EXHIBIT 10.79



                                CREDIT AGREEMENT

                            (Line of Credit Facility)


                                 by and between


                                  COBANK, ACB,

                      as Agent and as a Syndication Party,





                                       and



                 VILLAGE FARMS INTERNATIONAL FINANCE ASSOCIATION




                            dated as of June 24, 1997



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                                TABLE OF CONTENTS

Article 1.  DEFINED TERMS ..................................................   1

     1.1 Additional Costs ..................................................   1

     1.2 Administrative Agent Fee ..........................................   1

     1.3 Advance ...........................................................   1

     1.4 Advance Amount ....................................................   1

     1.5 Advance Date ......................................................   1

     1.6 Advance Payment ...................................................   1

     1.7 Advance Request ...................................................   1

     1.8 Aggregate Commitment ..............................................   1

     1.9 APD ...............................................................   2

     1.10 APD Subsidiary ...................................................   2

     1.11 Authorized Officer ...............................................   2

     1.12 Bank Debt ........................................................   2

     1.13 Base Rate ........................................................   2

     1.14 Base Rate Margin .................................................   2

     1.15 BDGCFR ...........................................................   2

     1.16 Borrower Benefit Plan ............................................   2

     1.17 Borrower Debt ....................................................   2

     1.18 Borrower Pension Plan ............................................   2

     1.19 Business Day .....................................................   2

     1.20 Closing Date .....................................................   3

     1.21 CoBank Equity Interests ..........................................   3

     1.22 Code .............................................................   3



                                        i
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     1.23 Collateral .......................................................   3

     1.24 Compliance Certificate ...........................................   3

     1.25 Construction Facility ............................................   3

     1.26 Contributing Syndication Parties .................................   3

     1.27 Credit Agreement (Construction Loan Funding) .....................   3

     1.28 Credit Agreement (Term Loan Funding) .............................   3

     1.29 Default Interest Rate ............................................   3

     1.30 Delinquency Interest .............................................   3

     1.31 Delinquent Amount ................................................   4

     1.32 Delinquent Syndication Party .....................................   4

     1.33 Environmental Laws ...............................................   4

     1.34 Environmental Regulations ........................................   4

     1.35 Equity ...........................................................   4

     1.36 Equity Margin ....................................................   4

     1.37 Equity Margin Report .............................................   4

     1.38 Equity Margin Report Deadline ....................................   4

     1.39 Equity to NFI ....................................................   4

     1.40 ERISA ............................................................   4

     1.41 Event of Default .................................................   4

     1.42 Fair Market Value ................................................   4

     1.43 GAAP .............................................................   4

     1.44 Greenhouse Facility ..............................................   4

     1.45 Guarantor ........................................................   5

     1.46 Guarantor Cash Flow ..............................................   5



                                       ii
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     1.47 Guarantor Collateral .............................................   5

     1.48 Guarantor Security Documents .....................................   5

     1.49 Guaranty .........................................................   5

     1.50 Hazardous Substances .............................................   5

     1.51 Indemnified Agency Parties .......................................   5

     1.52 Indemnified Parties ..............................................   5

     1.53 Intercreditor Agreement ..........................................   5

     1.54 LC Collateral ....................................................   5

     1.55 LC Commitment Amount .............................................   5

     1.56 LC Notice of Advance .............................................   6

     1.57 LC Request .......................................................   6

     1.58 Leasehold Assignment & Consent ...................................   6

     1.59 Letter of Credit .................................................   6

     1.60 Letter of Credit Availability Period .............................   6

     1.61 Licensing Laws ...................................................   6

     1.62 Line of Credit Availability Period ...............................   6

     1.63 Loan .............................................................   6

     1.64 Loan Advance Amount ..............................................   6

     1.65 Loan Documents ...................................................   6

     1.66 Loan Proceeds ....................................................   6

     1.67 Majority Lenders .................................................   6

     1.68 Material Adverse Effect ..........................................   6

     1.69 Material Agreements ..............................................   7

     1.70 Maturity Date ....................................................   7


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     1.71 Maximum Syndication Amount .......................................   7

     1.72 Net Fixed Investments ............................................   7

     1.73 Note or Notes ....................................................   7

     1.74 Notice of Advance ................................................   7

     1.75 Notice of Loan Advance ...........................................   7

     1.76 Organization Documents ...........................................   7

     1.77 Payment Account ..................................................   7

     1.78 Payment Distribution .............................................   7

     1.79 Permitted Encumbrance ............................................   7

     1.80 Person ...........................................................   8

     1.81 Potential Default ................................................   8

     1.82 Quarter ..........................................................   8

     1.83 Reimbursement Agreement ..........................................   8

     1.84 Required License .................................................   8

     1.85 Regulatory Change ................................................   8

     1.86 Security Documents ...............................................   8

     1.87 Successor Agent ..................................................   8

     1.88 Super Majority ...................................................   8

     1.89 Syndication Acquisition Agreement ................................   8

     1.90 Syndication Interest .............................................   8

     1.91 Syndication Parties ..............................................   8

     1.92 Syndication Party Advance Date ...................................   9

     1.93 Syndication Party LC Payment Date ................................   9

     1.94 Syndication Party Payment Date ...................................   9

                                       iv

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Article 1.  DEFINED TERMS .................................................    1

     1.95 Syndication Share ...............................................    9

     1.96 Term Facility ...................................................    9

     1.97 Title Commitments ...............................................    9

     1.98 Title Insurers ..................................................    9

     1.99 Title Policies ..................................................    9

     1.100 Transfer .......................................................    9

     1.101 Underlying Borrowers ...........................................    9

     1.102 Underlying Construction Loan Borrowers .........................    9

     1.103 Underlying Liens ...............................................   10

     1.104 Underlying Loan ................................................   10

     1.105 Underlying Loan Documents ......................................   10

     1.106 Underlying LOC Borrowers .......................................   10

     1.107 Underlying Term Loan Borrowers .................................   10

     1.108 VF Lenders .....................................................   10

     1.109 VF Loan Agreement ..............................................   10

     1.110 Village Farms Revolving Loan ...................................   10

     1.111 Wire Instructions ..............................................   10

Article 2. CREDIT FACILITY ................................................   10

     2.1 Revolving Loan ...................................................   10

     2.2 Letter of Credit .................................................   10

Article 3. PURPOSES .......................................................   11

     3.1 Purpose - Line of Credit Loan ....................................   11

     3.2 Purpose - Letter of Credit .......................................   11

Article 4. AVAILABILITY ...................................................   12


                                     v
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     4.1 Availability - Line of Credit Loan ...............................   12

     4.2 Availability - Letters of Credit .................................   12

Article 5. INTEREST AND FEES ..............................................   12

     5.1 Interest Calculation .............................................   12

     5.2 Equity Margin ....................................................   12

     5.3 Default Interest Rate ............................................   13

     5.4 Fees .............................................................   13

                    5.4.1 Facility Fee ....................................   13

                    5.4.2 LOC Commitment Fee ..............................   13

                    5.4.3 Letter of Credit Availability Fee ...............   14

                    5.4.4 Letter of Credit Issuance Fee ...................   14

Article 6. NOTES; PAYMENTS ................................................   14

     6.1 Promissory Notes .................................................   14

     6.2 Principal Payments ...............................................   14

     6.3 Interest Payments ................................................   14

     6.4 Application of Regular Payments ..................................   14

     6.5 Manner of Payment ................................................   14

Article 7. PAYMENT APPLICATION/COMMITMENT REDUCTION .......................   15

     7.1 Application of Payments ..........................................   15

     7.2 Reduction of Aggregate Commitment ................................   15

Article 8. COBANK EQUITY ..................................................   15

Article 9. SECURITY .......................................................   15

     9.1 Borrower's Assets ................................................   15

     9.2 Guaranty .........................................................   16

                                       vi

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Article 10. REPRESENTATIONS AND WARRANTIES ................................   16

     10.1 Organization, Good Standing, Etc ................................   16

     10.2 Corporate Authority, Due Authorization; Consents ................   17

     10.3 Title to Property ...............................................   17

     10.4 Litigation ......................................................   17

     10.5 No Violations ...................................................   17

     10.6 Binding Agreement ...............................................   17

     10.7 Compliance with Laws ............................................   18

     10.8 Principal Place of Business .....................................   18

     10.9 Underlying Loans; Underlying Loan Documents .....................   18

     10.10 Payment of Taxes ...............................................   18

     10.11 Licenses and Approvals .........................................   18

     10.12 Employee Benefit Plans .........................................   19

     10.13 Equity Investments .............................................   19

     10.14 Real Property ..................................................   19

     10.15 Personal Property ..............................................   19

     10.16 Borrower Membership ............................................   20

     10.17 Environmental Compliance .......................................   20

     10.18 Fiscal Year ....................................................   20

     10.19 Material Agreements ............................................   20

     10.20 Regulations G, U and X .........................................   20

     10.22 Disclosure .....................................................   20

Article 11. CONDITIONS TO ADVANCES ........................................   20

     11.1 Conditions to Closing ...........................................   20

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          11.1.1 Loan Documents ...........................................   20

          11.1.2 Searches; UCC Filings; Recordings; Title Insurance .......   21

          11.1.3 Approvals ................................................   21

          11.1.4 Organizational Documents .................................   21

          11.1.5 Evidence of Corporate Action .............................   22

          11.1.6 Legal Opinion for Borrower and Guarantor .................   22

          11.1.7 Evidence of Insurance ....................................   22

          11.1.8 Phase I Environmental Studies ............................   22

          11.1.9 Survey ...................................................   22

          11.1.10 Material Agreements .....................................   22

          11.1.11 Appointment of The Corporation Company ..................   22

          11.1.12 No Material Change ......................................   22

          11.1.13 Fees and Expenses .......................................   23

          11.1.14 Application; CoBank Equity Interest Purchase Obligation .   23

          11.1.15 Further Assurances ......................................   23

          11.2 Conditions to Initial Advance ..............................   23

          11.2.1 Underlying Loan Documents; Possession of Documents .......   23

          11.2.2 Advance Request ..........................................   23

          11.2.3 Default ..................................................   24

          11.2.4 Representations and Warranties ...........................   24

     11.3 Conditions to All Subsequent Advances ...........................   24

          11.3.1 Representations and Warranties ...........................   24

          11.3.2 No Event of Default ......................................   24

          11.3.3 No Material Adverse Change ...............................   24


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          11.3.4 Advance Request ..........................................   24

          11.3.5 Possession of Collateral .................................   25

     11.4 Conditions to Issuance of Letters of Credit .....................   25

          11.4.1 Representations and Warranties ...........................   25

          11.4.2 No Event of Default ......................................   25

          11.4.3 No Material Adverse Change ...............................   25

          11.4.4 Issuance Request .........................................   25

          11.4.5 Possession of Collateral .................................   26

          11.4.6 Reimbursement Agreement ..................................   26

     11.5 Conditions to Advances to Fund Purchase of
             Village Farms Revolving Loan .................................   26

          11.5.1 Representations and Warranties ...........................   26

          11.5.2 No Event of Default ......................................   26

          11.5.3 No Material Adverse Change ...............................   26

          11.5.4 Advance Request ..........................................   26

          11.5.5 Possession of Collateral .................................   27

     11.6 Letter of Credit Conditions .....................................   27

          11.6.1 Aggregate Commitment Amount; LC Commitment Amount ........   27

          11.6.2 Form, Expiry Date, and Beneficiary .......................   27

     11.7 Additional Disbursement Conditions ..............................   27

          11.7.1 Aggregate Commitment Amount ..............................   27

          11.7.2 Disbursement Period ......................................   27

          11.7.3 Illegality of Loan .......................................   28

Article 12. AFFIRMATIVE COVENANTS .........................................   28


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     12.1 Books and Records ...............................................   28

     12.2 Reports and Notices .............................................   28

          12.2.1 Annual Financial Statements ..............................   28

          12.2.2 Quarterly Financial Statements ...........................   28

          12.2.3 Additional Information ...................................   28

          12.2.4 Notice of Default ........................................   29

          12.2.5 Notice of Certain Changes ................................   29

          12.2.6 Notice of Litigation .....................................   29

          12.2.7 Notice of Material Adverse Effect ........................   29

          12.2.8 Notice of Environmental Litigation .......................   29

          12.2.9 Regulatory and Other Notices .............................   29

          12.2.10 Adverse Action Regarding Required Licenses ..............   30

          12.2.11 Default of any Underlying Loan ..........................   30

          12.2.12 Annual Attorney's Opinion Regarding Collateral ..........   30

     12.3 Eligibility Certificate .........................................   30

     12.4 Maintenance of Existence and Qualification ......................   30

     12.5 Compliance with Legal Requirements and Agreements ...............   30

     12.6 Compliance with Environmental Laws ..............................   31

     12.7 Taxes ...........................................................   31

     12.8 Insurance .......................................................   31

     12.9 Title to Assets and Maintenance .................................   32

     12.10 Payment of Liabilities .........................................   32

     12.11 Further Assurances; Real Property Security Interests ...........   32

     12.12 Inspection .....................................................   33


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     12.13 Required Licenses; Permits; Etc ................................   33

     12.14 ERISA ..........................................................   33

     12.15 Operations and Members .........................................   34

Article 13. NEGATIVE COVENANTS ............................................   34

     13.1 Borrowing .......................................................   34

     13.2 No Other Businesses .............................................   34

     13.3 Liens ...........................................................   34

     13.4 Sale of Assets ..................................................   35

     13.5 Liabilities of Others ...........................................   35

     13.6 Payments on Indebtedness ........................................   36

     13.7 Merger; Acquisitions; Etc .......................................   36

     13.8 Loans, Advances and Investments .................................   36

     13.9 Transactions With Related Parties ...............................   36

     13.10 ERISA ..........................................................   36

     13.11 Payment of Dividends ...........................................   37

     13.12 Change in Fiscal Year ..........................................   37

     13.13 Extension of Credit ............................................   37

     13.14 Amendment/Waiver of Provisions of Underlying Loan Documents ....   38

Article 14. INDEMNIFICATION ...............................................   38

     14.1 General; Stamp Taxes; Intangibles Tax ...........................   38

     14.2 Indemnification Relating to Hazardous Substances ................   39

Article 15. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ........................   40

     15.1 Events of Default ...............................................   40

     15.2 No Advances .....................................................   41

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     15.3 Rights and Remedies .............................................   42

     15.4 Limitation on Rights and Remedies ...............................   42

Article 16. AGENCY AGREEMENT ..............................................   42

     16.1 Funding of Syndication Interest .................................   42

     16.2 Syndication Parties'Obligations to Remit Funds ..................   42

     16.3 Notice and Timing of Each Advance Payment .......................   43

     16.4 LC Notice of Advance ............................................   43

     16.5 Syndication Party's Failure to Remit Funds ......................   43

     16.6 Agency Appointment ..............................................   44

     16.7 Power and Authority of Agent ....................................   44

          16.7.1 Advice ...................................................   44

          16.7.2 Documents ................................................   44

          16.7.3 Proceedings ..............................................   45

          16.7.4 Retain Professionals .....................................   45

          16.7.5 Incidental Powers ........................................   45

          16.7.6 Letter of Credit Purposes ................................   45

     16.8 Duties of Agent .................................................   45

          16.8.1 Possession of Documents ..................................   45

          16.8.2 Distribute Payments ......................................   45

          16.8.3 Collections ..............................................   45

     16.9 Agent's Resignation or Removal ..................................   45

     16.10 Consent Required for Certain Actions ...........................   46

          16.10.1 Unanimous ...............................................   46

          16.10.2 Super Majority ..........................................   46

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     16.11 Distribution of Principal and Interest .........................   47

     16.12 Distribution of Certain Fees and Amounts .......................   47

          16.12.1 LOC Commitment Fee ......................................   47

          16.12.2 Letter of Credit Availability Fee .......................   47

          16.12.3 Funding Losses ..........................................   47

     16.13 Possession of Loan Documents ...................................   47

     16.14 Collateral Application .........................................   48

     16.15 Amounts Required to be Returned ................................   48

     16.16 Reports and Information to Syndication Parties .................   48

     16.17 Standard of Care ...............................................   49

     16.18 No Trust Relationship ..........................................   49

     16.19 Sharing of Costs and Expenses ..................................   49

     16.20 Syndication Parties'Indemnification of Agent ...................   50

     16.21 Books and Records ..............................................   50

     16.22 Administrative Agent Fee .......................................   50

     16.23 Representations and Warranties of All Parties ..................   50

     16.24 Representations and Warranties of CoBank .......................   51

     16.25 Syndication Parties'Independent Credit Analysis ................   51

     16.26 No Joint Venture or Partnership ................................   52

     16.27 Purchase for Own Account/Restrictions on Transfer ..............   52

     16.28 Certain Participants'Voting Rights .............................   53

     16.29 Method of Making Payments ......................................   53

     16.30 Events of Syndication Default/Remedies .........................   53

          16.30.1 Syndication Party Default ...............................   53

                                      xiii

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          16.30.2 Remedies ................................................   53

     16.31 Withholding Taxes ..............................................   54

     16.32 Further Assurances .............................................   54

Article 17. MISCELLANEOUS .................................................   54

     17.1 Costs and Expenses ..............................................   54

     17.2 Service of Process and Consent to Jurisdiction ..................   55

     17.3 Jury Waiver .....................................................   55

     17.4 Notices .........................................................   55

          17.4.1 Borrower .................................................   56

          17.4.2 CoBank ...................................................   56

     17.5 Notice to Syndication Parties and Agent .........................   56

     17.6 Successors and Assigns ..........................................   56

     17.7 Voting Rights Acknowledgment ....................................   57

     17.8 Severability ....................................................   57

     17.9 Entire Agreement ................................................   57

     17.10 Applicable Law .................................................   57

     17.11 Captions .......................................................   57

     17.12 Amendments .....................................................   57

     17.13 Additional Costs of Maintaining Loan ...........................   57

     17.14 Capital Requirements ...........................................   58

     17.15 Replacement Notes ..............................................   59

     17.16 Patronage Payments .............................................   59

     17.17 Mutual Release .................................................   59

     17.18 Liberal Construction ...........................................   59

                                      xiv


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                             EXHIBITS AND SCHEDULES



Exhibit 1.24               Compliance Certificate

Exhibit 6.1                Promissory Note Form

Exhibit 10.3               Permitted Encumbrances

Exhibit 10.4               Litigation

Exhibit 10.8               Borrower's Chief Executive Office and Place Where
                           Records Are Kept

Exhibit 10.11              Required Licenses and Consents

Exhibit 10.12              Borrower Benefit Plans

Exhibit 10.14              Interests in Real Property

Exhibit 10.19              Material Agreements

Exhibit 11.2.2             Advance Request Form

Exhibit 13.1               Existing Indebtedness

Exhibit 16.3               Notice of Loan Advance

Exhibit 16.4               LC Notice of Advance

Exhibit 16.27              Syndication Acquisition Agreement

Exhibit 16.29              Wire Instructions


                                       xv

<PAGE>


                                CREDIT AGREEMENT
                            (Line of Credit Facility)


Village Farms International Finance Association
Loan No. S-2489


     THIS CREDIT  AGREEMENT  ("Agreement") is entered into as of the 24th day of
June 1997, by and between COBANK,  ACB ("CoBank"),  whose mailing address is 245
North Waco Street,  Wichita,  Kansas  67201-2940 for its own benefit as a lender
(in that capacity  sometimes referred to as "CoBank") and, as Agent Bank for the
benefit  of the  present  and  future  Syndication  Parties  (in  that  capacity
"Agent"),  and  VILLAGE  FARMS  INTERNATIONAL  FINANCE  ASSOCIATION,  a Delaware
corporation,  whose address is 1811 Sardis Road North, Suite 207, Charlotte,  NC
28270 ("Borrower").


Article 1.  DEFINED TERMS

     As used in this Agreement,  the following terms shall have the meanings set
forth below (and such meaning  shall be equally  applicable to both the singular
and plural form of the terms defined, as the context may require):

     1.1 Additional Costs: shall have the meaning set forth in Section 17.13.

     1.2  Administrative  Agent  Fee:  shall  have  the  meaning  set  forth  in
Subsection 5.4.2.

     1.3 Advance: a disbursement of a portion of the Loan Proceeds.

     1.4 Advance Amount: shall have the meaning set forth in Section 16.4.

     1.5 Advance Date: a day (which shall be a Business Day) on which an advance
of Loan Proceeds is made.

     1.6 Advance Payment: shall have the meaning set forth in Section 16.2.

     1.7 Advance Request: shall have the meaning set forth in Subsection 11.2.2.

     1.8 Aggregate Commitment:  $10,000,000.00, subject to reduction as provided
in Section 7.2 hereof.

     1.9 APD: Agro Power Development, Inc.

     1.10 APD  Subsidiary  : (a) Village  Farms of  Delaware,  LLC;  (b) Village
Farms,  LLC;  (c)  Keystone  Village  Farms,  L.L.C;  and (d)  Village  Farms of
Wheatfield, L.L.C.


                                       1
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     1.11  Authorized  Officer:  shall have the meaning set forth in  Subsection
11.1.5.

     1.12  Bank  Debt:  all  amounts  owing  under the  Note,  fees,  Borrower's
obligations  to  purchase  CoBank  Equity  Interests,  Funding  Losses  and  all
interest,  expenses,  charges and other amounts payable by Borrower  pursuant to
the Loan Documents.

