authorities  making the same;  and (c)
execute,  deliver and file, at Mortgagor's sole cost and expense such financing,
continuation or amendment  statements and other instruments as the Mortgagee may
require in order to perfect,  protect and maintain its security  interest  under
the UCC on any portion of the Property.

     17. CERTAIN  WAIVERS.  The Mortgagor hereby waives and releases all benefit
that  might  accrue to the  Mortgagor  by virtue of any  present  or future  law
exempting  the  Property,  or any  part of the  proceeds  arising  from any sale


                                      -8-




thereof, from attachment,  levy or sale on execution,  or providing for any stay
of execution,  exemption  from civil process or extension of time for payment or
any rights of  marshalling  in the event of any sale  hereunder of the Property,
and, unless specifically required herein, all notices of the Mortgagor's default
or of the Mortgagee's  election to exercise,  or the Mortgagee's actual exercise
of any option under this Mortgage or any other Loan Document.

     18. NOTICES. All notices, demands, requests,  consents, approvals and other
communications  required or permitted  hereunder  ("NOTICES") must be in writing
and will be effective upon receipt.  Notices may be given in any manner to which
the parties may separately agree,  including  electronic mail.  Without limiting
the foregoing,  first-class mail, facsimile  transmission and commercial courier
service  are  hereby  agreed  to  as  acceptable  methods  for  giving  Notices.
Regardless  of the manner in which  provided,  Notices  may be sent to a party's
address as set forth above or to such other address as any party may give to the
other for such purpose in accordance with this section.

     19. FURTHER ACTS. By its signature hereon, the Mortgagor hereby irrevocably
authorizes  the  Mortgagee  to  execute  (on behalf of the  Mortgagor)  and file
against  the  Mortgagor  one  or  more  financing,   continuation  or  amendment
statements  pursuant to the UCC in form  satisfactory to the Mortgagee,  and the
Mortgagor   will  pay  the  cost  of  preparing  and  filing  the  same  in  all
jurisdictions in which such filing is deemed by the Mortgagee to be necessary or
desirable in order to perfect,  preserve and protect its security interests.  If
required  by  the  Mortgagee,  the  Mortgagor  will  execute  all  documentation
necessary  for the  Mortgagee to obtain and maintain  perfection of its security
interests in the Property. The Mortgagor will, at the cost of the Mortgagor, and
without expense to the Mortgagee,  do, execute,  acknowledge and deliver all and
every such further acts, deeds, conveyances,  mortgages, assignments, notices of
assignment,  transfers and assurances as the Mortgagee shall, from time to time,
require  for  the  better  assuring,  conveying,   assigning,   transferring  or
confirming unto the Mortgagee the property and rights hereby mortgaged, or which
Mortgagor  may be or may  hereafter  become  bound to  convey  or  assign to the
Mortgagee,  or for carrying out the intent of or facilitating the performance of
the  terms  of this  Mortgage  or for  filing,  registering  or  recording  this
Mortgage. The Mortgagor grants to the Mortgagee an irrevocable power of attorney
coupled with an interest for the purpose of exercising  and  perfecting  any and
all  rights  and  remedies  available  to the  Mortgagee  under the  Note,  this
Mortgage,  the other Loan  Documents,  at law or in equity,  including,  without
limitation, the rights and remedies described in this paragraph.

     20.  CHANGES  IN THE LAWS  REGARDING  TAXATION.  If any law is  enacted  or
adopted or amended after the date of this Mortgage which deducts the Obligations
from the value of the  Property  for the purpose of taxation or which  imposes a
tax, either directly or indirectly, on the Mortgagor or the Mortgagee's interest
in the Property,  the  Mortgagor  will pay such tax, with interest and penalties
thereon,  if any. If the  Mortgagee  determines  that the payment of such tax or
interest  and  penalties  by the  Mortgagor  would be unlawful or taxable to the
Mortgagee or unenforceable or provide the basis for a defense of usury, then the
Mortgagee shall have the option,  by written notice of not less than ninety (90)
days, to declare the entire Obligations immediately due and payable.

     21.  DOCUMENTARY  STAMPS. If at any time the United States of America,  any
State  thereof or any  subdivision  of any such State shall  require  revenue or
other stamps to be affixed to the Note or this Mortgage, or impose any other tax
or charge on the same,  the Mortgagor  will pay for the same,  with interest and
penalties thereon, if any.

     22. PRESERVATION OF RIGHTS. No delay or omission on the Mortgagee's part to
exercise  any right or power  arising  hereunder  will  impair any such right or
power or be  considered  a  waiver  of any such  right  or  power,  nor will the
Mortgagee's  action or inaction impair any such right or power.  The Mortgagee's

                                      -9-




rights and remedies  hereunder  are  cumulative  and not  exclusive of any other
rights or remedies which the Mortgagee may have under other  agreements,  at law
or in equity.

     23.  ILLEGALITY.  If any  provision  contained in this  Mortgage  should be
invalid,  illegal or unenforceable in any respect, it shall not affect or impair
the validity,  legality and  enforceability of the remaining  provisions of this
Mortgage.

     24. CHANGES IN WRITING. No modification, amendment or waiver of, or consent
to any departure by the Mortgagor  from,  any provision of this Mortgage will be
effective unless made in a writing signed by the Mortgagee, and then such waiver
or consent shall be effective only in the specific  instance and for the purpose
for which  given.  No notice to or demand  on the  Mortgagor  will  entitle  the
Mortgagor to any other or further notice or demand in the same, similar or other
circumstance.

     25.  ENTIRE   AGREEMENT.   This  Mortgage   (including  the  documents  and
instruments  referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and  understandings,  both written and oral,  between
the parties with respect to the subject matter hereof.

     26.  SURVIVAL;  SUCCESSORS AND ASSIGNS.  This Mortgage will be binding upon
and inure to the benefit of the Mortgagor and the Mortgagee and their respective
heirs, executors,  administrators,  successors and assigns;  PROVIDED,  HOWEVER,
that the  Mortgagor may not assign this Mortgage in whole or in part without the
Mortgagee's  prior written consent and the Mortgagee at any time may assign this
Mortgage  in  whole or in part;  and  PROVIDED,  FURTHER,  that the  rights  and
benefits under the Paragraphs entitled "Environmental  Matters",  "Inspection of
Property"  and  "Indemnity"  shall also inure to the  benefit of any  persons or
entities who acquire  title or  ownership  of the  Property  from or through the
Mortgagee or through action of the Mortgagee (including a foreclosure, sheriff's
or  judicial  sale).  The  provisions  of  Paragraphs  entitled   "Environmental
Matters",   "Inspection   of  Property"  and   "Indemnity"   shall  survive  the
termination,  satisfaction or release of this Mortgage,  the foreclosure of this
Mortgage or the delivery of a deed in lieu of foreclosure.

     27.  INTERPRETATION.  In  this  Mortgage,  unless  the  Mortgagee  and  the
Mortgagor  otherwise agree in writing,  the singular includes the plural and the
plural the  singular;  words  importing  any gender  include the other  genders;
references to statutes are to be construed as including all statutory provisions
consolidating,  amending or  replacing  the statute  referred  to; the word "or"
shall be deemed to  include  "and/or",  the words  "including",  "includes"  and
"include"  shall be deemed to be  followed  by the words  "without  limitation";
references to articles,  sections (or  subdivisions of sections) or exhibits are
to those of this Mortgage;  and  references to agreements and other  contractual
instruments  shall be deemed to  include  all  subsequent  amendments  and other
modifications  to such  instruments,  but only to the extent such amendments and
other  modifications  are not prohibited by the terms of this Mortgage.  Section
headings in this  Mortgage are included for  convenience  of reference  only and
shall not  constitute  a part of this  Mortgage for any other  purpose.  If this
Mortgage is executed by more than one party as  Mortgagor,  the  obligations  of
such persons or entities will be joint and several.

     28.  INDEMNITY.  The Mortgagor  agrees to indemnify  each of the Mortgagee,
each legal  entity,  if any, who  controls,  is controlled by or is under common
control with the Mortgagee  and each of their  respective  directors,  officers,
employees and agents (the "INDEMNIFIED  PARTIES"),  and to hold each Indemnified
Party  harmless  from  and  against,  any  and  all  claims,  damages,   losses,
liabilities and expenses (including all fees and charges of internal or external
counsel  with  whom any  Indemnified  Party  may  consult  and all  expenses  of
litigation and preparation  therefor) which any Indemnified  Party may incur, or
which may be asserted  against any  Indemnified  Party by any person,  entity or
governmental  authority (including any person or entity claiming derivatively on
behalf of the  Mortgagor),  in connection  with or arising out of or relating to
the matters referred to in this Mortgage or in the other Loan Documents, whether


                                      -10-




(a) arising from or incurred in connection with any breach of a  representation,
warranty or covenant by the  Mortgagor,  or (b) arising out of or resulting from
any suit, action, claim,  proceeding or governmental  investigation,  pending or
threatened,  whether based on statute, regulation or order, or tort, or contract
or otherwise,  before any court or governmental  authority;  PROVIDED,  HOWEVER,
that the foregoing indemnity  agreement shall not apply to any claims,  damages,
losses,  liabilities and expenses solely  attributable to an Indemnified Party's
gross negligence or willful  misconduct.  The indemnity  agreement  contained in
this Section  shall survive the  termination  of this  Mortgage,  payment of any
Obligations  and  assignment  of  any  rights   hereunder.   The  Mortgagor  may
participate at its expense in the defense of any such action or claim.

     29. GOVERNING LAW AND JURISDICTION. This Mortgage has been delivered to and
accepted by the  Mortgagee  and will be deemed to be made in the State where the
Mortgagee's office indicated above is located. THIS MORTGAGE WILL BE INTERPRETED
AND THE RIGHTS AND  LIABILITIES OF THE PARTIES  HERETO  DETERMINED IN ACCORDANCE
WITH THE LAWS OF THE  COMMONWEALTH  OF  PENNSYLVANIA,  EXCLUDING ITS CONFLICT OF
LAWS RULES,  EXCEPT THAT THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED (IF
DIFFERENT  FROM THE STATE WHERE SUCH OFFICE OF THE  MORTGAGEE IS LOCATED)  SHALL
GOVERN THE CREATION,  PERFECTION AND FORECLOSURE OF THE LIENS CREATED  HEREUNDER
ON THE  PROPERTY OR ANY  INTEREST  THEREIN.  The  Mortgagor  hereby  irrevocably
consents  to the  exclusive  jurisdiction  of any  state  or  federal  court  in
Philadelphia  County,  Pennsylvania  provided  that  nothing  contained  in this
Mortgage  will prevent the  Mortgagee  from  bringing any action,  enforcing any
award or judgment or exercising any rights  against the Mortgagor  individually,
against any security or against any property of the  Mortgagor  within any other
county, state or other foreign or domestic  jurisdiction.  The Mortgagee and the
Mortgagor agree that the venue provided above is the most  convenient  forum for
both the Mortgagee  and the  Mortgagor.  The  Mortgagor  waives any objection to
venue  and  any  objection  based  on a more  convenient  forum  in  any  action
instituted under this Mortgage.

     30.  AUTHORIZATION  TO  OBTAIN  CREDIT  REPORTS.  By  signing  below,  each
Mortgagor who is an individual  provides written  authorization to the Mortgagee
or its  designee  (and any assignee or potential  assignee  hereof)  authorizing
review of the  Mortgagor's  personal  credit  profile from one or more  national
credit bureaus. Such authorization shall extend to obtaining a credit profile in
considering  the  Obligations  and/or this  Mortgage  and  subsequently  for the
purposes of update, renewal or extension of such credit or additional credit and
for reviewing or collecting the resulting account.

     31.  CHANGE IN NAME OR LOCATIONS.  The Mortgagor  hereby agrees that if the
location of any of the  Property  changes  from the Land or its chief  executive
office,  or if the Mortgagor  changes its name,  its type of  organization,  its
state of organization (if Mortgagor is a registered organization), its principal
residence  (if  Mortgagor  is an  individual),  its chief  executive  office (if
Mortgagor  is  a  general   partnership  or   non-registered   organization)  or
establishes  a name in which it may do business  that is not the current name of
the Mortgagor, the Mortgagor will immediately notify the Mortgagee in writing of
the additions or changes.


                                      -11-




     32.  WAIVER OF JURY TRIAL.  THE  MORTGAGOR  IRREVOCABLY  WAIVES ANY AND ALL
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION,  PROCEEDING  OR CLAIM OF ANY
NATURE RELATING TO THIS MORTGAGE, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS
MORTGAGE OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE MORTGAGOR
ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

THE MORTGAGOR ACKNOWLEDGES THAT IT HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS  MORTGAGE,  INCLUDING  THE WAIVER OF JURY  TRIAL,  AND HAS BEEN  ADVISED BY
COUNSEL AS NECESSARY OR APPROPRIATE.

WITNESS the due execution  hereof as a document under seal, as of the date first
written above, with the intent to be legally bound hereby.

[CORPORATE SEAL]                            QUIGLEY MANUFACTURING INC.


Attest: /s/ Charles A. Phillips             By: /s/ George J. Longo
       ------------------------------          ---------------------------------

Print Name: Charles A. Phillips             Print Name: George J. Longo
           --------------------------                  -------------------------

Title:        VP                            Title:    V.P. - CFO
      -------------------------------             ------------------------------


                                      -12-




                            CERTIFICATE OF RESIDENCE

     The  undersigned  certifies  that the  residence  of the  Mortgagee is 1600
Market Street, Philadelphia, PA 19103.



                                                 /s/  John Siegrist
                                                --------------------------------
                                                On behalf of the Mortgagee


                                      -13-




COMMONWEALTH OF PENNSYLVANIA     )
                                 ) ss:
COUNTY OF BUCKS                  )


     On this,  the 1st day of October,  2004,  before me, a Notary  Public,  the
undersigned  officer,  personally  appeared  George J. Longo,  who  acknowledged
himself/herself  to be the Vice  President  of  Quigley  Manufacturing  Inc.,  a
Delaware corporation,  and that he/she, in such capacity, being authorized to do
so,  executed the foregoing  instrument  for the purposes  therein  contained by
signing on behalf of said corporation.

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


                                                Joanne J. Taylor
                                                --------------------------------
                                                Notary Public


My commission expires: March 21, 2005

                                      -14-



                                    EXHIBITS
                                 Lebanon County

A. LEGAL DESCRIPTION (ATTACHED HERETO)

B. PERMITTED ENCUMBRANCES:

Rights or claims by parties in possession  or under the terms of any  unrecorded
lease or agreement(s) of sale.

Water and Sewer Rents due for current year, not yet due and payable.

Liability for possible additional  assessment for County Taxes, School Taxes and
Municipal  Taxes;  and/or for new  construction  and/or  major  improvements  to
premises, not yet due and payable.

Under and subject to rights of Metropolitan Edison Company acquired as follows:

- - Miscellaneous Book Y-2, page 232
- - Miscellaneous Book Y-2, page 566
- - Miscellaneous Book Z-2, page 183
- - Miscellaneous Book 95, page 756

Under and subject to drainage easement as set forth on Plan Book 32, page 159.

Acreage content not insured.





