MARGO CARIBE INC
<DOCUMENT>
<TYPE>EX-10.A1
<SEQUENCE>4
<FILENAME>margocaribe10k2003ex10a-1.txt
<TEXT>

                                                                 Exhibit 10(a)1
                                 LEASE AGREEMENT

     LEASE AGREEMENT  entered into as of the first day of January,  2004, by and
between  MICHAEL J. SPECTOR,  who is the same person as Michael  Joseph  Spector
Miller,  and his wife  MARGARET D.  SPECTOR,  who is the same person as Margaret
McCredie Dickson,  both of legal age, married to each other, farmer and investor
respectfully,  and  residents of Dorado,  Puerto Rico  (hereinafter  referred to
collectively  as the  "Lessors");  and MARGO NURSERY FARMS,  INC., a corporation
organized  and  existing  under  the laws of the  Commonwealth  of  Puerto  Rico
(hereinafter referred to as the "Lessee"),  acting and represented herein by its
Senior Vice President and Chief Financial Officer,  Juan B. Medina, who has been
duly  authorized to appear herein by Resolution of the Board of Directors of the
Lessee.

     WHEREAS,  the Lessors are the owners in fee simple  ("pleno  dominio") of a
parcel of land  (hereinafter  referred to as the  ("Property")  described in the
Spanish language as follows:

"RUSTICA: Finca sita en el Barrio Cerro Gordo de Vega Alta, compuesta de ochenta
y seis punto ciento once (86.111) cuerdas que radica en el Barrio Sabana Llana,
sitio Cerro Gordo. En lindes por el Norte con carretera Insular seiscientos
noventa (690), denominada Cerro Gordo y parcela dedicada a uso publico: por el
Sur, Este y Oeste, con terrenos de Rubert Hermanos, Inc."

     The  Property is the remanant of the  following  parcel of land of which it
was  segregated  by means of Deed  number  Twenty (20) of  September  eight (8),
nineteen  hundred and ninety  seven  (1997),  executed in San Juan,  Puerto Rico
before Notary Blas R.  Ferraiouli  Martinez,  presented for recordation at Entry
Number 19 of the Dairy Book 223 on  October  fiftee  (15),  ninety  hundred  and
ninety seven (1997), described in the Spanish language as follows:

     "Finca  sita en el Barrio  Cerro  Gordo de Vega Alta,  compuesta  de 112.37
cuerdas,  segun  documento  presentado  radica en el Barrio Sabana,  sitio Cerro
Gordo y que  mensurada  por  los  Agrimensores  Milton  W.  Ruiz y Jose  Ramirez
Grandier en veintiocho de octubre de mil novecientos  cuarenta y tres, la cabida
de  dicha  finca  resulto  de  ciento  doce  punto  treinta  y  siete   cuerdas,
equivalentes  a cuarenta y cuatro (44)  hectareas,  dieciseis  areas y treinta y
cinco areas;  en lindes por sus cuatro puntos  cardinales con terrenos de Rubert
Hermanos,  Inc.,  estando  cruzada de Norte a Sur por la carretera  Insular seis
noventa (690) denominada Cerro Gordo."

     Inscrita al folio 97 del volumen 50 de Vega Alta, Registro de la Propiedad,
Seccion III de Bayamon, Finca numero 256.


     WHEREAS,  the Lessors and the Lessee have agreed to the lease the Property;

     NOW,  THEREFORE,  in consideration of the mutual covenants  hereinafter set
forth, the parties hereto agree as follows:

     1. Lease:  The Lessors  hereby lease to the Lessee,  and the Lessee  hereby
lets from the Lessors the Property.

                                       1
<PAGE>

     2. Term and Early  Termination:  The Demised Premises are leased for a five
(5) year term (hereinafter referred to as the "Term"),  commencing retroactively
as of  January  1st,  2003 and  ending on  December  31,  2007.  The  Lessee may
terminate this Lease before the expiration of the Term or any extension thereof,
by giving the  Lessors  written  notice to such  effect at least  eighteen  (18)
months before the proposed early termination.

     3. Rent: The Lessee shall pay to the Lessors during the Term monthly rental
payments, in advance, in the amount of TWENTY FOUR THOUSAND DOLLARS ($24,000.00)
each.

