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U.S. $425,000,000
CREDIT AGREEMENT
(SHORT TERM FACILITY)

    Dated as of October 31, 2000

HORMEL FOODS CORPORATION, a Delaware corporation (the "Borrower"), the Banks
listed on the signature pages (the "Banks," together with each bank which
becomes a lender hereunder pursuant to Section 8.07, collectively the
"Lenders"), SUNTRUST BANK, as Syndication Agent for the Lenders, U.S. BANK
NATIONAL ASSOCIATION, as Documentation Agent for the Lenders, and CITICORP
USA, INC. ("CUSA"), as administrative agent for the Lenders (in such capacity,
the "Administrative Agent"), agree as follows:

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

    Section 1.01  Certain Defined Terms.  As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

"Adjusted Eurodollar Rate" shall mean, for any Interest Period for a Eurodollar
Rate Advance comprising part of the same Borrowing, an interest rate per annum
equal to the rate obtained by dividing (a) the rate per annum (rounded upward,
if necessary, to the nearest whole multiple of 1/16 of 1%) that appears on the
Dow Jones Markets (Telerate) page 3750 (or such other comparable page as may, in
the opinion of the Administrative Agent, replace such page for the purpose of
displaying such rate) with maturities comparable to such Interest Period at
approximately 11:00 A.M. (London time) two Business Days prior to the first day
of such Interest Period by (b) a percentage equal to 100% minus the Eurodollar
Rate Reserve Percentage, subject, however, to the provisions of Section 2.02(b).

"Administrative Agent" means CUSA, in its capacity as administrative agent for
the Lenders, or any Person serving as its successor.

"Advance" means an advance by a Lender to the Borrower as part of a Borrowing
pursuant to Section 2.01, and refers to a Base Rate Advance or a Eurodollar Rate
Advance, each of which shall be a "Type" of Advance.

"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person.

"Agent" or "Agents" means the Administrative Agent; provided, that, solely for
purposes of Sections 7.02, 7.04, 7.05, 8.04, 8.07(b)(iv), 8.08 and 8.12 of this
Agreement the term "Agent" or "Agents", as the case may be, shall include the
Syndication Agent, the Documentation Agent and the Arranger.

"Agreement" means this Credit Agreement as it may be amended, supplemented or
otherwise modified from time to time.

"Applicable Lending Office" means, with respect to each Lender, such Lender's
Domestic Lending Office in the case of a Base Rate Advance, and such Lender's
Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

"Applicable Margin" means, for any period for which any interest payment is to
be made with respect to any Advance, the interest rate per annum derived by
dividing (i) the sum of Daily Margins for each of the days included in such
period by (ii) the number of days included in such period.

"Arranger" means Salomon Smith Barney Inc., as sole lead arranger and book
runner.

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"Assignment and Acceptance" means an assignment and acceptance entered into by a
Lender and an Eligible Assignee, and accepted by the Administrative Agent, in
substantially the form of Exhibit A hereto.

"Bankruptcy Code" means Title 11 of the United States Code entitled "Bankruptcy"
as now and hereafter in effect, or any successor statute.

"Base Rate" means, for any period, a fluctuating interest rate per annum as
shall be in effect from time to time which rate per annum shall at all times be
equal to the highest of:

    (a) the rate of interest announced publicly by Citibank in New York, New
York, from time to time, as Citibank's base rate (which is a rate set by
Citibank based upon various factors including Citibank's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate);

    (b) the sum of (A) 1/2 of one percent per annum, plus (B) the rate obtained
by dividing (x) the latest three-week moving average of secondary market morning
offering rates in the United States for three-month certificates of deposit of
major United States money market banks (such three-week moving average being
determined weekly by Citibank on the basis of such rates reported by certificate
of deposit dealers to and published by the Federal Reserve Bank of New York or,
if such publication shall be suspended or terminated, on the basis of quotations
for such rates received by Citibank, in either case adjusted to the nearest 1/16
of one percent or, if there is no nearest 1/16 of one percent, to the next
higher 1/16 of one percent), by (y) a percentage equal to 100% minus the average
of the daily percentages specified during such three-week period by the Board of
Governors of the Federal Reserve System for determining the maximum reserve
requirement (including, but not limited to, any marginal reserve requirements
for Citibank in respect of liabilities consisting of or including (among other
liabilities) three-month nonpersonal time deposits of at least $100,000), plus
(C) the average during such three-week period of the daily net annual assessment
rates estimated by Citibank for determining the current annual assessment
payable by Citibank to the Federal Deposit Insurance Corporation for insuring
three-month deposits in the United States; or

    (c) 1/2 of one percent per annum above the Federal Funds Rate.

