Document:

EXHIBIT 10.3

                                CREDIT AGREEMENT

         THIS AGREEMENT made as of this 18th day of November, 1986, by TAYLOR
INVESTMENT CORPORATION, a Minnesota corporation (herein called the "Borrower"),
for the benefit of NATIONAL CITY BUSINESS CREDIT, INC., a Minnesota corporation
(herein called "NCBC") .

                                    Recitals

         Borrower has requested that NCBC make loans to Borrower from time to
time at NCBC's sole discretion and, in connection therewith, has executed and
delivered for NCBC's benefit a Security Agreement of even date herewith,
together with various additional and supplemental documents (herein called the
"Security Documents"):

         This Agreement sets forth certain additional obligations undertaken by
Borrower to induce NCBC to make such loans.

         ACCORDINGLY, to induce NCBC to make one or more loans to Borrower, and
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Borrower hereby represents, warrants and agrees for the
benefit of NCBC that:

         1. The Loans. NCBC shall not be obligated to make any loans to
Borrower. All loans which NCBC may determine to make under this Agreement shall
be repayable on demand. Borrower will comply with the following procedure in
requesting loans from NCBC:

                  (a) Borrower will request loans from NCBC in such a manner as
         NCBC may from time to time prescribe.

                  (b) NCBC may make loans in any amount and in any manner
         requested orally or in writing (i) by any officer of Borrower; or (ii)
         by any person designated as Borrower's agent by any officer of Borrower
         in a writing delivered to NCBC; or (iii) by any person reasonably
         believed by NCBC to be an officer of Borrower or such a designated
         agent. Except as otherwise instructed in writing by such officer, agent
         or person, NCBC may disburse loan proceeds by deposit with any bank to
         or for the account of Borrower or to or for the account of any third
         party designated by such officer, agent or person, or by an instrument
         payable to Borrower or to any such third party delivered to any such
         officer, agent or person or to any such third party, or in any other
         manner deemed appropriate by NCBC. All principal of and interest on
         loans made by NCBC shall be repayable at the offices of NCBC in
         Minneapolis, Minnesota, unless NCBC designates a different place of
         payment by written notice to Borrower.

                  (c) NCBC may make loans on the basis of collateral available
         under the Security Documents or any other basis deemed appropriate by
         NCBC from time to time. NCBC may change from time to time, at its sole
         discretion and without notice to Borrower, the standards, criteria and
         formulae used by NCBC in determining the type and amount of collateral
         eligible for advance. In any event, subject to change at NCBC's
         discretion, Borrower shall not request loans on the basis of the
         following collateral:

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                           (1) Accounts receivable which are (i) disputed or
                  subject to claims or set offs; or (ii) owed by an account
                  debtor not located in the United States or Canada and not
                  secured by a bank letter of credit satisfactory to NCBC in its
                  sole discretion; or (iii) owed by an account debtor which is
                  the subject of any bankruptcy or insolvency proceedings or is
                  insolvent or has made an assignment for the benefit of
                  creditors or has failed or suspended or gone out of business.

                           (2) Collateral which is not warranted in the Security
                  Documents.

                           (3) Collateral which NCBC, in its sole discretion,
                  has declared ineligible collateral by written notice to
                  Borrower.

                           (4) Except for accounts receivable described under
                  subsection 1(c)(5), accounts receivable not paid within thirty
                  (30) days after invoice or, if NCBC in its discretion has
                  determined that a particular dated receivable is eligible for
                  advance, within thirty (30) days after the due date stated.

                           (5) Accounts receivable arising under contracts for
                  deed which are more than two (2) installments in arrears.

                           (6) Accounts receivable owed to Borrower by any
                  shareholder, subsidiary or affiliate of Borrower or by any
                  person obligated to pay any receivable deemed ineligible under
                  clauses (1) through (4), if such ineligible receivable is 10%
                  or more of the total amount due from such person.

         Notwithstanding any apportionment, exclusion or segregation of
         collateral made by NCBC for purposes of determining the amount or
         maximum amount of loans made to Borrower, all collateral granted to
         NCRC under the Security Documents, and the rights and interests of NCBC
         under the Security Documents, and all other collateral rights,
         interests and properties available to NCBC, shall secure and may be
         applied to pay any or all indebtedness of Borrower secured thereby, in
         any manner or order of application and without regard to any such
         apportionment, exclusion or segregation.

                  (d) Borrower will pay interest on all outstanding loans under
         this Agreement at an annual rate (computed on the basis of actual days
         elapsed in a 350-day year) which, for any particular month, shall be
         the greater of (i) nine percent (9%) per annum, or (ii) three and
         one-half percent (3.5%) per annum above the rate of interest publicly
         announced by National City Bank of Minneapolis from time to time as its
         "BASE" rate (the Bank may lend to its customers at rates that are at,
         above, or below the "BASE" rate); provided, that in any event no rate
         change shall be put into effect which would result in a rate greater
         than the highest rate permitted by law. Each change in the interest
         rate shall take effect simultaneously with the corresponding change in
         the designated bank's "BASE" rate.

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                  All interest shall accrue on the principal balance outstanding
         from time to time and shall be payable monthly and in any event on
         demand. Borrower agrees that NCBC may at any time or from time to time,
         without further request by Borrower, make a loan to Borrower, or apply
         the proceeds of any loan, for the purpose of paying all such interest
         promptly when due. In the computation of interest, NCBC may allow three
         banking days for the collection of uncollected funds.

                  (e) If any bank shall acquire a participation in loans under
         this Agreement and shall elect to accept interest with respect to such
         participation at a lesser rate than the rate of interest set forth in
         paragraph 1(d), the rate of interest payable by Borrower with respect
         to such participation shall be reduced to an amount one-half percent
         (1/2%) in excess of such lesser rate of interest, if, to the extent
         that and so long as such bank shall hold such participation. NCBC may
         retain the excess one-half percent (1/2%) as a servicing fee, free from
         any claim by Borrower or any participant. NCBC shall not be obligated
         to request, induce or permit any bank to acquire or to retain any
         participation at all or in any particular amount or at any particular
         rate of interest or on any particular terms.

                  (f) In addition to the interest provided for in Paragraph 1(d)
         hereof, payable on all outstanding loans under this Agreement, Borrower
         shall pay NCBC, on the date of this Agreement and on each anniversary
         date thereafter, the sum of Twenty Thousand Dollars ($20,000.00), which
         sum shall be due and payable without regard to the amount of loans
         outstanding hereunder.