     4. Option to Renew:

     (a) The  Lessors  hereby  grant to the Lessee an option to renew this Lease
for an  additional  five (5) year  period  under the same  terms and  conditions
hereof  except that the monthly  rent during the five (5) years  renewal  period
shall be the greater  of: (i) TWENTY  FOUR  THOUSAND  DOLLARS  ($24,000.00)  per
month;  or (ii) the monthly rent  provided for in paragraph 3 above,  subject to
adjustment  on January 1st,  2008, on the basis of the increase in the Wholesale
Price Index ("WPI") published by the United States  Department of Labor,  Bureau
of Labor Statistics,  from the WPI which was in effect on January 1, 2003 to the
WPI which is in effect on January 1, 2008.

     (b) This option to renew may be exercised  by the Lessee by written  notice
given to the  Lessors at least  ninety (90) days  before the  expiration  of the
Term. Unless otherwise  provided,  the word "Term" shall be construed to include
any renewal period.

     5. Lessee's Acceptance of Property: The Lessee acknowledges it has occupied
the Demised  Premises  for a number of years and, as such,  it has  examined the
Demised Premises and continues to accept the same in the condition they are now,
without  representation  or warranty  by the  Lessors,  express or implied,  and
without  recourse  to the Lessors as to the nature of  condition  of the Demised
Premises.

     6. Use, Maintenance and Repair: The Lessors and the Lessee acknowledge that
the Demised  Premises  consists  basically of a developed  nursery with offices,
green houses, warehouses, pumping stations, etc., and will be used by the Lessee
only in connection with its agribusiness.  Throughout the Term the Lessee shall,
at its  expense,  keep and maintain in a good,  clean,  and safe  condition  the
Demised Premises by undertaking all ordinary and necessary  repairs.  The Lessee
shall  conduct its  business in the Demised  Premises in a safe manner and shall
maintain the Demised premises free of any materials which may result in a public
nuisance.

     7. Alterations and Improvements:

     (a) The Lessee may, it its own expense,  make such alterations,  additions,
and changes to the Demised  Premises as it may deem  necessary or expedient  for
its business  operations within the Demised  Premises,  provided that the Lessee
shall not make any  material  change or  alteration  in or  around  the  Demised
premises  which,  when  completed,  would  substantially  diminish  the value of
Demised  Premises  without the written  consent of the  Lessors.  The  foregoing
notwithstanding,  if the estimated cost of any proposed alteration, improvement,
addition or change to the Demised  Premises  shall exceed the sum of ONE HUNDRED
THOUSAND  DOLLARS  ($100,000.00),  the Lessee  shall first  obtain the  Lessors'
approval, but such approval shall not be unreasonably withheld by the Lessors.

                                       2
<PAGE>

     (b) During the course of any  construction,  alteration  or addition to the
Demised  premises,  the Lessee  shall  deliver to the  Lessors,  at the Lessee's
expense,  comprehensive  general liability insurance of the character and in the
limits reasonably required by the Lessors,  but in an amount not less that THREE
MILLION DOLLARS ($3,000,000).

     (c) Any  alteration,  addition  and  improvement  placed  upon the  Demised
Premises by the Lessee,  as well as fixtures and  articles of personal  property
attached  to  or  used  in  connection  with  such  alterations,   additions  or
improvements,  shall  immediately  become the property of the Lessors and at the
end or other termination of this lease, and shall be surrendered to the Lessors;
provided,  however, that Lessors shall pay Lessee for the unamortized book value
of those leasehold improvements fixed to the the Demised Premises as of the date
of  termination  of  this  lease;  and,  provided,  further,  that  the  movable
furniture,  movable personal property,  and movable trade fixtures put in at the
expense of the Lessee which,  pursuant to the  provisions of this Lease,  may be
removed by the Lessee at or before the expiration or sooner  termination of this
Lease,  shall not be deemed to be the  property  of,  nor  surrendered  to,  the
Lessors.

     8. Property Taxes: The Lessee shall pay the real property taxes allocate to
the Demised Premises.

     9. Insurance:  Throughout the Term, the Lessee shall maintain in full force
comprehensive  general  public  liability  insurance  against  claims for bodily
injury,  death,  or  property  damage,  occurring  on, in or about  the  Demised
Premises and the adjoining and related  parking  areas,  streets,  sidewalks and
passageways,  such  insurance  to provide  limits of no less than THREE  MILLION
DOLLARS  ($3,000,000.00)  per person,  THREE MILLION DOLLARS  ($3,000,00.00) per
occurrence,  and ONE MILLION DOLLARS  ($1,000,000.00)  for property damage.  The
policy shall name both the Lessors and Puerto Rico Production Credit Association
(or its legal successor) as the insured parties. The Lessee shall deliver to the
Lessors  certificates  of insurance  certifying  that such  insurance is in full
force and effect and in the amounts set forth herein.

