EXHIBIT 10.67





                          VILLAGE FARMS OF TEXAS, L.P.




                        AGREEMENT OF LIMITED PARTNERSHIP









                          Dated as of February 6, 1996











     THE LIMITED PARTNERSHIP INTEREST REPRESENTED HEREBY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS
OF CERTAIN STATES AND HAVE BEEN OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS  FROM
THE REGISTRATION  REQUIREMENT OF THE ACT AND SUCH LAWS. THE LIMITED  PARTNERSHIP
INTEREST IS SUBJECT TO  RESTRICTIONS  ON  TRANSFERABILITY  AND RESALE AND MAY BE
TRANSFERRED  ONLY IN A MANNER WHICH IS IN COMPLIANCE WITH THE PROVISIONS OF THIS
AGREEMENT, AND MAY ONLY BE TRANSFERRED IN A TRANSACTION THAT IS REGISTERED UNDER
THE ACT OR EXEMPT FROM SUCH REGISTRATION.


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                                TABLE OF CONTENTS





                                LIST OF SCHEDULES

Schedule 1.1(a)            Calculation of Internal Rate of Return
Schedule 1.1(b)            Project Budget
Schedule 1.1(c)            Project Documents
Schedule 1.1(d)            Site
Schedule 6.3               Initial Officers of the Partnership




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                        AGREEMENT OF LIMITED PARTNERSHIP

     This  Agreement  of Limited  Partnership  dated as of  February  6, 1996 of
VILLAGE FARMS OF TEXAS,  L.P. (the  "Partnership")  is by and among COGENTRIX OF
FORT  DAVIS I,  INC.,  a  Delaware  corporation  ("Cogentrix  GP" and a "General
Partner"),  COGENTRIX OF FORT DAVIS II, INC., a Delaware corporation ("Cogentrix
LP" and a "Limited  Partner"),  VILLAGE  FARMS OF DELAWARE,  L.L.C.,  a Delaware
limited liability company ("VF Delaware" and a "General  Partner"),  and VILLAGE
FARMS,  L.L.C.,  a  Delaware  limited  liability  company  ("VF" and a  "limited
partner").

     VF Delaware is a newly-formed  Delaware limited liability company owned 99%
by Agro Power Development,  Inc., a New York corporation ("Agro Power"),  and 1%
by VF. VF is a newly-formed Delaware limited liability company owned 99% by Agro
Power  and 1% by VF  Delaware.  Agro  Power  has  entered  into  agreements  and
instruments (as more fully defined hereafter,  the "Project  Documents") related
to the  development  and  operation of a venlo style  greenhouse  located in the
vicinity of Fort Davis, Texas for the purpose of producing and selling beefsteak
tomatoes (as more fully defined hereafter, the "Project").  In order to continue
with the development of the Project and obtain  financing for  construction  and
working  capital  needs,  Agro Power desires that  Cogentrix GP and Cogentrix LP
contribute in the aggregate  $4,656,781.00 to the Project. In order to encourage
Cogentrix to contribute such funds to the Project,  Agro Power has agreed (1) to
organize  VF  Delaware  and VF and  cause  them to  form  the  Partnership  with
Cogentrix GP and  Cogentrix LP pursuant to which all Project  Documents  will be
assigned to the Partnership,  as VF Delaware's  contribution to the Partnership,
in  exchange  for a 1%  interest  in  the  Partnership,  and  likewise  as  VF's
contribution  to  the  Partnership  in  exchange  for  a  49%  interest  in  the
Partnership,  (2) that,  in exchange  for a  contribution  to the capital of the
Partnership of $980 by Cogentrix LP, Cogentrix LP will receive a 49% interest in
the Partnership,  and (3) that, in exchange for a contribution to the capital of
the Partnership of $20 by Cogentrix GP,  Cogentrix GP will receive a 1% interest
in the  Partnership.  Cogentrix  GP and  Cogentrix  LP have  agreed to make such
contributions  to the capital of the Partnership on the terms and conditions set
forth herein.

     Accordingly,  in  consideration  of the covenants and agreements  contained
herein and other good and  valuable  consideration,  the receipt and adequacy of
which are hereby  acknowledged,  and intending to be legally bound,  the parties
hereto hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

1.1  Certain Defined Terms.

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

     "Abandonment" has the meaning set forth in subsection 6.2(e).

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     "Adjusted Capital Account Deficit" means, with respect to any Partner,  the
deficit balance,  if any, in such Partner's Capital Account as of the end of the
relevant fiscal year, after giving effect to the following adjustments:

          (a) Credit to such Capital  Account any amounts  which such Partner is
     obligated  to restore  pursuant to any  provision  of this  Agreement or is
     deemed to be obligated to restore  pursuant to the penultimate  sentence of
     Regulations Section 1.704-2(g)(1) and 1.704-2(i)(5); and

          (b) debit to such Capital  Account the items  described in Regulations
     Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

The foregoing  definition  of Adjusted  Capital  Account  Deficit is intended to
comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted consistently therewith.

     "Administrative Agent" means CoBank, ACB.

     "Adverse  Consequence"  means all actions,  suits,  proceedings,  hearings,
investigations,  charges, complaints,  claims, demands, injunctions,  judgments,
orders, decrees, rulings,  damages, dues, penalties,  fines, costs, amounts paid
in settlement,  liabilities,  obligations,  Taxes, liens,  losses,  expenses and
fees,  including,  but not limited to, court  costs,  arbitral  costs,  costs of
investigation, and attorneys' fees.

     "Affiliate" of any designated Person, means each Person which,  directly or
indirectly,  controls or is controlled  by or is under common  control with such
designated  Person and, without limiting the generality of the foregoing,  shall
include (a) any Person  which  beneficially  owns or holds ten percent  (10%) or
more of any class of voting  securities of such designated Person or ten percent
(10%) or more of the  equity  interest  in such  designated  Person  and (b) any
Person of which such designated  Person  beneficially owns and holds ten percent
(10%) or more of any  class of voting  securities  or in which  such  designated
Person  beneficially  owns or holds  ten  percent  (10%)  or more of the  equity
interest. For the purposes of this definition, the terms "controls", "controlled
by" and "under common control  with," as used with respect to any Person,  shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of the  management  and policies of such Person,  whether  through the
ownership of voting securities or by contract or otherwise.  Notwithstanding the
foregoing,  neither  Cogentrix  GP or  Cogentrix  LP,  on the one  hand,  nor VF
Delaware  or VF, on the other  hand,  shall be  deemed to be  Affiliates  of one
another.

     "After-Tax"  means after  deducting  Cogentrix  GP's or Cogentrix  LP's, as
applicable,  notional  project  Federal  and state  income  tax. As used in this
definition of After-Tax,  the notional  project  Federal and state income tax of
Cogentrix GP and Cogentrix LP shall be calculated as follows:

          (a) The  Partnership's  taxable  income would be  calculated  from the
     Schedule K most recently  filed with the Internal  Revenue  Service (or the
     appropriate  successor  form or  schedule),  which for  purposes of clarity
     would include operating income as



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     shown on such  Schedule and all  separately  stated items of income or loss
     (except tax exempt income) as shown on such Schedule.

          (b) Assuming the Partnership were taxable as a for-profit corporation,
     the Partnership's Federal and state income tax would be determined based on
     the  taxable  income  calculated  in (a).  For these  purposes,  it will be
     assumed that all of the  Partnership's  taxable  income shall be taxed at a
     blended  Federal/state  rate of 38.0%  (subject  to  adjustment  upward  or
     downward,  as  applicable,  to  reflect  changes  in the  highest  marginal
     corporate Federal tax rate).

          (c) The Partnership's  notional income tax obligation as calculated in
     (b) shall be allocated among the Partners in the same manner as Profits and
     Losses are allocated among the Partners under Article IV hereof.

Provided  that,  for each  quarter  end and at year end  until  such time as the
Partnership  has filed a  Schedule K with the  Internal  Revenue  Service  and a
true-up of taxable  income has  occurred,  notional  project  Federal  and state
income tax for Cogentrix GP and Cogentrix LP shall be calculated by  multiplying
Estimated  Taxable  Income  allocated  to  Cogentrix  GP and  Cogentrix LP under
Article IV hereof, as the case may be, by 38.0% (subject to adjustment upward or
downward,  as applicable,  to reflect changes in the highest marginal  corporate
Federal tax rate).

     "Agreement"  means this  Agreement  of  Limited  Partnership,  as  amended,
supplemented or otherwise modified and in effect from time to time.

     "Agro Power" means Agro Power Development Inc., a New York corporation with
offices at 10 Alvin Court, East Brunswick, New Jersey 08816.

     "Agro Power Investment" means all cash  contributions to the capital of the
Partnership made by VF Delaware and VF pursuant to this Agreement.

     "Appraisal Procedure" means a procedure whereby two independent appraisers,
one chosen by each General Partner, shall agree upon the determinations then the
subject of appraisal. Each General Partner shall deliver a written notice to the
other  appointing its appraiser within 15 days after receipt from the other of a
written notice  appointing  its  appraiser.  Each appraiser then shall prepare a
written appraisal with respect to the determinations  which then are the subject
of appraisal. If within 30 days after appointment of the two appraisers they are
unable to agree upon the amount in question, a third independent appraiser shall
be chosen  within 10 days  thereafter  by the  mutual  consent of such first two
appraisers or, if such first two appraisers  fail to agree upon the  appointment
of a third appraiser, such appointment shall be made by the American Arbitration
Association,  or any organization successor thereto, from a panel of arbitrators
having  experience  in the  business  of  operating a  hydroponic  hot house and
marketing the product  produced therein and a familiarity with equipment used or
operated in such business.  The decision of the third appraiser so appointed and
chosen  shall  be  given  within  30 days  after  the  selection  of such  third
appraiser.  If three appraisers shall be appointed and the  determination of one
appraiser  is  disparate  from the median by more than twice the amount by which
the other  determination is disparate from the median, then the determination of
such  appraiser  shall be excluded,  the remaining two  determinations  shall be
averaged  and such



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average shall be binding and conclusive on the General  Partners;  otherwise the
average of all three  determinations  shall be  binding  and  conclusive  on the
General Partners.  (For example, if the two appraisers  appointed by the General
Partners determine a value of $100 and $200, and the third appraiser  determines
a value of $150, then the involved value shall be conclusively  determined to be
$150 ($100 + $200 + $150 divided by 3). As a further example, consider the first
example but the third  appraiser  places a value of $190. In this case, the $100
valuation shall be disregarded and the value shall be conclusively determined to
be $195 ($190 + $200 divided by 2). The $100  valuation is  disregarded  because
the median of the three appraisers was $190 and the difference  between $100 and
$190 is $90, which is more than twice the difference between $200 and $190 which
is $10, which  multiplied by two is $20.) If a General  Partner shall appoint an
appraiser  and the other Person shall fail to appoint an appraiser in the manner
specified  herein,  the  determination  of the  appraiser so appointed  shall be
binding and  conclusive on the General  Partners.  The expenses of the appraisal
procedure shall be borne solely by the Partnership.

     "Budgets" has the meaning set forth in subsection 6.2(i).

     "Business Day" means a day other than a Saturday, a Sunday or any other day
on which commercial banks in Texas,  North Carolina or New Jersey are authorized
or required by law or executive order to be closed.

     "Buy-Out Offer" has the meaning set forth in Section 11.2.

     "Buy-Out Offeree" has the meaning set forth in Section 11.2.

     "Buy-Out Offeror" has the meaning set forth in Section 11.2.

     "Capital Account" means,  with respect to any Partner,  the capital account
maintained  for such Partner in the  Partnership  Books in  accordance  with the
following provisions:

          (a) To each  Partner's  Capital  Account  there shall be credited such
     Partner's  Capital  Contributions,  such  Partner's  distributive  share of
     Profits  and any other  items in the  nature  of  income or gain  which are
     allocated under this Agreement.

          (b) To each  Partner's  Capital  Account  there  shall be debited  the
     amount of cash and the Gross Asset Value of any property (other than money)
     (net of any liabilities assumed by such Partner or to which the property is
     subject)  distributed  to such  Partner  pursuant to any  provision of this
     Agreement,  and such Partner's  distributive  share of Losses and any other
     items in the nature of deductions or losses which are allocated  under this
     Agreement.

          (c) In the event all or a portion of an interest in the Partnership is
     transferred in accordance with the terms of this Agreement in a transaction
     that does not result in a termination of the Partnership under Code Section
     708(b)(1)(B),  the transferee  shall succeed to the Capital  Account of the
     transferor to the extent it relates to the transferred interest.


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          (d) In determining  the amount of any liability for purposes of clause
     (a) and clause (b) hereof,  there shall be taken into  account Code Section
     752(c) and any other applicable provisions of the Code and the Regulations.

          (e) If a Partner owns more than one Partnership Interest,  one Capital
     Account shall be maintained for the Partnership Interests of the Partner.

          (f) Each  Partner's  Capital  Account  shall in all other  respects be
     maintained  in  accordance  with  the  provisions  of  Regulations  Section
     1.704-1(b).

The foregoing  provisions and the other provisions of this Agreement relating to
the  maintenance  of capital  accounts are  intended to comply with  Regulations
Section 1.704-1(b),  and shall be interpreted and applied in a manner consistent
with such Regulations.

     "Capital  Contribution"  means, with respect to any Partner,  the amount of
money and the initial Gross Asset Value of any property  (other than money) (net
of any  liabilities  assumed  by the  Partnership  or to which the  property  is
subject) contributed to the Partnership with respect to any Partnership Interest
held by such Partner pursuant to the terms of this Agreement.

