Exhibit 10.61








                                  GROUND LEASE


                                     Between

                 THE BUFFALO ENTERPRISE DEVELOPMENT CORPORATION

                                    Landlord,

                                       and

                          AGRO POWER DEVELOPMENT, INC.

                                     Tenant.







                         Dated: As of September 4, 1997



<PAGE>

                                 LEASE AGREEMENT

     THIS LEASE  AGREEMENT is made as of the 4th day of September,  1997 between
THE  BUFFALO  ENTERPRISE  DEVELOPMENT   CORPORATION,   a  not-for  profit  local
development  corporation  organized  under  the laws of the  State of New  York,
having its principal  office and place of business at 620 Main Street,  Buffalo,
New York 14202 (the "Landlord") and AGRO POWER  DEVELOPMENT,  INC., a New Jersey
corporation,  having an office at 10 Alvin  Court,  East  Brunswick,  New Jersey
08816 (the "Tenant").

                                    ARTICLE I

                                   DEFINITIONS

     Section 1.1.  Definitions.  Unless otherwise defined herein,  the following
terms shall have the respective meanings specified below:

          (a)  "Affiliate"  shall  mean  Tenant  or any party  controlled  by or
     controlling Tenant.

          (b) "Assignment" shall mean any permitted  assignment to a third party
     by Tenant of all of its rights and obligations under this Lease.

          (c) "Assignee" shall mean the assignee under an Assignment.

          (d) "Commencement of Work" shall mean the date on which the excavation
     work in connection with the  construction of the Improvements has begun. To
     "Commence Work" shall have the correlative meaning.

          (e) "Commencement Date" shall mean the date hereof.

          (f)  "Completion  Date"  shall  mean  (1)  the  date  upon  which  the
     Improvements have been substantially completed in accordance with generally
     accepted construction practices and have been certified to Landlord as such
     by Tenants, based on certificates of completion reasonably  satisfactory to
     Landlord and a permanent  and  unconditional  certificate  of occupancy has
     been issued therefor, and (2) with respect to the change, alteration or new
     construction of the  Improvements,  or any Restoration of the Improvements,
     that point in time when the Improvements have been substantially  completed
     in accordance with generally accepted construction  practices and have been
     certified as such by Landlord and a permanent and unconditional certificate
     of occupancy has been issued for the completed work.

          (g)  "Construction  Period" shall mean the period  commencing with the
     Commencement of Work for the Improvements,  or Restoration, as the case may
     be, and ending with the Completion Date of the Improvements or Restoration,
     as the case may be.

          (h) "Contract"  shall mean that certain  Contract for Sale of Land for
     Redevelopment  dated  July 2,  1997 by and  between  City  of  Buffalo  and
     Landlord.



<PAGE>

          (i) "Default"  shall mean any condition or event which  constitutes or
     would,  after  notice  or lapse of time,  or both,  constitute  an Event of
     Default.

          (j) "Demised  Premises" shall mean the Land and all Easements,  rights
     and rights of way and licenses,  but shall not include the  Improvements or
     Tenant's fixtures.

          (k)  "Development  Costs"  shall  mean  the  costs of  developing  and
     constructing the Improvements.

          (l) "Easements"  shall mean those easements under, over and across the
     property  of  the  Landlord  adjacent  to the  Land  which  are  reasonably
     necessary  for  access  to the  Land  and to  furnish  services  (including
     utilities) to the Improvements.

          (m) "Event of Default" shall mean any of the acts or omissions defined
     in Section 16.1 of this Lease.

          (n) "Governmental  Authorities" means all federal, state and municipal
     governments, courts, departments,  commissions, boards, and officers having
     jurisdiction   over  the  Demised   Premises,   the   Improvements  or  the
     construction thereof, or over, Landlord, Tenant or any Subtenant.

          (o) "Governmental  Requirement(s)"  means all present and future laws,
     ordinances, orders, rules, regulations and requirements of any Governmental
     Authority having jurisdiction over the Improvements or the Demised Premises
     or the use of either of them or this  Lease and all  building  permits  and
     other  licenses  and  approvals  required by the  appropriate  Governmental
     Authorities in connection with the Improvements or this Lease.

          (p)  "Hazardous  Materials"  shall have the meaning  ascribed to it in
     Section 5.3.

          (q) "Impositions" shall mean all taxes, all assessments, water, sewer,
     or other rents and  charges,  excises,  levies,  fees  (including,  without
     limitation,  licenses,  permits,  inspections,  authorizations  and similar
     fees),  and all other  governmental  charges,  whether  general or special,
     ordinary or  extraordinary,  foreseen or  unforeseen,  which  relate to the
     ownership of the Land and the  Improvements  or the use or occupancy of the
     Land and the Improvements.

          (r) "Improvements"  shall mean construction of a 18+/- acre greenhouse
     facility to be used solely for agricultural purposes, concrete pad, parking
     areas,  driveways,  utilities and all other  appropriate  appurtenances and
     improvements,  including,  but not limited to, retention pond, distribution
     and heating plant  facilities  used solely for the purpose of servicing the
     aforesaid  greenhouse facility and underground  conduits and piping related
     thereto.

          (s) "Land" shall mean that certain  parcel of real property  described
     in Exhibit A attached hereto.

          (t) "Landlord" shall mean the Landlord named herein or any assignee or
     other successor in interest of the named Landlord, which at the time is the
     owner of the Land.



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<PAGE>

          (u) "Lease"  shall mean this  agreement  between the  Landlord and the
     Tenant, including any renewals or amendments.

          (v) "Leasehold Estate" shall mean the leasehold estate created by this
     Lease.

          (w)  "Leasehold  Mortgage"  shall  mean any  mortgage  or  other  real
     property security  instrument by which Tenant may encumber,  hypothecate or
     mortgage all or any part of the Leasehold  Estate  pursuant to the terms of
     this Lease.

          (x)  "Leasehold  Mortgagee"  shall  mean the  holder of any  Leasehold
     Mortgage.

          (y) "Municipality" shall mean the City of Buffalo.

          (z) "Plans and Specifications" shall mean the site plan,  construction
     plans,  drawings  and related  drawings for the  Improvements  which are in
     sufficient detail to obtain a building permit from the Municipality.

          (aa)  "Project"  shall  mean the  construction  and  operation  of the
     Improvements.

          (ab)  "Rent"  shall mean all  amounts  payable  by Tenant to  Landlord
     pursuant to this Lease.

          (ac)  "Restoration"  shall have the meaning  ascribed to it in Section
     8.2.

          (ad)  "Sublease"  shall mean a sublease  of space in the  Improvements
     between a Subtenant and Tenant.

          (ae)  "Subtenant"  shall mean the subtenant under a Sublease for space
     in the Improvements.

          (af)  "Tenant"  shall mean the Tenant  herein named or any assignee or
     other successor in interest of the Tenant, which at the time in question is
     the owner of the Leasehold  Estate;  but the  foregoing  provisions of this
     subsection  shall not be construed to relieve the Tenant or any assignee or
     other successor in interest of the Tenant from the full and prompt payment,
     performance and observance of the covenants, obligations,  conditions to be
     paid, performed and observed by the Tenant under this Lease.

          (ag) "Unavoidable Delay" shall mean delays due to strikes, act of God,
     inability to obtain labor or materials, Governmental Requirements,  removal
     of Hazardous Materials  discovered at any time after the Commencement Date,
     enemy action, civil commotion, fire, unusual inclement weather, unavoidable
     casualty or similar causes beyond the reasonable control of Tenant.





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<PAGE>

                                   ARTICLE II

                          PREMISES; TERM OF LEASE; RENT

     Section 2.1.  Demise.  The Landlord does hereby demise and lease to Tenant,
and Tenant does hereby hire and take from Landlord, the Demised Premises.

     Section 2.2.  Term.  A. This Lease shall have an initial term (the "Initial
Term") of Fifteen (15) years  beginning on the  Commencement  Date and ending on
the  day  immediately   preceding  the  fifteenth  (15th)   anniversary  of  the
Commencement Date.

     B. Provided Tenant is not then in default  hereunder at the time the option
herein is exercised and at the  commencement of the "Renewal Term"  (hereinafter
defined),  Tenant may, at Tenant's option,  extend the Initial Term for a period
of Five (5) years  commencing  on the first day  occurring  after the end of the
Initial  Term  ("Renewal  Term  Commencement   Date")  and  ending  on  the  day
immediately  preceding  the 5th  anniversary  of the Renewal  Commencement  Date
("Renewal Term").  Tenant shall give Landlord notice of the exercise of Tenant's
option at least One Hundred  Eighty  (180) days prior to the  expiration  of the
Initial Term.

     C. The Initial  Term and the Renewal  Term  provided  herein,  if any,  are
hereinafter collectively referred to as the "Term".

     Section 2.3.  Payment of Rent.  Tenant  agrees to pay to  Landlord,  at the
address  provided for in Article XVII,  each year during the Term of this Lease,
annual  base  rental  in  the  sum  of  Thirty   Thousand  and  00/100   Dollars
($30,000.00).  The  annual  base  rent  shall  be  payable  in  equal  quarterly
installments  in advance  of Seven  Thousand  Five  Hundred  and 00/100  Dollars
($7,500.00), each installment to be due on the first day of each and every third
month of each "Lease  Year"  during the Term (Lease Year shall mean the 12-month
period  commencing  on the first  day of the  first  full  month  following  the
Commencement  Date and each  successive  12-month period  thereafter  during the
Term) provided,  however,  if the Commencement Date shall not occur on the first
day of a month, (i) the initial quarterly  installment shall be due on the first
day of the first full month  following the  Commencement  Date, and Tenant shall
pay to Landlord on the Commencement  Date as rent for the partial month in which
the Commencement Date shall occur a sum equal to one monthly  installment of the
annual base rent payable  prorated to reflect the number of days in said partial
month,  and (ii) the last  quarterly  installment  due  during the Term shall be
adjusted to reflect a payment due which is equal to a quarterly installment less
the prorated portion of the last calendar month which is not within the Term.

     Section 2.4.  Additional  Rent.  As additional  rent,  Tenant shall pay all
Impositions  and all  other  sums due and  payable  hereunder.  In the  event of
Tenant's  failure  after any  applicable  grace or cure  period to pay any sums,
costs,  expenses or deposits which Tenant in any of the provisions of this Lease
assumes or agrees to pay and/or deposit, Landlord shall have (in addition to all
other rights and remedies) all of the rights and remedies provided for herein or
by law in the case of non-payment of rent.

     Section  2.5.  Net  Lease.  This Lease is a net lease and the Rent shall be
paid (i) without notice or demand, and without counterclaim,  set-off,  defense,
suspension  or  deferment,


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<PAGE>

of any kind, and without deduction,  abatement or diminution of any kind. Except
as otherwise  expressly  provided  herein,  this Lease shall not terminate,  and
Tenant  shall not have any right to terminate or avoid this Lease or be entitled
to the abatement  (in whole or in part) of any rents  hereunder or any reduction
thereof, nor shall the obligations and liabilities of Tenant hereunder be in any
way  affected  for any reason.  The  obligations  of Tenant  hereunder  shall be
separate and independent  covenants and agreements.  Nothing in this Lease shall
prevent Landlord from suing the Tenant for damages or specific performance. Each
payment  made by Tenant to Landlord  pursuant to this Lease shall be final,  and
Tenant shall not seek to recover all or any part of such  payment from  Landlord
for any reason whatsoever.

     Section 2.6. Late Fee. In the event an installment of rent due hereunder is
not paid  within  ten (10) days  after it  becomes  due, a late fee equal to ten
percent (10%) of the amount due will be charged.

                                   ARTICLE III

                             DEVELOPMENT OF THE LAND

     Section 3.1. Tenant's Obligation to Develop Land.

     (a) Scope of  Development.  Tenant will  improve  the Land by  constructing
thereon  the  Improvements  pursuant  to Plans and  Specifications  prepared  by
Tenant.  Landlord hereby grants and  acknowledges its approval of such Plans and
Specifications  and agrees that the  approval  rights set forth in Sections 3. 1
(c)  and  (d)  hereof  shall  not  apply  to  the  initial  construction  of the
Improvements.

     (b)  Schedule  of  Performance.  The Land shall be  developed  by Tenant in
accordance  with the time  schedule set forth in Exhibit B attached  hereto (the
"Schedule of Performance"),  subject to Unavoidable Delays.  Tenant shall submit
to Landlord on or before each deadline set forth in the Schedule of  Performance
satisfactory evidence of the satisfaction of such deadline.  The satisfaction of
the matters  set forth in the  Schedule  of  Performance  by the dates set forth
therefor is an essential part of this Lease,  time being of the essence.  In the
event that Landlord grants an extension of any such date,  Landlord shall not be
deemed  thereby  to be  waiving  any other  rights  hereunder  or  implying  the
extension of any other dates.