ALL THAT  CERTAIN  lot or piece of  ground,  situate  in the  Township  of North
Lebanon,  County of  Lebanon  and  Commonwealth  of  Pennsylvania,  bounded  and
described as follows, to wit:

BEGINNING at a point on the eastern  right-of-way  line of North 15th Avenue (PA
State  Highway  Route  #38017,  (50 foot  wide),  said  point  being  50.0  feet
northwardly of the northwestern  corner of land of Pierce W. Boltz; THENCE along
said eastern right-of-way line of North 15th Avenue, North 34 degrees 30 minutes
West, a distance of 275.0 feet to a point;  THENCE  along the  southern  side of
Joel Drive (50 foot wide),  the  following  two courses and  distances:  along a
curve to the right  having a radius of 25.0 feet,  an arc distance of 39.27 feet
and a chord  bearing of North 10 degrees 30 minutes  East,  a distance  of 35.36
feet to a point; THENCE North 55 degrees 30 minutes East, a distance of 1,080.00
feet to a point;  THENCE  along land of MAC (of which this was formerly a part),
also being  along the  center  line of a 100.0 foot wide  drainage  and  utility
easement, South 34 degrees 30 minutes East, a distance of 565.0 feet to a point;
THENCE along said land of MAC,  also being along the northern  side of a 30 foot
wide utility  easement,  South 61 degrees 24 minutes 23 seconds West, a distance
of 874.60 feet to a point;  THENCE  along said land of MAC,  the  following  two
courses and  distances:  North 34 degrees 31 minutes  West,  a distance of 175.0
feet to a point;  THENCE  South 55 degrees 30 minutes  West, a distance of 235.0
feet to the place of BEGINNING.

CONTAINING 12.0 acres.

BEING Lot No. 4 on Land  Subdivision  Plan for MAC,  dated  December  15,  1983,
recorded  January 6, 1984,  in the  Recorder of Deeds  Office,  Lebanon  County,
Pennsylvania, in Plan Book 32, page 159.


                                    EXHIBIT A




                    OPEN-END MORTGAGE AND SECURITY AGREEMENT

                ------------------------------------------------


                           QUIGLEY MANUFACTURING INC.

                                    Mortgagor

                                       AND

                         PNC BANK, NATIONAL ASSOCIATION,

                                    Mortgagee

                ------------------------------------------------

                                   Return to:

                          PNC Bank, National Association
                          1600 Market Street
                          Philadelphia, PA  19103

                          Attention:  John Siegrist

EX-10

                                                                    Exhibit 10.4


                                                                 (Lancaster Co.)
OPEN-END MORTGAGE
AND SECURITY AGREEMENT                                          [OBJECT OMITTED]
(THIS MORTGAGE SECURES FUTURE ADVANCES)


     THIS OPEN-END MORTGAGE AND SECURITY  AGREEMENT (this "MORTGAGE") is made as
October 1, 2004,  by QUIGLEY  MANUFACTURING  INC., a Delaware  corporation  (the
"Mortgagor"), with an address at 621 N. Shady Retreat Road, Doylestown, PA 18901
in favor of PNC BANK, NATIONAL ASSOCIATION (the "MORTGAGEE"), with an address at
1600 Market Street, Philadelphia, PA 19103.

     WHEREAS,  the  Mortgagor is the owner of a certain  tract or parcel of land
described in Exhibit A attached hereto and made a part hereof, together with the
improvements now or hereafter erected thereon; and

     WHEREAS,  the  Mortgagor  is  providing a guaranty  of a  borrowing  by The
Quigley  Corporation  (the  "BORROWER")  from the  Mortgagee in an amount not to
exceed Three Million Dollars ($3,000,000) (the "LOAN"),  which Loan is evidenced
by one or more promissory notes in favor of the Mortgagee (the "NOTE");

     NOW, THEREFORE,  for the purpose of securing the payment and performance of
the following obligations (collectively called the "OBLIGATIONS"):

     (A) The Loan, the Note and all other loans, advances,  debts,  liabilities,
obligations,  covenants  and duties owing by the Mortgagor or by the Borrower to
the Mortgagee or to any other direct or indirect subsidiary of The PNC Financial
Services Group,  Inc., of any kind or nature,  present or future  (including any
interest accruing thereon after maturity, or after the filing of any petition in
bankruptcy,  or the  commencement  of any  insolvency,  reorganization  or  like
proceeding relating to the Mortgagor,  whether or not a claim for post-filing or
post-petition  interest  is  allowed  in such  proceeding),  whether  direct  or
indirect (including those acquired by assignment or participation),  absolute or
contingent,  joint or several,  due or to become due,  now existing or hereafter
arising, whether or not (i) evidenced by any note, guaranty or other instrument,
(ii) arising under any agreement,  instrument or document, (iii) for the payment
of money, (iv) arising by reason of an extension of credit,  opening of a letter
of  credit,  loan,  equipment  lease or  guarantee,  (v) under any  interest  or
currency  swap,  future,  option or other  interest  rate  protection or similar
agreement, (vi) under or by reason of any foreign currency transaction, forward,
option or other similar  transaction  providing for the purchase of one currency
in exchange for the sale of another  currency,  or in any other manner, or (vii)
arising out of  overdrafts  on deposit or other  accounts  or out of  electronic
funds transfers  (whether by wire transfer or through automated  clearing houses
or  otherwise) or out of the return unpaid of, or other failure of the Mortgagee
to receive  final  payment for, any check,  item,  instrument,  payment order or
other deposit or credit to a deposit or other account, or out of the Mortgagee's
non-receipt  of or inability to collect  funds or otherwise not being made whole
in connection with depository or other similar arrangements; and any amendments,
extensions,  renewals and increases of or to any of the foregoing, and all costs
and  expenses  of the  Mortgagee  incurred  in the  documentation,  negotiation,
modification,  enforcement,  collection and otherwise in connection  with any of
the foregoing, including reasonable attorneys' fees and expenses.





     (B) Any sums advanced by the  Mortgagee or which may  otherwise  become due
pursuant to the provisions of the Note or this Mortgage or pursuant to any other
document or  instrument  at any time  delivered to the  Mortgagee to evidence or
secure  any  of  the  Obligations  or  which  otherwise  relate  to  any  of the
Obligations  (as the same may be amended,  supplemented or replaced from time to
time, the "LOAN DOCUMENTS").

The Mortgagor,  for good and valuable consideration,  receipt of which is hereby
acknowledged, and intending to be legally bound hereby, does hereby give, grant,
bargain, sell, convey, assign, transfer, mortgage, hypothecate, pledge, set over
and confirm unto the Mortgagee  and does agree that the  Mortgagee  shall have a
security  interest in the  following  described  property,  all  accessions  and
additions  thereto,  all  substitutions  therefor and  replacements and proceeds
thereof, and all reversions and remainders of such property now owned or held or
hereafter acquired (the "PROPERTY"), to wit:

          (a) All of the Mortgagor's estate in the premises described in Exhibit
A, together with all of the  easements,  rights of way,  privileges,  liberties,
hereditaments,  gores, streets, alleys,  passages,  ways, waters,  watercourses,
rights and  appurtenances  thereunto  belonging or appertaining,  and all of the
Mortgagor's estate, right, title, interest,  claim and demand therein and in the
public  streets  and ways  adjacent  thereto,  either in law or in  equity  (the
"LAND");

          (b) All the buildings,  structures and  improvements of every kind and
description now or hereafter  erected or placed on the Land, and all facilities,
fixtures,  machinery,  apparatus,  appliances,   installations,   machinery  and
equipment,  including  all  building  materials  to be  incorporated  into  such
buildings and all electrical,  heating,  air conditioning and plumbing equipment
necessary for the  operation of such  buildings,  now or hereafter  attached to,
located in or used in  connection  with  those  buildings,  structures  or other
improvements (the "IMPROVEMENTS");

          (c) All rents, issues and profits arising or issuing from the Land and
the Improvements  (the "RENTS")  including the Rents arising or issuing from all
leases,  licenses,  subleases  or any other use or  occupancy  agreement  now or
hereafter  entered into  covering  all or any part of the Land and  Improvements
(the  "LEASES"),  all of which  Leases  and Rents  are  hereby  assigned  to the
Mortgagee by the  Mortgagor.  The foregoing  assignment  shall include all fees,
charges,  accounts or other payments for the use or occupancy of rooms and other
public facilities in hotels,  motels, or other lodging properties,  and all cash
or securities  deposited under Leases to secure  performance of lessees of their
obligations thereunder, whether such cash or securities are to be held until the
expiration of the terms of such leases or applied to one or more installments of
rent coming due prior to the expiration of such terms. The foregoing  assignment
extends to Rents  arising both before and after the  commencement  by or against
the Mortgagor of any case or proceeding  under any Federal or State  bankruptcy,
insolvency  or similar  law, and is intended as an absolute  assignment  and not
merely the granting of a security interest. The Mortgagor, however, shall have a
license to collect retain and use the Rents so long as no Event of Default shall
have occurred and be continuing or shall exist.  The Mortgagor  will execute and
deliver to the Mortgagee, on demand, such additional assignments and instruments
as the Mortgagee may require to  implement,  confirm,  maintain and continue the
assignment of Rents hereunder; and

          (d) All proceeds of the conversion,  voluntary or involuntary,  of any
of the foregoing into cash or liquidated claims.

          To have and to hold the same unto the  Mortgagee,  its  successors and
assigns, forever.

          Provided,  however,  that if the Mortgagor  shall pay to the Mortgagee
the  Obligations,  and if the Mortgagor shall keep and perform each of its other
covenants,  conditions  and  agreements  set forth  herein and in the other Loan
Documents, then, upon the termination of all obligations, duties and commitments


                                       -2-




of the Mortgagor  under the  Obligations  and this Mortgage,  and subject to the
provisions of the paragraph  entitled  "Survival;  Successors and Assigns",  the
estate hereby granted and conveyed shall become null and void.

          This Mortgage is an "Open-End  Mortgage" as set forth in 42 Pa. C.S.A.
ss.8143 and secures obligations up to a maximum principal amount of indebtedness
outstanding  at any time  equal to double  the face  amount  of the  Note,  plus
accrued and unpaid  interest,  including  advances  for the payment of taxes and
municipal assessments,  maintenance charges,  insurance premiums, costs incurred
for the  protection  of the  Property  or the  lien of this  Mortgage,  expenses
incurred  by the  Mortgagee  by  reason  of a default  or Event of  Default  (as
hereinafter  defined) by the Mortgagor  under this Mortgage and advances for the
construction, alteration or renovation on the Property or for any other purpose,
together with all other sums due hereunder or secured hereby.  All notices to be
given to the Mortgagee  pursuant to 42 Pa. C.S.A.  ss.8143 shall be given as set
forth in Section 18.

          1.  REPRESENTATIONS  AND  WARRANTIES.  The  Mortgagor  represents  and
warrants to the Mortgagee that (i) the Mortgagor has good and  marketable  title
to an estate in fee simple  absolute  in the Land and  Improvements  and has all
right,  title and  interest  in all other  property  constituting  a part of the
Property,  in each case free and clear of all liens and encumbrances,  except as
may  otherwise  be set forth on an Exhibit B hereto  and (ii) its name,  type of
organization,  jurisdiction of organization  and chief executive office are true
and complete as set forth in the heading of this  Mortgage.  This  Mortgage is a
valid and enforceable first lien on the Property (except as set forth on Exhibit
B) and the Mortgagee shall, subject to the Mortgagor's right of possession prior
to an Event of Default,  quietly enjoy and possess the  Property.  The Mortgagor
shall preserve such title as it warrants herein and the validity and priority of
the lien hereof and shall  forever  warrant and defend the same to the Mortgagee
against the claims of all persons.

     2.  AFFIRMATIVE  COVENANTS.  Until all of the  Obligations  shall have been
fully paid, satisfied and discharged the Mortgagor shall:

          (a) PAYMENT AND  PERFORMANCE OF  OBLIGATIONS.  Pay or cause to be paid
and perform all Obligations when due as provided in the Loan Documents.

          (b)  LEGAL  REQUIREMENTS.  Promptly  comply  with and  conform  to all
present and future laws, statutes, codes, ordinances, orders and regulations and
all  covenants,  restrictions  and  conditions  which may be  applicable  to the
Mortgagor or to any of the Property (the "LEGAL REQUIREMENTS").

          (c)  IMPOSITIONS.  Before  interest or  penalties  are due thereon and
otherwise when due, the Mortgagor  shall pay all taxes of every kind and nature,
all charges for any easement or agreement  maintained  for the benefit of any of
the Property,  all general and special assessments (including any condominium or
planned unit development assessments,  if any), levies, permits,  inspection and
license fees,  all water and sewer rents and charges,  and all other charges and
liens,  whether of a like or different nature,  imposed upon or assessed against
the  Mortgagor or any of the Property  (the  "IMPOSITIONS").  Within thirty (30)
days after the payment of any  Imposition,  the  Mortgagor  shall deliver to the
Mortgagee  written  evidence  acceptable to the  Mortgagee of such payment.  The
Mortgagor's  obligations to pay the  Impositions  shall survive the  Mortgagee's
taking  title  to  (and  possession  of)  the  Property   through   foreclosure,
deed-in-lieu or otherwise, as well as the termination of the Mortgage including,
without limitation, by merger into a deed.

          (d)  MAINTENANCE  OF  SECURITY.  Use,  and permit  others to use,  the
Property  only for its present use or such other uses as permitted by applicable
Legal Requirements and approved in writing by the Mortgagee. The Mortgagor shall


                                      -3-




keep the Property in good  condition and order and in a rentable and  tenantable
state of repair and will make or cause to be made,  as and when  necessary,  all
repairs, renewals, and replacements,  structural and nonstructural, exterior and
interior,  foreseen  and  unforeseen,  ordinary  and  extraordinary,   provided,
however,  that no structural  repairs,  renewals or  replacements  shall be made
without the Mortgagee's  prior written consent.  The Mortgagor shall not remove,
demolish or alter the Property nor commit or suffer waste with respect  thereto,
nor permit the Property to become deserted or abandoned. The Mortgagor covenants
and agrees not to take or permit any action with respect to the  Property  which
will in any  manner  impair  the  security  of this  Mortgage  or the use of the
Property as set forth in the Loan Documents.

     3. LEASES.  The Mortgagor  shall not (a) execute an assignment or pledge of
the Rents or the  Leases  other than in favor of the  Mortgagee;  (b) accept any
prepayment  of an  installment  of any  Rents  prior  to the  due  date  of such
installment;  or (c) enter  into or amend any of the terms of any of the  Leases
without the Mortgagee's prior written consent. Any or all leases or subleases of
all or any  part  of the  Property  shall  be  subject  in all  respects  to the
Mortgagee's prior written consent, shall be subordinated to this Mortgage and to
the Mortgagee's  rights and, together with any and all rents,  issues or profits
relating thereto, shall be assigned at the time of execution to the Mortgagee as
additional collateral security for the Obligations,  all in such form, substance
and detail as is satisfactory to the Mortgagee in its sole discretion.

     4. DUE ON SALE CLAUSE.  The Mortgagor  shall not sell,  convey or otherwise
transfer any interest in the Property  (whether  voluntarily  or by operation of
law),  or  agree  to do so,  without  the  Mortgagee's  prior  written  consent,
including (a) any sale, conveyance,  encumbrance,  assignment, or other transfer
of  (including  installment  land sale  contracts),  or the grant of a  security
interest  in, all or any part of the legal or equitable  title to the  Property,
except as otherwise permitted hereunder;  (b) any lease of all or any portion of
the Property; or (c) any sale,  conveyance,  encumbrance,  assignment,  or other
transfer  of, or the grant of a security  interest in, any share of stock of the
Mortgagor,  if a corporation or any partnership interest in the Mortgagor,  if a
partnership,  or any membership interest,  if a limited liability entity, except
in favor of the  Mortgagee.  Any  default  under  this  Section  shall  cause an
immediate acceleration of the Obligations without any demand by the Mortgagee.

