Exhibit 10.64



                                 LEASE AGREEMENT

                         Dated as of September 21, 1993



                                     between



                        COGENTRIX OF PENNSYLVANIA, INC.,
                                   as Lessor,



                                       and



                          KEYSTONE VILLAGE FARMS, INC.
                                    as Lessee



                               Greenhouse Facility
                        Located in Ringgold, Pennsylvania



<PAGE>

                                TABLE OF CONTENTS
                                (Lease Agreement)

PARTIES

ARTICLE I            DEFINITIONS; CONSTRUCTION OF REFERENCES..................1

    Section 1.01.    Definitions..............................................1
    Section 1.02.    Construction of References...............................7

ARTICLE II           LEASE OF FACILITY........................................7

ARTICLE III          RENT AND SERVICES........................................7

    Section 3.01.    Basic Rent...............................................7
    Section 3.02.    Supplemental Rent........................................7
    Section 3.03.    Method of Payment........................................8
    Section 3.04.    Late Payment.............................................8
    Section 3.05.    Net Lease; No Setoff; Etc................................8
    Section 3.06.    Utilities................................................8
    Section 3.07.    Services Provided by Lessor..............................9

ARTICLE IV           DISCLAIMER OF WARRANTIES.................................9

ARTICLE V            RESTRICTION ON LIENS.....................................9

ARTICLE VI           OPERATION AND MAINTENANCE; ALTERATIONS,
                     MODIFICATIONS AND ADDITIONS..............................9

    Section 6.01.    Operation and Maintenance................................9
    Section 6.02.    Repair and Replacement...................................10
    Section 6.03.    Alterations Required by Law..............................10
    Section 6.04.    Plans and Specifications; Operating Manual...............10
    Section 6.05.    Operational Alterations..................................11
    Section 6.06.    Title to Parts...........................................11
    Section 6.07.    Lessor's Option to Pay Costs of Alterations..............12
    Section 6.08.    Reports of Alterations...................................12
    Section 6.09.    Removal of Parts.........................................12
    Section 6.10.    Parts Free and Clear of Liens............................12
    Section 6.11.    Permitted Contests.......................................12
    Section 6.12.    Operating Logs...........................................13
    Section 6.13.    Return of Facility.......................................13

ARTICLE VII          IDENTIFICATION...........................................13

                                       i

<PAGE>

ARTICLE VIII         INSURANCE................................................13

    Section 8.01.    Coverage.................................................13
    Section 8.02.    Policy Provisions........................................15
    Section 8.03.    Evidence of Insurance....................................16
    Section 8.04.    No Duty of Lessor to Verify..............................17

ARTICLE IX           LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE................17

    Section 9.01.    Occurrence of Event of Loss..............................17
    Section 9.02.    Repair of Loss or Destruction............................17
    Section 9.03.    Other Dispositions.......................................18

ARTICLE X            INTEREST CONVEYED TO LESSEE..............................18

ARTICLE XI           ASSIGNMENT AND SUBLEASE; LOCATION........................18

    Section 11.01.   Assignment and Sublease..................................18
    Section 11.02.   Location.................................................18

ARTICLE XII          INSPECTION AND REPORTS...................................19

    Section 12.01.   Condition and Operation..................................19
    Section 12.02.   Annual Insurance Report..................................19
    Section 12.03.   Financial Reports........................................19
    Section 12.04.   Budget Approval..........................................20
    Section 12.05.   Liability................................................21
    Section 12.06.   Liens....................................................21

ARTICLE XIII         EVENTS OF DEFAULT........................................21

ARTICLE XIV          ENFORCEMENT..............................................22

    Section 14.01.   Remedies.................................................22
    Section 14.02.   Survival of Lessee's Obligations.........................23
    Section 14.03.   Remedies Cumulative......................................23

ARTICLE XV           RIGHT TO PERFORM FOR LESSEE..............................24

ARTICLE XVI          INDEMNITIES..............................................24

    Section 16.01.   General Indemnity........................................24
    Section 16.02.   Fees, Taxes and Other Charges............................25
    Section 16.03.   Survival.................................................28
    Section 16.04.   Waiver...................................................28

                                       ii

<PAGE>

ARTICLE XVII         COVENANTS OF LESSEE......................................29

    Section 17.01.   Operation of Facility....................................29
    Section 17.02.   Affiliated Transactions..................................29

ARTICLE XVIII        MISCELLANEOUS............................................29

    Section 18.01.   Further Assurances.......................................29
    Section 18.02.   Quiet Enjoyment..........................................30
    Section 18.03.   Facility as Security for Lessor's Obligations............30
    Section 18.04.   Notices..................................................30
    Section 18.05.   Severability.............................................30
    Section 18.06.   Amendment................................................30
    Section 18.07.   Headings.................................................31
    Section 18.08.   Counterparts.............................................31
    Section 18.09.   Governing Law............................................31
    Section 18.10.   Performance of Obligations to Lender.....................31
    Section 18.11.   Binding Effect; Successors and Assigns; Survival.........31
    Section 18.12.   Divisible Lease..........................................31
    Section 18.13.   Effectiveness............................................31
    Section 18.14.   Security Agreement.......................................32


SCHEDULES

SCHEDULE 1.01(a)     Description of Facility
SCHEDULE 3.01        Basic Rent
SCHEDULE 3.02        Supplemental Rent



EXHIBITS

EXHIBIT 1.01         Lender Consent and Agreement


                                      iii

<PAGE>

     LEASE  AGREEMENT  dated as of  September  21,  1993  between  COGENTRIX  OF
PENNSYLVANIA,  INC., a Delaware corporation (the "Lessor"), and KEYSTONE VILLAGE
FARMS, INC., a Pennsylvania corporation (the "Lessee").

                              W I T N E S S E T H:

     WHEREAS,  the Lessor owns a greenhouse facility in Ringgold,  Pennsylvania;
and

     WHEREAS, the Lessor desires to lease the Facility (as defined below) to the
Lessee and the Lessee desires to lease the Facility from the Lessor,  all on the
terms and conditions herein contained.

     In consideration of the mutual  agreements  herein contained and other good
and valuable consideration, receipt of which is hereby acknowledged, the parties
hereto, intending to be legally bound hereby, agree as follows:

                                    ARTICLE I

                     DEFINITIONS; CONSTRUCTION OF REFERENCES

     Section 1.01. Definitions.  As used in this Agreement,  the following terms
shall have the following  meanings (such definitions to be equally applicable to
both the singular and plural forms of the terms defined):

     "Address" shall mean:

          (a) with respect to the Lessor, 9405 Arrowpoint Boulevard,  Charlotte,
     North Carolina 28273, ATTN: President; and

          (b) with respect to the Lessee,  12 Elkins Road, East  Brunswick,  New
     Jersey 08816, ATTN: Michael A. Degiglio; and

          (c) with respect to the Lender,  Banque Paribas,  New York Branch,  as
     Agent,  787 Seventh  Avenue,  32nd Floor,  New York, New York 10019,  ATTN:
     Glenn Tobias, Specialized Industries Group.

     "Affiliate"  of  any  Person  shall  mean  any  other  Person  directly  or
indirectly controlling, controlled by or under common control with, such Person.

     "Agent" shall mean Banque Paribas, New York Branch as agent for the Lender.

     "Alterations"  shall  mean,  with  respect  to the  Facility,  alterations,
improvements,  modifications  and additions to the Facility  (but  excluding any
replacement of Parts incorporated in the Facility).

     "APD" shall mean Agro Power Development, Inc., a New York corporation.

     "Basic Rent" shall mean the rent payable  pursuant to Section 3.01. of this
Agreement.



<PAGE>

     "Board of Directors" with respect to the Lessee or the Lessor, means either
the Board of Directors or any duly authorized committee of that Board.

     "Board Resolution" means a copy of a resolution  certified by the Secretary
or an Assistant  Secretary of the Lessee or Lessor,  as the case may be, to have
been duly adopted by its Board of  Directors  and to be in full force and effect
on the date of such certification.

     "Bonus"  with  respect to the  Lessee's  grower and sales  representatives,
shall mean  bonuses  paid to such  persons  pursuant to bonus plans the specific
terms of which are approved by the Lessor in writing  prior to the  commencement
of the Lease Year in which such bonuses are paid.

     "Budget" shall have the meaning specified in Section 12.04.

     "Business  Day" shall mean any day other than a  Saturday,  Sunday or other
day on  which  banks  are  authorized  to be  closed  in New  York,  New York or
Charlotte, North Carolina.

     "Cash Flow" shall mean for any Lease Year (a) the sum of (i) gross revenues
from the sale of Product,  plus (ii) all amounts received by the Lessee pursuant
to the  Line of  Credit  Facility  Agreement,  plus,  (iii)  insurance  proceeds
received  by the  Lessor  from  policies  of the type  described  in  subsection
8.01(a)(iii)  or any other  insurance  proceeds paid with respect to the loss or
damage to Product,  plus, (iv) revenues  received  pursuant to Article XVII plus
(v) all other  operating  revenues  of the  Facility,  minus (b) all  Greenhouse
Expenses paid in the ordinary  course of business (but  excluding any Greenhouse
Expenses that are prepaid by the Lessee).

     "Closing Date" shall mean the date this Agreement is executed and delivered
by the parties.

     "Code" shall mean the Internal  Revenue  Code of 1986,  as amended,  or any
comparable successor law.

     "Default" means any event or condition which,  with notice or lapse of time
or both, would become an Event of Default.

     "Equipment" shall mean the equipment and other property described in Part 1
of Schedule  1.01(a) of this  Agreement,  together with any Parts which may from
time to time be  incorporated  in such  equipment or other property and title to
which shall have vested in the Lessor.

     "Effective Date" shall have the meaning specified in Section 18.13.

     "Escrow  Agent" shall have the meaning  specified in Section  3.02. of this
Agreement.

     "Event of Default" shall have the meaning specified in Article XIII of this
Agreement.

     "Event of Loss" shall mean (a) the actual or constructive total loss of all
or substantially all the Facility, or the condemnation,  confiscation or seizure
of, or requisition of title to, or requisition by any Governmental  Authority of
the use of, all or substantially all the Facility, or

                                       2

<PAGE>

(b) the loss, destruction or damage of or condemnation,  confiscation or seizure
of, or requisition by any Governmental  Authority of the use of, such portion of
the Facility as to render the Facility  unable to operate at  substantially  the
same level of operation as prior to the occurrence of such event,  unless (x) it
is feasible to restore,  rebuild or replace the affected portion of the Facility
and (y) in the  opinion of the Lender and the  Lessor,  sufficient  funds are or
will be available to the Lessor (i) to restore,  rebuild or replace the affected
portion  of the  Facility  so that  the  Facility  will be  able to  operate  at
substantially  the same level of  operation as prior to the  occurrence  of such
event within  twelve (12) months after the  occurrence of such event and (ii) to
pay all Rent until such restoration, rebuilding or replacement is completed.

     "Expense" shall have the meaning specified in Section 16.01. of the Lease.

     "Facility" shall mean the Lessor's rights in and to the Plant, the Site and
the Equipment.

     "Fees, Taxes and Other Charges" shall have the meaning specified in Section
16.02. of the Lease.

     "Gas Supply  Contract"  shall mean the Gas Supply  Contract  dated June 15,
1989 among the Lessor, J.C. Enterprises and Cogentrix,  Inc., as the same may be
amended, supplemented or otherwise modified from time to time.

     "Greenhouse  Expenses"  shall  mean the sum  (without  duplication)  of (a)
direct labor costs paid  (excluding the salary and benefits paid to the Lessee's
grower  and sales  representatives  but  including  a Bonus  paid  with  respect
thereto),  (b) seed expense paid,  (c)  packaging  supplies  expense  paid,  (d)
fertilizer and chemical expenses paid, (e) biological  control,  including bees,
expense paid, (f) freight expense paid, (g) growing medium and supplies  expense
paid,  (h) carbon  dioxide  expense  paid,  (i)  utility  (including  hot water,
electricity  and natural gas) expense paid,  (j)  Management Fee paid, (k) Basic
Rent paid,  (1) insurance  premiums and property  taxes paid,  (m) principal and
interest paid with respect to the Line of Credit Facility  Agreement and (n) all
other cash  expenses  paid  relating to the  operation of the  Facility,  to the
extent contained in the Budget; provided,  however, that there shall be excluded
from  Greenhouse  Expenses (a) all expenses to be paid from the Management  Fee,
(b) all payments  with respect to federal,  state and local  income  taxes,  (c)
payment of  principal,  interest and fees with respect all  indebtedness  of the
Lessee  for non  capital  expenditures  other  than the Line of Credit  Facility
Agreement and (d) payment of principal,  interest,  lease payments and fees with
respect to the  acquisition  by the Lessee of capital  equipment,  except to the
extent consented to in advance by the Lessor in writing.

