EXHIBIT 10.83


                        LINE OF CREDIT SECURITY AGREEMENT

                                 by and between

                VILLAGE FARMS INTERNATIONAL FINANCE ASSOCIATION,

                                    as Debtor

                                       and

                                  COBANK, ACB,

                     as Agent for the Line of Credit Lenders


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                                TABLE OF CONTENTS


1. Definitions .............................................................   2

2. Collateral/Grant of Security Interest ...................................   4

    2.1 Grant of First Priority Interest ...................................   4

    2.2 Grant of Second Priority Security Interest .........................   6

    2.3 Grant of First Priority Security Interest ..........................   6

3. Secured Obligations .....................................................   7

4. Representations and Warranties ..........................................   7

    4.1 Organization; Power and Authority, etc .............................   7

    4.2 Due Authorization; Power ...........................................   7

    4.3 Consents; Approvals ................................................   7

    4.4 Title to Collateral ................................................   7

    4.5 Underlying Line of Credit Loans ....................................   7

    4.6 Principal Office; Collateral; Books and Records ....................   8

5. Covenants of Debtor .....................................................   8

    5.1 Title to Collateral ................................................   8

    5.2 Location of Debtor, Collateral and Books and Records ...............   9

    5.3 Books and Records ..................................................   9

    5.4 Inspection of Collateral ...........................................   9

    5.5 Transfers, Dispositions and Encumbrances ...........................   9

    5.6 Maintenance and Repair; Taxes; Insurance ...........................   9

    5.7 Compliance with Laws ...............................................  10

    5.8 Change in Structure or Name ........................................  10


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    5.9 Underlying Line of Credit Loan Documents ...........................  10

    5.10 Possession of Collateral; Further Assurances ......................  10

6. Events of Default .......................................................  10

7. Rights Upon Default .....................................................  10

    7.1 General ............................................................  10

    7.2 Right of Secured Party to Take Possession and Dispose of Collateral   11

    7.3 Notice of Disposition of Collateral ................................  11

    7.4 Right of Secured Party to Use and Operate Collateral ...............  11

    7.5 Collection of Accounts .............................................  12

    7.6 Rights of Secured Party With Respect to the Securities Collateral ..  13

    7.7 Collection of Underlying Line of Credit Loan Notes .................  14

8. General Provisions ......................................................  15

    8.1 Appointment and Rights of Agent ....................................  15

    8.2 Amendment, Modification, and Waiver ................................  15

    8.3 Costs and Attorneys'Fees ...........................................  15

    8.4 Revival of Obligations .............................................  16

    8.5 Performance by Secured Party .......................................  16

    8.6 Power of Attorney ..................................................  16

    8.7 Protection of Collateral ...........................................  17

    8.8 Additional Rights of Secured Party .................................  17

    8.9 Successors and Assigns .............................................  17

    8.10 Advances ..........................................................  17

    8.11 Severability ......................................................  17

    8.12 Governing Law .....................................................  18


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    8.13 Notices ...........................................................  18

    8.14 Financing Statement ...............................................  18

    8.15 Conflict with Line of Credit Loan Agreement .......................  18


                                      iii

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                                    EXHIBITS


Exhibit 4.6     Location of Principal Office and Collateral


                                       iv

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                        LINE OF CREDIT SECURITY AGREEMENT


     THIS LINE OF CREDIT SECURITY AGREEMENT ("Security Agreement") is made as of
the 24th day of June, 1997, by and between VILLAGE FARMS  INTERNATIONAL  FINANCE
ASSOCIATION, a Delaware corporation ("Debtor") whose address is 1811 Sardis Road
North, Suite 207, Charlotte, North Carolina 28270 and COBANK, ACB ("CoBank"), as
Agent on  behalf  of and for the  benefit  of the  Line of  Credit  Lenders  (as
hereinafter defined), whose address is 245 N. Waco Street, Wichita, Kansas 67202
(CoBank  and all  Successor  Agents  appointed  pursuant  to the Line of  Credit
Agreement are referred to herein as "Secured Party").

                                 R E C I T A L S

     A. The Line of Credit Lenders have entered into a Credit Agreement (Line of
Credit  Facility)  of even date  herewith  with Debtor (as amended  from time to
time,  the  "Line of  Credit  Agreement")  pursuant  to which the Line of Credit
Lenders  have  agreed to  provide  Debtor  with a line of credit of  $10,000,000
("Line of Credit Loan"),  including a sublimit of $5,000,000 for the issuance of
letters  of  credit,  under the terms  and  conditions  set forth in the Line of
Credit  Agreement  to (i) fund  Debtor's  purchase  of the LOC Loan (as  defined
below), (ii) fund Debtor's loan to Agro Power Development, Inc. ("Guarantor") to
meet  Guarantor's  working capital needs,  (iii) fund the extension by Debtor of
lines of credit (including provisions for the issuance of letters of credit) (1)
to Underlying  Term Loan Borrowers (as defined below) to meet their needs during
the planting  phase of each year's  production  cycle and to meet their  payment
requirements  under their Underlying Term Loans (as defined below) for a maximum
of 180 days in any three year period, and (2) to members of Debtor to meet their
needs  during the  planting  phase of each  year's  production  cycle,  and (iv)
provide for the  issuance  of, and fund any draws made under,  letters of credit
issued by the LC Issuing Bank (as defined in the Line of Credit  Agreement)  for
the account of Debtor to  facilitate  the purchase and sale by Guarantor and its
subsidiaries of vegetables and fruits.

     B. The  provisions  of the Line of Credit  Agreement  require  that  Debtor
execute certain  documents,  including this Security  Agreement,  whereby Debtor
shall  grant  a lien  and  security  interest  to  Secured  Party  in all of its
property, both tangible and intangible, whether now owned or hereafter acquired,
as security  for the  performance  of its  obligations  under the Line of Credit
Agreement and the other Line of Credit Loan Documents (as defined below).

                               A G R E E M E N T S

     In consideration  of the mutual  covenants and agreements  herein contained
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Debtor and Secured Party agree as follows:


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     1. Definitions.  Capitalized terms used, but not defined, herein shall have
the  meaning  given to such  terms in the Line of Credit  Agreement,  if defined
therein. In addition, unless otherwise defined herein, each term used herein and
defined in the  Uniform  Commercial  Code as  enacted  in the State of  Colorado
("UCC")  shall have the  meaning  given to such term in the UCC. As used in this
Security Agreement, the following terms shall have the meanings set forth below:

     "Collateral"  means the First  Priority  Collateral,  the  Second  Priority
Collateral and the Shared Collateral.