     "Capital  Lease"  means any lease of property,  real or personal,  which in
accordance with GAAP,  would be required to be capitalized on a balance sheet of
the lessee.

     "Code"  means the Internal  Revenue  Code of 1986,  as amended from time to
time.

     "Cogentrix GP Designee" has the meaning set forth in Section 6.1(a).

     "Cogentrix  GP" means  Cogentrix  of Fort Davis  Texas I, Inc.,  a Delaware
corporation.

     "Cogentrix   Investment"   means  (a)  the   respective   Initial   Capital
Contribution of Cogentrix GP and Cogentrix LP, (b) all subsequent  contributions
to the capital of the  Partnership  made by Cogentrix GP or Cogentrix LP (as the
case may be) pursuant to this  Agreement in excess of any Agro Power  Investment
and  (c) all  payments  made  by  Cogentrix  GP,  Cogentrix  LP or any of  their
Affiliates  pursuant to any of the Project Loan  Documents (it being  understood
for purposes of (c) that the  Partnership is not an Affiliate of Cogentrix GP or
Cogentrix  LP) which  shall be  allocated  for the  purposes  of this  Agreement
between Cogentrix GP and Cogentrix LP pursuant to their agreement.

     "Cogentrix  LP" means  Cogentrix  of Fort Davis Texas II,  Inc., a Delaware
corporation.

     "Commonly  Controlled Entity" means, with respect to any Person, an entity,
whether or not  incorporated,  which is under  common  control  with such Person
within the meaning of Section 414(b) or (c) of the Code.

     "Construction  Agreement"  means the  Commercial  Design  and  Construction
Contract  dated  February  12,  1996,  by and among the  Partnership,  Cogentrix
Energy,  Inc. and Agro Power,  as it may be amended,  supplemented  or otherwise
modified and in effect from time to time.



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     "Construction/Term  Facility"  means  a  loan  facility  in the  amount  of
$21,123,125.00 provided by the Construction/Term  Lender pursuant to the Project
Loan Documents.

     "Construction/Term Lender" means Farm Credit Bank of Texas or its successor
under the Construction/Term Facility.

     "Cumulative  Distributions  to Cogentrix"  means the aggregate,  cumulative
distributions of Net  Distributable  Cash received by Cogentrix GP and Cogentrix
LP from the Partnership.

     "Cumulative   Distributions   to  VF"  means  the   aggregate,   cumulative
distributions of Net Distributable  Cash received by VF Delaware and VF from the
Partnership.

     "Delaware Act" means the Delaware Revised Uniform Limited  Partnership Act,
6 Del.C.  "  17-101,  et seq.,  as it may be  amended  from time to time and any
successor to such Act.

     "Depreciation" means, for each fiscal year or other period, an amount equal
to the deprecation,  amortization,  or other cost recovery  deduction  allocable
with respect to an asset for such  period,  except that if the Gross Asset Value
of an asset  differs  from its  adjusted  basis for Federal tax  purposes at the
beginning of such period,  Depreciation  shall be an amount which bears the same
ratio  to  such   beginning   Gross  Asset  Value  as  the  Federal  income  tax
depreciation,  amortization  or other cost  recovery  deduction  for such period
bears to such beginning adjusted tax basis;  provided that if the Federal income
tax depreciation, amortization, or other cost recovery deduction for such period
is zero, Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the Management Committee.

     "Dollars" and "$" means dollars in lawful  currency of the United States of
America.

     "Equity  Funding Date" means the day on which all of the  conditions to the
initial  drawdown  under the  Construction/Term  Loan  Facility  (other than the
contributions  to the capital of the  Partnership to be made by Cogentrix GP and
Cogentrix  LP  under  Section  3.2)  have  been met to the  satisfaction  of the
Administrative Agent and the Construction/Term Lender.

     "ERISA" means the  Employment  Retirement  Income  Security Act of 1974, as
amended from time to time.

     "ERISA  Affiliate"  means,  with respect to any Person,  any corporation or
trade or business which is a member of the same controlled group of corporations
(within  the  meaning of Section  414(b) of the Code) as such Person or is under
common  control  (within  the  meaning of Section  414(c) of the Code) with such
Person.

         "Estimated  Taxable  Income"  means  book  income  of  the  Partnership
computed in accordance with GAAP adjusted to reflect the estimated  depreciation
and amortization  timing differences  between financial reporting and income tax
reporting.


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     "First Priority  Return" means the receipt by Cogentrix GP and Cogentrix LP
of  cash  distributions  from  Net  Distributable  Cash in an  aggregate  amount
sufficient to provide each of Cogentrix GP and Cogentrix LP, as the case may be,
with an Internal Rate of Return on its respective Cogentrix Investment hereunder
of  [information  omitted and subject to request  for  confidential  treatment]%
calculated in  accordance  with Schedule  1.1(a) (it being  understood  that any
amounts which are part of Cogentrix Investment pursuant to subsection (b) or (c)
of the definition of Cogentrix  Investment shall only be entitled to such return
from the date they are actually paid or made).

     "GAAP" means  generally  accepted  accounting  principles as in effect from
time to time in the United States.

     "General Partner" means each of Cogentrix GP and VF Delaware and any Person
admitted to the Partnership as an additional  General Partner in accordance with
the provisions of this Agreement,  until such time as such Person ceases to be a
general partner of the Partnership as provided herein or in the Delaware Act.

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

     "Gross Asset Value" means,  with respect to any asset, the asset's adjusted
basis for Federal income tax purposes, except as follows:

          The initial Gross Asset Value of any asset contributed by a Partner to
     the  Partnership  shall be the gross fair market  value of such  asset,  as
     determined by agreement of the Partners;

          The Gross Asset Value of all  Partnership  assets shall be adjusted to
     equal their respective gross fair market values, as determined by agreement
     of the  Partners,  and in the  event  the  Partners  fail to so  agree,  as
     determined by the Appraisal  Procedure,  as of the following times: (i) The
     acquisition  of an  additional  interest in the  Partnership  by any new or
     existing   Partner  in  exchange  for  more  than  a  de  minimis   Capital
     Contribution; (ii) the distribution by the Partnership to a Partner of more
     than a de minimis  amount of property as  consideration  for an interest in
     the Partnership if the Management Committee reasonably determines that such
     adjustment  is necessary or  appropriate  to reflect the relative  economic
     interests of the Partners in the Partnership;  and (iii) the liquidation of
     the    Partnership    within   the   meaning   of    Regulations    Section
     1.704-1(b)(2)(ii)(g);

          the Gross  Asset Value of any  Partnership  asset  distributed  to any
     Partner  shall be the gross fair market  value of such asset on the date of
     distribution  as  determined by agreement of the Partners and, in the event
     the Partners fail to so agree, as determined by the Appraisal Procedure;

          the Gross Asset Values of  Partnership  assets shall be increased  (or
     decreased) to reflect any  adjustments to the adjusted basis of such assets
     pursuant to Code  Section  734(b) or Code Section  743(b),  but only to the
     extent that such adjustments are taken into account in determining  Capital
     Accounts pursuant to Regulations  Section  1.704-1(b)(2)(iv)(m);  provided,
     however,  that Gross Asset  Values  shall not be adjusted to the extent the
     Partners  agree  (and  in the  event  the  Partners  fail to so  agree,  as
     determined  by the  Appraisal  Procedure)  that an  adjustment  pursuant to
     clause (ii) of this  definition is necessary or  appropriate  in connection
     with a transaction that would otherwise result in an adjustment pursuant to
     clause  (iv) of this  definition.  If the Gross Asset Value of an asset has
     been  determined  or  adjusted  pursuant  to  clauses  (i) and (ii) of this
     definition or clause (iv) of this definition,  such Gross Asset Value shall
     thereafter be adjusted by the Depreciation  taken into account with respect
     to such asset; and


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          the Gross Asset Value of any asset owned indirectly by the Partnership
     through a subsidiary  partnership shall be determined pursuant to the terms
     of the partnership agreement for such subsidiary partnership.

     "Indebtedness"  means, with respect to any Person, (a) indebtedness of such
Person for borrowed  money or for the deferred  purchase price of property or of
services (other than obligations  under agreements for the purchase of goods and
services in the normal  course of business  which are not more than 30 days past
due; (b)  obligations of such Person under Capital  Leases;  (c)  obligations of
such Person pursuant to interest hedging  transactions;  (d) obligations of such
Person in respect of letters of credit;  (e)  obligations  of such Person  under
direct and indirect  guarantees in respect of, and  obligations  (contingent  or
otherwise)  to purchase or otherwise  acquire,  or  otherwise  assure a creditor
against loss in respect of,  indebtedness  or obligations of others of the kinds
referred to in clause (a),  (b,), (c) or (d) above (other than  endorsements  of
negotiable  instruments  in the  ordinary  course  of  business);  and  (f)  any
obligations of such Person or a Commonly  Controlled  Entity to a Multi-Employer
Plan. For purposes of clarity,  "Indebtedness"  includes the  obligations of the
Partnership  to repay  amounts  borrowed  under,  and to pay other amounts owing
under, the Project Loan Documents.

     "Initial  Capital  Contribution"  means,  with respect to Cogentrix GP, the
amount of $20 and, with respect to Cogentrix LP, means the amount of $980.

     "Internal Rate of Return" (whether or not capitalized)  means the return to
capital  calculated  at each calendar  quarter end in  accordance  with Schedule
1.1(a), attached hereto and incorporated herein by reference.

     "Lien"  means any  mortgage,  deed of  trust,  security  interest,  pledge,
hypothecation,  encumbrance  or lien  (statutory or other) of any kind or nature
whatsoever  (including,  without  limitation,  any  agreement to give any of the
foregoing,  any  conditional  sale  or  other  title  retention  agreement,  any
financing  lease  having  substantially  the same  economic  effect  as any such
agreement,  and the filing of any statement under the Uniform Commercial Code or
comparable law of any jurisdiction).

     "Limited  Partner"  means  each of  Cogentrix  LP and VF and any Person who
becomes a limited  partner of the  Partnership  in accordance  with the terms of
this Agreement and is shown as such on the books and records of the Partnership.

     "Losses" has the meaning given to it in the definition of "Profits."


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     "Management  Agreement" means the Management  Agreement dated the same date
as this Agreement by and between the  Partnership  and Agro Power,  as it may be
amended,  supplemented  or  otherwise  modified and in effect from time to time,
pursuant to which Agro Power will provide operation and maintenance  services to
the Partnership.

     "Management  Committee"  means the Management  Committee of the Partnership
referred to in Section 6.1.

     "Marketing  Agreement" means the Marketing Agreement dated the same date as
this  Agreement  by and  between the  Partnership  and VF, as it may be amended,
supplemented or otherwise modified and in effect from time to time,  pursuant to
which VF will agree to market tomatoes produced by the Partnership.

     "Multi-Employer  Plan" means,  with respect to any Person, a Multi-Employer
Plan as defined in Section 3(37) of ERISA to which  contributions have been made
by such Person or any ERISA Affiliate and which is covered by Title IV of ERISA.

     "Net Distributable  Cash" means for any period, an amount equal to all cash
received by the Partnership during such period,  including cash, but not limited
to, cash from operations, reductions in reserves, casualty proceeds, rebates and
other extraordinary items, less (a) principal,  interest and other payments made
under or pursuant to the Construction Term Facility,  (b) interest and fees paid
pursuant  to  the  Revolving  Facility,  or  other  borrowings,   (c)  all  cash
expenditures  of and  payments  made by the  Partnership,  and (d) any  reserves
established by the Management  Committee of the Partnership,  and subject to the
limitations  on  distributions,  if any,  imposed  pursuant  to the terms of the
Project Loan Documents.

     "Nonrecourse  Deductions"  shall have the meaning set forth in  Regulations
Sections  1.704-2(b)  and  (c).  The  amount  of  Nonrecourse  Deductions  for a
Partnership fiscal year equals the excess, if any, of the net increase,  if any,
in the amount of  Partnership  minimum  gain  during  the  fiscal  year over the
aggregate amount of any  distributions  during that fiscal year of proceeds of a
nonrecourse  liability that are allocable to an increase in Partnership  minimum
gain, determined according to the provisions of Regulations Section 1.704-2(c).

     "Operating  Budget"  means the  business  plan and  budget  required  to be
provided to the Partnership pursuant to the Management Agreement.

     "Operating  Management Fee" means a management fee to be paid to Agro Power
in accordance with the Management Agreement.

     "Partner" means any of the General Partners or the Limited Partners.

     "Partner  Nonrecourse  Deductions"  shall  have the  meaning  specified  in
Regulations Section 1.704-2(i)(2).



                                     - 9 -
<PAGE>


     "Partnership"  means Village Farms of Texas, L.P., the limited  partnership
formed  pursuant to this Agreement and the filing of the  Certificate of Limited
Partnership with the Delaware Secretary of State.

     "Partnership   Books"  means  the  books  and  records  maintained  by  the
Partnership  and reviewed  within sixty (60) days of each fiscal year end by the
Management Committee, in which records and information relating to the ownership
of the  Partnership,  the  constituency of the Management  Committee and actions
taken by the Management  Committee or the Partners is maintained,  including but
not limited to, a register of the Partners, each Partner's Capital Account, each
Partner's Percentage Interest, actions taken by the Management Committee and the
Partners, and this Agreement and any amendments hereto.