     (c) Approvals for Alterations,  Additions or Modifications of Improvements.
During the Term of this Lease,  Tenant shall be entitled to perform or undertake
alterations,  additions, improvements or construction (each an "Alteration") to,
in connection  with, or in the  Improvements  and on the Land in accordance with
plans  and  specifications   prepared  by  Tenant.   Prior  to  undertaking  any
Alteration,  Tenant  shall  prepare and submit site plans,  construction  plans,
drawings and related documents to Landlord for written approval.  Landlord shall
either approve or disapprove in writing any of the items  submitted for approval
to Landlord within 30 days of Landlord's receipt thereof. Any disapprovals shall
be accompanied by a written  explanation setting forth in detail the reasons for
disapproval.  Failure by Landlord to express disapproval of any such item within
such 30 day period  shall  constitute  Landlord's  approval  of such  item.  The
criteria  used by Landlord in approving or  disapproving  any such item shall be
(1)  quality  of  general  design  evaluated   pursuant  to  customary  industry
standards,  and  (2)  the  suitability  of the  landscaping  on the  Land to the
adjacent land owned by Landlord.  In


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<PAGE>

the event Landlord disapproves of any such item, Tenant shall cause such item to
be  appropriately  revised  as soon as  possible  after  receipt  of a notice of
disapproval  and resubmit  the same to Landlord  for  approval  pursuant to this
Section 3.1.  Landlord and Tenant  agree to cooperate  reasonably  each with the
other in resolving  any  objections  of the other to such item and/or  requested
modifications  by the other.  The provisions of this Section 3.1 with respect to
notice,  time for and method of approval  shall apply to any such  revised  item
resubmitted  to Landlord for approval.  Upon approval of any such item,  whether
directly or through  Landlord's  failure to disapprove  the item within the time
set forth in this Section 3.1, upon Tenant's  request Landlord shall execute and
return a copy of such item to Tenant  marked  approved by Landlord with the date
of such approval.

     It is understood and agreed that any approval  issued by Landlord  pursuant
hereto shall not constitute  approval from any Governmental  Authority which may
be required.

     (d)  Changes  to Plans and  Specifications.  Tenant  may make  changes  and
modifications  which are not  material to the plans and  specifications  for any
Alteration or to resolve a minor  inconsistency or ambiguity  without  obtaining
Landlord's prior approval. No material modification or alteration may be made to
the  plans and  specifications  for any  Alteration  without  the prior  written
consent of Landlord.

     (e) Reports and Information.  During the Construction Period,  Tenant shall
provide to Landlord copies of all documents and  correspondence  relative solely
to the  construction  of the  Improvements  which it provides  to the  Leasehold
Mortgagee, it being understood and agreed that such documents and correspondence
shall not include the financial aspects of the construction or the Tenant.

     Copies of all soils reports,  surveys,  hazardous  wastes or toxic reports,
feasibility studies and other similar written materials prepared for Tenant with
respect to the Land shall be  delivered  to Landlord  within ten (10) days after
receipt by Tenant.

     (f)  Obligation  to Develop Land.  Subject to  Unavoidable  Delays,  Tenant
agrees to: (1) Commence Work on the Improvements,  on or before the first day of
the 2nd full calendar month following the Commencement  Date, in accordance with
the  timetable  set  forth  therefor  in  the  Schedule  of  Performance  and in
compliance with all Governmental  Requirements and, (2) to diligently proceed to
substantially  complete the lien-free  completion of the  Improvements in a good
and  workmanlike  manner  and  substantially  in  compliance  with the Plans and
Specifications  and other drawings pursuant to the Schedule of Performance on or
before the first day of the 12th full calendar month following the  Commencement
of Work.

     (g) Efforts to Sublease.  To the extent Subleases are permitted  hereunder,
Tenant shall at all times use diligent and  commercially  reasonable  efforts to
enter into Subleases with  Subtenants at market rentals which shall obligate the
Subtenant  thereunder  to pay or reimburse  Tenant as sublessor  thereunder  for
Impositions,  insurance,  utilities,  maintenance  and  other  items of  expense
(either on a net basis or above  specified  levels)  relating  to such  Sublease
space, on terms reasonably consistent with general market conditions.



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<PAGE>

     (h)  Use  of  Plans.  The  contracts  with  any  architect,   other  design
professional  or any general  contractor  shall  provide,  in form and substance
reasonably  satisfactory to Landlord,  for the assignment thereof to Landlord as
security to Landlord for Tenant's performance  hereunder,  and Landlord shall be
furnished  with any such  contract,  together with the further  agreement of the
parties  thereto,  that if this Lease is  terminated  due to  Tenant's  default,
Landlord may, at its election,  use any Plans and Specifications to which Tenant
is then entitled  pursuant to any such contract upon the payment of any sums due
to any party thereto. The above-described assignment and the Landlord's right to
elect  to  use  the  Plans  and  Specifications  as  described  above  shall  be
subordinate  to and shall not defeat or in any way interfere  with the rights of
the   Leasehold   Mortgagee  in  and  to  any  such   contracts  and  Plans  and
Specifications  so assigned and Landlord  shall  execute such  agreements as the
Leasehold Mortgagee may reasonably request to confirm such subordination.

     (i) As-Built Plans and  Specifications.  Upon the Completion  Date,  Tenant
shall provide Landlord with a complete and legible full-size set of all as-built
Plans  and  Specifications  (including  all  operating  manuals  for  mechanical
systems) regarding all of the Improvements, as such Plans and Specifications may
be  amended  from time to time,  within 30 days after  such  as-built  Plans and
Specifications are prepared or after such amendment, as the case may be.

     Section 3.2. Construction.

     (a) Conditions to  Commencement of  Construction.  Tenant shall satisfy the
following  conditions  in  accordance  with the time  schedule  set forth in the
Schedule of Performance and in no event shall Tenant  commence any  construction
on the Improvements until the following conditions have been satisfied or waived
by Landlord,  in addition to other conditions and  requirements  imposed by this
Lease:

          (1) Tenant  shall have  obtained  all permits  and other  governmental
     approvals necessary to commence such construction; and

          (2)  If  Tenant  intends  to  employ  a  general  contractor  for  the
     construction of the Improvements, Tenant shall have entered into a complete
     and binding contract which such general  contractor and said contract shall
     be required to comply with all applicable Governmental Requirements.

     (b)  Restrictions:   Governmental   Permits.   No  Improvements   shall  be
constructed  or maintained  unless the same conform to and are  consistent  with
applicable zoning for the Land, all other applicable  Governmental  Requirements
(including  without  limitation  any  conditional  use permit or other  license,
permit,  or  certificate  required to be issued by  Governmental  Authorities in
connection  with the  Improvements).  Before  commencement  of  construction  or
development  of the  Improvements,  Tenant  shall,  at  Tenant's  sole  cost and
expense,  secure any and all applicable  permits,  licenses and other  approvals
which may be required by any  Governmental  Authority having  jurisdiction  over
such  construction,  development or work.  Landlord shall provide its reasonable
cooperation  to assist  Tenant in  securing  any  permit,  license  or  approval
required in connection with Section  3.2(b);  provided that Tenant shall pay all
reasonable  costs  and  expenses  of  Landlord  associated  therewith,  if  any.



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Notwithstanding  the  foregoing   sentence,   Landlord  shall  have  no  implied
obligation  to cause such permits to be issued.  Tenant shall  provide a copy of
each such permit,  license or other approval to Landlord prior to commencing the
subject work or activity.

     (c) Construction Standards. Subject to Unavoidable Delay, all construction,
alteration or repair work permitted herein shall be accomplished  expeditiously,
diligently and in accordance with good engineering practices.  Tenant shall take
all  reasonably  necessary  measures  to  minimize  any  damage,  disruption  or
inconvenience caused by such work and make adequate provision for the safety and
convenience of all persons  affected  thereby.  Tenant shall pay (or cause to be
paid) all costs and expenses  associated  with such work and shall indemnify and
hold Landlord harmless from all damages, lawsuits and claims attributable to the
performance  of such work.  Dust,  noise and other effects of such work shall be
controlled using commercially  accepted methods customarily utilized in order to
control deleterious effects associated with construction projects in a populated
or developed area.

     (d) Costs of Construction.  The entire cost and expense of constructing any
and all Improvements shall be borne and paid by Tenant.

     (e) Rights of Access.  For the  purposes of assuring  compliance  with this
Lease,  representatives  of Landlord  shall have the right of access to the Land
without  charges or fees,  at normal  construction  hours,  during the period of
construction  subject  to the  rights  of  Subtenants.  Nothing  in this  Lease,
however,  shall be interpreted to impose an obligation  upon Landlord to conduct
such inspections or any liability in connection therewith.

     (f)  Subcontracts.  All  subcontracts  entered  into by Tenant  and/or  the
general contractor relating to the construction of the Improvements shall comply
with all applicable Governmental Requirements.

                                   ARTICLE IV

                              TAXES AND ASSESSMENTS

     Section 4.1. Real Property  Taxes.  Tenant  covenants and agrees to pay all
Impositions when due during the term of this Lease.

     Section 4.2. Tenant's Right to Contest.  Tenant shall have the right at its
own  expense to  contest  the amount or  validity,  in whole or in part,  of any
Imposition by  appropriate  proceedings  diligently  conducted in good faith but
only after payment of such Imposition unless such payment would operate as a bar
to such  contest or  interfere  with the  production  thereof,  in which  event,
notwithstanding the provisions of Section 4.1 hereof, payment of such Imposition
shall be postponed.

     Upon the  termination  of such  proceedings,  it shall be the obligation of
Tenant to pay or cause to be paid the amount of such  Imposition or part thereof
as finally determined in such proceedings and the payment of which may have been
deferred  during the prosecution of such  proceedings,  together with any costs,
fees  (including  counsel  fees),  interest,  penalties or other  liabilities in
connection therewith which are deemed a part of an Imposition.



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                                   ARTICLE V

                             USE OF DEMISED PREMISES

     Section 5.1.  Use.  Tenant  shall use the Demised  Premises for the Project
only and for no other purpose.

     Section 5.2. Title to Improvements and Fixtures.  Subject to the provisions
of Article XXI, the  Improvements are and shall be the property of the Tenant or
any  party  taking  title  through  the  Tenant  by  means  of a deed in lieu of
foreclosure or foreclosure  during,  and only during, the Term of this Lease. At
all times during the Term of this Lease, the Improvements shall not be conveyed,
transferred or assigned unless such conveyance,  transfer or assignment shall be
in compliance with the provisions of Article X, and at all such times the holder
of the Leasehold Estate shall be the owner of the Improvements.

     Section 5.3. Environmental Compliance.  Tenant shall comply with, and shall
include  covenants in the Subleases  with all of its Subtenants to cause them to
comply with, federal,  state and local laws,  ordinances or regulations relating
to: (1) industrial hygiene, (2) the environmental  conditions on, under or about
the  Demised  Premises  including,  but not  limited  to,  soil and  groundwater
conditions,  and (3) the use, generation,  manufacture,  production,  storage or
disposal on, under, or about the Demised Premises or  transportation  to or from
the Demised Premises of flammable explosives,  radioactive materials,  hazardous
wastes,  toxic substances or related injurious  materials,  whether injurious by
themselves or in  combination  with other  materials  (collectively,  "Hazardous
Materials").  For the purpose of this Lease,  Hazardous  Materials shall include
but not be limited to substances defined as "hazardous  substances,"  "hazardous
materials," or "toxic substances" in the Comprehensive  Environmental  Response,
Compensation and Liability Act of 1980, as amended,  42 U.S.C.  Section 9601, et
seq.;  the Hazardous  Materials  Transportation  Act, 49 U.S.C.  Section 1801 et
seq.;  the Resource  Conservation  and Recovery  Act, 42 U.S.C.  Section 6901 et
seq.; Articles 15 and 27 of the New York State  Environmental  Conservation Law;
and in the regulations  adopted and  publications  promulgated from time to time
pursuant to said laws.

                                   ARTICLE VI

                    REPAIRS COMPLIANCE WITH LAWS, ALTERATIONS

     Section  6.1.  Repairs.  Tenant  shall at all times during the Term of this
Lease,  at  Tenant's  sole cost and  expense,  keep the  Demised  Premises,  the
Improvements  and all  sidewalks,  driveways,  parking  lots and curbs  adjacent
thereto in good order,  condition and repair,  ordinary wear and tear  excepted,
and in  such  condition  as may be  required  by  law  and by the  terms  of any
insurance  policies  carried by  Tenant,  whether  or not such  repair  shall be
interior or  exterior,  and whether or not such repair  shall be of a structural
nature,  and  whether  or not the  same  can be said to be  within  the  present
contemplation of the parties hereto.