     "Construction   Agent"  means  CoBank  in  its  role  as  Agent  under  the
Construction  Loan  Agreement  and  each  Successor  Agent  (as  defined  in the
Construction Loan Agreement).

     "Construction  Lenders"  means  CoBank,  in its role as a lender  under the
Construction Loan Agreement,  and any other entity that purchases, now or in the
future, a Syndication  Interest (as defined in the Construction  Loan Agreement)
in the Construction Loan.

     "Construction  Loan" means the credit  facility  made  available  to Debtor
pursuant to the Construction Loan Agreement.

     "Construction Loan Agreement" means the Credit Agreement (Construction Loan
Funding) of even date  herewith  by and between  CoBank for its own benefit as a
lender  and as Agent for the  benefit  of the  present  and  future  syndication
parties  as named or defined  therein,  and  Debtor,  wherein  the  Construction
Lenders  have  agreed  to lend to  Debtor an  aggregate  principal  amount up to
$30,000,000  for the purpose of enabling  Debtor to make  construction  loans to
eligible third parties to use for the purposes therein specified.

     "Construction Loan Documents" means the Construction Loan Agreement and any
and all other  present  and  future  agreements,  documents  and/or  instruments
evidencing,  documenting,  securing or  otherwise  relating to the  Construction
Loan,  all as the same may from  time to time be  amended,  modified,  extended,
renewed or restated.

     "Hedge Agreement" means the secured interest rate hedging agreement of even
date herewith executed by and between Debtor and CoBank.

     "Intercreditor  Agreement" means the  Intercreditor  Agreement of even date
herewith by and between the Construction  Lenders, the Term Lenders, the Line of
Credit Lenders, the Construction Agent, the Term Agent, the Line of Credit Agent
and Debtor.

     "Line of Credit  Agent" means CoBank in its role as Agent under the Line of
Credit Agreement and each Successor Agent.


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     "Line of Credit  Lenders"  means  CoBank in its role as a lender  under the
Line of Credit  Agreement  and any other  entity that  purchases,  now or in the
future, a Syndication Interest in the Line of Credit Loan.

     "Line of Credit Loan Documents"  means the Line of Credit  Agreement,  this
Security  Agreement  and  any and  all  other  present  and  future  agreements,
documents  and/or  instruments  evidencing,  documenting,  securing or otherwise
relating to any or all of the Line of Credit Loan, all as the same may from time
to time be amended, modified, extended, renewed or restated.

     "LOC Loan" shall have the meaning given to such term in the Loan  Agreement
dated as of February 14, 1996 by and between  Village  Farms of Texas,  L.P., as
borrower, Farm Credit Bank of Texas and Texas Production Credit Association,  as
lenders, and CoBank, as Administrative Agent.

     "Term  Agent"  means  CoBank  in its role as  Agent  under  the  Term  Loan
Agreement and each Successor Agent (as defined in the Term Loan Agreement).

     "Term  Lenders"  means CoBank,  in its role as a lender under the Term Loan
Agreement,  and  any  other  entity  that  purchases,  now or in the  future,  a
Syndication Interest (as defined in the Term Loan Agreement) in the Term Loan.

     "Term Loan" means the credit  facility made available to Debtor pursuant to
the Term Loan Agreement.

     "Term Loan  Agreement"  means the Credit  Agreement  (Term Loan Funding) of
even date herewith by and between  CoBank for its own benefit as a lender and as
Agent for the benefit of the present and future syndication  parties as named or
defined  therein,  and Debtor,  wherein the Term  Lenders have agreed to lend to
Debtor an  aggregate  principal  amount up to  $50,000,000  for the  purpose  of
enabling  Debtor to make term  loans to  eligible  third  parties to use for the
purposes therein specified.

     "Term Loan Documents"  means the Term Loan  Agreement,  the Hedge Agreement
and  any  and  all  other  present  and  future  agreements,   documents  and/or
instruments  evidencing,  documenting,  securing or otherwise relating to any or
all of the  Term  Loan,  all as the  same  may  from  time to  time be  amended,
modified, extended, renewed or restated.

     "Underlying  Construction  Loans" shall have the meaning given to such term
in the Construction Loan Agreement.

     "Underlying  Construction  Loan  Collateral"  means all of Debtor's  assets
relating to the Underlying Construction Loans, including without limitation, all
promissory  notes,  loan  agreements,   security  agreements,  deeds  of  trust,
mortgages,  guaranties, financing statements and other documents, agreements and
instruments  executed in connection with the Underlying  Construction  Loans and
all collateral security therefor.


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     "Underlying Line of Credit Borrower" means (a) the Underlying LOC Borrowers
(as defined in the Line of Credit  Agreement),  and (b) all subsidiaries of with
respect to which the LC Issuing  Bank  issues a letter of credit for the account
of Debtor in order to facilitate the purchase and sale by such  subsidiaries  of
vegetables and fruits.

     "Underlying  Line  of  Credit  Collateral"  means  all of  Debtor's  assets
relating to the Underlying Line of Credit Loans,  including without  limitation,
all  promissory  notes,  loan  agreements,  security  agreements,  reimbursement
agreements,  deeds of trust,  mortgages,  guaranties,  financing  statements and
other  documents,  agreements and  instruments  executed in connection  with the
Underlying Line of Credit Loans and all collateral security therefor.

     "Underlying Line of Credit Loans" shall mean "Underlying  Loans" as defined
in the Line of Credit Agreement and the reimbursement obligations owed to Debtor
in connection  with the issuance of Letters of Credit (as defined in the Line of
Credit Agreement) pursuant to the Line of Credit Agreement.

     "Underlying  Term Loan Borrowers" shall have the meaning given to such term
in the Term Loan Agreement.

     "Underlying  Term Loans"  shall have the meaning  given to such term in the
Term Loan Agreement.

     "Underlying Term Loan Collateral"  means all of Debtor's assets relating to
the Underlying Term Loans, including without limitation,  promissory notes, loan
agreements,   security  agreements,  deeds  of  trust,  mortgages,   guaranties,
financing statements and other documents, agreements and instruments executed in
connection with the Underlying Term Loans and all collateral security therefor.