     5. INSURANCE.  The Mortgagor shall keep the Property  continuously insured,
in an amount not less than the cost to  replace  the  Property  or an amount not
less than eighty  percent  (80%) of the full  insurable  value of the  Property,
whichever  is  greater,  covering  such risks and in such  amounts and with such
deductibles  as are  satisfactory  to the Mortgagee  and its counsel  including,
without  limitation,  insurance  against loss or damage by fire,  with  extended
coverage  and  against  other  hazards  as the  Mortgagee  may from time to time
require. With respect to any property under construction or reconstruction,  the
Mortgagor  shall maintain  builder's risk  insurance.  The Mortgagor  shall also
maintain  comprehensive general public liability insurance,  in an amount of not
less than One  Million  Dollars  ($1,000,000)  per  occurrence  and Two  Million
Dollars ($2,000,000) general aggregate per location,  which includes contractual
liability  insurance  for the  Mortgagor's  obligations  under the  Leases,  and
worker's compensation insurance. All property and builder's risk insurance shall
include  protection  for  continuation  of income  for a period  of twelve  (12)
months,  in the event of any damage caused by the perils referred to above.  All
policies,  including  policies for any amounts carried in excess of the required
minimum and policies not specifically  required by the Mortgagee,  shall be with
an insurance  company or companies  satisfactory  to the Mortgagee,  shall be in
form satisfactory to the Mortgagee,  shall meet all coinsurance  requirements of
the Mortgagee,  shall be maintained in full force and effect,  shall be assigned
to the Mortgagee,  with premiums prepaid,  as collateral security for payment of
the Obligations,  shall be endorsed with a standard mortgagee clause in favor of
the  Mortgagee  and  shall  provide  for at least  thirty  (30)  days  notice of
cancellation  to the Mortgagee.  Such insurance shall also name the Mortgagee as
an additional  insured under the  comprehensive  general public liability policy
and the Mortgagor  shall also deliver to the Mortgagee a copy of the replacement
cost coverage endorsement.  If the Property is located in an area which has been


                                      -4-




identified by any governmental agency,  authority or body as a flood hazard area
or the like, then the Mortgagor shall maintain a flood insurance policy covering
the  Property in an amount not less than the  original  principal  amount of the
Loan or the maximum  limit of  coverage  available  under the  federal  program,
whichever amount is less.

     6. RIGHTS OF  MORTGAGEE TO INSURANCE  PROCEEDS.  In the event of loss,  the
Mortgagee shall have the exclusive  right to adjust,  collect and compromise all
insurance claims, and the Mortgagor shall not adjust,  collect or compromise any
claims under said policies without the Mortgagee's  prior written consent.  Each
insurer is hereby  authorized  and directed to make payment under said policies,
including return of unearned  premiums,  directly to the Mortgagee instead of to
the  Mortgagor  and the  Mortgagee  jointly,  and  the  Mortgagor  appoints  the
Mortgagee as the Mortgagor's attorney-in-fact to endorse any draft therefor. All
insurance proceeds may, at the Mortgagee's sole option, be applied to all or any
part of the Obligations and in any order  (notwithstanding that such Obligations
may not then  otherwise be due and payable) or to the repair and  restoration of
any of the Property under such terms and conditions as the Mortgagee may impose.

     7.  INSTALLMENTS  FOR  INSURANCE,   TAXES  AND  OTHER  CHARGES.   Upon  the
Mortgagee's request, the Mortgagor shall pay to the Mortgagee monthly, an amount
equal to one-twelfth  (1/12) of the annual  premiums for the insurance  policies
referred to hereinabove  and the annual  Impositions and any other item which at
any time may be or become a lien upon the Property (the "ESCROW  CHARGES").  The
amounts so paid  shall be used in  payment  of the Escrow  Charges so long as no
Event of Default shall have occurred.  No amount so paid to the Mortgagee  shall
be  deemed to be trust  funds,  nor  shall  any sums  paid  bear  interest.  The
Mortgagee shall have no obligation to pay any insurance premium or Imposition if
at any time the funds being held by the Mortgagee for such premium or Imposition
are insufficient to make such payments. If, at any time, the funds being held by
the Mortgagee for any insurance  premium or Imposition are exhausted,  or if the
Mortgagee  determines,  in  its  sole  discretion,   that  such  funds  will  be
insufficient  to pay in full any insurance  premium or Imposition  when due, the
Mortgagor shall promptly pay to the Mortgagee,  upon demand, an amount which the
Mortgagee  shall  estimate as  sufficient  to make up the  deficiency.  Upon the
occurrence of an Event of Default,  the Mortgagee  shall have the right,  at its
election, to apply any amount so held against the Obligations due and payable in
such order as the Mortgagee may deem fit, and the Mortgagor hereby grants to the
Mortgagee a lien upon and security interest in such amounts for such purpose.

     8. CONDEMNATION. The Mortgagor, immediately upon obtaining knowledge of the
institution of any proceedings for the  condemnation or taking by eminent domain
of any of the  Property,  shall  notify the  Mortgagee  of the  pendency of such
proceedings.  The  Mortgagee may  participate  in any such  proceedings  and the
Mortgagor  shall  deliver to the Mortgagee  all  instruments  requested by it to
permit such  participation.  Any award or compensation for property taken or for
damage to property not taken, whether as a result of such proceedings or in lieu
thereof,  is hereby assigned to and shall be received and collected  directly by
the  Mortgagee,  and  any  award  or  compensation  shall  be  applied,  at  the
Mortgagee's   option,   to  any  part  of  the  Obligations  and  in  any  order
(notwithstanding  that any of such  Obligations may not then be due and payable)
or to the repair and  restoration  of any of the  Property  under such terms and
conditions as the Mortgagee may impose.

     9.  ENVIRONMENTAL  MATTERS.  (a) For  purposes of this  Section 9, the term
"ENVIRONMENTAL LAWS" shall mean all federal,  state and local laws,  regulations
and orders,  whether now or in the future  enacted or issued,  pertaining to the
protection of land,  water,  air, health,  safety or the  environment.  The term
"REGULATED  SUBSTANCES"  shall mean all  substances  regulated by  Environmental
Laws,  or which are known or considered to be harmful to the health or safety of
persons,  or the presence of which may require  investigation,  notification  or
remediation under the Environmental  Laws. The term  "CONTAMINATION"  shall mean


                                      -5-




the discharge, release, emission, disposal or escape of any Regulated Substances
into the environment.

          (b) The Mortgagor represents and warrants (i) that no Contamination is
present at, on or under the Property and that no  Contamination  is being or has
been emitted onto any surrounding  property;  (ii) all operations and activities
on the  Property  have  been and are  being  conducted  in  accordance  with all
Environmental  Laws,  and the  Mortgagor  has all permits and licenses  required
under the Environmental  Laws; (iii) no underground or aboveground storage tanks
are or have  been  located  on or  under  the  Property;  and  (iv) no  legal or
administrative proceeding is pending or threatened relating to any environmental
condition,  operation or activity on the  Property,  or any violation or alleged
violation of Environmental  Laws. These  representations and warranties shall be
true as of the date hereof, and shall be deemed to be continuing representations
and warranties  which must remain true,  correct and accurate  during the entire
duration of the term of this Mortgage.

          (c) The Mortgagor shall ensure, at its sole cost and expense, that the
Property and the conduct of all  operations  and  activities  thereon comply and
continue to comply with all  Environmental  Laws. The Mortgagor shall notify the
Mortgagee  promptly  and in  reasonable  detail in the event that the  Mortgagor
becomes  aware of any  violation  of any  Environmental  Laws,  the  presence or
release of any Contamination  with respect to the Property,  or any governmental
or third party claims relating to the environmental condition of the Property or
the conduct of operations or activities  thereon.  The Mortgagor also agrees not
to permit or allow  the  presence  of  Regulated  Substances  on any part of the
Property,  except  for  those  Regulated  Substances  (i)  which are used in the
ordinary course of the Mortgagor's business,  but only to the extent they are in
all cases used in a manner which complies with all Environmental  Laws; and (ii)
those Regulated  Substances which are naturally  occurring on the Property.  The
Mortgagor agrees not to cause, allow or permit the presence of any Contamination
on the Property.

          (d) The  Mortgagee  shall not be liable for, and the  Mortgagor  shall
indemnify,  defend  and hold  the  Mortgagee  and the  Indemnified  Parties  (as
hereinafter defined) and all of their respective successors and assigns harmless
from and  against  all  losses,  costs,  liabilities,  damages,  fines,  claims,
penalties  and  expenses  (including  reasonable  attorneys',  consultants'  and
contractors' fees, costs incurred in the  investigation,  defense and settlement
of claims,  as well as costs  incurred  in  connection  with the  investigation,
remediation or monitoring of any Regulated Substances or Contamination) that the
Mortgagee or any Indemnified  Party may suffer or incur  (including as holder of
the  Mortgage,  as  mortgagee in  possession  or as successor in interest to the
Mortgagor as owner of the Property by virtue of a foreclosure or acceptance of a
deed in lieu of  foreclosure)  as a  result  of or in  connection  with  (i) any
Environmental  Laws  (including  the assertion that any lien existing or arising
pursuant  to  any  Environmental  Laws  takes  priority  over  the  lien  of the
Mortgage);  (ii)  the  breach  of  any  representation,  warranty,  covenant  or
undertaking  by the  Mortgagor  in this  Section 9; (iii) the presence on or the
migration of any Contamination or Regulated  Substances on, under or through the
Property;  or (iv) any  litigation  or claim by the  government  or by any third
party in  connection  with the  environmental  condition  of the Property or the
presence or migration of any Regulated Substances or Contamination on, under, to
or from the Property.

          (e) Upon the  Mortgagee's  request,  the  Mortgagor  shall execute and
deliver an Environmental  Indemnity Agreement satisfactory in form and substance
to the  Mortgagee,  to  more  fully  reflect  the  Mortgagor's  representations,
warranties, covenants and indemnities with respect to the Environmental Laws.

     10. INSPECTION OF PROPERTY. The Mortgagee shall have the right to enter the
Property  at any  reasonable  hour for the  purpose  of  inspecting  the  order,
condition and repair of the buildings and improvements  erected thereon, as well
as the conduct of operations and  activities on the Property.  The Mortgagee may


                                      -6-




enter the Property (and cause the Mortgagee's employees,  agents and consultants
to enter the Property),  upon prior written notice to the Mortgagor,  to conduct
any and all  environmental  testing  deemed  appropriate by the Mortgagee in its
sole  discretion.  The  environmental  testing shall be accomplished by whatever
means the Mortgagee may deem  appropriate,  including the taking of soil samples
and the  installation  of  ground  water  monitoring  wells or  other  intrusive
environmental  tests.  The  Mortgagor  shall  provide  the  Mortgagee  (and  the
Mortgagee's  employees,  agents and consultants)  reasonable rights of access to
the  Property as well as such  information  about the  Property  and the past or
present  conduct of operations  and  activities  thereon as the Mortgagee  shall
reasonably request.

     11. EVENTS OF DEFAULT.  The  occurrence of any one or more of the following
events  shall  constitute  an "EVENT  OF  DEFAULT"  hereunder:  (a) any Event of
Default (as defined in any of the Obligations); (b) any default under any of the
Obligations  that does not have a defined  set of  "Events of  Default"  and the
lapse of any notice or cure period provided in such  Obligations with respect to
such default; (c) demand by the Mortgagee under any of the Obligations that have
a demand feature;  (d) the Mortgagor's failure to perform any of its obligations
under this Mortgage or under any Environmental  Indemnity Agreement executed and
delivered  pursuant to Section 9(e); (e) falsity,  inaccuracy or material breach
by the Mortgagor of any written  warranty,  representation  or statement made or
furnished to the  Mortgagee by or on behalf of the  Mortgagor;  (f) an uninsured
material loss,  theft,  damage,  or  destruction to any of the Property,  or the
entry of any judgment against the Mortgagor or any lien against or the making of
any levy,  seizure or  attachment  of or on the  Property;  (g) the  Mortgagee's
failure to have a mortgage lien on the Property with the priority required under
Section 1; (h) any  indication or evidence  received by the  Mortgagee  that the
Mortgagor may have  directly or indirectly  been engaged in any type of activity
which,  in the  Mortgagee's  discretion,  might result in the  forfeiture of any
property of the Mortgagor to any governmental entity,  federal,  state or local;
(i) foreclosure  proceedings are instituted  against the Property upon any other
lien or claim,  whether  alleged  to be  superior  or junior to the lien of this
Mortgage;  (j) the failure by the Mortgagor to pay any  Impositions  as required
under  Section  2(c),  or to  maintain  in full force and  effect any  insurance
required under Section 5; or (k) the Mortgagor or any other obligor or guarantor
of any of the Obligations, shall at any time deliver or cause to be delivered to
the Mortgagee a notice  pursuant to 42 Pa.  C.S.A.  ss.8143 (or any successor or
similar law, rule or regulation)  electing to limit the indebtedness  secured by
this Mortgage.

     12. RIGHTS AND REMEDIES OF MORTGAGEE.  If an Event of Default  occurs,  the
Mortgagee may, at its option and without demand, notice or delay, do one or more
of the following:

          (a) The Mortgagee may declare the entire unpaid  principal  balance of
the  Obligations,  together  with all  interest  thereon,  to be due and payable
immediately.

          (b) The Mortgagee may (i) institute and maintain an action of mortgage
foreclosure  against the Property and the  interests of the  Mortgagor  therein,
(ii)  institute  and  maintain  an  action  on any  instruments  evidencing  the
Obligations or any portion  thereof,  and (iii) take such other action at law or
in equity for the enforcement of any of the Loan Documents as the law may allow,
and in each such action the Mortgagee shall be entitled to all costs of suit and
attorneys fees.

          (c) The  Mortgagee  may,  in its sole  and  absolute  discretion:  (i)
collect any or all of the Rents,  including any Rents past due and unpaid,  (ii)
perform any  obligation or exercise any right or remedy of the  Mortgagor  under
any Lease, or (iii) enforce any obligation of any tenant of any of the Property.
The Mortgagee may exercise any right under this subsection  (c),  whether or not
the Mortgagee  shall have entered into  possession  of any of the Property,  and
nothing  herein  contained  shall be construed as  constituting  the Mortgagee a
"mortgagee  in  possession",  unless the  Mortgagee  shall have entered into and
shall continue to be in actual possession of the Property.  The Mortgagor hereby
authorizes  and directs each and every  present and future  tenant of any of the
Property  to pay all Rents  directly to the  Mortgagee  and to perform all other


                                      -7-




obligations of that tenant for the direct  benefit of the  Mortgagee,  as if the
Mortgagee were the landlord under the Lease with that tenant,  immediately  upon
receipt  of a demand by the  Mortgagee  to make such  payment  or  perform  such
obligations.  The Mortgagor hereby waives any right,  claim or demand it may now
or hereafter  have against any such tenant by reason of such payment of Rents or
performance of obligations to the Mortgagee, and any such payment or performance
to the  Mortgagee  shall  discharge the  obligations  of the tenant to make such
payment or performance to the Mortgagor.

          (d) The  Mortgagee  shall  have  the  right,  in  connection  with the
exercise of its remedies  hereunder,  to the  appointment  of a receiver to take
possession  and control of the Property or to collect the Rents,  without notice
and without regard to the adequacy of the Property to secure the Obligations.  A
receiver  while in  possession  of the  Property  shall  have the  right to make
repairs and to make improvements necessary or advisable in its or his opinion to
preserve the Property,  or to make and keep them rentable to the best advantage,
and the Mortgagee may advance moneys to a receiver for such purposes. Any moneys
so expended or advanced by the Mortgagee or by a receiver  shall be added to and
become a part of the Obligations secured by this Mortgage.

     13. APPLICATION OF PROCEEDS.  The Mortgagee shall apply the proceeds of any
foreclosure  sale of, or other  disposition  or  realization  upon,  or Rents or
profits  from,  the  Property  to  satisfy  the  Obligations  in such  order  of
application as the Mortgagee shall determine in its exclusive discretion.