     "Governmental Authority" shall mean any nation or government,  any state or
other  political  subdivision  thereof,  and any  entity  exercising  executive,
legislative,  judicial,  regulatory or administrative functions of or pertaining
to government.

     "Incorporated  in" shall have the meaning specified in Section 6.02. of the
Lease.

     "Indemnitee"   shall  mean  the  Lessor,  the  Lender  and  the  respective
successors, assigns, officers, directors, employees and agents of any thereof.

     "Inspecting  Parties" shall have the meaning specified in Section 12.01. of
the Lease.



                                       3

<PAGE>

     "Insurance  and  Condemnation  Proceeds  Accounts"  shall mean the  account
referred to as the Insurance and Condemnation  Proceeds  Account  established by
the Security Agent pursuant to the terms of the Security Deposit Agreement.

     "Lease  Security  Agreement"  shall have the meaning  specified  in Section
18.14. of the Lease.

     "Lease Term" shall mean (a) the period  commencing  on December 1, 1993 and
ending on  December  31,  2003,  or (b) such  shorter  period as may result from
earlier termination of the Lease as provided herein.

     "Lease Termination Date" shall mean the last day of the Lease Term.

     "Lease Year" shall mean each period  commencing  on January 1 and ending on
December 31 during the term of this  Lease;  provided,  however,  that the first
Lease Year shall commence on December 1, 1993 and end on December 31, 1994.

     "Lender" shall mean Banque Paribas, New York Branch, and each other banking
institution  that  is a  party  to the  Loan  Agreement,  and  their  respective
successors and assigns.

     "Lender Consent and Agreement"  shall mean the Lender Consent and Agreement
in the form of Exhibit 1.01. hereto.

     "Lessee"  shall  mean  Keystone   Village   Farms,   Inc.,  a  Pennsylvania
corporation, and its permitted successors and permitted assigns.

     "Lessor"   shall  mean   Cogentrix  of   Pennsylvania,   Inc.,  a  Delaware
corporation, and its successors and permitted assigns.

     "Lien" shall mean any lien, mortgage,  encumbrance,  pledge, charge, lease,
easement, servitude, right of others or security interest of any kind, including
any  thereof  arising  under  any  conditional  sale or  other  title  retention
agreement.

     "Line of Credit Facility  Agreement" shall mean the Line of Credit Facility
Agreement dated as of December 1, 1993 between  Cogentrix,  Inc. and the Lessee,
as the  same may be  amended,  modified  or  supplemented  from  time to time in
accordance with the provisions thereof.

     "Loan  Agreement" shall mean the Construction and Term Loan Agreement dated
as of June 15,  1989  between  the  Lessor  and the  Lender,  as the same may be
amended,  modified  or  supplemented  from time to time in  accordance  with the
provisions thereof.

     "Management  Agreement"  shall mean the Management  Agreement to be entered
into  between  the Lessee and APD  pursuant  to which APD will  provide  certain
management services to the Lessee,  which Management Agreement shall be approved
in advance by the Lessor in writing.

     "Management  Fee" shall mean the management fee paid to APD pursuant to the
Management Agreement for (a) all internal accounting services of the Lessee, (b)
salary and



                                       4

<PAGE>

other benefits paid to the Lessee's  grower and sales  representatives,  (c) all
internal  management  services  performed by principals of the Lessee or APD and
(d) all direct  out-of-pocket  expenses  (including  travel and living expenses)
paid in connection  with the  performance  of the services  described in clauses
(a), (b) and (c). The Management Fee shall be two hundred fifty thousand dollars
($250,000.00) per year (except that for the first Lease Year, the Management Fee
shall be two  hundred  seventy-one  thousand  dollars  ($271,000.00))  and shall
increase on an annual basis as of May 1 of each Lease Year  following  the first
Lease  Year at a rate equal to the  percentage  increase  in the gross  national
product  implicit  price  deflator,  but in no event  shall the  increase in the
Management Fee exceed five percent (5%) per Lease Year. The Management Agreement
shall  provide  that the  Management  Fee be paid in twelve  (12) equal  monthly
installments in arrears during each Lease Year (except for the first Lease Year,
in which  the  Management  Fee  shall be paid in  thirteen  (13)  equal  monthly
installments in arrears.)

     "Mortgage"  shall mean the mortgage by the Lessor to the Lender dated as of
April 15, 1989, as amended from time to time.

     "Nonseverable"  shall  describe  (i) with  respect  to any  Alteration,  an
Alteration which is a "nonseverable  improvement"  within the meaning of Revenue
Procedure 79-48 and (ii) with respect to any part not constituting an Alteration
or part of an  Alteration,  a part  which  cannot be  readily  removed  from the
equipment without causing material damage to the Facility.

     "Notes"  shall mean the term loan notes  issued by the Lessor to the Lender
pursuant to the Loan Agreement.

     "Officer's Certificate" means a certificate signed by a Responsible Officer
of the party required to give such certificate.

     "Operating  Manual"  shall mean such  operating  manuals as are  ordinarily
maintained  by the Lessee  with  respect to the  Facility  and any such  manuals
provided by any manufacturer of any component of the Facility.

     "Operative  Documents" shall mean this Lease Agreement,  the Line of Credit
Facility Agreement and the Consent and Agreement.

     "Overdue  Rate" shall mean an interest  rate equal to ten percent (10%) per
annum.

     "Parts" shall have the meaning specified in Section 6.02.

     "Permitted Liens" shall mean (a) the respective rights and interests of the
Lessor,  the Lessee and the Lender as provided in the Operative  Documents,  (b)
liens for  taxes  either  not yet due or being  contested  in good  faith and by
appropriate  proceedings,  so long as such  proceedings  shall not  involve  any
danger  of the  sale,  forfeiture  or loss of any  part of the  Facility,  title
thereto  or any  interest  therein  and  shall  not  interfere  with  the use or
disposition  of  the  Facility  or  the  payment  of  Rent,  (c)  materialmen's,
mechanics',  workers, repairmen's,  employees' or other similar Liens arising in
the  ordinary  course  of  business  for  amounts  either  not yet due or  being
contested  in  good  faith  and by  appropriate  proceedings  so  long  as  such
proceedings shall not involve any danger of the sale,  forfeiture or loss of any
part of the  Facility,  title  thereto  or any  interest  therein  and shall not
interfere  with the use or  disposition  of the Facility or the payment of



                                       5

<PAGE>

Rent,  (d) Liens arising out of judgments or awards with respect to which at the
time an appeal or  proceeding  for review is being  prosecuted in good faith and
either  which have been  bonded or for the  payment of which  adequate  reserves
shall  have  been  provided  and (e)  Liens  created  pursuant  to the  Security
Agreement.

     "Person" shall mean individual,  corporation,  partnership,  joint venture,
association,   joint-stock  company,  trust,   unincorporated   organization  or
government or any agency or political subdivision thereof.

     "Plans and Specifications"  shall mean the plans and specifications for the
Plant and the Equipment identified as such, as the same may be revised from time
to time in accordance with the terms of this Agreement.

     "Plant"  shall  mean  those  buildings  and other  properties  specifically
described  in Part 2 of Schedule  1.01.(a)  to the Lease,  together at all times
with any and all Parts which may from time to time be incorporated in the Plant.

     "Product" shall mean tomatoes or any other agricultural product approved in
writing by the Lessor and the Lender.

     "Rent" shall mean Basic Rent and Supplemental Rent, collectively.

     "Rent  Payment  Date"  shall mean the first day of each April,  May,  June,
July, August, September,  October, November and December during the term of this
Agreement and the Lease Termination Date.

     "Responsible Officer" shall mean the Chairman or Vice Chairman of the Board
of Directors,  the Chairman or Vice  Chairman of the Executive  Committee of the
Board of Directors, the President, any Vice President (whether or not designated
by a number or a word or words added before or after the title "Vice President",
including any Assistant Vice President), the Secretary, any Assistant Secretary,
the  Treasurer,  any  Assistant  Treasurer  or any other  officer of any of them
customarily  performing functions similar to those performed by any of the above
designated officers.

     "Revenue Account" shall mean the account referred to as the Revenue Account
and  established  by the  Security  Agent  pursuant to the terms of the Security
Deposit Agreement.

     "Security  Agent" shall mean First Union National Bank of North Carolina or
any  bank  acting  as  successor  security  agent  under  the  Security  Deposit
Agreement.

     "Security  Agreement"  shall mean the Security  Agreement to be dated as of
December 1, 1993  between  Cogentrix,  Inc.  and the Lessee,  as the same may be
amended, supplemented or otherwise modified from time to time.

     "Security  Deposit  Agreement"  shall mean the Security  Deposit  Agreement
dated as of June 15,  1989 by and among the Lessor,  the Agent and the  Security
Agent, as the same may be amended,  supplemented or otherwise modified from time
to time.



                                       6
<PAGE>

     "Site" shall mean the land described in Part 3 of Schedule  1.01.(a) of the
Lease.

     "Supplemental  Rent" shall mean the rent payable  pursuant to Section 3.02.
of this Agreement.

     "Supplemental Rent Payment Date" shall mean for any Lease Year the March 31
following the end of such Lease Year.

     Section 1.02. Construction of References. All references in this instrument
to designated  sections and other  subdivisions  are to designated  sections and
other  subdivisions of this  instrument,  and the words  "herein",  "hereof" and
"hereunder" and other words of similar import refer to this Lease as a whole and
not to any particular section or other subdivision.

     Except as otherwise  indicated,  all the agreements or  instruments  herein
defined shall mean such  agreements or  instruments as the same may from time to
time be  supplemented  or amended or the terms thereof waived or modified to the
extent permitted by, and in accordance with, the terms thereof.

                                   ARTICLE II

                                LEASE OF FACILITY

     As of December  1, 1993,  subject to all the terms and  conditions  of this
Agreement,  the Lessor shall  lease,  and hereby as of the  Effective  Date does
lease, the Facility to the Lessee,  and the Lessee shall lease, and hereby as of
the Effective Date does lease, the Facility from the Lessor for the Lease Term.

                                   ARTICLE III

                                RENT AND SERVICES

     Section 3.01. Basic Rent.  Subject to adjustment as provided below,  during
the Lease  Term,  the  Lessee  shall pay to the  Lessor in  arrears on each Rent
Payment  Date Basic Rent for the  Facility in an amount  equal to the amount set
forth on Schedule 3.01. for such Rent Payment Date (in the case of the last Rent
Payment  Date if such date is other than a Rent  Payment  Date,  such Basic Rent
shall be prorated based on the number of days during which the Lessee leased the
Facility).  Basic Rent  shall be  increased  in  accordance  with any  agreement
reached  in  connection  with the  payment  by the  Lessor  of the  costs of any
Alterations in accordance with Section 6.07. hereof.

     Section  3.02.  Supplemental  Rent.  In addition to Basic Rent,  the Lessee
shall pay to the Lessor  Supplemental  Rent in an amount equal to the percentage
of Cash Flow set forth on Schedule  3.02.  during the Lease  Term.  Supplemental
Rent shall be payable for each Lease Year on the Supplemental Rent Payment Date.
On or  before  the last day of each  month of each  Lease  Year  (commencing  in
February,  1994), the Lessee shall pay into an escrow account established with a
bank  satisfactory to the Lessor (the "Escrow Agent") an amount equal to (a) the
cumulative  year-to-date  Cash Flow for the Lease  Year  through  the end of the
preceding month minus (b) amounts  previously paid into the escrow account,  all
as reflected on the certificate  provided pursuant to Section  12.03(a)(ii).  On
the  Supplemental  Rent Payment Date  following the end of each Lease Year,  the
Escrow  Agent shall pay to the Lessor an amount equal to the



                                       7

<PAGE>

Supplemental  Rent for the preceding  Lease Year required to be paid pursuant to
this Section  3.02,  as reflected  on the  certificate  required to be delivered
pursuant to Section  12.03(b),  and shall pay the remaining amounts held in such
account with respect to the prior Lease Year to the Lessee.

