So is it a link farm.. well it can be if you let it. So take my advice and dont let it become one.

When exchanging links, make sure the target site is at least somewhat relevent to your own topic. Linking to numerous sites completly unrelated to your own doesn't help you, and it doesnt help the sites you are linking to.  So in short, stay on topic.

Scrutinize the sites you are linking to.

Is the site in Google's index ?

Do a Google search on 

site:www.somesite.com

and

cache:www.somesite.com

If you get results you know Googlebot has at least found the site. If you get results with the "site:" operator you know it has at least indexed some of it's pages.

Ask yourself, will my visitors find this site useful?  If not, it's probably not relevent enough for you to consider linking to.

So to summarize, just be a bit picky