     14.  CONFESSION OF JUDGMENT IN EJECTMENT.  At any time after the occurrence
of an Event of  Default,  without  further  notice,  regardless  of whether  the
Mortgagee  has asserted any other right or exercised any other remedy under this
Mortgage or any of the other Loan Documents, it shall be lawful for any attorney
of any court of record as  attorney  for the  Mortgagor  to confess  judgment in
ejectment against the Mortgagor and all persons claiming under the Mortgagor for
the recovery by the  Mortgagee of possession of all or any part of the Property,
for which this  Mortgage  shall be sufficient  warrant.  If for any reason after
such  action  shall  have  commenced  the  same  shall be  discontinued  and the
possession of the Property shall remain in or be restored to the Mortgagor,  the
Mortgagee shall have the right upon any subsequent  default or defaults to bring
one or more  amicable  action or  actions as  hereinbefore  set forth to recover
possession of all or any part of the Property.

     15.  MORTGAGEE'S  RIGHT  TO  PROTECT  SECURITY.  The  Mortgagee  is  hereby
authorized to do any one or more of the  following,  irrespective  of whether an
Event of Default has occurred: (a) appear in and defend any action or proceeding
purporting  to affect the security  hereof or the  Mortgagee's  rights or powers
hereunder;  (b) purchase such insurance policies covering the Property as it may
elect if the  Mortgagor  fails  to  maintain  the  insurance  coverage  required
hereunder;  and (c) take such  action as the  Mortgagee  may  determine  to pay,
perform or comply with any Impositions or Legal Requirements, to cure any Events
of Default and to protect its security in the Property.

     16. APPOINTMENT OF MORTGAGEE AS ATTORNEY-IN-FACT.  The Mortgagee, or any of
its officers, is hereby irrevocably appointed attorney-in-fact for the Mortgagor
(without  requiring any of them to act as such),  such appointment being coupled
with an interest, to do any or all of the following: (a) collect the Rents after
the occurrence of an Event of Default;  (b) settle for,  collect and receive any
awards  payable under Section 8 from the  authorities  making the same;  and (c)
execute,  deliver and file, at Mortgagor's sole cost and expense such financing,
continuation or amendment  statements and other instruments as the Mortgagee may
require in order to perfect,  protect and maintain its security  interest  under
the UCC on any portion of the Property.

     17. CERTAIN  WAIVERS.  The Mortgagor hereby waives and releases all benefit
that  might  accrue to the  Mortgagor  by virtue of any  present  or future  law
exempting  the  Property,  or any  part of the  proceeds  arising  from any sale


                                      -8-




thereof, from attachment,  levy or sale on execution,  or providing for any stay
of execution,  exemption  from civil process or extension of time for payment or
any rights of  marshalling  in the event of any sale  hereunder of the Property,
and, unless specifically required herein, all notices of the Mortgagor's default
or of the Mortgagee's  election to exercise,  or the Mortgagee's actual exercise
of any option under this Mortgage or any other Loan Document.

     18. NOTICES. All notices, demands, requests,  consents, approvals and other
communications  required or permitted  hereunder  ("NOTICES") must be in writing
and will be effective upon receipt.  Notices may be given in any manner to which
the parties may separately agree,  including  electronic mail.  Without limiting
the foregoing,  first-class mail, facsimile  transmission and commercial courier
service  are  hereby  agreed  to  as  acceptable  methods  for  giving  Notices.
Regardless  of the manner in which  provided,  Notices  may be sent to a party's
address as set forth above or to such other address as any party may give to the
other for such purpose in accordance with this section.

     19. FURTHER ACTS. By its signature hereon, the Mortgagor hereby irrevocably
authorizes  the  Mortgagee  to  execute  (on behalf of the  Mortgagor)  and file
against  the  Mortgagor  one  or  more  financing,   continuation  or  amendment
statements  pursuant to the UCC in form  satisfactory to the Mortgagee,  and the
Mortgagor   will  pay  the  cost  of  preparing  and  filing  the  same  in  all
jurisdictions in which such filing is deemed by the Mortgagee to be necessary or
desirable in order to perfect,  preserve and protect its security interests.  If
required  by  the  Mortgagee,  the  Mortgagor  will  execute  all  documentation
necessary  for the  Mortgagee to obtain and maintain  perfection of its security
interests in the Property. The Mortgagor will, at the cost of the Mortgagor, and
without expense to the Mortgagee,  do, execute,  acknowledge and deliver all and
every such further acts, deeds, conveyances,  mortgages, assignments, notices of
assignment,  transfers and assurances as the Mortgagee shall, from time to time,
require  for  the  better  assuring,  conveying,   assigning,   transferring  or
confirming unto the Mortgagee the property and rights hereby mortgaged, or which
Mortgagor  may be or may  hereafter  become  bound to  convey  or  assign to the
Mortgagee,  or for carrying out the intent of or facilitating the performance of
the  terms  of this  Mortgage  or for  filing,  registering  or  recording  this
Mortgage. The Mortgagor grants to the Mortgagee an irrevocable power of attorney
coupled with an interest for the purpose of exercising  and  perfecting  any and
all  rights  and  remedies  available  to the  Mortgagee  under the  Note,  this
Mortgage,  the other Loan  Documents,  at law or in equity,  including,  without
limitation, the rights and remedies described in this paragraph.

     20.  CHANGES  IN THE LAWS  REGARDING  TAXATION.  If any law is  enacted  or
adopted or amended after the date of this Mortgage which deducts the Obligations
from the value of the  Property  for the purpose of taxation or which  imposes a
tax, either directly or indirectly, on the Mortgagor or the Mortgagee's interest
in the Property,  the  Mortgagor  will pay such tax, with interest and penalties
thereon,  if any. If the  Mortgagee  determines  that the payment of such tax or
interest  and  penalties  by the  Mortgagor  would be unlawful or taxable to the
Mortgagee or unenforceable or provide the basis for a defense of usury, then the
Mortgagee shall have the option,  by written notice of not less than ninety (90)
days, to declare the entire Obligations immediately due and payable.

     21.  DOCUMENTARY  STAMPS. If at any time the United States of America,  any
State  thereof or any  subdivision  of any such State shall  require  revenue or
other stamps to be affixed to the Note or this Mortgage, or impose any other tax
or charge on the same,  the Mortgagor  will pay for the same,  with interest and
penalties thereon, if any.

     22. PRESERVATION OF RIGHTS. No delay or omission on the Mortgagee's part to
exercise  any right or power  arising  hereunder  will  impair any such right or
power or be  considered  a  waiver  of any such  right  or  power,  nor will the
Mortgagee's  action or inaction impair any such right or power.  The Mortgagee's


                                      -9-




rights and remedies  hereunder  are  cumulative  and not  exclusive of any other
rights or remedies which the Mortgagee may have under other  agreements,  at law
or in equity.

     23.  ILLEGALITY.  If any  provision  contained in this  Mortgage  should be
invalid,  illegal or unenforceable in any respect, it shall not affect or impair
the validity,  legality and  enforceability of the remaining  provisions of this
Mortgage.

     24. CHANGES IN WRITING. No modification, amendment or waiver of, or consent
to any departure by the Mortgagor  from,  any provision of this Mortgage will be
effective unless made in a writing signed by the Mortgagee, and then such waiver
or consent shall be effective only in the specific  instance and for the purpose
for which  given.  No notice to or demand  on the  Mortgagor  will  entitle  the
Mortgagor to any other or further notice or demand in the same, similar or other
circumstance.

     25.  ENTIRE   AGREEMENT.   This  Mortgage   (including  the  documents  and
instruments  referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and  understandings,  both written and oral,  between
the parties with respect to the subject matter hereof.

     26.  SURVIVAL;  SUCCESSORS AND ASSIGNS.  This Mortgage will be binding upon
and inure to the benefit of the Mortgagor and the Mortgagee and their respective
heirs, executors,  administrators,  successors and assigns;  PROVIDED,  HOWEVER,
that the  Mortgagor may not assign this Mortgage in whole or in part without the
Mortgagee's  prior written consent and the Mortgagee at any time may assign this
Mortgage  in  whole or in part;  and  PROVIDED,  FURTHER,  that the  rights  and
benefits under the Paragraphs entitled "Environmental  Matters",  "Inspection of
Property"  and  "Indemnity"  shall also inure to the  benefit of any  persons or
entities who acquire  title or  ownership  of the  Property  from or through the
Mortgagee or through action of the Mortgagee (including a foreclosure, sheriff's
or  judicial  sale).  The  provisions  of  Paragraphs  entitled   "Environmental
Matters",   "Inspection   of  Property"  and   "Indemnity"   shall  survive  the
termination,  satisfaction or release of this Mortgage,  the foreclosure of this
Mortgage or the delivery of a deed in lieu of foreclosure.

     27.  INTERPRETATION.  In  this  Mortgage,  unless  the  Mortgagee  and  the
Mortgagor  otherwise agree in writing,  the singular includes the plural and the
plural the  singular;  words  importing  any gender  include the other  genders;
references to statutes are to be construed as including all statutory provisions
consolidating,  amending or  replacing  the statute  referred  to; the word "or"
shall be deemed to  include  "and/or",  the words  "including",  "includes"  and
"include"  shall be deemed to be  followed  by the words  "without  limitation";
references to articles,  sections (or  subdivisions of sections) or exhibits are
to those of this Mortgage;  and  references to agreements and other  contractual
instruments  shall be deemed to  include  all  subsequent  amendments  and other
modifications  to such  instruments,  but only to the extent such amendments and
other  modifications  are not prohibited by the terms of this Mortgage.  Section
headings in this  Mortgage are included for  convenience  of reference  only and
shall not  constitute  a part of this  Mortgage for any other  purpose.  If this
Mortgage is executed by more than one party as  Mortgagor,  the  obligations  of
such persons or entities will be joint and several.

     28.  INDEMNITY.  The Mortgagor  agrees to indemnify  each of the Mortgagee,
each legal  entity,  if any, who  controls,  is controlled by or is under common
control with the Mortgagee  and each of their  respective  directors,  officers,
employees and agents (the "INDEMNIFIED  PARTIES"),  and to hold each Indemnified
Party  harmless  from  and  against,  any  and  all  claims,  damages,   losses,
liabilities and expenses (including all fees and charges of internal or external
counsel  with  whom any  Indemnified  Party  may  consult  and all  expenses  of
litigation and preparation  therefor) which any Indemnified  Party may incur, or
which may be asserted  against any  Indemnified  Party by any person,  entity or
governmental  authority (including any person or entity claiming derivatively on
behalf of the  Mortgagor),  in connection  with or arising out of or relating to
the matters referred to in this Mortgage or in the other Loan Documents, whether


                                      -10-




(a) arising from or incurred in connection with any breach of a  representation,
warranty or covenant by the  Mortgagor,  or (b) arising out of or resulting from
any suit, action, claim,  proceeding or governmental  investigation,  pending or
threatened,  whether based on statute, regulation or order, or tort, or contract
or otherwise,  before any court or governmental  authority;  PROVIDED,  HOWEVER,
that the foregoing indemnity  agreement shall not apply to any claims,  damages,
losses,  liabilities and expenses solely  attributable to an Indemnified Party's
gross negligence or willful  misconduct.  The indemnity  agreement  contained in
this Section  shall survive the  termination  of this  Mortgage,  payment of any
Obligations  and  assignment  of  any  rights   hereunder.   The  Mortgagor  may
participate at its expense in the defense of any such action or claim.

     29. GOVERNING LAW AND JURISDICTION. This Mortgage has been delivered to and
accepted by the  Mortgagee  and will be deemed to be made in the State where the
Mortgagee's office indicated above is located. THIS MORTGAGE WILL BE INTERPRETED
AND THE RIGHTS AND  LIABILITIES OF THE PARTIES  HERETO  DETERMINED IN ACCORDANCE
WITH THE LAWS OF THE  COMMONWEALTH  OF  PENNSYLVANIA,  EXCLUDING ITS CONFLICT OF
LAWS RULES,  EXCEPT THAT THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED (IF
DIFFERENT  FROM THE STATE WHERE SUCH OFFICE OF THE  MORTGAGEE IS LOCATED)  SHALL
GOVERN THE CREATION,  PERFECTION AND FORECLOSURE OF THE LIENS CREATED  HEREUNDER
ON THE  PROPERTY OR ANY  INTEREST  THEREIN.  The  Mortgagor  hereby  irrevocably
consents  to the  exclusive  jurisdiction  of any  state  or  federal  court  in
Philadelphia  County,  Pennsylvania  provided  that  nothing  contained  in this
Mortgage  will prevent the  Mortgagee  from  bringing any action,  enforcing any
award or judgment or exercising any rights  against the Mortgagor  individually,
against any security or against any property of the  Mortgagor  within any other
county, state or other foreign or domestic  jurisdiction.  The Mortgagee and the
Mortgagor agree that the venue provided above is the most  convenient  forum for
both the Mortgagee  and the  Mortgagor.  The  Mortgagor  waives any objection to
venue  and  any  objection  based  on a more  convenient  forum  in  any  action
instituted under this Mortgage.

     30.  AUTHORIZATION  TO  OBTAIN  CREDIT  REPORTS.  By  signing  below,  each
Mortgagor who is an individual  provides written  authorization to the Mortgagee
or its  designee  (and any assignee or potential  assignee  hereof)  authorizing
review of the  Mortgagor's  personal  credit  profile from one or more  national
credit bureaus. Such authorization shall extend to obtaining a credit profile in
considering  the  Obligations  and/or this  Mortgage  and  subsequently  for the
purposes of update, renewal or extension of such credit or additional credit and
for reviewing or collecting the resulting account.

     31.  CHANGE IN NAME OR LOCATIONS.  The Mortgagor  hereby agrees that if the
location of any of the  Property  changes  from the Land or its chief  executive
office,  or if the Mortgagor  changes its name,  its type of  organization,  its
state of organization (if Mortgagor is a registered organization), its principal
residence  (if  Mortgagor  is an  individual),  its chief  executive  office (if
Mortgagor  is  a  general   partnership  or   non-registered   organization)  or
establishes  a name in which it may do business  that is not the current name of
the Mortgagor, the Mortgagor will immediately notify the Mortgagee in writing of
the additions or changes.


                                      -11-




     32.  WAIVER OF JURY TRIAL.  THE  MORTGAGOR  IRREVOCABLY  WAIVES ANY AND ALL
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION,  PROCEEDING  OR CLAIM OF ANY
NATURE RELATING TO THIS MORTGAGE, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS
MORTGAGE OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE MORTGAGOR
ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

THE MORTGAGOR ACKNOWLEDGES THAT IT HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS  MORTGAGE,  INCLUDING  THE WAIVER OF JURY  TRIAL,  AND HAS BEEN  ADVISED BY
COUNSEL AS NECESSARY OR APPROPRIATE.

WITNESS the due execution  hereof as a document under seal, as of the date first
written above, with the intent to be legally bound hereby.

[CORPORATE SEAL]                            QUIGLEY MANUFACTURING INC.


Attest: /s/ Charles A. Phillips             By: /s/ George J. Longo
       ------------------------------          ---------------------------------

Print Name: Charles A. Phillips             Print Name: George J. Longo
           --------------------------                  -------------------------

Title:        VP                            Title:    V.P. - CFO
      -------------------------------             ------------------------------


                                      -12-




                            CERTIFICATE OF RESIDENCE

     The  undersigned  certifies  that the  residence  of the  Mortgagee is 1600
Market Street, Philadelphia, PA 19103.



                                                 /s/  John Siegrist
                                                --------------------------------
                                                On behalf of the Mortgagee


                                      -13-




COMMONWEALTH OF PENNSYLVANIA     )
                                 ) ss:
COUNTY OF BUCKS                  )


     On this,  the 1st day of October,  2004,  before me, a Notary  Public,  the
undersigned  officer,  personally  appeared  George J. Longo,  who  acknowledged
himself/herself  to be the Vice  President  of  Quigley  Manufacturing  Inc.,  a
Delaware corporation,  and that he/she, in such capacity, being authorized to do
so,  executed the foregoing  instrument  for the purposes  therein  contained by
signing on behalf of said corporation.