     Section 3.03. Method of Payment.  Basic Rent and Supplemental Rent shall be
paid into the Revenue Account as provided in this Section 3.03 hereof; provided,
however,  that  after all  indebtedness  of the  Lessor  arising  under the Loan
Agreement has been paid in full,  such amounts shall be payable to the Lessor in
accordance with instructions to be provided by the Lessor.  Each payment of Rent
shall be made by the Lessee in immediately  available funds prior to 11:00 A.M.,
local  time,  at the place of payment on the  scheduled  date when such  payment
shall be due,  unless such  scheduled date shall not be a Business Day, in which
case such payment  shall be made on the  preceding  Business  Day, with the same
force and effect as though made on such scheduled date.

     Section 3.04. Late Payment.  If any Rent or any other amount required to be
paid  hereunder  shall not be paid when due,  the Lessee shall pay to the Lessor
interest  (to the  extent  permitted  by law) on such  overdue  amount  from and
including  the due date  thereof to but  excluding  the date of payment  thereof
(unless such payment  shall be made after 11:00 A.M.,  local time, in which case
such date of payment  shall be included) at the Overdue  Rate. If any Rent shall
be paid on the date when due, but after 11: 00 A.M., local time, at the place of
payment, interest shall be payable as aforesaid for one day.

     Section  3.05.  Net Lease,  No Setoff;  Etc. This Lease is a net lease and,
notwithstanding  any other  provision  of this Lease,  it is intended  that Rent
shall be paid without notice, demand, counterclaim, setoff, deduction or defense
and without abatement, suspension, deferment, diminution or reduction.

     Section  3.06.  Utilities.  The Lessor  agrees to provide to the Lessee the
following services at the prices set forth below:

          (a) electricity at no additional charge;

          (b)  natural  gas  to be  consumed  by  the  Lessee,  which  shall  be
     separately  metered,  at a rate equal to the  contract  price in effect for
     each  billing  period  under the Gas  Supply  Contract,  up to a maximum of
     twenty-five  thousand dollars  ($25,000.00)  per year ; provided,  however,
     that the Lessee  shall not be required to pay for natural gas consumed as a
     result of scheduled or unscheduled  outages of the Lessor's  electric power
     plant located adjacent to the Facility;

          (c) hot water, at a rate equal to $15,000 per Lease Year; and

          (d) water,  at a rate equal to fifty cents  ($0.50)  per one  thousand
     gallons.

     The Lessor shall invoice the Lessee for such services  monthly as incurred,
and such invoices shall be payable within thirty (30) days of invoice.



                                       8

<PAGE>

     Section 3.07.  Services  Provided by Lessor.  At the request of the Lessee,
the  Lessor  shall also  provide at the  Lessee's  expense  general  maintenance
services  currently being provided to the Facility.  The Lessor shall charge the
Lessee an amount equal to its actual cost in providing  such  services and shall
invoice the Lessee for such services monthly as incurred. Such invoices shall be
payable within thirty (30) days of invoice.

                                   ARTICLE IV

                            DISCLAIMER OF WARRANTIES

     THE  FACILITY  IS BEING  LEASED  PURSUANT TO THIS  AGREEMENT  ON AN "AS-IS,
WHERE-IS"  BASIS.  NEITHER THE LESSOR NOR THE LENDER HAS MADE OR SHALL BE DEEMED
TO HAVE MADE ANY  REPRESENTATION  OR  WARRANTY,  EXPRESS OR  IMPLIED,  AS TO THE
TITLE,  VALUE,  MERCHANTABILITY,   COMPLIANCE  WITH  SPECIFICATIONS,  CONDITION,
DESIGN, OPERATION,  ABSENCE OF LATENT DEFECTS OR FITNESS FOR USE OF THE FACILITY
(OR ANY PART  THEREOF),  OR ANY OTHER  REPRESENTATION  OR  WARRANTY  WHATSOEVER,
EXPRESS OR IMPLIED,  WITH RESPECT TO THE FACILITY (OR ANY PART  THEREOF).  It is
agreed  that  except as  expressly  provided  herein all risks  incident  to the
matters  discussed  in the  preceding  sentence,  as  between  the Lessor or the
Lender,  on the one hand, and the Lessee,  on the other,  are to be borne by the
Lessee.  The provisions of this Article IV have been negotiated,  and, except to
the  extent  otherwise  expressly  stated  in  this  Agreement,   the  foregoing
provisions  are  intended  to  be a  complete  exclusion  and  negation  of  any
representations  or warranties by the Lessor or the Lender,  express or implied,
with  respect  to the  Facility,  that  may  arise  pursuant  to any  law now or
hereafter in effect, or otherwise.

                                    ARTICLE V

                              RESTRICTION ON LIENS

     The Lessee shall not directly or indirectly create, incur, assume or suffer
to exist any Lien on or with  respect  to the  Facility,  title  thereto  or any
interest therein,  except Permitted Liens. The Lessee shall promptly, at its own
expense,  take such action as may be necessary duly to discharge or eliminate or
bond in a manner  satisfactory  to the  Lessor  any such Lien if the same  shall
arise at any time.  The Lessee  further  agrees that it shall pay or cause to be
paid on or before the time or times  prescribed  by law (after  giving effect to
any applicable grace period) any taxes, assessments,  fees or charges imposed on
the Lessee (or any  affiliated or related group of which the Lessee is a member)
under the laws of any  jurisdiction  that,  if unpaid,  might result in any Lien
prohibited by this Lease.

                                   ARTICLE VI

                     OPERATION AND MAINTENANCE; ALTERATIONS,

                           MODIFICATIONS AND ADDITIONS

     Section 6.01.  Operation and Maintenance.  The Lessee,  at its own expense,
shall at all times  operate,  maintain,  service  and  repair  the  Facility  in
accordance  with  (a)  prudent  commercial  operating   maintenance   practices,
including  all   manufacturers'   warranty   requirements  to  the  extent  such
requirements  are made  known to the  Lessee,  (b) the  then  current  Operating



                                       9

<PAGE>

Manual, (c) except to the extent Section 6.11 hereof shall apply, all applicable
requirements  of law  and  of  any  court  and  of  any  Governmental  Authority
(including without limitation all zoning,  environmental protection,  pollution,
sanitary and safety laws) noncompliance with which would have a material adverse
effect on the Lessee's right to operate the Facility,  the Lessee's  business or
financial condition or the rights of the Lessor in the Facility or would, in the
opinion of the Lessor, involve a material risk of any of the items enumerated in
Section 6.11 (i) through (iv), and (d) all requirements contained in permits and
licenses  relating to the  Facility in effect from time to time during the Lease
Term.  In  connection  therewith,  the Lessee shall (i) maintain the Facility in
good  operating  condition,  ordinary  wear and tear  excepted,  (ii)  cause the
Facility to  continue to have the  capacity  and  functional  ability to produce
Product on a continuing basis, in normal commercial operation, in a commercially
efficient  manner,  (iii)  comply with the  standards  imposed by any  insurance
policies in effect at any time with respect to the Facility or any part thereof,
and (iv) bear the expense  associated  with changes in  permitting  requirements
relating  to the  Facility  during  the Lease  Term.

     Section 6.02.  Repair and  Replacement.  Except after the  occurrence of an
Event of Loss,  and except as provided  below,  the Lessee,  at its own expense,
shall keep the Facility in good operating  condition  (reasonable  wear and tear
excepted),  and  shall  make  all  repairs,  replacements  and  renewals  of all
necessary   or  useful   appliances,   parts,   instruments,   accessories   and
miscellaneous property of whatever nature (collectively,  the "Parts") necessary
to  maintain  the  Facility in good  operating  condition.  The Lessee  shall be
responsible  for  making  (a)  all  structural  and  nonstructural  repairs  and
replacements  to  the  Facility  up to ten  thousand  dollars  ($10,000)  in the
aggregate  in each Lease Year and (b) all repairs and  replacements  relating to
movable,  grading,  packaging and  distribution  equipment.  The Lessor shall be
responsible  for making all necessary  structural and  nonstructural  repairs in
excess of ten  thousand  dollars  ($10,000)  in the  aggregate in any Lease Year
other than repairs and  replacements  of items  referred to in clause (b) above;
provided,  however, that if such repairs or replacements are necessitated by the
negligent or willful acts of the Lessee, its employees, agents or invitees, then
the cost of such repairs or  replacements  shall be borne by the Lessee.  In the
ordinary  course of  maintenance,  service,  repair or  testing,  the Lessee may
remove  any Parts,  but the Lessee  shall  cause  such Parts to be  replaced  as
promptly as practicable.  All  replacement  Parts shall be free and clear of all
Liens  except  Permitted  Liens  and  shall  be in at  least  as good  operating
condition  as, and shall have a value and  utility at least  equal to, the Parts
replaced, assuming such replaced Parts were in the condition and repair required
to be maintained by the terms hereof.

     Section  6.03.  Alterations  Required  by Law.  The Lessor  shall make such
Alterations  to the  Facility as may be  required  from time to time to meet the
requirements of and be in conformity with all applicable requirements of law, of
any court and of any  Governmental  Authority  and the Lessee will  maintain the
same in proper operating  condition under such laws and requirements,  except to
the extent Section 6.11 hereof shall apply. Upon completion of such Alterations,
the Basic Rent shall be automatically  increased on an annual basis by an amount
equal to sixty-five  dollars ($65.00) for every one thousand dollars ($1,000) of
costs paid by the Lessor in connection with the Alterations.

     Section  6.04.  Plans  and  Specifications;  Operating  Manual.  As soon as
practicable following the Effective Date, the Lessor shall provide to the Lessee
the Operating Manual and a complete set of "as-built"  Plans and  Specifications
(which shall in the aggregate  reflect the


                                       10

<PAGE>

Facility as of the Effective  Date).  The Lessee shall  maintain  throughout the
Lease Term, and keep on file at the Facility,  a current  Operating Manual and a
complete  set  of  "as-built"  Plans  and  Specifications  (which  shall  in the
aggregate  reflect all Parts  incorporated  in the Facility and all  Alterations
made  pursuant  to this  Article  VI) with  respect  to the  Facility.  Upon any
expiration  of the Lease Term or the  exercise of  remedies  pursuant to Article
XIII hereof,  the Lessee shall deliver to the Lessor a complete set,  current as
of the  date  of such  return  or  exercise  of  remedies,  of  such  Plans  and
Specifications  and all work drawings and similar  documents with respect to the
operation of the Facility.  The Plans and  Specifications  shall not be revised,
amended or modified in any manner  which would  adversely  affect the  operating
capacity, cost efficiency, utility, reliability or value of the Facility.

     Section 6.05. Operational  Alterations.  In addition to the foregoing,  the
Lessee,  at its own expense  (subject to Section 6.07 hereof),  may from time to
time make such  Alterations  to the Facility as the Lessee may deem desirable in
the proper  conduct of its  business,  which  shall be approved by the Lessor in
advance, provided that such Alterations shall not adversely affect the operating
capacity, cost efficiency, utility, reliability or value of the Facility.

     Section 6.06. Title to Parts. Title to each Part (including any Alteration)
incorporated  in the Facility  pursuant to this Article VI shall without further
act vest in the Lessor and shall be deemed to  constitute a part of the Facility
and be subject to this Lease in the following cases:

          (a) such Part shall be in replacement of or in  substitution  for, and
     not in addition to, any Part  originally  incorporated  in the Equipment or
     any Part title to which  shall have  vested in the Lessor  pursuant to this
     Section 6.06;

          (b) such Part shall be required  to be  incorporated  in the  Facility
     pursuant to the terms of Sections 6.02 and 6.03 hereof;

          (c) such Part shall be Nonseverable; or

          (d) such Part shall be paid for by the Lessor.

     If such Part or Parts are  incorporated  in the  Facility  pursuant to this
Article  VI and are not within any of the  categories  set forth in clauses  (a)
through  (d) above,  then title to such Part or Parts  shall vest in the Lessee,
subject to the rights of the Lessor provided in Section 6.09 hereof.

     All Parts  (other  than Parts the title to which is vested in the Lessee in
accordance  with the  preceding  sentence) at any time removed from the Facility
shall remain the property of the Lessor,  no matter  where  located,  until such
time as such Parts shall be replaced by Parts that have been incorporated in the
Equipment and that meet the  requirements  for  replacement  Parts  specified in
Section 6.02 hereof. Immediately upon any replacement Part becoming incorporated
in the  Equipment as provided in Section 6.02 hereof,  without  further act, (a)
title to the  removed  Part  shall  thereupon  vest in such  Person  as shall be
designated by the Lessee,  free and clear of all rights of the Lessor, (b) title
to such  replacement  Part  shall  thereupon  vest in the  Lessor  and (c)  such
replacement  Part shall  become  subject to this Lease and be deemed part of the
Facility  for all  purposes  hereof to the same  extent as the parts  originally
incorporated in the Facility.