     Section  6.2.  Compliance  with Laws.  Tenant shall at all times during the
Term of the Lease, at Tenant's own cost and expense, perform and comply with all
laws, rules, orders, ordinances,  regulations, and requirements now or hereafter
enacted  or  promulgated,  of every  Governmental  Authority,  and of any agency
thereof,  relating  to  the  Demised  Premises,  or  the  Improvements,  or  the
facilities  or equipment  therein,  or the  streets,  sidewalks,  vaults,  vault

                                       9

<PAGE>

spaces,  curbs and gutters adjoining the Demised Premises,  or the appurtenances
to the Demised Premises,  or the franchises and privileges  connected therewith,
whether  or  not  such  laws,  rules,  orders,   ordinances,   regulations,   or
requirements so involved shall  necessitate  structural  changes,  improvements,
interference  with use and enjoyment of the Demised Premises,  replacements,  or
repairs,  extraordinary  as well as  ordinary,  and Tenant  shall so perform and
comply,  whether or not such laws,  rules,  orders,  ordinances,  regulations or
requirements  shall now exist or shall hereafter be enacted or promulgated,  and
whether or not such laws, rules, orders, ordinances, regulations or requirements
can be said to be within the present contemplation of the parties hereto.

     Tenant  shall have the right,  provided it does so with due  diligence  and
dispatch,  to contest by appropriate legal proceedings,  without cost or expense
to Landlord,  the validity of any law,  rule,  order,  ordinance,  regulation or
requirement of the nature hereinabove referred to in this Article VI. Tenant may
postpone  compliance  with such law,  rule,  order,  ordinance,  regulation,  or
requirement until the final  determination of such proceedings,  only so long as
such  postponement  of  compliance  will not subject  Landlord  to any  criminal
prosecution,  or any other  liability of any kind  against the  reversion of the
Demised  Premises  or the  Improvements  thereon  which  may  arise by reason of
postponement  or failure of compliance  with such law, rule,  order,  ordinance,
regulation,  or  requirement,  and  Tenant  shall  indemnify  and hold  Landlord
harmless  from the same. No provisions of this Lease shall be construed so as to
permit Tenant to postpone  compliance  with such law,  rule,  order,  ordinance,
regulation or  requirement if any sovereign,  municipal,  or other  governmental
authority  shall  threaten  to carry out any work to comply  with the same or to
foreclose  or sell any lien  affecting  all or any part of the Demised  Premises
which shall have arisen by reason of such postponement or failure of compliance.

     Section  6.3.  Alterations.  Tenant  shall  have  the  right  to  make  any
alteration. addition or modification to the Demised Premises or the Improvements
provided such alteration, addition or modification is (i) in compliance with all
applicable  Governmental  Requirements,  (ii)  consistent with and a part of the
stated use and  purpose of the  Improvements  set forth in Section 1.1 and (iii)
constructed  pursuant to and in accordance  with Article III provided,  however,
the  requirements  contained in (iii) shall not apply in the case of an interior
alteration costing less than $250,000.00 including labor and materials.

                                  ARTICLE VII

                                    INSURANCE

     Section   7.1.   Public   Liability.   Tenant  shall  secure  and  maintain
comprehensive  general public liability  insurance for bodily injury,  death, or
property damage occurring on, in or about the Demised Premises,  which insurance
shall have total  combined  single limits of not less than Five Million  Dollars
($5,000,000)  per occurrence.  Such insurance  shall have no deductible.  If, by
reason of changed  circumstances  or economic  conditions the insurance  amounts
referred to in this Lease become  inadequate in Landlord's  judgment  reasonably
exercised,  Tenant shall  increase the amounts of such  insurance  promptly upon
Landlord's request.

     Section 7.2.  Coverage  Requirements.  Any insurance  carried or secured by
Tenant in  connection  with the  Demised  Premises  shall be carried in favor of
Landlord,  Tenant and the Leasehold  Mortgagee as the parties  insured and shall
fully  protect  Landlord,  Tenant and


                                       10

<PAGE>

Leasehold  Mortgagee as their  respective  interests may appear.  Such insurance
shall be written by companies that are  nationally  recognized and authorized to
do business in New York State and acceptable to Landlord, such acceptance not to
be unreasonably withheld.

     Section 7.3. Cancellation; Non-Renewal. Every policy referred to in Section
7.1 of  this  Lease  shall,  to  the  extent  obtainable,  provide  that  (a) no
cancellation,  non-renewal,  reduction  or material  amendment  in the  coverage
afforded  under said  policies  will be effective  until at least 30 days' prior
written  notice  of  such  cancellation,   non-renewal,  reduction  or  material
amendment  has been given to Landlord in  accordance  with  Article XVII of this
Lease and (b) that the interests of the Landlord shall not be invalidated by any
act or  negligence  of  Tenant or  Landlord  or any  person or entity  having an
interest in the Demised  Premises,  by occupancy or use of the Demised  Premises
for purposes more hazardous than permitted by such policy, or by any foreclosure
or other  proceedings  relating to the Demised  Premises.  Tenant shall promptly
advise Landlord of any policy cancellation,  reduction, non-renewal or amendment
which adversely affects Landlord.

     Section  7.4.  Copies  of  Policies.  Prior to the  effective  date for any
insurance  required by this  Article,  Tenant shall  deliver to Landlord  either
certified copies of the policies for such insurance or certificates of insurance
reasonably  satisfactory  to Landlord  evidencing the existence of all insurance
coverages  that are required to be maintained by Tenant under this Article.  Any
insurance  required  under this  Article  may be  provided  under  such  blanket
policies as are then customary for other properties owned, leased or occupied by
Tenant,  provided  that the coverage  allocated to or available  for the Demised
Premises,  and the  interest  of the  Landlord  thereon,  is not  less  than the
coverage required by this Article as separately stated.

                                  ARTICLE VIII

                           DESTRUCTION AND RESTORATION

     Section 8.1. Tenant's Restoration of Improvements.  In case of damage to or
destruction  of the  Improvements  or any part  thereof by fire or other  cause,
Tenant,  at its option and its sole cost and  expense,  shall either (i) restore
the  same as  nearly  as  possible  to  their  value,  condition  and  character
immediately  prior to such damage or  destruction,  or (ii) terminate the Lease.
Tenant shall  notify  Landlord of its  election to restore the  Improvements  or
terminate the Lease before the 30th day after the fire or other casualty. In the
event  Tenant  elects to restore the  Improvements,  such  restoration  shall be
commenced  with  due  diligence  and in good  faith,  and  prosecuted  with  due
diligence and in good faith,  Unavoidable  Delays excepted.  In the event Tenant
elects to terminate the Lease,  Tenant shall,  at  Landlord's  option,  raze the
Improvements so damaged or destroyed.  The duty imposed by this provision, if so
exercised  by  Landlord,  to raze the  Improvements  shall  include,  but not be
limited to, the duty to demolish and remove all basements and foundations,  fill
all  excavations,  return the surface to grade and leave the  premises  safe and
free from debris and hazards.  Nothing  contained  in this section  shall modify
Landlord's  right to acquire title to the Improvements as otherwise set forth in
this Lease.

     Section 8.2. Application of Insurance Proceeds.  In the event Tenant elects
to restore the Improvements pursuant to Section 8.1, all insurance proceeds paid
as provided  herein,  on account of any damage,  loss or  destruction,  less the
actual cost,  fees and expenses,  incurred by Tenant,  Landlord or any Leasehold
Mortgage  in  connection  with  the  adjustment  of any  such


                                       11

<PAGE>

damage, loss or destruction,  which costs and expenses shall be paid to Landlord
or any Leasehold  Mortgagee,  as the case may be, shall be applied,  (subject to
reasonable  provisions for the  disbursement  thereof  included in any Leasehold
Mortgage) toward the payment of the cost of restoration,  repairs, replacements,
rebuilding  or  alterations,  including  the cost of  demolition  and  temporary
repairs and for the  protection  of property  pending  completion  of  permanent
restoration,  repairs,  replacements,  rebuilding or  alterations  (all of which
temporary repairs,  protection of property and permanent  restoration,  repairs,
replacement,  rebuilding or alterations are hereinafter collectively referred to
as the  "Restoration"),  and,  subject  to  reasonable  terms  for  disbursement
included  in any  Leasehold  Mortgage,  shall be paid  out from  time to time to
Tenant or in accordance with its  directions,  as such  Restoration  progresses,
upon  the  written   request  of  Tenant  which  shall  be  accompanied  by  all
certificates,  invoices.  and  releases  that may then be  necessary  to protect
Landlord and the Demised Premises from any lien,  charge or liability and by the
written  approval of the  Leasehold  Mortgagee,  if any, or Landlord if there is
then no Leasehold Mortgagee.

     Upon compliance with the foregoing  provisions of this Section, out of such
insurance  money  there shall be paid to Tenant or to such  person(s)  as may be
reasonably  designated by Tenant the respective amount stated in such request to
have been paid by Tenant or to be due to such person(s), as the case may be.

     If the insurance  money,  less the actual cost, fees and expenses,  if any,
incurred by Landlord,  Tenant and/or the Leasehold  Mortgagee in connection with
the adjustment of the loss (the "Net Insurance Proceeds"), shall be insufficient
in the  reasonable  judgment  of  Landlord  to  pay  the  entire  cost  of  such
Restoration, Tenant shall, to Landlord's reasonable satisfaction, arrange to pay
the  deficiency   prior  to  commencement   or  continuation  of   construction.
Additionally,  if the  estimated  cost  of  such  Restoration  exceeds  the  Net
Insurance Proceeds by either (a) 5% of the then market value of the Improvements
at the time of such  Restoration,  or (b) 10% of the value of Tenant's equity in
the  Improvements,  Landlord  may  require  Tenant,  at  Tenant's  sole cost and
expense,  to furnish  Landlord with a performance  bond and surety bond or other
assurances of completion as shall be satisfactory to Landlord.

     Subject to the reasonable terms for disbursement  included in any Leasehold
Mortgage,  upon the  completion and payment in full of the  Restoration  and the
expiration of all  applicable  lien periods,  and so long as there is no default
under the terms, conditions, covenants and agreements of this Lease, any balance
of the  insurance  proceeds  remaining  to be paid shall be paid to Tenant or to
Leasehold Mortgagee, as their interests may appear.

     Section  8.3. No Release of Tenant's  Obligations.  No  destruction  of, or
damage to the  Improvements or any part thereof by fire or any other cause shall
permit  Tenant  to  surrender  this  Lease  or  shall  relieve  Tenant  from its
obligations  to pay the full Rent  payable  under  this Lease or from any of its
other  obligations  under  this  Lease,  and  Tenant  waives  any  rights now or
hereafter  conferred  upon it by statute or otherwise to quit or surrender  this
Lease or the  Demised  Premises  or any  suspension,  diminution,  abatement  or
reduction  of rent on  account  of any such  destruction  or  damage,  including
specifically the provisions of Section 227 of the New York Real Property Law.



                                       12
<PAGE>

                                   ARTICLE IX

                                  FEE MORTGAGES

     Section 9.1. Current Mortgage.  Landlord currently represents that the Land
is not currently subject to any mortgage.

     Section  9.2.  Future  Mortgages.  Landlord  covenants  that  any  mortgage
encumbering   the  Land  during  the  term  hereof  shall  contain  a  provision
substantially similar to the following:

               "That neither the  mortgagee,  its successors
               or   assigns,   nor   any   purchaser   at  a
               foreclosure sale under such mortgage, nor any
               transferee   under   a  deed   in   lieu   of
               foreclosure  under such  mortgage  shall have
               any  greater  rights  with  respect  to [this
               Lease]   than  the  rights   granted  to  the
               landlord under the terms of [this Lease]."

                                   ARTICLE X

                          ASSIGNMENT, SUBLETTING, ETC.

     Section 10.1. Prohibited Transfers.

     (a) No Rights to  Successors.  No  voluntary  or  involuntary  successor in
interest shall acquire any rights or powers under this Lease.

     (b) No Assignment. Tenant may not assign this Lease or any interest herein,
or otherwise  sell,  transfer or convey any right,  title or interest Tenant may
have in the Demised  Premises,  without first  obtaining the written  consent of
Landlord  which  consent may be  withheld  by Landlord in its sole and  absolute
discretion.  Notwithstanding the immediately preceding sentence to the contrary,
Landlord's  consent  shall not be required for an assignment of this Lease to an
"Affiliated  Entity"  (hereinafter  defined).  An Affiliated Entity shall be any
corporation,   partnership,  joint  venture  or  trust,  at  least  50%  of  the
outstanding  stock  or  partnership  or joint  venture  interest  or  beneficial
interest,  as the case may be, of which is owned by Tenant.  Notwithstanding any
assignment to an Affiliated Entity,  Tenant shall remain liable under this Lease
and Landlord  shall be permitted to enforce the provisions of this Lease against
Tenant  without  proceeding  in any way  against  any other  person  or  entity,
provided  however,  the aforesaid  liability of Tenant shall  terminate upon the
occurrence  of the  Completion  Date except as to  liability of Tenant under the
Lease which has accrued prior to the Completion Date.