     2. Collateral/Grant of Security Interest.

     2.1. Grant of First Priority  Interest.  Debtor,  for  consideration and to
secure  the  Secured  Obligations  (as  defined  below),  hereby  grants a first
priority  security  interest to Secured Party in the  Underlying  Line of Credit
Collateral,  tangible and intangible,  wherever located and whether now owned or
hereafter acquired, together with all additions, substitutions, products thereof
and proceeds therefrom or arising out of the rights reflected  therein,  and all
renewals,  amendments,  substitutions,  and  replacements  of all  or  any  part
thereof, including without limitation the following property (collectively,  the
"First Priority Collateral"):

          (a) all promissory  notes made by Underlying Line of Credit  Borrowers
     payable to Debtor to evidence the  obligations of such  Underlying  Line of
     Credit Borrowers to Debtor under their respective Underlying Line of Credit
     Loans (collectively, "Underlying Line of Credit Notes");


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          (b) all of Debtor's rights under (i) all loan  agreements  executed by
     and between Debtor and an Underlying  Line of Credit Borrower in connection
     with an Underlying Line of Credit Loan  (collectively,  "Underlying Line of
     Credit  Agreements"),   (ii)  all  mortgages,   deeds  of  trust,  security
     agreements,  financing  statements,  leasehold  assignments  and  consents,
     assignments and any other documents and agreements executed as security for
     the  obligations  of an  Underlying  Line  of  Credit  Borrower  to  Debtor
     (collectively,  "Underlying Line of Credit Security Documents"),  and (iii)
     any other  instruments,  documents or agreements  executed and delivered in
     connection  with, or to secure the  obligations  of an  Underlying  Line of
     Credit   Borrower   under  its   Underlying   Line  of   Credit   Agreement
     (collectively,  with its Underlying Line of Credit Note, Underlying Line of
     Credit  Agreement  and  Underlying  Line  of  Credit  Security   Documents,
     "Underlying Line of Credit Documents");

          (c) all assets and properties acquired by Debtor through  foreclosure,
     or deed in lieu of  foreclosure,  on collateral  for an Underlying  Line of
     Credit Loan, including without limitation the following:

               (i) all of an Underlying Line of Credit Borrower's  right,  title
          and   interest   in  and  to  all   permits,   licenses,   franchises,
          certificates, plans and specifications,  studies, contract rights (but
          not  obligations),  claims against third parties,  judgments,  awards,
          building  materials,   rights  for  utilities  and  other  rights  and
          privileges obtained in connection with its Greenhouse Facility and the
          real property on which its Greenhouse  Facility is built ("Property"),
          and all equipment,  fixtures,  and other personal property of any kind
          or  character,  now or later  located on or about its Property and its
          Greenhouse  Facility or used in connection  with the  construction  or
          operation thereof, or stored off its Property for future incorporation
          on or about its Property and its  Greenhouse  Facility,  together with
          all  accessories  thereto,   replacements  thereof  and  substitutions
          therefor;

               (ii) all seed,  fertilizer and other supplies,  and all crops now
          or in the future  planted or growing on an  Underlying  Line of Credit
          Borrower's  Property,  all crops harvested now or in the future on its
          Property ("Produce") and all other farm products, and the products and
          cash  and  non-cash   proceeds  of  such  crops,   including   general
          intangibles,  instruments,  and  Paid  In  Kind  certificates  and any
          governmental  subsidies,  rebates or other  payments  with  respect to
          farming  or  related  operations  of such  Underlying  Line of  Credit
          Borrower on its Property or otherwise under any governmental programs;

               (iii) all of the rents,  bonuses,  royalties,  revenues,  income,
          proceeds,  damages,  profits  and other  benefits  and income  paid or
          payable to an Underlying Line of Credit Borrower from its Property and
          the improvements  located thereon,  the Leases (as defined below),  or
          from the use, possession,  operation,  or sale of its Property and the
          improvements   located  thereon,   including  without  limitation  any
          insurance or condemnation proceeds; and



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               (iv)  any  and  all  leases,  subleases,  assignments,  licenses,
          concessions  or other  agreements  (written  or oral,  now or later in
          effect)  which grant a possessory  interest in and to, or the right to
          use,  all or any  part  of an  Underlying  Line of  Credit  Borrower's
          Property and the improvements located thereon ("Leases"),  and any and
          all security and other deposits made in connection with the Leases and
          all  guaranties  of those  leases,  including  also  any oil,  gas and
          mineral  leases,  and any  bonuses,  royalties,  and other income from
          Leases.

     2.2. Grant of Second Priority Security Interest.  Debtor, for consideration
and to secure the Secured Obligations,  hereby grants a second priority security
interest to Secured Party in (a) the Underlying  Construction  Loan  Collateral,
wherever located and whether now owned or hereafter acquired,  together with all
additions, substitutions, products thereof and proceeds therefrom or arising out
of the rights reflected therein,  and all renewals,  amendments,  substitutions,
and  replacements  of all or any part thereof,  to be shared pari passu with the
Term Agent pursuant to the terms and provisions of the Intercreditor  Agreement,
and (b) the Underlying Term Loan  Collateral,  wherever  located and whether now
owned  or  hereafter  acquired,  together  with  all  additions,  substitutions,
products  thereof and proceeds  therefrom or arising out of the rights reflected
therein, and all renewals, amendments, substitutions, and replacements of all or
any part thereof,  to be shared pari passu with the Construction  Agent pursuant
to the terms and provisions of the Intercreditor Agreement (all of the foregoing
shall be collectively referred to herein as the "Second Priority Collateral").

     2.3. Grant of First Priority Security  Interest.  Debtor, for consideration
and to secure the Secured  Obligations,  hereby grants a first priority security
interest to Secured  Party to be shared pari passu with the  Construction  Agent
and the Term Agent  pursuant to the terms and  provisions  of the  Intercreditor
Agreement in all assets and  properties of Debtor other than the First  Priority
Collateral and the Second Priority Collateral, tangible and intangible, wherever
located  and  whether  now  owned  or  hereafter  acquired,  together  with  all
additions, substitutions, products thereof and proceeds therefrom or arising out
of the rights reflected therein,  and all renewals,  amendments,  substitutions,
and replacements of all or any part thereof,  including  without  limitation the
following  property to the extent that it is not included in the First  Priority
Collateral  or  the  Second  Priority  Collateral  (collectively,   the  "Shared
Collateral"):

          all fixtures;  furniture;  furnishings,  accounts; inventory
          (including  without  limitation,   returned  or  repossessed
          goods);  chattel  paper;  instruments,  drafts;  letters  of
          credit;  money;  utility  and  other  deposits,   documents;
          equipment;   tools;   machinery;   goods;   motor  vehicles;
          investment property;  general intangibles (including without
          limitation,   litigation  rights  and  resulting  judgments,
          goodwill, patents, tradenames, trade secrets, trademarks and
          other  intellectual  property,  tax  refunds,  miscellaneous
          rights to payment, entitlements,  uncertificated securities,
          margin accounts,



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          computer  programs,   invoices,  books,  records  and  other
          information   relating   to  or  arising   out  of  Debtor's
          business).