                                       11
<PAGE>

     Section 6.07. Lessor's Option to Pay Costs of Alterations.  If requested to
do so by the Lessee,  the Lessor may at its option pay for any Alteration  title
to which will vest or has vested in the Lessor  pursuant to Section 6.06 hereof,
subject to agreement as to adjustments in Basic Rent in accordance  with Section
3.01 hereof.

     Section  6.08.  Reports  of  Alterations.  On or  before  March  15 of each
calendar  year  commencing in 1995 and on the date on which the Lease Term shall
expire, the Lessee shall furnish the Lessor with a report stating the total cost
(as determined in accordance with the Lessee's normal  accounting  practices) of
all Alterations  which are Nonseverable and which were not financed  pursuant to
Section 6.07 hereof and which are not described in clause (i) or (ii) of Section
4(4).03(c) of Revenue Procedure 75-21 as modified by Revenue Procedure 79-48 and
which were made  during the period from the date of this Lease to the end of the
preceding  calendar  year in the case of the first  such  report  or during  the
period  from the end of the period  covered by the last  previous  report to one
month  prior  to such  report  in the case of  subsequent  reports  and  briefly
describing  all such  Alterations.  Each such report shall be  accompanied by an
Officer's  Certificate  stating  that no  Alteration  has been made  that  would
adversely affect the operating capacity, cost efficiency,  utility,  reliability
or value of the Facility or the ability of the Lessee to perform its obligations
hereunder.

     Section 6.09.  Removal of Parts. All Parts  incorporated in the Facility to
which the Lessee (or any other  Person  other than the Lessor)  shall have title
pursuant to the  provisions of Section 6.06 hereof may,  subject to any right of
the Lessor to use such Part as provided herein and so long as such removal shall
be permitted by this  Agreement and shall not result in any violation of any law
or  governmental  regulation and so long as no Default or Event of Default shall
have occurred and be  continuing,  be removed at any time by the Lessee (or such
other Person) and shall be removed by the Lessee (or the Lessee shall cause such
other  Person so to remove such Parts)  prior to the delivery of the Facility to
the Lessor in accordance  with the provisions of the Lease,  other than upon the
termination  of this Lease  pursuant to Article  XIV  hereof,  and title to such
Parts shall at all times remain in the Lessee (or such other Person).

     Section 6.10.  Parts Free and Clear of Liens. Any Part title to which shall
vest in the Lessor  pursuant to Section  6.06 hereof  shall be free and clear of
all Liens except Permitted Liens.

     Section 6.11. Permitted Contests.  If, to the extent and for so long as (a)
a test, challenge, appeal or proceeding for review of any applicable requirement
of law or of a Governmental  Authority  relating to the operation or maintenance
of the  Facility  shall  be  prosecuted  in  good  faith  by the  Lessee  or (b)
compliance  with such  requirement  shall  have been  excused or  exempted  by a
nonconforming use permit, waiver, extension or forbearance, the Lessee shall not
be required to comply with such  requirement  but only if such test,  challenge,
appeal,  proceeding  or  noncompliance  shall not, in the opinion of the Lessor,
involve a material  risk of (i)  foreclosure,  sale,  forfeiture  or loss of, or
imposition of any Lien other than a Permitted  Lien on, any part of the Facility
or of impairment of the operation of the Facility,  (ii)  extending the ultimate
imposition of such requirement  beyond the termination of the Lease Term (unless
there shall have been  furnished  indemnification  satisfactory  to the Lessor),
(iii) any  material  claim  against  the Lessor  (unless  there  shall have been
furnished indemnification  satisfactory to the Lessor) or (iv) the nonpayment of
Rent.



                                       12

<PAGE>

     Section 6.12.  Operating Logs. The Lessee shall keep maintenance and repair
reports in sufficient detail to indicate the nature and date of major work done.
Such  reports  shall  be kept on file by the  Lessee  at its  offices  or at the
Facility for as long as they would be kept by a prudent owner or operator of the
Facility  (but in no event  less than three (3) years  following  the end of the
Lease Term), and shall be made available to the Lessor upon reasonable request.

     Section 6.13. Return of Facility.  Upon termination of this Agreement,  the
Lessee,  at its  own  expense,  shall  return  the  Facility  to the  Lessor  by
surrendering  the same into the  possession  of the Lessor free and clear of all
Liens and in the condition required by Section 6.01 hereof.

                                   ARTICLE VII

                                 IDENTIFICATION

     The Lessee shall maintain throughout the Lease Term in a prominent location
at each entrance to each of the buildings  comprising  the Facility at least one
(1) plate or other clear and durable  marking  stating  "THE  EQUIPMENT  AND ALL
RELATED EQUIPMENT IN THIS FACILITY IS OWNED BY COGENTRIX OF PENNSYLVANIA, INC.,"
in letters not less than one-half inch in height. On the Closing Date the Lessee
shall  certify  that it has  complied  with the  preceding  sentence.  Except as
provided  herein or as  otherwise  directed by the Lessor,  the Lessee shall not
allow the name of any  Person  other than that of the Lessee to be placed on any
Part of the Facility as a designation  that might reasonably be interpreted as a
claim of ownership or right to possession or use thereof.

                                  ARTICLE VIII

                                    INSURANCE

     Section 8.01. Coverage.

          (a) Subject to subsection 8.01(b), the Lessee shall maintain:

               (i)  property  damage  insurance  with  respect  to the  Facility
          insuring  against  loss or damage  from (x) fire and  normal  extended
          coverage  perils  customarily  included  in  policies  available  with
          respect  to  property  comparable  to  the  Facility  and  (y)  flood,
          earthquake and other perils  customarily  included under Difference in
          Conditions policies so available;

               (ii) "boiler and machinery" insurance with respect to damage (not
          insured  against  pursuant  to  subsection  8.01(a)(i)  above)  to the
          machinery,  plant, equipment,  storage facilities or similar apparatus
          included in the Facility  from risks  normally  insured  against under
          boiler and machinery policies;

               (iii)   business   interruption   insurance   with   respect   to
          interruptions in the operation of the Facility;

               (iv)  comprehensive  general public liability,  including blanket
          contractual,  personal  injury,  product  liability,  property  damage

                                       13

<PAGE>

          (including  broad form  property  damage and  explosion,  collapse and
          underground  property  damage)  and loss of use of property of others,
          insurance  applicable  to the  Facility in such amounts as are usually
          carried by Persons operating similar facilities  presenting comparable
          risks in the same  general  region  but in any event  with a  combined
          single limit of not less than $5,000,000,  with separate aggregate for
          product and general  liability,  which  policy  shall be written on an
          occurrence basis;

               (v)  (x)  workers'   compensation   insurance   or   occupational
          disability  benefits insurance (in at least the statutory amounts) and
          such other forms of  insurance  which the Lessee is required by law to
          maintain  or cause to be  maintained,  covering  loss  resulting  from
          injury,  sickness,  disability or death of the employees of the Lessee
          and (y)  employers'  liability  insurance  in an amount  not less than
          $500,000 single limit;

               (vi) comprehensive  automobile liability insurance against claims
          of personal  injury  (including  bodily injury and death) and property
          damage covering all owned, leased, non-owned and hired vehicles with a
          $1,000,000.00  minimum limit per occurrence for combined bodily injury
          and property damage liability; and

               (vii) such other  insurance  with respect to the Facility in such
          amounts and against such  insurable  hazards as is usually  carried by
          Persons operating similar  properties in the same general region,  but
          any loss of the type customarily  covered by the policies described in
          subsections  8.01(a)(i),  (ii) and (iii),  whether actually covered in
          whole or in part by such policies,  shall be the responsibility of the
          Lessee and the absence of such  coverage  shall not relieve the Lessee
          from any of its obligations under any of the Operative Documents;

          provided,  however, that the amount of insurance coverage specified in
     subsections 8.01(a)(i) and (a)(ii) above with respect to the Facility shall
     not in any  event be less than the  replacement  cost of the  Facility,  as
     determined by the Lessor, including agreed amount waiving coinsurance.

          All insurance  policies  carried in accordance with Section 8.01 shall
     be  maintained  with insurers with a Best rating of A minus or better and a
     Best size  rating of IX or better  (except  for  policies  underwritten  by
     Lloyds of London and approved English  companies  acceptable to the Lessor)
     approved  by the  Lessor  and  not  disqualified  from  insuring  risks  in
     Pennsylvania.

          Any insurance  policies  carried in accordance  with this Section 8.01
     shall be subject to (i)  exclusions  of the sort  existing in the insurance
     policies in effect on the Closing Date and (ii) such deductible amounts and
     retentions


                                       14

<PAGE>

     as shall not exceed the following  amounts  specified  with respect to such
     policies:

         (1)   Property Damage....................................$10,000;

         (2)   Boiler and Machinery...............................$10,000;

         and

         (3)   Public Liability...................................$10,000.

          Notwithstanding  anything to the  contrary in this Article  VIII,  the
     Lessee  shall at all times  ensure that the  insurance  it  maintains  with
     respect to the  Facility  is not less  extensive  or  inclusive  in type or
     amount  of  coverage  than that  maintained  by it in  accordance  with its
     standard   corporate   minimum  practice  with  respect  to  other  similar
     facilities.

          (b) During the Lease Term and unless the Lessor gives the Lessee sixty
     (60) days prior  written  notice,  the Lessor shall  provide the  insurance
     coverage  specified in subsection  8.01(a)(i)  with respect to the building
     only  and the  Lessee  shall  reimburse  the  Lessor  for the  cost of such
     coverage.

     Section 8.02.  Policy  Provisions.  Any insurance policy  maintained by the
Lessee pursuant to Section 8.01 hereof shall:

          (a) specify the Lessor and the Lender as additional insureds, as their
     respective interests may appear;

          (b)  provide,  except in the case of public  liability  insurance  and
     workers'  compensation  insurance,  that  all loss or  occurrence  shall be
     adjusted with the Lessee and Lessor,  unless an Event of Default shall have
     occurred and be continuing,  in which case such loss or occurrence shall be
     adjusted  with the  Lessor,  and  payable  (x) in respect of  payments  not
     exceeding  $10,000,  provided  no Default  or Event of  Default  shall have
     occurred  or  be  continuing,   to  the  Lessee,   and  (y)  in  all  other
     circumstances  (A)  unless  and until  receipt  of notice  from the  Lender
     stating that the Loan Agreement  shall have been satisfied and  discharged,
     to the  Lender for  deposit  in the  Insurance  and  Condemnation  Proceeds
     Account and (B) thereafter, to the Lessor;

          (c)  include  effective  waivers  by the  insurer  of all  claims  for
     insurance  premiums or  commissions  or (if such  policies  provide for the
     payment thereof)  additional premiums or assessments against the Lessor and
     the Lender;

          (d)  provide  that in respect of the  interests  of the Lessor and the
     Lender, such policies shall not be invalidated by any action or inaction of
     the



                                       15
<PAGE>

     Lessee or any other  Person  and shall  insure  the  Lessor  and the Lender
     regardless   of,  and  any   claims   for  the  losses   shall  be  payable
     notwithstanding:

               (i) the  occupation  or use of the  Facility  for  purposes  more
          hazardous than permitted by the terms of the policy;

               (ii)  any  foreclosure  or other  proceeding  or  notice  of sale
          relating to all or any portion of the Facility; or

               (iii)  any  change  in the  title to or  ownership  of all or any
          portion of the Facility.

          (e) provide that such  insurance  shall be primary  insurance and that
     the  insurers  under such  insurance  policies  shall be liable  under such
     policies  without right of contribution  from any other insurance  coverage
     effected  by or on  behalf  of the  Lessor  or the  Lender  under any other
     insurance policies covering a loss that is also covered under the insurance
     policies  maintained by the Lessee  pursuant to this Article VIII and shall
     expressly  provide  that all  provisions  thereof,  except  the  limits  of
     liability  (which  shall be  applicable  to all  insureds  as a group)  and
     liability  for premiums  (which shall be solely a liability of the Lessee),
     shall  operate  in the same  manner  as if  there  were a  separate  policy
     covering each insured;

          (f) provide that any  cancellation  thereof or material adverse change
     therein  shall not be  effective  as to the Lessor and the Lender  until at
     least sixty (60) days after receipt by the Lessor and the Lender of written
     notice thereof;

          (g) waive any right of subrogation of the insurers  against the Lessor
     and the  Lender,  and  waive  any right of the  insurers  to any  setoff or
     counterclaim or any other deduction, whether by attachment or otherwise, in
     respect of any liability of the Lessor or the Lender;

          (h)  provide  that  the  whole  or any part of the  right,  title  and
     interest of the Lessor or the Lessee therein may be assigned to the Lender;
     and

          (i) subject to Section 8.01 hereof, be reasonably  satisfactory to the
     Lessor and the Lender in all other material respects.