                  (g) NCBC may maintain from time to time, at its discretion,
         liability records as to any and all loans made or repaid and interest
         accrued or paid under this Agreement. All entries made on any such
         record shall be presumed correct until Borrower establishes the
         contrary. On demand by NCBC, Borrower will admit and certify in writing
         the exact principal balance which Borrower then asserts to be
         outstanding to NCBC for loans under this Agreement. Any billing
         statement or accounting rendered by NCBC shall be conclusive and fully
         binding on Borrower unless specific written notice of exception is
         given to NCBC by Borrower within 30 days after its receipt by Borrower.

                  (h) Borrower's obligations with respect to all loans shall be
         fully binding and enforceable without any note or other evidence of
         indebtedness. Nevertheless, if NCBC so requests, Borrower will duly
         execute and deliver to NCBC a promissory note negotiable in form,
         payable on demand to the order of NCBC in a principal amount equal to
         the principal balance then outstanding to NCBC for loans under this
         Agreement, together with interest as set forth in paragraph 1(d).

                  (i) In requesting any loans under this Agreement, Borrower
         shall be deemed to represent and warrant to NCBC that, as of the date
         of the proposed loans, (i) all of the representations and warranties
         made by paragraph 3 will be true and correct except for changes caused
         by transactions permitted under this Agreement, and (ii) no breach or

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<PAGE>

         default under, and no Event of Default defined or described in, this
         Agreement or any of the Security Documents will exist.

         2. Affiliate. For the purpose of this Agreement, "Affiliate" refers to
North Country Realty, Inc., a/k/a North Country Realty of Minnesota, Inc.; Four
Seasons Realty, Inc.; Four Seasons Realty of Brainerd, Inc.; D and P Land, Inc.;
and Lands End Realty, Inc.; and any other corporation, partnership, person or
entity which now or hereafter controls, is controlled by, or is under common
control with Borrower. Borrower agrees that any breach, default or event of
default by or attributable to any Affiliate under any agreement between such
Affiliate and NCBC shall constitute a breach of this Agreement and an Event of
Default under the Security Documents.

         3. Representations and Warranties. Borrower represents and warrants to
NCBC that:

                  (a) Borrower is a corporation duly organized and existing in
         good standing under the laws of the State of Minnesota. It has the
         corporate power to own its property and to carry on its business as now
         conducted and is duly qualified to do business in all states in which
         such qualification is required. During its corporate existence,
         Borrower has done business solely under the name Taylor Investment
         Corporation. Borrower does not own any capital stock of any
         corporation, except North Country Realty, Inc., a/k/a North Country
         Realty of Minnesota, Inc.; Four Seasons Realty, Inc.; Four Seasons
         Realty of Brainerd, Inc.; D and P Land, Inc.; and Lands End Realty,
         Inc.

                  (b) Borrower is duly authorized and empowered to execute,
         deliver and perform this Agreement and the Security Documents and to
         borrow money from NCBC.

                  (c) The execution and delivery of this Agreement and the
         Security Documents, and the performance by Borrower of its obligations
         thereunder, do not and will not violate or conflict with any provision
         of law or the Articles of Incorporation or By-Laws of Borrower and do
         not and will not violate or conflict with, or cause any default or
         event of default to occur under, any agreement binding upon Borrower.

                  (d) The execution and delivery of this Agreement and the
         Security Documents have been duly approved by all necessary action of
         the directors and shareholders of Borrower; and this Agreement and the
         Security Documents have in fact been duly executed and delivered by
         Borrower and constitute its lawful and binding obligations, legally
         enforceable against it in accordance with their respective terms
         (subject to laws generally affecting the enforcement of creditors'
         rights).

                  (e) No litigation, tax claims or governmental proceedings are
         pending or are threatened against Borrower or any Affiliate and no
         judgment or order of any court or administrative agency is outstanding
         against Borrower or any Affiliate.

                  (f) The transaction evidenced by this Agreement does not
         violate any law pertaining to usury or the payment of interest on
         loans.

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                  (g) The authorization, execution, delivery and performance of
         this Agreement and the Security Documents are not and will not be
         subject to the jurisdiction, approval or consent of, or to any
         requirement of registration with or notification to, any federal, state
         or local regulatory body or administrative agency.

                  (h) The proper places to file financing statements to perfect
         the security interests created by the Security Documents are the
         offices of the Secretary of State of Minnesota. When the financing
         statements heretofore signed by Borrower are filed in the
         aforementioned offices, NCBC will have a valid and perfected security
         interest in all collateral described in the Security Documents, subject
         to no prior security interest, assignment, lien or encumbrance (except
         interests, if any, specifically approved by NCBC in writing).

                  (i) Payment of present and future debts, liabilities and
         obligations of Borrower to NCBC has been guaranteed by Philip C. Taylor
         pursuant to one or more instruments of guaranty duly executed and
         delivered and legally enforceable by NCBC, without further act and
         without condition, in accordance with the stated terms (subject to laws
         generally affecting the enforcement of creditors' rights).

                  (j) The conduct of its business by Borrower is not subject to
         registration with, notification to, or regulation, licensing,
         franchising, consent or approval by any state or federal governmental
         authority or administrative agency, except general laws and regulations
         which are not related or applicable particularly or uniquely to the
         type of business conducted by Borrower, which do not materially
         restrict or limit the business of Borrower, and with which Borrower is
         in full compliance and except for regulation, registration with,
         notification to, licensing, franchising, consent or approval by state
         or federal authority as agency which Borrower has obtained or is in
         full compliance with. All registrations and notifications required to
         be made, and all licenses, franchises, permits, operating certificates,
         approvals and consents required to be issued, to enter into or conduct
         such business have been duly and lawfully made or obtained and issued,
         and all terms and conditions set forth therein or imposed thereby have
         been duly met and complied with.

                  (k) To the best knowledge of Borrower based upon reasonable
         inquiry, no director, officer, employee or agent of, or consultant to,
         Borrower is prohibited by law, by regulation, by contract, or by the
         terms of any license, franchise, permit, certificate, approval or
         consent from participating in the business of Borrower as director,
         shareholder, partner, officer, employee or agent of, or as consultant
         to, Borrower is the subject of any pending or, to Borrower's best
         knowledge, threatened proceeding which, if determined adversely, would
         or could result in such a prohibition.

                  (l) All assets of Borrower and any Affiliates are free and
         clear of liens, security interests and encumbrances, except those
         permitted under paragraph 5(b).

                  (m) Borrower and all Affiliates have filed all federal and
         state tax returns which are required to be filed, and all taxes shown
         as due thereon have been paid.