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


                                                Joanne J. Taylor
                                                --------------------------------
                                                Notary Public


My commission expires: March 21, 2005


                                      -14-




                                    EXHIBITS
                                Lancaster County

A. LEGAL DESCRIPTION (ATTACHED HERETO)

B. PERMITTED ENCUMBRANCES:

Rights or claims by parties in possession  or under the terms of any  unrecorded
lease or agreement(s) of sale.

Water and Sewer Rents due for current year, not yet due and payable.

Liability for possible additional  assessment for County Taxes, School Taxes and
Municipal  Taxes;  and/or for new  construction  and/or  major  improvements  to
premises, not yet due and payable.

Subject to restrictions as set forth in Record Book N-42, page 43.

Subject to restrictions as set forth in Record Book H-40, page 425.

Subject to Agreement as set forth in Record Book S-44, page 248.

Easement of alley along the south side of premises.

Acreage content not insured.






31 NORTH SPRUCE STREET AND NORTH SPRUCE STREET:

ALL THAT  CERTAIN  tract or piece  of land  situated  on the east  side of North
Spruce  Street  in  the  Borough  of  Elizabethtown,  County  of  Lancaster  and
Commonwealth of Pennsylvania,  and having thereon erected a factory building and
other  improvements,  and known and  numbered  as 31 North  Spruce  Street,  and
bounded and described as follows, to wit:

BEGINNING  at the  northwest  corner  thereof  at the  southeast  corner  of the
intersection  of North Spruce Street and Snyder  Avenue,  thence along the south
side of Snyder Avenue in an easterly  direction,  one hundred  eighty-three  and
five hundredths (183.05) feet to a point; thence by land now or formerly of Anna
Kline  (K-43-330),  South seventeen (17) degrees east, one hundred  twenty-eight
and  eighty-four  hundredths  (128.84)  feet to a  point  on the  north  side of
Mechanics Street (also known as Mechanics Alley); thence along the north side of
Mechanics  Street in a Westerly  direction,  one hundred  eighty-three  and five
hundredths  (183.05)  feet to a point on the east side of North  Spruce  Street;
thence along the east side of North Spruce Street in a northerly direction,  one
hundred twenty-seven and three tenths (127.3) feet to the place of BEGINNING.

AND

234 SNYDER AVENUE:

ALL THAT CERTAIN  tract or piece of ground with a one and  one-half  story brick
dwelling  and  garage  thereon  erected,  situated  on the South  side of Snyder
Avenue, in the Borough of Elizabethtown, County of Lancaster and Commonwealth of
Pennsylvania, known and numbered as 234 Snyder Avenue, and being part of Lot No.
3 on the  revised  plan of lots  prepared  by Rodney  R.  Waltermyer,  R.S.,  in
December 1950,  and known as Snyder-Hess  Subdivision  Plan,  more  particularly
bounded  and  described  according  to a  more  recent  survey  made  by  Rodney
Waltermyer, R.S., dated February 1954, as follows to wit:

BEGINNING  at a stake at the  Southwest  corner  of the  intersection  of Snyder
Avenue  and North  Locust  Street;  thence  along the West side of North  Locust
Street,   South  seventeen  (17)  degrees  East,  one  hundred  twenty-nine  and
thirty-seven  hundredths (129.37) feet to a stake on the North side of Mechanics
Street;  thence along the North side of Mechanics  Street,  South  seventy-three
(763)  degrees  West,  sixty-six  (66)  feet to a  stake  on the  North  side of
Mechanics  Street;  thence  along the  remaining  portion  of Lot  No.3,  now or
formerly of the party of the Second Part herein (31 North Spruce Street),  North
seventeen (17) degrees West, one hundred twenty-eight and eighty-four hundredths
(128.84)  feet to a stake on the South side of Snyder  Avenue;  thence along the
South side of Snyder Avenue, North seventy-two (72) degrees East, sixty-six (66)
feet to the place of BEGINNING.


                                    EXHIBIT A




                    OPEN-END MORTGAGE AND SECURITY AGREEMENT

                ------------------------------------------------


                           QUIGLEY MANUFACTURING INC.

                                    Mortgagor

                                       AND

                         PNC BANK, NATIONAL ASSOCIATION,

                                    Mortgagee

                ------------------------------------------------

                                   Return to:

                          PNC Bank, National Association
                          1600 Market Street
                          Philadelphia, PA  19103

                          Attention:  John Siegrist

EX-10

                                                                    Exhibit 10.5


                          REGISTRATION RIGHTS AGREEMENT

     This Registration  Rights Agreement (this  "AGREEMENT") is made and entered
into as of October  1,  2004,  by and among The  Quigley  Corporation,  a Nevada
corporation  (the  "COMPANY"),   and  the  undersigned   shareholders  (each,  a
"SHAREHOLDER" and collectively, the "SHAREHOLDERS").

                                    WHEREAS:

     A. In connection with that certain Asset Purchase and Sale Agreement by and
between Joel,  Inc.  ("JOEL") and the Company (the  "PURCHASE  AGREEMENT"),  the
Company has agreed, upon the terms and subject to the conditions of the Purchase
Agreement,  to issue 113,097  shares of the Company's  common stock,  $.0005 par
value  per  share  (the  "COMMON  STOCK")  to the  Shareholders  as  part of the
consideration  for the Acquired  Assets (as such term is defined in the Purchase
Agreement);

     B.  To  induce  the  Shareholders  to  execute  and  deliver  the  Purchase
Agreement,  the Company has agreed to provide certain  registration rights under
the  Securities  Act  of  1933,  as  amended,  and  the  rules  and  regulations
thereunder,  or any similar  successor  statute  (collectively,  the "SECURITIES
ACT"), and applicable state securities laws.

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
contained  herein and other good and  valuable  consideration,  the  receipt and
sufficiency of which are hereby  acknowledged,  the Company and the Shareholders
hereby agree as follows.

     1.  Definitions.  Capitalized  terms used and not otherwise  defined herein
that are defined in the Purchase  Agreement  shall have the meanings  given such
terms in the Purchase Agreement. As used in this Agreement,  the following terms
shall have the following meanings:

     "BUYBACK  DATE" means the 180th day following  the Closing Date,  PROVIDED,
HOWEVER,  that the Buyback Date shall be extended beyond the 180th day following
the  Closing  Date for any time  period of delay  that is the  result  solely of
Joel's need to address any regulatory agency concerns  regarding the adequacy of
Joel's financial statements.

     "CALL RIGHT" shall have the meaning set forth in Section 2(b).

     "CASH PAYMENT" shall have the meaning set forth in Section 2(b).

     "CLOSING  DATE"  means the date on which the  closing  of the  transactions
contemplated by the Purchase Agreement occurs.

     "COMMISSION" means the Securities and Exchange Commission.

     "EFFECTIVE  REGISTRATION  DATE"  means  the  date on which  the  Commission
declares the Registration Statement to be effective.

     "EFFECTIVENESS  DATE"  means the  120th day  following  the  Closing  Date,
PROVIDED,  however,  that the  Effectiveness  Date shall be extended  beyond the
120th day  following  the Closing  Date for any time period of delay that is the





result solely of Joel's need to address any regulatory agency concerns regarding
the adequacy of Joel's financial statements.

     "EFFECTIVENESS PERIOD" shall have the meaning set forth in Section 2(a).

     "EXCHANGE ACT" means the Securities  Exchange Act of 1934, as amended,  and
the rules and regulations thereunder, or any similar successor statute.

     "INDEMNIFIED PARTY" shall have the meaning set forth in Section 5(c).

     "INDEMNIFYING PARTY" shall have the meaning set forth in Section 5(c).

     "PROCEEDING"  means an action,  claim,  suit,  investigation  or proceeding
(including,  without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

     "PROSPECTUS"  means the prospectus  included in the Registration  Statement
(including,  without  limitation,  a prospectus  that  includes any  information
previously omitted from a prospectus filed as part of an effective  registration
statement in reliance upon Rule 430A  promulgated  under the Securities Act), as
amended or supplemented by any prospectus supplement,  with respect to the terms
of the  offering of any  portion of the  Registrable  Securities  covered by the
Registration  Statement,  and  all  other  amendments  and  supplements  to  the
Prospectus,  including post-effective  amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.

     "PUT RIGHT" shall have the meaning set forth in Section 2(c).

     "REGISTRABLE  SECURITIES"  means the shares of Common Stock issued upon the
closing of the transactions  contemplated by the Purchase  Agreement,  including
any  securities  which may  thereafter be issued in respect of any such share of
Common Stock in the event of any stock split,  stock dividend,  recapitalization
or reclassification;  share exchange,  consolidation,  merger or reorganization;
distribution   of  warrants  or  other  rights;   or  other  like  issuances  or
distributions of securities.

     "REGISTRATION  STATEMENT" means each registration  statement required to be
filed  hereunder,  including the Prospectus,  amendments and supplements to such
registration   statement  or  Prospectus,   including  pre-  and  post-effective
amendments,  all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.

     "RULE 144" means Rule 144  promulgated  by the  Commission  pursuant to the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule or regulation  hereafter adopted by the Commission having substantially the
same effect as such Rule.

     "RULE 415" means Rule 415  promulgated  by the  Commission  pursuant to the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule or regulation  hereafter adopted by the Commission having substantially the
same effect as such Rule.





     "TRADING MARKET" means any of the NASD OTC Bulletin Board,  NASDAQ SmallCap
Market,  the Nasdaq National Market, the American Stock Exchange or the New York
Stock Exchange.

     2. Registration.

     (a) Within 20 days  following the Closing  Date,  the Company shall prepare
and use its best efforts to file with the  Commission a  Registration  Statement
covering the  Registrable  Securities for an offering to be made on a continuous
basis  pursuant to Rule 415.  The  Registration  Statement  shall be on Form S-3
(except  if the  Company  is not  then  eligible  to  register  for  resale  the
Registrable  Securities on Form S-3, in which case such registration shall be on
another  appropriate form in accordance  herewith).  The Company shall cause the
Registration  Statement  to become  effective  and remain  effective as provided
herein.  The Company shall use its  reasonable  commercial  efforts to cause the
Registration  Statement to be declared  effective  under the  Securities  Act as
promptly as possible  after the filing  thereof,  but in any event no later than
the Effectiveness Date. The Company shall use its reasonable  commercial efforts
to keep the Registration  Statement  continuously effective under the Securities
Act  until  the date  which  is the  earlier  date of when  (i) all  Registrable
Securities  have  been  effectively  registered  under  the  Securities  Act and
disposed of in accordance with the  Registration  Statement  covering them, (ii)
all  Registrable  Securities are  distributed to the public pursuant to Rule 144
(or any similar  provision then in force) under the Securities Act, or (iii) all
Registrable  Securities are otherwise freely  transferable  without  restriction
under the Securities Act (the "EFFECTIVENESS PERIOD").

     (b) Following the Effective  Registration Date and upon notice of a sale by
a Shareholder and confirmation by such Shareholder that he has complied with the
prospectus delivery requirements, the Company shall cause its counsel to issue a
opinion  to the  transfer  agent  stating  that the  shares  are  subject  to an
effective registration statement and can be reissued free of restrictive legend.

     3. Registration Procedures.  If and whenever the Company is required by the
provisions hereof to effect the registration of any Registrable Securities under
the Securities Act, the Company will, as expeditiously as possible:

     (a) prepare and file with the  Commission the  Registration  Statement with
respect to such Registrable  Securities,  respond as promptly as possible to any
comments  received  from the  Commission,  and use its best efforts to cause the
Registration  Statement  to become and remain  effective  for the  Effectiveness
Period with respect thereto;

     (b) prepare and file with the Commission such amendments and supplements to
the  Registration  Statement and the Prospectus used in connection  therewith as
may be  necessary  to comply  with the  provisions  of the  Securities  Act with
respect  to  the  disposition  of  all  Registrable  Securities  covered  by the
Registration  Statement and to keep such Registration  Statement effective until
the expiration of the Effectiveness Period;

     (c) furnish to the  Shareholders  such  reasonable  number of copies of the
Registration  Statement and the Prospectus included therein as such Shareholders
may  request  in order to  facilitate  the  public  sale or  disposition  of the





Registrable Securities covered by the Registration Statement;

     (d) list the Registrable  Securities covered by the Registration  Statement
with any Trading Market on which the Common Stock of the Company is then listed;

     (e) use its  commercially  reasonable  efforts to  register  or qualify the
Registrable  Securities  covered by the Registration  Statement under such state
securities  or blue  sky laws of such  jurisdictions  as such  Shareholders  may
reasonably request;  PROVIDED,  HOWEVER, that the Company shall not be obligated
to file any  general  consent  to  service of process or to qualify as a foreign
corporation  in any  jurisdiction  in which it is not so qualified or to subject
itself to taxation in connection with any such  registration or qualification of
such Registrable Securities;

     (f)  immediately  notify  the  Shareholders  at any time when a  Prospectus
relating  thereto is required to be delivered  under the Securities  Act, of the
happening  of any event of which the Company has  knowledge as a result of which
the  Prospectus  contained in such  Registration  Statement,  as then in effect,
includes  an untrue  statement  of a material  fact or omits to state a material
fact required to be stated therein or necessary to make the  statements  therein
not misleading in light of the circumstances then existing; and

     (g) prepare and promptly file with the Commission  and promptly  notify the
Shareholders   of  the  filing  of  such   amendments  or  supplements  to  such
Registration  Statement  or  Prospectus  as  may be  necessary  to  correct  any
statements  or  omissions  if, at the time when a  Prospectus  relating  to such
Registrable Securities is required to be delivered under the Securities Act, any
event has  occurred  as the  result of which  any such  Prospectus  or any other
Prospectus then in effect may include an untrue  statement of a material fact or
omit to state any material  fact  required to be stated  therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

     4. Registration Expenses. All expenses relating to the Company's compliance
with Sections 2 and 3 hereof,  including,  without limitation,  all registration
and filing  fees,  printing  expenses,  fees and  disbursements  of counsel  and
independent  public  accountants  for the  Company,  fees of the NASD,  transfer
taxes,  fees of  transfer  agents and  registrars,  fees of,  and  disbursements
incurred  by, one counsel for the  Shareholders  (to the extent such  counsel is
required due to Company's failure to meet any of its obligations hereunder), are
called "REGISTRATION  EXPENSES." All selling commissions  applicable to the sale
of Registrable  Securities,  including any fees and disbursements of any special
counsel to the Shareholders beyond those included in Registration  Expenses, are
called "SELLING  EXPENSES" and shall be the  responsibility of the Shareholders.
The Company shall only be responsible for all Registration Expenses.

     5. Indemnification.

     (a) In the event of a registration of any Registrable  Securities under the
Securities Act pursuant to this  Agreement,  the Company will indemnify and hold
harmless the Shareholders  against any losses,  claims,  damages or liabilities,





joint or  several,  to which  the  Shareholders  may  become  subject  under the
Securities  Act or  otherwise,  insofar  as  such  losses,  claims,  damages  or
liabilities  (or actions in respect  thereof) arise out of or are based upon any
untrue  statement or alleged untrue  statement of any material fact contained in
any  Registration   Statement  under  which  such  Registrable  Securities  were
registered  under the  Securities  Act  pursuant  to this  Agreement,  any final
Prospectus  contained therein,  or any amendment or supplement thereof, or arise
out of or are based upon the  omission or alleged  omission  to state  therein a
material fact required to be stated  therein or necessary to make the statements
therein not misleading,  and will reimburse the  Shareholders for any reasonable
legal or other expenses  incurred by them in connection  with  investigating  or
defending any such loss, claim, damage, liability or action; provided,  however,
that the  Company  will not be liable in any such case if and to the extent that
any such  loss,  claim,  damage or  liability  arises out of or is based upon an
untrue  statement or alleged untrue statement or omission or alleged omission so
made  in  conformity  with  information   furnished  by  or  on  behalf  of  the
Shareholders in writing specifically for use in any such document.