     1.13 Base Rate:  a rate of interest  per annum equal to the "prime rate" as
published from time to time in the Eastern Edition of the Wall Street Journal as
the average  prime  lending rate for  seventy-five  percent  (75%) of the United
States'  thirty (30) largest  commercial  banks,  or if the Wall Street  Journal
shall cease publication or cease publishing the "prime rate" on a regular basis,
such other regularly  published average prime rate applicable to such commercial
banks as is acceptable to Agent in its sole discretion,  with such rate modified
by adding the Base Rate Margin and subtracting the Equity Margin.

     1.14 Base Rate  Margin:  shall be the Base Rate Margin in effect  under the
Credit  Agreement  (Term  Loan  Funding)  from  time  to  time,  and,  upon  the
termination of the Credit Agreement (Term Loan Funding), 100 basis points.

     1.15 BDGCFR: shall have the meaning set forth in Subsection 5.2.

     1.16 Borrower  Benefit Plan: shall have the meaning set forth in Subsection
10.12.

     1.17 Borrower Debt: the sum of the principal balance owed by Borrower under
the Term Facility and the Construction Facility.

     1.18 Borrower  Pension  Plan: a Borrower  Benefit Plan that is an "employee
pension  benefit  plan" as defined in Section  3(2) of ERISA that is intended to
satisfy the requirements of Section 401(a) of the Code.

     1.19 Business Day: any day other than a Saturday or Sunday and other than a
day which is a Federal  legal holiday or a legal holiday for banks in the States
of Colorado, New York, or North Carolina.

     1.20 Closing Date:  that date on which Agent,  Borrower and Guarantor  have
executed all Loan  Documents  and on which the  conditions  set forth in Section
11.1 of this Agreement have been met.

     1.21 CoBank Equity  Interests:  shall have the meaning set forth in Article
8.

     1.22 Code: shall have the meaning set forth in Section 10.12.

     1.23 Collateral: shall have the meaning set forth in Section 9.1.


                                       2
<PAGE>


     1.24 Compliance  Certificate:  a certificate of the chief financial officer
of Borrower in the form attached hereto as Exhibit 1.24.

     1.25  Construction  Facility:  means the credit  facility made available to
Borrower pursuant to the Credit Agreement (Construction Loan Funding).

     1.26 Contributing  Syndication Parties: shall have the meaning set forth in
Section 16.5.

     1.27 Credit Agreement (Construction Loan Funding):  means that agreement so
titled  dated June 24,  1997,  by and  between  CoBank for its own  benefit as a
lender and as agent bank for the benefit of the  present and future  syndication
parties as named or defined  therein,  and  Borrower,  wherein the lenders  have
agreed to lend to Borrower a specified  sum of money for the purpose of enabling
Borrower to make  construction  loans to eligible  third  parties to use for the
purposes therein specified.

     1.28 Credit  Agreement (Term Loan Funding):  means that agreement so titled
dated June 24, 1997,  by and between  CoBank for its own benefit as a lender and
as agent bank for the benefit of the present and future  syndication  parties as
named or defined therein, and Borrower,  wherein the lenders have agreed to lend
to  Borrower a specified  sum of money for the  purpose of enabling  Borrower to
make term  loans to  eligible  third  parties  to use for the  purposes  therein
specified.

     1.29 Default  Interest  Rate: a rate of interest  equal to 400 basis points
plus the Base Rate.

     1.30  Delinquency  Interest:  shall have the  meaning  set forth in Section
16.5.

     1.31 Delinquent Amount: shall have the meaning set forth in Section 16.5.

     1.32  Delinquent  Syndication  Party:  shall have the  meaning set forth in
Section 16.5.

     1.33  Environmental   Laws:  the  Comprehensive   Environmental   Response,
Compensation  and  Liability  Act  of  1980  as  amended,  42  U.S.C.  9601-9657
("CERCLA")  and the Resource  Conservation  and Recovery Act of 1976,  42 U.S.C.
6901-6987 ("RCRA").

     1.34 Environmental  Regulations:  as defined in the definition of Hazardous
Substances.

     1.35 Equity: as determined in accordance with GAAP, plus Minority Interests
(as defined in accordance with GAAP).

     1.36 Equity Margin: shall have the meaning set forth in Section 5.2.


                                       3
<PAGE>


     1.37 Equity Margin Report: shall have the meaning set forth in Section 5.2.

     1.38 Equity  Margin  Report  Deadline:  shall have the meaning set forth in
Section 5.2.

     1.39 Equity to NFI:  the ratio,  with  respect to APD, of its Equity to its
Net Fixed Investments.

     1.40 ERISA: shall have the meaning set forth in Subsection 10.12.

     1.41 Event of Default: shall have the meaning set forth in Section 15.1.

     1.42 Fair Market Value:  a valuation as  determined in a written  appraisal
from an MAI certified appraiser.

     1.43 GAAP: generally accepted accounting principles in the United States of
America, applied consistently, as in effect from time to time.

     1.44  Greenhouse  Facility:  means a greenhouse  used by an Underlying  LOC
Borrower for the planting, growing and harvesting of vegetables and/or fruits.

     1.45 Guarantor: APD.

     1.46  Guarantor  Cash Flow:  Cash  received by APD on account of its equity
interests in the  Underlying  Borrowers or from other  investments  and business
activities of such Guarantor.

     1.47 Guarantor Collateral: shall have the meaning set forth in Section 9.2.

     1.48  Guarantor  Security  Documents:   the  security   agreement,   pledge
agreement,  and/or other  security  documents  executed by Guarantor in favor of
Agent and the  present  and future  Syndication  Parties  to secure  Guarantor's
performance  of its  obligations  under the Guaranty with a first lien on all of
Guarantor's assets.

     1.49 Guaranty:  the guaranty, in form and substance  satisfactory to Agent,
to be executed by Guarantor  in favor of Agent,  as in effect on the date hereof
and as hereafter amended.

     1.50  Hazardous  Substances:  dangerous,  toxic  or  hazardous  pollutants,
contaminants,  chemicals,  wastes,  materials  or  substances,  as defined in or
governed by the provisions of any Environmental Laws or any other federal, state
or local law, statute, code, ordinance, regulation, requirement or rule relating
thereto  ("Environmental  Regulations"),  and also including urea  formaldehyde,
polychlorinated biphenyls, asbestos, asbestos-containing materials, nuclear fuel
or waste,  and petroleum  products,  or any other waste,  material,  substances,
pollutant or



                                       4
<PAGE>


contaminant  which would subject an owner of property to any damages,  penalties
or liabilities under any applicable Environmental Regulations.

     1.51  Indemnified  Agency  Parties:  shall  have the  meaning  set forth in
Section 16.20.

     1.52 Indemnified Parties: shall have the meaning set forth in Section 14.1.

     1.53 Intercreditor Agreement: means that agreement so titled dated June 24,
1997,  by and  between  CoBank for its own benefit as a lender and as agent bank
for the  benefit  of the  present  and  future  syndication  parties as named or
defined therein, Borrower, and Guarantor.

     1.54 LC Collateral: shall have the meaning set forth in Section 3.2.

     1.55 LC Commitment Amount: $5,000,000.00.

     1.56 LC Notice of  Advance:  shall  have the  meaning  set forth in Section
16.4.

     1.57 LC Request: shall have the meaning set forth in Subsection 11.4.4.

     1.58 Leasehold  Assignment & Consent: the Leasehold Assignment and Consent,
in form and substance satisfactory to Agent.

     1.59 Letter of Credit: shall have the meaning set forth in Section 2.2.

     1.60 Letter of Credit Availability Period: shall have the meaning set forth
in Section 4.2.

     1.61 Licensing Laws: shall have the meaning set forth in Section 10.5.

     1.62 Line of Credit Availability  Period:  shall have the meaning set forth
in Section 4.1.

     1.63 Loan: shall have the meaning set forth in Section 2.1.

     1.64 Loan Advance Amount: shall have the meaning set forth in Section 16.3.

     1.65 Loan Documents: this Agreement, the Notes, the Security Documents, the
Guaranty,  the Guarantor  Security  Documents,  and other documents  required to
grant to Agent, for the benefit of the Syndication Parties, a perfected security
interest in the Collateral and in the Guarantor Collateral.

     1.66 Loan Proceeds: shall have the meaning set forth in Section 3.1.

     1.67 Majority Lenders: shall have the meaning set forth in Section 16.9.


                                       5
<PAGE>


     1.68 Material  Adverse Effect:  means: (a) a material adverse effect on the
financial condition, results of operation, business or property of Borrower; (b)
a material  adverse effect on the ability of Borrower to perform its obligations
under this  Agreement and the other Loan  Documents;  or (c) a material  adverse
effect upon the ability of Agent to enforce  its rights and  remedies  under the
Loan Documents.

     1.69  Material  Agreements:  shall  have the  meaning  set forth in Section
10.19.

     1.70 Maturity  Date:  September 30, 1998,  provided that such date shall be
automatically  extended for  successive  twelve (12) month periods  unless on or
before any July 31, either Agent provides to Borrower,  or Borrower  provides to
Agent,  notice of  termination  effective as of the following  September 30; and
provided  further  that,  and  notwithstanding  any such notice,  to the limited
extent  that on any such date one or more  Letters of Credit  have not  expired,
this  Agreement  and the other  Loan  Documents  shall  remain in full force and
effect  for the sole  purpose  of  providing  finding  for any draws  under such
unexpired Letters of Credit.

     1.71 Maximum Syndication Amount:

               For CoBank              - $ 10,000,000.00

     1.72 Net Fixed  Investments:  Total  Assets less  Current  Assets,  as such
amounts are determined in accordance with GAAP.

     1.73 Note or Notes: the promissory  notes executed by Borrower  pursuant to
Section 6.1 hereof, and all amendments,  renewals,  substitutions and extensions
thereof.

     1.74 Notice of Advance: shall have the meaning set forth in Section 16.4.

     1.75  Notice of Loan  Advance:  shall have the meaning set forth in Section
16.3.

     1.76 Organization Documents: in the case of a corporation,  its articles or
certificate  of  incorporation  and bylaws;  in the case of a  partnership,  its
partnership agreement and certificate of limited partnership,  if applicable; in
the case of a limited  liability  company,  its articles of organization and its
operating agreement.

     1.77 Payment Account: shall have the meaning set forth in Section 16.11.

     1.78  Payment  Distribution:  shall have the  meaning  set forth in Section
16.11.

     1.79  Permitted  Encumbrance:  shall have the  meaning set forth in Section
10.3.


                                       6
<PAGE>


     1.80  Person : any  individual,  corporation,  limited  liability  company,
association, partnership, trust, organization,  government, governmental agency,
or other entity.

     1.81 Potential Default: any event, other than an event described in Section
15.1(a) hereof, which with the giving of notice or lapse of time, or both, would
become an Event of Default.

     1.82 Quarter: the quarters of the calendar year commencing as of January 1,
April 1, July 1 and October 1.

     1.83 Reimbursement  Agreement:  shall have the meaning set forth in Section
3.2.

     1.84 Required License: shall have the meaning set forth in Section 10.11.

     1.85 Regulatory Change: shall have the meaning set forth in Section 17.13.

     1.86  Security  Documents:  the security  agreements,  mortgages,  deeds of
trust,  financing  statements,  pledge  agreements,   leasehold  assignment  and
consents,  assignments  and/or other security  documents executed by Borrower in
favor of Agent, for the benefit of the Syndication Parties, to secure Borrower's
performance of its  obligations  under the Notes and other Loan Documents with a
first lien on all assets, real and personal,  of Borrower, in form and substance
acceptable to Agent.

     1.87 Successor  Agent:  such Person as may be appointed as successor to the
rights and duties of Agent as provided in Section 16.9 of this Agreement.

     1.88 Super Majority: Syndication Parties whose Syndication Shares aggregate
at least seventy-five percent (75%).

     1.89 Syndication Acquisition Agreement: shall have the meaning set forth in
Section 16.27.

     1.90  Syndication  Interest:  shall have the  meaning  set forth in Section
16.1.

     1.91 Syndication Parties: shall mean:

     CoBank  in its role as such,  but not in its role as Agent  hereunder.  and
such  Persons  as shall  from  time to time  execute a  Syndication  Acquisition
Agreement  substantially  in the form of Exhibit 16.27 hereto  signifying  their
election  to  purchase  all or a  portion  of the  Syndication  Interest  of any
Syndication  Party,  in accordance  with Section  16.27 hereof,  and to become a
Syndication Party hereunder.


                                       7
<PAGE>


     1.92  Syndication  Party Advance Date:  shall have the meaning set forth in
Section 16.3.

     1.93 Syndication Party LC Payment Date: shall have the meaning set forth in
Section 16.4.

     1.94  Syndication  Party Payment Date:  shall have the meaning set forth in
Section 16.4.

     1.95 Syndication Share: shall mean:

          For CoBank  *100%  ______________(subject  to  adjustment  for sale of
          further Syndication Interests)

          subject,  in each case,  to  adjustment  as provided  in Section  16.4
          hereof.

     1.96 Term  Facility:  means the credit  facility made available to Borrower
pursuant to the Credit Agreement (Term Loan Funding).

     1.97 Title  Commitments:  shall have the  meaning  set forth in  Subsection
11.1.2.

     1.98 Title Insurers: shall have the meaning set forth in Subsection 11.1.2.

     1.99 Title Policies: shall have the meaning set forth in Subsection 11.1.2.

     1.100 Transfer: shall have the meaning set forth in Section 16.27.

     1.101  Underlying  Borrowers:   collectively,   the  Underlying  Term  Loan
Borrowers and the Underlying Construction Loan Borrowers.

     1.102  Underlying  Construction  Loan Borrowers:  means each Person to whom
Borrower has, at any time,  made  available an Underlying  Construction  Loan as
defined in the  Credit  Agreement  (Construction  Loan  Funding),  which is then
outstanding.

     1.103  Underlying  Liens:  shall have the meaning  set forth in  Subsection
12.2.11.

     1.104 Underlying Loan: shall have the meaning set forth in Section 3.1.

     1.105 Underlying Loan Documents: all of the documents,  including,  without
limitation,  the loan agreement,  promissory  note(s),  and security  documents,
executed in connection with any Underlying Loan.

     1.106 Underlying LOC Borrowers: means: (a) each Person to whom Borrower has
at any time outstanding an Underlying Loan; and (b) Village Farms of



                                       8
<PAGE>


Texas,  L.P. at such time as an Advance is made to fund  Borrower's  purchase of
the Village Farms Revolving Loan.

     1.107  Underlying Term Loan  Borrowers:  means each Person to whom Borrower
has,  at any time,  made  available  an  Underlying  Term Loan as defined in the
Credit Agreement (Term Loan Funding), which is then outstanding.

     1.108 VF Lenders:  Farm Credit  Bank of Texas and Texas  Production  Credit
Association.

     1.109 VF Loan Agreement:  That Loan Agreement dated as of February 14, 1996
by and between Village Farms of Texas,  L.P., as borrower,  the VF Lenders,  and
CoBank, as Administrative Agent.

     1.110 Village Farms Revolving Loan: The LOC Loan (as defined in the VF Loan
Agreement)  made  to  Village  Farms  of  Texas,  L.P.  pursuant  to the VF Loan
Agreement.

     1.111 Wire Instructions: shall have the meaning set forth in Section 16.29.

Article 2. CREDIT FACILITY

     2.1  Revolving  Loan.  On the  terms  and  conditions  set  forth  in  this
Agreement, the Syndication Parties agree, each as to their Syndication Share and
to the extent of their Maximum  Syndication  Amount, to make a revolving loan to
Borrower  (the  "Loan")  in an amount up to the  Aggregate  Commitment  less the
undrawn face amount of any Letters of Credit then outstanding.

     2.2  Letter  of  Credit.  On the  terms  and  conditions  set forth in this
Agreement, the LC Issuing Bank agrees to issue letters of credit (each a "Letter
of Credit")  any time during the Letter of Credit  Availability  Period up to an
aggregate  undrawn face amount of all such Letters of Credit  outstanding at any
one time  equal to the  lesser  of:  (a) the LC  Commitment  Amount;  or (b) the
Aggregate  Commitment less the principal  amount  committed under all Underlying
Loans then  outstanding.  Each Syndication  Party is responsible for funding its
Syndication  Share of all draws  under the Letters of Credit,  and such  amounts
will be funded out of the Loan.

Article 3. PURPOSES

     3.1  Purpose  - Line of  Credit  Loan.  The  proceeds  of the  Loan  ("Loan
Proceeds") may be used by Borrower only: (a) to fund Borrower's  purchase of the
Village Farms Revolving Loan; (b) to fund Borrower's loan  ("Underlying  Loan"):
(i) to APD (upon  its  becoming  a member of  Borrower)  to meet  APD's  working
capital  needs;  (ii) to Underlying  Term Loan Borrowers (A) to meet their needs
during the  planting  phase of each  year's  production  cycle as set forth in a
planting cycle budget to be provided by the Underlying  Term Loan Borrower,  and
(B) to  enable  such  Underlying  Term  Loan  Borrowers  to meet  their  payment
requirements  under their  Underlying Term


                                       9
<PAGE>


Loan for a maximum of 180 days in any three year period; and (iii) to Members to
meet their needs during the planting  phase of each year's  production  cycle as
set forth in a planting  cycle  budget to be provided by the Member;  and (c) to
fund  draws  under the  Letters  of Credit.  All such  Underlying  Loans must be
evidenced by  Underlying  Loan  Documents  satisfactory  to Agent and loans made
under (i) must be secured by all of APD's  inventory and accounts and loans made
under (ii) or (iii) must be  secured by all the assets of such  Underlying  Term
Loan Borrower or such Member, as applicable.

     3.2  Purpose - Letter of  Credit.  Letters of Credit  may be  requested  by
Borrower to support  commitments:  (a) of Borrower to third parties  incurred in
connection  with the conduct of its regular  business;  (b) of APD to facilitate
the purchase and sale by APD of fruits and/or  vegetables and for other purposes
approved by Borrower and Agent;  (c) of (i) Members or (ii) Underlying Term Loan
Borrowers  to third  parties,  in the case of (i) or  (ii),  supplying  services
and/or  materials to such  Member's or such  Underlying  Term Loan  Borrowers in
connection with the operation of their respective Greenhouse Facilities;  and/or
(d) of an APD  Subsidiary  to  facilitate  the  purchase  and  sale by such  APD
Subsidiary of fruits and/or vegetables.  The Person for whose benefit or account
Letters  of Credit  are  issued  under  (b),  (c),  or (d) must have  executed a
reimbursement  agreement  ("Reimbursement  Agreement")  in  form  and  substance
satisfactory to Agent  obligating  such Person to reimburse  Borrower and the LC
Issuing  Bank for the  amount  of any draw  under  such  Letter  of  Credit  and
associated  costs and  liabilities,  and such  Person's  obligations  under such
reimbursement  agreement must be secured by a first lien on all  merchandise and
documents,  and including any letter of credit or proceeds  thereof,  which come
into the  possession  or control  of such  Person,  or in which such  Person may
acquire  an  interest,  or which  shall come into the  possession  or control of
Borrower  or the LC Issuing  Bank or any  correspondents  of  Borrower or the LC
Issuing Bank as the result of or in connection with any  transactions  under the
Letter of Credit ("LC Collateral").

ARTICLE 4. AVAILABILITY

     4.1  Availability  - Line of Credit Loan.  The Loan  Proceeds  will be made
available to Borrower as soon as the applicable  conditions set forth in Article
11 hereof  have been  satisfied  and until the  Maturity  Date  ("Line of Credit
Availability  Period").  Unless otherwise agreed, the Loan Proceeds will be made
available on any Business Day during the Availability  Period: (a) to fund draws
under Letters of Credit; and (b) by wire transfer of immediately available funds
in  accordance  with  written  wire  transfer  instructions  to be  furnished by
Borrower on a form supplied by Agent. Amounts borrowed under the Loan and repaid
may be reborrowed during the Line of Credit Availability Period.

     4.2  Availability  - Letters of Credit.  The Letters of Credit will be made
available to Borrower as soon as the applicable  conditions set forth in Article
11  hereof  have  been  satisfied,  provided  however  such  conditions  must be
satisfied  no later than



                                       10
<PAGE>


December 31, 1997,  and until a date sixty (60) days prior to the Maturity  Date
("Letter of Credit Availability Period").

ARTICLE 5. INTEREST AND FEES

     5.1 Interest Calculation. The outstanding principal balance under the Notes
shall  bear  interest  at the Base Rate and shall be  calculated  on the  actual
number of days each Advance is outstanding on the basis of a year  consisting of
360 days. In  calculating  interest,  the Advance Date shall be included and the
date each Advance is repaid shall be excluded.

     5.2 Equity Margin.  The "Equity Margin" shall be determined as of each June
30 and December 31 as provided in the table below  (expressed  in basis  points)
based on: (a) the ratio of Equity to NFI of APD, on a  consolidated  basis;  and
(b) the ratio of Borrower  Debt to Guarantor  Cash Flow  ("BDGCFR"),  as of such
date:

                            Equity to NFI
                     less than           =>40<50            50 or more
                         40
         BDGCFR
         ------
         =>8.0                12.5                25.0               50.0
         =>4.0< 8.0           25.0                50.0               62.5
         < 4.0                50.0                62.5               75.0

provided that the Equity Margin may never exceed the Base Rate Margin.

