

     

                          EQUIPMENT LEASE AGREEMENT



         EQUIPMENT LEASE AGREEMENT dated March 22, 1999, by and between


BESICORP GROUP,  INC., a New York  corporation,  having its principal office and
place of business at 1151 Flatbush Road, Kingston, New York ("Lessor"), and

BESICORP SERVICES, INC., a New York corporation, having its principal office and
place of business at 1151 Flatbush Road, Kingston, New York ("Lessee").


                              W I T N E S S E T H :


         IN CONSIDERATION of the mutual agreements set forth hereinafter and the
payment of rent as provided for herein, the parties agree as follows:

         1.  Property  Leased.  Subject  to the  terms  and  conditions  of this
Agreement,  Lessor  hereby agrees to lease to Lessee and Lessee hereby agrees to
lease from  Lessor the items of  personal  property  (individually  a "Unit" and
collectively  the  "Equipment")  described in the Schedule  annexed  hereto (the
"Schedule").  Lessee  shall have no right,  title or interest in the  Equipment,
except as expressly set forth in this Lease.

         2. Term,  Rent and  Termination.  The term of this Lease shall be for a
period of two (2) years,  commencing on the date hereof and  continuing  through
March 21, 2001.

         3. Rent.  The total rent  hereunder  (the "Basic Rent") shall be in the
amount of  $507,503  and shall be payable in equal  installments  of  $63,473.88
payable on July 1, 1999,  October 1, 1999,  January 1, 2000, April 1, 2000, July
1, 2000, October 1, 2000, January 1, 2001 and March 1, 2001.

         4. Acceptance,  Warranties,  Limitation of Liability. Lessee represents
and agrees that, as of the date hereof,  each Leased Unit is of a size,  design,
capacity  and  manufacturer  selected  by Lessee and that  Lessee has as between
Lessee and Lessor unconditionally accepted such Item.
LESSOR SHALL HAVE NO LIABILITY TO LESSEE FOR ANY CLAIM, LOSS OR DAMAGE CAUSED OR
ALLEGED TO BE CAUSED DIRECTLY,  INDIRECTLY,  INCIDENTALLY OR  CONSEQUENTIALLY BY
THE EQUIPMENT, BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN, BY ANY
INCIDENT  WHATSOEVER  IN  CONNECTION  THEREWITH,  ARISING  IN STRICT  LIABILITY,
NEGLIGENCE  OR  OTHERWISE,  OR IN ANY  WAY  RELATED  TO OR  ARISING  OUT OF THIS
AGREEMENT.  LESSOR MAKES NO EXPRESS OR IMPLIED WARRANTIES OF ANY KIND, INCLUDING
THOSE OF MERCHANTABILITY, DURABILITY AND FITNESS FOR A PARTICULAR PURPOSE OR USE
WITH RESPECT TO THE EQUIPMENT AND EXPRESSLY DISCLAIMS


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THE SAME. Notwithstanding the foregoing,  Lessee will be entitled to the benefit
of any applicable manufacturer's warranties, and, to the extent assignable, such
warranties are hereby  assigned by Lessor for the benefit of Lessee,  and Lessee
shall take all reasonable  action to enforce such warranties  where available to
Lessee.

         5. Obligation to Pay Rent Unconditional.  This Lease is a net lease and
Lessee  agrees that its  obligation to pay all Basic Rent and other sums payable
hereunder (collectively,  "Rent"), and the rights of Lessor in and to such Rent,
are absolute and unconditional and are not subject to any abatement,  reduction,
setoff,  defense,  counterclaim or recoupment due or alleged to be due to, or by
reason of, any past,  present or future  claims  which  Lessee may have  against
Lessor,  the manufacturer or seller of the Equipment,  or against any person for
any reason whatsoever.