     (c)  Transfers   Requiring   Approval  and  Exceptions.   If  Tenant  is  a
partnership,  joint venture, trust or corporation,  any direct or indirect sale,
assignment or other transfer of 50% or more of the  partnership or joint venture
interest (whether in one transaction or as a result of a series of transactions)
or any direct or indirect  sale,  assignment or other transfer of the beneficial
interest in the case of a trust (whether in one  transaction or as a result of a
series of  transactions)  or any direct or indirect  sale,  assignment  or other
transfer  of 50% or more of the  outstanding  voting  stock,  or of any class of
voting  stock if  there is more  than  one  such  class,  of such a  corporation
(whether in one  transaction or as a result of a series of  transactions)  shall
constitute  an  Assignment  by Tenant of this  Lease  for the  purposes  of this
Section and shall not be



                                       13

<PAGE>

permitted  to occur  without  first  obtaining  the written  consent of Landlord
pursuant to Section 10.2.

     Section 10.2. Landlord's Consent to Assignments.

     (a) Generally. If Tenant receives the prior written consent of Landlord, it
may assign all, but only all, of its right, title and interest in this Lease and
the Improvements.

     (b) Limitation on Damages.  If Tenant judicially  contests any disapproval,
it is agreed that no damages shall be payable to Tenant in any such action.

     (c) No Waiver. Landlord's approval of or consent to any proposed Assignment
shall not be a waiver of any right to object to further or future subleasings or
Assignments,  and Landlord's consent to each such successive  Assignment must be
first obtained in writing from Landlord.

     (d) Assumption of Tenant's Obligations.  Before any proposed Assignment can
be effective for any purpose  under this Lease,  including but not limited to an
assignment to an Affiliated Entity, the proposed Assignee must assume in writing
the  performance  of all of the terms,  covenants and  conditions on the part of
Tenant to be performed hereunder from and after the date of such Assignment.

     Section  10.3.  Assignment  Invalid.  Any transfer or  Assignment  to which
Landlord has consented shall be void and shall confer no right of occupancy upon
the proposed Assignee unless and until a written assumption  pursuant to Section
10.2(d) by the proposed Assignee is received by Landlord.

     Section 10.4. Permitted Subletting.

     (a) Generally. Tenant may not enter into a Sublease without first obtaining
Landlord's  prior  written  consent which consent may be withheld by Landlord in
its sole and absolute discretion.  Any Subleases to which Landlord has consented
shall  be  expressly  subject  to the  terms  of this  Lease  and the  following
additional criteria (together with any other criteria established by Landlord in
its sole and absolute discretion):

          (1)   Independent   Subtenants.   Except  as  otherwise   provided  in
     subparagraph  (c) hereof,  all Subleases  shall be with  independent  third
     parties  who  are  not  Affiliates  and  shall  be  based  on  arm's-length
     negotiations between Tenant and such independent third parties.

          (2) Subordination of Subleases.  All Subleases shall provide that they
     shall be subject and  subordinate  not only to this Lease,  but also to any
     new lease made by Landlord as provided in Article XI.

          (3) Consistent with Nature of Project.  All Subleases shall be for use
     which is consistent with the nature of the Improvements.



                                       14

<PAGE>

          (4) Right of  Disapproval.  It is agreed  that  Landlord  shall not be
     liable for any damages in connection with its disapproval of any Sublease.

     (b) Notwithstanding any permitted  subletting,  Tenant shall, at all times,
remain liable for the  performance of all of the covenants and agreements  under
this Lease on its part to be so performed.

     (c)  Notwithstanding  anything  contained in this Article to the  contrary,
Landlord's  consent  shall not be required  for a  subletting  to an  Affiliated
Entity  provided such sublease is in compliance  with  subparagraphs  (a)(2) and
(a)(3) hereof..

                                   ARTICLE XI

                               LEASEHOLD MORTGAGES

     Section 11.1. Leasehold Mortgages.  Tenant shall have the right at any time
and from time to time to mortgage  its  interest in this Lease under one or more
Leasehold Mortgages,  and to assign this Lease and any Sublease(s) as collateral
security for such Leasehold Mortgage(s). If Tenant shall mortgage this Lease and
if the Leasehold  Mortgagee  shall send to Landlord a true copy of the Leasehold
Mortgage  together with written  notice  specifying  the name and address of the
Leasehold Mortgagee, Landlord agrees that so long as any such Leasehold Mortgage
shall remain  unsatisfied of record or until written notice of  satisfaction  is
given by the holder thereof to Landlord, the following provisions shall apply:

     (a) There shall be no cancellation, surrender or modification of this Lease
by joint action of Landlord and Tenant  without the prior  consent in writing of
the Leasehold Mortgagee.

     (b) Landlord  shall,  upon serving Tenant with any notice of Default (which
notice shall specify the nature of the Default) or  termination,  simultaneously
serve a copy  of  such  notice  upon  the  Leasehold  Mortgagee.  The  Leasehold
Mortgagee  shall  thereupon  have the same period as provided the Tenant,  after
service of such notice upon it, to remedy or cause to be remedied  the  defaults
complained  of, and the  Landlord  shall  accept such  performance  by or at the
instigation of such Leasehold  Mortgagee as if the same had been done by Tenant;
provided  however,  upon the  occurrence  of an Event of Default  under  Section
16.1(a),  Leasehold  Mortgagee  shall have thirty (30) days after written notice
from Landlord to remedy or cause to have remedied such default thereunder.

     Section 11.2.  Nullification of Defaults.  Notwithstanding  anything to the
contrary  herein  contained,  if any Default  shall occur which  pursuant to any
provision of this Lease entitles Landlord to terminate this Lease and if, before
the  expiration  of thirty  (30) days from the date of  service of a copy of the
notice of termination  upon a Leasehold  Mortgagee  pursuant to Section 11.1(b),
the leasehold  Mortgagee  shall have notified  Landlord of its desire to nullify
such  notice  (such  notification  from the  Leasehold  Mortgagee  being  herein
referred to as a "Nullification  Notice"), then in such event Landlord shall not
be entitled to  terminate  this Lease by reason of the Default  specified in the
Nullification  Notice and any notice of termination  theretofore  given shall be
void and of no effect,  provided  that within  thirty (30) days after service of
the Nullification  Notice the Leasehold  Mortgagee shall have cured any monetary
Defaults


                                       15

<PAGE>

then existing hereunder and shall either have (a) complied or commenced the work
of complying with any  nonmonetary  obligations  then in default (and diligently
and  continuously  prosecutes  same to  completion)  or (b)  acquired or sold or
commenced the process of acquiring or selling Tenant's interest in this Lease by
foreclosure of the Leasehold Mortgage or otherwise.

     Section 11.3. Curing of Defaults. If Landlord's notice of termination shall
have been nullified pursuant to Section 11.2,  Landlord shall not have the right
subsequently  to terminate this Lease so long as the Leasehold  Mortgagee or its
nominee or successor  continues to pay the Rent due hereunder and either (a) the
Leasehold  Mortgagee  or its  nominee  proceeds  with  reasonable  diligence  to
complete or cause the  completion  of the work of curing  non-monetary  Defaults
(and diligently and  continuously  prosecutes  same to  completion),  or (b) the
Leasehold Mortgagee or its nominee proceeds with reasonable diligence to acquire
or sell  Tenant's  interest  in this  Lease  by  foreclosure  or  otherwise  and
following such  acquisition  or sale, the Leasehold  Mortgagee or its nominee or
any  purchaser  or  assignee of Tenant's  interest in this Lease  proceeds  with
reasonable  diligence to complete or cause the  completion of the work of curing
non-monetary  Defaults,  which are susceptible of cure by Leasehold Mortgagee or
its  nominee.  The  giving of a notice of  Default or  termination  by  Landlord
pursuant to the provisions of this Article does not impair  Landlord's  right to
give, nor impair Tenant's and the Leasehold  Mortgagee's right to receive,  such
notices  for other  Defaults  that may arise  hereunder,  and the giving of such
notices shall be subject to the provisions of this Article.

     Section 11.4.  Replacement Leases.  Landlord agrees that, in the event of a
termination  of  this  Lease,  Landlord  shall  upon  request  of any  Leasehold
Mortgagee (and whether or not a Nullification  Notice may have been given) enter
into a new lease of the Land with the  Leasehold  Mortgagee or its nominee for a
term equal to what would  have been the  remainder  of the term of this Lease if
this Lease had not been terminated, which new lease shall be effective as of the
date of such  termination and shall be at the same Rent and upon the same terms,
provisions,  covenants and  agreements as are herein  contained  (including  any
right to  extend  the term of this  Lease and the  provisions  set forth in this
Article XI),  subject only (a) to the same  conditions of title as this Lease is
subject to on the date of the execution  hereof and any liens or encumbrances or
other  matters  (i) which  were  caused or  created  by  Tenant,  (ii) which are
required by law or (iii) which the Tenant was  obligated to discharge  under the
terms of this Lease and (b) to the rights, if any, of parties then in possession
of any part of the Demised Premises, provided that:

          (a) Said Leasehold  Mortgagee shall make written request upon Landlord
     for such new lease within  thirty (30) days after the  termination  of this
     Lease;

          (b) Said Leasehold Mortgagee or its nominee executes and delivers such
     new lease within  thirty (30) days after the  execution and delivery of the
     new lease by  Landlord  to said  Leasehold  Mortgagee  in  response  to the
     request made pursuant to subparagraph (a) above;

          (c) Said  Leasehold  Mortgagee or its nominee shall pay to Landlord at
     the time of the  execution  and delivery of said new lease any and all sums
     which  would at the  time of the  execution  and  delivery  thereof  be due
     pursuant to this Lease but for such  termination,  together  with any costs
     and expenses,  including  reasonable  attorney's fees, which Landlord shall
     have incurred by reason of such Default;



                                       16

<PAGE>

          (d) Said Leasehold Mortgagee or its nominee upon the execution of such
     new lease  cures  within  thirty (30) days  thereof  (unless  such  Default
     requires work to be performed, acts to be done, or conditions to be removed
     which cannot by their nature reasonably be performed,  done or removed,  as
     the case may be,  within  such  thirty  (30) day  period  in which  case no
     Default  shall be deemed  to exist so long as  Leasehold  Mortgagee  or its
     nominee  shall have  commenced  curing the same within such thirty (30) day
     period  and  shall  diligently  and  continuously  prosecute  the  same  to
     completion) all non-monetary Defaults of which it has notice (and which are
     susceptible  of cure  by  Leasehold  Mortgagee  or its  nominee)  remaining
     uncured  under this lease as of the date of  execution  and delivery of the
     new lease;

          (e) Landlord shall not warrant  possession of the Demised  Premises to
     the tenant under the new lease or title to the Improvements, but the tenant
     under such new lease shall have the same right,  title and  interest in and
     to the  Improvements  as  Tenant  had  therein  and  thereto  prior  to the
     termination of this Lease; and

          (f) Such new lease shall be made expressly  subject to the rights,  if
     any, of the Tenant under this Lease.

     Section 11.5.  Written  Assurances.  Landlord  shall upon Tenant's  request
execute,  acknowledge  and deliver to Tenant and/or each Leasehold  Mortgagee an
agreement prepared at the cost and expense of Tenant and in form satisfactory to
such  Leasehold  Mortgagee,  confirming  all or any of the  provisions  of  this
Article.

     Section  11.6.  Landlord's  Costs and  Expenses.  The  Leasehold  Mortgagee
receiving any new lease pursuant to the provisions of this Article shall pay all
of Landlord's reasonable costs and expenses (including attorney's fees) incident
to Landlord's entering into such new lease.

     Section 11.7. No Merger. So long as any Leasehold Mortgage is in existence,
unless all Leasehold  Mortgagees shall otherwise  expressly  consent in writing,
the fee title to the Land and the  Leasehold  Estate shall not merge,  but shall
remain separate and distinct,  notwithstanding the acquisition of both fee title
to the Demised Premises and the Leasehold Estate by Landlord,  or by Tenant,  or
by any Leasehold Mortgagee, or by any other party.

     Section 11.8. Priority.  In the event that there is more than one Leasehold
Mortgage  affecting the Leasehold Estate, the most senior Leasehold Mortgage has
priority in terms of exercising the rights of a Leasehold  Mortgagee pursuant to
the  provisions  of this  Article.  Notwithstanding  the  immediately  preceding
sentence  to the  contrary,  the  aforesaid  rights  may be  exercised  under  a
Leasehold Mortgage,  other than the most senior Leasehold  Mortgage,  provided a
written  intercreditor  agreement is submitted to Landlord  which  evidences the
authority of said Leasehold Mortgagee to exercise said rights.

     Section 11.9. Leasehold Mortgage Assignment. Leasehold Mortgagee may assign
this Lease  provided (i) an  assumption  agreement is executed by said  assignee
pursuant to Section  10.2(d) and (ii) said  assignee  has a financial  net worth
sufficient to discharge  the  obligations  of Tenant  hereunder as determined by
Landlord in its discretion reasonably exercised.