On or before the last Business Day of each September and March  ("Equity  Margin
Report Deadline"), commencing September of 1997, Borrower shall provide to Agent
a statement,  certified to by Borrower's chief financial officer,  showing:  (a)
the Equity to NFI ratio of APD as of the  preceding  June 30 or December  31, as
applicable,  and  showing  the  amounts  of APD's  Equity  and  APD's  Net Fixed
Investments  as of such date;  and (b) the ratio of Borrower  Debt to  Guarantor
Cash Flow as of the preceding June 30 or December 31, as applicable, and showing
the amounts of Borrower  Debt and amount of Guarantor  Cash Flow as of such date
("Equity Margin Report").  The Equity Margin for the six month period commencing
as of the November 1 or May 1 next succeeding such Equity Margin Report Deadline
shall be based on the Equity to NFI ratio and BDGCFR shown in such Equity Margin
Report  (unless,  and except to the extent,  that the  contents of the annual or
quarterly  financial  statements  received  by Agent from  Borrower  pursuant to
Subsections 12.2.1 or 12.2.2 hereof or from APD pursuant to the Guaranty produce
different  ratios).  If the Equity Margin Report is not received by Agent by the
Equity Margin Report  Deadline,  the Equity Margin for the period  commencing on
the following  November 1 or May 1, as applicable,  will be determined as though
the BDGCFR upon which such Equity Margin is based is equal to 8.0.


                                       11
<PAGE>


     5.3  Default  Interest  Rate.  All Bank Debt  shall,  at the sole option of
Agent,  bear interest at the Default Interest Rate from and after the occurrence
and during the  continuance  of an Event of  Default.  Upon the  occurrence  and
during  the  continuance  of an Event of Default or  Potential  Default,  at the
option of Agent, interest shall be payable upon demand by Agent, and in no event
less frequently than monthly.

     5.4 Fees. Borrower shall pay or cause to be paid the following fees:

     5.4.1  Facility  Fee.  A  non-refundable  (except  for the  proviso  below)
facility fee equal to 75 basis points  multiplied  by the  Aggregate  Commitment
payable to CoBank on the Closing  Date;  provided  that the Facility Fee payable
with respect to the amount  advanced  under the Line of Credit  Facility to fund
Borrower's  purchase of the Village  Farms  Revolving  Loan shall be refunded to
Borrower at the time of such advance so long as it occurs within 180 days of the
Closing Date.

     5.4.2  LOC  Commitment  Fee.  A fee  equal to 50  basis  points  per  annum
multiplied by the Unused Line of Credit Commitment,  calculated daily commencing
on the  Closing  Date and payable to Agent,  for the benefit of the  Syndication
Parties, in arrears on the last day of each Quarter.  The "Unused Line of Credit
Commitment"  shall be  determined  as of any day by starting  with the Aggregate
Commitment and subtracting  therefrom (a) the undrawn face amount of all Letters
of Credit then outstanding and (b) the outstanding principal balance owing under
the Line of Credit Facility.

     5.4.3 Letter of Credit  Availability  Fee. A fee, payable to Agent, for the
benefit of the  Syndication  Parties,  at the time of issuance of each Letter of
Credit and at the time of each renewal of a Letter of Credit, in an amount to be
quoted by Agent, in its sole discretion, at the time of issuance.

     5.4.4 Letter of Credit Issuance Fee. A fee,  payable to the LC Issuing Bank
at the time of each such issuance or renewal of each Letter of Credit,  equal to
the  greater  of (a) 3% of the face  amount  of such  Letter of  Credit;  or (b)
$1,500.00.

ARTICLE 6. NOTES; PAYMENTS

     6.1 Promissory Notes. Each Syndication Party's Syndication  Interest in the
Loan  shall be  evidenced  by a  promissory  note,  payable to the order of such
Syndication  Party in the face amount equal to such Syndication  Party's Maximum
Syndication  Amount,  in the form attached  hereto as Exhibit 6.1 (each a "Note"
and collectively, such promissory notes shall be referred to as the "Notes").

     6.2 Principal Payments. Principal shall be payable in full on or before the
Maturity Date.


                                       12
<PAGE>


     6.3  Interest  Payments.  Interest  shall be payable  the tenth day of each
month  commencing on the tenth day of the month following the month in which the
Closing Date occurs, and on the Maturity Date.

     6.4  Application  of Regular  Payments.  Upon the occurrence and during the
continuance of an Event of Default or Potential Default,  all payments and other
amounts  received  by Agent shall be  applied,  as Agent in its sole  discretion
shall determine,  to fees, the purchase of CoBank Equity Interests,  interest or
principal indebtedness under the Notes, or to any other Bank Debt. The amount of
Loan Proceeds  advanced and other Bank Debt, and all payments by or on behalf of
Borrower, of such amounts, shall be entered on the books of the Agent and/or the
Syndication Parties and such entries shall be presumptive evidence of the unpaid
amounts outstanding from time to time under the Notes and other Loan Documents.

     6.5 Manner of Payment. All payments,  including prepayments,  that Borrower
is required or permitted to make under the terms of this Agreement shall be made
to Agent (a) in immediately  available  federal  funds,  to be received no later
than 12:00 noon Central Time of the Business Day on which such payment is due by
wire  transfer  through  Federal  Reserve  Bank,  Kansas City,  Routing  Number:
307088754,  COBANK  ENGWD (or to such other  account as Agent may  designate  by
notice);  and (b)  without  setoff  or  counterclaim  and free and  clear of and
without  deduction  for  any  taxes,  levies,  impost,  duties,  charges,  fees,
deductions,  withholding,  compulsory  loans,  restrictions or conditions of any
nature now or hereafter  imposed or levied by any  jurisdiction or any political
subdivision  thereof or taxing or other  authority  therein  unless  Borrower is
compelled by law to make such deduction or withholding.

ARTICLE 7.        PAYMENT APPLICATION/COMMITMENT REDUCTION

7.1  Application of Payments.  Upon the occurrence and during the continuance of
an Event of  Default or  Potential  Default,  Borrower  hereby  agrees  that all
amounts paid to Agent shall be applied,  as Agent in its sole  discretion  shall
determine,  to fees,  the  purchase  of CoBank  Equity  Interests,  interest  or
principal indebtedness under the Notes (in such order of maturity as Agent shall
select), or to any other Bank Debt.

7.2 Reduction of Aggregate Commitment.  Borrower shall have the right, from time
to time, to reduce the Aggregate Commitment in multiples of $100,000.00 upon two
(2) Business  Days prior  written  notice to Agent  provided  that the requested
reduction shall not cause the Aggregate Commitment to be less than the aggregate
amount of (a) the  outstanding  principal  balance  owing under the Loan and the
Notes,  plus (b) the undrawn face amount of all  outstanding  Letters of Credit.
Any  reduction of the  Aggregate  Commitment  pursuant to this Section  shall be
irrevocable.


                                       13
<PAGE>


ARTICLE 8.        COBANK EQUITY

     Borrower agrees to purchase such equity interests in CoBank ("CoBank Equity
Interests")  as CoBank  may from time to time  require  in  accordance  with its
bylaws and capital plan as applicable to  cooperative  borrowers  generally.  In
connection with the foregoing,  Borrower hereby acknowledges  receipt,  prior to
the execution of this Agreement,  of CoBank's bylaws,  a written  description of
the terms and  conditions  under which the CoBank  Equity  Interests are issued,
CoBank's  Loan-Based  Capital Plan,  CoBank's most recent annual report,  and if
more recent than CoBank's latest annual report, its latest quarterly report.

ARTICLE 9. SECURITY

     9.1 Borrower's  Assets.  As security for the payment and performance of all
obligations of Borrower to Agent, CoBank, and the Syndication Parties, including
but not limited to principal and interest  under the Notes,  purchases of CoBank
Equity Interests, fees, Funding Losses, reimbursements,  and all other Bank Debt
or  obligations  under any of the Loan  Documents,  Borrower shall grant to, and
maintain  for,  Agent,  for the benefit of all  present  and future  Syndication
Parties,  a  first  lien  and  security  interest,  subject  only  to  Permitted
Encumbrances and to the provisions of the Intercreditor Agreement, in all of its
assets,  both real and personal,  tangible and intangible,  whether now owned or
hereafter acquired,  including, without limitation, the Underlying Loans and the
Underlying  Loan  Documents  and its  interest in the  collateral  securing  the
Underlying Loans  ("Collateral"),  pursuant to the Security Documents.  Borrower
shall execute and deliver to Agent, for the benefit of the Syndication  Parties,
the  Security  Documents to evidence  the  security  interest of Agent,  for the
benefit  of the  Syndication  Parties,  in the  Collateral,  together  with such
financing  statements or other documents as Agent shall request.  Borrower shall
deliver the originals of the Underlying Loan Documents to Agent, for the benefit
of all present and future Syndication Parties.  Borrower shall also execute such
further security agreements,  mortgages,  deeds of trust,  financing statements,
assignments or other documents as Agent shall  reasonably  request,  in form and
substance as Agent shall  specify,  to  establish,  confirm,  perfect or provide
notice of Agent's security interest (for the benefit of all Syndication Parties)
in the Collateral.  If requested by Agent:  (a) Borrower and Agent shall place a
legend on any chattel paper included in the Collateral  showing Agent's security
interest  therein;  and (b) Borrower  shall  deliver to Agent  possession of any
instruments and securities  included in the Collateral (duly endorsed to Agent's
reasonable satisfaction).

     9.2 Guaranty.  Borrower's  obligations  under this  Agreement and all other
Loan  Documents  shall be guaranteed by APD pursuant to the APD Guaranty and the
APD Guaranty shall be secured by a first lien and security interest,  subject to
the provisions of the Intercreditor  Agreement,  in all of its assets, both real
and personal,  tangible and intangible,  whether now owned or hereafter acquired
("Guarantor Collateral") pursuant to the Guarantor Security Documents.


                                       14
<PAGE>


ARTICLE 10. REPRESENTATIONS AND WARRANTIES

     To induce the Syndication  Parties to make the Loan, and  recognizing  that
the Syndication Parties are relying thereon, Borrower represents and warrants as
follows:

     10.1  Organization,  Good Standing,  Etc.  Borrower (a) is duly  organized,
validly  existing,  and  in  good  standing  under  the  laws  of its  state  of
incorporation;  (b) qualifies as a cooperative association under the laws of its
state of  incorporation;  (c) is duly  qualified  to do business  and is in good
standing in each  jurisdiction  in which the  transaction  of its business makes
such  qualification  necessary;  and (d) has all  requisite  corporate and legal
power (i) to own and  operate its assets and to carry on its  business,  (ii) to
enter into and perform the Loan  Documents to which it is a party,  and (iii) to
make the Underlying Loans.

     10.2 Corporate Authority,  Due Authorization;  Consents.  Borrower has full
power and authority to conduct its business as  contemplated to be operated from
and after the  Closing  Date;  to execute,  deliver  and perform  under the Loan
Documents  and all  other  documents  and  agreements  as  contemplated  by this
Agreement;  and to make the  Underlying  Loans,  all of  which  have  been  duly
authorized.  All consents or approvals of any Person which are necessary for, or
are required as a condition of, the execution,  delivery and  performance of the
Loan Documents and/or making of the Underlying Loans have been obtained.

     10.3 Title to Property.  Borrower holds good and marketable title to all of
its real property (other than rights of way,  easements and similar interests in
real property which in the aggregate are not material), owns all of its personal
property,  and holds  all of its  leases,  free and  clear of any lien,  pledge,
restriction,  or encumbrance,  except as specifically identified in Exhibit 10.3
attached   hereto  or  as   permitted   by  Section   13.3  hereof   ("Permitted
Encumbrances")  and subject to the  Intercreditor  Agreement.  All of Borrower's
leases which  constitute  Material  Agreements  are in full force and effect and
afford  Borrower  peaceful  and  undisturbed  possession  of the subject  matter
thereof.

     10.4 Litigation.  Except as described on Exhibit 10.4 hereto, there are, no
pending legal or governmental  actions,  proceedings or  investigations to which
Borrower is a party or to which any property of Borrower is subject  which might
result in any Material  Adverse  Effect and, to  Borrower's  knowledge,  no such
actions or proceedings  are threatened or  contemplated  by any federal,  state,
county, city (or similar unit) governmental agency or any other Person.

     10.5 No  Violations.  The execution,  delivery and  performance of the Loan
Documents  and the making of the  Underlying  Loans will not:  (a)  violate  any
provision of Borrower's  articles of incorporation or bylaws,  or any law, rule,
regulation,  judgment,  order or ruling of any court or governmental agency; (b)
violate,  conflict with,  result in a breach of,  constitute a default under, or
with the  giving of  notice  or the  expiration  of time or both,  constitute  a
default under, any existing real estate  mortgage,  indenture,  lease,  security
agreement,  contract,  note,  instrument  or any other  agreements



                                       15
<PAGE>


or documents  binding on Borrower or  affecting  its  property;  or (c) violate,
conflict with,  result in a breach of,  constitute a default under, or result in
the loss of, or restriction of rights under,  any Required License or any order,
law,  rule,  or regulation  under or pursuant to which any Required  License was
issued or is maintained ("Licensing Laws").

     10.6 Binding  Agreement.  Each of the Loan Documents to which Borrower is a
party is, or when executed and delivered,  will be, the legal, valid and binding
obligation of Borrower,  enforceable in accordance with its terms,  subject only
to limitations on enforceability imposed by applicable  bankruptcy,  insolvency,
reorganization,   moratorium,   or  similar  laws  affecting  creditors'  rights
generally and by general principles of equity.

     10.7  Compliance  with Laws.  Borrower is in  compliance  with all federal,
state,  and local  laws,  rules,  regulations,  ordinances,  codes  and  orders,
including without limitation all Environmental Laws and all Licensing Laws, with
respect to which noncompliance would result in a Material Adverse Effect.

     10.8 Principal Place of Business.  Borrower's  place of business,  or chief
executive office if it has more than one place of business,  and the place where
the records required by Section 12.1 hereof are kept, is located at the place(s)
shown on Exhibit 10.8 hereto.

     10.9 Underlying  Loans;  Underlying  Loan Documents.  As of the time of any
Advance:  (a) the  Underlying  Loan  Documents  will have been duly  authorized,
executed,  and delivered by all parties  thereto and will  constitute the legal,
valid, and binding obligation of all parties thereto,  enforceable in accordance
with their terms,  subject only to the effects of  bankruptcy,  insolvency,  and
similar laws generally  affecting the rights of creditors or the availability of
equitable  remedies;  (b) any  Underlying  Loan  will be free  from any right of
set-off,  counterclaim  or other  claim,  or  defense  and no  event of  default
thereunder  shall  have  occurred  and be  continuing;  (c) any  Underlying  LOC
Borrower's  obligations  pursuant to its Underlying Loan will,  except where the
Underlying Loan Documents  specifically  state otherwise,  be secured by a first
and  prior  lien in favor of  Borrower  in all  assets  of such  Underlying  LOC
Borrower; (d) all closing and pre-closing requirements, if any, set forth in the
Underlying Loan Documents,  will have been satisfied in full; (e) the Underlying
Loan  Documents will have been approved by Agent and shall not have been amended
subsequent to such approval;  (f) the Underlying  Loans will not be in violation
of any applicable  usury statutes;  and (g) to Borrower's  knowledge and belief,
the Underlying Loan Documents,  projections,  budgets,  financial statements, or
other information  furnished by or on behalf of any Underlying LOC Borrower will
not contain any  misstatement  of a material  fact, nor omit to state a material
fact.

     10.10 Payment of Taxes. Borrower has filed all required federal,  state and
local tax returns  and has paid all taxes as shown on such  returns as they have
become



                                       16
<PAGE>


due.  Borrower has paid when due all other  taxes,  assessments  or  impositions
levied or assessed against Borrower or its business or properties.

     10.11 Licenses and Approvals. Borrower has ownership of, or license to use,
or  has  been  issued,   all  trademarks,   patents,   copyrights,   franchises,
certificates,  approvals, permits,  authorities,  agreements, and licenses which
are used or  necessary  to permit it to own its  properties  and to conduct  its
business  as  presently  being  conducted,  and to  make  the  Underlying  Loans
("Required  Licenses").  Exhibit 10.11 lists all Required Licenses  presently in
existence with respect to Borrower.  Each Required  License is in full force and
effect, and there is no outstanding notice of cancellation or termination or, to
Borrower's knowledge,  any threatened  cancellation or termination in connection
therewith, nor has an event occurred with respect to any Required License which,
with the  giving of  notice  or  passage  of time or both,  could  result in the
revocation or  termination  thereof or otherwise in any impairment of Borrower's
rights with respect  thereto,  which  impairment could reasonably be expected to
have a Material Adverse Effect. No consent, permission, authorization, order, or
license of any governmental  authority, is necessary in connection with the: (a)
execution, delivery,  performance, or enforcement of the Loan Documents to which
Borrower is a party; and (b) the making of the Underlying Loans,  except such as
have been  obtained  and are in full force and effect  and as are  described  on
Exhibit 10.11.

     10.12  Employee  Benefit  Plans.  Borrower does not  presently  maintain or
participate in, and has not in the past  maintained or  participated  in, and is
not obligated to contribute to, any of the following  (each a "Borrower  Benefit
Plan" and  collectively  "Borrower  Benefit  Plans"):  (a) any funded  "employee
welfare  benefit  plan," as that term is defined in Section 3(1) of the Employee
Retirement  Income  Security  Act of  1974,  as  amended,  and  the  regulations
thereunder ("ERISA"); (b) any "multiemployer plans," as defined in Section 3(37)
of ERISA; (c) any "employee  pension benefit plan" as defined in Section 3(2) of
ERISA; (d) any "employee  benefit plan", as such term is defined in Section 3(3)
of ERISA; (e) any "multiple  employer plan" within the meaning of Section 413 of
the Internal  Revenue Code of 1986, as amended from time to time  ("Code");  (f)
any "multiple employer welfare  arrangement" within the meaning of Section 3(40)
of ERISA;  (g) a  "voluntary  employees'  beneficiary  association"  within  the
meaning of Section  501(a)(9) of the Code;  (h) a "welfare  benefit fund" within
the meaning of Section 419 of the Code; or (i) any employee welfare benefit plan
within the meaning of Section 3(1) of ERISA for the benefit of retired or former
employees.

     10.13  Equity  Investments.  Borrower  does not now own any  stock or other
voting or equity interest,  directly or indirectly, in any Person other than the
CoBank Equity Interests.

     10.14  Real  Property.  Borrower:  (a) has  all  real  property  interests,
including without  limitations fee interests,  leasehold  interests,  easements,
licenses  and rights of way which are  necessary  for the conduct of  Borrower's
business;  and (b) does not own any fee interest or leasehold  interest,  or any
other interest,  including  without  limitation



                                       17
<PAGE>


any easements,  rights of way or licenses,  in real property,  other than as set
forth on Exhibit 10.14 hereto.

     10.15  Personal  Property.  Borrower  has all  tangible  personal  property
necessary for the conduct of  Borrower's  business as it is  contemplated  to be
conducted;  and all such  property is in good  operating  condition  and repair,
reasonable wear and tear excepted, and suitable in all material respects for the
uses for which it is being utilized.

     10.16  Borrower  Membership.  Village  Farms of Texas,  L.P. is a member of
Borrower.

     10.17 Environmental Compliance.  Without limiting the provisions of Section
10.7  above,  all  property  owned or  leased  by  Borrower  and all  operations
conducted  by it are in  compliance  in all  material  respects  with  all  Laws
relating  to  environmental  protection,  with  respect to which the  failure to
comply would have a Material Adverse Effect.

     10.18 Fiscal Year. Each fiscal year of Borrower begins on January 1 of each
calendar year and ends on December 31 of each calendar year.

     10.19 Material  Agreements.  That Exhibit 10.19 attached  hereto sets forth
all  agreements  of Borrower,  the  termination  or breach of which,  based upon
Borrower's  knowledge as of the date of making any  representation  with respect
thereto, would have a Material Adverse Effect ("Material  Agreements").  Neither
Borrower  nor,  to  Borrower's  knowledge,  any  other  party  to  any  Material
Agreement, is in default thereunder, and no facts exist which with the giving of
notice or the passage of time, or both, would constitute such a default.

     10.20  Regulations  G, U and X. No portion of any Advance  will be used for
the purpose of purchasing, carrying, or making loans to finance the purchase of,
any "margin security" or "margin stock" as such terms are used in Regulations G,
U or X of the Board of Governors of the Federal Reserve System, 12 C.F.R.  Parts
207, 221 and 224.

     10.21  Disclosure.  The  representations  and warranties  contained in this
Article 10 and in the other Loan  Documents do not contain any untrue  statement
of a  material  fact or omit to state a  material  fact  necessary  to make such
representations not misleading.