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<PAGE>

                  (n) Borrower has furnished financial statements for the
         periods ending: March 31, 1985; December 31, 1985 and May 31, 1986.

         These statements were prepared in accordance with generally accepted
         accounting principles consistently maintained, present fairly the
         financial condition of Borrower as at the dates thereof, and disclose
         fully all liabilities of Borrower, whether or not contingent, with
         respect to any pension plan. Since May 31, 1986, there has been no
         material adverse change in the financial condition of Borrower.

                  (o) Each qualified retirement plan of Borrower presently
         conforms to and is administered in a manner consistent with the
         Employee Retirement Income Security Act of 1974.

                  (p) Borrower will not request or maintain any credit for the
         purpose of purchasing or carrying any security, within the meaning of
         Regulation G or U of the Board of Governors of the Federal Reserve
         System.

         4. Affirmative Covenants. Borrower covenants and agrees that it will:

                  (a) Use the proceeds of any and all loans made by NCBC solely
         for lawful and proper corporate purposes of the Borrower.

                  (b) Pay all taxes, assessments and governmental charges prior
         to the time when any penalties or interest accrue, unless contested in
         good faith with an adequate reserve for payment.

                  (c) Continue the conduct of its business; maintain its
         corporate existence; maintain all rights, licenses and franchises; and
         comply with all applicable laws and regulations.

                  (d) Maintain its property in good working order and condition
         and make all needful and proper repairs, replacements, additions and
         improvements thereto.

                  (e) Deliver to NCBC:

                           (1) Within ninety (90) days after the end of each
                  fiscal year, a statement of Borrower's financial condition as
                  at the end of such fiscal year and a statement of earnings and
                  retained earnings of Borrower for such fiscal year, with
                  comparative figures for the preceding fiscal year, prepared,
                  if NCBC so requests, on a consolidating and consolidated basis
                  to include any Affiliated Corporation, certified without
                  qualification by independent certified public accountants
                  acceptable to NCBC.

                           (2) Within twenty-five (25) days after the end of
                  each fiscal month, a statement of Borrower's financial
                  condition and an operating statement and statement of earnings

                                      -6-
<PAGE>

                  and retained earnings of Borrower for such month, in each case
                  with comparative figures for the same month in the preceding
                  fiscal year, prepared on the same basis as the most recent
                  annual statement provided pursuant to clause (1) above
                  (excluding the presentation of footnotes therein), certified
                  by an officer of Borrower.

                           (3) Within twenty-five (25) days after the end of
                  each month, an aging of Borrower's accounts receivable as at
                  the end of such month.

                           (4) Within twenty-five (25) days after the end of
                  each month, an aging of Borrower's accounts payable as at the
                  end of such month.

                           (5) From time to time, any and all receivables,
                  schedules, collection reports, equipment schedules, copies of
                  invoices to account debtors and shipment documents and
                  delivery receipts for goods sold, and other material, reports,
                  records or information required by NCBC.

                  (f) Permit any officer, employee, attorney or accountant for
         NCBC to audit, review, make extracts from, or copy any and all
         corporate and financial books, records and properties of Borrower at
         all times during ordinary business hours, to send and discuss with
         account debtors and other obligors requests for verification of amounts
         owed to Borrower, and to discuss the affairs of Borrower with any of
         its directors, officers, employees, or agents.

                  (g) Maintain property, liability, business interruption,
         workman's compensation and other forms of insurance in reasonable
         amounts designated at any time or from time to time by NCBC.

                  (h) At all times maintain the book net worth of Borrower at
         amounts in excess of $1,900,000.00 and maintain Borrower's tangible net
         worth (excluding all intangible assets designated by NCBC) at amounts
         in excess of $1,400,000.00.

                  (i) Notify NCBC promptly of (i) any disputes or claims by
         customers of Borrower; (ii) any goods returned to or recovered by
         Borrower; (iii) any change in the persons constituting the officers and
         directors of Borrower; and (iv) the occurrence of any breach, default
         or event of default by or attributable to Borrower under this Agreement
         or any of the Security Documents.

         5. Negative Covenants. Borrower covenants and agrees that it will not,
except with the prior written approval of NCBC:

                  (a) Become or remain liable in any manner in respect of any
         indebtedness or contractual liability (including, without limitation,
         notes, bonds, debentures, loans, guaranties, obligations of
         partnerships, and pension liabilities, in each case whether or not
         contingent and whether or not subordinated), except:

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                           (1) Indebtedness arising under this Agreement;

                           (2) Unsecured indebtedness, other than for money
                  borrowed or for the purchase of a capital asset, incurred in
                  the ordinary course of its business, which becomes due and
                  must be fully satisfied within twelve months after the date on
                  which it is incurred;

                           (3) Unsecured indebtedness, in an amount not
                  exceeding Twenty-five Thousand Dollars ($25,000.00) at any one
                  time outstanding, which is fully subordinated in right of
                  payment to all indebtedness owed to NCBC pursuant to a
                  subordination agreement accepted or approved in writing by
                  NCBC;

                           (4) Indebtedness arising out of the lease or purchase
                  of goods constituting equipment and either unsecured or
                  secured only by a purchase money security interest securing
                  purchase money indebtedness, but in any event only if such
                  equipment is acquired in compliance with Paragraph 5(c);

                           (5) Presently outstanding unsecured borrowings, if
                  any.

                           (6) Secured indebtedness, arising from the purchase
                  of land, described on Exhibit A hereto, together with
                  additional secured indebtedness arising from the purchase of
                  land, as Borrower may from time to time incur; provided
                  however, in no event shall secured indebtedness arising from
                  the purchase of land (including the indebtedness listed on
                  Exhibit A hereto) exceed $2,500,000.00; and provided further,
                  that all indebtedness marked on Exhibit A as "To be paid off
                  at Funding" shall be paid off and fully satisfied at the time
                  of initial funding of the first loan to be made hereunder.

                  (b) Create, incur or cause to exist any mortgage, security
         interest, encumbrance, lien or other charge of any kind upon any of its
         property or assets, whether now owned or hereafter acquired, except:

                           (1) The interests created by the Security Documents;

                           (2) Liens for taxes or assessments not yet due or
                  contested in good faith by appropriate proceedings;

                           (3) A purchase money security interest or lessor's
                  interest securing indebtedness permitted to be outstanding or
                  incurred under Paragraph 5(a)(4);

                           (4) Security interests approved by NCBCI in writing;
                  and

                           (5) Other liens, charges and encumbrances incidental
                  to the conduct of its business or the ownership of its
                  property which were not incurred in connection with the
                  borrowing of money or the purchase of property on credit and
                  which do not in the aggregate materially detract from the
                  value of its property or materially impair the use thereof in
                  its business.