                                       17

<PAGE>

     Section  11.10.  Option  Rights.  In the event  Leasehold  Mortgagee  shall
acquire Tenant's leasehold interest  hereunder,  Leasehold  Mortgagee shall have
all of Tenant's rights hereunder, including, but not limited to, Tenant's rights
under Article XXIX, and be subject to all obligations of Tenant under this Lease
except as may be otherwise expressly provided herein.

                                  ARTICLE XII

                           REPRESENTATIONS BY LANDLORD

     Section  12.1.  Representations  by  Landlord.  Tenant  accepts the Demised
Premises  in the  existing  condition,  and Tenant  agrees that except as may be
specifically  set  forth  in  this  Lease,  no  representations,   statement  or
warranties,  express or  implied,  have been made by or on behalf of Landlord in
respect thereof or in respect of the condition  thereof or the use or occupation
that may be made  thereof  and that  Landlord  shall in no event  whatsoever  be
liable for any latent or patent defects therein. Notwithstanding the immediately
preceding sentence, Landlord represents, solely to Leasehold Mortgagee, (i) upon
information and belief without independent inquiry that the building permits for
the construction of the  Improvements,  have been issued by the Municipality and
(ii)  attached  hereto as Exhibit "E" is a copy of the  resolution of the common
council of the  Municipality  evidencing the approval by the Municipality of the
Contract and this Lease.

                                  ARTICLE XIII

                    LANDLORD NOT LIABLE FOR INJURY OR DAMAGE

     Section 13.1. Landlord Not Liable. Except for injury, loss or damage caused
by  the  negligent  acts  of  Landlord,  its  agents,  servants,   employees  or
contractors, Landlord shall not in any event whatsoever be liable for any injury
or damage to any property or to any person happening on, in or about the Demised
Premises  or the  appurtenances  thereto,  nor for any  injury  or damage to the
Demised  Premises,  or to any  property  belonging to Tenant or any other person
which may be caused by any fire,  breakage,  leakage or defect or by water, rain
or snow that may leak into,  issue or flow from any part of the Demised Premises
or which may arise from any other cause whatsoever.

                                  ARTICLE XIV

                     INDEMNIFICATION OF LANDLORD AND TENANT

     Section  14.1.  Indemnification  of  Landlord.  In  addition  to any  other
indemnities  to  Landlord  specifically  provided in this  Lease,  Tenant  shall
indemnify and save harmless  Landlord against and from all  liabilities,  suits,
obligations,  fines,  damages,  penalties,  claims, costs, charges and expenses,
including reasonable attorneys fees, which may be imposed upon or incurred by or
asserted  against  Landlord,  its  agents or  employees  by reason of any of the
following occurring during the term of this Lease:

          (a) any work or thing done in, on or about the Demised Premises or any
     part thereof;

          (b) any use,  non-use,  possession,  occupation,  alteration,  repair,
     condition, operation, maintenance or management of the Demised Premises, or
     any part thereof or of any street, alley, sidewalk, curb, vault, passageway
     or space adjacent thereto;



                                       18

<PAGE>

          (c) any  negligence  on the part of Tenant or any  subtenant or any of
     its or their agents, contractors, servants, employees or licensees;

          (d) any accident,  injury (including death) or damage to any person or
     property occurring in, on or about the Demised Premises or any part thereof
     or in, on or about any street, alley, sidewalk,  curb, vault, passageway or
     space adjacent thereto;

          (e) any failure on the part of Tenant to perform or comply with any of
     the covenants,  agreements,  terms or conditions contained in this Lease or
     any easements,  sublease, license or concession agreement on its part to be
     performed or complied with;

          (f) any liability which may be asserted against  Landlord  relating to
     (i) the use of the Demised  Premises or (ii) a default or breach  under the
     Contract but only to the extent that Tenant has "Contract  Obligations" (as
     defined in section 28.3) thereunder pursuant to Section 28.3 hereof; and

          (g) any and all liabilities, claims and causes of action arising under
     the  terms  and  conditions  of  every  sublease,   license  or  concession
     agreement.

     The  indemnities  in favor of Landlord  contained  in this  Section and any
other indemnity specifically provided to Landlord under this Lease shall survive
the termination of this Lease.

     Section  14.2.  Negligence  of  Landlord.  Notwithstanding  anything to the
contrary contained in this Lease, Tenant shall not indemnify Landlord or relieve
Landlord from  responsibility to Tenant for any injury, loss or damage caused by
the negligent or improper acts or omissions of Landlord,  its agents,  servants,
employees or  contractors  or any acts or  omissions  of  Landlord,  its agents,
servants, employees or contractors in violation of the terms of this Lease.

     Section 14.3.  Indemnification of Tenant. Landlord shall indemnify and save
harmless Tenant against and from all  liabilities,  suits,  obligations,  fines,
damages, penalties,  claims, costs, charges, and expenses,  including reasonable
attorney's  fees,  which may be imposed upon or incurred by or asserted  against
Tenant, its agents or employees, by reason of any default by Landlord under this
Lease or the  Contract.  The  indemnities  in favor of Tenant  contained in this
Lease shall survive the termination of this Lease.

     Section 14.4. Notice of Claim. Tenant or Landlord as the case may be, shall
be given  notice  of any  claim  which  might  give  rise to its  obligation  to
indemnify  Landlord  or Tenant as the case may be  pursuant to the terms of this
Lease.

                                   ARTICLE XV

                           LANDLORD MAY CURE DEFAULTS

     Section  15.1.  Cure By  Landlord.  If Tenant  shall be in  default  in the
performance  of any of its  obligations  under this Lease beyond any  applicable
notice or cure period,  Landlord may do whatever is reasonably necessary to cure
such default for the account and at the expense of Tenant; and the amount of any
payment made or expense  incurred by Landlord for such  purpose,  with  interest
thereon at highest rate  permitted by law, shall be


                                       19

<PAGE>

deemed  additional  rent and  shall be paid by  Tenant to  Landlord  on  demand,
provided  however,  that  Landlord  shall be under no  obligation  to cure  said
default.  Notwithstanding  any provision of this Lease to the  contrary,  in the
event Landlord  elects to exercise its rights under this Section 15. 1, Landlord
shall give five (5) days prior notice thereof to Tenant and Leasehold Mortgagee.

                                  ARTICLE XVI

                DEFAULTS, CONDITIONAL LIMITATIONS, REMEDIES, ETC.

     Section 16.1.  Events of Default.  Each of the following events shall be an
"Event of Default" hereunder:

          (a)  Failure  of  Tenant  to pay any  installment  of Rent or any part
     thereof or any other payment of money,  costs or expenses  herein agreed to
     be paid by Tenant,  when due,  and the  continuance  of such  failure for a
     period of ten (10) days after written notice from Landlord  specifying such
     failure;

          (b)  Failure of Tenant to observe or perform  one or more of the other
     terms,   conditions,   covenants  or  agreements  of  this  Lease  and  the
     continuance  of such failure for a period of thirty (30) days after written
     notice by Landlord specifying such failure;

          (c) Tenant vacates or abandons the Premises;

          (d) Except as may be otherwise permitted under the terms of this Lease
     for the  benefit  of a  Leasehold  Mortgagee,  this  Lease  or the  Demised
     Premises or any part of the Demised Premises are taken upon execution or by
     other process of law directed against Tenant,  or are taken upon or subject
     to any  attachment  at the  instance of any  creditor  or claimant  against
     Tenant,  and the  attachment is not  discharged or disposed of within sixty
     (60) days after its levy.

          (e)  Tenant  files a  petition  in  bankruptcy  or  insolvency  or for
     reorganization  or  arrangement  under the  bankruptcy  laws of the  United
     States or under any  insolvency  act of any state,  or admits the  material
     allegations of any such petition by answer or otherwise, or is dissolved or
     makes an assignment for the benefit of creditors.

          (f)  Involuntary   proceedings   under  any  such  bankruptcy  law  or
     insolvency  act or for the  dissolution  of Tenant are  instituted  against
     Tenant,  or a receiver or trustee is appointed for all or substantially all
     of the property of Tenant,  and such  proceeding  is not  dismissed or such
     receivership  or  trusteeship  vacated  within  ninety (90) days after such
     institution or appointment.

          (g) Tenant fails to take  physical  possession  of the Premises on the
     Commencement Date.

          (h) A default  by  Tenant  under the  "Option  Contract"  (hereinafter
     defined).

     Section  16.2.  Termination  Upon  Default.  Subject to the  provisions  of
Article  XI and  Article  XXIX,  if an  Event of  Default  shall  occur  (and be
continuing),  Landlord,  at any time thereafter,  may at its option give written
notice to Tenant  stating  that this  Lease and the term  hereby  demised  shall
expire and  terminate on the date  specified  in such notice,  and upon the date
specified in such notice,  this Lease and the term hereby demised and all rights
of the Tenant


                                       20

<PAGE>

under this Lease shall expire and terminate as if that date were the date herein
definitely fixed for the termination of the term of this Lease, and Tenant shall
quit and surrender the Demised Premises.

     Section 16.3.  Recovery of Demised  Premises.  Subject to the provisions of
Article XI and Article XXIX,  if any Event of Default shall occur,  Landlord may
without  notice  re-enter and  repossess the Demised  Premises  expel Tenant and
those claiming  through or under Tenant and remove the effects of both or either
using  such  force  for  that  purpose  as may be  necessary  and  proper  under
applicable  law  without  being  liable to  indictment,  prosecution  or damages
therefor.

     Section 16.4.  Damages.  In the event of the  termination of this Lease, or
the  re-entry  or  repossession  of the  Demised  Premises  (as above set forth)
Landlord shall be entitled to such  remedies,  rights and damages as are granted
by applicable law including, but not limited to, acceleration of Rent.

     Section  16.5.  Receipt of Monies.  No receipt of monies by  Landlord  from
Tenant  after  termination  of this Lease,  or after the giving of any notice of
termination of this Lease, shall reinstate,  continue or extend the term of this
Lease or affect any notice  theretofore  given to Tenant, or operate as a waiver
of the right of  Landlord  to enforce  the  payment of Rent and any other sum or
sums of money and other charges herein  reserved and agreed to be paid by Tenant
then due or  thereafter  falling  due,  or  operate  as a waiver of the right of
Landlord to recover possession of the Land by proper remedy.

     Section 16.6.  Waiver.  Subject to the provisions of Article XI, no failure
by  Landlord or Tenant to insist upon the strict  performance  of any  covenant,
agreement,  term or  condition  of this Lease or to exercise any right or remedy
consequent upon a breach  thereof,  and no acceptance of full or partial Rent by
Landlord during the continuance of any such breach, shall constitute a waiver of
any such breach or of such covenant,  agreement, term or condition. No covenant,
agreement,  term or condition of this Lease to be performed or complied  with by
Tenant or Landlord,  and no breach thereof, shall be waived, altered or modified
except by a written  instrument  executed by both Landlord and Tenant. No waiver
of any breach  shall  affect or alter this Lease,  but each and every  covenant,
agreement,  term and  condition  of this Lease shall  continue in full force and
effect with respect to any other then existing or subsequent breach thereof.

     Section 16.7.  Acceleration  of Rent.  Subject to the provisions of Article
XI, if any Event of  Default  shall  occur,  Landlord  may  accelerate  all Rent
required to be paid by Tenant  under the terms of this Lease  during the balance
of the Term and  declare  the same to be  immediately  due and payable by giving
Tenant notice of such acceleration and declaration.

     Section  16.8.  Right to Relet and  Damages  Upon  Reentry.  Subject to the
provisions  of Article  XI,  should  Landlord  elect to reenter as  provided  in
Section 16.3, or should Landlord take possession  pursuant to legal  proceedings
or pursuant  to any notice  provided by law,  Landlord  may,  from time to time,
without  terminating  this Lease,  relet the Demised Premises or any part of the
Demised  Premises in Landlord's or Tenant's name, but for the account of Tenant,
for such term or terms (which may be greater or less than the period which



                                       21

<PAGE>

would otherwise have constituted the balance of the Term) and on such conditions
and upon such  other  terms  (which  may  include  concessions  of free rent and
alteration and repair of the Demised  Premises) as Landlord,  in Landlord's sole
discretion,  may  determine,  and  Landlord  may  collect  and receive the rent.
Landlord  will in no way be  responsible  or liable for any failure to relet the
Demised  Premises  or any part of the  Demised  Premises,  or for any failure to
collect any rent due upon such reletting.  No such reentry or taking  possession
of the  Demised  Premises  by  Landlord  will be  construed  as an  election  on
Landlord's  part to terminate  this Lease  unless a notice of such  intention is
given to Tenant.  No such reentry or repossession of the Demised  Premises shall
relieve Tenant of its liability and obligations  under this Lease,  all of which
shall  survive  such  reentry  or  repossession.  Landlord  reserves  the  right
following  any  such  reentry  or  reletting  to  exercise  Landlord's  right to
terminate  this Lease by giving  Tenant such  notice,  in which event this Lease
will terminate as specified in such notice.