ARTICLE 11.       CONDITIONS TO ADVANCES

     11.1 Conditions to Closing. . The obligation (a) of the Syndication Parties
to make the Loan and to make any Advance  thereunder;  and (b) of the LC Issuing
Bank to issue the first Letter of Credit,  are each subject to satisfaction,  in
Agent's sole discretion, of each of the following conditions precedent:


                                       18
<PAGE>


     11.1.1 Loan Documents. Agent shall have received duly executed originals of
the Loan Documents.

     11.1.2 Searches; UCC Filings; Recordings; Title Insurance. Agent shall have
received:  (a) searches of appropriate  filing offices showing that (i) no state
or federal tax liens have been filed which  remain in effect  against  Borrower,
(ii) except with respect to Permitted  Encumbrances no financing statements have
been filed by any Person  except to perfect the security  interests  required by
this  Agreement,  which remain in effect against  Borrower or any of its assets,
(iii) all  financing  statements  necessary  to perfect the  security  interests
granted to Agent (for the  benefit of the  Syndication  Parties)  under the Loan
Documents have been filed or recorded, to the extent such security interests are
capable of being  perfected by such filing,  and (iv) all of the Loan  Documents
required to be recorded or filed to perfect  the  security  interests  and liens
granted therein shall be so recorded and filed; (b) mortgagees'  title insurance
commitments ("Title Commitments")  acceptable to Agent from one or more insurers
acceptable to Agent (the "Title Insurers") committing to issue one or more title
policies  (ALTA Loan Policy  Form) (the "Title  Policies")  insuring the lien in
favor of Agent (on behalf of the  Syndication  Parties)  on each  parcel of real
property  owned in fee by Borrower  having an  estimated  Fair  Market  Value of
$25,000.00 or more as a first priority lien on such real property,  subject only
to Permitted Encumbrances,  and (i) deleting the standard printed exceptions and
the gap  exception,  (ii)  containing  only  such  exceptions  to  title  as are
reasonably  acceptable to Agent, and (iii) containing such other endorsements as
Agent  may  reasonably  require;  and (c)  either  a  Title  Commitment  or,  at
Borrower's  option, a written  ownership and encumbrance  report of current date
indicating  that there are no prior liens on each  parcel of such real  property
having an estimated Fair Market Value of less than $25,000.00.  In addition,  in
the case of the parcels of real property  covered by a Title  Commitment,  as of
the Closing  Date Agent shall have  received  from the Title  Insurers a written
confirmation  acceptable  to  Agent  confirming  that  the  Title  Insurers  are
irrevocably committed to issue the Title Policies.

     11.1.3  Approvals.  Agent shall have received  evidence  satisfactory to it
that all consents and approvals of  governmental  authorities  and third parties
which are with respect to Borrower and Guarantor,  necessary for, or required as
a condition of: (a) the validity and  enforceability of the Loan Documents;  (b)
creation of and realization on, Agent's lien (for the benefit of the Syndication
Parties) on the  Collateral;  and (c) the making of the Underlying  Loans,  have
been obtained and are in full force and effect.

     11.1.4  Organizational  Documents.  Agent  shall  have  received:  (a) good
standing certificates,  dated no more than thirty (30) days prior to the Closing
Date, for Borrower and Guarantor for their  respective  states of  incorporation
and for each state where their operations require qualification or authorization
to transact  business;  (b) a copy of the articles of  incorporation of Borrower
and   Guarantor   certified  by  the  Secretary  of  State  of  their  state  of
organization;  and (c) a copy of the bylaws of Borrower and Guarantor, certified
as true and complete by the  Secretary  or  Assistant  Secretary of Borrower and
Guarantor, respectively.


                                       19
<PAGE>


     11.1.5 Evidence of Corporate Action.  Agent shall have received in form and
substance satisfactory to Agent: documents evidencing all corporate action taken
by each of Borrower and Guarantor to authorize (including the specific names and
titles  of  the  persons  authorized  to so  act  ("Authorized  Officers"))  the
execution,  delivery  and  performance  of the Loan  Documents  to which it is a
party,  and with  respect  to  Borrower,  the  making of the  Underlying  Loans,
certified  to be true and correct by the  Secretary  or  Assistant  Secretary of
Borrower and Guarantor, respectively.

     11.1.6 Legal Opinion for Borrower and Guarantor.  Agent shall have received
opinions of counsel for Borrower and for  Guarantor  (who shall be acceptable to
Agent),  in form and content  acceptable  to Agent and addressed to Agent and to
each Syndication Party (and expressly permitting reliance thereon by each future
Syndication Party).

     11.1.7  Evidence of Insurance.  Borrower and Guarantor  shall have provided
Agent with insurance certificates and such other evidence, in form and substance
satisfactory  to Agent,  of all insurance  required to be maintained by it under
the Loan Documents.

     11.1.8 Phase I  Environmental  Studies.  Borrower and Guarantor  shall have
submitted  to Agent such  studies,  investigations  and reports  with respect to
environmental  matters  for  real  property  owned  by  Borrower  or  Guarantor,
respectively,  from  consultants  acceptable  to  Agent  as  may  be  reasonably
requested by Agent and content and results of those studies,  investigations and
reports shall be reasonably acceptable to Agent.

     11.1.9 Survey.  Borrower and Guarantor  shall have provided Agent with ALTA
improvement  surveys  of all real  property  owned  by  Borrower  or  Guarantor,
respectively,  and  having a Fair  Market  Value of  $25,000.00  or more,  which
surveys,  the  certifications  thereon,  and all information  contained therein,
shall be acceptable to Agent.

     11.1.10  Material  Agreements.  Agent shall have  received  copies of those
Material Agreements as Agent may request in its sole discretion.

     11.1.11 Appointment of The Corporation  Company.  Agent shall have received
evidence  satisfactory  to Agent that The  Corporation  Company,  1675 Broadway,
Denver,  Colorado  80202 has accepted  appointment  by Borrower and Guarantor to
serve as their agent for service of process in  accordance  with Section 17.2 of
this Agreement and Section 11.7 of the Guaranty.

     11.1.12 No Material Change.  No change shall have occurred in the condition
or  operations  of  Borrower  since May 1,  1997 or  Guarantor  since  March 31,
1997,which, in either case, could result in a Material Adverse Effect.

     11.1.13 Fees and Expenses. Borrower shall have paid Agent, by wire transfer
of immediately available federal funds all fees set forth in Section 5.3 of this


                                       20
<PAGE>


Agreement  which are due on the Closing Date, and all expenses owing pursuant to
Section 17.1 hereof.

     11.1.14 Application;  CoBank Equity Interest Purchase Obligation.  Borrower
shall have: (a) completed the loan application form provided by CoBank;  and (b)
purchased such CoBank Equity Interests as CoBank may require pursuant to Article
8 hereof.

     11.1.15  Further  Assurances.  Borrower and  Guarantor  shall have provided
and/or  executed and delivered to Agent such further  assignments,  documents or
financing statements, in form and substance satisfactory to Agent, that Borrower
and  Guarantor  are to execute  and  deliver  pursuant  to the terms of the Loan
Documents or as Agent may reasonably request.

     11.2 Conditions to Initial Advance.  The Syndication Parties' obligation to
make the initial  Advance to fund any particular  Underlying  Loan is subject to
the  satisfaction,  in  Agent's  sole  discretion,  of  each  of  the  following
conditions precedent:

     11.2.1 Underlying Loan Documents; Possession of Documents. Agent shall have
received:  (a) such information  regarding the proposed Underlying LOC Borrower,
including credit information,  as Agent may request;  (b) evidence,  in form and
substance  satisfactory to Agent that the Underlying  Loan Documents  evidencing
the Underlying Loan are on forms, and contain terms and conditions, satisfactory
to Agent in its sole discretion,  and in compliance with all applicable laws and
regulations;  (c) proof  satisfactory to Agent that the Underlying Loan has been
closed and that all conditions to closing  thereof and to an advance of funds as
set forth in the Underlying  Loan Documents  have been  satisfactorily  met; (d)
possession of executed  originals of the  Underlying  Loan  Documents,  properly
endorsed;  and (e) such other  instruments and documents in which Agent has been
granted a security interest (for the benefit of the Syndication  Parties) and of
which Agent is to have possession under the terms of the Loan Documents.

     11.2.2 Advance Request.  Agent shall have received from Borrower (including
by facsimile  transmission):  (a) a duly completed  request in the form attached
hereto  as  Exhibit  11.2.2  ("Advance  Request")  which  has been  signed by an
Authorized Officer; and (b) such other information or documentation as Agent may
request.  The  Advance  Request  shall be deemed to have  been  received  on the
Business Day received if actually  received by Agent before 12:00 noon,  Central
Time, and as of the next Business Day if received by Agent after such time or on
other than a Business Day;  provided that an Advance Request shall not be deemed
to have been  received by Agent until it is  satisfactory  to Agent and includes
all  information  and  documentation  that  Agent may  request.  Within  one (1)
Business  Day of the date an Advance  Request  is deemed to have been  received,
Agent shall either fund the Advance or advise Borrower to the contrary; provided
that if Agent does not advise  Borrower or does not fund  within such



                                       21
<PAGE>


time, the Advance Request shall be deemed to have been declined for funding. The
Advance Request shall be irrevocable.

     11.2.3  Default.  As of the Advance  Date no Event of Default or  Potential
Default shall have occurred and be continuing,  and the disbursing of the amount
of the Loan  Proceeds  requested in the Advance  Request  shall not result in an
Event of Default or Potential Default.

     11.2.4  Representations and Warranties.  The representations and warranties
of Borrower and of Guarantor contained in each of the Loan Documents to which it
is a party,  shall be true and correct in all material respects on and as of the
date on which the Advance is to be made as though made on . Borrower  shall have
paid Agent, by wire transfer of immediately available federal funds all fees set
forth in Section  5.4 of this  Agreement  which are then due and payable and all
expenses owing pursuant to Section 17.1 hereof.

     11.3  Conditions  to  All  Subsequent  Advances.   The  obligation  of  the
Syndication  Parties to make  Advances to fund any  particular  Underlying  Loan
after the  Initial  Advance  is  subject to the  satisfaction,  in Agent's  sole
discretion, of each of the following conditions precedent:

     11.3.1  Representations and Warranties.  The representations and warranties
of  Borrower  contained  in this  Agreement  shall  be true and  correct  in all
material respects on and as of the date of such Advance as though made on and as
of such date.

     11.3.2 No Event of Default.  No Event of Default and no  Potential  Default
shall have  occurred  and be  continuing,  and no Event of Default or  Potential
Default would result from the making of the Advance.

     11.3.3 No Material  Adverse Change.  No material  adverse change shall have
occurred in the condition, operations, or prospects of Borrower.

     11.3.4 Advance Request.  Agent shall have received  (including by facsimile
transmission)  a  duly  completed   Advance  Request  signed  by  an  Authorized
Representative.  The Advance  Request  shall be  effective  on the  Business Day
received if actually received by Agent before 12:00 noon Central time, and as of
the next  Business  Day if  received by Agent after such time or on other than a
Business Day;  provided that an Advance Request shall not be deemed to have been
received by Agent until it is satisfactory to Agent and includes all information
and  documentation  that Agent may  request.  Within one (1) Business Day of the
date an Advance Request is deemed to have been received, Agent shall either fund
the Advance or advise Borrower to the contrary;  provided that if Agent does not
advise  Borrower or does not fund within such time, the Advance Request shall be
deemed to have  been  declined  for  funding..  Advance  Requests  submitted  by
Borrower shall be irrevocable.


                                       22
<PAGE>


     11.3.5  Possession of Collateral.  Agent shall have received  possession of
the Collateral  with respect to which  perfection is accomplished by possession,
including all Collateral which constitutes  Underlying Loan Documents,  properly
endorsed.

     11.4 Conditions to Issuance of Letters of Credit.  The obligation of the LC
Issuing Bank to issue Letters of Credit, is subject to satisfaction,  in Agent's
sole discretion, of each of the following conditions precedent:

     11.4.1  Representations and Warranties.  The representations and warranties
of  Borrower  contained  in this  Agreement  shall  be true and  correct  in all
material  respects on and as of the date of such  issuance as though made on and
as of such date.

     11.4.2 No Event of Default.  No Event of Default and no  Potential  Default
shall have  occurred  and be  continuing,  and no Event of Default or  Potential
Default would result from the issuance of the Letter of Credit.

     11.4.3 No Material  Adverse Change.  No material  adverse change shall have
occurred in the condition, operations, or prospects of Borrower.

     11.4.4 Issuance Request.  Agent shall have received (including by facsimile
transmission) (a) a duly completed request for issuance of a Letter of Credit in
form and substance,  and accompanied by such information and  documentation,  as
shall be  satisfactory to Agent and the LC Issuing Bank in their sole discretion
("LC Request") signed by an Authorized  Representative.  The LC Request shall be
effective  on the  Business  Day  received if actually  received by Agent before
12:00 noon Central  time,  and as of the next  Business Day if received by Agent
after  such time or on other than a Business  Day;  provided  that an LC Request
shall not be deemed to have been received by Agent until it is  satisfactory  to
Agent and the LC Issuing  Bank and includes all  information  and  documentation
that Agent and the LC Issuing Bank may request. Within five (5) Business Days of
the date an LC Request is deemed to have been received, Agent shall either cause
the LC  Issuing  Bank to issue the  Letter of Credit or advise  Borrower  to the
contrary. LC Requests submitted by Borrower shall be irrevocable.

     11.4.5  Possession of Collateral.  Agent shall have received  possession of
the Collateral  with respect to which  perfection is accomplished by possession,
including all Collateral which constitutes  Underlying Loan Documents and/or APD
Loan Documents, in each case properly endorsed.

     11.4.6  Reimbursement  Agreement.  Agent shall have  received,  in form and
substance  satisfactory to Agent, a copy of a Reimbursement  Agreement and proof
of the granting and perfection of a security interest in the LC Collateral,  all
as required in Section 3.2 hereof.


                                       23
<PAGE>


     11.5  Conditions to Advances to Fund  Purchase of Village  Farms  Revolving
Loan.  The  obligation  of the  Syndication  Parties  to make an Advance to fund
Borrower's  purchase of the Village Farms  Revolving Loan from the VF Lenders is
subject  to the  satisfaction,  in  Agent's  sole  discretion,  of  each  of the
following conditions precedent:

     11.5.1  Representations and Warranties.  The representations and warranties
of  Borrower  contained  in this  Agreement  shall  be true and  correct  in all
material respects on and as of the date of such Advance as though made on and as
of such date.

     11.5.2 No Event of Default.  No Event of Default and no  Potential  Default
shall have  occurred  and be  continuing,  and no Event of Default or  Potential
Default would result from the making of the Advance.

     11.5.3 No Material  Adverse Change.  No material  adverse change shall have
occurred in the condition, operations, or prospects of Borrower.

     11.5.4 Advance Request.  Agent shall have received  (including by facsimile
transmission)  in  form  and  substance   satisfactory  to  Agent  in  its  sole
discretion:  (a) a  duly  completed  Advance  Request  signed  by an  Authorized
Representative;  and (b) the original of the LOC Note (as defined in the VF Loan
Agreement)  properly  endorsed from the VF Lenders to Borrower and from Borrower
to Agent; and (c) proof of (including copies of all necessary documentation) the
assignment from the VF Lenders to Borrower of all security for the LOC Note. The
Advance  Request  shall be  effective  on the  Business Day received if actually
received by Agent before 12:00 noon Central  time,  and as of the next  Business
Day if  received  by Agent  after  such time or on other  than a  Business  Day;
provided  that an Advance  Request  shall not be deemed to have been received by
Agent  until it is  satisfactory  to Agent  and  includes  all  information  and
documentation that Agent may request.  Within five (5) Business Days of the date
an Advance Request is deemed to have been received,  Agent shall either fund the
Advance or advise  Borrower  to the  contrary.  Advance  Requests  submitted  by
Borrower shall be irrevocable.

     11.5.5  Possession of Collateral.  Agent shall have received  possession of
the Collateral  with respect to which  perfection is accomplished by possession,
including all Collateral which constitutes  Underlying Loan Documents,  properly
endorsed.

     11.6 Letter of Credit Conditions. At no time and in no event shall Borrower
be entitled to the  issuance of a Letter of Credit  except in strict  compliance
with the following conditions:

     11.6.1 Aggregate  Commitment  Amount; LC Commitment Amount. The face amount
thereof:  (a) when added to (i) the outstanding  principal amount owed under the
Loan and (ii) the  undrawn  face  amount of all  other  outstanding  Letters  of


                                       24
<PAGE>


Credit,  must not exceed  the  Aggregate  Commitment;  and (b) when added to the
undrawn face amount of all other outstanding  Letters of Credit, must not exceed
the LC Commitment Amount.

     11.6.2 Form, Expiry Date, and Beneficiary.  Each such Letter of Credit: (a)
must be in form and substance  satisfactory  to Agent and the LC Issuing Bank in
their sole  discretion;  (b) must,  unless a later expiry date is agreed upon in
writing  at the time of  issuance  (or  renewal)  by all of the  Line of  Credit
Lenders,  expire by its terms no later than the earlier of (i) one (1) year from
the date of  issuance,  or (ii) thirty (30)  Business  Days prior to the Line of
Credit  Maturity Date as in effect on the date of issuance;  and (c) must be for
the benefit of Borrower, an Underlying Term Loan Borrower, or a Member.

     11.7 Additional Disbursement  Conditions.  At no time and in no event shall
the Syndication Parties be obligated to make Advances under the Loan:

     11.7.1 Aggregate  Commitment  Amount.  In excess of an amount,  which, when
added  to:  (a) all  prior  Advances  and (b) the  undrawn  face  amount  of all
outstanding Letters of Credit, would exceed the Aggregate Commitment Amount.

     11.7.2 Disbursement  Period. If the Advance would be made other than during
the Availability Period.

     11.7.3  Illegality  of  Loan.  After  the  enactment  of  any  law  by  any
governmental  authority  having  jurisdiction  over any Syndication  Party which
would make it unlawful in any  respect  for such  Syndication  Party to make the
Advance.

ARTICLE 12. AFFIRMATIVE COVENANTS

     From and  after  the date of this  Agreement  and  until  the Bank  Debt is
indefeasibly paid in full and the Syndication Parties have no obligation to make
any advances  hereunder,  Borrower  agrees that it will observe and comply with,
the following covenants for the benefit of Agent and the Syndication Parties:

     12.1 Books and  Records.  Borrower  shall at all times keep proper books of
record and account,  in which correct and complete  entries shall be made of all
its dealings, in accordance with GAAP.

     12.2 Reports and Notices.  Borrower  shall  provide to Agent the  following
reports, information and notices:

     12.2.1 Annual Financial Statements.  As soon as available,  but in no event
later than one hundred and twenty (120) days after the end of any fiscal year of
Borrower  occurring  during  the term  hereof  annual  financial  statements  of
Borrower, prepared in accordance with GAAP consistently applied which shall: (a)
be audited by  independent  certified  public  accountants  selected by Borrower
which are reasonably acceptable to Agent; (b) be accompanied by a report of such
accountants  containing  an



                                       25
<PAGE>


opinion  reasonably  acceptable  to Agent;  (c) be  accompanied  by a Compliance
Certificate;  (d) be prepared in reasonable  detail and in comparative form; and
(e) include a balance sheet, an income  statement,  a statement of cash flows, a
statement of stockholders' equity, and all notes and schedules relating thereto.

     12.2.2 Quarterly Financial Statements. As soon as available but in no event
more than  sixty (60) days after the end of each  Quarter in  Borrower's  fiscal
year  the  following  financial  statements  concerning  Borrower's  operations,
prepared in accordance with GAAP consistently  applied: (a) a balance sheet, (b)
an  income  statement,  (c) a  statement  of  cash  flows,  (d) a  statement  of
stockholders'  equity,  for such Quarter and for the year to date,  and (e) such
other  quarterly  statements as Agent may reasonably  request,  which  quarterly
statements  requested  under this clause (e) shall include any and all notes and
schedules thereto. Such quarterly financial statements required pursuant to this
Subsection shall be accompanied by a Compliance Certificate.

     12.2.3 Additional  Information.  With reasonable promptness:  (a) copies of
all communications which Borrower receives or initiates from or to an Underlying
LOC  Borrower  and all  reports,  certificates,  and  other  written  materials,
including, without limitation, all financial statements, which Borrower receives
from or on  account  of an  Underlying  LOC  Borrower;  and (b) such  additional
financial information or documentation as Agent may reasonably request.

     12.2.4 Notice of Default.  As soon as the existence of any Event of Default
or Potential  Default  becomes known to any officer of Borrower,  Borrower shall
promptly  give  Agent  written  notice of such  Event of  Default  or  Potential
Default,  the nature and status thereof,  and the action being taken or proposed
to be taken with respect thereto.

     12.2.5 Notice of Certain Changes. Borrower shall: (a) notify Agent at least
ten (10)  Business  Days  prior to the  occurrence  of any change in the name or
business  form of Borrower;  and (b) take all actions  necessary  or  reasonably
requested by Agent in order to maintain the  perfected  status of Agent's  first
lien and security  interest  (subject only to Permitted  Encumbrances and to the
Intercreditor Agreement) in the Collateral.

     12.2.6  Notice of  Litigation.  Borrower  shall  promptly  notify  Agent in
writing  of all  litigation  in which  Borrower  or,  to  Borrower's  knowledge,
Guarantor is a party,  and which  either:  (a) involves an amount of $100,000 or
more,  singly or in the  aggregate  at any  time;  or (b)  could  reasonably  be
expected  to result in a Material  Adverse  Effect  with  respect to Borrower or
Guarantor.

     12.2.7 Notice of Material  Adverse Effect.  Promptly after Borrower obtains
knowledge thereof,  notice of any matter which has resulted or would result in a
Material Adverse Effect on Borrower or Guarantor.