         6. Installation, De-installation, Maintenance and Repair. Lessee shall,
at its expense, be responsible for the delivery, installation,  de-installation,
redelivery,  maintenance  and  repair  of the  Equipment  by a party  reasonably
acceptable to Lessor.  Lessee agrees,  at all times during the term, at its sole
expense, to keep the Equipment in good repair,  condition and working order, and
to furnish all parts,  mechanisms or devices which may be required in the course
of so  doing.  Lessee  will at all times  during  the term  maintain  in force a
maintenance  agreement  covering the Equipment with the manufacturer  thereof or
such other party as may be reasonably  acceptable  to Lessor.  Lessor shall have
the right, but not the obligation,  to inspect the Equipment  during  reasonable
business  hours.  Lessee shall permit  manufacturer  access to the  Equipment to
install  "no  charge"  engineering  changes  in order to keep the  Equipment  at
current engineering levels.

         7.  Representations and Warranties.  Lessee represents and warrants for
the benefit of Lessor that:

                  (a) Lessee is a corporation  duly organized,  validly existing
         and in good  standing  under  the  laws of the  State  of New  York and
         authorized to do business in any jurisdiction  where the Equipment will
         be located and has adequate power to enter into and perform this Lease.

                  (b) The Lease has been duly authorized, executed and delivered
         by Lessee and  constitutes  the valid,  legal and binding  agreement of
         Lessee, enforceable in accordance with its terms.

                  (c) The entering into and  performance  of this Lease will not
         violate any judgment,  order, law or regulation applicable to Lessee or
         any  provision  of  Lessee's  Articles of  Incorporation  or By-laws or
         result in the creation of any lien, charge,  security interest or other
         encumbrance  upon any assets of Lessee or on the Equipment  pursuant to
         any  instrument to which Lessee is a party or by which it or its assets
         may be bound.

                  (d) There are no actions,  suits or proceedings pending, or to
         the knowledge of Lessee  threatened,  before any court,  administrative
         agency, arbitrator or governmental


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         body  which  will,  if  determined  adversely  to  Lessee,   materially
         adversely  affect its  ability to perform  its  obligations  under this
         Lease or any related agreement to which it is a party.

         8.       Risk of Loss.

                  (a) Lessee agrees to bear the risk of loss with respect to any
damage,  destruction,  loss, theft, or governmental  taking of any Unit, whether
partial or  complete  and whether or not through any fault or neglect of Lessee.
Except as provided in this Section 8, no such event shall relieve  Lessee of its
obligation to pay Rent hereunder.

                  (b) If any Unit is  damaged,  Lessee  shall,  at its  expense,
cause  such  repairs  to be made as are  necessary  to  return  such Unit to its
previous condition,  or if insurance is available,  shall utilize such insurance
proceeds received to repair such damage.

                  (c) In the  event of a  governmental  taking  of a Unit for an
indefinite  period or for a stated period which does not extend beyond the term,
all  obligations of the Lessee with respect to such Item  (including  payment of
Rent) will continue. So long as Lessee is not in default hereunder,  Lessor will
pay to Lessee all sums received by Lessor by reason of such governmental  taking
up to the amount paid by Lessee during such period.

         9.  Insurance.  Lessee,  at its  expense,  shall  insure the  Equipment
against  all  risks  and in such  amounts  as Lessor  reasonably  requires  with
carriers  acceptable to Lessor. All such insurance policies must name Lessor and
Lessee as  insureds,  and must  provide that they may not be canceled or altered
without at least 30 days prior written notice to Lessor.  Upon Lessor's  written
consent, Lessee may act as a self-insurer in amounts acceptable to Lessor.

         10. Indemnity. Except for the gross negligence or willful misconduct of
Lessor, Lessee agrees to indemnify Lessor against, and hold Lessor harmless from
any and all claims, actions, suits,  proceedings,  costs, expenses,  damages and
liabilities  at law or in equity,  including  attorneys'  fees,  arising out of,
connected with or resulting from this Lease or the Equipment, including, without
limitation,  the  manufacturer,   selection,   purchase,  delivery,  possession,
condition, use, operation or return thereof. Lessee's obligations hereunder will
survive the expiration of this Lease with respect to acts or events occurring or
alleged to have  occurred  prior to the return of the Equipment to Lessor at the
end of the Lease term. Lessee shall, at its own expense, carry bodily injury and
property damage liability  insurance during the term of the Lease in amounts and
against risks  customarily  insured  against by the Lessee on equipment owned by
it. Any  amounts  received  by Lessor with  respect to such  insurance  shall be
credited against the Lessee's obligations under this Section 10.