     If Landlord does not elect to terminate  this Lease as permitted in Section
16.2, but elects to take possession as provided in Section 16.3, Tenant will pay
to Landlord:  (a) Rent and other sums as provided in this Lease,  which would be
payable under this Lease if such repossession had not occurred, less (b) the net
proceeds,  if  any,  of  any  reletting  of the  Premises  after  deducting  all
Landlord's  reasonable  expenses in connection with such  reletting,  including,
without limitation,  all repossession costs, brokerage  commissions,  attorneys'
fees,  expenses  of  employees,  alteration  and repair  costs and  expenses  of
preparation  for such reletting.  If, in connection with any reletting,  the new
lease term extends beyond the existing Term, or the premises covered by such new
lease include other premises not part of the Premises,  a fair  apportionment of
the rent  received from such  reletting and the expenses  incurred in connection
with such reletting as provided in this Section will be made in determining  the
net  proceeds  from such  reletting,  and any rent  concessions  will be equally
apportioned over the term of the new lease.  Tenant will pay such rent and other
sums to  Landlord  monthly on the day on which the Rent would have been  payable
under  this Lease if  possession  had not been  retaken,  and  Landlord  will be
entitled to receive such Rent from Tenant on each such day.

     Section 16.9. Cumulative Rights. Each right and remedy of Landlord provided
for in this Lease  shall be  cumulative  and shall be in addition to every other
right or remedy provided for in this Lease, and the exercise or beginning of the
exercise by Landlord of any one or more of the rights or remedies  provided  for
in this Lease shall not preclude the  simultaneous or later exercise by Landlord
of any or all other rights or remedies provided for in this Lease.

     Section 16.10.  Costs and Expenses.  Tenant shall pay to Landlord all costs
and expenses,  including  reasonable  attorneys'  fees,  incurred by Landlord in
enforcing any of the covenants and  provisions of this Lease and incurred in any
action  brought  on  account  of the  provisions  hereof,  and all  such  costs,
expenses, and attorneys' fees may be included in and form a part of any judgment
entered in any  proceeding  brought by Landlord  against Tenant on or under this
Lease.

                                  ARTICLE XVII

                                     NOTICES

     Section 17.1. Notices.  Whenever it is provided herein that notice, demand,
request or other communication shall or may be given to or served upon either of
the parties by


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<PAGE>

the other, and whenever either of the parties shall desire to give or serve upon
the other any notice, demand, request or other communication with respect hereto
or to the Land, each such notice,  demand,  request or other communication shall
be in writing and, any law or statute to the contrary notwithstanding,  shall be
effective for any purpose if given or served as follows:

          (a) If by  Landlord,  by mailing the same to Tenant by  registered  or
     certified  mail postage  prepaid,  return receipt  requested,  addressed to
     Tenant  at  10  Alvin  Court,  East  Brunswick,  New  Jersey  08816,  Attn:
     President,  or at such  other  address  as  Tenant  may  from  time to time
     designate by notice given to Landlord by registered or certified mail.

          (b) If by Tenant,  by mailing the same to Landlord  by  registered  or
     certified mail,  postage prepaid,  return receipt  requested,  addressed to
     Landlord at 620 Main Street Buffalo, New York 14202, Attn: President of the
     Buffalo  Enterprise  Development  Corporation,  or at such other address as
     Landlord  may from  time to time  designate  by  notice  given to Tenant by
     registered or certified mail.

     Every notice,  demand,  request or other  communication  hereunder shall be
deemed to have been given or served two (2) days following the post mark date.

                                 ARTICLE XVIII

                                  CONDEMNATION

     Section 18.1. Effect of Condemnation. If at any time during the term of the
Lease, all or  substantially  all of the Demised Premises shall be taken for any
public or quasi-public  purpose by any lawful power or authority by the exercise
of the right of condemnation or eminent domain or by agreement between Landlord,
Tenant and those  authorized  to exercise  such  right,  this Lease and the term
hereby granted shall  terminate and expire on the date of such taking,  the Rent
shall be  apportioned  and paid to the date of such  taking and any awards  with
respect to such  taking  shall be  apportioned  between  Landlord  and Tenant as
provided in Section 18.2. If less than all, or substantially all, of the Demised
Premises  shall be taken as  aforesaid,  this  Lease and the term  hereof  shall
continue with abatement of the Rent in an amount equal to the product of (i) the
Rent that would otherwise be payable if there was no taking,  multiplied by (ii)
a fraction,  the  numerator of which is the number of square feet of the Demised
Premises  remaining  after the taking and the denominator of which is the number
of square feet  contained in the Demised  Premises  before any taking.  The term
"all or substantially  all of the Demised Premises" shall be deemed to mean such
portion of the Demised Premises as when so taken would leave remaining a balance
of the Demised  Premises  which,  due either to the area or the  location of the
part so taken in relation to the part not so taken,  would not,  under  economic
conditions,  zoning laws or building  regulation  then  existing or  prevailing,
readily  accommodate  an altered or new  building or  buildings  of a nature and
floor area  sufficient,  together with such portion of the Demised  Premises not
taken in the condemnation,  to reasonably permit the economically  viable use of
the Demised Premises by Tenant.

     Section  18.2.  Condemnation  Awards.  In the  event  of  taking  of all or
substantially all of the Demised Premises,  the net award (or settlement in lieu
thereof)  shall be  payable  to the  Tenant  and  Landlord  by paying to (a) the
Landlord,  an amount  equal to the value of  Landlord's  interest in the Demised
Premises,  subject to this Lease (valued  immediately prior



                                       23

<PAGE>

to the  taking),  and (b) to the Tenant (or  Leasehold  Mortgagee if so required
pursuant to any  Leasehold  Mortgage)  an amount  equal to the value of Tenant's
interest under this Lease (valued immediately prior to the taking). In the event
the balance of the award is not  sufficient to fully pay the  aforesaid  amounts
due to Landlord  and Tenant,  or the balance of award  exceeds the  aggregate of
such sums,  then  Landlord  and Tenant shall share such balance of the amount in
the same  proportion as the  respective  amounts due to each of them pursuant to
the provisions of this Section 18.2 bear to the total of said amounts.

     Section 18.3.  Partial Taking.  In the event less than all or substantially
all of the  Demised  Premises,  is taken,  the total  award  shall be payable to
Tenant for utilization in the restoration and repair of the Demised  Premises to
as near their former condition as circumstances  will permit.  After application
of the award for such restoration,  any balance of the award shall be payable in
the same manner as set forth in Section 18.2.

     Section 18.4.  Date of Taking.  For the purpose of this Article XVIII,  the
Demised Premises or a part thereof,  as the case may be, shall be deemed to have
been taken or condemned on the date on which  actual  possession  of the Demised
Premises  and/or a part  thereof,  as the case may be, is acquired by any lawful
power or  authority  or the date on which  title  vests  therein,  whichever  is
earlier.

     Section 18.5.  Temporary Takings.  In case of any governmental  action, not
resulting in the taking or condemnation  of any portion of the Demised  Premises
but creating a right to compensation therefor, such as the changing of the grade
of any street upon which the Land abuts, this Lease shall continue in full force
and effect  without  reduction or abatement of Rent, and the award shall be paid
to Tenant as its sole property.

                                  ARTICLE XIX

                       CERTIFICATES BY LANDLORD AND TENANT

     Section 19.1. Tenant's Certificate. Tenant agrees at any time and from time
to time (as may be reasonable) upon not less than twenty (20) days' prior notice
by  Landlord  to execute,  acknowledge  and  deliver to Landlord a statement  in
writing  certifying  that this Lease is unmodified  and in full force and effect
(or if there have been modifications, that the same are in full force and effect
as modified and stating the  modifications)  and the dates to which the Rent has
been paid in advance,  if any, and stating  whether or not to the best knowledge
of the signer of such  certificate  Landlord is in default in performance of any
covenant,  agreement or condition contained in this Lease and, if so, specifying
each such default of which the signer may have knowledge.

     Section 19.2. Landlord's Certificate.  Landlord agrees at any time and from
time to time (as may be reasonable),  upon not less than twenty (20) days' prior
notice by Tenant or Leasehold  Mortgagee to execute,  acknowledge and deliver to
Tenant and Leasehold Mortgagee a statement in writing certifying that this Lease
is  unmodified  and in full  force  and  effect  (or if there  shall  have  been
modifications, that the same is in full force and effect as modified and stating
the modifications) and the dates to which the Rent has been paid in advance,  if
any,  and  stating  whether or not to the best  knowledge  of the signer of such
certificate



                                       24

<PAGE>

Tenant is in default in the performance of any covenant,  agreement or condition
contained in this Lease,  and, if so,  specifying each such default of which the
signer may have knowledge.

                                   ARTICLE XX

                                    CONSENTS

     Section  20.1.  Landlord-Tenant.  It is  understood  and  agreed  that  the
granting  of any  consent  by  either  party  to the  other to  perform  any act
requiring  consent under the terms of this Lease,  or the failure on the part of
any party to object  to any such  action  taken  without  consent,  shall not be
deemed a waiver  by the party of its  rights to  require  such  consent  for any
further similar act.

                                  ARTICLE XXI

                            SURRENDER AT END OF TERM

     Section  21.1.  Surrender.  On the last day of the term  hereof or upon any
earlier  termination  of this Lease  (unless  Tenant has  acquired  title to the
Demised Premises  pursuant to Article XXIX), or upon a re-entry by Landlord upon
the Land pursuant to Article XVI hereof,  Tenant shall well and truly  surrender
and deliver up to Landlord the Demised  Premises free and clear of all liens and
encumbrances  other than those, if any,  existing at the date hereof, or created
by  Landlord or  subsequent  owners of the Demised  Premises,  and,  without any
payment or allowance  whatever by Landlord.  Tenant hereby waives any notice now
or hereafter  required by law with  respect to vacating the Demises  Premises on
any  such  termination  date.  Title  to any  Improvements  on the  Land  at the
termination  of this Lease shall pass to Landlord  without the  necessity of any
payment  therefor.  At the  end of the  Term,  Tenant  will  promptly  quit  and
surrender the Demised Premises broom-clean,  in good order and repair,  ordinary
wear and tear excepted. If Tenant is not then in default, Tenant may remove from
the Demised Premises any trade fixtures, equipment and moveable furniture placed
in the Demised  Premises by Tenant,  whether or not the same are fastened to the
Improvements  thereon;  provided  Tenant  will not remove any trade  fixtures or
equipment without Landlord's prior written consent if such fixtures or equipment
are used in the  operation  of the Demised  Premises or removal of the same will
result in impairing the structural strength of the Improvements.  Whether or not
Tenant is in default,  Tenant will remove  such  Improvements,  trade  fixtures,
equipment  and  furniture  as  Landlord  may  request  at its  sole  option  and
discretion. Tenant will fully repair any damage occasioned by the removal of any
trade fixtures, equipment, furniture,  alterations,  additions and Improvements.
All trade  fixtures,  equipment,  furniture,  inventory,  effects,  alterations,
additions and  Improvements  not so removed will be deemed  conclusively to have
been abandoned and may be  appropriated,  sold,  stored,  destroyed or otherwise
disposed of by Landlord without notice to Tenant or any other person and without
obligation to account for them;  and Tenant will reimburse to Landlord on demand
all expenses  incurred in  connection  with such  property,  including,  but not
limited  to,  the cost of  repairing  any damage to the  Premises  caused by the
removal of such  property.  Tenant's  obligation  to observe  and  perform  this
covenant will survive the expiration or other termination of this Lease.





                                       25

<PAGE>

                                  ARTICLE XXII

                               NO ORAL AGREEMENTS

     Section 22.1.  Agreements in Writing. This Lease contains all the promises,
agreements,  conditions,  inducements and  understandings  between  Landlord and
Tenant relative to the Land and there are no promises,  agreements,  conditions,
understandings,  inducements,  warranties or  representations,  oral or written,
expressed or implied, between them other than as herein set forth.

                                 ARTICLE XXIII

                                 QUIET ENJOYMENT

     Section 23.1. Quiet Enjoyment.  Landlord  covenants that, if and so long as
Tenant shall faithfully perform the agreements,  terms, covenants and conditions
hereof, Tenant shall and may peaceably and quietly have, hold and enjoy the Land
for the term  hereby  granted  without  molestation  or  disturbance  by or from
Landlord or any party claiming through Landlord.

                                  ARTICLE XXIV

                        INVALIDITY OF CERTAIN PROVISIONS

     Section 24.1. Partial Invalidity. If any term or provision of this Lease or
the application thereof to any person or circumstances  shall, to any extent, be
invalid or  unenforceable,  the remainder of this Lease,  or the  application of
such term or provision to persons or circumstances  other than those as to which
it is held invalid or  unenforceable,  shall not be affected  thereby,  and each
term and  provision  of this Lease shall be valid and be enforced to the fullest
extent permitted by law.

                                  ARTICLE XXV

                             RECORDING OF MEMORANDUM

     Section 25.1. Memoranda. Landlord and Tenant will, upon the written request
of the other,  join in the execution of a memorandum of lease in proper form for
recordation.  Any  recordation  thereof and New York State  transfer  stamps due
thereon shall be at Tenant's sole cost and expense.