                                       26
<PAGE>


     12.2.8 Notice of Environmental Litigation.  Without limiting the provisions
of  Subsection  12.2.6 of this  Agreement,  promptly  after  Borrower's  receipt
thereof,   notice  of  the  receipt  of  all  pleadings,   orders,   complaints,
indictments,  or other  communication  alleging  a  condition  that may  require
Borrower to  undertake or to  contribute  to a cleanup or other  response  under
Environmental Regulations, or which seeks penalties, damages, injunctive relief,
or  criminal  sanctions  related to alleged  violations  of such laws,  or which
claims  personal  injury  or  property  damage  to any  person  as a  result  of
environmental  factors or conditions or which,  if adversely  determined,  could
have a Material Adverse Effect on Borrower.

     12.2.9  Regulatory and Other Notices.  Promptly  after  Borrower's  receipt
thereof,  copies of any notices or other  communications  received from: (a) any
governmental  authority  with respect to any matter or proceeding  the effect of
which  could  reasonably  be  expected  to have a  Material  Adverse  Effect  on
Borrower; or (b) from APD.

     12.2.10 Adverse Action Regarding Required  Licenses.  In the event Borrower
learns that any petition, action, investigation, notice of violation or apparent
liability, notice of forfeiture, order to show cause, complaint or proceeding is
pending, or, to the best of Borrower's knowledge, threatened, to seek to revoke,
cancel, suspend,  modify, or limit any of the Required Licenses,  Borrower shall
provide Agent with prompt  written notice thereof and shall take, or cause to be
taken, all reasonable measures to contest such action in good faith.

     12.2.11  Default of any  Underlying  Loan.  As soon as the existence of any
event of default or potential default under any Underlying Loan becomes known to
Borrower,  Borrower  shall  promptly give Agent written  notice of such event of
default or  potential  default,  the nature and status  thereof,  and the action
being taken or proposed to be taken with respect thereto.

     12.2.12 Annual Attorney's Opinion Regarding  Collateral.  No later than the
last  Business  Day of  February  of each  year,  an  opinion  of legal  counsel
acceptable  to Agent as to the status of (a)  Borrower's  liens on the assets of
the  Underlying  LOC  Borrowers  to secure  the  Underlying  Loans  ("Underlying
Liens");  and (b)  CoBank's  liens on the assets of  Borrower to secure the Loan
(and including the collateral  assignment to CoBank of the Underlying  Loans and
Underlying Liens).

     12.3 Eligibility  Certificate.  Borrower shall maintain its membership base
so that not less than fifty  percent  (50%) of its equity  interest  is owned by
Persons  engaged in the  business  of  producing  vegetables,  fruits,  or other
agricultural products. Within thirty (30) days of the beginning of each calendar
year,  Borrower  shall provide Agent with a written  certification  signed by an
officer thereof stating that Borrower is in compliance with this Section.

     12.4  Maintenance of Existence and  Qualification.  Borrower shall maintain
its corporate  existence in good standing  under the laws of Delaware.  Borrower
will



                                       27
<PAGE>


qualify and remain  qualified as a foreign  corporation in each  jurisdiction in
which such  qualification  is necessary  or  desirable in view of its  business,
operations and properties.

     12.5 Compliance with Legal Requirements and Agreements. Borrower shall: (a)
comply with all laws,  rules,  regulations and orders  applicable to Borrower or
its  business;  and  (b)  all  agreements,   indentures,  mortgages,  and  other
instruments  to which it is a party  or by  which it or any of its  property  is
bound;  provided,  however,  that the  failure of  Borrower  to comply with this
sentence in any instance not directly  involving  Agent or a  Syndication  Party
shall not  constitute  an Event of  Default  unless  such  failure  would have a
Material Adverse Effect.

     12.6 Compliance with Environmental Laws. Without limiting the provisions of
Section 12.5 of this Agreement,  Borrower shall comply in all material  respects
with, and take all reasonable steps necessary to cause all persons  occupying or
present  on any  properties  owned or leased by  Borrower  to comply  with,  all
Environmental  Regulations,  the  failure  to comply  with  which  would  have a
Material Adverse Effect.

     12.7  Taxes.   Borrower  shall  cause  to  be  paid  when  due  all  taxes,
assessments,  and other governmental charges upon it, its income, its sales, its
properties,  and federal and state taxes withheld from its employees'  earnings,
unless such taxes, assessments, or other governmental charges shall be contested
in good faith by  appropriate  actions or legal  proceedings  and Borrower shall
establish adequate reserves therefor in accordance with GAAP.

     12.8 Insurance.  Borrower shall keep the Collateral insured at all times by
an insurance carrier or carriers approved by Agent which have an A rating by the
current  BEST Key Rating  Guide  (provided  that  Florists  Mutual Group will be
deemed an  approved  insurance  carrier so long as its BEST Key Rating  does not
fall below its rating as of the Closing  Date),  against all risks  covered by a
special form policy (and including flood,  earthquake and windstorm coverage) in
the  amount of the full  replacement  cost  (other  than with  respect  to motor
vehicles)  of the  Collateral  as  well  as  liability,  worker's  compensation,
business  interruption,  boiler and machinery and such other  insurance as Agent
may  reasonably  require,  in amounts and with  deductibles  or maximum  payouts
customarily  carried by entities in similar  lines of business.  Borrower  shall
also maintain fidelity coverage (including employee dishonesty) on such officers
and employees and in such amounts as Agent shall  specify,  or in the absence of
any such  specification,  as  customarily  carried  by  corporations  engaged in
comparable  businesses and comparably  situated.  Such insurance  policies shall
contain such  reasonable  endorsements  as Agent shall from time to time require
and all  liability  policies  shall name Agent as an  additional  insured as its
interests may appear (and for the benefit of the Syndication Parties).  All such
insurance  policies shall be endorsed with a mortgagee's or loss payable clause,
as  appropriate,  in favor of Agent  (and  for the  benefit  of the  Syndication
Parties).  The policy or policies  evidencing all insurance  referred to in this
Section and receipts for the payment of premiums thereon or certificates of such
insurance  satisfactory  to Agent shall be delivered  to and held by Agent.  All
such insurance  policies  shall contain a provision  requiring at least ten (10)
days' notice to Agent prior



                                       28
<PAGE>


to any  cancellation  for  non-payment of premiums and at least  forty-five (45)
days' notice to Agent of cancellation for any other reason or of modification or
non-renewal.  No later than forty (40) days prior to expiration,  Borrower shall
give Agent (a)  satisfactory  written  evidence of renewal of all such  policies
with  premiums  paid,  or (b) a written  report as to the steps  being  taken by
Borrower to renew or replace all such  policies,  provided that  notwithstanding
the  receipt  of such  written  report,  Agent may at any time  thereafter  give
Borrower  written  notice to provide  Agent with such  evidence as  described in
clause  (a),  in which  case  Borrower  must do so within  ten (10) days of such
notice.  Borrower  agrees to pay all  premiums on such  insurance as they become
due,  and will not  permit  any  condition  to exist on or with  respect  to the
Collateral  which would wholly or partially  invalidate  any insurance  thereon.
Effective upon the occurrence of an Event of Default,  all of Borrower's  right,
title and interest in and to all such  policies and any unearned  premiums  paid
thereon  are  hereby  assigned  to Agent  (for the  benefit  of the  Syndication
Parties) who shall have the right, but not the obligation, to assign the same to
any purchaser of the  Collateral at any  foreclosure  sale.  Borrower shall give
immediate  written  notice  to the  insurance  carrier  and  Agent of any  loss.
Borrower hereby authorizes and empowers Agent upon the occurrence and during the
continuation  of an Event of  Default,  at Agent's  option  and in Agent's  sole
discretion,  to act as  attorney-in-fact  for Borrower to make proof of loss, to
adjust and compromise any claim under insurance policies, to collect and receive
insurance  proceeds,  and to deduct therefrom  Agent's expenses  incurred in the
collection  of such  proceeds,  and all  insurance  policies of  Borrower  shall
provide that Agent may act as Borrower's attorney-in-fact for such purposes.

     12.9 Title to Assets and  Maintenance.  Borrower  shall defend and maintain
title to all its  material  properties  and assets,  including  the  Collateral.
Borrower  shall  keep  its  assets,  both  real  and  personal,   including  the
Collateral,  in good order and condition  consistent with industry  practice and
shall make all necessary  repairs,  replacements  and  improvements  so that its
business may be properly and advantageously conducted.

     12.10  Payment  of   Liabilities.   Borrower  shall  pay  all   liabilities
(including,  without limitation:  (a) any indebtedness for borrowed money or for
the deferred  purchase price of property or services;  (b) any obligations under
leases which have or should have been  characterized as capitalized  leases,  as
determined in accordance with GAAP; and (c) any contingent liabilities,  such as
guaranties,  for the obligations of others relating to indebtedness for borrowed
money or for the deferred  purchase price of property or services or relating to
obligations  under  leases  which  have or  should  have been  characterized  as
capitalized  leases,  as determined in accordance  with GAAP) as they become due
beyond any  period of grace  under the  instrument  creating  such  liabilities,
unless (with the exception of the Bank Debt) they are contested in good faith by
appropriate actions or legal proceedings, Borrower establishes adequate reserves
therefor  in  accordance  with GAAP,  and such  contesting  will not result in a
Material Adverse Effect.


                                       29
<PAGE>


     12.11 Further Assurances; Real Property Security Interests. Borrower shall,
as may be required from time to time by Agent,  provide such documents as may be
necessary or desirable in the judgment of Agent to confirm the security interest
in the Collateral  granted to Agent for the benefit of the Syndication  Parties.
Promptly  after the  purchase or other  acquisition  of any fee interest in real
estate having a cost or Fair Market Value of $25,000.00 or more,  Borrower shall
provide Agent with written notice of such  acquisition  and shall grant to Agent
(for the benefit of the  Syndication  Parties) a first deed of trust or mortgage
on such real estate  (subject to liens  permitted  by Section 13.3 hereof and to
the Intercreditor  Agreement),  such deed of trust or mortgage to be in form and
substance as reasonably  specified by Agent.  In connection with the delivery of
any  mortgage  or deed of  trust,  Borrower  shall,  where  required  under  the
guidelines set forth in Subsection 12.1.2 of this Agreement,  deliver to Agent a
mortgagee's  title  policy  satisfactory  to Agent in such amount as Agent shall
specify,  but in no event  greater  than the  value  of the real  estate,  to be
obtained at Borrower's  sole cost. In connection  with entering into, as lessee,
any lease of an interest in real property which lease calls for a rental payment
equal to or in excess of $25,000.00 per annum, Borrower shall deliver to Agent a
Leasehold  Assignment & Consent (naming Agent as assignee for the benefit of the
Syndication  Parties),  together  with such  consents or  estoppels of lessor as
Agent shall specify.

     12.12 Inspection.  Permit Agent or its agents, during normal business hours
or at  such  other  times  as the  parties  may  agree,  to  examine  Borrower's
properties,  books, and records,  and to discuss Borrower's  affairs,  finances,
operations, and accounts with its respective officers, directors, employees, and
independent certified public accountants.

     12.13 Required  Licenses;  Permits;  Etc.  Borrower shall duly and lawfully
obtain and maintain in full force and effect all Required Licenses.

     12.14 ERISA. In the event Borrower adopts,  maintains, or becomes obligated
to make payments under,  any Borrower Benefit Plan in the future (which Borrower
may not do without the prior  written  consent of Agent),  Borrower  shall:  (a)
cause Borrower's  Benefit Plans to comply in all material respects with the Code
and ERISA,  including but not limited to preparing and delivering  each material
report,  statement or other  document  required by ERISA and the Code within the
period specified  therein and conforming in form and substance to the provisions
thereof;  (b) cause any  Borrower  Benefit  Plan that is intended to satisfy the
requirements  of  Section  401(a)  of the  Code  to  satisfy  such  requirements
including,  but not limited to obtaining a favorable  determination  letter with
respect to each such Borrower  Benefit Plan; and (c) prepare and deliver and (d)
administer  each  Borrower  Benefit Plan in all material  respects in accordance
with the terms of such plan and with ERISA,  the Code, and any other  applicable
law, except to the extent any failure to comply with the preceding  clauses (a),
(b) or (c) would not have a Material  Adverse  Effect.  Borrower  shall take any
actions  necessary to terminate  its status as a  participating  employer in any
employee benefit plan (within the meaning of Section 3(3) of ERISA) sponsored by
an other  entity.  Within ten (10) Business  Days after  receiving  such notice,
Borrower shall furnish to



                                       30
<PAGE>


Agent any notice  received by Borrower  relating to an assertion  of  withdrawal
liability  imposed  by  any  Multiemployer  Plan  upon  Borrower  or  Borrower's
controlled  group prior to the Closing Date, or relating to any violation of the
provisions of the Code or ERISA asserted by the Department of Labor, the Pension
Benefit  Guaranty  Corporation or the Department of the Treasury with respect to
any Borrower  Benefit Plan that could  reasonably be expected to have a Material
Adverse Effect.

     12.15 Operations and Members.  Borrower shall: (a) duly and lawfully obtain
and maintain its business and  operations  for the mutual benefit of the members
thereof; (b) furnish services,  including  financing,  to its members; (c) limit
its  members  to  farmers,  ranchers,  or  producers  or  harvesters  of aquatic
products;  (d) either (i) allow no member more than 1 vote, or (ii) refrain from
paying  dividends on stock or  membership  capital in excess of 10% per annum or
such lesser amount as is permitted by applicable  state  statutes;  (e) prohibit
any  transfer or  acquisition  of an interest in Borrower if it would  result in
less than 80% of the control of Borrower  being held by  farmers,  producers  or
harvesters  of  aquatic   products;   and  (f)  conduct  its  business  so  that
transactions  with or for  its  members  are at  least  equal  in  value  to its
transactions with nonmembers (other than the United States or agencies thereof).

ARTICLE 13.       NEGATIVE COVENANTS

     From  and  after  the  date  of  this  Agreement  until  the  Bank  Debt is
indefeasibly  paid in full and the  Syndication  Parties have no  obligation  to
disburse Loan Proceeds, Borrower agrees that it will observe and comply with the
following covenants:

     13.1  Borrowing.  Borrower  shall not  create,  incur,  assume or permit to
exist:  (a) any  indebtedness  for borrowed  money or for the deferred  purchase
price  of  property  or  services;  (b)  any  contingent  liabilities,  such  as
guarantees;  or (c) any obligations  under leases which have or should have been
characterized as capital leases,  as determined in accordance with GAAP,  except
for: (u) indebtedness owing under the Loan Documents, (v) indebtedness under the
Construction  Facility  and the Term  Facility,  (w) leases and  purchase  money
financing of property  used in the ordinary  course of  Borrower's  business the
aggregate  amount of which does not exceed  $50,000.00 at any one time;  (x) the
indebtedness  outstanding  on the date hereof and which is  described on Exhibit
13.1 hereto; ; and (y) indebtedness constituting any refinancing or refunding of
indebtedness  described in subparagraphs  (u), (v), (w), and (x) of this Section
13.1,  provided that the principal  amount thereof does not increase as a result
of any such  refinancing  or refunding from the balance owing on the date hereof
or on the date of such refinancing or refunding, whichever is lower.

     13.2 No Other  Businesses.  Borrower  shall not  transact  or engage in any
business other than the making of loans to its members.


                                       31
<PAGE>


     13.3 Liens.  Borrower will not create, incur, assume or suffer to exist any
mortgage, pledge, lien, charge or other encumbrance on, or any security interest
in, any of the Collateral, except:

     (a) the security interests,  mortgages, pledges, liens, or other charges or
encumbrances   resulting  from  the  Loan  Documents  and  arising  out  of  the
Construction Facility and the Term Facility;

     (b)  liens  for taxes or other  governmental  charges  which are not due or
remain  payable  without  penalty,  or are  being  contested  in good  faith  by
appropriate  actions  or  proceedings;  provided  that  such  reserves  or other
appropriate  provisions,  if any, as shall be required by GAAP,  shall have been
made for such taxes or other governmental charges;

     (c)  deposits  or pledges to secure  workmen's  compensation,  unemployment
insurance,  old  age  benefits  or  other  social  security  obligations  or  in
connection with or to secure the performance of bids,  tenders,  trade contracts
or leases or to secure statutory  obligations or surety or appeal bonds or other
pledges or deposits of like nature and all in the ordinary course of business;

     (d)  mechanics',  carriers',  workmen's,  repairmen's  or other  like liens
arising in the ordinary course of business in respect of obligations not yet due
or which are being contested in good faith and by appropriate proceedings;

     (e) easements, rights-of-way, zoning restrictions and other similar matters
incidental to the ownership of property which do not in the aggregate materially
detract from the value of such property or assets or materially impair their use
in the operation of the business of Borrower; and

     (f) purchase money security interests in property;  provided that: (i) such
property is used in the ordinary  course of Borrower's  business,  provided that
such security interests shall attach only to the property so purchased, (ii) the
amount of the  purchase  money  financing  so secured does not exceed the amount
permitted under Section 13.1, and (iii) the purchase occurred  subsequent to the
Closing Date.

     13.4 Sale of  Assets.  Borrower  will not sell,  convey,  assign,  lease or
otherwise transfer or dispose of, voluntarily, by operation of law or otherwise,
any of the  Collateral to any Person,  except that:  (a) Borrower may dispose of
equipment  which is  obsolete  or no longer  used or useful by  Borrower  in its
business so long as (i) no Event of Default has occurred and is continuing,  and
(ii) the  transfer is made in an arms length  transaction;  and (b) Borrower may
dispose of worn-out equipment so long as (i) if an Event of Default has occurred
and is  continuing,  any  proceeds  are paid to Agent  (for the  benefit  of the
Syndication  Parties)  and (ii) such sales do not  involve  equipment  having an
aggregate  fair  market  value in excess of  $50,000.00  for all such  equipment
disposed of in any calendar year.


                                       32
<PAGE>


     13.5 Liabilities of Others. Borrower will not assume, guarantee, endorse or
otherwise  become  directly  or  contingently  liable  in  connection  with  any
obligation of any other Person.

     13.6  Payments  on  Indebtedness.  Borrower  shall  not make any  principal
payment on any indebtedness except: (a) indebtedness owing hereunder,  under the
Credit   Agreement  (Term  Loan  Funding),   and  under  the  Credit   Agreement
(Construction Loan Funding); and (b) so long as no Event of Default or Potential
Default  shall  exist,  other  indebtedness  permitted  by Section  13.1 of this
Agreement.

     13.7 Merger;  Acquisitions;  Etc.  Borrower  shall not merge or consolidate
with any entity, or acquire all or substantially all of the assets of any person
or entity,  or form or create  any new  subsidiary  or  affiliate,  or  commence
operations under any other name,  organization,  or entity,  including any joint
venture.

     13.8 Loans,  Advances and Investments.  Except as provided in Section 13.13
hereof and except for the purchase of CoBank Equity Interests, Borrower will not
make or permit to remain outstanding any loan or advance to, or own, purchase or
acquire any stock,  obligations  or securities  of, or any other interest in, or
make any capital  contribution  to, any Person,  except that  Borrower  may own,
purchase or acquire:

     (a)  commercial  paper  maturing not in excess of one year from the date of
acquisition and rated P1 by Moody's Investors Service,  Inc. or A1 by Standard &
Poor's Corporation on the date of acquisition;

     (b)  certificates of deposit in North American  commercial banks rated C or
better by  Keefe,  Bruyette  & Woods,  Inc.  or 3 or better by Cates  Consulting
Analysts, maturing not in excess of one year from the date of acquisition;

     (c) obligations of the United States government or any agency thereof,  the
obligations of which are guaranteed by the United States  government,  maturing,
in each case, not in excess of one year from the date of acquisition; and

     (d) repurchase  agreements of any bank or trust company  incorporated under
the laws of the United  States of America or any state thereof and fully secured
by a pledge of obligations issued or fully and unconditionally guaranteed by the
United States government.

     13.9  Transactions  With  Related  Parties.  Borrower  shall not  purchase,
acquire,  or sell any  equipment,  other  personal  property,  real  property or
services from or to any affiliate,  except in the ordinary  course of Borrower's
business  and upon fair and  reasonable  terms no less  favorable  than would be
obtained by Borrower in a comparable arm's-length  transaction with an unrelated
Person.

     13.10 ERISA.  Borrower shall not: (a) adopt,  maintain, or become obligated
to contribute to any Borrower  Benefit Plan without the prior written consent of
Agent;  (b)  engage  in or  permit  any  transaction  which  could  result  in a
"prohibited transaction" (as



                                       33
<PAGE>


such term is defined in Section 406 of ERISA) or in the  imposition of an excise
tax  pursuant  to  Section  4975  of the  Code;  (c)  engage  in or  permit  any
transaction  or other event which could result in a  "reportable  event" as such
term is defined in Section 4043 of ERISA for any Borrower Pension Plan; (d) fail
to make full payment when due of all amounts which,  under the provisions of any
Borrower Benefit Plan, Borrower is required to pay as contributions thereto; (e)
permit to exist any "accumulated funding deficiency" (as such term is defined in
Section  302 of ERISA) in excess of  $25,000.00,  whether  or not  waived,  with
respect to any  Borrower  Pension  Plan;  (f) fail to make any  payments  to any
"multiemployer  plan" that  Borrower may be required to make under any agreement
relating to such  "multiemployer  plan" or any law  pertaining  thereto;  or (g)
terminate  any  Borrower  Pension  Plan in a manner  which  could  result in the
imposition  of a lien on any  property of Borrower  pursuant to Section  4068 of
ERISA. Borrower shall not terminate any Borrower Pension Plan so as to result in
any  liability  to the Pension  Benefit  Guaranty  Corporation.  As used in this
Section, all terms enclosed in quotation marks shall have the meanings set forth
in ERISA.  Borrower's failure to comply with any of the foregoing  provisions of
this  Section  shall not  constitute  a breach of this  Agreement or an Event of
Default unless such failure has a Material Adverse Effect.