"Base Rate Advance" means an Advance which bears interest at a rate per annum
determined on the basis of the Base Rate, as provided in Section 2.06(a).

"Borrower" means Hormel Foods Corporation, a Delaware corporation.

"Borrowing" means a borrowing consisting of simultaneous Advances of the same
Type made on the same day pursuant to the same Notice of Borrowing by each of
the Lenders pursuant to Section 2.02(a).

"Business Day" means a day of the year other than a Saturday or a Sunday on
which banks are not required or authorized to close in New York City or Los
Angeles and, if the applicable Business Day relates to any Eurodollar Rate
Advances, on which dealings are carried on in the London interbank market.

"Capital Lease" means, with respect to any Person, any lease of any property by
that Person as lessee which would, in conformity with GAAP, be required to be
accounted for as a capital lease on the balance sheet of that Person.

"Cash" means money, currency or a credit balance in a deposit account.

"Cash Equivalents" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof,
(b) marketable direct obligations issued by any state of the United States of
America or any political

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subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating generally obtainable from either S&P or
Moody's, (c) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating of A-1 or
higher from S&P or P-1 or higher from Moody's, and (d) certificates of deposit
or bankers' acceptances maturing within one year from the date of acquisition
thereof issued by any lender.

"Citibank" means Citibank, N.A.

"Code" means the Internal Revenue Code of 1986, as amended.

"Commitment" has the meaning specified in Section 2.01.

"Commitment Termination Date" means October 30, 2001, the date that occurs
364 days from the Effective Date; provided, however, that, subject to the
provisions of Section 2.15, if any Lender has consented to an Extension Request
with regard to the then existing Commitment Termination Date, the then existing
Commitment Termination Date as to such Lender shall be automatically extended
for 364 days from the then existing Termination Date.

"Compliance Certificate" means a certificate substantially in the form of
Exhibit B hereto, delivered to the Lenders by the Borrower pursuant to
Section 5.01(b)(iii).

"Convert," "Conversion" and "Converted" each refers to a conversion of Advances
of one Type into Advances of another Type pursuant to Section 2.08.

"CUSA" means Citicorp USA, Inc.

"Daily Margin" means, for any date of determination and designated Level
applicable on such date of determination, the following interest rates per
annum:

 
  TYPE OF ADVANCE

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  Base Rate
Advance

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  Eurodollar
Rate Advance

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  Level 1   0 % 0.4300 % Level 2   0 % 0.5400 % Level 3   0 % 0.6500 % Level 4  
0 % 0.7250 % Level 5   0 % 0.9250 %

provided that, (i) until the earlier of (a) the Rating Date or (b) July 1, 2001,
the applicable Level shall be deemed to be Level 3 and (ii), on and after
July 1, 2001, unless and until the Rating Date has occurred (or if, for any
reason, a rating, once established, is unavailable), the applicable Level shall
be deemed to be Level 5; provided further that, on and after July 1, 2001, if
the Rating Date has not occurred, but a rating has been established by Moody's
or S&P for the short-term, unsecured Debt of the Borrower, the applicable Level
shall be deemed to be Level 3; provided further that, for the period between
December 15, 2000 and January 15, 2001, the applicable Daily Margin shall be the
rate per annum determined as set forth above plus, in each case, .125% per
annum. If any change in the rating established by S&P or Moody's with respect to
Long-Term Debt shall result in a change in the applicable Level, the change in
the Daily Margin shall be effective as of the date on which such rating change
is publicly announced.

"Debt" means (i) indebtedness for borrowed money or for the deferred purchase
price of property or services, (ii) obligations as lessee under Capital Leases,
or (iii) obligations under guarantees in respect of indebtedness or in respect
of obligations of others of the kinds referred to in clause (i) or (ii) above.

"Designating Lender" has the meaning specified in Section 8.07(g).

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"Documentation Agent" means U.S. Bank National Association, in its capacity as
documentation agent for the Lenders, or any Person serving as its successor.

"Dollars" and the sign "$" each means lawful money of the United States of
America.

"Domestic Lending Office" means, with respect to any Lender, the office of such
Lender specified as its "Domestic Lending Office" opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which an
Eligible Assignee became a Lender, or such other office of such Lender as such
Lender may from time to time specify to the Borrower and the Agents.