         11. Liens and Taxes.  Lessee will,  at its expense,  keep the Equipment
free and clear of all levies, liens and encumbrances. Lessee shall not assign or
otherwise  encumber this Lease or any of its rights hereunder  without the prior
written  consent of Lessor.  Lessee  will  declare  and pay when due all license
fees,  registration  fees,  assessments,  charges and taxes,  whether municipal,
state or federal, including, but not limited to, sales, use, excise and property
taxes, and penalties and interest

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with respect thereto, excluding,  however, any taxes based on or measured solely
by Lessor's net income.  Lessee shall provide evidence of any payment  hereunder
upon request of Lessor.

         12. Lessee's Failure to Perform. Should Lessee fall to make any payment
or do any act required herein,  Lessor has the right, but not the obligation and
without releasing Lessee from any obligation hereunder,  to make or do the same,
and to pay,  purchase,  contest or compromise  any  encumbrance,  charge or lien
which in the  judgment  of  Lessor  appears  to  affect  the  Equipment,  and in
exercising any such rights,  incur any liability and expend whatever  amounts in
its absolute discretion it may deem necessary therefor.  All sums so incurred or
expended  by Lessor  shall be due and  payable  by Lessee  within 30 days  after
demand, shall be considered Rent hereunder and will bear interest at the rate of
8% per anum.

         13.  Equipment  is Personal  Property;  Location of  Equipment.  Lessee
covenants and agrees that the Equipment is, and will at all times be and remain,
personal  property.  Lessee may move a Unit from the  address set forth above to
another of Lessee's locations upon 20 day's notice to Lessor; provided, however,
that in no event will any Unit be moved to a location  outside the United States
of America or to any jurisdiction  within the United States of America which has
not adopted the Uniform Commercial Code.

         14.  Designation  of  Ownership.  If at any time during the term hereof
Lessee is  supplied  with  labels,  plates or other  markings  stating  that the
Equipment  is  owned  by  Lessor,  Lessee  agrees  to  affix  and  keep the same
prominently  displayed  on the  Equipment.  Lessee  agrees  to  execute  Uniform
Commercial Code financing statements and any and all other instruments necessary
to perfect  Lessor's  interest in this Lease,  the payments due hereunder or the
Equipment.

         15. Use.  Lessee shall use the Equipment in a careful and proper manner
in  conformance  with  manufacturer's  specifications  and shall comply with and
conform  to all  federal,  state,  municipal  and  other  laws,  ordinances  and
regulations  in any way relating to the  possession,  use or  maintenance of the
Equipment.

         16. Surrender of Equipment.  Upon the expiration or earlier termination
of this Lease with  respect to any Unit,  Lessee shall return the same to Lessor
in good repair,  condition and working  order,  ordinary wear and tear resulting
from proper use thereof alone excepted. All cost of de- installation, packaging,
insurance and transportation of the equipment will be borne by Lessee.

         17.  Default.  The  occurrence  of any of the  following  events  shall
constitute  an Event of Default  and shall,  at the option of Lessor,  terminate
this Lease and Lessee's right to possession of the Equipment:

                  (a) The  non-payment  by Lessee of any item of Rent  within 10
         days after written notice that such Rent is overdue.

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                  (b) The  failure by Lessee to  perform  or  observe  any other
         term,  covenant or condition of this Lease which is not cured within 30
         days after written notice thereof from Lessor.

                  (c) Any affirmative act of insolvency by Lessee, or the filing
         by  Lessee  of  any   petition   or   action   under  any   bankruptcy,
         reorganization,  insolvency, arrangement,  liquidation,  dissolution or
         moratorium law, or any other law or laws for the relief of, or relating
         to debtors.