     13.11 Payment of Dividends.  Borrower  shall not,  directly or  indirectly,
declare  or pay any  dividends  on  account  of any  shares  of any class of its
capital stock now or hereafter outstanding, or set aside or otherwise deposit or
invest  any sums for such  purpose,  or redeem,  retire,  defease,  purchase  or
otherwise  acquire any shares of any class of its capital stock (or set aside or
otherwise  deposit or invest any sums for such  purpose)  for any  consideration
other  than  common  stock or  apply or set  apart  any sum,  or make any  other
distribution  (by  reduction  or  capital or  otherwise)  in respect of any such
shares or retire capital  equities or other written  notices of  allocation,  or
make any other distribution or allocation of its earnings,  surplus or assets to
any holder of stock,  allocated equities or other written notices of allocation,
or agree to do any of the  foregoing;  provided  that  Borrower  may  distribute
patronage-sourced  earnings  annually in the form of cash and qualified  written
notices  of  allocation,  so long as the  cash  portion  is the  minimum  amount
required to qualify the distribution as a deductible patronage  distribution for
federal income tax purposes,  and such written notices constitute equity and not
debt.

     13.12 Change in Fiscal Year. Borrower shall not change its fiscal year from
a year ending on December 31.

     13.13 Extension of Credit. Notwithstanding the prohibitions of Section 13.8
hereof, Borrower may make extensions of credit as follows:

     (a) Underlying Loans approved by Agent for funding  hereunder and which are
included in the Collateral;


                                       34
<PAGE>


     (b) Loans  approved by Agent for funding under the Credit  Agreement  (Term
Loan Funding); and

     (c)  Loans  approved  by Agent  for  funding  under  the  Credit  Agreement
(Construction Loan Funding).

     13.14 Amendment/Waiver of Provisions of Underlying Loan Documents. Borrower
shall not, without the prior written consent of Agent, amend, or agree to amend,
or waive any  material  provision  of, or give its consent  with  respect to any
material  matter under,  any of the Underlying Loan Documents after originals or
copies thereof have been delivered to Agent.



ARTICLE 14.       INDEMNIFICATION

     14.1 General;  Stamp Taxes;  Intangibles Tax.  Borrower agrees to indemnify
and hold  Agent  and each  Syndication  Party  and  their  directors,  officers,
employees,  agents,  professional  advisers  and  representatives  ("Indemnified
Parties")  harmless  from  and  against  any and all  claims,  damages,  losses,
liabilities,  costs or expenses  whatsoever which Agent or any other Indemnified
Party may incur (or which may be claimed against any such  Indemnified  Party by
any  Person),  including  attorneys'  fees  incurred by any  Indemnified  Party,
arising  out  of  or  resulting  from:  (a)  the  material   inaccuracy  of  any
representation  or warranty of Borrower or  Guarantor  in this  Agreement or the
other Loan  Documents;  (b) the  material  failure of Borrower or  Guarantor  to
perform or comply with any covenant or obligation of Borrower or Guarantor under
this Agreement or the other Loan Documents;  or (c) the exercise by Agent of any
right or  remedy  set  forth in this  Agreement  or the  other  Loan  Documents,
provided  that Borrower  shall have no  obligation to indemnify any  Indemnified
Party against claims,  damages,  losses,  liabilities,  costs or expenses to the
extent that a court of  competent  jurisdiction  renders a final  non-appealable
determination that the foregoing are solely the result of the willful misconduct
or gross negligence of such Indemnified  Party. In addition,  Borrower agrees to
indemnify and hold the Indemnified Parties harmless from and against any and all
claims, damages, losses,  liabilities,  costs or expenses whatsoever which Agent
or any other  Indemnified  Party may incur (or which may be claimed  against any
such Indemnified Party by any Person), including attorneys' fees incurred by any
Indemnified Party, arising out of or resulting from the imposition or nonpayment
by  Borrower  of any stamp tax,  intangibles  tax, or similar tax imposed by any
state,  including any amounts owing by virtue of the assertion that the property
valuation  used to calculate any such tax was  understated.  Borrower shall have
the right to assume the  defense  of any claim as would give rise to  Borrower's
indemnification  obligation  under  this  Section  with  counsel  of  Borrower's
choosing so long as such defense is being diligently and properly  conducted and
Borrower shall establish to the Indemnified Party's satisfaction that the amount
of such claims are not, and will not be,  material in  comparison  to the liquid
and unrestricted  assets of Borrower available to respond to any award which may
be granted on account of such claim.  So long as the conditions of the preceding
sentence are met, Indemnified Party shall have no further right to reimbursement
of attorney's fees incurred thereafter. The obligation to



                                       35
<PAGE>


indemnify  set forth in this  Section  shall  survive  the  termination  of this
Agreement and other covenants.

     14.2 Indemnification  Relating to Hazardous Substances.  Borrower shall not
locate,  produce,  treat,  transport,  incorporate,  discharge,  emit,  release,
deposit or dispose of any Hazardous  Substance in, upon, under, over or from any
property owned or held by Borrower,  except in accordance with all Environmental
Regulations;  Borrower  shall not permit any Hazardous  Substance to be located,
produced, treated,  transported,  incorporated,  discharged,  emitted, released,
deposited,  disposed of or to escape in, upon,  under, over or from any property
owned or held by Borrower, except in accordance with Environmental  Regulations;
and  Borrower  shall  comply  with  all  Environmental   Regulations  which  are
applicable to such property.  If Agent reasonably believes that an Environmental
Regulation  has been violated by Borrower's  activities  upon property  owned or
held by Borrower,  and if Agent so  requests,  Borrower  shall have  prepared an
environmental  review,  audit,  assessment and/or report relating to the subject
property,  at  Borrower's  sole  cost  and  expense,  by an  engineer  or  other
environmental expert acceptable to Agent. If, however, the environmental review,
audit,  assessment  and/or report reveals that no  Environmental  Regulation has
been violated, Agent shall reimburse Borrower for the costs and expenses of such
engineer  or other  environmental  expert in  completing  such  audit or report.
Borrower shall indemnify the Indemnified  Parties  against,  and shall reimburse
the Indemnified Parties for, any and all claims, demands, judgments,  penalties,
liabilities,  costs, damages and expenses,  including court costs and attorneys'
fees  incurred  by the  Indemnified  Parties  (prior to  trial,  at trial and on
appeal) in any action against or involving the  Indemnified  Parties,  resulting
from  any  breach  of the  foregoing  covenants,  or from the  discovery  of any
Hazardous  Substance in, upon,  under or over, or emanating from, such property,
it being the intent of Borrower and the Indemnified Parties that the Indemnified
Parties shall have no liability or responsibility  for damage or injury to human
health,  the  environmental or natural resources caused by, for abatement and/or
clean-up of, or otherwise with respect to, Hazardous Substances by virtue of the
interest of Agent,  or any  Syndication  Party,  in the property  created by any
documents  securing Bank Debt (including  without limitation the Loan Documents)
or as the result of Agent or any Syndication  Party exercising any of its rights
or remedies  with  respect  thereto,  including  but not limited to becoming the
owner thereof by foreclosure or conveyance in lieu of foreclosure. The foregoing
covenants of this Section shall be deemed  continuing  covenants for the benefit
of the  Indemnified  Parties,  and any successors and assigns of the Indemnified
Parties, including but not limited to the holder of any certificate of purchase,
any transferee of the title of Agent or any Syndication  Party or any subsequent
owner of the  property,  and shall  survive the  satisfaction  or release of any
lien,  any  foreclosure  of any  lien  and/or  any  acquisition  of title to the
property  or any part  thereof  by Agent or any  Syndication  Party,  or  anyone
claiming by, through or under Agent or any Syndication Party or Borrower by deed
in lieu of  foreclosure  or  otherwise.  Any  amounts  covered by the  foregoing
indemnification  shall  bear  interest  from the date  incurred  at the  Default
Interest Rate, shall be payable on demand,  and shall be secured by the Security


                                       36
<PAGE>


Documents.  The  indemnification and covenants of this Section shall survive the
termination of this Agreement and other covenants.

ARTICLE 15. EVENTS OF DEFAULT; RIGHTS AND REMEDIES

     15.1 Events of Default. The occurrence of any of the following events (each
an "Event of Default") shall, at the option of Agent, make the entire Bank Debt,
including the Notes, immediately due and payable (provided,  that in the case of
an Event of Default under  Subsection  15.1(f) all amounts owing under the Notes
and the other Loan Documents shall  automatically and immediately become due and
payable without any action by or on behalf of Agent), and Agent may exercise all
rights and remedies for the collection of any amounts outstanding  hereunder and
take whatever action it deems necessary to secure itself,  all without notice of
default,  presentment or demand for payment,  protest or notice of nonpayment or
dishonor, or other notices or demands of any kind or character:

     (a)  Failure of  Borrower to pay within five (5) days of the date when due,
whether by  acceleration  or otherwise,  any of the Bank Debt in accordance with
this Agreement or the other Loan Documents.

     (b) Any  representation  or warranty  set forth in any Loan  Document,  any
Advance  Request,  or in the Guaranty or  Guarantor  Security  Documents,  or in
connection with any transaction  contemplated by any such document,  shall prove
in any material  respect to have been false or misleading  when made by Borrower
or Guarantor.

     (c) Any default by Borrower or Guarantor in the  performance  or compliance
with the covenants,  promises,  conditions or provisions of Sections 12.3, 12.8,
12.12,  13.1, 13.3, 13.4, 13.5, 13.7, 13.11,  13.12, or 13.14 of this Agreement,
or Sections 9.1, 9.3, 9.4, 9.5, 9.6, 9.8, 9.9, or 9.13 of the Guaranty.

     (d) Any breach of the covenants  set forth in Sections  12.2,  12.9,  12.10
(except as provided in Section 15.1(e)),  12.13, 12.14, 12.15, 13.6, 13.8, 13.9,
or 13.10 of this  Agreement or Sections 9.2, 9.7, 9.10, or 9.11 of the Guaranty,
and such  failure  continues  for five (5) days  after  Borrower  learns of such
failure to comply,  whether by Borrower's  own discovery or through  notice from
Agent.

     (e) The  failure of Borrower  or  Guarantor  to pay when due, or failure to
perform or observe any other  obligation or condition with respect to any of the
following  obligations  to any  Person,  beyond  any  period of grace  under the
instrument creating such obligation:  (i) any indebtedness for borrowed money or
for the deferred  purchase price of property or services,  (ii) any  obligations
under leases which have or should have been characterized as capitalized leases,
as determined in accordance with GAAP, or (iii) any contingent liabilities, such
as  guaranties,  for the  obligations  of others  relating to  indebtedness  for
borrowed  money or for the  deferred  purchase  price of property or services or
relating  to   obligations   under   leases  which  have  or  should  have  been
characterized  as  capitalized  leases,  as determined in accordance  with GAAP;


                                       37
<PAGE>

provided that no such failure will be deemed to be an Event of Default hereunder
unless and until the aggregate  amount owing under  obligations  with respect to
which such failures have occurred and are continuing is at least $50,000.00 with
respect to Borrower, or $50,000.00 with respect to Guarantor.

     (f) Borrower or Guarantor  applies for or consents to the  appointment of a
trustee  or  receiver  for  any  part  of  its   properties;   any   bankruptcy,
reorganization,  debt  arrangement,  dissolution  or  liquidation  proceeding is
commenced or  consented  to by Borrower or  Guarantor;  or any  application  for
appointment  of a  receiver  or a trustee,  or any  proceeding  for  bankruptcy,
reorganization, debt management or liquidation is filed for or commenced against
Borrower or Guarantor,  and is not withdrawn or dismissed within sixty (60) days
thereafter.

     (g) Failure of Borrower or Guarantor to comply with any other  provision of
this Agreement or the other Loan Documents not  constituting an Event of Default
under any of the preceding  provisions  of this Section  15.1,  and such failure
continues  for  thirty  (30) days after  Borrower  or  Guarantor  learns of such
failure to comply, whether by Borrower's or Guarantor's own discovery or through
notice from Agent.

     (h) The Guaranty or the Guarantor  Security  Documents  shall,  at any time
after their execution, cease to be in full force and effect, or shall be revoked
or declared  null and void, or the validity or  enforceability  thereof shall be
contested  by  Guarantor,  or  Guarantor  shall deny any  further  liability  or
obligation thereunder, or shall be in default or fail to perform its obligations
thereunder, or any covenant or agreement set forth therein shall be breached, or
Guarantor should breach or be in default under the terms of any of the Guarantor
Security Documents.

     (i) The  occurrence  of an event of  default,  unless  and  until a written
waiver  thereof has been granted by the Agent  thereunder,  under the  following
agreements  of even date  herewith  and  executed  by and between  Borrower,  as
borrower thereunder,  CoBank as agent and (alone, or with any other Person) as a
syndication party thereunder:  Credit Agreement (Term Loan Funding),  and Credit
Agreement (Construction Loan Funding).

     (j) The entry of one or more judgments in an aggregate  amount in excess of
$50,000,000.00   against  Borrower  and/or  in  excess  of  $100,000.00  against
Guarantor, in either case not stayed, discharged or paid within thirty (30) days
after entry.

     (k) The occurrence of an event of default under an Underlying Loan.

     15.2 No Advances.  The  Syndication  Parties  shall have no  obligation  to
disburse Loan Proceeds if a Potential Default or an Event of Default shall occur
and be continuing.

     15.3 Rights and Remedies.  In addition to the remedies set forth in Section
15.1 and 15.2 of this  Agreement,  upon the  occurrence  of an Event of Default,
Agent shall,  subject to the  provisions of Section 15.4 hereof,  be entitled to
exercise all the



                                       38
<PAGE>



rights and remedies provided in the Security  Documents and other Loan Documents
and by any applicable law, including, without limitation, the Uniform Commercial
Code as enacted in the state of Colorado or the state  where the  Collateral  is
located at such time,  whichever  provides Agent with greater  rights.  Each and
every right or remedy  granted to Agent pursuant to this Agreement and the other
Loan Documents, or allowed Agent by law or equity, shall be cumulative.  Failure
or delay on the part of Agent to  exercise  any such  right or remedy  shall not
operate as a waiver thereof. Any single or partial exercise by Agent of any such
right or remedy shall not preclude any future  exercise  thereof or the exercise
of any other right or remedy.

     15.4 Limitation on Rights and Remedies.  Notwithstanding  the provisions of
Section  15.3  hereof,  when the sole  Event of  Default  is an Event of Default
caused by Section 15.1(k) hereof, Agent will, for a period of time designated by
Agent in its sole  discretion,  refrain from  accelerating  the Loan if Borrower
promptly (a) proposes,  and diligently pursues, a course of action (for example,
for collection,  restructuring,  or assignment)  with respect to such Underlying
Loan to which  course of action  the Super  Majority  give Agent  their  written
approval in their sole discretion,  (b) ceases making advances  thereunder,  and
(c) charges  interest on such  Underlying  Loan at the default rate specified in
the relevant Underlying Loan Documents).

ARTICLE 16.       AGENCY AGREEMENT

     16.1 Funding of Syndication Interest. (a) Each Syndication Party, severally
but not jointly,  hereby irrevocably agrees to fund its Syndication Share of all
Advances  from  time to time  pursuant  to the terms  and  conditions  contained
herein;  provided that no Syndication Party shall be required to fund an Advance
in an amount such that the aggregate principal balance owing to such Syndication
Party after such funding would be in excess of such Syndication  Party's Maximum
Syndication   Amount.   Each  Syndication   Party's  interest  in  the  Advances
("Syndication  Interest")  hereunder  shall be without  recourse to Agent or any
other  Syndication  Party  and  shall  not  be  construed  as a  loan  from  any
Syndication  Party to Agent or any other  Syndication  Party.  Each  Syndication
Party  acknowledges that the Loan is a revolving credit until the Maturity Date,
and that, as a result, the amount of its Syndication  Interest will fluctuate as
Borrower repays and reborrows amounts under the Loan.

     16.2  Syndication  Parties'  Obligations to Remit Funds.  Each  Syndication
Party  agrees to remit the amount of each  Advance  requested by Borrower as set
forth in each Notice of Loan Advance ("Advance  Payment") as such Notice of Loan
Advance may be sent, in the manner provided in Section 16.3 hereof, from time to
time for Advances to be made under the Loan on or prior to the Maturity Date, or
draws made or to be made on a Letter of Credit on or prior to July 31, 2000.

     16.3 Notice and Timing of Each  Advance  Payment.  On the  Business  Day on
which Agent  approves an Advance  Request for funding,  Agent shall provide each
Syndication  Party with a notice in  substantially  the form attached  hereto as
Exhibit 16.3 ("Notice of Loan  Advance"),  indicating,  among other things,  the
amount ("Loan



                                       39
<PAGE>


Advance Amount") and Advance Date of the requested Advance and the amount of the
Syndication  Party's Advance  Payment.  Each  Syndication  Party shall remit its
Advance  Payment  directly to Agent, on the date specified in the Notice of Loan
Advance  which  shall not be later than the  Advance  Date  ("Syndication  Party
Advance Date").

     16.4 LC Notice of  Advance.  Prior to, or promptly  after,  honoring a draw
under any Letter of Credit,  Agent shall provide each  Syndication  Party with a
notice in substantially  the form attached hereto as Exhibit 16.4 ("LC Notice of
Advance"), indicating, among other things, the amount of the draw, the Letter of
Credit  number  under  which  the  draw is being  made,  and the  amount  of the
Syndication  Party's  Advance  Payment to be made on account of such draw.  (The
Notice of Loan  Advance  and the LC  Notice  of  Advance  shall be  referred  to
collectively  as "Notice of  Advance,"  and the Loan  Advance  Amount and the LC
Advance Amount shall be referred to collectively as the "Advance  Amount".) Each
Syndication  Party  shall  remit such  payment  directly  to Agent,  on the date
specified in the LC Notice of Advance ("Syndication Party LC Payment Date") (the
Syndication  Party Loan Payment Date and the  Syndication  Party LC Payment Date
shall be referred to collectively as the "Syndication Party Payment Date").

     16.5  Syndication  Party's Failure to Remit Funds.  If a Syndication  Party
("Delinquent  Syndication  Party") fails to remit its Advance Payment in full by
11:00 a.m. Central Time on the Syndication Party Advance Date (the unpaid amount
of any such payment being hereinafter  referred to as the "Delinquent  Amount"),
in addition to any other remedies  available  hereunder,  any other  Syndication
Party or  Syndication  Parties  may,  but shall  not be  obligated  to,  pay the
Delinquent  Amount (the Syndication  Party or Syndication  Parties which advance
such  Delinquent  Amount  are  referred  to  as  the  "Contributing  Syndication
Parties"),  in which  case (a) the  Delinquent  Amount  which  any  Contributing
Syndication Party pays shall not count as an Advance Payment against the Maximum
Syndication Amount of the Contributing Syndication Party, and (b) the Delinquent
Syndication  Party shall be  obligated  to pay to Agent,  for the account of the
Contributing Syndication Parties, interest on the Delinquent Amount at a rate of
interest equal to the rate of interest which Borrower is obligated to pay on the
Delinquent  Amount  ("Delinquency  Interest")  until the Delinquent  Syndication
Party remits the full Delinquent  Amount and remits all Delinquency  Interest to
Agent,  which will  distribute  such  payments to the  Contributing  Syndication
Parties  (pro rata based on the amount of the  Delinquent  Amount  which each of
them (if more than one)  paid) on the same  Business  Day as such  payments  are
received by Agent if received no later than 11:00 a.m.  Central time or the next
Business  Day if received by Agent  thereafter.  In addition,  the  Contributing
Syndication  Parties shall be entitled to share, on the same pro rata basis, and
Agent shall pay over to them, for application against  Delinquency  Interest and
the Delinquent Amount, the Delinquent  Syndication Party's Payment  Distribution
and any fee  distributions  made under Section 16.11 hereof until the Delinquent
Amount and all Delinquency  Interest have been paid in full. For voting purposes
the Agent shall readjust the Syndication  Shares of such Delinquent  Syndication
Party  and the  Contributing  Syndication  Parties  from  time to time  first to
reflect the advance of the  Delinquent  Amount by the  Contributing  Syndication
Parties,



                                       40
<PAGE>


and  then to  reflect  the full or  partial  reimbursement  to the  Contributing
Syndication Parties of such Delinquent Amount. In the event no Syndication Party
elects to pay the  Delinquent  Amount  with  respect to any  Advance  Amount but
Borrower elects to receive such Advance Amount (less the Delinquent Amount), the
proportionate share of Payment Distributions to which the Delinquent Syndication
Party is  entitled  and its  proportionate  voting  rights  shall be adjusted to
reflect  its failure to pay the  Delinquent  Amount.  As between the  Delinquent
Syndication  Party and the  Contributing  Syndication  Parties,  the  Delinquent
Syndication  Party's interest in its Note shall be deemed to have been partially
assigned to the Contributing Syndication Parties in the amount of the Delinquent
Amount and Delinquency  Interest owing to the Contributing  Syndication  Parties
from time to time.