                                  ARTICLE XXVI

                                SECURITY DEPOSIT

     Tenant has deposited  with Landlord the sum of Fifteen  Thousand and 00/100
($15,000.00)  Dollars  ("Security  Deposit")  as an  inducement  to  Landlord to
purchase the Demised Premises from the Municipality.  In consideration  thereof,
Tenant hereby agrees and stipulates that the Security Deposit is non-refundable.
Notwithstanding  anything contained in the immediately preceding sentence to the
contrary,  Landlord  shall  disburse the Security  Deposit to Tenant for general
landscaping,  fencing  and  exterior  security  relating  to  the  Project  upon
submission of receipted invoices to Landlord and the approval by Landlord of (i)
said invoices and (ii) the completion and quality of the aforesaid work.



                                       26
<PAGE>

                                 ARTICLE XXVII

                                ENTRY BY LANDLORD

     Landlord,  and  Landlord's  agents  and  employees  may enter  the  Demised
Premises  at any  reasonable  hour upon  24-hour  prior  notice to Tenant to (a)
inspect the same,  (b) exhibit the same to  prospective  purchasers,  lenders or
tenants,  or (c)  determine  whether  Tenant  is  complying  with  all  Tenant's
obligations under this Lease.

                                 ARTICLE XXVIII

                            INCORPORATION OF CONTRACT

     Section 28.1. General Statement. It is understood and agreed by and between
Landlord  and Tenant that  Landlord's  acquisition  of the  Demised  Premises is
pursuant  to the  Contract  and that the  Demised  Premises  is  subject  to the
Contract.

     Section 28.2.  Incorporation.  The Contract is hereby incorporated into and
made a part of the terms of this Lease.

     Section 28.3.  Tenant's Contract  Obligations.  Tenant hereby covenants and
agrees to  perform  and comply  with all terms and  conditions  of the  Contract
including  but not  limited to all  covenants  in the  Contract  relating to the
improvement,   use  and/or  operation  of  the  Demised  Premises  (collectively
"Contract Obligations") and hereby assumes all Contract Obligations set forth in
the Contract.  Notwithstanding  anything contained in this Article XXVIII to the
contrary,  Tenant  does not agree to perform or comply  with any of the terms or
conditions of the Contract or  obligations of the Contract set forth in Sections
1, 2, 3, 5(A) (excepting  Section 5(A) Eleventh and 5(A) Twelfth),  5(D), 5(E)v,
and 5(E)vi  thereof.  Tenant  hereby  further  covenants and agrees that it will
consent to, join in the execution of and/or subordinate its rights in this Lease
to the  easements  described in the Contract,  a copy of the easement  agreement
containing said easements being attached hereto as Exhibit "D".

                                  ARTICLE XXIX

                               OPTION TO PURCHASE

     Section 29.1. Option. In consideration of the sum of One Dollar and No More
($1.00 and No More) paid to Landlord,  Landlord hereby grants,  bargains,  sells
and conveys to Tenant the option (the "Option") to purchase the Demised Premises
and  all  rights  and  appurtenances   pertaining  thereto,   including  without
limitation  all of  Landlord's  right,  title and  interest  in and to  adjacent
streets,  alleys,  rights of way and easements at the applicable  purchase price
("Purchase  Price") determined in accordance with the provisions of Section 29.2
hereof. The term of the Option shall commence on the Commencement Date and shall
expire on the earlier to occur of (i) the last day of the Term of this Lease and
(ii) the termination of this Lease pursuant to the terms hereof ("Option Term").
Tenant may exercise the Option at any time during the Option Term upon notice to
Landlord  given at any time  during  the  Option  Term.  The date upon which the
Option is so exercised is  hereinafter  referred to as the "Exercise  Date".  If
Tenant  shall so  exercise  the  Option,  the terms,  covenants  and  conditions
hereinbefore  and  hereinafter  set forth and as provided  in the form  contract
attached  hereto as Exhibit "C" and made a part hereof shall become the contract
between the parties hereto ("Option Contract").



                                       27

<PAGE>

     Section 29.2.  Option  Purchase Price.  The term "Purchase  Price," as used
herein shall mean as follows:

          (1) In the event  the  Exercise  Date is on or after the  Commencement
     Date  but  prior  to the 5th  anniversary  of the  Commencement  Date,  the
     Purchase Price shall be $450,000.00.

          (2) In the event the Exercise Date is on or after the 5th  anniversary
     of  the  Commencement  Date  but  prior  to  the  10th  anniversary  of the
     Commencement Date, the Purchase Price shall be $500,000.00.

          (3) In the event the Exercise Date is on or after the 10th anniversary
     of the Commencement Date, the Purchase Price shall be $600,000.00.

          (4)  The  parties  hereby  agree  that  in the  event  the  Option  is
     exercised,  the Tenant  shall be entitled to and shall  receive as a credit
     against the  applicable  Purchase  Price,  the  aggregate  annual base rent
     payments received by Landlord pursuant to Section 2.3 hereof as of the date
     of closing.

     Section 29.3.  Option  Termination.  It is  understood  and agreed that the
Option  contained  in this Article XXIX is appendant to and a part of the Lease,
and shall  automatically  terminate if (i) it is not exercised within the Option
Term (ii) the Lease has been terminated pursuant to its terms or (iii) the Lease
Term has expired.  It is  understood  and agreed by the parties  hereto that the
Option shall not survive the Lease.

     Section  29.4.  Lease.  In the  event  Tenant  exercises  the  Option,  all
provisions of this Lease shall remain in full force and effect until the closing
described in the Option Contract,  provided,  however,  this provision shall not
operate to extend the Term.  In the event Tenant has exercised the Option and is
not in default under the Option Contract,  Landlord shall not exercise its right
and remedies under Section 16.2 or 16.3.

                                  ARTICLE XXX

                                  MISCELLANEOUS

     Section 30.1.  Captions.  The captions of this Lease are for convenience of
reference  only and in no way define,  limit or describe  the scope or intent of
this Lease or in any way affect this Lease.

     Section 30.2. Table of Contents. The table of contents preceding this Lease
(if any) is for the purpose of  convenience  of reference  only and is not to be
deemed or construed in any way as part of this Lease or as supplemental  thereto
or amendatory thereof.

     Section  30.3.  Use of Terms.  The use herein of the neuter  pronoun in any
reference  to  Landlord  or Tenant  shall be deemed to  include  any  individual
Landlord or Tenant,  and the use herein of the words "successors and assigns" or
"successors  or assigns"  of  Landlord or Tenant  shall be deemed to include the
heirs, legal representatives and assigns of any individual Landlord or Tenant.



                                       28

<PAGE>

     Section 30.4. Amendment. This Lease cannot be changed or terminated orally,
but  only by an  instrument  in  writing  executed  by the  party  against  whom
enforcement of any waiver,  change,  modification  or discharge is sought.  This
Lease shall be governed by the laws of the State of New York.

     Section 30.5.  Survival.  The agreements,  terms,  covenants and conditions
herein  shall  bind and inure to the  benefit of  Landlord  and Tenant and their
respective heirs, personal representatives,  successors and (except as otherwise
provided herein) assigns.

     Section 30.6. Consents.  Unless specifically set forth in this Lease to the
contrary,  the consent or approval of either party hereto  required  pursuant to
the provision of this Lease shall not be unreasonably withheld or delayed.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease of the day
and year first above written..

LANDLORD:                                   THE BUFFALO ENTERPRISE
                                            DEVELOPMENT CORPORATION

                                            By:
                                               ---------------------------------
                                            Name: Daniel S. Bicz
                                                 -------------------------------

                                            Title: President
                                                 -------------------------------


TENANT:                                     AGRO POWER, INC.

                                            By:
                                               ---------------------------------
                                            Name: Albert W. Vanzeyst
                                                 -------------------------------
                                            Title: President
                                                 -------------------------------





                                       29

<PAGE>

STATE OF NEW YORK                   )
COUNTY OF ERIE                      )       SS:

         On the 21st day of August,  1997,  before me personally  came Daniel S.
Bicz,  to me  known,  who being by me duly  sworn,  did  depose  and say that he
resides at 13 Marina Park,  Buffalo,  New York;  that he is the President of The
Buffalo Enterprise Development Corporation, the corporation described herein and
who by said corporation  executed the foregoing  instrument;  that he signed his
name thereto by order of the Board of Directors of said corporation.



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



<PAGE>


STATE OF NEW YORK                   )
COUNTY OF ERIE                      )       SS:

         On the 21st day of August,  1997,  before me personally  came Albert W.
Vanzeyst,  to me known,  who being by me duty sworn,  did depose and say that he
resides at 2799 Marsh Wren Circle,  Longwood,  FL 32779 that he is the President
of Agro Power  Development,  Inc., the corporation  described  herein and who by
said  corporation  executed the  foregoing  instrument;  that he signed his name
thereto by order of the Board of Directors of said corporation.


                                            ------------------------------------
                                            Notary Public



<PAGE>

                                    EXHIBIT A


     ALL TRACT OR PARCEL OF LAND situate in the City of Buffalo, County of Erie,
State of New York, being part of Lots 55, 56, 59 and 197 in Township 10, Range 8
of the  Buffalo  Creek  Indian  Reservation-further  distinguished  as  parts of
Subdivision Lots, 5, 6; 7, 8. 9, 10 and 11 in Block 2 an shown an a map filed in
the Erie County  Clerk's  Office  under Cover Number 615 plus  additional  lands
further bounded and described as following:

     BEGINNING at the point in the northeasterly line of South Park Avenue which
is 120 feet northwesterly of the interaction of the northwesterly line of Bertha
Street as shown on Map Cover 615 and the northeasterly line of South Park Avenue
formerly known an Abbott Road being (66 feet wide);

thence  northwesterly  along  the  northeasterly  line of  South  Park  Avenue a
distance  of 810.21 feet to an angle  point in the  northeasterly  line of South
Park Avenue,

thence  continuing  northwesterly  along the  northeasterly  line of South  Park
Avenue a distance of 739.55 feet to a point,  said point being the southwesterly
corner of lands now or formerly owned by Niagara Mohawk Power Corporation,  said
point being 604.55 feet east of the  southeasterly  line of the new channel line
of the  Buffalo  River as fixed by the Common  Council of the City of Buffalo in
1914;

thence  northeasterly  at right angles and along the southerly  line of lands of
Niagara  Mohawk Power  Corporation,  a distance  of-135.0 feet to a point,  said
point  being  the  southeasterly   corner  of  lands  of  Niagara  Mohawk  Power
Corporation;

thence northerly and parallel with the  northeasterly  line of South Park Avenue
and along the  easterly  line of lands of Niagara  Mohawk  Power  Corporation  a
distance  60.00 feet to a point,  said point being the  northwesterly  corner of
lands of Niagara Mohawk Power Corporation:

thence  westerly  along a line drawn at right  angles to South  Park  Avenue and
along the northerly line of lands of Niagara Mohawk Power Corporation a distance
of 135.00 feet to a point in the northeasterly line of South Park Avenue;

thence  northwesterly  along  the  northeasterly  line of  South  Park  Avenue a
distance of 544.55 feet to a point,  said point being in the  southerly  line of
the new channel of the Buffalo River as previously mentioned;

thence in an easterly  direction along said channel line at an interior angle of
70(Degree)  32' 20" a distance of 393.90 feet to an angle point in said  channel
line.



<PAGE>

                               EXHIBIT A (cont'd)


thence in a southeasterly direction along said channel line at an interior angle
of  145(Degree)  11' 40" a  distance  of 263.78  feet to an angle  point in said
channel line;

thence  continuing in a  southeasterly  direction  along said channel line at an
interior  angle of  149(Degree)  33' 20" a distance  of 2031.71  feet to a point
thence  southwesterly  at an interior  angle of 66(Degree) 56' 54" a distance of
789.38 feet to the point of beginning.



<PAGE>


                                    EXHIBIT B

                             SCHEDULE OF PERFORMANCE

MILESTONE                                                                    DAY
---------                                                                    ---

Notice to proceed...........................................................   0

Mobilization................................................................  21

Site Work
       Complete Grade & Subbase.............................................  60

Headhouse
       Complete Design of Headhouse.........................................  45
       Complete Foundation..................................................  80
       Complete Steel Erection.............................................. 160
       Substantial Completion............................................... 220

Greenhouse
       Complete Design of Greenhouse........................................  45
       Complete Foundation.................................................. 105
       Complete Steel Erection.............................................. 155
       Complete Roof Glazing................................................ 170

Start-Up/Testing............................................................ 210

Substantial Completion...................................................... 340

Final Completion............................................................ 365

Notice to proceed was issued on June 1, 1997.