     (b) In the event of a registration of the Registrable  Securities under the
Securities  Act  pursuant  to  this  Agreement,  each of the  Shareholders  will
indemnify  and hold harmless the Company,  and its officers,  directors and each
other  person,  if any,  who  controls  the  Company  within the  meaning of the
Securities Act,  against all losses,  claims,  damages or liabilities,  joint or
several,  to which the  Company or such  persons  may become  subject  under the
Securities  Act or  otherwise,  insofar  as  such  losses,  claims,  damages  or
liabilities  (or actions in respect  thereof) arise out of or are based upon any
untrue  statement or alleged  untrue  statement  of any material  fact which was
furnished in writing by such  Shareholder  to the Company  expressly  for use in
(and such  information is contained in) the  Registration  Statement under which
such Registrable Securities were registered under the Securities Act pursuant to
this  Agreement,  any  preliminary  Prospectus  or  final  Prospectus  contained
therein,  or any amendment or supplement  thereof,  or arise out of or are based
upon the omission or alleged omission in information furnished in writing to the
Company by such  Shareholder  to state  therein a material  fact  required to be
stated therein or necessary to make the statements  therein not misleading,  and
will  reimburse  the Company and each such  person for any  reasonable  legal or
other expenses  incurred by them in connection with  investigating  or defending
any such loss, claim, damage, liability or action, provided,  however, that such
Shareholder  will be liable in any such case if and only to the extent  that any
such loss,  claim,  damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity with information  furnished in writing to the Company by or on behalf
of such Shareholder specifically for use in any such document.

     (c) Promptly  after  receipt by a party  entitled to claim  indemnification
hereunder (an "Indemnified  Party") of notice of the commencement of any action,
such Indemnified Party shall, if a claim for  indemnification in respect thereof
is to be made against a party hereto  obligated  to indemnify  such  Indemnified
Party (an  "Indemnifying  Party"),  notify  the  Indemnifying  Party in  writing
thereof,  but the omission so to notify the Indemnifying Party shall not relieve
it from any  liability  which it may have to such  Indemnified  Party other than
under this Section 5(c) and shall only  relieve it from any  liability  which it
may have to such Indemnified  Party under this Section 5(c) if and to the extent
the Indemnifying  Party is prejudiced by such omission.  In case any such action
shall  be  brought  against  any  Indemnified  Party  and it  shall  notify  the
Indemnifying Party of the commencement  thereof, the Indemnifying Party shall be
entitled  to  participate  in and,  to the extent it shall  wish,  to assume and
undertake  the defense  thereof with counsel  satisfactory  to such  Indemnified
Party,  and, after notice from the Indemnifying  Party to such Indemnified Party
of its election so to assume and undertake the defense thereof, the Indemnifying





Party shall not be liable to such Indemnified  Party under this Section 5(c) for
any legal expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof; if the Indemnified Party retains its own counsel, then
the  Indemnified  Party shall pay all fees,  costs and expenses of such counsel,
provided,  however,  that, if the defendants in any such action include both the
indemnified  party and the  Indemnifying  Party and the Indemnified  Party shall
have reasonably  concluded that there may be reasonable defenses available to it
which are different  from or additional to those  available to the  Indemnifying
Party or if the interests of the Indemnified  Party  reasonably may be deemed to
conflict with the interests of the  Indemnifying  Party,  the Indemnified  Party
shall have the right to select one  separate  counsel  and to assume  such legal
defenses and otherwise to  participate  in the defense of such action,  with the
reasonable expenses and fees of such separate counsel and other expenses related
to such participation to be reimbursed by the Indemnifying Party as incurred.

     (d) In order to provide for just and equitable contribution in the event of
joint  liability  under the  Securities  Act in any case in which  either  (i) a
Shareholder makes a claim for indemnification  pursuant to this Section 5 but it
is judicially  determined (by the entry of a final judgment or decree by a court
of competent  jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such  indemnification may not be enforced in such
case  notwithstanding  the fact that this Section 5 provides for indemnification
in such case, or (ii)  contribution  under the Securities Act may be required on
the part of such  Shareholder  in  circumstances  for which  indemnification  is
provided under this Section 5; then, and in each such case, the Company and such
Shareholder  will  contribute  to  the  aggregate  losses,  claims,  damages  or
liabilities  to which they may be subject  (after  contribution  from others) in
such  proportion  as is  appropriate  to  reflect  the  relative  fault  of  the
Indemnifying  Party and the  Indemnified  Party in  connection  with the actions
which resulted in such losses,  claims,  damages or liabilities,  as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and  Indemnified  Party shall be  determined  by reference to, among other
things,  whether any action in question,  including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such Indemnifying
Party or Indemnified Party, and the parties' relative intent, knowledge,  access
to  information  and  opportunity  to correct or prevent such action;  provided,
however,  that,  in any such  case,  no person or  entity  guilty of  fraudulent
misrepresentation  (within  the  meaning  of  Section  10(f) of the Act) will be
entitled  to  contribution  from any person or entity who was not guilty of such
fraudulent misrepresentation.  The amount paid or payable by a party as a result
of the losses,  claims, damages or liabilities referred to above shall be deemed
to include any legal or other fees or expenses reasonably incurred by such party
in connection with any investigation or proceeding.

     6. Miscellaneous.

     (a) Remedies.  In the event of a breach by the Company or by a Shareholder,
of any of their respective obligations under this Agreement, each Shareholder or
the Company,  as the case may be, in addition to being  entitled to exercise all
rights granted by law and under this Agreement,  including  recovery of damages,
will be entitled to specific performance of its rights under this Agreement.





     (b) No  Piggyback  on  Registrations.  Neither  the  Company nor any of its
security holders (other than the Shareholders in such capacity  pursuant hereto)
may include  securities of the Company in any Registration  Statement other than
the  Registrable  Securities,  and the  Company  shall not after the date hereof
enter into any agreement providing any such right for inclusion of shares in the
Registration  Statement  to any of its  security  holders.  The  Company has not
previously  entered into any  agreement  granting any  registration  rights with
respect  to any of its  securities  to any  person  that  have  not  been  fully
satisfied.

     (c) Compliance.  Each Shareholder  covenants and agrees that he will comply
with the prospectus delivery requirements of the Securities Act as applicable to
him  in  connection  with  sales  of  Registrable  Securities  pursuant  to  the
Registration Statement.

     (d) Discontinued Disposition. Each Shareholder agrees by his acquisition of
such  Registrable  Securities that, upon receipt of a notice from the Company of
the occurrence of a Discontinuation  Event (as defined below),  such Shareholder
will forthwith discontinue  disposition of such Registrable Securities under the
applicable Registration Statement until such Shareholder's receipt of the copies
of the supplemented Prospectus and/or amended Registration Statement or until it
is  advised  in  writing  (the  "ADVICE")  by the  Company  that  the use of the
applicable  Prospectus may be resumed,  and, in either case, has received copies
of any additional or supplemental  filings that are incorporated or deemed to be
incorporated  by reference in such  Prospectus or  Registration  Statement.  The
Company may provide  appropriate  stop orders to enforce the  provisions of this
paragraph.  For purposes of this Section 6(d), a  "DISCONTINUATION  EVENT" shall
mean (i) when the  Commission  notifies  the  Company  whether  there  will be a
"review" of such Registration  Statement and whenever the Commission comments in
writing on such  Registration  Statement;  (ii) any request by the Commission or
any other Federal or state governmental  authority for amendments or supplements
to such  Registration  Statement or  Prospectus or for  additional  information;
(iii)  the  issuance  by  the  Commission  of  any  stop  order  suspending  the
effectiveness  of  such  Registration  Statement  covering  any  or  all  of the
Registrable  Securities or the initiation of any  Proceedings  for that purpose;
(iv)  the  receipt  by the  Company  of any  notification  with  respect  to the
suspension of the  qualification  or exemption from  qualification of any of the
Registrable  Securities  for  sale in any  jurisdiction,  or the  initiation  or
threatening of any Proceeding for such purpose; and/or (v) the occurrence of any
event or passage of time that makes the  financial  statements  included in such
Registration Statement ineligible for inclusion therein or any statement made in
such Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated  therein by reference  untrue in any material respect or that
requires  any  revisions to such  Registration  Statement,  Prospectus  or other
documents so that, in the case of such Registration Statement or Prospectus,  as
the case may be, it will not contain any untrue  statement of a material fact or
omit to state any material  fact  required to be stated  therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.  The Company shall promptly take any and all  commercially
reasonable actions necessary to rectify any Discontinuation  Event such that the
use of the applicable Prospectus may be resumed.

     (e)  Piggy-Back  Registrations.  If at any time  during  the  Effectiveness
Period  there is not an  effective  Registration  Statement  covering all of the
Registrable  Securities and the Company shall determine to prepare and file with
the  Commission  a  registration  statement  relating to an offering for its own
account or the account of others under the  Securities  Act of any of its equity





securities,  other than on Form S-4 or Form S-8 (each as  promulgated  under the
Securities Act) or their then  equivalents  relating to equity  securities to be
issued solely in connection  with any  acquisition  of any entity or business or
equity  securities  issuable in connection  with stock option or other  employee
benefit plans, then the Company shall send to each Shareholder written notice of
such determination and, if within fifteen days after receipt of such notice, any
such Shareholder shall so request in writing,  the Company shall include in such
registration  statement  all or any  part of such  Registrable  Securities  such
Shareholder  requests  to be  registered  to the  extent the  Company  may do so
without  violating  registration  rights of others which exist as of the date of
this  Agreement,  subject to customary  underwriter  cutbacks  applicable to all
holders of registration  rights and subject to obtaining any required consent of
any selling stockholder(s) to such inclusion under such registration statement.

     (f) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended,  modified or supplemented,  and
waivers or consents to departures  from the provisions  hereof may not be given,
unless  the  same  shall  be in  writing  and  signed  by the  Company  and  the
Shareholders of the then outstanding Registrable Securities. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates  exclusively to the rights of certain  Shareholders and
that does not directly or indirectly affect the rights of other Shareholders may
be given by Shareholders of at least a majority of the Registrable Securities to
which such waiver or consent relates; provided,  however, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance
with the provisions of the immediately preceding sentence.

     (g) Notices. Any notice or request hereunder may be given to the Company or
the Shareholder at the respective  addresses set forth below or as may hereafter
be specified in a notice  designated  as a change of address  under this Section
6(g). Any notice or request  hereunder shall be given by registered or certified
mail, return receipt requested,  hand delivery,  overnight mail, Federal Express
or other  national  overnight  next day  carrier  (collectively,  "COURIER")  or
telecopy  (confirmed  by mail).  Notices and  requests  shall be, in the case of
those by hand delivery, deemed to have been given when delivered to any party to
whom it is addressed,  in the case of those by mail or overnight mail, deemed to
have been given three (3)  business  days after the date when  deposited  in the
mail or with the  overnight  mail  carrier,  in the case of a Courier,  the next
business day following timely delivery of the package with the Courier,  and, in
the case of a  telecopy,  when  confirmed.  The  address  for such  notices  and
communications shall be as follows:

     (i) If to the Company:      The Quigley  Corporation
                                 Attention:  Guy Quigley, President
                                 P.O. Box 1349
                                 621 N. Shady Retreat Road
                                 Doylestown, PA 18901

         With a copy to:         Thomas F. J. MacAniff, Esq.
                                 Eastburn and Gray, P.C.
                                 P.O. Box 1389
                                 60 East Court Street
                                 Doylestown, PA  18901





    (ii) If to a Shareholder:    To the name and  address  set forth  under such
                                 Shareholder's  signature on the signature pages
                                 hereto.

     or  such  other  address  as may be  designated  in  writing  hereafter  in
accordance with this Section 6(g) by such person.

     (h)  Successors and Assigns.  This Agreement  shall inure to the benefit of
and be binding upon the successors and permitted  assigns of each of the parties
and shall inure to the benefit of each  Shareholder.  The Company may not assign
its rights or obligations  hereunder  without the prior written  consent of each
Shareholder.  Each Shareholder may not assign their respective  rights hereunder
without the prior written consent of the Company; PROVIDED, HOWEVER, that in the
event of a transfer of Registrable  Securities in which the transferor  receives
no tangible consideration (such as, but not limited to, a transfer to the estate
or heirs in the case of a deceased  Shareholder),  the transferee shall have all
rights theretofore held by the transferor under this Agreement.

     (i)  Execution  and  Counterparts.  This  Agreement  may be executed in any
number of counterparts,  each of which when so executed shall be deemed to be an
original  and, all of which taken  together  shall  constitute  one and the same
Agreement.   In  the  event  that  any   signature  is  delivered  by  facsimile
transmission,  such  signature  shall create a valid  binding  obligation of the
party  executing  (or on whose behalf such  signature is executed) the same with
the same  force and  effect as if such  facsimile  signature  were the  original
thereof.

     (j) Governing  Law. All questions  concerning the  construction,  validity,
enforcement  and  interpretation  of this  Agreement  shall be  governed  by and
construed and enforced in accordance with the internal laws of the  Commonwealth
of  Pennsylvania,  without regard to the principles of conflicts of law thereof.
Each  party  agrees  that  all  Proceedings   concerning  the   interpretations,
enforcement and defense of the transactions contemplated by this Agreement shall
be  commenced  exclusively  in the  Court  of  Common  Pleas  of  Bucks  County,
Pennsylvania.  Each party hereto  hereby  irrevocably  submits to the  exclusive
jurisdiction of the Court of Common Pleas of Bucks County,  Pennsylvania for the
adjudication  of any dispute  hereunder  or in  connection  herewith or with any
transaction  contemplated  hereby or discussed  herein,  and hereby  irrevocably
waives,  and  agrees not to assert in any  Proceeding,  any claim that it is not
personally  subject to the jurisdiction of any such court,  that such Proceeding
is improper.  Each party hereto hereby  irrevocably  waives personal  service of
process and consents to process being served in any such Proceeding by mailing a
copy thereof via  registered  or  certified  mail or  overnight  delivery  (with
evidence of  delivery)  to such party at the address in effect for notices to it
under this  Agreement  and agrees that such service  shall  constitute  good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law.  Each party hereto  hereby  irrevocably  waives,  to the fullest  extent
permitted  by  applicable  law,  any and all right to trial by jury in any legal
proceeding  arising  out of or relating to this  Agreement  or the  transactions
contemplated  hereby. If either party shall commence a Proceeding to enforce any
provisions of this Agreement, then the prevailing party in such Proceeding shall
be reimbursed  by the other party for its  reasonable  attorneys  fees and other





costs and expenses incurred with the investigation,  preparation and prosecution
of such Proceeding.

     (k) Cumulative  Remedies.  The remedies  provided herein are cumulative and
not exclusive of any remedies provided by law.

     (l) Severability.  If any term, provision,  covenant or restriction of this
Agreement is held by a court of competent  jurisdiction to be invalid,  illegal,
void or  unenforceable,  the remainder of the terms,  provisions,  covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected,  impaired or  invalidated,  and the parties hereto shall use
their reasonable  efforts to find and employ an alternative means to achieve the
same or  substantially  the  same  result  as that  contemplated  by such  term,
provision,  covenant or restriction.  It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining  terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

     (m)  Headings.  The  headings  in this  Agreement  are for  convenience  of
reference only and shall not limit or otherwise affect the meaning hereof.