     16.6 Agency Appointment.  Each of the Syndication Parties hereby designates
and  appoints  Agent to act as agent to  service  and  collect  the Loan and its
respective Note and to take such action on behalf of such Syndication Party with
respect to the Loan and such Note,  and to  execute  such  powers and to perform
such  duties,  as  specifically  delegated  or  required  herein,  as well as to
exercise  such  powers and to perform  such  duties as are  reasonably  incident
thereto,  and to receive and benefit from such fees and  indemnifications as are
provided  for or set forth  herein,  until such time as a successor is appointed
and qualified to act as Agent.

     16.7 Power and Authority of Agent.  Without  limiting the generality of the
power and authority  vested in Agent pursuant to Section 16.6 hereof,  the power
and authority vested in Agent includes, but is not limited to, the following:

     16.7.1  Advice.  To  solicit  the  advice  and  assistance  of  each of the
Syndication  Parties  concerning the administration of the Loan and the exercise
by Agent of its various rights,  remedies,  powers, and discretions with respect
thereto.

     16.7.2 Documents. To execute, seal, acknowledge,  and deliver as Agent, all
such instruments as may be appropriate in connection with the  administration of
the Loan and the exercise by Agent of its various rights with respect thereto.

     16.7.3 Proceedings. To initiate,  prosecute, defend, and to participate in,
actions  and  proceedings  in its name as Agent for the  ratable  benefit of the
Syndication Parties.

     16.7.4 Retain Professionals.  To retain attorneys,  accountants,  and other
professionals to provide advice and professional  services to Agent,  with their
fees and  expenses  reimbursable  to Agent by  Syndication  Parties  pursuant to
Section 16.19 hereof.

     16.7.5 Incidental Powers. To exercise powers reasonably incident to Agent's
discharge of its duties enumerated in Section 16.7 hereof.


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<PAGE>


     16.7.6  Letter of Credit  Purposes.  To determine  the purposes  other than
those set forth in Section  2.2 of this  Agreement  for which a Letter of Credit
may be issued.

     16.8 Duties of Agent.  The duties of Agent  hereunder  shall consist of the
following:

     16.8.1  Possession  of  Documents.  To safekeep one original of each of the
Loan  Documents  other than the Notes  (which will be in the  possession  of the
Syndication Party named as payee therein).

     16.8.2  Distribute  Payments.  To receive and distribute to the Syndication
Parties payments made by Borrower pursuant to the Loan Documents.

     16.8.3  Collections.  Subject to the provisions of Section 16.9 hereof, to,
on  behalf  of and  for the  ratable  benefit  of all  Syndication  Parties,  in
accordance  with customary  banking  practices,  exercise all rights,  remedies,
powers, privileges, and discretion to which Agent is entitled to collect amounts
owing under the Loan and the Notes.

     16.9 Agent's Resignation or Removal. Agent may resign at any time by giving
at least sixty (60) days' prior written notice of its intention to do so to each
of the Syndication  Parties.  After the receipt of such notice,  the Syndication
Parties holding in the aggregate at least 66 2/3% of the  Syndication  Shares of
the Loan ("Majority Lenders") shall appoint a successor  ("Successor Agent"). If
(a) no  Successor  Agent  shall  have been so  appointed  which is either  (i) a
Syndication  Party,  or (ii)  if not a  Syndication  Party,  which  is a  Person
approved by  Borrower,  or (b) if such  Successor  Agent has not  accepted  such
appointment,  in either  case  within  forty-five  (45) days after the  retiring
Agent's  giving  of such  notice of  resignation,  then the  retiring  Agent may
appoint a Successor  Agent which  shall be a bank or a trust  company  organized
under the laws of the United States of America or any state thereof and having a
combined  capital,  surplus and undivided profit of at least  $250,000,000.  Any
Agent may be removed  upon the written  demand of the  Required  Lenders,  which
demand shall also appoint a Successor Agent. Upon the appointment of a new Agent
hereunder,  the term "Agent" shall for all purposes of this Agreement thereafter
mean such successor.  After any retiring Agent's resignation hereunder as Agent,
or the removal  hereunder of any Agent,  the provisions of this Agreement  shall
continue  to inure to the  benefit  of such  Agent  as to any  actions  taken or
omitted to be taken by it while it was Agent under this Agreement.

     16.10 Consent Required for Certain  Actions.  Except as provided in Section
15.4  hereof,  Agent  may not take  any of the  following  actions  (nor may the
Syndication  Parties take the action  described in Subsection  16.10.1(c))  with
respect to, or under,  the Loan  Documents  without the prior  written  consent,
given after  notification  by Agent of its intention to take any such action (or
notification by such  Syndication  Parties as are



                                       42
<PAGE>


proposing the action described in Subsection 16.10.1(c) of their intention to do
so),  of  Syndication  Parties  holding  in the  aggregate,  at the time of such
notification:

     16.10.1  Unanimous.  One hundred percent (100%) of the  Syndication  Shares
before:

     (a)  Agreeing  to an  increase  in the  Aggregate  Commitment  Amount,  the
Construction  Commitment Amount, the LC Commitment Amount or an extension of the
Maturity Date;

     (b) Agreeing to a reduction  in the amount,  or to a delay in the due date,
of any payment by Borrower of interest,  principal, or fees; provided,  however,
this  restriction  shall not apply to a delay in payment granted by Agent in the
ordinary  course of  administration  of the Loan and the exercise of  reasonable
judgment (so long as such payment delay does not exceed five (5) days); or

     (c)  Reducing the voting  rights  percentage  set forth in this  Subsection
16.10.1; or

     (d) Releasing the line on any of the Collateral  except in connection  with
the full payment of an Underlying Loan.

     16.10.2  Super  Majority . A  sufficient  interest  to  constitute  a Super
Majority before:

     (a)  Consenting  to any  action,  amendment,  or granting  any waiver,  not
covered in Subsection 16.9.1;

     (b) Agreeing to amend Article 16 of this Agreement; or

     (c)  Determining  the purposes other than those set forth in Section 2.2 of
this Agreement for which a Letter of Credit may be issued.

If no written consent or denial is received from a Syndication Party within five
(5) Business  Days after written  notice of any proposed  action as described in
this Section is delivered to such Syndication  Party by Agent,  such Syndication
Party shall be conclusively deemed to have consented thereto for the purposes of
this Section.

     16.11 Distribution of Principal and Interest. Agent will receive and accept
all payments (including  prepayments) of principal and interest made by Borrower
on the Loan and the  Notes  and will  hold all such  payments  in trust  for the
benefit of all present and future  Syndication  Parties,  and, if  requested  in
writing by the Majority  Lenders,  in an account  segregated  from Agent's other
funds  and  accounts  ("Payment  Account").  After the  receipt  by Agent of any
payment  representing  interest or principal  on the Loan,  Agent shall remit to
each  Syndication  Party an  amount  equal to such  payment,  multiplied  by the
Syndication Party's Syndication Share ("Payment Distribution") no later than the
same Business Day as such payment is received by Agent if received no



                                       43
<PAGE>


later than 11:00 a.m. Central Time or the next Business Day if received by Agent
thereafter.  Any Syndication Party's rights to its Payment Distribution shall be
subject to the rights of any Contributing Syndication Parties to such amounts as
set forth in Section 16.5.hereof.

     16.12 Distribution of Certain Fees and Amounts. Agent shall (a) receive and
hold in trust for the benefit of all present and future Syndication  Parties, in
the Payment Account and segregated from Agent's other funds and accounts and (b)
shall remit to the Syndication Parties, as indicated, the fees and other amounts
described below:

     16.12.1 LOC  Commitment  Fee.  The  quarterly  LOC  Commitment  Fee paid by
Borrower  to  Agent  in  connection  with  the  Loan  shall  be  distributed  to
Syndication  Parties in accordance with their respective  Syndication  Shares no
later than the same  Business Day that payment of such fee is received by Agent,
if received no later than 11:00 a.m.  Central  Time, or the next Business Day if
received by Agent thereafter.

     16.12.2   Letter  of  Credit   Availability   Fee.  The  Letter  of  Credit
Availability  Fee paid by Borrower to Agent at the time of issuance  and renewal
of each Letter of Credit.

     16.12.3 Funding  Losses.  The amount of any Funding Losses paid by Borrower
to Agent in connection with a prepayment of any portion of a Fixed Loan shall be
distributed  to the  Syndication  Parties in  accordance  with their  respective
Syndication  Shares no later  than the same  Business  Day that  payment of such
Funding  Losses is  received by Agent,  if received no later than 11:00  Central
time, or the next Business Day if received by Agent thereafter.

     16.13  Possession of Loan  Documents.  The Loan  Documents  (other than the
Notes) shall be held by Agent in its name, for the ratable benefit of itself and
the other Syndication Parties without preference or priority.

     16.14  Collateral  Application.  The  Syndication  Parties  shall  have  no
interest  in any other loans made to  Borrower  by any other  Syndication  Party
other than the Loan, or in any property  taken as security for any other loan or
loans made to Borrower by any other Syndication Party, or in any property now or
hereinafter in the possession or control of any other Syndication  Party,  which
may be or become  security for the Loan solely by reason of the  provisions of a
security  instrument that would cause such security  instrument and the property
covered  thereby  to  secure  generally  all  indebtedness  owing to such  other
Syndication  Party.  Notwithstanding  the  foregoing,  to the extent  such other
Syndication  Party  applies  such  funds or the  proceeds  of such  property  to
reduction of the Loan,  such other  Syndication  Party shall share such funds or
proceeds with all Syndication Parties according to their respective  Syndication
Shares.  In the event that any Syndication  Party shall obtain payment,  whether
partial  or full,  from any source in  respect  of the Loan,  including  without
limitation  payment by reason of the  exercise  of a right of  offset,  banker's
lien, general lien, or counterclaim, reducing




                                       44
<PAGE>


such  Syndication   Party's  outstanding  balance  in  the  Loan  to  below  its
Syndication  Share,  such Syndication  Party will promptly make such adjustments
(which may include  payment in cash or the purchase of further  syndications  or
participations  in the Loan) to the end that such excess payment shall be shared
with  all  other  Syndication   Parties  in  accordance  with  their  respective
Syndication Shares.

     16.15  Amounts  Required  to be  Returned.  If Agent makes any payment to a
Syndication  Party in  anticipation of the receipt of final funds from Borrower,
and such funds are not received  from  Borrower,  or if excess funds are paid by
Agent to any Syndication  Party as the result of a miscalculation by Agent, then
Syndication Party shall, on demand of Agent,  forthwith return to Agent any such
amounts,  plus interest  thereon (from the day such amounts were  transferred by
Agent to the Syndication  Party to, but not including,  the day such amounts are
returned by  Syndication  Party) at a rate per annum equal to the Federal  Funds
Rate in effect on the date of such  demand.  If Agent is required at any time to
return to Borrower or a trustee,  receiver,  liquidator,  custodian,  or similar
official any portion of the payments made by Borrower to Agent, whether pursuant
to any bankruptcy or insolvency law or otherwise,  then Syndication Party shall,
on demand of Agent,  forthwith return to Agent any such payments  transferred to
Syndication  Party by Agent but  without  interest or penalty  (unless  Agent is
required  to pay  interest or penalty on such  amounts to the person  recovering
such payments).

     16.16  Reports and  Information  to  Syndication  Parties.  Agent shall use
reasonable  efforts to provide to  Syndication  Parties,  as soon as practicable
after  actual  knowledge  thereof is  acquired by an officer  thereof  primarily
responsible  for Agent's  duties as such with  respect to the Loan or  primarily
responsible for the credit relationship  between Agent and Borrower:  (a) notice
of the  existence  of any Event of Default or Potential  Default  under the Loan
Documents, and (b) any material factual information which has a material adverse
effect on the  creditworthiness  of Borrower and Borrower hereby authorizes such
disclosure by Agent to the Syndication Parties.  Failure of Agent to provide the
information  referred to in this Section shall not result in any liability upon,
or right  to make a claim  against,  Agent  except  where a court  of  competent
jurisdiction renders a final non-appealable determination that such failure is a
result of the  willful  misconduct  or gross  negligence  of Agent.  Syndication
Parties acknowledge and agree that all information and reports received pursuant
to this  Agreement  will be  received in  confidence  in  connection  with their
Syndication   Interest,   and  that  such  information  and  reports  constitute
confidential  information and shall not be disclosed to any third party,  except
pursuant to appropriate legal or regulatory process, (or used by the Syndication
Party except in connection with the Loan and its Syndication  Interest)  without
the prior written consent of Agent or Borrower, as applicable.

     16.17 Standard of Care.  Agent shall not be liable to  Syndication  Parties
for any error in judgment  or for any action  taken or not taken by Agent or its
agents,  except for its gross negligence or willful  misconduct.  Subject to the
preceding sentence,  Agent will exercise the same care in administering the Loan
and the Loan Documents as it



                                       45
<PAGE>


exercises  for similar  loans  which it holds for its own account and risk,  and
Agent  shall not have any further  responsibility  to the  Syndication  Parties.
Without  limiting  the  foregoing,  Agent  may  rely on the  advice  of  counsel
concerning  legal matters and on any written  document it believes to be genuine
and correct and to have been signed or sent by the proper Person or Persons.

     16.18 No Trust Relationship.  Neither the execution of this Agreement,  nor
the sharing in the Loan,  nor the holding of the Loan  Documents  in its name by
Agent, nor the management and  administration  of the Loan and Loan Documents by
Agent  (including  the  obligation to hold certain  payments and proceeds in the
Payment Account in trust for the Syndication Parties), nor any other right, duty
or obligation of Agent under or pursuant to this  Agreement is intended to be or
create,  and none of the  foregoing  shall be  construed  to be or  create,  any
express,  implied  or  constructive  trust  relationship  between  Agent and any
Syndication  Party.  Each  Syndication  Party hereby agrees and stipulates  that
Agent is not acting as trustee for such  Syndication  Party with  respect to the
Loan, this Agreement, or any aspect of either, or in any other respect.

     16.19  Sharing of Costs and  Expenses.  To the extent not paid by Borrower,
each  Syndication  Party will  promptly  upon demand  reimburse  Agent,  ratably
according to their  respective  Syndication  Shares,  for all reasonable  costs,
disbursements,  and  expenses  incurred  by Agent  on or after  the date of this
Agreement for legal,  accounting,  consulting,  and other  services  rendered to
Agent in its role as Agent in the  administration of the Loan,  interpreting the
Loan Documents,  and protecting,  enforcing, or otherwise exercising any rights,
both  before  and  after  default  by  Borrower  under the Loan  Documents,  and
including,  without  limitation,  all costs and expenses  incurred in connection
with any bankruptcy proceedings;  provided, however, that the costs and expenses
to be shared in  accordance  with this  Section  shall not  include any costs or
expenses incurred by CoBank solely as a Syndication Party in connection with the
Loan, nor to Agent's internal costs and expenses.

     16.20  Syndication   Parties'   Indemnification   of  Agent.  Each  of  the
Syndication Parties agree to indemnify Agent, including any Successor Agent, and
its  directors,   officers,   employees,   agents,   professional  advisers  and
representatives ("Indemnified Agency Parties"), (to the extent not reimbursed by
Borrower,  and without in any way limiting the obligation of Borrower to do so),
ratably according to their respective  Syndication  Shares, from and against any
and  all  liabilities,   obligations,   losses,  damages,  penalties,   actions,
judgments,  suits, costs, expenses or disbursements of any kind whatsoever which
may at any  time  (including,  without  limitation,  at any time  following  the
payment of the Loan and/or the  expiration  or  termination  of the  Syndication
Interests  or this  Agreement)  be imposed on,  incurred by or asserted  against
Agent (or any of the  Indemnified  Agency  Parties while acting for Agent or for
any Successor  Agent) in any way relating to or arising out of this Agreement or
the Loan  Documents,  or the  performance  of the duties of Agent  hereunder  or
thereunder  or any action taken or omitted while acting in the capacity of Agent
under or in connection with any of the foregoing;  provided that the Syndication
Parties shall not be liable for the payment of any portion of such  liabilities,
obligations, losses, damages, penalties,



                                       46
<PAGE>


actions,  judgments,  suits, costs,  expenses or disbursements of an Indemnified
Agency  Party to the  extent  that any of the  forgoing  result  from the  gross
negligence or willful  misconduct of that Indemnified Agency Party as determined
by a court of competent  jurisdiction.  The agreements  and  obligations in this
Section shall survive the payment of the Loan, the  Syndication  Interests,  and
the expiration or termination of this Agreement.

     16.21 Books and  Records.  Agent shall  maintain  such books of account and
records  relating  to the Loan as it  maintains  with  respect to other loans of
similar  type and amount,  and which shall  clearly and  accurately  reflect the
Syndication  Interest of each Syndication Party.  Syndication  Parties, or their
agents,  may inspect such books of account and records at all  reasonable  times
during Agent's regular business hours.

     16.22  Administrative Agent Fee. CoBank shall not be entitled to any fee or
compensation,  other than the  Administrative  Agent Fee for acting as Agent. In
the event the Successor  Agent is  contractually  entitled to an additional fee,
each Syndication Party will be responsible for the amount thereof  multiplied by
their Syndication Share.

     16.23  Representations  and  Warranties  of All  Parties.  Agent  and  each
Syndication Party represents and warrants that (a) the making and performance of
this Agreement is within its power and has been duly authorized by all necessary
corporate and other action by it, (b) this  Agreement is in compliance  with all
applicable  laws  and  regulations  promulgated  under  such  laws  and does not
conflict  with nor  constitute  a  breach  of its  charter  or  by-laws  nor any
agreements by which it is bound,  and does not violate any  judgment,  decree or
governmental or administrative  order, rule or regulation  applicable to it, (c)
no approval, authorization or other action by, or declaration to or filing with,
any governmental or administrative  authority or any other Person is required to
be  obtained  or made by it in  connection  with  the  execution,  delivery  and
performance of its duties under this Agreement,  and (d) this Agreement has been
duly executed by it, and constitutes the legal, valid, and binding obligation of
such  Person,   enforceable  in  accordance  with  its  terms,  except  as  such
enforceability   may  be   limited   by   applicable   bankruptcy,   insolvency,
reorganization,  moratorium  or other  similar  laws  affecting  the  rights  of
creditors generally and general equitable principles (regardless of whether such
enforceability  is  considered  in a  proceeding  at  law  or in  equity).  Each
Syndication  Party that is a state or national bank represents and warrants that
the act of entering into and performing its obligations under this Agreement has
been  approved by its board of directors or its loan  committee  and such action
was duly noted in the written minutes of the meeting of such board or committee,
and that it will  furnish  Agent  with a  certified  copy of such  minutes or an
excerpt therefrom reflecting such approval.

     16.24  Representations  and  Warranties of CoBank.  CoBank,  in its role as
Syndication  Party and as Agent,  makes no express or implied  representation or
warranty and assumes no responsibilities  with respect to the due authorization,
execution,  or delivery of the Loan Documents;  the accuracy of any information,
statements,  or certificates  provided by Borrower,  the legality,  validity, or
enforceability  of the Loan


                                       47
<PAGE>

Documents;  the filing or recording of any document;
the  collectibility  of the Loan; the  performance by any Borrower of any of its
obligations under the Loan Documents;  or the financial condition or solvency of
any Borrower or any other party obligated with respect to the Loan.

     16.25 Syndication  Parties'  Independent Credit Analysis.  Each Syndication
Party  acknowledges  receipt of true and  correct  copies of all Loan  Documents
(other than any Note  payable to another  Syndication  Party)  from Agent.  Each
Syndication  Party agrees and represents that it has relied upon its independent
review (a) of the Loan Documents, and (b) any information independently acquired
by such  Syndication  Party from Borrower or otherwise in making its decision to
acquire an interest in the Loan  independently and without reliance on CoBank or
Agent.  Each Syndication Party represents and warrants that it has obtained such
information as it deems necessary  (including any information  such  Syndication
Party  independently  obtained  from  Borrower  or  others)  prior to making its
decision to acquire an  interest in the Loan.  Each  Syndication  Party  further
agrees  and  represents  that it has  made  its  own  independent  analysis  and
appraisal  of  and  investigation  into  each  Borrower's  authority,  business,
operations,  financial  and other  condition,  creditworthiness,  and ability to
perform its  obligations  under the Loan Documents and has relied on such review
in making its  decision  to acquire an interest  in the Loan.  Each  Syndication
Party agrees that it will continue to rely solely upon its independent review of
the facts and  circumstances  related to  Borrower,  and without  reliance  upon
CoBank or Agent, in making future decisions with respect to all matters under or
in connection with the Loan Documents and its  participation in the Loan. CoBank
and Agent assume no responsibility for the financial condition of Borrower, APD,
or any APD Loan Borrower, or for the performance of Borrower's obligations under
the Loan Documents,  APD's  performance of its obligations  under the Underlying
Loan  Documents,  or the performance by any APD Loan Borrower of its obligations
under the APD Loan Documents.  Except as otherwise  expressly  provided  herein,
neither  CoBank  nor  any  other  Syndication  Party  shall  have  any  duty  or
responsibility to furnish to any other  Syndication  Parties any credit or other
information concerning Borrower which may come into its possession.