     3. Secured  Obligations.  The security  interests  granted to Secured Party
under this Security  Agreement  shall secure the payment and  performance of the
obligations  to, and covenants and agreements of Debtor made for the benefit of,
the Line of Credit  Lenders  under the Line of Credit Loan  Documents  ("Secured
Obligations").

     4.  Representations  and  Warranties.  Debtor  represents  and  warrants to
Secured Party as follows:

     4.1. Organization;  Power and Authority,  etc. Debtor is duly organized and
validly  existing  under  the laws of the  State  of  Delaware.  Debtor  has all
necessary  power and authority to own its property,  to carry on its business as
now owned and operated by it, and to make the  Underlying  Line of Credit Loans.
Debtor  is  duly  qualified  to do  business  and  is in  good  standing  in all
jurisdictions  in which the  failure  to be so  qualified  would have a Material
Adverse Effect.

     4.2. Due Authorization;  Power. The execution,  delivery and performance by
Debtor of this Security  Agreement  and the other Line of Credit Loan  Documents
are within the powers of Debtor and have been duly  authorized  by all necessary
action on the part of Debtor.

     4.3. Consents;  Approvals. Debtor has obtained all consents or approvals of
any Person  which are  necessary  for, or are  required  as a condition  of, the
execution,  delivery and  performance of, and the enforcement of Secured Party's
rights and remedies under, this Security Agreement.

     4.4.  Title to  Collateral.  Debtor  is the true  and  lawful  owner of all
existing Underlying Line of Credit Loans, has full power and authority to pledge
and grant a security  interest in the  Underlying  Line of Credit  Loans and the
Underlying Line of Credit  Documents,  and has not granted any right or interest
in any existing or future Underlying Line of Credit Loans or the Underlying Line
of Credit Documents to any person or entity other than Secured Party, except for
the second priority security interest granted to the Construction  Agent and the
Term Agent under the  Construction  Loan Documents and the Term Loan  Documents,
respectively.  Except  as  otherwise  permitted  hereunder  or under the Line of
Credit Agreement and subject to the terms of the Intercreditor Agreement, Debtor
has good title to the Collateral free of all adverse claims,  interests,  liens,
or encumbrances and has full power and authority to sell, transfer,  pledge, and
grant to Secured Party a security interest in, the Collateral.

     4.5.  Underlying Line of Credit Loans.  With respect to the Underlying Line
of Credit Loans:



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          (a) no default or event which with  notice  and/or the passage of time
     would become a default under any of the Underlying Line of Credit Documents
     for any Underlying Line of Credit Loan has occurred and is continuing;

          (b) the proceeds of each existing  Underlying Line of Credit Loan have
     been, and the proceeds of each future  Underlying  Line of Credit Loan will
     be, used for the purposes  permitted under Sections 3.1 and 3.2 of the Line
     of Credit Agreement;

          (c) with respect to all existing  Underlying Line of Credit Loans, the
     Underlying  Line of Credit  Documents  have been duly  executed  by the all
     parties thereto and constitute the legal,  valid and binding  obligation of
     all parties thereto, enforceable in accordance with their terms, subject to
     the effects of  bankruptcy,  insolvency,  and similar  laws  affecting  the
     rights of creditors  generally or the  availability of equitable  remedies,
     and are free  from any right of  set-off,  counterclaim  or other  claim or
     defense;

          (d) each  existing  Underlying  Line of Credit Loan is, and all future
     Underlying  Line of  Credit  Loans  will be,  secured  by a first  lien and
     security  interest in favor of Debtor in all assets of the Underlying  Line
     of Credit Borrower,  free and clear of all other liens, security interests,
     restrictions,  adverse claims or defenses, except where the Underlying Line
     of Credit Documents approved by Secured Party specifically state otherwise;

          (e) to Debtor's  knowledge and belief,  there is no  misstatement of a
     material  fact,  nor an  omission to state a material  fact,  in any of the
     financial statements,  projections,  budgets or other information furnished
     by or on behalf of any existing  Underlying Line of Credit  Borrower,  nor,
     has anything  occurred  subsequent to the  furnishing  of such  information
     which would have a material  adverse  effect on the  results of  operation,
     business,  property, or prospects of any existing Underlying Line of Credit
     Borrower.

     4.6. Principal Office;  Collateral;  Books and Records. The principal place
of  business  and,  if Debtor  has more than one  place of  business,  the chief
executive  office  ("Principal  Office")  of  Debtor  and the  locations  of all
Collateral,  other than Collateral in the possession of the Construction  Agent,
the Term Agent or the Line of Credit Agent,  and Debtor's  books and records are
listed on Exhibit 4.6 attached hereto.

     5. Covenants of Debtor. Debtor covenants to Secured Party that:

     5.1. Title to Collateral.  Except as otherwise permitted hereunder or under
the Line of Credit Agreement, Debtor shall not create or permit the existence of
any adverse claims,  interests,  liens, or other encumbrances against any of the
Collateral.  Debtor shall (a) provide  prompt written notice to Secured Party of
any future  adverse  claims,  interests,  liens,  or  encumbrances  against  any
Collateral,  (b)  promptly  obtain a



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release or discharge of any such claims, interests, liens, or other encumbrances
and  (c)  diligently  defend  Debtor's  and  Secured  Party's  interests  in the
Collateral.

     5.2. Location of Debtor,  Collateral and Books and Records. Debtor will not
change any place of business,  its chief executive  office,  the location of any
Collateral  or the  location  of its books and records  without  giving at least
thirty (30) days' prior written notice to Secured Party and  furnishing  Secured
Party with such  documents as Secured Party may reasonably  request  pursuant to
Section 5.10 hereof prior to taking any such action.

     5.3.  Books and  Records.  Debtor  shall  keep  proper  books of record and
account in which  complete  and correct  entries will be made of all of Debtor's
dealings in accordance with GAAP.

     5.4. Inspection of Collateral.  Upon Secured Party's request,  Debtor shall
allow Secured Party, the Line of Credit Lenders or persons  designated by any of
them,  during  normal  business  hours or at such other times as the parties may
agree, to: (a) examine the Collateral,  wherever  located,  (b) examine and make
extracts or copies from  Debtor's  books and records;  and (c) discuss  Debtor's
affairs,  finances,  operations,  and  accounts  with its  respective  officers,
directors, employees, and independent certified public accountants.