<PAGE>

                                    EXHIBIT C

                                 OPTION CONTRACT

     THIS  OPTION   CONTRACT  (this   "Agreement")   dated  the  ______  day  of
____________, 19___ by and between BUFFALO ENTERPRISE DEVELOPMENT CORPORATION, a
not-for-profit  local  development  corporation  organized under the laws of the
State of New York, having its principal office and place of business at 620 Main
Street,  Buffalo, New York 14202 ("Seller") and AGRO POWER DEVELOPMENT,  INC., a
New Jersey corporation,  having an office at 10 Alvin Court, East Brunswick, New
Jersey 08816 ("Purchaser").

     1. Sale.  Seller  agrees to sell and  convey to  Purchaser,  and  Purchaser
agrees to purchase from Seller, on the terms and conditions herein provided, the
following property, rights and interests (collectively, the "Property"):

          (a) All of that certain  tract of land located in the City of Buffalo,
     County of Erie,  and State of New York and legally  described on Schedule A
     attached hereto and made a part hereof ("Land").

          (b) All buildings and other improvements,  if any, located on the Land
     ("Improvements").

          (c) All  rights  and  appurtenances  pertaining  to the  Land  and the
     Improvements,  including without  limitation,  all of Seller's right, title
     and  interest  in  and to  adjacent  streets,  alleys,  rights  of way  and
     easements.

     2. Purchase Price. Purchaser agrees to pay to Seller the Purchase Price for
the Property,  calculated  pursuant to Section 29.2 of that certain ground lease
between Seller and Purchaser dated as of September 4, 1997 ("Ground Lease"),  as
follows:

          (a) Upon delivery of the "Deed" (as hereinafter provided and defined),
     by  delivery  to  Seller of the sum equal to the  Purchase  Price  less the
     credits set forth in Section 9 hereof.

     3. Title Documents.

     Purchaser  may,  at its  option,  and sole  cost and  expense,  obtain  the
following:

          (i) a survey of the Land ("Survey").

          (ii) a fully  guaranteed  tax and title  search  covering the Property
     ("Abstract")  and a  local  tax  certificate,  where  not  covered  by  the
     Abstract.

          (iii) A commitment  in favor of Purchaser  for the most recent form of
     ALTA  owner's  title  insurance  policy  ("Commitment")  issued  by a title
     insurance  company



<PAGE>

     acceptable to Purchaser  ("Title Company") setting forth the state of title
     to the Property including the state of facts shown on the Survey, if any.

     4. Obligations of Seller Prior to Closing.  During the period commencing on
the date  hereof and ending on the Closing  Date (as  hereinafter  defined),  or
within such other period hereinafter contemplated in this Section, Seller agrees
as follows:

          (a) Not to create, grant, accept or enter into any option to purchase,
     right  of  first  refusal,   sale  agreement,   lease,  use  and  occupancy
     arrangement  with  respect to all or any  portion of the  Property  without
     Purchaser's prior written consent.

          (b) Not to create or  suffer a lien of any kind  whatsoever  on all or
     any portion of the Property,  it being understood and agreed by the parties
     hereto  that any lien which is a result of  Purchaser's  failure to perform
     its  obligations  under the Ground  Lease shall not be a breach of Seller's
     agreement hereunder.

     5. Closing.  The date ("Closing  Date") upon which the sale and purchase of
the Property  ("Closing") shall take place on the thirtieth (30th) day following
the date on which the option to  purchase  has been  exercised  under the Ground
Lease  but in no event  later  than the last day of the Term  under  the  Ground
Lease,  TIME BEING OF THE ESSENCE with respect to said date.  The Closing  shall
take place at 10:00 a.m. on the Closing  Date at the offices of Saperston & Day,
P.C., 1100 M&T Center, Three Fountain Plaza, Buffalo, New York.

     6. Conveyance and Exceptions.

          (a) At the Closing,  Seller shall convey to Purchaser its title to the
     Property  by a  recordable  quit  claim deed with lien  covenant  ("Deed"),
     subject to the following ("Permitted Exceptions"):

               (i) any state of facts an accurate survey would show;

               (ii) all easements,  right of ways, and other encumbrances of any
          kind, recorded or unrecorded, which may affect the Property;

               (iii)  all  applicable  federal,  state  and  local  regulations,
          statutes, and laws;

               (iv) all liens other than those created or suffered by Seller, it
          being  understood and agreed by the parties hereto that any lien which
          is a result of Purchaser's  failure to perform its  obligations  under
          the  Ground  Lease  shall  not  be  a  breach  of  Seller's  agreement
          hereunder.

          (b) If the  Commitment  shall disclose  encumbrances  or exceptions to
     title other than the Permitted Exceptions ("Unpermitted Exceptions"), or if
     the Survey shall disclose any  encroachment or other matter rendering title
     to the Property  unmarketable  ("Survey  Defect"),  Seller may, at Seller's
     sole  option,  cause the  Unpermitted  Exceptions  to be  removed  from the
     Commitment and Survey Defects to be removed prior to Closing.

                                        2

<PAGE>

          (c) In the event  Seller  does not so elect to remove the  Unpermitted
     Exceptions or Survey Defect,  Purchaser, at its sole option and upon notice
     to Seller, shall elect: (i) to terminate this Agreement;  or (ii) to accept
     the conveyance of the Property  subject to the unremoved  matters.  If this
     Agreement is terminated  pursuant to clause (i) above,  neither party shall
     have any further liability or obligation hereunder.

     7. Seller's Obligations at Closing. At the Closing, Seller shall furnish to
Purchaser  the  following,   each  of  which  shall  be  in  a  form  reasonably
satisfactory to Purchaser's counsel:

          (a) The Deed.

          (b) A State of New York  Board of  Equalization  and  Assessment  Real
     Property Transfer Report for the Property and the transaction  contemplated
     herein.

          (c) (i) Form TP-584  published by the New York  Department of Taxation
     and Finance  ("Department")  consisting of the New York State Combined Real
     Property  Transfer  Tax  Affidavit,  Real Estate Tax Return and Credit Line
     Mortgage  Certificate;  and (ii) if applicable,  Form TP-584.1 published by
     the  Department  consisting  of the New  York  State  Transfer  Tax  Return
     Supplemental Schedules.

          (d) A FIRPTA Affidavit executed by Seller.

          (e) Possession of the Property.

          (f) A certified  copy of  resolutions  of Seller's  Board of Directors
     authorizing  and  directing  the  sale  of the  Property  pursuant  to this
     Agreement.

          (g) Such other  documents  as Seller is  required to deliver by law or
     pursuant to the terms of this Agreement.

     8. Purchaser's  Obligations at Closing.  Provided that Seller shall perform
all of Seller's  obligations  under this  Agreement,  Purchaser shall deliver to
Seller at the Closing the following:

          (a) The Purchase  Price,  minus the credits set forth in Section 9(b),
     in the form of immediately available funds.

          (b) Such other  documents  and  payments as  Purchaser  is required to
     deliver by law or pursuant to the terms of this Agreement.

     9. Adjustments; Costs.

          (a) Seller and  Purchaser  acknowledge  and agree  that  Purchaser  is
     obligated  to  pay  all  "Impositions"  as  defined  in the  Ground  Lease.
     Accordingly, there shall be no proration of any Impositions.

                                       3

<PAGE>

          (b) Purchaser shall receive a credit against the Purchase Price in the
     amount calculated pursuant to and in accordance with Section 29.2(4) of the
     Ground Lease.

          (c)  Purchaser  shall  pay all  recording  costs,  all New York  State
     Mortgage  Taxes,  if  any,  and  the  premium  for the  Title  Policy,  all
     documentary, intangible, transfer and other taxes with respect to the Deed,
     the Survey, all search continuation charges.

     10. Representations and Warranties.  To induce Purchaser to enter into this
Agreement, Seller represents and warrants to Purchaser as follows:

          (a)  Seller  is not a  "foreign  person"  as such term is  defined  in
     Section 7701 of the Internal Revenue Code, as amended.

          (b) There is no lease,  option to purchase,  right of first refusal to
     purchase or  agreement  for the sale and  purchase of all or any portion of
     the  Property to any person or entity,  except for this  Agreement  and the
     Ground Lease.

          (c) Seller has full power and  authority to enter into and  consummate
     the  transaction  contemplated  by this  Agreement  without  the consent or
     approval  of any third  party,  and when signed by Seller,  this  Agreement
     constitutes a legal, valid and binding obligation of Seller, enforceable in
     accordance with its terms.

     Seller  acknowledges  that Purchaser will rely on Seller's  representations
and  warranties in connection  with  entering  into this  Agreement.  All of the
foregoing  representations  and  warranties  shall  merge  into  the Deed at the
Closing.

     11. Conditions Precedent to Closing.

          (a)  Compliance by Seller and Purchaser  with all terms and conditions
     under this contract.

     12.  Broker.  Each party hereto  represents and warrants to the other party
that it has not utilized the services of any real estate broker,  salesperson or
finder in connection with this Agreement or the transaction  contemplated.  Each
party hereto agrees to indemnify,  defend and hold the other party harmless from
and against all other claims for brokerage commissions and finder's fees arising
from or attributable to the acts or omissions of the  indemnifying  party or any
party or entity  acting  or  purportedly  acting  on behalf of the  indemnifying
party.

     13.  Remedies Upon  Default.  If either party shall fail to keep or observe
any covenant, agreement or obligation to be kept or observed by such party under
this  Agreement,  the other  party  shall have the  right,  in  addition  to the
exercise  of any  other  remedy  available  to it at law  or in  equity,  (i) to
terminate this Agreement upon notice to the other party and recover damages;  or
(ii) to enforce specific performance of this Agreement.

     14.  Notices.  Any notice required or permitted to be given hereunder shall
be deemed given when  personally  delivered  or  deposited in the United  States
mail,  postage  prepaid,  certified or express mail,  return receipt  requested,
addressed to Seller or Purchaser, as the case may be, as follows:



                                       4
<PAGE>

     If to Seller:     The Buffalo Enterprise Development Corporation
                       620 Main Street
                       Buffalo, New York 14202
                       Attention: President

     With a copy to:   Saperston & Day, P.C.
                       1100 M&T Center
                       Three Fountain Plaza
                       Buffalo, New York 14203
                       Attention: Gary L. Mucci

     If to Purchaser.  AGRO Power Development, Inc.
                       10 Alvin Court
                       East Brunswick, New Jersey 08816
                       Attention: President

     With a copy to:   Giordano, Halleran & Ciesla
                       125 Half Mile Road
                       Middletown, New Jersey 07748
                       Attention: Edward Radzely

     Either party to this  Agreement may change its address for notice  purposes
by giving notice  thereof to the other party hereto,  except that such change of
address notice shall not be deemed to have been given until actually received by
the addressee thereof.

     15. Ground Lease.

     This Agreement and all rights and obligations hereunder shall automatically
terminate in the event the Ground Lease is terminated.

     16. Purchaser's Representations.

     (a)  Purchaser  shall be deemed to warrant and represent to Seller that, as
of the date of this Agreement, (i) Purchaser is familiar with the Property; (ii)
Purchaser is in possession of the Property  pursuant to the Ground Lease;  (iii)
Purchaser accepts the Property in "as is" condition, subject only to the express
representations  and warranties  made by Seller in this Agreement and the Ground
Lease;  and (iv) Purchaser is entering into this Agreement  voluntarily upon its
own judgment and is not relying  upon any  representation  or warranty of Seller
other than as appears in this Agreement.

     17. Remedies.

     Each party shall have all rights and remedies  available under New York law
both at law and equity in the event of a default by the other party hereunder.

     18. Miscellaneous.



                                       5

<PAGE>

     (a) This  Agreement  shall be binding  upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.

     (b) This  Agreement  constitutes  the entire  agreement  and  understanding
between the parties  hereto,  and there are no  agreements,  representations  or
warranties  except those herein  expressly set forth,  and it is agreed that any
change in,  addition to,  amendment or modification of the terms hereof shall be
of no effect unless reduced to writing and executed by both parties hereto.

     (c) The captions used in connection with the Sections of this Agreement are
for convenience of reference only and shall not be deemed to construe,  limit or
expand the meaning or language of this Agreement.

     (d) If the last day for performance of any obligation hereunder occurs on a
Saturday, Sunday or legal holiday, the time for performance shall be extended to
the next regular business day.

     (e) If any  provision  of this  Agreement  is held by a court of  competent
jurisdiction  to be  invalid,  void  or  unenforceable,  the  remainder  of  the
provisions of this Agreement  shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.

     (f) Nothing in this  Agreement,  express or implied,  is intended to confer
upon any person,  other than the parties hereto and their respective  successors
and assigns, any rights or remedies whatsoever.

     (g) This  Agreement  shall be governed by and construed in accordance  with
the laws of the State of New York.

     IN WITNESS WHEREOF,  the parties hereto have executed this Agreement on the
date first above written.

                            SELLER:    BUFFALO ENTERPRISE DEVELOPMENT
                                       CORPORATION


                                       By:______________________________________
                                       Its:_____________________________________


                            PURCHASER: AGRO POWER DEVELOPMENT, INC.


                                       By:______________________________________
                                       Its:_____________________________________




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