     16.26 No Joint  Venture  or  Partnership.  Neither  the  execution  of this
Agreement,  the sharing in the Loan,  nor any  agreement to share in payments or
losses  arising as a result of this  transaction is intended to be or to create,
and the foregoing shall not be construed to be, any  partnership,  joint venture
or other joint enterprise  between Agent and any Syndication  Party, nor between
any of the Syndication Parties.

     16.27 Purchase for Own  Account/Restrictions  on Transfer. Each Syndication
Party represents that it has acquired and is retaining its Syndication  Interest
in the Loan  for its own  account  in the  ordinary  course  of its  banking  or
financing  business and not with a view toward the sale,  distribution,  further
participation,  or transfer  thereof.  Each Syndication  Party other than CoBank
agrees  that  it  will  not  sell,  assign,   convey  or  otherwise  dispose  of
("Transfer"),  or create or permit to exist any lien or security interest on all
or any part of its Syndication  Interest in the Loan,  without the prior written
consent of Agent and Borrower (which consent will not be




                                       48
<PAGE>


unreasonably  withheld);  provided that (a) any such Transfer (except a Transfer
to  another  Syndication  Party or a Transfer  by  CoBank)  must be in a minimum
amount  of the  lesser  of (i)  $5,000,000.00  or (ii)  the full  amount  of the
Syndication Interest, (b) the transferee must execute an agreement substantially
in the form of Exhibit 16.27 hereto  ("Syndication  Acquisition  Agreement") and
assume all of the transferor's  obligations hereunder and execute such documents
as Agent may  reasonably  require,  and (c) the  Syndication  Party  making such
Transfer must pay Agent an assignment fee of $2,500.00.  Any  Syndication  Party
may participate  any part of its Syndication  Interest in the Loan to any Person
with the prior written  consent of Agent and Borrower (which consent will not be
unreasonably  withheld),  and each Syndication Party understands and agrees that
in the event of any such  participation,  (x) its Syndication  Share and Maximum
Syndication Amount will not change on account of such participation,  (y) except
as provided in Section 16.28 hereof,  the participant  will have no rights under
this Agreement,  including,  without  limitation,  voting rights or the right to
receive payments or distributions, and (z) Agent shall continue to deal directly
with the Syndication Party with respect to the Loan and the Syndication  Party's
Syndication Interest as though no participation had been granted and will not be
obligated to deal directly with any participant.  Notwithstanding  any provision
contained herein to the contrary,  any Syndication  Party may at any time pledge
or assign all or any portion of its Syndication  Interest to any Federal Reserve
Bank in accordance with applicable law.

     16.28 Certain  Participants'  Voting  Rights.  All Persons which purchase a
participation  interest in CoBank's  interest as a Syndication  Party  hereunder
may, in CoBank's sole  discretion  (or as required in any agreement  under which
such purchase is made and  governed),  be allowed by CoBank to vote, on a dollar
basis,  on any  matter  requiring  or  allowing  CoBank,  in its  capacity  as a
Syndication  Party, to provide or withhold its consent,  or to otherwise vote on
any proposed action.

     16.29 Method of Making Payments.  Payment and transfer of all amounts owing
or to be paid or remitted hereunder,  including, without limitation,  payment of
the  Initial  Payment  and each  Advance  Payment by  Syndication  Parties,  and
distribution  of  principal  or interest  payments  or fees or other  amounts by
Agent,  shall be by wire transfer in accordance with the instructions  contained
on Exhibit 16.29 hereto ("Wire Instructions").

     16.30 Events of Syndication Default/Remedies.

     16.30.1  Syndication  Party  Default.  Any  of the  following  occurrences,
failures  or  acts,  with  respect  to  any  of the  Syndication  Parties  shall
constitute an Event of Syndication  Default  hereunder by such party: (a) if any
representation  or warranty made by such party in this Agreement  shall be found
to have been untrue in any material respect, (b) if such party fails to make any
distributions or payments  required under this Agreement within five (5) days of
the date required, (c) if such party breaches any other covenant,  agreement, or
provision of this  Agreement  which breach  shall have  continued  uncured for a
period of thirty (30) consecutive days after such breach first occurs,  unless a
shorter period is required to avoid  prejudicing  the rights and position of the
other


                                       49
<PAGE>


Syndication  Parties,  (d) if any agency having supervisory  authority over such
party,  or any  creditors  thereof,  shall  file a  petition  to  reorganize  or
liquidate  such  party  pursuant  to any  applicable  federal  or  state  law or
regulation  and such petition  shall not be discharged or denied within  fifteen
(15) days after the date on which it is filed, (e) if by the order of a court of
competent  jurisdiction or by any appropriate  supervisory  agency,  a receiver,
trustee  or  liquidator  shall be  appointed  for  such  party or for all or any
material part of its property or if such party shall be declared  insolvent,  or
(f) if such  party  shall be  dissolved,  or shall  make an  assignment  for the
benefit of its creditors,  or shall file a petition seeking to take advantage of
any debtors' act,  including the  bankruptcy  act, or shall admit in writing its
inability to pay its debts generally as they become due, or shall consent to the
appointment  of a receiver  or  liquidator  of all or any  material  part of its
property.

     16.30.2 Remedies.  Upon the occurrence of an Event of Syndication  Default,
the  non-defaulting  parties,  acting by, or through the  direction of, a simple
majority  (determined on the basis of Syndication  Share) of the  non-defaulting
parties,  may, in addition to any other  remedy  specifically  set forth in this
Agreement,  have and exercise any and all remedies available generally at law or
equity, including the right to damages and to specific performance.

     16.31  Withholding  Taxes.  Each  Syndication  Party  represents that it is
entitled  to  receive  any  payments  to be made  to it  hereunder  without  the
withholding  of any tax and will  furnish to Agent and to  Borrower  such forms,
certifications,  statements and other documents as Agent or Borrower may request
from  time to time to  evidence  such  Syndication  Party's  exemption  from the
withholding  of any tax  imposed  by any  jurisdiction  or to  enable  Agent  or
Borrower,  as the case may be, to comply with any applicable laws or regulations
relating  thereto.  Without  limiting  the  effect  of  the  foregoing,  if  any
Syndication  Party is not  created  or  organized  under the laws of the  United
States of America or any state thereof,  such Syndication  Party will furnish to
Agent  and  Borrower  IRS  Form  4224  or  Form  1001,   or  such  other  forms,
certifications,  statements  or  documents,  duly executed and completed by such
Syndication  Party, as evidence of such Syndication  Party's  exemption from the
withholding of United States tax with respect thereto.  Notwithstanding anything
herein to the  contrary,  Borrower  shall not be  obligated to make any payments
hereunder  to such  Syndication  Party until such  Syndication  Party shall have
furnished to Agent and Borrower the requested form, certification,  statement or
document.

     16.32 Further  Assurances.  Agent and each Syndication  Party agree to take
whatever  steps and execute such  documents may be  reasonable  and necessary to
implement this Article 16 and to carry out fully the intent thereof.



ARTICLE 17. MISCELLANEOUS

     17.1 Costs and Expenses. To the extent permitted by law, Borrower agrees to
pay to Agent and the Syndication Parties, on demand, all out-of-pocket costs and
expenses (a) incurred by Agent (including,  without  limitation,  the reasonable
fees and


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<PAGE>


expenses of counsel retained by Agent, and including fees and expenses  incurred
for consulting, appraisal, engineering, inspection, and environmental assessment
services) in connection with the preparation,  negotiation, and execution of the
Loan  Documents and the  transactions  contemplated  thereby,  and processing LC
Requests  and Advance  Requests;  and (b)  incurred by Agent or any  Syndication
Party  (including,  without  limitation,  the  reasonable  fees and  expenses of
counsel  retained by Agent and the  Syndication  Parties) in connection with the
enforcement  or protection  of the  Syndication  Parties'  rights under the Loan
Documents upon the occurrence of an Event of Default or upon the commencement of
an action by Borrower against Agent or any Syndication Party (except that if the
court  makes  a  specific   finding  that  Borrower  has  prevailed  on  all  or
substantially  all of its claims in such action  brought by  Borrower,  Borrower
shall not be obligated to pay the out-of-pocket  costs and expenses of Agent and
the  Syndication  Parties in  connection  with such action),  including  without
limitation  collection of the Loan  (regardless  of whether such  enforcement or
collection is by court action or otherwise).  Borrower shall not be obligated to
pay the costs or expenses of any Person whose only  interest in the Loan is as a
holder of a participation interest.

     17.2 Service of Process and Consent to Jurisdiction. Borrower hereby agrees
that any  litigation  with respect to this  Agreement or to enforce any judgment
obtained  against  Borrower  for breach of this  Agreement or under the Notes or
other Loan  Documents  may be brought in the courts of the State of Colorado and
in the United States  District Court for the District of Colorado (if applicable
subject matter  jurisdictional  requirements  are present),  as Agent may elect;
and, by execution and delivery of this Agreement,  Borrower  irrevocably submits
to such  jurisdiction.  With respect to litigation  concerning this Agreement or
under the Notes or other Loan Documents within the jurisdiction of the courts of
the State of Colorado or the United  States  District  Court for the District of
Colorado,  Borrower  hereby  irrevocably  appoints,  until January 15, 2011, The
Corporation  Company,  1675 Broadway,  Denver,  Colorado  80202, as the agent of
Borrower to receive  for and on behalf of  Borrower,  service of process,  which
service may be made by mailing a copy of any  summons or other legal  process to
Borrower in care of such agent.  Borrower  agrees that Borrower shall maintain a
duly  appointed  agent for service of summons and other legal process as long as
Borrower remains  obligated under this Agreement and shall keep Agent advised in
writing of the identity  and  location of such agent.  The receipt by such agent
and/or by Borrower of such summons or other legal process in any such litigation
shall be deemed personal  service and acceptance by Borrower for all purposes of
such litigation.

     17.3  Jury  Waiver.  IT IS  MUTUALLY  AGREED  BY AND  BETWEEN  AGENT,  EACH
SYNDICATION  PARTY,  AND  BORROWER  THAT  THEY EACH  WAIVE  TRIAL BY JURY IN ANY
ACTION,  PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER OF THEM AGAINST THE OTHER
PARTY ON ANY MATTER WHATSOEVER  ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
AGREEMENT, THE NOTES, OR THE OTHER LOAN DOCUMENTS.

     17.4 Notices. All notices, requests and demands required or permitted under
the terms of this  Agreement  shall be in writing and (a) shall be  addressed as
set forth


                                       51
<PAGE>

below or at such other address as either party shall  designate in writing,  (b)
shall  be  deemed  to have  been  given or made:  (i) if  delivered  personally,
immediately upon delivery, (ii) if by telex, telegram or facsimile transmission,
immediately  upon  sending  and  upon  confirmation  of  receipt,  (iii)  if  by
nationally recognized overnight courier service with instructions to deliver the
next  Business  Day, one (1) Business Day after  sending,  and (iv) if by United
States Mail,  certified  mail,  return  receipt  requested,  five (5) days after
mailing.


     17.4.1 Borrower:

                     Village Farms Finance Cooperative
                     1811 Sardis Road North, Suite 207
                     Charlotte, NC 28270
                     FAX: (704) 849-7662
                     Attention: Chief Financial Officer

     With a copy to:

                     Agro Power Development, Inc.
                     10 Alvin Court
                     New Brunswick, NJ 08816
                     FAX: (908) 254-1710
                     Attention:

     17.4.2 CoBank:

                     245 North Waco Street
                     Wichita, Kansas 67201-2940
                     FAX: (316) 290-2006
                     Attention: Greg E. Somerhalder

     With a copy to:

                     FARM CREDIT BANK OF TEXAS
                     6210 Highway 290 East
                     Austin, Texas 78723
                     P.O. Box 15919
                     Austin, Texas 78761
                     FAX: (512) 465-0675
                     Attention:

     17.5 Notice to Syndication  Parties and Agent. No action shall be commenced
by Borrower for any claim against Agent or any  Syndication  Party on account of
any act or failure to act by such Person  unless a notice  specifically  setting
forth the claim of Borrower  shall have been given to such Person  within  sixty
(60)  calendar  days after


                                       52
<PAGE>


Borrower has knowledge or should  reasonably have acquired  knowledge of the act
or omission which Borrower  alleges gave rise to such claim, and failure to give
such notice shall constitute a waiver of any such claim.

     17.6 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of Borrower, Agent, and Syndication Parties, and their respective
successors  and  assigns,  except that  Borrower  may not assign or transfer its
rights or  obligations  hereunder  without  the  prior  written  consent  of the
Syndication Parties.

     17.7 Voting  Rights  Acknowledgment.  Borrower  and each present and future
Syndication  Party  acknowledge  and agree that any  entity  which  purchases  a
participation  interest  in  CoBank's  interest  as  Syndication  Party may,  in
CoBank's  sole  discretion  (or as  required in any  agreement  under which such
purchase is made and governed), be allowed by CoBank to vote, on a dollar basis,
on any matter  requiring or allowing  CoBank,  in its capacity as a  Syndication
Party  hereunder  (but not in its  capacity as Agent  hereunder),  to provide or
withhold its consent, or to otherwise vote on any proposed action.

     17.8 Severability.  The invalidity or  unenforceability of any provision of
this  Agreement  or the other Loan  Documents  shall not  affect  the  remaining
portions  of such  documents  or  instruments;  in case  of such  invalidity  or
unenforceability,  such documents or  instruments  shall be construed as if such
invalid or unenforceable provisions had not been included therein.

     17.9 Entire Agreement.  This Agreement  (together with all exhibits hereto,
which are  incorporated  herein by this  reference) and the other Loan Documents
represent  the  entire  understanding  of Agent,  each  Syndication  Party,  and
Borrower  with  respect  to the  subject  matter  hereof and shall  replace  and
supersede  any  previous  agreements  of the parties with respect to the subject
matter hereof.

     17.10  Applicable  Law.  To the extent not  governed by federal  law,  this
Agreement and the other Loan  Documents,  and the rights and  obligations of the
parties  hereto and thereto shall be governed by and  interpreted  in accordance
with the internal  laws of the State of Colorado,  without  giving effect to any
otherwise applicable rules concerning conflicts of law.

     17.11 Captions. The captions or headings in this Agreement and any table of
contents hereof are for convenience only and in no way define, limit or describe
the scope or intent of any provision of this Agreement.

     17.12 Amendments. This Agreement may not be modified or amended unless such
modification  or amendment is in writing and is signed by Borrower,  Agent,  and
all Syndication Parties (and each Syndication Party hereby agrees to execute any
such amendment approved pursuant to Section 16.10 hereof).  Borrower agrees that
it  shall  reimburse  Agent  for all  fees  and  expenses  incurred  by Agent in
retaining outside legal


                                       53
<PAGE>

counsel in  connection  with any  amendment or  modification  to this  Agreement
requested by Borrower.

     17.13  Additional  Costs of Maintaining  Loan.  Borrower shall pay to Agent
from time to time  such  amounts  as Agent  may  determine  to be  necessary  to
compensate  any  Syndication  Party for any  costs  incurred  by it which  Agent
determines,  based on information presented to it by such Syndication Party, are
attributable  to such  Syndication  Party's making or  maintaining  any Advances
hereunder or its obligation to make any such  Advances,  or any reduction in any
amount  receivable by such  Syndication  Party under this  Agreement or the Note
payable to it in respect to any such Advances or such obligation (such increases
in costs and reductions in amounts  receivable  being herein called  "Additional
Costs"),  resulting  from any change after the date of this  Agreement in United
States  federal,  state,  municipal,  or foreign laws or regulations  (including
Regulation D), or the adoption or making after such date of any interpretations,
directives,  or  requirements  applying  to a  class  of  banks  including  such
Syndication Party of or under any United States federal,  state,  municipal,  or
foreign  laws or  regulations  (whether  or not  having the force of law) by any
court or governmental or monetary  authority charged with the  interpretation or
administration  thereof ("Regulatory  Change"),  which: (a) changes the basis of
taxation of any amounts payable to such  Syndication  Party under this Agreement
or the Note payable to such Syndication Party in respect of any of such Advances
(other than taxes imposed on the overall net income of such Syndication  Party);
or (b) imposes or modifies any reserve, special deposit, or similar requirements
relating to any extensions of credit or other assets of, or any deposits with or
other liabilities of, such Syndication Party; or (c) imposes any other condition
affecting this Agreement or the Note payable to such  Syndication  Party (or any
of such extensions of credit or liabilities).  Agent will notify Borrower of any
event  occurring  after  the date of this  Agreement  which  will  entitle  such
Syndication  Party to  compensation  pursuant  to this  Section as  promptly  as
practicable  after it obtains  knowledge  thereof and determines to request such
compensation.  Agent shall  include with such notice,  a  certificate  from such
Syndication  Party  setting forth in reasonable  detail the  calculation  of the
amount  of such  compensation.  Determinations  by Agent  for  purposes  of this
Section of the effect of any Regulatory  Change on the costs of such Syndication
Party of  making  or  maintaining  Advances  or on  amounts  receivable  by such
Syndication Party in respect of Advances, and of the additional amounts required
to compensate such Syndication Party in respect of any Additional  Costs,  shall
be conclusive absent manifest error,  provided that such determinations are made
on a reasonable basis.

     17.14 Capital  Requirements.  In the event that the  introduction of or any
change in (a) any law or  regulation,  or (b) the judicial,  administrative,  or
other governmental interpretation of any law or regulation, or (c) compliance by
any Syndication Party or any corporation  controlling any such Syndication Party
with any guideline or request from any  governmental  authority  (whether or not
having the force of law) has the effect of  requiring  an increase in the amount
of capital  required or expected to be maintained by such  Syndication  Party or
any corporation  controlling such Syndication  Party, and such Syndication Party
certifies that such increase is based in


                                       54
<PAGE>

any part upon such Syndication Party's obligations hereunder,  and other similar
obligations, Borrower shall pay to such Syndication Party such additional amount
as shall be certified by such  Syndication  Party to Agent and to Borrower to be
the net present  value  (discounted  at the Variable  Rate) of (a) the amount by
which such increase in capital  reduces the rate of return on capital which such
Syndication  Party  could  have  achieved  over the period  remaining  until the
Maturity  Date but for such  introduction  or  change,  (b)  multiplied  by such
Syndication  Party's Syndication Share of the Aggregate  Commitment.  Agent will
notify  Borrower of any event  occurring  after the date of this  Agreement that
will entitle any such Syndication Party to compensation pursuant to this Section
as  promptly  as  practicable  after it obtains  knowledge  thereof  and of such
Syndication  Party's  determination  to request such  compensation.  Agent shall
include with such notice,  a  certificate  from such  Syndication  Party setting
forth in reasonable  detail the calculation of the amount of such  compensation.
Determinations  by any  Syndication  Party for  purposes of this  Section of the
effect of any increase in the amount of capital required to be maintained by any
such  Syndication  Party  and of the  amount  of  compensation  owed to any such
Syndication  Party under this Section shall be conclusive absent manifest error,
provided that such determinations are made on a reasonable basis.

     17.15 Replacement Notes. Upon receipt by Borrower of evidence  satisfactory
to it of: (a) the loss,  theft,  destruction  or mutilation of any Note, and (in
case of loss, theft or destruction) of the agreement of the Syndication Party to
which  the Note was  payable  to  indemnify  Borrower,  and upon  surrender  and
cancellation  of  such  Note,  if  mutilated;  or  (b)  the  assignment  of  any
Syndication Interest and Note relating thereto, or any portion thereof, pursuant
to this Agreement, then Borrower will pay any unpaid principal and interest (and
Funding Losses,  if applicable)  then or previously due and payable on such Note
and  will  deliver  in  lieu of  such  Note a new  Note  or,  in the  case of an
assignment of a portion of a Syndication  Interest new Notes,  for any remaining
balance.

     17.16  Patronage  Payments.  Borrower  acknowledges  and  agrees  that  any
patronage,  or similar,  payments  to which  Borrower is entitled on account its
ownership  of CoBank  Equity  Interests  will not be based on any portion of its
Syndication  Share  in which  CoBank  has at any time  granted  a  participation
interest.

     17.17 Mutual Release.  Upon full  indefeasible  payment and satisfaction of
the Bank Debt and Notes and the other  obligations  contained in this Agreement,
the parties, including Borrower, Agent, and each Syndication Party shall, except
as  provided  in  Article  14  hereof,  thereupon  automatically  each be fully,
finally, and forever released and discharged from any further claim,  liability,
or obligation in connection with the Bank Debt.

     17.18 Liberal  Construction.  This Agreement constitutes a fully negotiated
agreement between  commercially  sophisticated  parties,  each assisted by legal
counsel,  and shall not be construed  and  interpreted  for or against any party
hereto.



                                       55
<PAGE>



     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                                     BORROWER:

                                                     VILLAGE FARMS INTERNATIONAL
                                                     FINANCE   ASSOCIATION,    a
                                                     cooperative     corporation
                                                     formed  under  the  laws of
                                                     the State of Delaware


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


                                                     COBANK:

                                                     COBANK, ACB


                                                     By:
                                                        ------------------------
                                                     Name: Greg E. Somerhalder
                                                     Title: Vice President