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<PAGE>

                           (6) Mortgages, encumbrances, or liens securing
                  indebtedness permitted under Paragraph 5(a)(6).

                  (c) Expend or contract to expend, in any one calendar year,
         more than Fifty Thousand Dollars ($50,000.00), in the aggregate or more
         than Twenty Thousand Dollars ($20,000.00) in any one transaction for
         the lease, purchase or other acquisition of any capital asset, or for
         the lease of any other asset, whether payable currently or in the
         future.

                  (d) Sell, lease, or otherwise dispose of all or any
         substantial part of its property, except as permitted under the
         Security Documents; provided however, Borrower may, from time to time,
         request from NCBC permission to sell chattel paper consisting of
         contracts for deed or mortgages, and if adequate provision is made for
         the proceeds of such sale to be applied to Indebtedness arising under
         this Agreement, NCBC shall not unreasonably withhold its consent.

                  (e) Consolidate or merge with any other corporation; or
         acquire any business; or acquire stock of any corporation; or enter
         into any partnership or joint venture.

                  (f) Substantially alter the nature of the business in which it
         is engaged.

                  (g) Declare or pay any dividends (except dividends payable
         solely in its capital stock), or purchase or redeem any of its capital
         stock, or otherwise distribute any property on account of its capital
         stock; or enter into any agreement therefor.

                  (h) Purchase stock or securities of, extend credit to or make
         investments in, become liable as surety for, or guarantee or endorse
         any obligation of, any person, firm or corporation, except investments
         in direct obligations of the United States and commercial bank deposits
         and extensions of credit reflected by trade accounts receivable arising
         for goods sold by Borrower in the ordinary course of its business.

                  (i) After notice from NCBC, grant any excessive discount,
         credit or allowance to any customer of Borrower or accept any return of
         goods sold.

                  (j) In any manner transfer any property without prior or
         present receipt of full and adequate consideration.

                  (k) Permit more than Five Thousand Dollars ($5,000.00) to be
         owing to Borrower by the officers, directors or shareholders of
         Borrower or any Affiliated Corporation, or members of their families,
         on account of any loan, travel advance, credit sale or other
         transaction or event.

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<PAGE>

                  (l) Pay excessive or unreasonable salaries, bonuses,
         commissions, consultant fees, or other compensation; or increase the
         salary, bonus, commissions, consultant fees or other compensation of
         Philip C. Taylor, or any member of his family, by more than ten percent
         (10%) in any one year, either individually or for all such persons in
         the aggregate, or pay any such increase from any source other than
         profits earned in the year of payment; provided however, NCBC hereby
         consents to a salary for Philip C. Taylor of $100,000 for calendar year
         1986.

                  (m) Permit any breach, default or event of default to occur
         under any note, loan agreement, indenture, lease, mortgage, contract
         for deed, security agreement or other contractual obligation binding
         upon Borrower.

         6. Event of Default. Any breach of any representation, warranty, or
agreement of Borrower set forth herein or in any of the Security Documents shall
constitute an Event of Default under the Security Documents.

         7. Setoff. Borrower agrees that NCBC may at any time or from time to
time, at its sole discretion and without demand and without notice to anyone,
set off any liability owed to Borrower by NCBC, whether or not due, against any
indebtedness owed to NCBC by Borrower (for loans under this Agreement or for any
other transaction or event), whether or not due. In addition, each bank or other
person holding a participating interest in any loans made to Borrower by NCBC
shall have the right to appropriate or set off any deposit or other liability
then owed by such bank or person to Borrower, whether or not due, and apply the
same to the payment of said participating interest, as fully as if such bank or
person had lent directly to Borrower the amount of such participating interest.

         8. Termination by Borrower. So long as NCBC, in its sole discretion, is
willing to make loans to Borrower for ordinary working capital purposes subject
to the availability of collateral deemed eligible by NCBC, Borrower may
terminate this Agreement and (subject to payment and performance of all
outstanding secured obligations) may obtain any release or termination of the
Security Documents to which Borrower is otherwise entitled by law, effective
only on the second or any subsequent anniversary date of this Agreement, and
then only if NCBC receives at least 60 days' prior written notice of Borrower's
intent to terminate this Agreement effective on such anniversary date; provided
however, notwithstanding the foregoing provisions of this Paragraph 8, Borrower
may terminate this Agreement at any time upon payment to NCBC of a prepayment
penalty of Twenty Thousand Dollars ($20,000.00) and satisfaction of all
indebtedness and other obligations of Borrower under this Agreement pursuant to
the next succeeding sentence of this Paragraph 8. Upon any such termination, all
obligations of Borrower under this Agreement and the Security Documents shall
remain in full force and effect until all indebtedness under this Agreement and
all other debts, liabilities and obligations of Borrower secured by the Security
Documents or any other collateral security have been fully paid and satisfied.

         9. Reservation of Right to Make Demand. Borrower acknowledges that NCBC
reserves the right to demand immediate payment of any or all loans and the
interest thereon and of all other obligations of Borrower payable on demand,
whether or not Borrower has complied with the terms of this Agreement or the
Security Documents.

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<PAGE>

         10. Miscellaneous. Borrower agrees that:

                  (a) Borrower will furnish to NCBC, prior to the first advance,
         (i) a certified copy of resolutions of the directors and if required
         the shareholders of Borrower, authorizing the execution, delivery and
         performance of this Agreement and the Security Documents; (ii) a
         certificate of an officer of Borrower confirming, in his personal
         capacity, the representations and warranties set forth in paragraph 3;
         (iii) a written opinion of Borrower's independent legal counsel,
         addressed to NCBC, confirming to the satisfaction of NCBC the
         representations and warranties set forth in clauses (a) through (i) of
         paragraph 3; and (iv) currently certified copies of the Articles of
         Incorporation and Bylaws of Borrower and a Certificate of Good Standing
         issued as to Borrower by the Secretary of State of the state of its
         incorporation; and (v) all certificates of insurance and insurance
         endorsements required under the Security Documents; and (vi) all
         collateral schedules, security interest subordination agreements,
         searches, abstracts, releases and termination statements which NCBC may
         request adequately to assure and confirm the creation, perfection and
         priority of the security interests created by the Security Documents.