                  (d) The  filing of any  involuntary  petition  against  Lessee
         under  any   bankruptcy,   reorganization,   insolvency,   arrangement,
         liquidation,  dissolution  or  moratorium  law or any other law for the
         relief of or relating to debtors which is not dismissed  within 60 days
         thereafter,  or the appointment of any receiver,  liquidator or trustee
         to take  possession  of any  substantial  portion of the  properties of
         Lessee,  unless the  appointment is set aside or ceases to be in effect
         within 60 days from the date of said filing or appointment.

                  (e) The subsection of a substantial part of Lessee's  property
         or any  Unit to any  levy,  seizure,  assignment  or sale for or by any
         creditor or governmental agency.

                  (f) Any  representation  or  warranty  made by  Lessee in this
         Lease or in any document  furnished  by Lessee to Lessor in  connection
         with  this  Lease  or with  respect  to the  acquisition  or use of the
         Equipment shall be untrue in any material respect.

         18.      Remedies.  Upon the happening of any of the above events:

                  (a) Lessor may proceed, by appropriate court action or actions
         either at law or in  equity,  to enforce  performance  by Lessee of the
         applicable  covenants of this  Agreement or to recover  damages for the
         breach thereof.

                  (c)      Lessor may, upon notice and demand upon Lessee:

                           (i) Take  possession  of the  Equipment and lease the
                    same or any portion thereof, for such period, amount, and to
                    such entity as Lessor shall  reasonably  elect. The proceeds
                    of such lease  will be  applied by Lessor (A) first,  to pay
                    all  actual and  reasonable  costs and  expenses,  including
                    reasonable legal fees and disbursements,  incurred by Lessor
                    as a result of the default and the  exercise of its remedies
                    with  respect  thereto,  and (B)  second,  to pay  Lessor an
                    amount  equal  to  any  delinquent  Rent  due.  Any  surplus
                    remaining  thereafter  will be  retained  by Lessor.  To the
                    extent  Lessor has not  received  the amounts  specified  in
                    Section   17(a),   and  the   proceeds  of  such  Lease  are
                    insufficient to pay such amounts,  Lessee will forthwith pay
                    such  amounts to Lessor plus  interest at the rate of 8% per
                    annum.

                           (ii)  Take  possession  of  the  Equipment  and  upon
                    reasonable  terms  sell the same or any  portion  thereof at
                    public or private sale and without demand or notice



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                    of  intention  to sell.  The  proceeds  of such sale will be
                    applied  by  Lessor  (A)  first,   to  pay  all  actual  and
                    reasonable  costs and expenses,  including  reasonable legal
                    fees and  disbursements,  incurred  by Lessor as a result of
                    the default and the  exercise of its  remedies  with respect
                    thereto,  and (B) second,  pay to Lessor an amount  equal to
                    any  delinquent  Rent due and payable.  To the extent Lessor
                    has not received the amounts specified in Section 17(a), and
                    the  proceeds  of such  sale  are  insufficient  to pay such
                    amounts,  Lessee will  forthwith  pay such amounts to Lessor
                    plus interest at the rate of 8% per annum.

              The exercise of any of the  foregoing  remedies by Lessor will not
              constitute a  termination  of this Lease unless Lessor so notifies
              Lessee,  but in no event  shall  Lessee  be  required  to make any
              further rent payments. No remedy referred to in this Section 18 is
              intended  to be  exclusive,  but each shall be  cumulative  and in
              addition  to any  other  remedy  referred  to above  or  otherwise
              available to Lessor at law or in equity.

              19.  Special  Terms.  Any  special  terms set forth in one or more
Exhibits,  Schedules  or Riders to this  Lease as they  apply to the  applicable
Equipment Schedule(s) will be applicable as though fully set forth herein.

              20.  Lessee's  Right to  Purchase.  Lessee shall have the right to
purchase  all of the  Equipment  effective  as of March 31, 2000 (the  "Purchase
Date") for a purchase  price of $288,479  together  with the lease  payment that
would have been due on April 1, 2000.  Lessee may exercise its right to purchase
by notice to Lessor given not less than 15 days prior to the Purchase  Date.  In
the event Lessee shall  exercise its right to purchase,  Lessor shall deliver to
Lessee on or prior to the Purchase  Date a quit-claim  bill of sale with respect
to all of the Equipment  against  delivery by Lessee to Lessor of a certified or
official bank check  representing the aggregate  purchase price.  Following such
purchase, this Lease shall be deemed to be terminated and of no further force or
effect.