     Section 8.03. Evidence of Insurance. The Lessee shall deliver to the Lessor
and the Lender at least two (2) days  before the  Effective  Date  copies of all
policies of  insurance  required  hereby and, on the date this Lease is executed
and on each  December  31  thereafter  during the Lease  Term,  certificates  of
insurance,  copies  of all  policies  of  insurance  evidencing  the  provisions
described  in  Section  8.02(a)  hereof  executed  by the  insurer  by its  duly
authorized  agent,  and a  certification  from the Lessee's  insurance  agent or
broker to the effect that all premiums required to have been paid have been paid
in full.



                                       16

<PAGE>

     Section  8.04.  No Duty of Lessor to Verify.  No  provision of this Article
VIII or any provision of any other Operative Document shall impose on the Lessor
any duty or  obligation  to verify the  existence  or adequacy of the  insurance
coverage  maintained by the Lessee nor shall the Lessor be  responsible  for any
representation  or warranty  made by or on behalf of the Lessee to any insurance
company or underwriter.

                                   ARTICLE IX

                    LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE

     Section 9.01. Occurrence of Event of Loss. If an Event of Loss shall occur,
the  Lessee  shall give the Lessor  and  Lender  prompt  written  notice of such
occurrence  and the date  thereof.  Unless the  Lessor  and the Lender  agree in
writing  within thirty (30) days after such  occurrence  to restore,  rebuild or
replace  the  Facility  in  accordance  with  the  provisions  contained  in the
definition of "Event of Loss," then this Agreement shall terminate  effective on
the thirtieth day  following the  occurrence of the Event of Loss.  Any payments
(except for payments  under  insurance  policies  maintained by the Lessee other
than  pursuant to Article VIII hereof)  received at any time by the Lessor or by
the Lessee from any  Governmental  Authority  or other Person as a result of the
occurrence  of an Event of Loss shall be retained by the Lessor or promptly paid
to the Lessor by the Lessee;  provided,  however,  that so long as no Default or
Event of Default  shall have occurred and be  continuing,  the Lessee may retain
any proceeds of requisition of use payments made by any  Governmental  Authority
and  attributable  to the Facility for a period equal to the then current  Lease
Term.

     Section 9.02. Repair of Loss or Destruction.

          (a) In the event of loss or  destruction  of all or a  portion  of the
     Facility which (x) does not constitute an Event of Loss or (y)  constitutes
     an Event of Loss but the Lessor and the Lender agree to restore, rebuild or
     replace the Facility,  then the Lessor shall give prompt notice  thereof to
     the Lessee,  and the Lessor,  at its own cost and expense,  shall  promptly
     repair,  replace and rebuild  the  Facility,  at least to the extent of the
     value  and as  nearly  as  practicable  to the  character  of the  Facility
     existing immediately prior to such occurrence;  provided, however, that the
     Lessee shall pay the  difference,  if any,  between the insurance  proceeds
     received  by the  Lessor as a result of such  loss or  destruction  and the
     costs and  expenses  incurred  by the Lessor in  restoring,  rebuilding  or
     replacing the Facility if the loss or destruction thereof resulted from the
     negligent, willful, reckless or wanton act or failure to act of the Lessee,
     its employees, agents, invitees or independent contractors.

          (b) Except as  provided  in Section  9.01,  this  Agreement  shall not
     terminate  or be  affected  in any manner by reason of the  destruction  or
     damage  in  whole  or in  part  of  the  Facility,  or  by  reason  of  the
     untenantability  of the Facility,  and the Rent reserved in this  Agreement
     and all other  charges  payable  hereunder  shall be paid by the  Lessee in
     accordance  with the terms,  covenants and  conditions  of this  Agreement,
     without abatement, diminution or reduction.



                                       17

<PAGE>

     Section 9.03. Other Dispositions.  Notwithstanding the foregoing provisions
of this  Article  IX, so long as a Default  or an Event of  Default  shall  have
occurred and be continuing, any amount that would otherwise be payable to or for
the account of, or that would  otherwise be retained by, the Lessee  pursuant to
this  Article IX shall be paid to the Lender (or to the Lessor after the lien of
the Loan Agreement  shall have been released) as security for the obligations of
the Lessee under this Lease and, at such time  thereafter as no Default or Event
of Default shall be continuing, such amount shall be paid promptly to the Lessee
unless the Lessor shall have  theretofore  declared  this Lease to be in default
pursuant to Section 14.01  hereof,  in which event such amount shall be disposed
of by the Lender in accordance  with the  provisions of the Loan Agreement or by
the Lessor in accordance with the provisions of this Agreement,  as the case may
be.

                                    ARTICLE X

                           INTEREST CONVEYED TO LESSEE

     This Lease is an  agreement  of lease and does not convey to the Lessee any
right, title or interest in or to the Facility except as a lessee.

                                   ARTICLE XI

                        ASSIGNMENT AND SUBLEASE; LOCATION

     Section 11.01.  Assignment  and Sublease.  The Lessor shall be permitted to
assign  any of its  right,  title or  interest  in, to or under  this  Agreement
without  the  consent of the Lessee if the  assignee is (a) a lender or group of
lenders  providing  financing to the Lessor or (b) a purchaser of the  Facility.
All other  assignments  of any  right,  title or  interest  in, to or under this
Agreement shall be made only with the prior written consent of the Lessee, which
consent shall not be unreasonably withheld. Except as provided below, the Lessee
may not sublease the Facility or any part thereof or assign any of its rights or
interest  hereunder  without the written  consent of the Lessor,  which  consent
shall not be unreasonably withheld; provided, however, that any such sublease or
assignment  by the  Lessee  (a) shall not  release  the  Lessee  from any of its
obligations or liabilities of any nature whatsoever arising under this Agreement
and the Lender  Consent and  Agreement;  (b) shall be  expressly  subject to and
subordinate to this  Agreement;  (c) shall be  accompanied  by an  unconditional
guarantee of the Lessee's  obligations  under the Lease issued by a party having
financial strength satisfactory to the Lessor; and (d) shall not be permitted if
a Default or Event of Default has  occurred and is  continuing.  Notwithstanding
the foregoing,  the Lessee shall be permitted to assign this  Agreement  without
the  consent of the Lessor  only in the event the Lessee is being  merged  into,
consolidated  with or otherwise  combined with other  corporations a majority of
whose voting  capital  stock is owned by the  shareholders  of the Lessee on the
Effective Date, so long as following such merger,  consolidation or combination,
the majority of voting  capital  stock of the  surviving  entity is owned by the
shareholders  of the Lessee on the Effective  Date.  These  provisions  shall be
binding on any subsequent  assignee or sublessee of the Lessee's or the Lessor's
rights or interest  hereunder.  The rights and obligations of the Lessor and the
Lessee  hereunder  shall  inure to the  benefit  of,  and be binding  upon,  the
permitted  successors  and  permitted  assigns  of the  Lessor  and the  Lessee,
respectively.

     Section  11.02.  Location.  The Lessee  shall not  remove,  or permit to be
removed,  the Plant or  Equipment  or any part thereof from the Site without the
prior written consent of the



                                       18

<PAGE>

Lessor,  except  that the  Lessee or any other  Person  may  remove  any Part in
accordance with the provisions of Sections 6.02 and 6.09 hereof.

                                   ARTICLE XII

                             INSPECTION AND REPORTS

     Section 12.01. Condition and Operation. The Lender and the Lessor and their
authorized  representatives (the "Inspecting Parties") may inspect, at their own
expense, the Facility. After an Event of Default has occurred and is continuing,
the Inspecting Parties may also inspect, at their expense, the books and records
of the Lessee relating to the Facility and make copies and abstracts  therefrom.
The Lessee shall furnish to the Inspecting  Parties  statements  accurate in all
material  respects  regarding the condition and state of repair of the Facility,
all at such  times  and as often  as may be  reasonably  requested.  None of the
Inspecting  Parties shall have any duty to make any such  inspection or inquiry.
To the extent permissible,  the Lessee shall prepare and file in timely fashion,
or,  where the Lessor shall be required to file,  the Lessee  shall  prepare and
deliver to the Lessor within a reasonable time prior to the date for filing, any
reports with respect to the condition or operation of the Facility that shall be
required to be filed with any Governmental Authority.

     Section 12.02.  Annual Insurance Report. On or before March 15 of each year
during the Lease  Term,  and within  ten (10) days  after any  material  adverse
change in the information  set forth in the  certificates  provided  pursuant to
Section  8.03 hereof,  the Lessee  shall  deliver to the Lessor and the Lender a
report of a Responsible  Officer of the Lessee setting forth (a) a complete list
of all insurance  policies  obtained and  maintained  by the Lessee  pursuant to
Article  VIII,  (b) stating  whether  such  insurance  policies  comply with the
requirements  of Article  VIII and (c)  stating  whether all  premiums  then due
thereon have been paid.

     Section 12.03.  Financial Reports.  During the Lease Term, the Lessee shall
provide to the Lessor and the Lender the following:

          (a) As soon as  available,  and in any event  within  thirty (30) days
     after  the  end of  each  month,  unaudited  financial  statements  for the
     Facility,  including  a  balance  sheet  as at the  end of such  month  and
     statements of income and retained  earnings and of cash flow for such month
     and for the period from the  beginning  of the Lease  Year.  There shall be
     included with such financial  statements (i) a certificate of a Responsible
     Officer  stating in effect that,  to the best of his  knowledge and belief,
     such  financial  statements  are true and correct and have been prepared in
     accordance  with generally  accepted  accounting  principles,  consistently
     applied,  subject to changes resulting from year-end adjustments and (ii) a
     certificate  of a Responsible  Officer  setting forth in detail  reasonably
     satisfactory  to the Lessor a calculation  of Cash Flow of the Facility for
     such month and for the Lease Year through the end of such month.

          (b) In addition,  as soon as available  and in any event within ninety
     (90) days after the end of each Lease Year,  financial  statements  for the
     Facility,  including a balance sheet as of the end of such Lease Year,  and
     statements of



                                       19

<PAGE>

     income and retained earnings and of cash flow for such Lease Year, prepared
     in accordance with generally accepted  accounting  principles  consistently
     applied  and  accompanied  by the review  opinion of a  recognized  firm of
     independent  certified public accountants  acceptable to the Lessor.  There
     shall be  included  with  such  financial  statements  a  certificate  of a
     Responsible Officer setting forth in detail reasonably  satisfactory to the
     Lessor a calculation  of Cash Flow of the Facility for such Lease Year. The
     Lessor shall have the right at any time to audit the  financial  statements
     and the  certificate of Cash Flow required to be provided  hereunder.  Such
     audit shall be performed by an independent certified public accounting firm
     selected by the Lessor and shall be at the  Lessor's  expense,  unless such
     audit  results in the upward  adjustment of Cash Flow for any Lease Year in
     an amount equal to two percent  (2%) or more of the Cash Flow  reflected on
     the  certificate  provided to the Lessor by the  Lessee,  in which case the
     cost of such audit shall be paid by the Lessee and shall not be  considered
     Greenhouse  Expenses.  Any payments  required to be made as a result of any
     adjustment  to the Cash Flow shall be made  within ten (10)  Business  Days
     following receipt of the results of the audit.

          (c) The Lessor shall have the right to review the books and records of
     the Lessee  relating  to the  Facility  for the  purpose of  verifying  the
     accuracy of the financial statements and calculations of Cash Flow provided
     pursuant to Sections 12.03(a) and (b). and

          (d) On or  before  January  31 of each  year  during  the  Lease  Term
     (commencing on January 31, 1995), a certificate of a Responsible Officer of
     the Lessee stating that such  Responsible  Officer has made or caused to be
     made a  review  of  all  transactions  relating  to the  Facility  and  the
     financial  and  operating  condition  of the  Lessee  for  the  immediately
     preceding Lease Year and that, based on such review, no Default or Event of
     Default has occurred during such year (or, if a Default or Event of Default
     shall  have  occurred,  specifying  the nature  thereof  and the action the
     Lessee has taken or prepares to take with respect thereto).