                  (b) On demand, Borrower will pay or reimburse NCBC for all
         expenses, including all reasonable fees and disbursements of legal
         counsel, incurred by NCBC in connection with the preparation,
         negotiation, execution, performance or enforcement of this Agreement or
         the Security Documents, or any document contemplated thereby, or the
         perfection, protection, enforcement or foreclosure of the security
         interests created by the Security Documents, or in connection with the
         protection or enforcement of the interests and collateral security of
         NCBC in any litigation or bankruptcy or insolvency proceeding or the
         prosecution or defense of any action or proceeding relating in any way
         to the transactions contemplated by this Agreement.

                  (c) The performance or observance of any promise or condition
         set forth in this Agreement may be waived in writing by NCBC, but not
         otherwise. No delay in the exercise of any power, right or remedy of
         NCBC shall operate as a waiver thereof, nor shall any single or partial
         exercise thereof or the exercise of any other power, right or remedy.

                  (d) NCBC and its participants, if any, are not partners or
         joint venturers, and NCBC shall not have any liability or
         responsibility for any obligation, act or omission of any of its
         participants.

                  (e) This Agreement shall be binding upon Borrower and its
         successors and assigns and shall inure to the benefit of NCBC and its
         participants, successors and assigns. This Agreement shall be effective
         when executed by Borrower and delivered to NCBC, whether or not this
         Agreement is executed by NCBC. All rights and powers specifically
         conferred upon NCBC may be transferred or delegated by NCBC to any of

                                      -11-
<PAGE>

         its participants, successors or assigns. Except to the extent otherwise
         required by law, this Agreement and the transaction evidenced hereby
         shall be governed by the substantive laws of the State in which this
         Agreement is accepted by NCBC. If any provision or application of this
         Agreement is held unlawful or unenforceable in any respect, such
         illegality or unenforceability shall not affect other provisions or
         applications which can be given effect, and this Agreement shall be
         construed as if the unlawful or unenforceable provision or application
         had never been contained herein or prescribed hereby. All
         representations and warranties contained in this Agreement or in any
         other agreement between Borrower and NCBC shall survive the execution,
         delivery and performance of this Agreement and the creation and payment
         of any indebtedness to NCBC. Borrower waives notice of the acceptance
         of this Agreement by NCBC.

         IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the proper officers thereunto duly authorized on the day and year first above
written.

                                        TAYLOR INVESTMENT CORPORATION

                                        /s/ Philip C. Taylor
                                        ----------------------------------------
                                               Its
                                                   -----------------------------

                                        Address:  511 - 11th Avenue South
                                                  Suite 425
                                                  Minneapolis, Minnesota  55415

Accepted at Minneapolis, Minnesota
on November 24, 1986.

NATIONAL CITY BUSINESS CREDIT, INC.

By       /s/
  -------------------------------------
         Its Vice President

                                      -12-
<PAGE>

                                                      *TO BE PAID OFF AT FUNDING
                                    EXHIBIT A

                          TAYLOR INVESTMENT CORPORATION
                              SECURED INDEBTEDNESS
LOANS:

           LENDER                        SECURITY              BALANCE
           ------                        --------              -------

Industry Financial Corp.        Office Furniture &          $ 69,260.55
                                Equipment

Commercial Credit Corp.         Assignment of Contracts     $ 73,363.25
                                Hinckley Office Bldg.

Farmers & Merchants State       Mortgages on Land Held      $186,538.80
Bank of Hinckley                for Sale                    (73 ,762.32 )*
                                                            $112,776.48  Balance

Pine City State Bank            Mortgages on Land Held      $ 86,201.94
                                for Sale                     (18,850.23 )*
                                                            $ 67,351.71  Balance

First National Bank of          Mortgages on Land Held      $169,000.00
Deerwood                        for Sale                    (115,000.00 )*
                                                            $ 54,000.00  Balance

Marquette Bank of Mpls N.A.     Assignment of Contracts       44,536.26
Northeast Office                for Deed

Norwest Bank Mpls. N.A.         Assignment of Contracts     $697,422.62
                                and Mortgage                (259,246.68 )*
                                                            $438,175.94  Balance

First American Bank of          Mortgage on Land Held        325,000.00
Brainerd                        for Sale

First Federal Savings &         Assignment of Contracts     $ 54,020.96
Loan Ass'n of Brainerd          for Deed & Crosby Ofc.       (14,020.96 )*
                                Bldg                        $ 40,000.00  Balance

Peoples National Bank of        Mortgage on Land Held       $ 40,000.00
Mora                            for Sale

American National Bank of       Mortgage on Brainerd        $ 54,421.57
Brainerd                        Office Building

Lakeland State Bank of          Mortgage on Land Held       $ 61,133.12
Pequot Lakes                    for SaleEXHIBIT 10.4

                               SECURITY AGREEMENT

         THIS AGREEMENT made as of this 18th day of November, 1986, between
TAYLOR INVESTMENT CORPORATION, a Minnesota corporation, as debtor (herein called
"Debtor") and NATIONAL CITY BUSINESS CREDIT, INC., a Minnesota corporation
(herein called "NCBC"), as secured party.

         For good and valuable consideration, Debtor hereby agrees for the
benefit of NCBC as follows:

         1.1 Debtor hereby grants NCBC a security interest (collectively
referred to as the "Security Interests") in the property described below, as
security for the payment and performance of each and every debt, liability and
obligation of every type and description which Debtor may now or at any time
hereafter owe to NCBC (whether such debt, liability or obligation now exists or
is hereafter created or incurred, whether it arises in a transaction involving
NCBC alone or in a transaction involving other creditors of Debtor, and whether
it is direct or indirect, due or to become due, absolute or contingent, primary
or secondary, liquidated or unliquidated, or sole, joint, several or joint and
several, and including specifically, but not limited to, all indebtedness of
Debtor arising under any loan or credit agreement or guaranty between Debtor and
NCBC, whether now in effect or hereafter entered into; all such debts,
liabilities and obligations are herein collectively referred to as the
"Obligations"). The Security Interests shall attach to the following property of
Debtor (the "Collateral"), and all products and proceeds thereof:

         INVENTORY: All inventory of Debtor, whether now owned or hereafter
         acquired, whether consisting of whole goods, spare parts or components,
         supplies or materials, whether acquired, held or furnished for sale,
         for lease or under service contracts or for manufacture or processing,
         and wherever located, but excluding therefrom any and all interests in
         land.