     5.5.  Transfers,   Dispositions  and  Encumbrances.   Except  as  otherwise
permitted  hereunder or under the Line of Credit Agreement,  (a) Debtor will not
offer to sell, sell,  transfer or otherwise  dispose of any of the Collateral or
any interest therein, and (b) Debtor will not create,  incur, or permit to exist
any mortgage,  lien, charge,  encumbrance,  or security interest whatsoever with
respect to the Collateral.

     5.6.  Maintenance  and  Repair;  Taxes;  Insurance.  Debtor  will  keep the
Collateral  in good  order and  repair  and  adequately  insured at all times in
accordance with the provisions of the Line of Credit Agreement.  Debtor will pay
promptly all taxes and other governmental charges with respect to the Collateral
when due and payable except as otherwise  permitted  hereunder or under the Line
of  Credit  Agreement.  Secured  Party or the Line of Credit  Lenders,  at their
option,  may (a)  discharge  (i) any taxes or other  governmental  charges  that
Debtor is  required to pay but fails to pay,  unless such taxes or  governmental
charges 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, and (ii) liens, security interests,  or other encumbrances to which any
Collateral is at any time subject that are not permitted  hereunder or under the
Line of Credit Agreement,  and (b) upon the failure of Debtor to do so, purchase
insurance on any insurable  Collateral and pay for the repair,  maintenance,  or
preservation  thereof, and Debtor agrees to reimburse Secured Party and the Line
of Credit Lenders on demand for any payment or expenses  incurred by any of them
pursuant to the  foregoing  authorization  and any  unreimbursed  amounts  shall
constitute



                                       9
<PAGE>


amounts owing under the Secured Obligations for all purposes under this Security
Agreement.

     5.7. Compliance with Laws. Debtor shall not use the Collateral in violation
of any applicable statutes, regulations or ordinances where such violation would
have a Material Adverse Effect.

     5.8.  Change in  Structure  or Name.  Debtor  shall not,  without the prior
written consent of Secured Party, change its name or business structure.

     5.9.  Underlying  Line of  Credit  Documents.  Debtor  shall  take all such
actions as are necessary to maintain the Underlying Line of Credit  Documents in
full force and effect.  Without the consent of Secured  Party,  Debtor shall not
amend, supplement,  grant consents, or otherwise modify or waive compliance with
any provision of any Underlying Line of Credit Document. Each Underlying Line of
Credit Loan shall be secured by a first lien on all the assets of the Underlying
Line of Credit  Borrower,  except where the Underlying Line of Credit  Documents
for such Underlying  Line of Credit Loan approved by Secured Party  specifically
state otherwise.

     5.10.  Possession  of  Collateral;  Further  Assurances.  Debtor  shall (a)
deliver promptly to Secured Party,  with such endorsement as Secured Party shall
require,  all  instruments  and documents  comprising part of the First Priority
Collateral or the Shared Collateral,  now owned or hereafter acquired,  of which
possession  is required in order to perfect the  security  interests  of Secured
Party granted herein, (b) upon demand,  execute, assign and endorse all proxies,
applications,  acceptances, stock powers, chattel paper, documents,  instruments
and other  evidences of payment or writings  constituting  or relating to any of
the Collateral,  and (c) execute from time to time financing  statements and any
other  documents in form and content  satisfactory  to Secured Party and perform
such other acts,  including  without  limitation the notation of Secured Party's
interest  on the face of all  chattel  paper,  as Secured  Party may  reasonably
request to  perfect,  maintain  and  continue a valid  security  interest in the
Collateral,  and  Debtor  will  pay all  costs  associated  with the  filing  or
recordation of any such documents.

     6.  Events of  Default.  Debtor  shall be in default  under  this  Security
Agreement  upon the  occurrence  of an Event of Default under the Line of Credit
Agreement ("Event of Default").

     7.Rights Upon Default.

     7.1.  General.  Upon the  occurrence of an Event of Default and at any time
thereafter  (unless  such Event of Default has been waived in writing by Secured
Party),  Secured Party may declare the Secured  Obligations  immediately due and
payable, and Secured Party shall, subject to the provisions of the Intercreditor
Agreement,  have all the rights and remedies of a secured  party under Article 9
of the UCC or other  applicable law and all the rights provided  herein,  in the
Line of Credit



                                       10
<PAGE>


Agreement,  or in any other instruments and documents  executed and delivered in
connection  with,  or to secure the  obligations  of Debtor  under,  the Line of
Credit  Agreement,  all of which rights and remedies  shall,  to the full extent
permitted by law, be cumulative.

     7.2.  Right of Secured Party to Take  Possession and Dispose of Collateral.
Upon the  occurrence  of an  Event  of  Default,  subject  to and to the  extent
permitted  by the  provisions  of the  UCC  or  other  applicable  law  and  the
Intercreditor Agreement, unless such Event of Default has been waived in writing
by Secured Party, Secured Party shall have the right to:

          (a) take  possession of the  Collateral and enter upon the premises on
     which the  Collateral  or any part  thereof may be situated  and remove the
     Collateral from those premises and thereafter to hold,  store,  and/or use,
     operate, manage, and control the Collateral;

          (b) require  Debtor to deliver the  Collateral  to Secured  Party at a
     place to be designated  by Secured Party which is reasonably  convenient to
     both parties; and

          (c) sell,  lease or otherwise  dispose of any or all of the Collateral
     in its then  present  condition or following  any  commercially  reasonable
     preparation or processing  thereof,  whether by public or private sale, for
     cash,  on  credit  or  otherwise,   with  or  without   representations  or
     warranties,  and upon such terms as may be acceptable to Secured Party, and
     Secured Party may purchase the Collateral at any public sale.

     7.3.  Notice  of  Disposition  of  Collateral.  Unless  the  Collateral  is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a  recognized  market,  Secured  Party will give notice to Debtor of any
sale or other  disposition by Secured Party with respect to any Collateral which
is subject to Article 9 of the UCC at the address for Debtor specified above, or
such other address as may from time to time be shown on Secured Party's records,
at least five (5) Business  Days prior to such action.  Any such notice shall be
deemed to meet any  requirement  hereunder or under an applicable law (including
without  limitation the UCC) that  reasonable  notification be given of the time
and place of such sale or other disposition. Debtor consents and agrees that, in
addition to the other  rights and  remedies  provided  to Secured  Party in this
Article 7, Secured Party may, in lieu of, or prior to, selling the Collateral at
public or private  sale,  retain any payments  received on account of any of the
Collateral  and apply the same to amounts  owing under the  Secured  Obligations
until such time as the Secured Obligations have been paid in full.