     Section 12.04.  Budget  Approval.  No later than the  forty-five  (45) days
prior to the  commencement  of any Lease Year,  the Lessee shall  present to the
Lessor for its approval,  which shall not be unreasonably  withheld,  its budget
for the Facility for the following Lease Year,  prepared in detail  satisfactory
to the Lessor  (the budget  prepared  pursuant  to this  Section  12.04 shall be
referred  to herein as the  "Budget").  In the event the  Lessor  withholds  its
approval of any Budget,  it shall  provide to the Lessee a written  statement of
specific  objections to the Budget.  The Budget  presented shall be deemed to be
approved  with  respect  to all  items  except  those to which  the  Lessor  has
objected.  In the event the Lessee disputes the Lessor's objections,  the Lessor
and the Lessee  shall  appoint a mutually  agreeable  independent  advisor  with
experience in the operation of greenhouse facilities, which advisor shall review
the disputed  amounts and decide the appropriate  level of expenditures for such
items.  The  decision of such  advisor  shall be binding upon the Lessor and the
Lessee and shall become part of the Budget for such Lease Year.

                                       20

<PAGE>

     Section  12.05.  Liability.  The Lessee  shall,  promptly  after  obtaining
knowledge  thereof,  give prompt  written notice to the Lessor and the Lender of
each  accident  likely to result in  material  damages  or claims  for  material
damages  against the Lessee or any other  Person with respect to the Facility in
excess of $100,000  (if such claims and damages are  insured) or $25,000 (if not
insured), and occurring in whole or in part (whenever asserted) during the Lease
Term,  and on request shall furnish to the Lessor and the Lender  information as
to the time,  place and nature  thereof,  the names and addresses of the parties
involved, any Persons injured,  witnesses and owners of any property damaged and
such other  information  as may be known to it, and shall  promptly upon request
furnish  the Lessor and the Lender with  copies of all  correspondence,  papers,
notices and documents whatsoever received by the Lessee in connection therewith.

     Section 12.06. Liens. The Lessee shall promptly, and in no event later than
five (5) Business Days after it shall have obtained  knowledge of the attachment
of any Lien that it shall be obligated  to  discharge  or eliminate  pursuant to
Article V hereof,  notify the Lessor  and the Lender of the  attachment  of such
Lien and the full particulars thereof unless the same shall have been removed or
discharged by the Lessee.

                                  ARTICLE XIII

                                EVENTS OF DEFAULT

     The following events shall  constitute  Events of Default (whether any such
event  shall  be  voluntary  or  involuntary  or come  about or be  effected  by
operation of law or pursuant to or in compliance  with any  judgment,  decree or
order  of any  court  or any  order,  rule  or  regulation  of any  Governmental
Authority):

          (a) the Lessee  shall fail to make any payment of Rent within five (5)
     days after the same shall have become due; or

          (b) the  Lessee  shall fail to make any  payment  of any other  amount
     payable  hereunder  within ten (10) days after  notice of such failure from
     the Lessor or the Lender; or

          (c) the  Lessee  shall  fail  to  perform  or  observe  any  covenant,
     condition or agreement to be performed or observed by it under Article VIII
     or Article XI hereof within five (5) days after notice of such failure from
     the Lessor or the Lender; or

          (d) the  Lessee  shall  fail  to  perform  or  observe  any  covenant,
     condition  of  agreement  (not  included in clause (a),  (b) or (c) of this
     Article XIII to be performed or observed by it hereunder or under any other
     Operative Document and such failure shall continue  unremedied for a period
     of thirty (30) days after written notice thereof from the Lessor; or

          (e) the filing by the Lessee or APD of any petition for dissolution or
     liquidation of the Lessee or the  commencement by the Lessee of a voluntary
     case under any applicable  bankruptcy,  insolvency or other similar law now
     or hereafter in effect,  or the Lessee shall have consented to the entry of
     an order  for  relief in an  involuntary  case  under any such law,  or the
     failure of the



                                       21

<PAGE>

     Lessee  generally  to pay its debts as such debts  become due  (within  the
     meaning of the Bankruptcy  Reform Act of 1978, as amended),  or the failure
     by the Lessee  promptly to satisfy or discharge any execution,  garnishment
     or attachment of such  consequence  as will impair its ability to carry out
     its  obligations  under this  Agreement,  or the  appointment  of or taking
     possession by a receiver,  custodian or trustee (or other similar official)
     for the  Lessee  or any  substantial  part of its  property,  or a  general
     assignment by the Lessee for the benefit of its creditors,  or the entry by
     the Lessee into an  agreement of  composition  with its  creditors,  or the
     Lessee shall have taken any corporate  action in  furtherance of any of the
     foregoing;  or the filing against the Lessee of an involuntary  petition in
     bankruptcy  which  results  in  an  order  for  relief  being  entered  or,
     notwithstanding that an order for relief has not been entered, the petition
     is not dismissed  within  forty-five (45) days of the date of the filing of
     the  petition,  or  the  filing  under  any  law  relating  to  bankruptcy,
     insolvency  or relief of debtors  of any  petition  against  the Lessee for
     reorganization,  composition, extension or arrangement with creditors which
     either (i) results in a finding or adjudication of insolvency of the Lessee
     or (ii) is not  dismissed  within  forty-five  (45) days of the date of the
     filing of such petition; or

          (f) any  representation  or  warranty  by the Lessee in any  Operative
     Document or in any certificate or document delivered pursuant thereto shall
     have been materially false when made; or

          (g) the  occurrence  of an Event of  Default  under the Line of Credit
     Facility Agreement.

                                   ARTICLE XIV

                                   ENFORCEMENT

     Section 14.01. Remedies. Upon the occurrence of any Event of Default and at
any time thereafter so long as the same shall be continuing,  the Lessor may, at
its option, by notice to the Lessee, declare this Lease to be in default, and at
any time thereafter the Lessor may do one or more of the following as the Lessor
in its sole discretion shall determine:

          (a) the Lessor may, by notice to the Lessee, rescind or terminate this
     Lease;

          (b) the Lessor may (i) demand  that the Lessee,  and the Lessee  shall
     upon the written demand of the Lessor,  return the Facility promptly to the
     Lessor in the manner and condition required by, and otherwise in accordance
     with all of the  provisions  of,  Article VI hereof as if the Facility were
     being  returned at the end of the Lease Term,  and the Lessor  shall not be
     liable  for the  reimbursement  of the  Lessee  for any costs and  expenses
     incurred by the Lessee in  connection  therewith,  (ii) enter upon the Site
     and take  immediate  possession  of (to the  exclusion  of the  Lessee) the
     Facility or remove the Plant or Equipment or both,  by summary  proceedings
     or otherwise,  all without liability to the Lessee for or by reason of such
     entry or taking of  possession,



                                       22
<PAGE>

     whether for the  restoration of damage to property caused by such taking or
     otherwise and (iii) offer employment to the Lessee's employees;

          (c) the  Lessor  may  sell all or any  part of the  Equipment  and its
     rights to the Plant and the Site at public or private  sale,  as the Lessor
     may  determine,  free and clear of any rights of the Lessee and without any
     duty to account to the Lessee  with  respect to such  action or inaction or
     any proceeds with respect thereto;

          (d) the Lessor may lease to others all or any part of the  Facility as
     the  Lessor in its sole  discretion  may  determine,  free and clear of any
     rights of the Lessee  and  without  any duty to account to the Lessee  with
     respect to such action or for any  proceeds  with respect to such action or
     inaction,  except that the Lessee's  obligation to pay Rent with respect to
     the  Facility  for  periods  commencing  after the  Lessee  shall have been
     deprived of use of the  Facility  pursuant to this  paragraph  (d) shall be
     reduced by the net proceeds,  if any,  actually received by the Lessor from
     leasing  the  Facility  to any  Person  other  than the Lessee for the same
     periods or any portion thereof; and

          (e) the  Lessor may  exercise  any other  right or remedy  that may be
     available to it under applicable law or proceed by appropriate court action
     to enforce the terms hereof or to recover damages for the breach hereof.

     Section  14.02.  Survival  of Lessee's  Obligations.  Except as provided in
subsection 14.01(d) above, no termination of this Lease, in whole or in part, or
repossession  of all or any  portion of the  Facility  or exercise of any remedy
under Section  14.01 hereof  shall,  except as  specifically  provided  therein,
relieve  the Lessee of any of its  liabilities  and  obligations  hereunder.  In
addition,  the Lessee shall be liable,  except as otherwise  provided above, for
any and all unpaid Rent due  hereunder  before,  during or after the exercise of
any of the foregoing remedies,  including all reasonable legal fees and expenses
and other costs and expenses  incurred by the Lessor and the Lender by reason of
the occurrence of any Event of Default or the exercise of the Lessor's  remedies
with  respect  thereto,  and  including  all  costs  and  expenses  incurred  in
connection with the return of the Facility in the manner and condition  required
by, and otherwise in accordance  with the provisions of, Article VI hereof as if
such Facility were being returned at the end of the Lease Term.

     Section 14.03. Remedies Cumulative. To the extent permitted by, and subject
to the mandatory  requirements of,  applicable law, each and every right,  power
and remedy  herein  specifically  given to the Lessor or otherwise in this Lease
shall be  cumulative  and shall be in addition to every other  right,  power and
remedy herein  specifically given or now or hereafter existing at law, in equity
or by statute,  and each and every right, power and remedy whether  specifically
herein  given or otherwise  existing  may be exercised  from time to time and as
often  and in such  order as may be  deemed  expedient  by the  Lessor,  and the
exercise or the  beginning  of the  exercise of any power or remedy shall not be
construed to be a waiver of the right to exercise at the same time or thereafter
any right,  power or remedy.  No delay or omission by the Lessor in the exercise
of any right,  power or remedy or in the pursuit of any remedy  shall impair any
such right, power or remedy or be construed to be a waiver of any default on the
part of the



                                       23

<PAGE>

Lessee or to be an  acquiescence  therein.  No express or implied  waiver by the
Lessor of any Event of  Default  shall in any way be, or be  construed  to be, a
waiver of any future or subsequent Event of Default.

                                   ARTICLE XV

                           RIGHT TO PERFORM FOR LESSEE

     If the Lessee  shall fail to perform or comply  with any of its  agreements
contained herein, the Lessor may perform or comply with such agreement,  and the
amount of such payment and the amount of the expenses of the Lessor  incurred in
connection  with such  payment or the  performance  of or  compliance  with such
agreement,  as the case may be,  together with  interest  thereon at the Overdue
Rate, shall be payable by the Lessee upon demand.

                                   ARTICLE XVI

                                   INDEMNITEES

     Section 16.01. General Indemnity.

          (a)  Payment of Expenses by Lessee.  The Lessee  shall pay,  and shall
     indemnify and hold harmless each Indemnitee  from and against,  any and all
     liabilities,  obligations,  losses,  damages,  penalties,  claims, actions,
     suits,  costs,  expenses  and  disbursements,   including  legal  fees  and
     expenses,  of  whatsoever  kind and nature  (collectively,  "Expenses"  and
     individually,  an "Expense"),  imposed on, incurred by or asserted  against
     any Indemnitee (whether because of an action or omission by such Indemnitee
     or otherwise),  in any way relating to or arising out of the occupation and
     operation of the Facility by the Lessee and the  production and sale of the
     Product.

          (b) Exceptions.  The indemnities  contained in Section 16.01(a) hereof
     with regard to any  particular  Indemnitee  shall not extend to any Expense
     (i)  resulting  from the willful  misconduct  or gross  negligence  of such
     Indemnitee  (other than willful  misconduct or gross negligence  imputed to
     such  Indemnitee  solely by reason of its interest in the  Facility),  (ii)
     resulting  solely  from  the  breach  by  such  Indemnitee  of  any  of its
     representations, warranties or covenants in any of the Operative Documents,
     (iii) unless an Event of Default shall have occurred and be continuing  and
     Lessor or Lender shall be exercising  remedies with respect thereto, to the
     extent such Expense shall relate to acts or events not  attributable to the
     Lessee that occur after the Lease Term, (iv) so long as no Event of Default
     shall have occurred and be continuing, to the extent attributable solely to
     the disposition or attempted disposition of the Facility or any interest in
     any thereof,  by or on behalf of any  Indemnitee,  other than a transfer of
     the Facility pursuant to Article XIV hereof or as required by any Operative
     Documents,  (v)  constituting  Fees,  Taxes or Other  Charges or (vi) which
     constitutes internal, overhead expenses of the Indemnitee.