         RECEIVABLES: Each and every right of Debtor to the payment of money,
         whether such right to payment now exists or hereafter arises, whether
         such right to payment arises out of a sale, lease or other disposition
         of goods or other property, out of a rendering of services, out of a
         loan, out of the overpayment of taxes or other liabilities, or any
         other transaction or event, whether such right to payment is created,
         generated or earned by Debtor or by some other person who subsequently
         transfers his interest to Debtor, whether such right to payment is or
         is not already earned by performance, and howsoever such right to
         payment may be evidenced, together with all other rights and interests
         (including all liens and security interests) which Debtor may at any
         time have by law or agreement against any account debtor or other
         person obligated to make any such payment or against any property of
         such account debtor or other person; all including but not limited to
         all present and future accounts, contract rights, chattel papers,
         bonds, notes and other debt instruments, and rights to payment in the
         nature of general intangibles.

<PAGE>

         CHATTEL PAPER: To the extent not hereinbefore described, all chattel
         paper of every kind and nature, including but not limited to, all
         right, title and interest of Debtor (including rights to payment) under
         contracts for deed and mortgages.

         EQUIPMENT: All equipment of Debtor, whether now owned or hereafter
         acquired, including all present and future machinery, vehicles,
         furniture, fixtures, manufacturing equipment, shop equipment, office
         and recordkeeping equipment, parts, tools, supplies and all other goods
         (except inventory) used or bought for use by Debtor for any business or
         enterprise and including specifically (without limitation) the goods
         described in any equipment schedule or list herewith or hereafter
         furnished to NCBC by Debtor, all accessions thereto, all substitutions
         and replacements thereof, and all like or similar property now owned or
         hereafter acquired by Debtor.

         EQUITY SECURITIES: All stocks and other instruments, now owned or
         hereafter acquired by Debtor, evidencing an ownership interest in any
         partnership, corporation, entity or enterprise.

         GENERAL INTANGIBLES: All general intangibles of Debtor whether now
         owned or hereafter acquired, including (without limitation) all present
         and future patents, patent applications, copyrights, trademarks, trade
         names, trade secrets, customer or supplier lists and contracts,
         manuals, operating instructions, permits, franchises, the right to use
         Debtor's name, and the good will of Debtor's business.

         1.2 Debtor represents, warrants and agrees that:

                  (a) Debtor has (or will have at the time it acquires rights in
         Collateral hereafter arising) and will maintain so long as the Security
         Interests may remain outstanding, absolute title to each item of
         Collateral and all proceeds thereof, free and clear of all interests,
         liens, attachments, encumbrances and security interests except for the
         Security Interests and as provided herein and except as NCBC may
         otherwise agree in writing. Debtor will defend the Collateral against
         all claims or demands of all persons (other than NCBC) claiming the
         Collateral or any interest therein. Debtor will not sell or otherwise
         dispose of the Collateral or any interest therein, except the sale of
         inventory in the ordinary course of Debtor's business, without NCBC's
         prior written consent.

                  (b) Debtor does business solely under its own name and the
         trade names (if any) set forth below. The sole place of business and
         chief executive office of Debtor is located at the address set forth
         below, and all of Debtor's records relating to its business or the
         Collateral are kept at that location. Debtor will not permit any
         tangible Collateral or any records pertaining to Collateral to be
         located in any state or area in which, in the event of such location, a
         financing statement covering such Collateral would be required to be,
         but has not in fact been, filed in order to perfect the Security
         Interests. Debtor will not change its name or the location of its place
         of business, without prior written notice to NCBC.

                                      -2-
<PAGE>

                  (c) None of the Collateral is or will become a fixture on real
         estate, unless a sufficient fixture filing is in effect with respect
         thereto.

                  (d) Each right to payment and each instrument, document,
         chattel paper and other agreement constituting or evidencing Collateral
         is (or, in the case of all future Collateral, will be when arising or
         issued) the valid, genuine and legally enforceable obligation, subject
         to no defense, setoff or counterclaim, of the account debtor or other
         obligor named therein or in Debtor's records pertaining thereto as
         being obligated to pay such obligation. Debtor will not agree to
         modify, amend, subordinate, cancel or terminate the obligation of any
         such account debtor or other obligor, without NCBC's prior written
         consent.

                  (e) Debtor will keep all tangible Collateral in good repair,
         working order and condition, normal depreciation excepted, and will,
         from time to time, replace any worn, broken or defective parts.

                  (f) Debtor will promptly pay all taxes and other governmental
         charges levied or assessed upon or against any Collateral or upon or
         against the creation, perfection or continuance of the Security
         Interests.

                  (g) Debtor will keep all Collateral free and clear of all
         security interests, liens and encumbrances except for the Security
         Interests as provided herein, purchase money security interests
         permitted under the Credit Agreement by and between NCBC and Debtor of
         even date herewith, and other security interests approved in writing by
         NCBC.

                  (h) Debtor will at all reasonable times permit NCBC or its
         representatives or examine or inspect any Collateral, or any evidence
         of Collateral, wherever located, and Debtor will at any time and from
         time to time send requests for verification of accounts or notices of
         assignment to account debtors and other obligors.

                  (i) Debtor will keep accurate and complete records pertaining
         to the Collateral and pertaining to Debtor's business and financial
         condition, prepared on the basis of generally accepted accounting
         principles consistently maintained; will submit to NCBC such weekly,
         monthly and other periodic reports concerning the Collateral and
         Debtor's business and financial condition as NCBC may from time to time
         request; and will permit NCBC, or its employees, accountants, attorneys
         or agents, to examine and copy any or all of its records at any time
         during Debtor's business hours.

                  (j) Debtor will promptly notify NCBC of any loss of or
         material damage to any Collateral or of any substantial adverse change,
         known to Debtor, in any Collateral or the prospect of payment thereof.

                  (k) Upon request by NCBC, whether such request is made before
         or after the occurrence of an Event of Default, Debtor will promptly
         deliver to NCBC in pledge all instruments, documents and chattel papers
         constituting Collateral, duly endorsed or assigned by Debtor.

                                      -3-
<PAGE>

                  (l) Debtor will at all times keep all tangible Collateral
         insured against risks of fire (including so-called extended coverage),
         theft, collision (for Collateral consisting of motor vehicles) and such
         other risks and in such amounts as NCBC may reasonably request, with
         any loss payable to NCBC to the extent of its interest.

                  (m) Debtor will pay or reimburse NCBC on demand for all costs
         of collection of any of the Obligations and all other out-of-pocket
         expenses (including in each case all reasonable attorneys' fees and
         legal expenses) incurred by NCBC in connection with the creation,
         perfection, protection, satisfaction, foreclosure or enforcement of the
         Security Interests or the creation, continuance or enforcement of this
         Agreement or any or all of the Obligations.

                  (n) Debtor will use and keep the Collateral, and will require
         that others use and keep the Collateral, only for lawful purposes,
         without violation of any federal, state or local law, statute or
         ordinance.