     10. Destruction or Contamination:

     (a) If,  during the term,  the Demised  Premises  are totally or  partially
destroyed,  rendering them totally or partially  inaccessible  or unusable,  the
Lessee shall, within six (6) months of the date of casualty, restore the Demised
Premises to substantially the same condition as they were immediately before the
destruction,  whether or not the insurance  proceeds are sufficient to cover the
actual cost of restoration. Such destruction shall not terminate this Lease, and
there shall not be any reduction or abatement of any rent due hereunder.

     (b) If the  Demised  Premises,  or a  substantial  portion  of the  Demised
Premises (not less that 25%) sufficient to render the remaining  portion thereof
unsuitable  for  the  Lessee's  continued  use or  occupancy  for  the  Lessee's
business,  are taken by condemnation or other eminent domain proceeding pursuant
to any law, general or especial,  then this Lease shall terminate as of the date
possession of the Demised  Premises or such  substantial  portion  thereof is so
taken.

     (c) The Lessee accepts full  responsibility  for any  contamination  of the
Demised  Premises  resulting from the Lessee's  operations,  not only during the

                                       3
<PAGE>

term of this  Lease  buy also  under the prior  leases of the  Demised  Premises
superseded by the terms hereof. The Lessee also accepts full  responsibility for
any contamination of water, land, air of any property of third parties,  as well
as abutting  parcels,  resulting  from the  Lessee's  operations  in the Demised
Premises.  The  Lessors  acknowledge  that  the  Demised  Premises  prior to the
commencement of the lease term hereunder.  The Lessors hereby release the Lessee
from  responsibility for any claims arising from the Lessee's use of the product
"Benlate" in its operations at the Demised Premises.

     11. Utility Charges: All costs for providing security and/or guard services
for the  Demised  Premises  shall be paid and  shall be for the  account  of the
Lessee. The Lessee shall also pay and be responsible for electricity,  water and
other utility charges including, but not limited to, telephone and telefax.

     12. Default by Lessee:

     (a) The occurrence of any of the following shall constitute a default under
this Lease:

          (i) Any  failure  by the  Lessee  to pay the rent  when due as  herein
     specified.  The Lessors shall forward  notice of such default in writing to
     the  Lessee,  and the  failure  of the Lessee to cure such  default  within
     thirty  (30) days after the date of receipt of such  notice  shall,  at the
     option of the Lessors, authorize the Lessors to terminate this Lease.

          (ii) The abandonment of the Demised Premises by the Lessee.

          (iii) A  failure  by the  Lessee  to  observe  and  perform  any other
     provision of this Lease,  where such failure continues for thirty (30) days
     after written notice by the Lessors. However, if the nature of such default
     is such that it cannot  reasonable be cured within such period,  the Lessee
     shall not be deemed to be in default if the Lessee shall within this period
     commence to cure and then diligently complete such curing.

          (iv)  The  making  by the  Lessee  of an  assignment  of its  interest
     hereunder without prior written approval from the Lessors, or if the Lessee
     shall file a petition  in  bankrupt  or the  appointment  of a receiver  or
     assignee shall automatically  terminate all rights of the Lessee under this
     Lease  and no  rights  thereto  shall  pass  to the  receiver,  trustee  in
     bankruptcy or assignee.

     (b) In any such  events,  the  Lessors may give the Lessee  written  notice
specifying a day not less than five (5) days thereafter whereupon the Term shall
end, and on the day  specified the Term shall expire as if that day were the day
herein  fixed for the  expiration  of the Term,  and the  Lessee  shall quit and
surrender the Demised  Premises to the Lessors,  and the rent for the balance of
the Term of this Lease shall become  immediately  due to compensate  the Lessors
for all  damages  sustained  by the Lessors  which  resulted  from the  Lessee's
failure to perform its obligations hereunder.

     13.  Sublease:  The Lessee will not assign or sublease the Demised Premises
without the prior written permission of the Lessors.