     "Partnership  Interest" means, with respect to any Partner, the interest of
such Partner in the Partnership,  whether general or limited,  at any particular
time,  including the rights and  obligations of such Partner as provided in this
Agreement and the Delaware Act.

     "Partnership  Percentage" means, with respect to any Partner,  at any time,
the percentage specified as such Partner's "Partnership  Percentage" at the time
such Partner was admitted to the Partnership, as adjusted in accordance with the
terms of this Agreement. The initial Partnership Percentages are as follows:

                  Cogentrix GP              1%
                  Cogentrix LP              49%
                  VF Delaware               1%
                  VF                                 49%

     "Permitted  Liens"  means  Liens  in  favor of any  Person  other  than the
Partners or any of their respective  Affiliates,  that (a) arise in the ordinary
course of business of the Partnership (including, without limitation, landlord's
materialmen's,  mechanic's,  worker's,  repairmen's  and  employee's  Liens  and
similar Liens which arise in connection with any tax,  assessment,  governmental
charge or levy) and (b) do not secure Indebtedness.

     "Person" means an individual,  partnership,  corporation,  business  trust,
joint  stock  company,  trust,   unincorporated   association,   joint  venture,
governmental authority or other entity of whatever nature.

     "Profits"  and  "Losses"  mean,  for any  period,  an  amount  equal to the
Partnership's  taxable income or loss for such period,  determined in accordance
with Code Section 703(a) (for this purpose,  all items of income,  gain, loss or
deduction  required to be stated  separately  pursuant to Code Section 703(a)(1)
shall be included in taxable income or loss), with the following adjustments:

          Income of the  Partnership  that is exempt from federal income tax and
     not otherwise taken into account in computing Profits or Losses pursuant to
     this definition shall be added to such taxable income or loss;


                                     - 10 -
<PAGE>


          any  expenditures  of  the  Partnership   described  in  Code  Section
     705(a)(2)(B) or treated as Code Section 705(a)(2)(B)  expenditures pursuant
     to Regulations Section  1.704-1(b)(2)(iv)(i),  and not otherwise taken into
     account in computing Profits or Losses pursuant to this definition shall be
     subtracted from such taxable income or loss;

          gain and loss with respect to the disposition of any Partnership asset
     (both  directly  owned  assets  and  assets  owned  indirectly   through  a
     subsidiary  partnership)  shall be computed with respect to the Gross Asset
     Value rather than adjusted tax basis of such asset;

          in lieu of the  depreciation,  amortization,  and other cost  recovery
     deductions  taken into account in computing  taxable income or loss,  there
     shall be taken into  account  Depreciation  for such  fiscal  year or other
     period; and

          in  the  event  of an  adjustment  in the  Gross  Asset  Value  of any
     Partnership  asset pursuant to clause (b) of the definition of "Gross Asset
     Value" herein, the amount of such adjustment shall be taken into account as
     gain or loss from the  disposition  of such asset for purposes of computing
     Profits and Losses.

     "Project"  means an  approximately  41-acre  venlo style  greenhouse  to be
located on the Site which is to be constructed in two phases of 20.5-acres  each
and on which the Partnership  will produce tomatoes for sale under the Marketing
Agreement.

     "Project Assets" has the meaning set forth in Section 3.1(a).

     "Project Budget" means the pro forma budget of total Project costs attached
hereto  as  Schedule  1.1(b),  as  amended  or  modified  from  time  to time in
accordance with subsection 6.2(i).

     "Project Credit  Facilities"  means,  collectively,  the  Construction/Term
Facility and the Revolving Facility.

     "Project Documents" means the agreements and instruments listed on Schedule
1.1(c) attached hereto and  incorporated  herein by reference as the same may be
amended,  supplemented  or  otherwise  modified in  accordance  with Section 6.2
hereof and in effect from time to time.

     "Project Loan Documents" means the agreements and instruments  executed by,
between or among the Partnership,  Administrative Agent,  Construction/Term Loan
Lender,  Revolver Lender, and any other party relating to the  Construction/Term
Loan  Facility  and/or  the  Revolving  Facility,  as the same  may be  amended,
supplemented or otherwise  modified in accordance with Section 6.2 hereof and in
effect from time to time.

     "Regulations" means the temporary, proposed and final regulations under the
Code and any successor provisions thereto.

     "Requirement  of Law"  means,  as to any  Person,  (a) the  certificate  of
incorporation  and by-laws or partnership  agreement or other  organizational or
governing  documents of such



                                     - 11 -
<PAGE>


Person,  and (b) any law,  treaty,  rule or  regulation or  determination  of an
arbitrator or a court or other Governmental  Authority,  in each case applicable
to or binding upon such Person or any of its  properties or to which such Person
or any of its  properties  is  subject  and the  violation  of  which,  or which
determination,  could  reasonably  be  expected  to (i) have a material  adverse
effect  on  the  business,  operations,   properties,  condition  (financial  or
otherwise) or prospects of such Person or (ii) materially  adversely  affect the
ability  of such  Person to  perform  its  obligations  under the  Project  Loan
Documents or the Project Documents to which it is a party.

     "Revolver  Lender"  means  Texas  Production  Credit   Association  or  its
successor under the Revolving Facility.

     "Revolving  Facility" means a loan facility in the amount of  $2,500,000.00
provided by the Revolver Lender pursuant to the Project Loan Documents.

     "Second Priority Return" means the receipt by Cogentrix GP and Cogentrix LP
of  cash  distributions  of  Net  Distributable  Cash  in  an  aggregate  amount
sufficient to provide each of Cogentrix GP and Cogentrix LP, as the case may be,
with an  Internal  Rate of  Return on its  respective  Cogentrix  Investment  of
[information  omitted  and  subject  to  request  for  confidential  treatment]%
inclusive of the First Priority  Return)  calculated in accordance with Schedule
1.1(a),  (it being  understood  that any  amounts  which  are part of  Cogentrix
Investment  pursuant to  subsection  (b) or (c) of the  definition  of Cogentrix
Investment  shall only be entitled to such return for the date they are actually
paid or made).  For purposes of Article V hereof,  Internal Rate of Return shall
be calculated at each calendar quarter end.

     "Site" means a parcel of approximately 202-acres located in the vicinity of
Fort Davis,  Texas and more fully  described on Schedule  1.1(d) attached hereto
and incorporated herein by reference.

     "Subsidiary"  means  with  respect  to any  Person,  an  Affiliate  that is
controlled  (directly or indirectly through one or more  intermediaries) by that
Person.

     "Taxes" means any and all income or gross receipt taxes,  franchise  taxes,
levies,  imposts,  duties,  assessments,  fees,  charges and withholdings of any
nature  whatsoever,  whether  or not  presently  in  existence,  imposed  by any
Governmental Authority.

     "VF" means Village Farms, L.L.C., a Delaware limited liability company, 99%
of which is owned by Agro Power and 1% of which is owned by VF Delaware.

     "VF Delaware" means Village Farms of Delaware,  L.L.C.,  a Delaware limited
liability company,  99% of which is owned by Agro Power and 1% of which is owned
by VF.

     "Withdraw" or  "Withdrawal",  with respect to any Partner,  means a Partner
ceasing to be a partner of the Partnership for any reason,  whether voluntary or
involuntary, and "Withdrawn", with respect to a Partner, means a Partner who has
ceased to be a partner of the Partnership.

     "Withdrawal  Date" means the date of the Withdrawal from the Partnership of
a Withdrawn Partner.


                                     - 12 -
<PAGE>


     Other Definitional Provisions.

          All terms defined in this  Agreement  shall have the defined  meanings
     when used in any  certificate or other document made or delivered  pursuant
     hereto, unless otherwise defined therein.

          As used  herein  and in any  certificate  or  other  document  made or
     delivered pursuant hereto, accounting terms not defined in Section 1.1, and
     accounting  terms partly  defined in Section 1.1 to the extent not defined,
     shall have the respective meanings given to them under GAAP.

          The words  "hereof,"  "herein"  and  "hereunder"  and words of similar
     import when used in this Agreement shall refer to this Agreement as a whole
     and  not to any  particular  provision  of  this  Agreement,  and  section,
     schedule and exhibit  references  are to this  Agreement  unless  otherwise
     specified.

          Unless the context requires otherwise, any reference in this Agreement
     to any of the Project  Documents or the Project Loan  Documents  shall mean
     any of such  documents as amended,  supplemented  or modified and in effect
     from time to time.

                                     ARTICLE
                               GENERAL PROVISIONS

     Formation of Partnership.  The Partners hereby form and establish a limited
partnership  under the terms and provisions of this Agreement and the provisions
of the Delaware Act, and the rights and  liabilities of the Partners shall be as
provided  in this  Agreement  and in the  Delaware  Act.  Concurrently  with the
execution of the Agreement by VF Delaware, VF, Cogentrix GP and Cogentrix LP, VF
Delaware and Cogentrix GP shall execute and file with the Office of Secretary of
State  of the  State  of  Delaware  a  Certificate  of  Limited  Partnership  in
accordance  with  Section  17-201 of the  Delaware  Act,  in form and  substance
satisfactory to both VF Delaware and Cogentrix GP.

     Name of the Partnership. The name of the Partnership shall be Village Farms
of  Texas,  L.P.,  or such  other  name as the  Partners  from  time to time may
designate.

     Business of the Partnership. The business of the Partnership is to develop,
construct,  and  operate  the  Project.  In  furtherance  of its  business,  the
Partnership  shall  have  and may  exercise  all  the  powers  now or  hereafter
conferred by the laws of the State of Delaware on partnerships  formed under the
laws of that state,  and shall do any and all things  necessary or desirable for
the  accomplishment  of the above purposes.  The Partnership  shall engage in no
other  business  except as permitted by the  Management  Committee in accordance
with Section 6.2 below.

     Registered  Office of the  Partnership.  The  Partnership  shall maintain a
registered office at, and the name and address of the  Partnership's  registered
agent in Delaware is, The



                                     - 13 -
<PAGE>


Corporation Trust Company,  1209 Orange Street,  New Castle County,  Wilmington,
Delaware 19801.

     Liability of the Partners Generally.

          Except as otherwise provided in the Delaware Act, each General Partner
     shall have the  liabilities of a partner in a partnership  without  limited
     partners to Persons other than the Partnership and the Limited Partners.

          Except as otherwise provided in this Agreement or the Delaware Act, no
     Limited Partner (or former Limited  Partner) shall be obligated to make any
     contribution  of capital to the  Partnership  or have any liability for the
     debts and obligations of the Partnership.

     Office of the  Partnership.  The  Partnership  shall maintain an office and
principal  place of business in Fort Davis,  Texas.  Pursuant to the  Management
Agreement, the books of account and other records with respect to the operations
of the Partnership  shall be maintained at 10 Alvin Court,  East Brunswick,  New
Jersey  08816.  The  Partnership  shall not have or maintain any office or other
place of business outside of Fort Davis, Texas.

     Duration of the Partnership.  The Partnership shall commence on the date of
this Agreement,  and shall continue until its termination in accordance with the
provisions of Article X.

                                     ARTICLE
                              CAPITAL CONTRIBUTIONS

     Capital Contributions.

          Simultaneously with the execution of the Agreement by VF Delaware, VF,
     Cogentrix  GP and  Cogentrix  LP, VF Delaware and VF shall  convey,  grant,
     transfer  and assign (or cause to be  conveyed,  granted,  transferred  and
     assigned) to the Partnership all of the Project  Documents,  all the rights
     of Agro Power or any  Affiliate  of Agro Power under the Project  Documents
     and all the assets and  business  of every kind and  description,  wherever
     located, real, personal and mixed, tangible or intangible, owned or held or
     used by Agro Power and any  Affiliate  of Agro Power  solely in  connection
     with the Project  (collectively,  the "Project  Assets").  The  Partnership
     hereby assumes and agrees to pay when due all  liabilities  and obligations
     of Agro Power and any  Affiliate  of Agro Power with respect to the Project
     Assets and agrees to be bound by all of the terms of, and to undertake  all
     of the  obligations of Agro Power and any Affiliate of Agro Power under the
     Project Documents.  For the purposes of the initial Capital Accounts of the
     Partners,  the Project  Assets and  Project  Documents  contributed  to the
     Partnership  by VF  Delaware  and VF shall be deemed  to have an  aggregate
     gross fair market value (net of liabilities) of $1,000.


                                     - 14 -
<PAGE>


          If any  consent  or  approval  is  required  in  connection  with  the
     assignment and contribution to the Partnership  pursuant to this subsection
     3.1(a) of any Project  Asset or any Project  Document,  VF Delaware  and VF
     shall have obtained such consent or approval  prior to such  assignment and
     contribution.

          Cogentrix GP shall  contribute to the Partnership on execution of this
     Agreement  by all of the  Partners  $20 by  wire  transfer  of  immediately
     available funds to an account designated in writing by the Partnership.

          Cogentrix LP shall  contribute to the Partnership on execution of this
     Agreement  by all of the  Partners  $980 by wire  transfer  of  immediately
     available funds to an account designated in writing by the Partnership.

     Additional Capital Contribution.  Upon the satisfaction of or waiver of the
conditions set forth in Section 3.3 hereof, on the Equity Funding Date Cogentrix
GP shall contribute to the Partnership $93,116 and Cogentrix LP shall contribute
to the Partnership $4,562,665 by wire transfer of immediately available funds to
an account designated in writing by the Partnership.