                  (o) Debtor from time to time will execute and deliver or
         endorse any and all instruments, documents, conveyances, assignments,
         security agreements, financing statements and other agreements and
         writings which NCBC may reasonably request in order to secure, protect,
         perfect or enforce the Security Interests or the rights of NCBC under
         this Agreement (but any failure to request or assure that Debtor
         executes, delivers or endorses any such item shall not affect or impair
         the validity, sufficiency or enforceability of this Agreement and the
         Security Interests, regardless of whether any such item was or was not
         executed, delivered or endorsed in a similar context or on a prior
         occasion).

If Debtor at any time fails to perform or observe any of the foregoing
agreements, and if such failure shall continue for a period of ten calendar days
after NCBC gives Debtor written notice thereof (or in the case of the agreements
contained in clauses (g) and (l) above, immediately upon the occurrence of such
failure, without notice or lapse of time), NCBC may, but need not, perform or
observe such agreement on behalf and in the name, place and stead of Debtor (or,
at NCBC's option, in NCBC's name) and may, but need not, take any and all other
actions which NCBC may reasonably deem necessary to cure or correct such failure
(including, without limitation, the payment of taxes, the satisfaction of
security interests, liens or encumbrances, the performance of obligations owed
to account debtors or other obligors, the procurement and maintenance of
insurance, the execution of assignments, security agreements and financing
statements, and the endorsement of instruments); and Debtor shall thereupon pay
to NCBC on demand the amount of all monies expended and all costs and expenses
(including reasonable attorneys' fees and legal expenses) incurred by NCBC in
connection with or as a result of the performance or observance of such
agreements or the taking of such action by NCBC, together with interest thereon
from the date expended or incurred at the highest lawful rate than applicable to
any of the Obligations. To facilitate the performance or observance by NCBC of
such agreements to Debtor, Debtor hereby irrevocably appoints NCBC, or the
delegate of NCBC, acting alone, as the attorney-in-fact of Debtor with the right
(but not the duty) from time to time to create, prepare, complete, execute,
deliver, endorse or file in the name and on behalf of Debtor any and all

                                      -4-
<PAGE>

instruments, documents, assignments, security agreements, financing statements,
applications for insurance and other agreements and writings required to be
obtained, executed, delivered or endorsed by Debtor under this Section 1.02.

         1.3 Debtor agrees to deliver to NCBC, or, at NCBC's option, to deposit
in one or more accounts maintained for NCBC by any bank reasonably satisfactory
to NCBC, all collections on accounts, contract rights, chattel paper and other
rights to payment constituting Collateral, and all other cash proceeds of
Collateral, immediately upon receipt thereof, in the form received, except for
Debtor's endorsement when deemed necessary. Amounts deposited in an account
shall not bear interest and shall not be subject to withdrawal by Debtor, except
after full payment and discharge of all Obligations. All such collections shall
constitute proceeds of Collateral and shall not constitute payment of any
Obligation, provided however, all amounts received by NCBC representing payments
on accounts receivable comprising part of the Collateral, or other payments
directed by Debtor to be applied to loans made by NCBC to Debtor, shall be
credited to the balance of such loans after allowing three (3) business days for
collection. Until delivered to NCBC or deposited in an account, all proceeds or
collections of Collateral shall be held in trust by Debtor for and as the
property of NCBC and shall not be commingled with any funds or property of
Debtor. NCBC may deposit any and all collections received by it from Debtor or
out of any collateral account in the general accounts of NCBC and may commingle
such collections with other property of NCBC or any other person. All items
shall be delivered to NCBC or deposited in any collateral account subject to
final payment. If any such item is returned uncollected, Debtor will immediately
pay NCBC, or, for items deposited in a collateral account, the bank maintaining
such account, the amount of that item, or such bank at its discretion may charge
any uncollected item to Debtor's commercial account or other account. Debtor
shall be liable as an endorser on all items deposited in any collateral account,
whether or not in fact endorsed by Debtor. NCBC from time to time at its
discretion may apply funds on deposit in any collateral account to the payment
of any or all Obligations, in any order or manner of application satisfactory to
NCBC.

         1.4 In addition to the rights of NCBC under Section 1.03, with respect
to any and all rights to payment constituting Collateral NCBC may at any time
(either before or after the occurrence of an Event of Default under Section
1.06) notify any account debtor or other person obligated to pay the amount due
that such right to payment has been assigned or transferred to NCBC for security
and shall be paid directly to NCBC. Debtor will join in giving such notice, if
NCBC so requests. At any time after Debtor or NCBC gives such notice to an
account debtor or other obligor, NCBC may, but need not, in NCBC's name or in
Debtor's name, (i) demand, sue for, collect or receive any money or property at
any time payable or receivable on account of, or securing, any such right to
payment, or grant any extension to, make any compromise or settlement with or
otherwise agree to waive, modify, amend or change the obligations (including
collateral obligations) of any such account debtor or other obligor; and (ii) as
agent and attorney-in-fact of Debtor notify the Unites' States Postal Service to
change the address for delivery of Debtor's mail to any address designated by
NCBC and otherwise intercept, receive, open and dispose of Debtor's mail,
applying all Collateral as permitted under this Agreement and holding all other
mail for Debtor's account or forwarding such mail to Debtor's last known
address.

                                      -5-
<PAGE>

         1.5 As additional security for the payment and performance of the
Obligations, Debtor hereby assigns to NCBC any and all monies (including,
without limitation, proceeds of insurance and refunds of unearned premiums) due
or to become due under, and all other rights of Debtor with respect to, any and
all policies of insurance now or at any time hereafter covering the Collateral
or any evidence thereof or any business records or valuable papers pertaining
thereto, and Debtor hereby directs the issue of any such policy to pay all such
monies directly to NCBC. At any time, whether before or after the occurrence of
any Event of Default, NCBC may (but need not), in NCBC's name or in Debtor's
name, execute and deliver proof of claim, receive all such monies, endorse
checks and other instruments representing payment of such monies, and adjust,
litigate, compromise or release any claim against the issuer of any such policy.