     (n) Pronouns and Plurals.  All pronouns and any variations thereof shall be
deemed to refer to the  masculine,  feminine,  singular or plural as the context
may require.  All  references  herein to "he," "him" or "his" or "she," "her" or
"hers"  shall  be for  purposes  of  simplicity  and  are not  intended  to be a
reference to a particular gender.

       [BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]





     IN WITNESS  WHEREOF,  the parties have  executed this  Registration  Rights
Agreement as of the date first written above.


                                       The Quigley Corporation


                                       By: /s/ Guy Quigley
                                          --------------------------------------
                                       Name:  Guy Quigley
                                       Title: President


                                       /s/ David B. Deck
                                       -----------------------------------------
                                       David B. Deck

                                       Address:
                                       551 Blossom Trail
                                       Mt. Joy, PA 17552


                                       /s/ Cheryl K. Deck
                                       -----------------------------------------
                                       Cheryl K. Deck

                                       Address:
                                       551 Blossom Trail
                                       Mt. Joy, PA 17552


                                       /s/ Sandra K. Sattazahn
                                       -----------------------------------------
                                       Sandra K. Sattazahn

                                       Address:
                                       600 Mine Road
                                       Lebanon, PA 17042


                                       /s/ Kristin L. Deck
                                       -----------------------------------------
                                       Kristin L. Deck

                                       Address:
                                       112 Mountain Stone Drive
                                       Elizabethtown, PA 17022


                                       /s/ Andrew D. Deck
                                       -----------------------------------------
                                       Andrew D. Deck

                                       Address:
                                       327 Springton Way
                                       Lancaster, PA 17601

EX-10

                                                                    Exhibit 10.6


                              EMPLOYMENT AGREEMENT

     THIS  EMPLOYMENT  AGREEMENT  (this  "Agreement")  is made  this  1st day of
October,  2004, between QUIGLEY MANUFACTURING INC., a Delaware  corporation,  as
employer (hereinafter "Employer"), and DAVID B. DECK (hereinafter "Employee")

                              W I T N E S S E T H:

     WHEREAS,  the Employer agrees to hire and employ Employee  according to the
terms and conditions stated herein; and,

     WHEREAS,  the Employee agrees to render Employer services  according to the
terms and conditions stated herein;

     NOW,  THEREFORE,  in  consideration of the mutual promises herein contained
and intending to be legally bound hereby, the parties hereto agree as follows:

     1. EMPLOYEE'S DUTIES AND TITLE.  Employer hereby employs Employee to render
services to  Employer in the title and  capacity  of  President,  with  assigned
duties and tasks as specified by Employer's  Board of Directors,  including,  by
way of  example  only and  without  limitation:  responsibility  for  Employer's
day-to-day  manufacturing  operations  and affairs at the Pharmaloz  facility in
Lebanon,  PA and the Simon Candy facility in  Elizabethtown,  PA. Employee's job
description shall be as described on Exhibit "A" attached hereto and made a part
hereof.  In no event shall  Employee's job  description or  responsibilities  be
materially  changed  without his  consent,  nor shall  Employee be  obligated to
relocate  without his consent.  The Employee  hereby accepts such employment for
the  period  stated in  Paragraph  2, and  agrees  to  devote  his full time and
attention and his best talents and expertise to the duties of employment  hereby
accepted by him.

     2.  TERM OF  EMPLOYMENT.  The  term of  Employee's  employment  under  this
Agreement shall commence on the date hereof  ("Commencement  Date") and continue
until the close of  business  on December  31,  2006 (the  "Termination  Date"),
unless sooner  terminated  pursuant to paragraph 5 of this Agreement;  PROVIDED,
however that the term will  automatically  renew on the Termination Date, and on
each  subsequent  anniversary of the  Termination  Date (each,  an  "ANNIVERSARY
DATE") for an additional  one-year period unless either party shall give written
notice of  non-renewal  to the other not less than  sixty (60) days prior to the
Termination Date or the  then-applicable  Anniversary  Date, in which event this
Agreement shall terminate on the Termination  Date or at the end of the one-year
period then in effect.

     3.  COMPENSATION.  As  compensation  to the  Employee  pursuant to services
rendered  under this  contract,  the Employer shall pay to Employee and Employee
shall accept the following salary, other compensation, and benefits:

          (a)  Employer  shall pay the Employee a base salary at an annual rate,
     of One Hundred Twenty Five Thousand Dollars ($125,000.00) per year, or such
     greater amount as the Board of Directors may from time to time determine.






          (b) The  Employee  shall be  entitled to such  bonuses  and  incentive
     compensation as may be awarded in the discretion of the Board of Directors.

          (c) The Employee shall  receive,  at the  Employer's  expense,  family
     healthcare coverage through such health insurance plan as is established by
     Employer,  and shall be entitled to  participate  in any  employee  benefit
     plans established by Employer,  including, without limitation,  pension and
     profit sharing plans, and savings plans, which are generally  applicable to
     the  Employer's  employees;  provided,  however,  that  (1) the  Employee's
     receipt of such benefits is pursuant to and determined by the provisions of
     such plans, and (2) the Employer  reserves the right to modify or eliminate
     and or all such plans, so long as Employer maintains and/or makes available
     employee  benefits  comparable to those available to Employee through JOEL,
     Inc. as of July 1, 2004.

          (d) Employee shall be entitled to participate in the stock option plan
     sponsored by The Quigley Corporation ("TQC") for officers and executives of
     TQC and  Employer,  and TQC's Board  (through its  Compensation  Committee)
     shall make periodic  determinations whether to award options to Employee in
     accordance with  determinations  made by such Committee regarding similarly
     situated officers.

     4. VACATION BENEFITS; EXPENSE REIMBURSEMENT.

          (a) The Employee  shall be entitled to six (6) weeks paid  vacation in
     each calendar  year (pro rated for 2004) during the term of his  employment
     hereunder.

          (b) The  Employer  shall  reimburse  the Employee  for  necessary  and
     appropriate  travel and business expenses incurred by Employee on behalf of
     the Employer

     5. TERMINATION.  Employee's employment under this Agreement shall terminate
upon  occurrence of any of the events  described in the following  subparagraphs
(a) through (c):

          (a) In the event of  Employee's  violation of any of the  covenants of
     this  Agreement,   his  employment  shall   automatically  and  immediately
     terminate; PROVIDED, however, that Employer provides Employee with ten (10)
     days' written notice of any such violation, and Employee has failed to cure
     the violation  within such 10-day period.  No further  payments or benefits
     whatsoever  shall be due to the  Employee  or any  beneficiary  under  this
     Agreement as of the date of said violation.

          (b) The  Employer may  terminate  the  employment  of the Employee for
     "cause"  at  any  time,  in  which  event  neither  the  Employee  nor  his
     beneficiaries   or  estate  shall  be  entitled  to  any  further  payments
     hereunder.  For purposes of this  Agreement,  "cause"  shall mean:


               (i) The misappropriation of funds or property of the Employer;


                                       2




               (ii) Any attempt to obtain  personal  profit from the Employer by
          actions  that are  adverse to the  interests  of the  Employer;

               (iii) Unreasonable  neglect or refusal to perform duties assigned
          to him; or

               (iv) Conviction of a felony.

          (c) If the Employee dies during the term of his employment  under this
     Agreement,  his employment shall automatically  terminate, and Employee and
     his estate and  beneficiaries  shall only be entitled to such benefits,  if
     any, as are provided under the Employer's  benefit plans in the event of an
     employee's  death, as well as any compensation due but not paid through the
     date of death.

     6. COVENANT NOT TO COMPETE. Except as provided in paragraph (b) below:

          (a) Employee agrees, that during the term of his employment under this
     Agreement and for a period of two (2) years thereafter, that:

               (i) He shall not  associate  with,  enter  into the employ of, or
          render any services to any business  that  competes with Employer or a
          business  that  conducts  similar  business (as defined  below) to the
          business of  Employer,  within a  twenty-five  (25) mile radius of the
          Employer's facilities in Lebanon and Elizabethtown, Pennsylvania.

               (ii) He shall not solicit, divert, or induce customers or clients
          of  Employer to obtain  similar  products  or  services  from  others,
          including any competitor of the Employer.

               (iii) He shall not acquire any financial interest, other than for
          full  consideration,  in any  competitor in a similar  business to the
          business of Employer  (including  any interest in any  publicly-traded
          entity) that competes with Employer anywhere in the United States.

               "Similar business" as used in the foregoing  subparagraphs  shall
          include,   but  not  be  limited  to,  the  business  of  manufacture,
          distribution and sale of (a) cold-relief products,  (b) allergy-relief
          products, and (c) health and nutritional supplements.

          (b) The  provisions  of  paragraphs  (a)(i) - (iii) shall not apply if
     Employee's employment terminates because of a sale, merger,  consolidation,
     or similar transaction involving the Employer.

     7. CONFIDENTIALITY/SECRECY COVENANTS.

          (a) During the period of his employment hereunder, and for a period of
     five (5) years thereafter, Employee agrees that he shall not:


                                       3




               (i) Use,  divulge,  or communicate to anyone,  either orally,  in
          writing,  or by  electronic  means,  the  names  and/or  addresses  of
          Employer's customers or clients, or the details of any transactions or
          financial  matters of Employer,  whether or not such  information  was
          available to Employee during his employment.

               (ii) Use,  divulge or  communicate to anyone,  either orally,  in
          writing, or by electronic means, any Employer trade secrets,  patents,
          formulas,  processes,  manufacturing  methods,  or  data  supplied  or
          available to him in connection with his employment.

          (b)  Employee  agrees  that  all  trade  secrets,  formulas,  patents,
     processes,  manufacturing  methods, data, documents,  equipment,  property,
     customer  and  supplier  information,   financial  information,  sales  and
     marketing  data,  and other  information  provided  to the  Employee by the
     Employer,  or obtained by the Employee,  in the course of, or in connection
     with, his employment, are and shall remain the property of the Employer and
     shall  be  returned  to the  Employer  by  the  Employee  immediately  upon
     termination  of  Employee's  employment,  and no  copies  or  reproductions
     thereof in any form shall be retained by Employee.

     8.  INJUNCTIVE  RELIEF.  In the event of a breach by Employee of any of the
covenants  contained in paragraphs 6 and 7 of this  Agreement,  Employee  agrees
that money damages shall not be an adequate remedy for such breach, and Employer
shall, in addition to all other remedies for such breach provided for under this
Agreement or applicable  law, have the right to request  immediate and permanent
injunctive  relief to enjoin  and  restrain  such  breach  and any  consequences
thereof.

     9. EMPLOYER'S  PROPRIETARY RIGHTS.  Employee agrees that all inventions and
products  developed by the Employee during the term of his employment under this
Agreement shall be owned by and be the exclusive property of the Employer.

     10. MISCELLANEOUS.

          (a)  This  Agreement  supersedes  any  and  all  prior  agreements  or
     understandings,  oral or written,  with  respect to the  employment  of the
     Employee with the Employer. This Agreement may not be altered or terminated
     orally,  and  shall be  modified  only by a  subsequent  written  Agreement
     executed by both the Employee and the Employer.

          (b) This  Agreement  shall be governed by and  construed in accordance
     with the laws of the Commonwealth of Pennsylvania.

          (c) This  Agreement  shall be  binding  upon  and  shall  inure to the
     benefit of the Employer and its successors and assigns; PROVIDED,  however,
     that  Employer  shall  not  assign  or  transfer  (by  operation  of law or
     otherwise)  this  Agreement  without the express prior  written  consent of
     Employee.  This  Agreement  shall be  binding  upon and shall  inure to the
     benefit of the Employee, his heirs, executors and personal representatives,
     and shall not be  assigned by the  Employee  and any  attempted  assignment
     shall be in violation of this Agreement and shall be null


                                       4



     and void.

          (d) Whenever  possible,  each  provisions of this  Agreement  shall be
     interpreted in such a manner as to make all provisions effective and valid;
     but, if any provision in this  Agreement is held to be invalid,  illegal or
     unenforceable,  such provision will be ineffective without invalidating the
     remainder of this Agreement.

          (e) All notices,  demands or other communications,  shall be delivered
     to the Employer or Employee at the following addresses which may be changed
     from time to time by either party within thirty (30) days' written  notice:


     To the Employer:

                Guy J. Quigley,  President/CEO
                The Quigley Corporation 621
                Shady Retreat Road P.O. Box 1349
                Doylestown, PA 18901

     To the Employee:

                David B. Deck
                31 North Spruce Street
                P.O. Box 488
                Elizabethtown, PA  17022

          (f) All rights and remedies  granted to the Employer  hereunder  shall
     not be  exclusive,  but shall be in  addition  to all rights  and  remedies
     available to the Employer at law or in equity.

          (g) Unless otherwise specifically defined within this Agreement, words
     and phrases  shall be construed and  interpreted  according to their common
     usage and meaning.  Headings and titles are for reference purposes only and
     are not to be construed as part of this Agreement.

                                       5




     IN WITNESS WHEREOF,  the Employer,  by its authorized  representative,  and
Employee have caused this  Agreement to be executed and made,  all as of the day
and year first written above.

                                            Quigley Manufacturing, Inc.


                                            By: /s/ George J. Longo
                                               ---------------------------------
                                               George J. Longo, V.P.


                                            /s/ David B. Deck
                                            ------------------------------------
                                            David B. Deck ("Employee")


THE QUIGLEY  CORPORATION hereby  unconditionally  and irrevocably  guarantees to
Employee the full and punctual  payment and performance of all obligations  when
due of Employer under this Employment Agreement.


                                            THE QUIGLEY CORPORATION


                                            By: /s/ Guy J. Quigley
                                               ---------------------------------
                                               Guy J. Quigley, President


                                       6


                                  Exhibit "A"

                     SUMMARY JOB DESCRIPTION FOR PRESIDENT


Essential duties and responsibilities of the President's job is to:
     1.   Establish current and long term objectives, plans and policies subject
          to approval by the Board of Directors;
     2.   Supervise those employees who report directly to the President and, at
          minimum, performs annual performance evaluations of those employees;
     3.   Final decision-maker regarding hiring and firing of employees;
     4.   Dispense advice,  guidance,  direction, and authorization to carry out
          major plans and procedures  consistent with  established  policies and
          Board approval;
     5.   Oversee organization's financial structure;
     6.   Review  operating  results  of the  organization,  comparing  them  to
          established objectives, and takes steps to help correct unsatisfactory
          results;
     7.   Establishes  and  maintains  an  effective  system  of  communications
          throughout the organization;
     8.   Represent  the  organization  with  major  customers,   the  financial
          community, major suppliers, and the public;
     9.   Plus such other duties as directed by the Board of Directors.

EX-10

                                                                    Exhibit 10.7



                              EMPLOYMENT AGREEMENT

     THIS  EMPLOYMENT  AGREEMENT  (this  "Agreement")  is made  this  1st day of
October,  2004, between QUIGLEY MANUFACTURING INC., a Delaware  corporation,  as
employer (hereinafter "Employer"), and DAVID HESS (hereinafter "Employee")

                              W I T N E S S E T H:

     WHEREAS,  the Employer agrees to hire and employ Employee  according to the
terms and conditions stated herein; and,

     WHEREAS,  the Employee agrees to render Employer services  according to the
terms and conditions stated herein;

     NOW,  THEREFORE,  in  consideration of the mutual promises herein contained
and intending to be legally bound hereby, the parties hereto agree as follows:

     1. EMPLOYEE'S DUTIES AND TITLE.  Employer hereby employs Employee to render
services to Employer in the title and capacity of Chief Operating Officer,  with
assigned  duties  and  tasks as  specified  by  Employer's  Board of  Directors,
including,  by way of example only and without  limitation:  responsibility  for
production and manufacturing, technical guidance, employee supervision and other
matters related to Employer's day-to-day manufacturing operations and affairs at
the  Pharmaloz  facility  in  Lebanon,  PA  and  the  Simon  Candy  facility  in
Elizabethtown,  PA.  Employee's job description shall be as described on Exhibit
"A" attached  hereto and made a part hereof.  In no event shall  Employee's  job
description or responsibilities  be materially changed without his consent,  nor
shall Employee be obligated to relocate without his consent. The Employee hereby
accepts  such  employment  for the period  stated in  Paragraph 2, and agrees to
devote his full time and  attention  and his best  talents and  expertise to the
duties of employment hereby accepted by him.