     7.4.  Right of Secured  Party to Use and  Operate  Collateral.  Upon taking
possession of the  Collateral,  Secured  Party may, from time to time,  make all
repairs,  replacements,  alterations,  additions, and improvements to and of the
Collateral that Secured Party deems proper.  Debtor agrees to reimburse  Secured
Party on demand for any  expenses  incurred  by Secured  Party  pursuant  to the
foregoing  authorization and



                                       11
<PAGE>


any  unreimbursed  amounts  shall  constitute  amounts  owing  under the Secured
Obligations  for all purposes under this Security  Agreement.  In any such case,
subject to and to the extent  permitted by the  provisions of the  Intercreditor
Agreement,  the UCC, or other applicable law, Secured Party shall have the right
to operate,  manage and control the Collateral and to carry on Debtor's business
and to exercise all rights and powers of Debtor in respect to the  Collateral as
Secured Party shall deem best,  including the right to enter into any agreements
with respect to the Collateral or any part thereof, that Secured Party sees fit;
and Secured  Party  shall be entitled to collect and receive all rents,  issues,
profits,  fees,  revenues,  and other  income of the  Collateral  and every part
thereof. Such rents, issues,  profits, fees, revenues, and other income shall be
applied to pay the  expenses  of holding and  operating  the  Collateral  and of
conducting the business thereof and of all maintenance,  repairs,  replacements,
alterations, additions, and improvements, and to make all payments which Secured
Party may be  required  or may elect to make,  if any,  for taxes,  assessments,
insurance,  and other charges upon the  Collateral or any part thereof,  and all
other  payments  which Secured Party may be required or authorized to make under
any provision of this Security Agreement (including  reasonable  attorneys' fees
and expenses). The remainder of such rents, issues, profits, fees, revenues, and
other income shall be applied to the payment of the Secured  Obligations in such
order of  priority as Secured  Party  shall  determine  in  accordance  with the
provisions of the Intercreditor  Agreement and, unless otherwise provided by law
or by a court  of  competent  jurisdiction,  any  surplus  from  the sale of the
Collateral  shall be returned to Debtor.  Without limiting the generality of the
foregoing, but subject to the provisions of the Intercreditor Agreement, Secured
Party shall have the right to apply for and have a receiver  appointed  ex-parte
by a court of competent  jurisdiction  in any action  taken by Secured  Party to
enforce  its rights and  remedies  hereunder  in order to manage,  protect,  and
preserve the Collateral and continue the operation of the business of Debtor and
to collect all revenues and profits thereof and apply them to the payment of all
expenses and other charges of such  receivership,  including the compensation of
the receiver,  and to the payment of the Secured  Obligations as described above
until a sale or other  disposition of the  Collateral  shall be finally made and
consummated.

     7.5.  Collection of Accounts.  Upon the occurrence of any Event of Default,
unless  such Event of  Default  has been  waived in  writing  by Secured  Party,
Secured Party shall,  subject to the provisions of the Intercreditor  Agreement,
have the right at any time and from time to time,  without notice, to (a) notify
account  debtors that accounts have been assigned to Secured  Party;  (b) advise
account debtors of Secured  Party's  security  interest and/or instruct  account
debtors to make payments  directly to Secured Party; (c) charge to any escrow or
other  account  of Debtor  with  Secured  Party or any Line of Credit  Lender or
controlled by any of them,  any item of payment  received by Secured Party which
is dishonored by the drawee or maker  thereof;  (d) endorse all items of payment
made payable to Debtor which may come into the possession of Secured Party;  (e)
collect all accounts in Secured  Party's name or Debtor's  name and take control
of any cash or non-cash  proceeds of accounts and of any returned or repossessed
goods;  (f) compromise,  extend or renew the amount owing on any account



                                       12
<PAGE>


or deal with any  account  as  Secured  Party may deem  advisable;  and (g) make
exchanges,  substitutions or surrenders of collateral for any account.  Once any
or all account  debtors have been notified,  whether by Debtor or Secured Party,
to make payment directly to Secured Party, all amounts and proceeds  received by
Debtor in respect of such accounts shall be received in trust for the benefit of
Secured  Party,  shall be  segregated  from other funds of Debtor,  and shall be
immediately  paid over to Secured  Party in the same form as so  received.  Such
actions and the application of any such amounts to the Secured Obligations shall
not be deemed to constitute retention in satisfaction of the Secured Obligations
under  Section  4-9-505 of the UCC and any  comparable  provision of the Uniform
Commercial Code as enacted in any other state where the Collateral is located.

     7.6.  Rights of Secured  Party With Respect to the  Securities  Collateral.
Upon the  occurrence  of any Event of Default,  unless such Event of Default has
been waived in writing by Secured Party:

          (a) Secured Party,  in its  discretion,  and without notice to Debtor,
     may, subject to the provisions of the Intercreditor Agreement, take any one
     or more of the following  actions without  liability  except to account for
     property  actually  received by it: (i) transfer to or register in its name
     or the name of its  nominee  any stock  certificates  or  evidence of other
     equity interests included in the Collateral ("Securities Collateral"), with
     or without indication of the security interest herein created,  and whether
     or not so  transferred  or  registered,  receive the income,  dividends and
     other distributions thereon and hold them as additional Collateral or apply
     them to the Secured Obligations in any order of priority;  (ii) exercise or
     cause to be exercised all voting and  corporate  powers with respect to any
     of the Securities  Collateral so registered or  transferred,  including (1)
     all rights to call or require shareholders  meetings and to remove or elect
     directors, and (2) all rights of proxy appointments,  conversion, exchange,
     subscription or any other rights,  privileges or options pertaining to such
     Securities Collateral, as if the absolute owner thereof; (iii) exchange any
     of the  Securities  Collateral  for other  property upon a  reorganization,
     recapitalization, reclassification or other readjustment and, in connection
     therewith,  deposit any of the  Securities  Collateral  with any depository
     upon such terms as Secured Party may determine;  and (iv) in its name or in
     the name of  Debtor,  demand,  sue for,  collect  or  receive  any money or
     property at any time payable or receivable on account of or in exchange for
     any of the Securities Collateral,  and Secured Party further shall have the
     right at any time to sign and  endorse  the name of  Debtor  upon any stock
     certificate, stock power, check, draft, money order, or any other documents
     of title or evidences of payment with respect to the Securities Collateral,
     in the name of Debtor, it being the intention of Debtor to grant to Secured
     Party the right to sell any portion or all of the Securities Collateral and
     the  proceeds  therefrom,  upon  the  occurrence  of an  Event  of  Default
     hereunder.