     Conditions.  The  obligation  of Cogentrix GP and  Cogentrix LP to make the
contributions  described in Section 3.2 are subject to the  satisfaction of each
of the following conditions precedent (except those conditions, if any, that may
be  specifically  waived  in  writing  by  Cogentrix  GP  or  Cogentrix  LP,  as
appropriate):

          The Project Credit  Facilities  and the Project Loan  Documents  shall
     have  been  approved  by the  Management  Committee  and the  Project  Loan
     Documents  will be executed by all parties  thereto.  An original  executed
     copy of each Project Loan  Document will be delivered to Cogentrix GP and a
     copy thereof delivered to Cogentrix LP as soon as available.

          All conditions to the closing of the Construction/Term  Facility shall
     have  occurred  or been  satisfied  (other than  evidence  that the capital
     contributions described in Section 3.2 have been made) and all governmental
     consents,   approvals,   permits  and  licenses  and  other  deliveries  in
     connection  with the  Project  which are  required  to be  received  by the
     Construction/Term  Lender and/or the Administrative Agent as a condition to
     the funding of the Construction/Term  Facility shall have been delivered or
     received.  A copy of all such  deliveries and other evidence of the closing
     shall be provided to Cogentrix GP and Cogentrix LP.

          The  contribution by VF Delaware  contemplated by Section 3.1(a) shall
     have been made to the  satisfaction  of Cogentrix  GP and  Cogentrix LP and
     evidence thereof  reasonably  satisfactory to Cogentrix GP and Cogentrix LP
     shall have been provided to them by VF Delaware.

          The following  representations or warranties shall be true and correct
     in all respects, and are hereby made to Cogentrix GP and Cogentrix LP by VF
     Delaware and VF as an inducement to their making capital  contributions  to
     the Partnership:


                                     - 15 -
<PAGE>

               Each of VF and VF  Delaware  (A) is a limited  liability  company
          duly organized,  validly  existing and in good standing under the laws
          of the State of Delaware,  the ownership of which is 99% by Agro Power
          and 1% by VF (in the case of VF Delaware) or 1% by VF Delaware (in the
          case of VF), (B) has full power and  authority  and the legal right to
          incur the  obligations  provided  for in this  Agreement,  and (C) has
          taken all necessary  action to authorize the  execution,  delivery and
          performance  of this  Agreement and the Project  Documents and Project
          Loan Documents to which it is a party.

               This  Agreement  and  the  Project  Documents  and  Project  Loan
          Documents to which it is a party have been duly  authorized,  executed
          and delivered by VF Delaware and VF and  constitute  the legal,  valid
          and  binding  obligations  of each of VF Delaware  and VF  enforceable
          against it in accordance  with their terms,  except as  enforceability
          may be limited  by  general  equitable  principles  and by  applicable
          bankruptcy,  insolvency,  reorganization,  moratorium  or similar laws
          affecting the rights of creditors generally.

               Neither the execution,  delivery or performance by VF Delaware or
          VF of this  Agreement or any of the Project  Documents or Project Loan
          Documents to which it is a party,  nor compliance by it with the terms
          and provisions hereof or thereof,  including,  without limitation, the
          assignment  of  the  Project  Documents  and  Project  Assets  to  the
          Partnership,  requires the consent or authorization of any other party
          (except  such  as have  been  duly  obtained),  or  conflicts  or will
          conflict  with or  result  in a breach  or  violation  of its  charter
          documents or by-laws or any of the terms,  conditions or provisions of
          any Requirement of Law applicable to it or its assets or business.

               It is not an "investment company" or a company "controlled" by an
          "investment  company" within the meaning of the Investment Company Act
          of 1940, as amended.

               The representations and warranties of VF Delaware or VF or any of
          their  respective  Affiliates  in or  pursuant  to any of the  Project
          Documents  or Project  Loan  Documents  are true and correct as of the
          date  hereof  and are  hereby  deemed to be made to  Cogentrix  GP and
          Cogentrix LP, mutatis mutandis, as if fully set forth herein.

     Interest.  No interest shall accrue on any  contribution  to the capital of
the Partnership.

     Withdrawals  of Capital.  No Partner shall have the right to withdraw or to
be repaid  or  returned  any  capital  contributed  by it,  except as  otherwise
provided herein.

     Additional Capital  Contributions.  Unless otherwise  unanimously agreed by
the Management Committee,  no Partner shall be required to make any contribution
to the capital of the Partnership other than its capital contributions set forth
in this Article III. If the  Management



                                     - 16 -
<PAGE>


Committee has agreed that an additional cash  contribution to the capital of the
Partnership is to be made but a Partner does not make such  contribution  as and
when required, then any other Partner may (but shall not be required to), at its
election,  either make all or a portion of the cash  contribution to the capital
of the Partnership  (which, in the case of such an investment by Cogentrix GP or
Cogentrix LP, would increase the Cogentrix Investment of such Partner or, in the
case of an investment by VF or VF Delaware, would constitute (and in the case of
subsequent investments would increase) an Agro Power Investment of such Partner)
or loan  all or a  portion  of the  amount  of such  non-contributing  Partner's
portion of such agreed-upon cash capital contribution to the Partnership. In the
event the Partner elects to make an additional cash contribution,  the Partner's
ownership  percentage  shall not change  but,  in the case of  Cogentrix  GP and
Cogentrix  LP, the  amount of the  contribution  will  increase  its  respective
Cogentrix  Investment and, in the case of VF and VF Delaware,  would  constitute
(or in the case of subsequent  contributions would increase) its respective Agro
Power  Investment.  (As a result,  for  example,  if  Cogentrix  were to make an
additional cash  contribution to the Partnership under this Section 3.6, and, if
at that  time,  distributions  of cash  from Net  Distributable  Cash are  being
allocated pursuant to Section 5.1(b),  then  distributions  shall continue to be
made under  Section  5.1(b) until  Cogentrix GP and  Cogentrix LP have  received
distributions of cash from Net Distributable Cash that will provide Cogentrix GP
and Cogentrix LP with the Second  Priority  Return on the  Cogentrix  Investment
(which will have been  increased by the amount of such cash  contribution  under
this Section 3.6)).  In the event the Partner  elects to make a loan,  then such
loan  shall be on  customary  terms  and  conditions,  shall be  evidenced  by a
customary  promissory  note, and shall provide that (a) the loan shall be repaid
in full together with interest  thereon prior to any distribution of cash by the
Partnership  to the  Partners,  (b) it shall bear  interest  at the same rate of
interest as the interest rate then in effect under the  Revolving  Facility plus
1% per annum and (c) shall comply in all respects with Project Loan Documents.

                                     ARTICLE
                        ALLOCATION OF PROFITS AND LOSSES

     Profits and Losses.

     After giving effect to the special  allocations  set forth in Sections 4.3,
4.4, 4.5, 4.6, 4.7 and 4.10 hereof,  the Partners shall share Profits and Losses
as follows:

          (i) Profits shall be allocated among the Partners as follows:

               (A) Profits  shall first be allocated to the General  Partners to
          offset  any prior  allocations  of Loss made to the  General  Partners
          under  Section  4.1(a)(ii)(B)  hereof which have not  previously  been
          offset.

               (B)  Thereafter,  Profits  shall be  allocated to the Partners to
          offset  any  prior  allocations  of Loss  made to the  Partners  under
          Section 4.1(a)(ii)(A) which have not previously been offset.

               (C) Thereafter, Profits shall be allocated 2% to Cogentrix GP and
          98% to Cogentrix LP until the aggregate  cumulative  Profits allocated
          to Cogentrix GP



                                     - 17 -
<PAGE>


          and  Cogentrix LP under this  subsection  (B) equals the excess of (I)
          Cumulative  Distributions to Cogentrix over (II) the sum of Cumulative
          Distributions to VF and the Cogentrix Investment.

               (D) Thereafter,  Profits shall be allocated among the Partners in
          proportion to their Partnership Percentages.

          (ii) Losses shall be allocated among the Partners as follows:

               (A) Losses shall first be allocated to the Partners in accordance
          with their positive Capital Accounts.

               (B) Thereafter, Losses shall be allocated to the General Partners
          in the proportion of their Partnership Percentages.

               For Federal income tax purposes, each item of income, gain, loss,
          deduction or credit entering into the computation of the Partnership's
          taxable income shall be allocated in the same proportion.

               The Profits and Losses of the  Partnership  shall be  unanimously
          determined  by the  Management  Committee  and shall be  allocated  as
          described  in Section  4.1(a) (i) at the end of each  fiscal  quarter,
          (ii) upon the  transfer  of the  Partnership  Interest  of any Partner
          pursuant to Article  VIII,  (iii) upon the  Withdrawal  of any Partner
          pursuant to Article IX, (iv) upon the  admission of any Partner to the
          Partnership  pursuant  to Article IX and (vi) at such other times that
          the Management Committee may determine.

     Capital  Account   Balances.   Each  Partner's  Capital  Account  shall  be
maintained in accordance with the principles of applicable Treasury  Regulations
promulgated  under Section  704(b) of the Code and as otherwise  provided in the
definition of "Capital Accounts" and in this Article IV.

     Minimum Gain Chargeback.

          Notwithstanding  any other provision in this Agreement,  if there is a
     net decrease in Partnership minimum gain (determined in accordance with the
     principles of Regulations Sections 1.704-2(b)(2) and 1.704-2(d)) during any
     Partnership taxable year, the Partners who would otherwise have an Adjusted
     Capital  Account  Deficit  at the  end of  such  year  shall  be  specially
     allocated  items of  Partnership  income  and gain for such year  (and,  if
     necessary,  subsequent  years)  in  an  amount  and  manner  sufficient  to
     eliminate as quickly as possible such Adjusted Capital Account Deficit. The
     items to be so allocated shall be determined in accordance with Regulations
     Section  1.704-2(g).  This subsection 4.3(a) is intended to comply with the
     minimum gain chargeback  requirements in such Regulation Sections and shall
     be interpreted consistently therewith.

          Notwithstanding  any other provision in this Agreement,  if there is a
     net  decrease  in  Partnership  minimum  gain  attributable  to  a  partner
     nonrecourse  debt of the  Partnership  (within the  meaning of  Regulations
     Sections 1.704-2(b)) during any



                                     - 18 -
<PAGE>


     Partnership  fiscal  year,  each Person who has a share of the  Partnership
     minimum gain  attributable  to such  nonrecourse  debt of the  Partnership,
     determined in accordance with Regulation  Section  1.704-2(i)(5),  shall be
     specially  allocated  items of  Partnership  income  and gain for such year
     (and, if necessary,  subsequent years) in an amount equal to the greater of
     (i) the portion of such Person's  share of the net decrease in minimum gain
     of  the  Partnership   attributable  to  such   nonrecourse   debt  of  the
     Partnership,    determined   in   accordance   with   Regulations   Section
     1.704-2(i)(b),  that is  allocable  to the  disposition  of property of the
     Partnership subject to such nonrecourse debt of the Partnership, determined
     in  accordance  with  Regulations  Section  1.704-2(i)(4),  or (ii) if such
     Person would otherwise have an Adjusted  Capital Account Deficit at the end
     of such year,  an amount  sufficient  to eliminate  such  Adjusted  Capital
     Account  Deficit.  Allocations  pursuant to the previous  sentence shall be
     made in proportion to the  respective  amounts  required to be allocated to
     each  Partner  pursuant  thereto.  The  items to be so  allocated  shall be
     determined in  accordance  with  Regulations  Section  1.704-2(i)(4).  This
     subsection  4.3(b) is intended to comply with the minimum  gain  chargeback
     requirement   in  such   Regulations   Section  and  shall  be  interpreted
     consistently therewith. Solely for purposes of this subsection 4.3(b), each
     Person's  Adjusted Capital Account Deficit shall be determined prior to any
     other  allocations  pursuant to this Article IV with respect to such fiscal
     year, other than allocations pursuant to subsection 4.3(a) hereof.

     Nonrecourse  Deductions.  Nonrecourse Deductions for any taxable year shall
be specifically  allocated among the Partners in proportion to their  Percentage
Interests.

     Partner  Nonrecourse  Deductions.  Nonrecourse  Deductions  attributable to
otherwise  nonrecourse  debt with respect to which a Partner or a related person
of a Partner  described in  Regulations  Section  1.752-2(c)  is the creditor or
otherwise  bears the "economic risk of loss" as defined in  Regulations  Section
1.752-2(b) shall be allocated to such Partner.

     Qualified Income Offset.  Notwithstanding anything in this Agreement to the
contrary,  in the event  any  Partner  unexpectedly  receives  any  adjustments,
allocations or distributions  described in paragraphs  (b)(2)(ii)(d)(4),  (5) or
(6) of Regulations  Section 1.704-1,  there shall be specially allocated to such
Partner  such items of  Partnership  income and gain,  at such times and in such
amounts as will  eliminate  as quickly as possible  that portion of its Adjusted
Capital Account Deficit caused or increased by such adjustments,  allocations or
distributions.

     Curative Allocations.  The allocations set forth in Sections 4.3, 4.4, 4.5,
4.6 and 4.10  hereof  are  intended  to  comply  with  certain  requirements  of
Regulations  Section,  1.704-1(b).  Notwithstanding any other provisions of this
Article IV (other than Sections 4.3, 4.4, 4.5, 4.6 and 4.10),  allocations  that
have taken place pursuant to Sections 4.3, 4.4, 4.5, 4.6 and 4.10 shall be taken
into account in  allocating  other items of income,  gain,  loss,  deduction and
credit so that, to the extent possible, the net amount of such other allocations
and the Sections 4.3, 4.4, 4.5, 4.6, and 4.10  allocations to each Partner shall
equal the net  amount  that  would have been  allocated  to each  Partner if the
Sections 4.3, 4.4, 4.5, 4.6, and 4.10 allocations had not occurred.