                                       24
<PAGE>

          (c) Notice.  If any party  entitled to  indemnity  under this  Section
     16.01 or the Lessee shall have  received  written  notice of any  liability
     indemnified  against under this Section 16.01,  it shall give prompt notice
     thereof to the Lessee, or the party entitled to be indemnified, as the case
     may be, but the failure to give such notice shall not affect any obligation
     under this Section 16.01. In case any action,  including any  investigatory
     proceeding,  shall be brought  against,  or commenced  with respect to, any
     Indemnitee  in respect of which the Lessee is  required to  indemnify  such
     Indemnitee  pursuant to the  provisions of this Section  16.01,  the Lessee
     shall  have  the  right  to  assume  the  defense  thereof,  including  the
     employment of counsel  reasonably  satisfactory  to such Indemnitee and the
     payment of all expenses. In the event the Lessee assumes the defense of any
     such action, any Indemnitee shall have the right to employ separate counsel
     in such action and participate  therein,  but the fees and expenses of such
     counsel  shall  be at the  expense  of  such  Indemnitee,  unless  (i)  the
     employment of such counsel has been specifically  authorized by the Lessee,
     or (ii) the named parties to such action (including any impleaded  parties)
     include  both such  Indemnitee  and the Lessee and  representation  of such
     Indemnitee and the Lessee by the same counsel would be inappropriate  under
     applicable  standards  of  professional  conduct due to actual or potential
     conflicting  interests  between  them or (iii) the counsel  employed by the
     Lessee and satisfactory to such Indemnitee has advised such Indemnitee,  in
     writing,  that such counsel's  representation  of such Indemnitee  would be
     likely to involve such counsel in  representing  differing  interests which
     could  adversely  affect  either the judgment or loyalty of such counsel to
     such  Indemnitee,  whether it be a  conflicting,  inconsistent,  diverse or
     other interest (in which case the Lessee shall not have the right to assume
     the  defense  of such  action  on  behalf  of  such  Indemnitee;  it  being
     understood,  however, that the Lessee shall not, in connection with any one
     such action,  or separate but  substantially  similar or related actions in
     the same  jurisdiction  arising  out of the  same  general  allegations  or
     circumstances,  be liable for the reasonable fees and expenses of more than
     one separate firm of attorneys,  and of any local counsel  retained by such
     firm,  at any one  time for  each  such  Indemnitee,  which  firm  shall be
     designated in writing by such  Indemnitee).  The Lessee shall not be liable
     for any settlement of any such action effected without its consent,  but if
     settled  with the  consent of the  Lessee or if there be a final  judgment,
     beyond further review or appeal,  in any such action,  the Lessee agrees to
     indemnify  and hold  harmless any  Indemnitee  from and against any loss or
     liability by reason of such settlement or judgment.

          (d)  Payment.  The  Lessee  covenants  and  agrees to pay all  amounts
     required  to be paid under  this  Section  16.01 on demand by the  relevant
     Indemnitee.

     Section 16.02. Fees, Taxes and Other Charges.

          (a) Payment by Lessee.



                                       25
<PAGE>

               (i) The Lessee hereby agrees to pay and assume liability for, and
          on  written  demand  to  indemnify,  protect,  defend,  save  and hold
          harmless each Indemnitee from and against, any and all governmental or
          quasi-governmental  fees  (including  without  limitation  license and
          registration   fees),   taxes  (including   without  limitation  gross
          receipts,  franchise, sales, use, property, real or personal, tangible
          or intangible),  interest  equalization and stamp taxes,  assessments,
          levies,  imposts,  duties,  charges  or  withholdings  of  any  nature
          whatsoever,  together  with any and all  penalties,  fines or interest
          thereon  ("Fees,   Taxes  and  Other  Charges")  imposed  against  any
          Indemnitee,  the Lessee or the Facility or any portion  thereof by any
          Federal, state or local governmental or taxing authority in the United
          States of America or by any foreign  government or any  subdivision or
          taxing authority  thereof,  upon or with respect to the occupation and
          operation of the Facility by the Lessee and the production and sale of
          the Product.

               (ii)  Notwithstanding  anything to the  contrary set forth above,
          the provisions of this Section 16.02 shall not apply to:

                    (A) Fees,  Taxes and Other  Charges on, or measured in whole
               or in part by (y) the net income or gross income of an Indemnitee
               or (z) the franchise,  capital, conduct of business, net worth or
               tax preference of an Indemnitee;

                    (B) Fees,  Taxes and Other  Charges to the extent on, levied
               on, or  measured  by,  any fees or  compensation  received  by an
               Indemnitee  for  services   rendered  in  connection   with  this
               Agreement;

                    (C)  Fees,  Taxes or Other  Charges  which  result  from any
               Indemnitee engaged in activities not related to this Agreement;

                    (D) so long as no  Event  of  Default  has  occurred  and is
               continuing,  Fees,  Taxes or other Charges imposed as a result of
               the voluntary sale, transfer,  assignment or other disposition of
               any  interest  in  the  Facility  by  an   Indemnitee,   if  such
               disposition  shall  not  be  pursuant  to or in  connection  with
               Article XIV hereof;

                    (E) Fees, Taxes or Other Charges imposed solely with respect
               to any period  after the end of the Lease Term unless an Event of
               Default  has  occurred  and is  continuing  and the Lessor or the
               Lender shall be exercising remedies with respect thereto;



                                       26

<PAGE>

                    (F) Fees,  Taxes or Other  Charges  imposed as the result of
               any  transfer or  disposition  of any interest in the Facility by
               any Indemnitee resulting from bankruptcy or other proceedings for
               the relief of debtors  (voluntary  or  involuntary)  in which the
               transferor is the debtor; or

                    (G) Fees, Taxes and Other Charges imposed solely as a result
               of the willful misconduct or gross negligence of the Indemnitee.

               (iii) In case any  report or return is  required  to be made with
          respect to any  obligations  of the Lessee under this Section 16.02 or
          arising out of this Section  16.02,  the Lessee  shall,  to the extent
          permitted  by law,  either  make such  report or return in such manner
          (including  the making  thereof in the Lessor's name) as will show the
          ownership  of the  Equipment  in the  Lessor  and  send a copy of such
          report or return to the  Lessor,  or shall  notify  the Lessor of such
          requirement  and make such report or return in such manner as shall be
          reasonably  satisfactory to the Lessor. Each Indemnitee agrees that it
          will  promptly  forward to the Lessee any  notice,  bill or any advice
          received by it concerning  any such Fees,  Taxes and Other Charges and
          will, at Lessee's  expense,  use its best efforts and take such lawful
          and  reasonable  steps as may be  proposed by the Lessee in writing to
          minimize  any of the same for which the  Lessee is  responsible  under
          this Section 16.02.

               (iv) The amount  which the Lessee  shall be required to pay to or
          for the account of any Indemnitee with respect to any Fees,  Taxes and
          Other Charges which are subject to indemnification  under this Section
          16.02 shall be an amount  sufficient to restore the  Indemnitee to the
          same position the Indemnitee  would have been in had such Fees,  Taxes
          and Other Charges not been incurred or imposed.  If the payment by the
          Lessee under this Section 16.02 of an amount equal to such Fees, Taxes
          and Other Charges would be more or less than the amount which would be
          required to make such  Indemnitee  whole as a result of any tax effect
          to an Indemnitee in connection  with such payment of such Fees,  Taxes
          or Other Charges,  including,  without limitation (A) the inclusion of
          any payment to be made by the Lessee under this  Section  16.02 in the
          taxable  income of any Indemnitee in one year and the deduction of the
          Fees,  Taxes and Other  Charges  with respect to which such payment is
          made from the taxable income of such  Indemnitee in a different  year,
          (B) the  nondeductibility  of such Fees,  Taxes and Other Charges from
          the  taxable  income  of  such   Indemnitee  or  (C)  the  anticipated
          realization  by such  Indemnitee  in a different  year of tax benefits
          resulting  from the  transaction  giving rise to such Fees,  Taxes and
          Other  Charges,  the amount of the  indemnity to be paid by the Lessee
          shall be adjusted to an amount which (after



                                       27

<PAGE>

          taking into  account all tax effects on such  Indemnitee,  any loss of
          use  of  money  resulting  from  differences  in  timing  between  the
          inclusion of such indemnity in the taxable  income of such  Indemnitee
          and the  anticipated  realization  by such  Indemnitee of tax benefits
          resulting from the  transaction to which such indemnity is related and
          the  present  value  of any  anticipated  future  tax  benefits  to be
          realized by such Indemnitee as a result of deducting such Fees,  Taxes
          and  Other  Charges  or as a result  of the  transaction  giving  rise
          thereto)  will be  sufficient  to  place  the  Indemnitee  in the same
          position such Indemnitee  would have been in had such Fees,  Taxes and
          Other Charges not been imposed.  All  computations for purposes hereof
          shall be based on tax rates in effect on the date payment  pursuant to
          this Section 16.02 is made.  Computations involving the loss of use of
          money or  calculations  of present value shall be based on the Overdue
          Rate as adjusted  for  applicable  income tax  effects and  compounded
          monthly on the Rent Payment Dates. Each Indemnitee shall in good faith
          use  reasonable  efforts in filing its tax returns and in dealing with
          taxing  authorities to seek and claim all tax benefits  available with
          respect to items referred to herein.

          (b) Refunds.  If any Indemnitee shall obtain a refund or credit of all
     or any part of any Fees,  Taxes and Other Charges,  payment of or indemnity
     for which  shall  have been made by the  Lessee  pursuant  to this  Section
     16.02, such Indemnitee shall, unless a Default or an Event of Default shall
     have occurred and be continuing,  promptly pay to the Lessee (i) the amount
     of  such  refund  or  credit  (together  with  any  interest  paid  to such
     Indemnitee with respect to such refund or credit) plus (ii) an amount equal
     to all tax  benefits  realized  by such  Indemnitee  as the  result  of the
     payment of the  amounts  referred  to in clause  (i) above and this  clause
     (ii).

     Section 16.03.  Survival.  The obligations of the Lessee under this Article
XVI shall survive the  termination  of this Agreement and are expressly made for
the  benefit  of and  shall be  enforceable  by any  Indemnitee,  separately  or
together,  without declaring this Agreement to be in default and notwithstanding
any assignment by the Lessor of this Lease or any of its rights  hereunder.  The
extension of applicable  statutes of  limitations by an Indemnitee or the Lessee
shall not affect the survival of the Lessee's or any  Indemnitee's  obligations,
as the case may be, under this Article XVI. The  obligations of the  Indemnitees
shall survive the  termination of this Lease.  All payments  required to be paid
pursuant to Article XVI shall be made directly to, or as otherwise requested by,
the Indemnitee  entitled  thereof,  upon written demand by such Indemnitee.  All
such written  demands shall specify the amounts payable and the facts upon which
the right to indemnification is based.

     Section 16.04.  Waiver. The Lessee hereby waives all tort claims and causes
of  action in tort it may have at any time  against  any  Indemnitee  in any way
relating to or arising from or alleged to relate to or arise from any  Operative
Document,  except with regard to circumstances  constituting an exception to the
Lessee's obligation to indemnify pursuant to Section 16.01(b) hereof.



                                       28

<PAGE>

                                  ARTICLE XVII

                               COVENANTS OF LESSEE

     Section  17.01.  Operation of Facility.  During the Lease Term,  the Lessee
shall use its best  efforts to  operate  the  Facility  (including  the  sowing,
growing,  harvesting  and  packaging of the  Product) at its fullest  productive
capacity as would a prudent  commercial  greenhouse  operator  under the same or
similar  circumstances  and to market the Product  with  substantially  the same
effort and on the same terms as used for product  produced  at other  facilities
operated  by the  Lessee or its  Affiliates.  The Lessee  hereby  agrees to give
prompt written notice to the Lessor if at any time the Lessee becomes aware that
the Facility is not being operated at its fullest productive capacity.

     Section 17.02. Affiliated Transactions.

          (a) In the event the Lessee uses the Facility to pack,  store,  grade,
     separate or distribute Product grown in greenhouses other than the Facility
     owned, leased, operated or managed by the Lessee, then the Lessee agrees to
     charge  such  greenhouses  a fee per pound  that is  satisfactory  to,  and
     approved  in advanced  by, the Lessor plus an amount  equal to at least the
     Lessee's  cost for boxes and packing  materials.  Without the prior written
     consent  of the  Lessor,  the  Lessee  shall not use the  Facility  for any
     product other than the Product.

          (b) In the event the Lessee purchases any equipment, supplies or other
     items  from  any  Affiliate,  such  purchases  shall  be on  terms  no less
     favorable than those available from unaffiliated parties.

          (c) The  Lessee  shall  provide  to the  Lessor on a monthly  basis in
     detail  satisfactory  to the  Lessor a list of all  Product  handled by the
     Facility  for  greenhouses  pursuant to  subsection  17.02(a) and all items
     purchased  from  Affiliates  and the  purchase  price  thereof  pursuant to
     subsection 17.02(b).