          (b) If Secured Party in good faith believes that the Securities Act of
     1933 ("Act") or any other state or federal law  prohibits or restricts  the
     customary  manner  of  sale  or  distribution  of  any  of  the  Securities
     Collateral,   Secured  Party  may,



                                       13
<PAGE>


     subject  to  the  provisions  of the  Intercreditor  Agreement,  sell  such
     Securities  Collateral privately or in any other manner deemed advisable by
     Secured  Party at such price or prices as Secured  Party  determines in its
     sole discretion. Debtor recognizes that such prohibition or restriction may
     cause the Securities  Collateral to have less value than it otherwise would
     have and that, consequently,  such sale or disposition by Secured Party may
     result in a lower sales price than if the sale were otherwise held. Secured
     Party may sell the  Securities  Collateral in one or more sales or parcels,
     for cash,  credit  or future  delivery,  and with or  without  the use of a
     stockbroker, as Secured Party may deem advisable.  Secured Party may be the
     purchaser  of any or all of the  Securities  Collateral.  In the event that
     Secured Party elects to sell all or any part of the  Securities  Collateral
     in a public sale, Debtor shall use its best efforts to register and qualify
     the Securities  Collateral,  or the applicable part thereof,  under the Act
     and all state securities laws, and all expenses thereof shall be payable by
     Debtor,  including,  but not  limited  to,  all  costs of  registration  or
     qualification  of any  Securities  Collateral  under  the Act and any state
     securities laws, and the sale of such Securities Collateral, including, but
     not limited to, brokers' or underwriters'  commissions,  fees or discounts,
     accounting and legal fees and  disbursements,  and expenses of transfer and
     sale.

          (c) Notwithstanding  any provision herein to the contrary,  CoBank may
     transfer,   dispose  or  liquidate  Debtor's  CoBank  Equity  Interests  in
     accordance with its usual  procedures and in accordance with its bylaws and
     capital plan as applicable to cooperative borrowers generally.

     7.7.  Collection of Underlying Line of Credit Notes. Upon the occurrence of
any Event of Default, unless such Event of Default has been waived in writing by
Secured Party, Secured Party may, subject to the provisions of the Intercreditor
Agreement,  (a) notify and require each  Underlying  Line of Credit  Borrower to
make all  payments  owing on the  Underlying  Line of Credit  Notes  directly to
Secured Party,  (b) endorse all items of payment,  with respect to amounts owing
under  Underlying  Line of Credit  Notes,  made payable to Debtor which may come
into the  possession  of Secured  Party;  (c)  collect  amounts  owing under the
Underlying  Line of Credit Notes in Secured  Party's name or Debtor's  name; (d)
compromise,  extend or renew the amount owing on any  Underlying  Line of Credit
Loan or deal with any  Underlying  Line of Credit Loan as Secured Party may deem
advisable; (e) make exchanges, substitutions or surrenders of collateral for any
Underlying  Line of Credit Loan, and (f) declare the  Underlying  Line of Credit
Loans  immediately  due and  payable,  exercise  all rights of Debtor  under the
Underlying  Line of Credit  Documents  and foreclose on all  collateral  for the
Underlying  Line of Credit Loans in  accordance  with the rights of Debtor under
the Underlying  Line of Credit  Documents.  Once any or all  Underlying  Line of
Credit Borrowers have been notified, whether by Debtor or Secured Party, to make
payment directly to Secured Party,  all amounts and proceeds  received by Debtor
in respect of such  Underlying  Line of Credit  Loans shall be received in trust
for the  benefit of  Secured  Party,  shall be  segregated  from other  funds of
Debtor,  and shall be immediately paid over to Secured Party in the same form as
so  received.  Debtor  agrees that by taking such action  Secured  Party will be
deemed to have acted in a



                                       14
<PAGE>


commercially reasonable manner and that such action by Secured Party will not be
deemed  to  constitute  retention  of the  Underlying  Line of  Credit  Notes in
satisfaction of the Secured Obligations under Section 4-9-505 of the UCC and any
comparable  provision  of the  Uniform  Commercial  Code as enacted in the state
where Debtor is located or otherwise.

     8. General Provisions.

     8.1.  Appointment and Rights of Agent.  Debtor  acknowledges,  agrees,  and
consents (a) to the appointment by the Line of Credit Lenders of CoBank as Agent
under the Line of Credit  Agreement  ("Agent") for the purposes of administering
certain  aspects of the Line of Credit Loan,  (b) that CoBank as Agent is acting
for the  benefit of the Line of Credit  Lenders  hereunder,  and (c) that in the
event that a Successor Agent is appointed for CoBank in its capacity as Agent in
accordance  with the  provisions  of the Line of Credit  Agreement  and  written
notification  thereof is provided to Debtor by CoBank, any Line of Credit Lender
or such Successor Agent,  such Successor Agent shall be entitled to exercise all
the rights of Secured  Party  hereunder,  and that Debtor  will  perform all its
obligations  hereunder with respect to such rights as it may be directed by such
Successor Agent.

     8.2. Amendment, Modification, and Waiver. Without the prior written consent
of  Secured  Party and  Debtor,  no  amendment,  modification,  or waiver of, or
consent to any  departure  by Debtor  from,  any  provision  hereunder  shall be
effective.  Any  such  amendment,  modification,  waiver,  or  consent  shall be
effective only in the specific  instance and for the specific  purpose for which
given.  No waiver by Secured Party of any default  shall be effective  unless in
writing,  and any such waiver shall not operate as a waiver of any other default
or the same default on a future  occasion.  The taking of the security  interest
created by this  Security  Agreement  shall not be deemed to waive or impair any
other  security  interest  Secured  Party may have or hereafter  acquire for the
payment of the Secured Obligations,  nor shall the taking of any such additional
security interest waive or impair this Security Agreement; but Secured Party may
resort  to any  security  it may  have in the  order  it may  deem  proper,  and
notwithstanding any collateral  security,  Secured Party shall retain its rights
of setoff against  Debtor.  No delay or omission on the part of Secured Party in
exercising any right hereunder shall operate as a waiver of such right or of any
other right hereunder.

     8.3. Costs and Attorneys'  Fees.  Debtor will, upon demand,  pay to Secured
Party  and the  Line of  Credit  Lenders  the  amount  of any and all  expenses,
including  the  reasonable  attorneys'  fees and expenses of counsel for Secured
Party and the Line of Credit Lenders and of any experts and agent, which Secured
Party  and the Line of  Credit  Lenders  may  incur in  connection  with (a) the
administration  of this Security  Agreement  upon the  occurrence of an Event of
Default,  unless and until such Event of Default  has been  waived in writing by
Secured Party; (b) the collection, retaking, storage, custody, preservation, use
or operation of, preparing for sale,  selling or other disposition and delivery,
collection  from, or other  realization  upon,  any of the  Collateral;  (c) the
exercise or enforcement of any of the rights of Secured Party



                                       15
<PAGE>

hereunder;  or (d) the  failure  by  Debtor to  perform  or  observe  any of the
provisions hereof.