                                     - 19 -
<PAGE>


     Tax  Allocations.  Except as provided in Sections  4.7 and 4.9 hereof,  for
income tax  purposes  each item of income,  gain,  loss and  deduction  shall be
allocated in the same manner as the  corresponding  book item is  allocated  for
Capital Account purposes.

     Property Subject to 704(b) and 704(c). In the case of any Partnership asset
(directly or  indirectly  owned) the Gross Asset Value of which differs from its
adjusted tax basis,  income, gain, loss and deduction with respect to such asset
shall,  solely for tax purposes,  be allocated in accordance with the principles
of Code Sections 704(b) and 704(c) to take account of such difference.

     Limitations.  Notwithstanding  anything to the contrary in this Article IV,
no  allocation  under this  Article IV shall be made to a Limited  Partner  that
would cause such Limited  Partner to have, or that would  increase,  an Adjusted
Capital Account Deficit. Any amount not allocated as a result of this limitation
shall be reallocated to the General  Partners pro rata in accordance  with their
relative Partnership Interests.

                                     ARTICLE
                                  DISTRIBUTIONS

     Distribution of Net Distributable  Cash. Subject to Section 5.2 hereof, Net
Distributable  Cash for each fiscal quarter shall be distributed to the Partners
within thirty (30) days after the end of such quarter as follows:

          First,  from  the date  hereof  and  until  each of  Cogentrix  GP and
     Cogentrix  LP  shall  have   received   distributions   of  cash  from  Net
     Distributable Cash sufficient to provide both Cogentrix GP and Cogentrix LP
     with the First  Priority  Return,  89.1% to Cogentrix LP, 0.9% to Cogentrix
     GP, 9.9% to VF Delaware and 0.1% to VF,

          Thereafter  until each of  Cogentrix  GP and  Cogentrix  LP shall have
     received  distributions of cash from Net  Distributable  Cash sufficient to
     provide both Cogentrix GP and Cogentrix LP with the Second Priority Return,
     64.386% to Cogentrix LP,  1.314% to Cogentrix  GP,  33.614% to VF Delaware,
     and 0.686% to VF, and

          Thereafter,  49%  to  Cogentrix  LP,  1% to  Cogentrix  GP,  49% to VF
     Delaware and 1% to VF.

     Default  Allocations  for Cogentrix.  In the event VF Delaware,  VF or Agro
Power  defaults or breaches any of its  obligations  under this  Agreement,  the
Management Agreement,  the Marketing Agreement or the Construction Agreement and
such default or breach has not been remedied  within any applicable cure period,
or any  representation  or  warranty  made by VF  Delaware,  VF or any of  their
respective  Affiliates  under  this  Agreement  or any such other  agreement  or
document  proves to have been untrue  when made and (a) as a result  thereof the
Partnership, Cogentrix GP and Cogentrix LP (or any of them) incurs or suffers an
Adverse Consequence and (b) Cogentrix GP or Cogentrix LP gives written notice of
such  Adverse  Consequence  to the  Partnership  and,  if the amount  thereof is
unknown, its good faith estimate of the amount of such Adverse Consequence, then
the Partnership  shall  thereafter  refrain from



                                     - 20 -
<PAGE>


making any  distributions  to VF Delaware  and VF (or either of them) under this
Agreement (any such  distribution that would have been made but for this Section
5.2 is hereinafter  referred to as a "Blocked  Distribution") and shall take the
following steps:

          The Partnership  shall distribute to Cogentrix GP or Cogentrix LP from
     such Blocked  Distributions  an aggregate  amount equal to 100% of any such
     Adverse  Consequence  suffered or actually  incurred  by  Cogentrix  GP and
     Cogentrix  LP or either of them (or,  if the  amount  thereof is not known,
     100% of  Cogentrix  GP's or  Cogentrix  LP's  written  good faith  estimate
     thereof).  Any  such  distribution  made  by  the  Partnership  under  this
     subsection 5.2(i) shall satisfy pro tanto the obligation of the Partnership
     to make  distributions  to VF  Delaware  and VF (or  either  of them)  with
     respect to the Blocked  Distributions.  For the purposes of this Agreement,
     any Adverse  Consequence  suffered or incurred by the Partnership  shall be
     deemed to have been suffered or incurred, on a dollar-for-dollar  basis, 1%
     by Cogentrix GP and 49% by Cogentrix LP.

          Upon  distribution  to  Cogentrix  GP and  Cogentrix LP of 100% of the
     aggregate  amount of any such  Adverse  Consequence  (or their  good  faith
     estimate   thereof)  from  Blocked   Distributions,   the  Partnership  may
     thereafter  make  distributions  to VF Delaware  and VF under  Section 5.1,
     unless and until it receives a subsequent notification from Cogentrix LP or
     Cogentrix GP under this Section 5.2.

     Default  Allocations  for VF. In the event  Cogentrix  GP,  Cogentrix LP or
Cogentrix  Energy,  Inc.  defaults or breaches any of its obligations under this
Agreement or the Construction  Agreement and such default or breach has not been
remedied within any applicable cure period,  or any  representation  or warranty
made by Cogentrix GP or  Cogentrix LP under this  Agreement  proves to have been
untrue when made and (a) as a result thereof the Partnership, VF Delaware and VF
(or any of them) incurs or suffers an Adverse Consequence and (b) VF Delaware or
VF gives written notice of such Adverse  Consequence to the Partnership  and, if
the amount  thereof is  unknown,  its good faith  estimate of the amount of such
Adverse  Consequence,  then the Partnership shall thereafter refrain from making
any  distributions  to Cogentrix  GP and  Cogentrix LP (or either of them) under
this  Agreement  (any such  distribution  that would have been made but for this
Section 5.3 is hereinafter  referred to as a "Blocked  Distribution")  and shall
take the following steps:

          The  Partnership  shall  distribute  to VF  Delaware  or VF from  such
     Blocked Distributions an aggregate amount equal to 100% of any such Adverse
     Consequence  suffered or actually  incurred by VF Delaware and VF or either
     of them (or, if the amount  thereof is not known,  100% of VF Delaware's or
     VF's written good faith estimate  thereof).  Any such  distribution made by
     the Partnership  under this  subsection  5.3(i) shall satisfy pro tanto the
     obligation  of the  Partnership  to make  distributions  to Cogentrix GP or
     Cogentrix LP (or either of them) with respect to the Blocked Distributions.
     For the purposes of this  Agreement,  any Adverse  Consequence  suffered or
     incurred  by the  Partnership  shall be  deemed to have  been  suffered  or
     incurred, on a dollar-for-dollar basis, 1% by VF and 49% by VF Delaware.

          Upon  distribution  to VF  Delaware  and VF of 100%  of the  aggregate
     amount of any such  Adverse  Consequence  (or  their  good  faith  estimate
     thereof) from



                                     - 21 -
<PAGE>


     Blocked Distributions, the Partnership may thereafter make distributions to
     Cogentrix  GP and  Cogentrix  LP under  Section  5.1,  unless  and until it
     receives  a  subsequent  notification  from VF  Delaware  or VF under  this
     Section 5.3.

                                     ARTICLE
                                   MANAGEMENT

          Management of the Partnership.

          The  overall  management  and control of the  business  affairs of the
     Partnership  shall be vested in the  Management  Committee,  subject to the
     limitations  contained in Section 6.2 or elsewhere in this  Agreement.  The
     Management  Committee  shall  consist of four  members,  two  designated by
     Cogentrix GP (each a "Cogentrix  GP  Designee")  and two  designated  by VF
     Delaware  (each a "VF Delaware  Designee"),  and a quorum of the Management
     Committee shall require at least three members of the Management Committee.
     No action at any meeting may be taken by the Management  Committee unless a
     quorum is present (acting in person or by proxy). The Management  Committee
     shall meet not less frequently  than  quarterly.  Members of the Management
     Committee may participate in a meeting of the Management Committee by means
     of conference telephone. No action may be taken by the Management Committee
     with respect to any of the matters  described in Section 6.2 hereof  unless
     such  action  is in the form of a  writing  signed  by all  members  of the
     Management  Committee.   Unless  otherwise  agreed,  all  meetings  of  the
     Management  Committee shall take place at Cogentrix's offices in Charlotte,
     North Carolina, Agro Power's offices in East Brunswick,  New Jersey or such
     other place as the Management Committee may unanimously agree.

          Except as set  forth in  Section  6.2,  any  action by the  Management
     Committee  shall  require the  approval of a majority of the members of the
     Management Committee.

          Any General  Partner may, at any time,  replace any of its  respective
     Designees to the  Management  Committee  with a new Designee and, upon such
     change, or upon the death or resignation of any Designee, a successor shall
     be  designated in writing by the party that  appointed  the Designee  being
     replaced.

          Any General Partner or member of the Management  Committee may, at any
     time,  request a meeting of the  Management  Committee  by sending  written
     notice  specifying in reasonable  detail the  purpose(s) of such meeting to
     all other Partners and to the members of the Management  Committee at least
     ten (10) days in advance of the proposed date for the meeting, which notice
     may be waived by all members of the Management  Committee and all Partners.
     Any  member  of the  Management  Committee  may  propose  that an action be
     submitted to the Management  Committee for approval,  and there shall be no
     requirement  of notice of the issues to be  addressed at any meeting of the
     Management Committee.


                                     - 22 -
<PAGE>


     Fundamental   Matters.  The  following  matters  shall  require  the  prior
unanimous authorization and approval of the Management Committee:

          Any transaction in which the  Partnership  (i) acquires,  purchases or
     leases any asset or right for  consideration  having a fair market value in
     excess of  $25,000,  (ii)  consolidates  or  merges  with or into any other
     Person,  (iii) sells,  assigns,  leases or otherwise transfers any asset or
     right having a fair market value in excess of $25,000,  or (iv) assumes any
     liability or  obligation  in  connection  with Section  6.2(a)(i)  above in
     excess of $25,000.

          The  approval,  execution  and  delivery  of any  contract,  lease  or
     agreement  following the Effective  Date;  provided,  that no such approval
     shall  be  required  for (i)  any  contracts  and  permit  applications  in
     existence prior to the Effective Date and listed on Schedule 1.1(c) hereto,
     or  (ii)  any  other  contract,  lease  or  agreement  which  is  expressly
     non-recourse  to the  Partners  so  long as the  amounts  to be paid by the
     Partnership  thereunder,  together with all other amounts to be paid by the
     Partnership pursuant to contracts,  leases or agreements that have not been
     unanimously  approved  or ratified by the  Management  Committee,  does not
     exceed $50,000 in the aggregate excluding  contracts,  leases or agreements
     for supplies used in the ordinary  course of business and  contemplated  in
     the Operating Budget.

          The approval, execution or delivery of any amendments to, modification
     or termination of,  enforcement of rights under, or any consents or waivers
     in connection with any contract,  lease or agreement,  other than contracts
     entered into without prior unanimous  approval of the Management  Committee
     pursuant to subsection 6.2(a) or clause (ii) of subsection 6.2(b) above.

          The sale or issuance by the  Partnership  of any  interest,  or of any
     option,  warrant or similar right to acquire any  interest,  of any kind in
     the Partnership.

          Any  decision  to (i)  terminate  all or any  substantial  part of the
     Project (an  "Abandonment") or (ii) engage in any activity not contemplated
     by this Agreement.

          The incurrence or assumption of any  Indebtedness by the  Partnership,
     except for (i)  Indebtedness  which,  when the principal  amount thereof is
     aggregated with the principal  amount of Indebtedness  previously  incurred
     pursuant to this  subsection  6.2(f) which  remains  outstanding,  does not
     exceed  $25,000 and (ii) the  Indebtedness  represented by the Project Loan
     Documents.

          The granting of any Lien (other than Permitted Liens) on the assets or
     rights of the Partnership.

          The repayment  (other than (i) repayments in accordance with scheduled
     maturity and (ii) paydowns on the  Revolving  Credit  Facility),  voluntary
     prepayment or redemption of, or any  refinancing or other  modification  of
     the terms of, any Indebtedness.


                                     - 23 -
<PAGE>


          The adoption and  modification of the Operating  Budget or the Project
     Budget (collectively, the "Budgets").

          The  approval  of  any   expenditure   or  investment  not  previously
     authorized in any Budget; provided, however, that no such approval shall be
     required for any  expenditure or investment so long as the amount  expended
     by the Partnership,  together with the amounts of all other expenditures by
     the  Partnership  during any  fiscal  year that have not been  approved  or
     ratified  by the  Management  Committee,  does not  exceed  $25,000  in the
     aggregate.

          The  initiation of any legal  proceedings  or arbitration on behalf of
     the  Partnership,  or  the  settlement  of  any  claim  by or  against  the
     Partnership  with  respect to claims in excess of $25,000 or which  include
     requests for an injunction, specific performance or other equitable relief.

          The   selection,   removal,   or   determination   of  authority   and
     responsibility  of the  officers  of the  Partnership,  general  or special
     counsel for the  Partnership,  accountants and auditors for the Partnership
     and the Project and the  approval  of any change in the  accounting  or tax
     policy of the Partnership or the Project.

          To the extent not specified in this Agreement, (i) any distribution of
     income or any assets or rights of the  Partnership or (ii) the  redemption,
     purchase or other acquisition of any interest in the Partnership.