     2.  TERM OF  EMPLOYMENT.  The  term of  Employee's  employment  under  this
Agreement shall commence on the date hereof  ("Commencement  Date") and continue
until the close of  business  on December  31,  2006 (the  "Termination  Date"),
unless sooner  terminated  pursuant to paragraph 5 of this Agreement;  PROVIDED,
however that the term will  automatically  renew on the Termination Date, and on
each  subsequent  anniversary of the  Termination  Date (each,  an  "ANNIVERSARY
DATE") for an additional  one-year period unless either party shall give written
notice of  non-renewal  to the other not less than  sixty (60) days prior to the
Termination Date or the  then-applicable  Anniversary  Date, in which event this
Agreement shall terminate on the Termination  Date or at the end of the one-year
period then in effect.

     3.  COMPENSATION.  As  compensation  to the  Employee  pursuant to services
rendered  under this  contract,  the Employer shall pay to Employee and Employee
shall accept the following salary, other compensation, and benefits:

          (a)  Employer  shall pay the Employee a base salary at an annual rate,
     of One  Hundred  Four  Thousand  Dollars  ($104,000.00)  per year,  or such
     greater amount as the Board of Directors may from time to time determine.





          (b) Employer shall, during the term of this Agreement, pay the premium
     for  a  $500,000  term  life  insurance  policy  obtained  by  Employer  in
     Employee's name.  Employer's payment of the premium shall be subject to all
     applicable federal, state or local employment or withholding taxes.

          (c) The  Employee  shall be  entitled to such  bonuses  and  incentive
     compensation as may be awarded in the discretion of the Board of Directors.

          (d) The Employee shall  receive,  at the  Employer's  expense,  family
     healthcare coverage through such health insurance plan as is established by
     Employer,  and shall be entitled to  participate  in any  employee  benefit
     plans established by Employer,  including, without limitation,  pension and
     profit sharing plans, and savings plans, which are generally  applicable to
     the  Employer's  employees;  provided,  however,  that  (1) the  Employee's
     receipt of such benefits is pursuant to and determined by the provisions of
     such plans, and (2) the Employer  reserves the right to modify or eliminate
     and or all such plans, so long as Employer maintains and/or makes available
     employee  benefits  comparable to those available to Employee through JOEL,
     Inc. as of July 1, 2004.

          (e) Employee shall be entitled to participate in the stock option plan
     sponsored by The Quigley Corporation ("TQC") for officers and executives of
     TQC and  Employer,  and TQC's Board  (through its  Compensation  Committee)
     shall make periodic  determinations whether to award options to Employee in
     accordance with  determinations  made by such Committee regarding similarly
     situated officers.

     4. VACATION BENEFITS; EXPENSE REIMBURSEMENT.

          (a) The Employee  shall be entitled to five (5) weeks paid vacation in
     each calendar  year (pro rated for 2004) during the term of his  employment
     hereunder.

          (b) The  Employer  shall  reimburse  the Employee  for  necessary  and
     appropriate  travel and business expenses incurred by Employee on behalf of
     the Employer

     5. TERMINATION.  Employee's employment under this Agreement shall terminate
upon  occurrence of any of the events  described in the following  subparagraphs
(a) through (c):

          (a) In the event of  Employee's  violation of any of the  covenants of
     this  Agreement,   his  employment  shall   automatically  and  immediately
     terminate; PROVIDED, however, that Employer provides Employee with ten (10)
     days' written notice of any such violation, and Employee has failed to cure
     the violation  within such 10-day period.  No further  payments or benefits
     whatsoever  shall be due to the  Employee  or any  beneficiary  under  this
     Agreement as of the date of said violation.

          (b) The  Employer may  terminate  the  employment  of the Employee for
     "cause"  at  any  time,  in  which  event  neither  the  Employee  nor  his


                                       2



     beneficiaries   or  estate  shall  be  entitled  to  any  further  payments
     hereunder.  For purposes of this  Agreement,  "cause"  shall mean:


               (i) The misappropriation of funds or property of the Employer;

               (ii) Any attempt to obtain  personal  profit from the Employer by
          actions  that are  adverse to the  interests  of the  Employer;

               (iii) Unreasonable  neglect or refusal to perform duties assigned
          to him; or

               (iv) Conviction of a felony.

          (c) If the Employee dies during the term of his employment  under this
     Agreement,  his employment shall automatically  terminate, and Employee and
     his estate and  beneficiaries  shall only be entitled to such benefits,  if
     any, as are provided under the Employer's  benefit plans in the event of an
     employee's  death, as well as any compensation due but not paid through the
     date of death.

          (d) In the event of Employee's  termination  for any reason other than
     set forth in paragraphs  (a) through (c),  Employee  shall be entitled to a
     lump-sum  severance  payment equal to nine (9) months'  salary.  No further
     payments  shall be due to Employee  hereunder.

     6. COVENANT NOT TO COMPETE. Except as provided in paragraph (b) below:

          (a) Employee agrees, that during the term of his employment under this
     Agreement and for a period of two (2) years thereafter, that:

               (i) He shall not  associate  with,  enter  into the employ of, or
          render any services to any business  that  competes with Employer or a
          business  that  conducts  similar  business (as defined  below) to the
          business of  Employer,  within a  twenty-five  (25) mile radius of the
          Employer's facilities in Lebanon and Elizabethtown, Pennsylvania.

               (ii) He shall not solicit, divert, or induce customers or clients
          of  Employer to obtain  similar  products  or  services  from  others,
          including any competitor of the Employer.

               (iii) He shall not acquire any financial interest, other than for
          full  consideration,  in any  competitor in a similar  business to the
          business of Employer  (including  any interest in any  publicly-traded
          entity) that competes with Employer anywhere in the United States.

               "Similar business" as used in the foregoing  subparagraphs  shall
          include,   but  not  be  limited  to,  the  business  of  manufacture,
          distribution and sale of (a) cold-relief products,  (b) allergy-relief
          products, and (c) health and nutritional supplements.

          (b) The  provisions  of  paragraphs  (a)(i) - (iii) shall not apply if
     Employee's employment terminates because of a sale, merger,  consolidation,
     or similar transaction involving the Employer.


                                       3




     7. CONFIDENTIALITY/SECRECY COVENANTS.

          (a) During the period of his employment hereunder, and for a period of
     five (5) years thereafter, Employee agrees that he shall not:

               (i) Use,  divulge,  or communicate to anyone,  either orally,  in
          writing,  or by  electronic  means,  the  names  and/or  addresses  of
          Employer's customers or clients, or the details of any transactions or
          financial  matters of Employer,  whether or not such  information  was
          available to Employee during his employment.

               (ii) Use,  divulge or  communicate to anyone,  either orally,  in
          writing, or by electronic means, any Employer trade secrets,  patents,
          formulas,  processes,  manufacturing  methods,  or  data  supplied  or
          available to him in connection with his employment.

          (b)  Employee  agrees  that  all  trade  secrets,  formulas,  patents,
     processes,  manufacturing  methods, data, documents,  equipment,  property,
     customer  and  supplier  information,   financial  information,  sales  and
     marketing  data,  and other  information  provided  to the  Employee by the
     Employer,  or obtained by the Employee,  in the course of, or in connection
     with, his employment, are and shall remain the property of the Employer and
     shall  be  returned  to the  Employer  by  the  Employee  immediately  upon
     termination  of  Employee's  employment,  and no  copies  or  reproductions
     thereof in any form shall be retained by Employee.

     8.  INJUNCTIVE  RELIEF.  In the event of a breach by Employee of any of the
covenants  contained in paragraphs 6 and 7 of this  Agreement,  Employee  agrees
that money damages shall not be an adequate remedy for such breach, and Employer
shall, in addition to all other remedies for such breach provided for under this
Agreement or applicable  law, have the right to request  immediate and permanent
injunctive  relief to enjoin  and  restrain  such  breach  and any  consequences
thereof.

     9. EMPLOYER'S  PROPRIETARY RIGHTS.  Employee agrees that all inventions and
products  developed by the Employee during the term of his employment under this
Agreement shall be owned by and be the exclusive property of the Employer.

     10. MISCELLANEOUS.

          (a)  This  Agreement  supersedes  any  and  all  prior  agreements  or
     understandings,  oral or written,  with  respect to the  employment  of the
     Employee with the Employer. This Agreement may not be altered or terminated
     orally,  and  shall be  modified  only by a  subsequent  written  Agreement
     executed by both the Employee and the Employer.

          (b) This  Agreement  shall be governed by and  construed in accordance
     with the laws of the Commonwealth of Pennsylvania.

          (c) This  Agreement  shall be  binding  upon  and  shall  inure to the
     benefit of the Employer and its successors and assigns; PROVIDED,  however,


                                       4




     that  Employer  shall  not  assign  or  transfer  (by  operation  of law or
     otherwise)  this  Agreement  without the express prior  written  consent of
     Employee.  This  Agreement  shall be  binding  upon and shall  inure to the
     benefit of the Employee, his heirs, executors and personal representatives,
     and shall not be  assigned by the  Employee  and any  attempted  assignment
     shall be in violation of this Agreement and shall be null and void.

          (d) Whenever  possible,  each  provisions of this  Agreement  shall be
     interpreted in such a manner as to make all provisions effective and valid;
     but, if any provision in this  Agreement is held to be invalid,  illegal or
     unenforceable,  such provision will be ineffective without invalidating the
     remainder of this Agreement.

          (e) All notices,  demands or other communications,  shall be delivered
     to the Employer or Employee at the following addresses which may be changed
     from time to time by either party within thirty (30) days' written  notice:


     To the Employer:

           Guy J. Quigley,  President/CEO
           The Quigley Corporation
           621 Shady Retreat Road
           P.O. Box 1349
           Doylestown, PA 18901

     To the Employee:

           David Hess
           31 North Spruce Street
           P.O. Box 488
           Elizabethtown, PA  17022

          (f) All rights and remedies  granted to the Employer  hereunder  shall
     not be  exclusive,  but shall be in  addition  to all rights  and  remedies
     available to the Employer at law or in equity.

          (g) Unless otherwise specifically defined within this Agreement, words
     and phrases  shall be construed and  interpreted  according to their common
     usage and meaning.  Headings and titles are for reference purposes only and
     are not to be construed as part of this Agreement.

                                       5




     IN WITNESS WHEREOF,  the Employer,  by its authorized  representative,  and
Employee have caused this  Agreement to be executed and made,  all as of the day
and year first written above.

                                            Quigley Manufacturing, Inc.


                                            By: /s/ Guy J. Quigley
                                               ---------------------------------
                                               Guy J. Quigley, its President


                                            /s/ David Hess
                                            ------------------------------------
                                            David Hess("Employee")


THE QUIGLEY  CORPORATION hereby  unconditionally  and irrevocably  guarantees to
Employee the full and punctual  payment and performance of all obligations  when
due of Employer under this Employment Agreement.

                                            THE QUIGLEY CORPORATION


                                            By: /s/ Guy J. Quigley
                                               ---------------------------------
                                               Guy J. Quigley, President


                                       6




                                  Exhibit "A"

              SUMMARY JOB DESCRIPTION FOR CHIEF OPERATING OFFICER


Essential duties and responsibilities of the Chief Operating Officer is to:
     1.   Oversee all of the production  functions of both  operating  plants to
          assure  compliance with established  operating  procedures,  including
          quality  assurance   functions,   maintenance   procedures,   material
          acquistion, storage and handling;
     2.   Establish production goals and objectives in line with capabilities of
          plant  personnel and equipment  parameters,  and reviews those results
          taking steps to help correct unsatisfactory results;
     3.   Supervise  those employees who report directly to the position and, at
          minimum, perform an annual performance evaluation of those employees;
     4.   Dispense advice,  guidance,  direction, and authorization to carry out
          plans and procedures consistent with established policies;
     5.   Review all capital  projects  ascertaining  the  functionality  of the
          project  and  selecting  the  vendor  in   consideration  of  quality,
          functionality, cost, service, and reputation;
     6.   Serves  as  a  technical   point  person  relating  to  new  products,
          ingredients, or processes;
     7.   Represents  the   organization  to  key  contract   customers,   major
          suppliers, and trade organizations;
     8.   Plus such other duties as directed by the President.

EX-99

                                                                    Exhibit 99.1



                               [GRAPHIC OMITTED]

CONTACT:
David K. Waldman/John W. Heilshorn                       The Quigley Corporation
Lippert Heilshorn & Associates                           Carl Fonash
(212) 838-3777                                           Shareholder Relations
DWALDMAN@LHAI.COM                                        (267) 880-1111

           QUIGLEY COMPLETES PURCHASE OF MANUFACTURING ASSETS OF JOEL

DOYLESTOWN,  PA. - OCTOBER 5, 2004 - THE QUIGLEY CORPORATION (NASDAQ:  QGLY) has
completed the asset  purchase with JOEL,  Inc., as announced on August 20, 2004,
for  approximately  $5.1 million,  which  includes $4.1 million in cash and $1.0
million of the Company's  stock. The transfer of assets includes  inventory,  as
well  as  land,   buildings,   machinery  and  equipment  of  two  manufacturing
facilities, located in Lebanon and Elizabethtown, Pennsylvania.

The Company funded the  acquisition  through its current working capital of $1.1
million and financed $3.0 million of the cash requirement  through a 7-year term
loan with PNC Bank, N.A., a Pennsylvania commercial bank.

JOEL,  Inc. has been the exclusive  manufacturer  of the  Company's  ColdEEZE(R)
Lozenge since its launch in 1995.

The Quigley Corporation (Nasdaq:  QGLY,  http://www.Quigleyco.com)  is a leading
developer and marketer of diversified health products including the COLD-EEZE(R)
family of patented zinc  gluconate  glycine  (ZIGG(TM))  lozenges and sugar free
tablets. COLD-EEZE is the only (ZIGG) lozenge proven in two double-blind studies
to reduce the  duration  of the common  cold from 7.6 to 4.4 days or by 42%.  In
addition to  Over-The-Counter  (OTC)  products,  the Company has formed  Quigley
Pharma   Inc.    (http://www.QuigleyPharma.com),    a   wholly   owned   ethical
pharmaceutical  subsidiary,  to introduce a line of  naturally-derived  patented
prescription drugs. The Quigley Corporation's customers include leading national
wholesalers  and  distributors,  as well as independent and chain food, drug and
mass  merchandise  stores  and  pharmacies.  The  Quigley  Corporation  makes no
representation  that  the  U.S.  Food  and  Drug  Administration  or  any  other
regulatory  agency  will  grant an IND or take any  other  action  to allow  the
aforementioned products to be studied or marketed. Furthermore, no claim is made
that the potential  medicine discussed here is safe,  effective,  or approved by
the Food and Drug Administration.

Certain statements in this press release are "forward-looking statements" within
the meaning of the Private Securities  Litigation Reform Act of 1995 and involve
known and  unknown  risk,  uncertainties  and other  factors  that may cause the
company's actual performance or achievements to be materially different from the
results, performance or achievements expressed or implied by the forward-looking
statement.  Factors that impact such forward-looking  statements include,  among
others,  changes in worldwide general economic  conditions,  changes in interest
rates, government regulations, and worldwide competition.

                                      # # #