     8.4. Revival of Obligations.  To the extent Debtor or any third party makes
a payment or payments to Secured  Party or Secured  Party  enforces its security
interest or exercises  any right of setoff,  and such payment or payments or the
proceeds  thereof are  subsequently  invalidated,  declared to be  fraudulent or
preferential, set aside, and/or required to be repaid to a trustee, receiver, or
any other  party  under any  bankruptcy,  insolvency  or other law or in equity,
then,  to the  extent of such  recovery,  the  Secured  Obligations  or any part
thereof  originally  intended to be satisfied  shall be revived and continued in
full force and effect as if such payment or payments had not been made,  or such
enforcement or setoff had not occurred.

     8.5.  Performance by Secured  Party.  In the event Debtor shall at any time
fail to pay or perform  punctually  any of its  obligations  hereunder,  Secured
Party may, at its option and without  notice to or demand upon  Debtor,  without
obligation  and  without  waiving  or  diminishing  any of its  other  rights or
remedies hereunder, fully perform or discharge any of such duties. All costs and
expenses  incurred  by Secured  Party in  connection  therewith,  together  with
interest  thereon at the Default  Interest  Rate set forth in the Line of Credit
Agreement,  shall become part of the Secured  Obligations  and be paid by Debtor
upon demand.

     8.6.  Power  of  Attorney.  Secured  Party  is  hereby  appointed  Debtor's
attorney-in-fact, with full power of substitution, at Secured Party's option and
Debtor's  expense,  to do all acts and things which Secured Party may reasonably
deem necessary to perfect and continue to perfect the security  interest created
by this Security Agreement, to protect its interest in the Collateral, and, upon
the occurrence of an Event of Default  hereunder (unless and until such Event of
Default has been waived in writing by Secured Party),  to protect or enforce and
collect  on the  Collateral  subject  to  the  provisions  of the  Intercreditor
Agreement, including without limitation:

          (a) to obtain and  adjust  the  insurance  required  to be  maintained
     hereunder;

          (b) to ask, demand, collect, sue for, recover, compromise, receive and
     give receipts for moneys due and to become due under the Underlying Line of
     Credit Documents;

          (c) to receive,  endorse, and collect any drafts or other instruments,
     documents and chattel paper, in connection with (a) above;

          (d) to file any claims or take any action or institute any proceedings
     which Secured Party may deem  necessary or desirable for the  collection of
     any of the  Collateral  or  otherwise  to enforce the rights of the Secured
     Party with respect to any of the Collateral; and



                                       16
<PAGE>


          (e) to collect the Underlying Line of Credit Loans and Underlying Line
     of Credit Notes and to enforce all rights and remedies  available to Debtor
     under the Underlying  Line of Credit  Documents and to endorse all items of
     payment on the Underlying Line of Credit Loans made payable to Debtor which
     may come into the possession of Secured Party.

The power vested in Secured Party as Debtor's  attorney-in-fact is, and shall be
deemed to be, coupled with an interest and cannot be revoked.

     8.7. Protection of Collateral.  Secured Party shall not be required to take
any steps  necessary to preserve  any rights in the  Collateral.  Secured  Party
shall further be under no duty to exercise or to withhold the exercise of any of
the rights,  powers,  privileges and options expressly or implicitly  granted to
Secured  Party in this  Security  Agreement,  and  Secured  Party  shall  not be
responsible  for any  failure to  exercise  such  rights nor for its delay in so
doing.  Secured  Party  shall be deemed  to have  exercised  reasonable  care as
custodian of the  Collateral if it takes such action to protect and preserve the
Collateral as Debtor shall request,  but failure to honor any such request shall
not be deemed to be a failure by Secured Party to exercise  reasonable care. The
care which Secured Party gives to the  safekeeping  of its property of like kind
shall  constitute  reasonable  care of the  Collateral  when in Secured  Party's
possession.

     8.8. Additional Rights of Secured Party.  Secured Party, in its discretion,
and without notice to Debtor,  may take any one or more of the following actions
without  liability except to account for property  actually  received by it: (a)
after the  occurrence  of an Event of Default,  unless such Event of Default has
been waived in writing by Secured Party, renew,  extend, or otherwise change the
terms and  conditions  of any of the  Collateral;  (b) take or release any other
collateral as security for any of the Collateral or the Secured Obligations; and
(c) add or release any guarantor,  endorser, surety or other party to any of the
Collateral or Secured Obligations.

     8.9. Successors and Assigns.  This Security Agreement shall be binding upon
and  inure to the  benefit  of Debtor  and  Secured  Party and their  respective
successors and assigns, except that Debtor may not assign or transfer its rights
or obligations hereunder without the prior written consent of Secured Party.

     8.10. Advances. Nothing herein contained shall be construed to obligate the
Line of Credit  Lenders  to make any loans or  advances  to Debtor  and the sole
purpose of this  Security  Agreement is to provide  collateral  security for the
Secured Obligations.

     8.11.  Severability.  Should any  provision of this  Security  Agreement be
deemed  unlawful or  unenforceable,  said provision  shall be deemed several and
apart from all other  provisions  of this  Security  Agreement and all remaining
provisions of this Security Agreement shall be fully enforceable.



                                       17
<PAGE>


     8.12.  Governing  Law.  This  Security  Agreement  shall be governed by and
interpreted in accordance  with the laws of the State of Colorado  except to the
extent that the validity or perfection of the security  interest  hereunder,  or
remedies hereunder in respect of any particular collateral,  are governed by the
laws of a jurisdiction other than the State of Colorado.

     8.13. Notices.  Notices by any party hereto to any other party hereto shall
be given as provided in the Line of Credit Agreement.

     8.14. Financing Statement. A copy, including a photocopy,  of this Security
Agreement may be filed as a financing statement. Debtor authorizes Secured Party
to file financing statements without Debtor's signature where permitted by law.

     8.15.  Conflict with Line of Credit  Agreement.  In the event of a conflict
between  the terms of this  Security  Agreement  and those of the Line of Credit
Agreement, the provisions of the Line of Credit Agreement shall control.

     This Security Agreement is executed as of the date first above written.

                                      DEBTOR:
                                      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

                                      SECURED PARTY:
                                      COBANK, ACB, as Agent on behalf of and for
                                      the benefit of the Line of Credit Lenders

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


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