                                  ARTICLE XVIII

                                  MISCELLANEOUS

     Section  18.01.  Further  Assurances.  The Lessee shall cause the Operative
Documents and any amendments  and  supplements to any of them (together with any
other instruments,  financing statements,  continuation  statements,  records or
papers  necessary  in  connection  therewith)  to be recorded  and/or  filed and
rerecorded  and/or refiled in each jurisdiction as and to the extent required by
law in order to, and shall  take such other  actions as may from time to time be
necessary to, establish,  perfect and maintain (a) the Lessor's right, title and
interest  in and to the  Facility,  not  subject to any Liens  except  Permitted
Liens,  (b) for the benefit of the Lender and other holders of Notes,  the first
mortgage lien and first priority  security interest in the Facility provided for
in the Loan  Agreement and including any Parts made subject to this Lease or the
Loan Agreement or the Mortgage pursuant to Article VI hereof and (c) each of the
other rights and interests  created by the Loan Agreement and the Mortgage or by
any other  Operative  Document  in the Lessor or the  Lender.  The  Lessee  will
promptly and duly execute and deliver to



                                       29

<PAGE>

each of the Lessor and the,  Lender such  documents and assurances and take such
further action as the Lessor may from time to time  reasonably  request in order
to carry out more effectively the intent and purpose of the Operative  Documents
and to establish  and protect the rights and remedies  created or intended to be
created  in favor of the  Lessor  and the  Lender,  to  establish,  perfect  and
maintain the Lessor's right,  title and interest in and to the Facility and, for
the benefit of the Lender,  the first mortgage lien and first priority  security
interest in the Facility  provided for in the Loan  Agreement  and the Mortgage,
including  without  limitation  if  requested by the Lessor or the Lender at the
expense of the Lessee,  the recording or filing of  counterparts  or appropriate
memoranda of the Operative  Documents,  or of such financing statements or other
documents with respect thereto as the Lessor or the Lender may from time to time
reasonably  request,  and the Lessor agrees promptly to execute and deliver such
of the  foregoing  financing  statements  or  other  documents  as  may  require
execution by the Lessor.

     Section  18.02.  Quiet  Enjoyment.  The Lessor  covenants  that it will not
interfere in the Lessee's quiet enjoyment of the Facility  hereunder  during the
Lease  Term,  so long as (a) the  Lessee is in  compliance  with each  ten-n and
condition hereof and (b) no Event of Default has occurred or is continuing.

     Section 18.03. Facility as Security for Lessor's  Obligations.  In order to
secure the indebtedness  evidenced by the Notes, the Lessor provides in the Loan
Agreement and the Mortgage, among other things, for the creation in favor of the
Lender of a first  mortgage lien and first  priority  security  interest for the
benefit of the  Lender  and any other  holder of Notes in the Plant and the Site
and for the  assignment  by the  Lessor to the  Lender of the  right,  title and
interest  of the  Lessor  in and to  this  Agreement  and  the  other  Operative
Documents,  to the extent  provided in the Loan Agreement and the Mortgage.  The
Lessee hereby agrees to execute and deliver to the Lender the Lender Consent and
Agreement.

     Section 18.04. Notices.  Unless otherwise specifically provided herein, all
notices,  consents,  directions,  approvals,  instructions,  requests  and other
communications  required  or  permitted  by the terms  hereof to be given to any
person shall be in writing and any such notice shall become  effective three (3)
Business Days after being  deposited in the mails,  certified or registered with
appropriate  postage prepaid for first-class mail or, if delivered by hand or in
the form of a telex or  telegram,  when  received,  and shall be directed to the
Address of such person.

     Section 18.05. Severability.  Any provision of this Agreement that shall be
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof  and any  such  prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.  To the extent permitted
by  applicable  law, the Lessee  hereby waives any provision of law that renders
any provision hereof prohibited or unenforceable in any respect.

     Section  18.06.  Amendment.  Neither  this  Agreement  nor any of the terms
hereof may be terminated, amended, supplemented,  waived or modified orally, but
only  by an  instrument  in  writing  signed  by the  party  against  which  the
enforcement of the termination,  amendment,  supplement,  waiver or modification
shall be sought and, for so long as the Loan  Agreement  is in effect,  with the
prior written consent of the Lender.



                                       30

<PAGE>

     Section 18.07.  Headings. The Table of Contents and headings of the various
Articles and Sections of this  Agreement are for  convenience  of reference only
and shall not modify, define or limit any of the terms or provisions hereof.

     Section 18.08. Counterparts.  This Agreement may be executed by the parties
hereto in separate  counterparts,  each of which when so executed and  delivered
shall be an original,  but all such counterparts  shall together  constitute but
one and the same instrument.

     Section  18.09.  Governing  Law. This  Agreement has been delivered in, and
shall in all respects be governed by, and construed in accordance with, the laws
of the  State of New York  applicable  to  agreements  made and to be  performed
entirely within such State, including all matters of construction,  validity and
performance; provided, however, that matters relating to rights in real property
shall  be  governed  by  and  construed  in  accordance  with  the  laws  of the
Commonwealth of Pennsylvania.

     Section 18.10. Performance of Obligations to Lender. The provisions of this
Agreement  which  require  or  permit  action  by,  the  consent,   approval  or
authorization  of, the furnishing of any document,  paper or information  to, or
the  performance of any other  obligation to, the Lender shall not be effective,
and the Sections hereof containing such provisions shall be read as though there
were no such  requirements of  permissions,  after all the Notes shall have been
paid in full in accordance with their terms.

     Section 18.11. Binding Effect; Successors and Assigns;  Survival. The terms
and  provisions of this  Agreement,  and the respective  rights and  obligations
hereunder of the Lessor and the Lessee,  shall be binding upon their  respective
successors and assigns (including, in the case of the Lessor, any Person to whom
the Lessor may transfer all or any portions of the  Facility),  and inure to the
benefit of their  respective  permitted  successors and assigns,  and the rights
hereunder of the Lender shall inure (subject to such conditions as are contained
herein) to the benefit of their respective permitted successors and assigns. The
obligations of the Lessee under this Agreement  shall survive the termination of
this Agreement.

     Section 18.12.  Divisible  Lease. It is the intention of the parties hereto
that this Agreement  shall  constitute  the lease of both personal  property and
real  property  and,  to such  extent,  shall  be  deemed  divisible.  It is the
intention  and  understanding  of the  parties  hereto  that  all the  Equipment
constitutes  personal  property  and all the  Site  and  Plant  constitute  real
property  for all  purposes  of this Lease and the other  documents  referred to
herein and for all purposes of bankruptcy  laws of the United States;  provided,
however,  that nothing herein shall affect the rights and  obligations of Lessor
or Lessee  under  Section  18.01  hereof,  it being  understood  that no filing,
refiling, recording, re-recording,  registration or reregistration in any office
for the filing,  recording or  registration  of interests in real property shall
constitute  or be deemed to  constitute  evidence or an  admission  by Lessor or
Lessee that the Equipment is real property.

     Section 18.13.  Effectiveness.  This Agreement shall become  effective upon
the date (the "Effective Date") the last of the following events occurs:

          (a) the Closing Date;

          (b) the receipt of the Lender Consent and Agreement; and

                                       31

<PAGE>

          (c)  the  termination  of  the  Lessor's   arrangement  with  Ringgold
     Nurseries, Inc. and VHB Greenhouse Management, Inc. and the vacation of the
     Facility thereby.

     The Lessor  agrees to  indemnify  and hold  harmless  the  Lessee  from all
Expenses  incurred by the Lessee as a result of the Lessor's  termination of its
arrangement with Ringgold Nurseries,  Inc. and VHB Greenhouse Management,  Inc.;
provided,  however, that the Lessor shall not indemnify the Lessee from Expenses
incurred  by the  Lessee  as a result of  discussions  held by the  Lessee  with
employees of Ringgold Nurseries, Inc., VHB Greenhouse Management,  Inc. or their
Affiliates.  In addition,  this Lease may be  terminated  by either party in the
event a  mutually  agreeable  Line of  Credit  Facility  Agreement  has not been
executed by December 1, 1993.

     Section 18.14.  Security  Agreement.  On or before the Effective  Date, the
Lessee shall execute a security  agreement (the "Lease  Security  Agreement") in
favor of the Lessor granting the Lessor a security  interest in all the Lessee's
property to secure the  Lessee's  obligations  under the Lease,  which  security
interest  shall be  expressly  subordinated  to the  security  interest  granted
pursuant to the Security Agreement.





                                       32

<PAGE>

     IN WITNESS  WHEREOF,  the undersigned have each caused this Lease Agreement
to be duly  executed  and  delivered  and their  corporate  seals to be hereunto
affixed and attested by their respective  officers  thereunto duly authorized as
of the day and year first above written.

Attest:                                  COGENTRIX OF PENNSYLVANIA, INC.



_______________________________          By:____________________________________
_____________________ Secretary          Name:
                                         Title:


      [Corporate Seal]



Attest:                                  KEYSTONE VILLAGE FARMS, INC.



_______________________________          By:____________________________________
_____________________ Secretary          Name: Michael A. Degiglio
                                         Title: President



      [Corporate Seal]


               Unconditional Guarantee of Payment and Performance

     APD is an Affiliate of the Lessee and is under  common  ownership  with the
Lessee.  To  induce  the  Lessor  to enter  into  this  Lease  Agreement  and in
consideration  for the  benefits  to be  derived  by APD from  the  transactions
contemplated  hereby,  APD  unconditionally  guarantees the payment when due and
timely  performance  of any and all  obligations  of  Lessee  under  this  Lease
Agreement.  Upon default by the Lessee in making payment  hereunder or any other
failure to perform its  obligations  hereunder,  APD shall make such  payment or
cause such  obligation to be performed,  promptly upon the demand of the Lessor.
APD  agrees  that the Lessor  and/or the Lessee may from time to time  extend or
renew  provisions  of this  Lease  Agreement  for any  period  and may grant any
releases,  compromises or indulgences with respect thereto  (including,  but not
limited  to, the  failure or  refusal  to  exercise  one or more of the right or
remedies  provided  herein),  without  notice to or consent of APD,  and without
affecting the liability of APD hereunder.

                                         AGRO POWER DEVELOPMENT, INC.



                                         By:____________________________________
                                         Name: Michael A. Degiglio
                                         Title: President



                                       33

<PAGE>

                                                                SCHEDULE 1.01(a)
                                                              TO LEASE AGREEMENT

                             Description of Facility

PART 1:  Description of Equipment


Description of Equipment

1 Trailer w/Spray Equipment

18 Tube Trolleys

1 Tomato Grading Machine



PART 2:  Description of Plant

     The  greenhouse  facility  containing   approximately  9.7  acres  and  the
headhouse facility, each as reflected on Exhibit B hereto.



PART 3:  Description of Site

     That portion of the property  described on Annex A hereto that is described
on the survey attached as Annex B hereto as the Greenhouse and the Headhouse.





                                       34

<PAGE>

                                                                   SCHEDULE 3.01
                                                              TO LEASE AGREEMENT

                                   BASIC RENT

     Basic Rent shall be payable as follows:

<TABLE>
<CAPTION>
                                                                                                         1998 and
     Rent Payment Date             1994              1995              1996              1997           Thereafter
     -----------------             ----              ----              ----              ----           ----------
<S>                                <C>               <C>               <C>               <C>               <C>
          April 1                   *                 *                 *                 *                 *
           May 1                    *                 *                 *                 *                 *
          June 1                    *                 *                 *                 *                 *
          July 1                    *                 *                 *                 *                 *
         August 1                   *                 *                 *                 *                 *
        September 1                 *                 *                 *                 *                 *
         October 1                  *                 *                 *                 *                 *
        November 1                  *                 *                 *                 *                 *
        December 1                  *                 *                 *                 *                 *
                                  -----             -----             -----             -----             -----
           TOTAL                    *                 *                 *                 *                 *
</TABLE>




*Information omitted and subject to request for confidential treatment





                                       35

<PAGE>

                                                                   SCHEDULE 3.02
                                                              TO LEASE AGREEMENT

                                SUPPLEMENTAL RENT

Supplemental Rent

 First $100,000       Cash Flow Between $100,000 and           Cash Flow in
  of Cash Flow                   $600,000                   Excess of $600,000
----------------     --------------------------------      --------------------
       *%                           *%                              *%









*Information omitted and subject to request for confidential treatment




                                       36