          Except as contemplated in Article X of this Agreement,  liquidating or
     dissolving,  or  proposing  to liquidate  or  dissolve,  or  effecting,  or
     proposing to effect, a recapitalization in any form of transaction,  of the
     Partnership.

          (i)  Commencing  any case,  proceeding  or other  action (A) under any
     existing or future law or any jurisdiction,  domestic or foreign,  relating
     to bankruptcy, insolvency,  reorganization or relief of debtors, seeking to
     have  an  order  for  relief   entered  with  respect  to  it,  or  seeking
     reorganization,    arrangement,    adjustment,   winding-up,   liquidation,
     dissolution,  composition  or other relief with respect to it or its debts,
     or (B) seeking  appointment  of a  receiver,  trustee,  custodian  or other
     similar  official for it or for All or any substantial  part of its assets;
     (ii) making, or proposing to make, a general  assignment for the benefit of
     its  creditors;  (iii)  admitting  or  proposing  to admit in  writing  its
     inability to pay its debts as they become due;  (iv) filing or proposing to
     file any plan of  reorganization  pursuant to 11 U.S.C.  " 101 et seq.; (v)
     taking,  or proposing to take, any action in furtherance  of, or indicating
     its consent to, approval of or  acquiescence  in, any of the acts set forth
     in clause (i) or (ii) above.

          Establishing  any  operating  or  capital  reserves  other  than those
     required by the Project Loan Documents.

          Establishing  committees of the  Management  Committee and  delegating
     voting authority to such committees.


                                     - 24 -
<PAGE>


          The approval, execution or delivery of any amendments to, modification
     or termination  of, or any waivers of any rights under, or the grant of any
     consents under or in connection with any Project Document, any Project Loan
     Document, the Marketing Agreement or the Management Agreement.

          The approval or taking of any action that would be an event of default
     or that  would  give  rise to a right  of  termination  under  any  Project
     Document or any Project Loan Document.

          The  approval  or taking  with any  action  that would give rise to an
     event of default under any Project Loan Document or that would give rise to
     a right of acceleration or termination under any Project Loan Document.

          The  reimbursement  by the  Partnership  of any General  Partner under
     Section  6.4(b)  hereof of any amount in excess of $5,000 during any fiscal
     quarter.

          Any change in or termination of any insurance  policies  maintained by
     the Partnership.

          Any  agreement to undertake any action that would require the approval
     of the Management Committee under this Section 6.2.

          Any act in contravention of this Agreement or the Act.

          Any act  which  would  make it  impossible  to carry  on the  ordinary
     business of the Partnership.

          Possession of Partnership  property by any Partner, or the assignment,
     transfer or pledge of rights of the  Partnership  in  specific  Partnership
     property for other than a Partnership purpose or other than for the benefit
     of the  Partnership,  or any commingling the funds of the Partnership  with
     the funds of any other person.

          Any action  which would cause the  Partnership  to be treated as other
     than a partnership for Federal income tax purposes.

          Any confession of a judgment against the Partnership or any Partner.

          The  grant of any power of  attorney  or  appointment  of any agent or
     attorney (other than customs brokers).

          The grant of signature  authority to any Person with respect to any of
     the Partnership's bank or investment accounts.

     Officers of the Partnership.  The Partnership may have such officers as may
be designated by the Management Committee from time to time. Such officers shall
(a) serve at the pleasure of the  Management  Committee,  (b) subject to Section
6.2 and to the  instructions  and directions of the Management  Committee,  have
such powers as are usually  exercised  by



                                     - 25 -
<PAGE>


comparable  designated officers of a Delaware corporation and (c) have the power
to bind the  Partnership  through  the  exercise  of such  powers to the  extent
consistent with the terms hereof.  The initial officers of the Partnership shall
be those persons listed on Schedule 6.3 attached hereto and incorporated  herein
by reference.  Following the execution  hereof,  officers  shall be appointed or
removed  only by action  of the  Management  Committee  in  accordance  with the
provisions of Section 6.1.

          No Compensation; Reimbursement.

          Except as expressly provided herein, the General Partners,  members of
     the  Management  Committee and officers shall receive no  compensation  for
     performing  their  duties as General  Partners,  members of the  Management
     Committee or officers under this Agreement;  provided,  however,  that this
     provision  shall not affect  any  Partners'  right to receive  its share of
     distributions as set forth in Article V hereof.

          Subject  to the  limitation,  if  any,  imposed  by the  Project  Loan
     Documents and subject to subsection  6.2(u),  each General Partner shall be
     entitled to  receive,  out of any  Partnership  funds  available  therefor,
     reimbursement of all amounts expended by such General Partner in payment of
     properly  incurred  and  documented  Partnership  obligations  paid by such
     General Partner out of its own funds so long as such  expenditures are made
     in accordance with the Budgets.

     Insurance.   The   Partnership   shall  (a)  maintain,   with  insurers  or
underwriters  of good repute,  in the name of the  Partnership,  such  insurance
relating to the  operations of the  Partnership  as is customary for  comparable
businesses  to that of the  Partnership  to  maintain,  against  such  risks and
pursuant to such terms (including deductible limits or self-insured  retentions)
as are  customary for such  businesses,  and (b) pay all premiums and other sums
payable in order to maintain  such  insurance.  For  purposes of clarity,  it is
hereby agreed that the Partnership shall maintain the insurance  required by the
Project Loan Documents and all insurance policies shall name Cogentrix GP and VF
Delaware as an additional insured and provided that they may not be cancelled or
terminated  except with 30 days' prior  written  notice to  Cogentrix  GP and VF
Delaware.

     Cooperation on Tax Matters. The Partnership shall cooperate fully as and to
the extent  reasonably  requested by  Cogentrix GP or VF Delaware in  connection
with the  preparation and filing of any Tax return,  statement,  report or form,
and any audit,  litigation or other proceeding with respect to Taxes relating to
or arising out of the Project. Such cooperation shall include the retention and,
upon request by either Cogentrix GP or VF Delaware, the provision of records and
information that are reasonably relevant to any such audit,  litigation or other
proceeding.  The  Partnership  agrees to (a) retain all books and  records  with
respect to Tax matters pertinent to the Project and (b) give Cogentrix GP and VF
Delaware  reasonable  written  notice prior to destroying or discarding any such
books and records.  The Partnership shall retain any records requested by either
Cogentrix GP or VF Delaware to be retained.

                                     ARTICLE
                        BOOKS, RECORDS AND BANK ACCOUNTS


                                     - 26 -
<PAGE>

     Books and Records.  In addition to the Partnership  Books,  the Partnership
shall also keep such  books of account  and other  records  with  respect to the
operations of the Partnership as will sufficiently  explain the transactions and
financial  position of the  Partnership  and enable  financial  statements to be
prepared in accordance with GAAP and shall cause such books and other records to
be  kept  in such  manner  as will  enable  them  to be  properly  audited.  The
Partnership  Books and such other books and records  shall be  maintained at the
principal  places of business of the Partnership and all Partners and their duly
authorized  representatives  shall at all times have  access to and the right to
review and copy such books and records.

     Accounting Basis and Fiscal Year. The books of the Partnership (a) shall be
kept on an  accrual  basis in  accordance  with  GAAP,  (b)  shall  reflect  all
Partnership  transactions,  (c)  shall  be  appropriate  and  adequate  for  the
Partnership's  business  and  for the  carrying  out of all  provisions  of this
Agreement,  and (d) shall be closed and  balanced  as of the end of each  fiscal
year, as soon as practicable  after the end of such fiscal year. The fiscal year
of the Partnership  shall be January 1 through  December 31 of each year or such
other  fiscal  year that may be  selected  with the  unanimous  approval  of the
Management Committee.

          Reports.

          Unless otherwise required by the Management Committee, the Partnership
     shall cause to be delivered to each Partner,  within 120 days after the end
     of each fiscal year, an annual report containing the following:

               A balance  sheet as of the end of the  Partnership's  fiscal year
          and statements of income, Partners' equity and cash flows for the year
          then ended,  each of which shall be audited and  reported on by Arthur
          Andersen & Co. or such other independent certified public accountants,
          which shall be a  nationally  recognized  accounting  firm,  as may be
          selected by the Management Committee;

               a general description of the activities of the Partnership during
          such year; and

               a report of any material  transaction between the Partnership and
          any Partner or any of its Affiliates,  including fees and compensation
          and  reimbursements  paid by the Partnership and the products supplied
          and services  performed by such Partner or any such Affiliate for such
          fees  or  compensation  and  the  expenses  so  reimbursed;  provided,
          however,  that no report shall be required  for any products  supplied
          and  services  performed  if such  products  and services are provided
          pursuant to the terms of a Project Document, the Management Agreement,
          the  Marketing  Agreement,  an  agreement  approved by the  Management
          Committee or set out in any Budget and the compensation therefor is in
          accordance with the terms of such agreement.

          Within 45 days after the end of each quarter of each fiscal year,  the
     Partnership  shall cause to be delivered to each Partner a quarterly report
     containing a balance sheet as of the end of such quarter and a statement of
     income for such quarter,



                                     - 27 -
<PAGE>


     each of which may be  unaudited  but which shall be  certified by the chief
     financial  officer of the  Partnership  as fairly  presenting the financial
     position  of the  Partnership  at the end of such  quarter  and  results of
     operations of the  Partnership for such quarter and as having been prepared
     in accordance with the accounting  methods  followed by the Partnership for
     Federal  income tax purposes and otherwise in accordance  with GAAP applied
     on a basis substantially  consistent with that of the Partnership's audited
     financial statements (subject to normal year end adjustments).

          Within 120 days of the end of each fiscal year, the  Partnership  will
     cause to be  delivered to each Partner all  information  necessary  for the
     preparation  of such  Partner's  Federal  income tax  returns,  including a
     statement showing such Partner's share of income, gains, losses, deductions
     and credits for such year for Federal income tax purposes and the amount of
     any  distributions  made to or for the account of such Partner  pursuant to
     this Agreement.

     Bank Accounts.  The Partnership  shall maintain one or more accounts in one
or more banks  located in Fort Davis,  Texas and such other  locations as may be
approved  by the  Management  Committee,  each of which  shall  be a member  the
Federal  Deposit  Insurance  Corporation.  In addition,  the  Partnership  shall
establish  such other  accounts  and deposit  amounts as required by the Project
Loan  Documents.  All such  amounts  shall be and  remain  the  property  of the
Partnership,  and shall be received,  held and disbursed by the  Partnership for
the purposes specified in this Agreement. There shall not be deposited in any of
said accounts any funds other than funds  belonging to the  Partnership,  and no
other funds shall in any way be commingled with such Partnership funds.

     Tax Returns.  The Management  Committee  shall cause income tax returns for
the   Partnership  to  be  prepared  and  timely  filed  with  the   appropriate
authorities.

     Tax Elections. The Management Committee shall, from time to time, make such
tax  elections  as it deems  necessary or advisable to carry out the business of
the Partnership or the purposes of this Agreement.

     Tax Matters Partner.  Cogentrix GP shall be the Partnership's  "tax matters
partner" for purposes of the Code and with respect to all other  Federal,  state
and local  Taxes.  The  approval  of the tax matters  partner  shall be required
before the  Partnership  or any Partner  (with respect to  Partnership  matters)
files any document with any Governmental  Authority  including,  but not limited
to, returns, amendments, requests for refunds, appeals, or waivers or extensions
of statutes of  limitations.  The tax matters partner shall take such actions as
the  Management   Committee  may  lawfully   require  in  connection   with  the
Partnership's Federal, state and local Tax matters.

     Withholdings.  Except and only to the extent required by applicable law and
except as permitted  hereunder,  the Partnership will not deduct or withhold any
amount in respect of any tax from any payment or distribution by the Partnership
to any Partner unless the Partnership has first received  written  authorization
from such Partner so to withhold or to deduct.


                                     - 28 -
<PAGE>


                                     ARTICLE
                              TRANSFER OF INTERESTS

          Transfer of a Partner's Interest.

          No  Partner  may sell,  transfer,  participate,  assign  or  otherwise
     dispose of (whether  voluntarily  or by  operation  of law)  (collectively,
     "transfer") all or any part of its Partnership  Interest  without the prior
     written consent of the non-transferring General Partner(s).