     14.  Access:  Although  the Lessee  shall have  complete  control  over the
Demised  Premises,  the Lessors  shall have the right to enter into and upon the

                                       4
<PAGE>

Demised  Premises or any part thereof  during  reasonable  hours for  inspection
purposes for showing the Demised  Premises to prospective  purchaser,  or within
ninety (90) days before the  expiration  of the Term or any renewal  thereof for
showing the Demised Premises to prospective  tenants. The Lessors may also enter
the Demised Premises at hours  previously  agreed to by the parties for purposes
of keeping and maintaining and/or making any and all alterations or improvements
that may be  required  or that may have been  agreed to by the  Lessors  and the
Lessee.

     15. Quiet  Enjoyment;  Option to Purchase:  The Lessors  covenant  that the
Lessee,  on paying the rent and  performing  all of its  obligations  hereunder,
shall  peacefully  and  quietly  have,  hold  and  enjoy  the  Demised  Premises
throughout  the Term and any  renewal  thereof  without  hindrance,  ejection or
disturbance  by any  person(s)  claiming  under the  Lessors.  The  Lessors,  in
addition,  expressly  agree and covenant  that should the Lessors  decide at any
time  during the Term of this Lease or any  renewal  thereof to sell or mortgage
the Demised  Premises or the Property of which it forms part,  the Lessors shall
require  from the buyer or mortgage  that this Lease be honored  under the exact
terms and conditions hereof by such buyer or mortgages.

               (a) The Lessors  hereby grant to the Lessee an option to purchase
          the Demised  Premises  at any time  during the Term and any  extension
          thereof  only in the case both  Lessors  pass away  during the Term of
          this Agreement or extension  thereof.  As such,  Lessee shall have the
          right to exercise  this option with the Estate of both Lessors  during
          the Term of this Agreement and any extension thereof.

               (b)  The  purchase  price  for  the  Demised  Premises  shall  be
          determined by MAI appraisal. Both the Estate of Lessors and the Lessee
          shall each  appoint  one  appraiser  within  fifteen  (15) days of the
          Lessee's  exercise of the option to  purchase.  Each  appraiser  shall
          notify both parties of their  decision,  and the purchase  price shall
          constitute the sum of both  appraisers'  decision  divided by two. The
          Lessee shall pay both appraisers for their services.  Should either of
          the parties not appoint an appraiser named by above-referenced fifteen
          (15)  day  period,  the  appraiser  named  by the  other  party  shall
          determine the value of the Demised Premises.

               (c) In addition to any rent and all other charges due  hereunder,
          throughout the Term and any extension thereof,  and until the date, if
          any, the Lessee exercises the option to purchase, the Lessee shall pay
          the Estate of  Lessors,  in  consideration  for the  granting  of said
          option,  the  monthly sum of ONE  THOUSAND  DOLARS  ($1,000.00).  This
          option shall terminate on the first to occur of the following events:

               1) The exercise of this option and the  consummation  of the sale
          and purchase of the Demised Premises by the parties hereto.

               2)  Termination  of the  herein  Lease,  whether  by  expiration,
          default, or mutual consent of the parties hereto.

               3) Failure and or refusal of the Lessee to pay in a timely manner
          any sums due hereunder for this option.

               (d) Upon  exercise  of the option to  purchase,  payment  will be
          made,  and within one  hundred and eighty  (180)  days,  the Estate of
          Lessors and the Lessee shall execute a public deed transferring  title
          to the Demised Premises in favor of the Lessee,  free and clear of all


                                       5
<PAGE>

          liens and encumbrances. The Lessee shall pay all fees relating to said
          execution,  including but not limited to, the internal  revenue stamps
          and  vouchers  and  notarial  fees  required for the public deed and a
          certified copy thereof, and the recording of the title transfer in the
          records of the Registry of Property.

               (e) Upon request of the Lessee  during the Term and any extension
          thereof, and at the expense of the Lessee, the Lessors agree that this
          option to  purchase  be recorded  in the  Registry  of  Property.  The
          Lessors  agree to execute (at the expense of the Lessee) a public deed
          and any other instruments, public or private, which may be required or
          convenient for such option to be recorded in the Registry of Property.

     17. Mortgages:  As further  consideration for the Lessee entering into this
Lease and for the  monthly  payments  to the  Lessors for the option to purchase
herein granted to the Lessee,  the Lessors agree not to mortgage or encumber the
Property  throughout  the  term,  and any  extension  thereof,  in excess of TEN
MILLION  DOLLARS  ($10,000,000.00)  unless  it  is  for  interim  financing  for
development of land that has not yet segregated.