              21. Lessor's Right to Sell. If Lessee shall not have exercised its
right to purchase the  Equipment as set forth in Paragraph 20, Lessor shall have
the right to sell the Equipment to Lessee as of March 21, 2001 (the "Sale Date")
for a purchase price of $55,000. Lessor may exercise its right to sell by notice
to  Lessee  given  not less than 15 days  prior to the Sale  Date.  In the event
Lessor  shall  exercise  its right to sell,  Lessor  shall  deliver  to Lessee a
quit-claim bill of sale with respect to all of the Equipment against delivery by
Lessee to  Lessor  of a  certified  or  official  bank  check  representing  the
aggregate purchase price.

              22.   Miscellaneous.

                    (a) Effect of Waiver.  No delay or omission to exercise  any
right or remedy  accruing  to Lessor  upon any breach or default of Lessee  will
impair  any such  right or  remedy  or be  construed  to be a waiver of any such
breach or default, nor will a waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter  occurring.  Any
waiver,  permit,  consent  or  approval  on the part of Lessor of any  breach or
default under this Lease

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or of any provision or condition hereof must be in writing and will be effective
only to the extent in such writing specifically set forth.

                    (b) Notices. Any notice required or permitted to be given by
the provisions hereof must be in writing and will be conclusively deemed to have
been  received by a party hereto on the day it is delivered to such party at the
address indicated below (or at such other address as such party specifies to the
other party in writing) or, if sent by registered  mail,  on the fifth  business
day after the day on which mailed, addressed to such party at such address:

                    IF TO LESSOR:           As set forth above



                    IF TO LESSEE:           As set forth above

                    (c) Attorney's Fees and Costs. In the event of any action at
law or suit in equity in relation to this Lease,  the  prevailing  party will be
entitled to a reasonable sum for its attorney's fees and costs.

                    (d)  Applicable  Law. This Lease and  Equipment  Schedule(s)
will be governed by, and construed in accordance  with, the laws of the State of
New York.

                    (e) Entire  Agreement.  Lessor and Lessee  acknowledge  that
there are no agreements or  understandings,  written or oral, between Lessor and
Lessee with  respect to the  Equipment,  other than as set forth herein and that
this Lease contains the entire agreement  between Lessor and Lessee with respect
thereto.  This Lease may not be  altered,  modified,  terminated  or  discharged
except  by  a  writing  signed  by  the  party  against  whom  such  alteration,
modification or discharge is sought.

                    (f) Severability.  Any provision of this Lease prohibited by
or unlawful or unenforceable under any applicable law or any jurisdiction shall,
at the sole option of the Lessor, be ineffective as to such jurisdiction without
invalidating the remaining provisions of this Lease.

                    (g) Quiet  Enjoyment.  Provided that no Event of Default has
occurred or is continuing  hereunder,  Lessor shall not interfere  with Lessee's
right of quiet enjoyment and use of the Equipment.

                    (h) Substitution.  Prior to delivery, Lessor and Lessee may,
by mutual  agreement,  provide  Equipment  with  different  serial  numbers  and
locations than those shown on the Schedule.

                    (i)  Alterations.  Lessee shall be permitted,  with Lessor's
consent and at its own  expense,  to make  alterations  or  improvements  to the
Equipment which are readily  removable  without  causing  material damage to the
Equipment and do not adversely affect any manufacturer's warranties with respect
to such equipment.

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                    (j) Headings.  Section headings are for convenience only and
shall not be construed as part of this Lease.


              IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease to be
duly executed all as of the date first above written.



LESSOR:                                             LESSEE:
BESICORP GROUP, INC.                                BESICORP SERVICES, INC.


By: _________________________                   By: ________________________  

Name: _______________________                   Name:_______________________  

Title: ______________________                   Title: _____________________ 

Date:  ______________________                   Date:  _____________________


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