          The  non-transferring  General  Partner(s)  may  condition its (their)
     consent to any transfer on compliance  by the Partner  desiring to transfer
     its Partnership Interest with all or any of the following:

               The transferring  Partner must give written notice to the General
          Partners  identifying in reasonable detail the proposed  transferee(s)
          and  the  terms  and  conditions  of the  proposed  transfer  and  the
          non-transferring General Partner(s) shall have a period of twenty (20)
          Business  Days  from the date of such  notice  either  to  consent  in
          writing to the proposed transferee(s),  or to give written notice that
          it does not consent to such transferee(s);

                    within ten (10)  Business  Days  after the  non-transferring
               General  Partner(s) gives written notice that it does not consent
               to a proposed  transferee,  it shall provide to the  transferring
               Partner a written explanation of the reasons therefor;

                    such transfer does not release the transferring Partner from
               its obligations hereunder;

                    the  transferee  shall not have the  right to be  separately
               represented on the Management  Committee  unless the transferring
               Partner is a General  Partner  that  previously  had the right to
               appoint  Designee's to the Management  Committee and the transfer
               involves all of such General Partner's Partnership Interest;

                    the  non-transferring  General  Partner(s) shall notify each
               other  Partner  in  writing  of its  decision  to  consent to the
               transfer  within  five  (5)  Business  Days of its  grant of such
               consent  (which notice shall include a copy of the notice sent to
               the  non-transferring  General  Partner(s)  by  the  transferring
               Partner) and,  prior to any such  transfer,  each Partner  (which
               term,  for  purposes of clarity,  includes  for  purposes of this
               subsection (v) the non-transferring  General Partner and excludes
               the  transferring  Partner)  shall have the right for thirty (30)
               Business Days following  such notice to purchase the  Partnership
               Interest being sold by the transferring  Partner pursuant to this
               Article VIII on the same terms and  conditions  as were set forth
               in such  notice.  In the event  that none of the  nontransferring
               Partners   exercises  its  right  to  purchase  such  Partnership
               Interest  being sold,  then the  transferring  Partner shall have
               forty-five   (45)  days   thereafter  to  complete  the



                                     - 29 -
<PAGE>


               sale in accordance with the terms of the notice, after which time
               the  transferring  Partner must again comply with the  procedures
               set  forth in this  Article  VIII.  In the  event  more  than one
               Partner exercises its right to purchase such Partnership Interest
               proposed to be transferred,  then such exercising  Partners shall
               exercise such right on a pro-rata basis based on their respective
               Partnership  Percentages  (without  considering  the  Partnership
               Percentage of the  transferring  Partner or the Partners (if any)
               not electing to exercise such right); or

                    (vii)  such  transferee  shall  not have the  right to sell,
               transfer,  participate,  assign or otherwise  dispose of all or a
               portion of such party's Partnership Interest except in accordance
               with the terms of this Section 8.1; and

                    (viii) the transferee shall execute  documents  satisfactory
               to the Management  Committee  sufficient to make the transferee a
               party to and be bound by the terms of this  Agreement and (B) the
               transferee   shall  expressly   assume  all  obligations  of  the
               transferring Partner hereunder.

                                     ARTICLE
                   ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS

     Additional  Partners.  Persons other than the  undersigned may from time to
time be admitted to the Partnership as General Partners or Limited Partners only
with the unanimous  consent of the  Management  Committee and only on such terms
and conditions as may be prescribed by the Management Committee.

     Withdrawal of Partners.

     No Partner may  withdraw  from the  Partnership  except as provided in this
Section 9.2.

          A Partner shall  immediately cease to be a Partner and shall be deemed
     to have Withdrawn from the Partnership, in the event:

               Such Partner shall commence a voluntary case or other proceedings
          seeking  liquidation,  reorganization  or other relief with respect to
          itself or its debts under any bankruptcy,  insolvency or other similar
          law now or  hereafter  in  effect  or  seeking  the  appointment  of a
          trustee, receiver, liquidator,  custodian or other similar official of
          it or any  substantial  part of its property,  or shall consent to any
          such relief or to the appointment of or taking  possession by any such
          official in an involuntary case or other proceeding  commenced against
          it, or shall make a general  assignment  for the benefit of creditors,
          or shall fail  generally to pay its debts as they become due, or shall
          take any corporate action to authorize any of the foregoing; or

               an  involuntary  case or  other  proceeding  shall  be  commenced
          against  such Partner  seeking  liquidation,  reorganization  or other
          relief  with



                                     - 30 -
<PAGE>


          respect to it or its debts under any  bankruptcy,  insolvency or other
          similar law now or hereafter in effect or seeking the appointment of a
          trustee, receiver, liquidator,  custodian or other similar official of
          it or any substantial part of its property,  and such involuntary case
          or other proceeding shall remain undismissed and unstayed for a period
          of sixty (60) days,  or an order for relief  shall be entered  against
          such Partner under the federal  bankruptcy laws as now or hereafter in
          effect; or

               such  Partner  defaults  in its  obligation  to  make  a  capital
          contribution pursuant to Sections 3.1 and 3.2 (and such default is not
          cured  within two (2) days of written  notice of such  default  from a
          General Partner); or

               it is required to Withdraw as a Partner  pursuant to the Delaware
          Act.

Such Partner's Withdrawal Date shall be the day such Withdrawal occurs.

          Any Partner may Withdraw  voluntarily from the Partnership on not less
     than thirty (30) days' prior  written  notice by such  Partner to the other
     Partners  either (i) in the event that such  Withdrawal  is after March 31,
     1996 and  conditions to the initial draw under the  Construction/Term  Loan
     Documents have not been satisfied or (ii) with the prior unanimous  consent
     of the Management  Committee.  Such Partner's  Withdrawal Date shall be the
     date on which a written notice of Withdrawal is made.

          Upon the Withdrawal of any Partner  pursuant to subsections  9.2(b) or
     (c), such Partner's  Capital  Account and Partnership  Percentage  shall be
     allocated,  as  of  the  Withdrawal  Date,  among  the  other  Partners  in
     proportion to their respective  Partnership  Percentages on such Withdrawal
     Date (it being  understood  that  such  allocation  shall  not  result in a
     Limited Partner becoming a General  Partner).  After its Withdrawal Date, a
     Withdrawn  Partner  shall not have any rights with  respect to the profits,
     capital or affairs of the Partnership  (including,  but not limited to, any
     rights of  representation  on the  Management  Committee  or any  committee
     thereof or any rights on liquidation of the Partnership pursuant to Article
     X).

          On the  Withdrawal  Date for any Partner  that  Withdraws  pursuant to
     Section  9.2(b)  or  Section  9.2(c)(ii),  such  Partner  shall  pay to the
     Partnership in cash any negative balance in such Partner's capital account.
     If the sum of such Partner's  capital account has a positive balance on the
     Withdrawal Date, the Partnership shall pay such amount to such Partner upon
     its withdrawal.

                                     ARTICLE
                           DISSOLUTION AND LIQUIDATION

          Events of Dissolution.

               The Partnership shall be dissolved upon:


                                     - 31 -
<PAGE>


               an Abandonment pursuant to subsection 6.2(e);

               the  occurrence  of an  event  requiring  dissolution  under  the
          Delaware Act;

               the unanimous consent of the General Partners; or

               at the election of  Cogentrix  GP, if Agro Power  ceases,  at any
          time,  to control (as defined in the  definition  of  "Affiliate")  VF
          Delaware or VF.

          Dissolution of the Partnership  shall be effective on the day on which
     the event occurs giving rise to the dissolution,  but the Partnership shall
     not  terminate  until the assets and rights of the  Partnership  shall have
     been distributed as provided herein. Notwithstanding the dissolution of the
     Partnership, prior to the termination of the Partnership, as aforesaid, the
     business of the Partnership and the affairs of the Partners, as such, shall
     continue to be governed by this Agreement. Upon dissolution, the Management
     Committee  shall  liquidate  the  assets of the  Partnership  and apply and
     distribute the proceeds thereof as contemplated by this Agreement.

          Distributions Upon Liquidation.

          After payment of  liabilities  owing to creditors  (but  excluding any
     liabilities  payable  with  respect  to  the  Management  Agreement  or the
     Marketing  Agreement other than amounts then due and owing), the Management
     Committee or the liquidator, if any, shall set up such reserves as it deems
     reasonably  necessary  for any  contingent  or  unforeseen  liabilities  or
     obligations of the Partnership  (other than liability and obligation  owing
     with respect to the Management Agreement and the Marketing Agreement). Said
     reserves may be paid over by the Management  Committee or the liquidator to
     a bank, to be held in escrow for the purpose of paying any such  contingent
     or unforeseen  liabilities  or  obligations  and, at the expiration of such
     period as the Management  Committee or the  liquidator may deem  advisable,
     such reserves  shall be distributed to the Partners or their assigns in the
     manner set forth in subsection (b) below.

          If any General  Partner has a negative  Capital Account at the time of
     dissolution of the  Partnership,  such General Partner shall be required to
     restore  to the  Partnership  the  amount of the  negative  balance  in its
     Capital  Account.  If any Limited  Partner has a negative  Capital  Account
     balance at the time of dissolution of the Partnership, such Limited Partner
     shall have no  obligation to restore to the  Partnership  the amount of the
     negative balance in its Capital Account.

          After paying the liabilities  and providing for the reserves  referred
     to in subsection  10.2(a) and the payment of any restoration  amounts under
     subsection  10.2(b),  the Management  Committee or the liquidator shall, by
     the  end of  the  Partnership's  taxable  year  in  which  the  Partnership
     dissolves   (or,  if  later,   within  90  days  after  the  date  of  such
     termination),  cause the net assets of the Partnership to be distributed in
     accordance with Article V hereof,  provided,  however, that no distribution
     shall be made pursuant to this


                                     - 32 -
<PAGE>


     sentence  that  creates or  increases  a Capital  Account  deficit  for any
     Partner  which  exceeds such  Partner's  obligation to restore such deficit
     (under subsection 10.2(b) above), determined as follows:

          Distributions shall be first determined  provisionally  without regard
     to Capital  Accounts,  and the  allocation  provisions of Article IV hereof
     shall also be  applied  provisionally.  If as a result of such  provisional
     calculations  and  allocations,  any Partner  would  thereby have a Capital
     Account  deficit which exceeds its obligation to restore such deficit under
     subsection  10.2(b)  above,  the  actual  distributions  pursuant  to  this
     subsection  (c) shall be equal to such  provisional  distribution  less the
     amount of such excess and actual  allocations  shall be made in  accordance
     with Article IV taking into account such actual distributions.

          Any  remaining  net assets  shall be  allocated  among the Partners in
     accordance with their positive Capital Accounts.

If such  distributions are insufficient to return to any Partner the full amount
of its  capital  contributions,  it shall  have no  recourse  against  any other
Partner.  Each Partner  shall  receive its share of the net assets in cash or in
kind,  and the  proportion  of such share that is  received in cash shall be the
same for each Partner. In the event that any part of such net assets consists of
notes or accounts receivable or other non-cash assets, the Management  Committee
or the liquidator shall take whatever steps it deems appropriate to convert such
assets into cash or into any other form which would  facilitate the distribution
thereof.  If any assets of the  Partnership  are to be distributed in kind, such
assets  shall be  distributed  on the  basis  of their  fair  market  value,  as
determined by the Management Committee or the liquidator,  if any, acting in its
sole discretion.

                                     ARTICLE
                               DISPUTE RESOLUTION

          Arbitration.

          In the event a dispute arises  between or among any Partners  relating
     to the terms of this Agreement and any Partner gives written notice of such
     dispute to the Management Committee,  then each of the Partners involved in
     such dispute shall refer the dispute to its senior  management.  The senior
     management  of each Partner  involved in such dispute shall meet and confer
     regarding the resolution of the dispute.  In the event a resolution of such
     dispute is not reached  within 30 days of the written  notice,  then any of
     the Partners involved in such dispute may submit the dispute to arbitration
     in accordance with Section 11.1(b).

          Arbitration of disputes pursuant to this Section 14.1(b) shall be held
     in Charlotte,  North Carolina under the commercial arbitration rules of the
     American Arbitration  Association,  and shall be heard by three arbitrators
     selected in accordance with such rules. Each arbitrator shall have at least
     five years  experience in the United States in a profession or  professions
     related to the  subject  matter  involved in the dispute


                                     - 33 -
<PAGE>


     and shall not be a past or present  officer,  director or  employee  of, or
     have any  interest in or  material  relationship  with,  any Partner or any
     Affiliate of any Partner. Any arbitral award shall be final and binding and
     may be  entered  by any  Partner  in any  state  or  Federal  court  having
     jurisdiction thereof. Costs of arbitration (including reasonable attorney's
     fees  and  costs)  shall  be paid  either  equally  by the  parties  to the
     arbitration or in accordance with the decision of the arbitrators.

          Buy/Sell Option.

          In the  event  that the  Management  Committee  is  unable  to reach a
     unanimous  decision  with  respect to any matter set forth in Section  6.2,
     either of the  General  Partners  (such  Partner  herein  referred  to as a
     "Buy-Out  Offeror")  shall have the right to make a written offer to buy (a
     "Buy-Out  Offer") all (but not less than all) of the Partnership  Interests
     of the other General Partner and its Affiliates. The Buy-Out Offer shall be
     at a price  determined in  accordance  with the  Appraisal  Procedure  (the
     "Aggregate  Purchase  Price") which shall be payment for all of the assets,
     liabilities and business of the  Partnership,  and the amount to be paid to
     any selling  Partner  under this  Section 11.2 shall be equal to the amount
     such  selling  Partner  would  receive if all the assets,  liabilities  and
     business of the  Partnership  were sold at the Aggregate  Purchase Price on
     the  date  the  Buy-Out  Offer  was  made  and the  Partnership  were  then
     immediately dissolved in accordance with Section 10.2. The General Partners
     hereby agree to use their best efforts to cause the Appraisal  Procedure to
     be  completed  within  ninety  (90) days after it has been  initiated.  The
     General  Partner  receiving a Buy-Out  Offer (a "Buy-Out  Offeree")  shall,
     within 30 days of the  determination  of the  Aggregate  Purchase  Price in
     accordance  with the  Appraisal  Procedure,  either (a) accept the  Buy-Out
     Offer on behalf of itself and its Affiliates who own Partnership  Interests
     or (b) agree to  purchase  all (but not less  than all) of the  Partnership
     Interests  of the Buy-Out  Offeror and its  Affiliates  upon the  foregoing
     terms and using the same  Aggregate  Purchase  Price as was  determined  in
     accordance  with the  Appraisal  Procedure to determine the amount owing to
     each selling Partner.  The failure of any Partner receiving a Buy-Out Offer
     to respond to such Buy-Out Offer within such 30-day deadline of its receipt
     thereof,  either  agreeing to accept such Buy-Out Offer on behalf of itself
     and its  Affiliates  or by agreeing to purchase all (but not less than all)
     of the  Partnership  Interest of the Buy-Out  Offeror and its Affiliates on
     the foregoing terms,  shall  constitute  (without any further action by the
     Buy-Out  Offeror,  the receiving  General  Partner or any other Partner) an
     irrevocable  acceptance  of such  Buy-Out  Offer by the  receiving  General
     Partner  binding on and  enforceable  against such General  Partner and its
     Affiliates.