     18.  Surrender of Possession:  Upon the expiration or other  termination of
this  Lease,  the Lessee  shall  remove from the  Demised  Premises  any and all
movable  industrial  equipment and  installations  belonging to the Lessee, in a
workman-like  manner,  and shall repair any damage which may thereby result; and
the Lessee shall surrender the Demised Premises in as good condition as the same
were received,  ordinary wear and tear, and damage by casualty not caused by the
act or negligence of the Lessee excepted. Any improvements made by the Lessee to
the  Demised  Premises  shall  remain  therein  and become the  Property  of the
Lessors, without any compensation being due to the Lessee for such improvements.

     19.  Separability:  Except as otherwise expressly agreed, each provision of
this Lease shall be  construed  to be a separate  and  independent  covenant and
agreement.  If any term or provision of this lease or the application thereof to
any   personal   circumstances   shall  to  any  extent  be  held   invalid  and
unenforceable,  the  reminder of this Lease or the  application  of such term or
provision  to persons or  circumstances  other than as to which it is invalid or
unenforceable,  shall not be affected  thereby.  Each term and provision of this
Lease shall be valid and shall be enforced to extent permitted by law.

     20.  Successors and Assigns:  The terms,  covenants and  conditions  hereof
shall be binding and inure to the  benefit of the  successors  in  interest  and
assigns to the parties hereto.

     21. Notices: Notices required or permitted under this Lease shall be deemed
sufficiently  given  or  served  if  sent  by  certified  mail,  return  receipt
requested, as follow:

         In case of notice to the Lessors:  Mr. and Mrs. Michael J. Spector
                                            Call Box 1370
                                            Dorado, P.R. 00646-1370


         In case of notice to Lessee:       Mr. Juan B. Medina
                                            Margo Nursery Farms, Inc.
                                            Road No. 690, Km. 5.8
                                            Vega Alta, P.R. 00692

                                       6
<PAGE>


     22. Arbitration: Any controversy, which shall arise between the Lessors and
the Lessee  regarding  the rights,  duties or  liabilities  hereunder  of either
party, shall be settled by arbitration. Such arbitration shall be before one (1)
disinterested  arbitrator  if one be agreed  upon,  otherwise  before  three (3)
disinterested arbitrators,  one named by the Lessors, one by the Lessee, and one
by the two (2) thus  chosen.  The  arbitrator  or  arbitrator  shall  settle the
controversy in accordance  with the provisions of this Lease and the laws of the
Commonwealth of Puerto Rico.

     23. Governing Law: This Lease shall be construed and enforced in accordance
with the laws of the Commonwealth of Puerto Rico.

     24.  Recordation.  Upon  request  of the  Lessee  during  the  Term and any
extension thereof, and at the expense of the Lessee, the Lessors agree that this
Lease be recorded in the Registry of Property.  The Lessors agree to execute (at
the expense of the Lessee) a public  deed and any other  instruments,  public or
private,  which may be required or convenient  for such option to be recorded in
the  Registry  of  Property.  The  Lessee  shall pay all fees  relating  to said
recordation,  including  but not limited  to, the  internal  revenue  stamps and
vouchers and  notarial  fees  required for the public deed and a certified  copy
thereof,  and the  recording  of the Lease in the  records  of the  Registry  of
Property.  In addition,  the Lessee shall  advance to the Lessors the legal fees
required  to  effect  the  cancellation  of the  Lease  in the  Registry  of the
Property.

     25. Entire  Agreement and  Amendments:  This Lease  constitutes  the entire
agreement  between  the  Lessors  and the  Lessee  for the lease of the  Demised
Premises, and supersedes and nullifies any and all prior leases,  agreements and
understandings  between the parties hereto for the lease of he Demised Premises.
This Lease may not be changed, modified or discharged except by an instrument in
writing signed by both the Lessors and the Lessee.

     IN WITNESS  WHEREOF,  the parties  hereto  execute this Agreement as of the
date stated above.



         /s/Michael J. Spector                     /s/Margaret D. Spector
         ---------------------                     ----------------------
         MICHAEL J. SPECTOR                        MARGARET D. SPECTOR


                            MARGO NURSERY FARMS, INC.



                              By: /s/Juan B. Medina
                              ---------------------
                              Name: Juan B. Medina
                       Title: Senior Vice President & CFO


                                       7

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</DOCUMENT>