         1.6 Each of the following occurrences shall constitute an Event of
Default under this Agreement (herein called an "Event of Default"): (i) Debtor
shall fail to pay any or all of the Obligations when due or, if payable on
demand, on demand; or (ii) Debtor shall fail to observe or perform any covenant
or agreement binding on Debtor under this Agreement or under any other
assignment; conveyance, instrument or agreement now in effect or hereafter made
between Debtor and NCBC; or (iii) any representation or warranty made by Debtor
in this Agreement or in any such other assignment, conveyance, instrument or
agreement, or in any financial statements, or reports or certificates heretofore
or at any time hereafter submitted by or on behalf of Debtor to NCBC, shall
prove to have been false or materially misleading when made; or (iv) payment of
any substantial indebtedness of Debtor, other than the obligations, shall be
demanded and Debtor shall fail to honor such demand or the maturity of any such
indebtedness shall be accelerated or any precondition or circumstance permitting
any creditor of Debtor, acting individually or with the consent of other
creditors, to accelerate the maturity of any such indebtedness shall have
occurred (for this purpose indebtedness shall be deemed substantial if it
exceeds $10,000); or (v) Debtor shall become insolvent or shall commit an act of
bankruptcy under the United States Bankruptcy Act, or shall file or have filed
against it, voluntarily or involuntarily, a petition in bankruptcy or for
reorganization or for the adoption of an arrangement or plan under the United
States Bankruptcy Act or shall procure or suffer the appointment of a receiver
for any substantial portion of its properties, or shall initiate or have
initiated against it, voluntarily or involuntarily, any act, process or
proceeding under any insolvency law or other statute or law providing for the
modification or adjustment of the rights of creditors; or (vi) NCBC shall in
good faith believe that the prospect of due and punctual payment of any or all
of the Obligations is impaired.

         1.7 Upon the occurrence of any Event of Default under Section 1.06 and
at any time thereafter, NCBC may exercise one or more of the following rights
and remedies: (i) declare all unmatured Obligations to be immediately due and
payable, and the same shall thereupon be immediately due and payable, without
presentment or other notice or demand (but NCBC expressly reserves the right to
demand payment of any Obligation payable on demand, at any time, whether or not
an Event of Default has occurred or is continuing); (ii) exercise and enforce
any and all rights and remedies available upon default to a secured party under
the Uniform Commercial Code, including, without limitation, the right to take
possession of Collateral, or any evidence thereof, proceeding without judicial
process or by judicial process (without a prior hearing or notice thereof, which
Debtor hereby expressly waives) and the right to sell, lease or otherwise
dispose of any or all of the Collateral, and in connection therewith Debtor will

                                      -6-
<PAGE>

on demand assemble the Collateral and make it available to NCBC at a place to be
designated by NCBC which is reasonably convenient to both parties. If notice to
Debtor of any intended disposition of Collateral or any other intended action is
required by law in a particular instance, such notice shall be deemed
commercially reasonable if given (in the manner specified in Section 1.09) at
least ten (10) calendar days prior to the date of intended disposition or other
action; (iii) without notice or demand offset any indebtedness NCBC or any of
its participants, successors or assigns then owes to Debtor, whether or not then
due, against any obligation then owed to NCBC or any of its participants,
successors or assigns by Debtor, whether or not then due; and (iv) exercise or
enforce any and all other rights or remedies available by law or agreement
against the Collateral, against Debtor, or against any other person or property.

         1.8 This Agreement does not contemplate a sale of accounts, contract
rights or chattel paper, and, as provided by law, Debtor is entitled to any
surplus and shall remain liable for any deficiency. NCBC's duty of care with
respect to Collateral in its possession (as imposed by law) shall be deemed
fulfilled if it exercises reasonable care in physically keeping such Collateral,
or in the case of Collateral in the custody or possession of a bailee or other
third person, exercises reason able care in the selection of the bailee or other
third person, and NCBC need not otherwise preserve, protect, insure or care for
any Collateral. NCBC shall not be obligated to preserve any rights Debtor may
have against prior parties, to realize on the Collateral at all or in any
particular manner in order or to apply any cash proceeds of the Collateral in
any particular order of application.

         1.9 This Agreement can be waived, modified, amended, terminated or
discharged, and the Security Interests can be released, only explicitly in a
writing signed by NCBC. A waiver so signed shall be effective only in the
specific instance and for the specific purpose given. Mere delay or failure to
act shall not preclude the exercise or enforcement of any rights or remedies
available to NCBC. All rights and remedies of NCBC shall be cumulative and may
be exercised singularly in any order or sequence, or concurrently, at NCBC's
option, and the exercise or enforcement of any such right or remedy shall
neither be a condition to nor bar the exercise or enforcement of any other. All
notices to be given to Debtor shall be deemed sufficiently given if delivered or
mailed by registered, certified or ordinary mail, postage prepaid, to Debtor at
its address set forth below or at its most recent address shown on NCBC's
records.

         1.10 NCBC and its participants, if any, are not partners or joint
venturers, and NCBC shall not have any liability or responsibility for any
obligation, act or omission of any of its participants.

         1.11 This Agreement, and the Security Interests granted hereby, shall
be binding upon Debtor, its successors and assigns, and shall inure to the
benefit of and be enforceable by NCBC and each and all of its participants,
successors and assigns, and shall be effective when executed by Debtor and
delivered to NCBC whether or not this Agreement is executed by NCBC. All rights
and powers specifically conferred upon NCBC may be transferred or delegated to
any of the participants, successors or assigns of NCBC. Except to the extent
otherwise required by law, this Agreement and the transaction evidenced hereby
shall be governed by the substantive laws of the State in which this Agreement
is accepted by NCBC. If any provision or application of this Agreement is held
unlawful or unenforceable in any respect, such illegality or unenforceability

                                      -7-
<PAGE>

shall not affect other provisions or applications which can be given effect, and
this Agreement shall be construed as if the unlawful or unenforceable provision
or application had never been contained herein or prescribed hereby. All
representations and warranties contained in this Agreement or in any other
agreement between Debtor and NCBC shall survive the execution, delivery and
performance of this Agreement and the creation and payment of the Obligations.
Debtor waives notice of the acceptance of this Agreement by NCBC.

         IN WITNESS WHEREOF, this Security Agreement has been duly executed and
delivered by the proper officers thereunto duly authorized on the day and year
first above written.

                                        TAYLOR INVESTMENT CORPORATION

                                        By:     /s/ Philip C. Taylor
                                            ------------------------------------
                                                Its: President

                                        By:     /s/ Linda J. Witte
                                            ------------------------------------
                                                Its: Vice President

                                        Address:  511 - 11th Avenue South
                                                  Suite 425
                                                  Minneapolis, Minnesota  55415

TRADE NAMES: None                       INVENTORY LOCATION:

                                        511 - 11th Avenue South
                                        Suite 425
                                        Minneapolis, Minnesota  55415

Accepted at Minneapolis, Minnesota
On November 24, 1986.

NATIONAL CITY BUSINESS CREDIT, INC.

By:      /s/
    -------------------------------------
         Its: Vice President

                                      -8-

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