          Any purchase of Partnership  Interests required pursuant to subsection
     11.2(a) shall be made through the redemption of such Partnership  Interests
     by  the  Partnership;   provided,  however,  that  if  such  redemption  is
     prohibited  by the Project  Loan  Documents,  such  purchase  shall be made
     directly by the purchasing  General Partner.  The closing date for any such
     purchase shall be on the date set by the purchasing  General  Partner which
     may be at any time within 180 days of the  acceptance of a Buy-Out Offer or
     agreement  to  purchase,  as the case may be. In the  event the  purchasing
     General  Partner  does not close the purchase  within such 180-day  period,
     then  the  purchasing  General  Partner's  right  to  purchase  Partnership
     Interests  under  Section  11.2(a)  shall at the


                                     - 34 -
<PAGE>


     close of business on such 180th day terminate and the other General Partner
     shall  thereafter have the right to purchase the  Partnership  Interests of
     the purchasing  General Partner and its Affiliates at a price determined by
     using the same  Aggregate  Purchase  Price and such other  General  Partner
     shall have 180 days immediately  following the expiration of the inital 180
     day  period in which to close such  purchase.  The price to be paid to each
     selling  Partner  shall  be  paid  by the  purchasing  General  Partner  in
     immediately available funds at the closing.

                                     ARTICLE
                                  MISCELLANEOUS

     Distributions  and  Notices.  Distributions  hereunder  shall be sent,  and
notices  required or permitted  hereunder shall be in writing and shall be sent,
to the address set forth for each Partner in signature pages hereof,  or at such
other address as may be supplied by written notice given in conformity  with the
terms of this Section 12.1.  Notices to the Management  Committee  shall be sent
care of all  Partners who have a right to  designate  members of the  Management
Committee.  Any notice  required or permitted  under this Agreement  shall be in
writing and shall be deemed to have been duly given  and/or  delivered  (a) when
personally  delivered,  (b) when sent by telefax and receipt is acknowledged via
telephone or otherwise  as  confirmation  of such receipt but only if the sender
obtains a printed  confirmation  of the receipt by the  recipient  of the entire
document,  (c) the  second  day  following  the day on  which  the same has been
delivered  prepaid to a reputable  overnight  courier service providing proof of
receipt  but only if sent for next  business  day  delivery or (d) five (5) days
after the deposit in the United  States mails,  registered or certified,  return
receipt  requested and postage  prepaid,  in each case addressed to the party to
whom such notice is to be given at the address set forth on the signature  pages
hereof), or at the most recent address(es)  specified by written notice given to
the other party in the same manner provided in this section; provided,  however,
that notice of an address change shall not be effective until actually received.
Distributions shall be deemed given only upon the receipt thereof by a Partner.

     Disclosure Obligations. The Partnership hereby covenants and agrees for the
benefit of  Cogentrix GP and VF Delaware  that it shall (a) notify  Cogentrix GP
and VF  Delaware  of any  material  fact  necessary  in order to make any of the
representations,  warranties  or  other  statements  made  by it in the  Project
Documents,  or any  other  written  statement  provided  to  Cogentrix  GP or VF
Delaware  not  misleading  and (b)  disclose in writing to  Cogentrix  GP and VF
Delaware any fact which materially  adversely affects, or which could reasonably
be  expected  in the future to  materially  adversely  affect  Cogentrix  GP, VF
Delaware or the  Project,  in each case under  clause (a) or (b) above  promptly
upon receiving knowledge of any such fact.

     Successors and Assigns.  Subject to the  restrictions on transfer set forth
herein, this Agreement,  and, each and every provision hereof,  shall be binding
upon  and  shall  inure  to  the  benefit  of  the  Partners,  their  respective
successors,   successors-in-title,   heirs  and  assigns,  and  each  and  every
successor-in-interest  to any Partner,  whether  such  successor  acquires  such
interest by way of gift,  purchase,  foreclosure  or by any other method,  shall
hold such interest subject to all of the terms and provisions of this Agreement.


                                     - 35 -
<PAGE>

     Amendments.  This  Agreement  may not be released,  discharged,  amended or
modified  in any manner  except by an  instrument  in  writing  signed by a duly
authorized officer of each party hereto.

     Partition.   The   Partners   hereby   agree  that  no  Partner,   nor  any
successor-in-interest  to any Partner, shall have the right while this Agreement
remains in effect to have the  property of the  Partnership  partitioned,  or to
file a complaint or  institute  any  proceeding  at law or in equity to have the
property of the Partnership partitioned,  and each Partner, on behalf of itself,
its  successors,  representatives,  heirs and  assigns,  hereby  waives any such
right.  It is the  intention  of the  Partners  that  during  the  term  of this
Agreement, the rights of the Partners and their successors-in-interest, as among
themselves, shall be governed by the terms of this Agreement, and that the right
of any Partner or  successor-in-interest  to assign, transfer, sell or otherwise
dispose of its interest in the  Partnership  shall be subject to the limitations
and restrictions of this Agreement.

     No  Waiver.  No waiver of any right  under this  Agreement  shall be deemed
effective  unless  contained in a writing  signed by the party charged with such
waiver.  The  failure of any  Partner to insist  upon  strict  performance  of a
covenant hereunder or of any obligation hereunder, irrespective of the length of
time for which such failure  continues,  shall not be a waiver of such Partner's
right  subsequently to demand strict  compliance.  No consent or waiver to or of
any branch or default in the  performance  of any  obligation  hereunder,  shall
constitute  a consent  or waiver to or of any  other  breach or  default  in the
performance of the same or any other obligation hereunder.

     Entire  Agreement.   This  Agreement  constitutes  the  full  and  complete
agreement of the parties  hereto with respect to the subject  matter  hereof and
supersedes  any  and  all  prior   agreements,   understandings,   promises  and
representations  made by either party to the other concerning the subject matter
hereof and the terms applicable hereto.

     Captions.  Titles  or  captions  of  articles,   sections  and  subsections
contained in this Agreement are inserted only as a matter of convenience and for
reference,  and in no way are intended to define,  limit, extend or describe the
scope of this Agreement or the intent of any provision hereof.

     Counterparts. This Agreement may be executed in any number of counterparts,
all of which together shall for all purposes  constitute one Agreement,  binding
upon the Partners notwithstanding that all Partners may not have signed the same
counterpart.

     Applicable  Law. This  Agreement  shall be deemed to have been entered into
and shall be construed and enforced in accordance  with the laws of the State of
Delaware  as applied  to  contracts  made and to be  performed  entirely  within
Delaware.

     Severability. If any provision of this Agreement is or becomes or is deemed
invalid, illegal or unenforceable in any jurisdiction,  (a) such provision shall
be construed or deemed  amended to conform to applicable  laws so as to be valid
and  enforceable,  or, if it cannot be so  construed or deemed  amended  without
materially  altering the intention of the parties hereto,  it shall be stricken,
(b) the validity,  legality and enforceability of such provision will not



                                     - 36 -
<PAGE>


in any way be affected or impaired thereby in any other jurisdiction and (c) the
remainder of this Agreement shall remain in full force and effect.




                     [This space intentionally left blank.]













                                     - 37 -
<PAGE>


     IN WITNESS  WHEREOF,  the Partners have  executed this  Agreement as of the
date first above mentioned.


                                           COGENTRIX OF FORT DAVIS I, INC.,
                                             as General Partner

                                           By
                                             -----------------------------------
                                           Printed Name:  Thomas F. Schwartz
                                           Title:  Vice President - Finance
                                                     and Treasurer

                                           Address for Notices:

                                           9405 Arrowpoint Boulevard
                                           Charlotte, North Carolina  28273
                                           Attention:  General Counsel

                                           Address for Distributions:

                                           9405 Arrowpoint Boulevard
                                           Charlotte, North Carolina  28273
                                           Attention:  Treasurer



                                           VILLAGE FARMS OF DELAWARE, L.L.C.,
                                             as General Partner

                                           By:  Agro Power Development, Inc.,
                                                Managing Member

                                                    By
                                                      --------------------------
                                                    Printed Name:  J. Kevin Cobb
                                                    Title:  Vice President

                                           Address for Notices:

                                           10 Alvin Court
                                           East Brunswick, New Jersey 08816
                                           Attention: Chief Financial Officer

                                           Address for Distributions:

                                           10 Alvin Court
                                           East Brunswick, New Jersey 08816
                                           Attention: Chief Financial Officer



                                     - 38 -
<PAGE>


                                           COGENTRIX OF FORT DAVIS II, INC.,
                                             as Limited Partner

                                           By
                                             -----------------------------------
                                           Printed Name:  Thomas F. Schwartz
                                           Title:  Vice President - Finance
                                                       and Treasurer

                                           Address for Notices:

                                           9405 Arrowpoint Boulevard
                                           Charlotte, North Carolina  28273
                                           Attention:  General Counsel

                                           Address for Distributions:

                                           9405 Arrowpoint Boulevard
                                           Charlotte, North Carolina  28273
                                           Attention:  Treasurer



                                           VILLAGE FARMS, L.L.C.

                                           By:  Agro Power Development, Inc.,
                                                Managing Member

                                                    By
                                                      --------------------------
                                                    Printed Name:  J. Kevin Cobb
                                                    Title:  Vice President

                                           Address for Notices:

                                           10 Alvin Court
                                           East Brunswick, New Jersey 08816
                                           Attention: Chief Financial Officer

                                           Address for Distributions:

                                           10 Alvin Court
                                           East Brunswick, New Jersey 08816
                                           Attention: Chief Financial Officer


                                     - 39 -
<PAGE>


                                 Schedule 1.1(a)

                     Calculation of Internal Rate of Return

Internal Rate of Return Calculation

The  calculation of the Internal Rate of Return in connection  with  determining
the First Priority Return and Second Priority Return will be based upon the cash
inflows and cash  outflows for  Cogentrix GP and Cogentrix LP. The Internal Rate
of Return shall be computed utilizing  Microsoft Excel software version 5.0. The
Internal Rate of Return shall be computed utilizing the @XIRR function in Excel.
For purposes of  calculating  the Internal Rate of Return,  the cash inflows and
cash  outflows to Cogentrix  GP and  Cogentrix  LP shall  consist  solely of the
following:

     Partner Contributions

     All  contributions  made by Cogentrix GP and Cogentrix LP will be reflected
     as a cash  inflow  as of the date such  contribution  was  received  by the
     Partnership.  Cogentrix GP and  Cogentrix LP will be credited for a partner
     contribution at any time such Partner funds cash into the  Partnership.  In
     addition,  to the extent  Cogentrix  Energy,  Inc. or any of its Affiliates
     funds cash directly into the  Partnership  or pays amounts to other persons
     to  fulfill  obligations  under  the  Partnership  Agreement  or any of the
     Project  Documents  or  Project  Loan  Documents  or  incurs  costs or fees
     associated  with  securing  an  obligation  to make a  contribution  to the
     Partnership,  then such funding into the Partnership or such other payments
     and/or  such  costs  or fees  will be  deemed  a  capital  contribution  by
     Cogentrix  GP and  Cogentrix  LP as of the day on  which  such  funding  or
     payment is made or such costs or fees are incurred.

     Distributions to Partners

     All  cash  distributions  will  be  reflected  as a cash  outflow  on a net
     After-Tax basis (based on allocations of the  Partnership's  taxable income
     (loss)  in  accordance   with  Section  4.1)  as  of  the  date  such  cash
     distribution  was received by the Partner.  In addition,  any  construction
     profits received by Cogentrix  Energy,  Inc. in excess of $400,000 shall be
     considered a distribution to Cogentrix GP and Cogentrix LP (in an aggregate
     amount equal to such  excess) for  purposes of the Internal  Rate of Return
     calculation.

The Internal Rate of Return  calculation  shall be performed by Agro Power as of
the end of each calendar  quarter and is subject to the approval of Cogentrix GP
and Cogentrix LP.

All  capitalized  terms used in this Schedule  1.1(a) and not otherwise  defined
herein shall have the meaning set forth in this Agreement.


<PAGE>


                                 Schedule 1.1(c)

                                Project Documents


1.   The Sales  Contract  dated as of February 8, 1996 by and between Agro Power
     which has assigned its interest therein to the  Partnership,  and Southwest
     Texas Municipal Gas Corporation.

2.   The Letter  Agreement dated January 15, 1996, as amended by the Addendum to
     Letter  Agreement,  by and between  Transok,  Inc. and Agro Power which has
     assigned its interest therein to the Partnerships.



<PAGE>



                                  Schedule 6.3

                       Initial Officers of the Partnership


Name                                         Title
----                                         -----

Michael A. DeGiglio                          President
Thomas F. Schwartz                           Vice President
J. Kevin Cobb                                Vice President
Lawrence J. Howard                           Treasurer
Dennis W. Alexander                          Secretary
Lori T. Hladik                               Assistant Secretary