"EBITDA" means, for any period, consolidated net income (excluding
extraordinary, unusual, or nonrecurring gains or losses), plus provision for
taxes of the Borrower and its Subsidiaries, plus interest expense of the
Borrower and its Subsidiaries, plus depreciation expense of the Borrower and its
Subsidiaries, plus amortization of intangibles of the Borrower and its
Subsidiaries, as determined on a consolidated basis in conformity with GAAP.

"Effective Date" means the date on which all of the conditions in Section 3.01
were satisfied or waived, which date was October 31, 2000.

"Eligible Assignee" means (i) a commercial bank organized under the laws of the
United States, or any state thereof, and having a combined capital and surplus
of at least $100,000,000; (ii) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economical Cooperation
and Development (the "OECD"), or a political subdivision of any such country and
having a combined capital and surplus of at least $100,000,000, provided that
such bank is acting through a branch or agency located in the country in which
it is organized or another country which is also a member of the OECD; and
(iii) any Person engaged in the business of lending and that is an Affiliate of
a Lender or of a Person of which a Lender is a Subsidiary.

"Environmental Law" means any and all statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions, grants, franchises,
licenses, agreements or other governmental restrictions of any federal, state or
local governmental authority within the United States or any State or territory
thereof and which relate to the environment or the release of any materials into
the environment.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.

"ERISA Affiliate" means any Person who for purposes of Title IV of ERISA is a
member of the Borrower's controlled group, or under common control with the
Borrower, within the meaning of Section 414 of the Code and the regulations
promulgated and rulings issued thereunder.

"ERISA Event" means (i) the occurrence of a reportable event, within the meaning
of Section 4043 of ERISA, unless the 30-day notice requirement with respect
thereto has been waived by the PBGC; (ii) the provision by the administrator of
any Pension Plan of a notice of intent to terminate such Pension Plan pursuant
to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (iii) the cessation of
operations at a facility by the Borrower or an ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA; (iv) the withdrawal by the
Borrower or an ERISA Affiliate from a Multiple Employer Plan during a plan year
for which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (v) the failure by the Borrower or any ERISA Affiliate to make a payment
to a Pension Plan required under Section 302(f)(1) of ERISA, which Section
imposes a lien for failure to make required payments; (vi) the adoption of an
amendment to a Pension Plan requiring the provision of security to such Pension
Plan, pursuant to Section 307 of ERISA; or (vii) the institution by the PBGC of
proceedings to terminate a Pension Plan, pursuant to Section 4042 of ERISA, or
the occurrence of any event or condition which, in the reasonable judgment of
the Borrower, might constitute grounds under

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Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, a Pension Plan.

"Eurocurrency Liabilities" has the meaning assigned to that term in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from time
to time.

"Eurodollar Lending Office" means, with respect to any Lender, the office of
such Lender specified as its "Eurodollar Lending Office" opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.

"Eurodollar Rate Advance" means an Advance that bears interest as provided in
Section 2.06(b).

"Eurodollar Rate Reserve Percentage" for any Interest Period for any Eurodollar
Rate Advance means the reserve percentage applicable during such Interest Period
(or if more than one such percentage shall be so applicable, the daily average
of such percentages for those days in such Interest Period during which any such
percentage shall be so applicable) under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirements (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for member banks
in the Federal Reserve System with respect to liabilities or assets consisting
of or including Eurocurrency Liabilities having a term equal to such Interest
Period.

"Events of Default" has the meaning specified in Section 6.01.

"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.

"GAAP" means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting profession,
which are applicable to the circumstances as of the date of determination.

"Hormel Foundation" is a Minnesota non-profit corporation organized for
religious, charitable, scientific, literary or educational purposes. The Hormel
Foundation is a public foundation. The Hormel Foundation is the beneficial owner
of 44.89% of common stock of The Hormel Foods Corporation as of October 30,
1999.

"Hostile Acquisition" means the acquisition of the capital stock or other equity
interests of a Person (the "Target") through a tender offer or similar
solicitation of the owners of such capital stock or other equity interests which
has not been approved (prior to such acquisition) by resolutions of the Board of
Directors of the Target or by similar action if the Target is not a corporation
or as to which such approval has been withdrawn.

"Insufficiency" means, with respect to any Pension Plan, the amount, if any, of
its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.

"Interest Period" means, for each Eurodollar Rate Advance comprising part of the
same Borrowing, the period commencing on the date of such Eurodollar Rate
Advance, or on the date of continuation of

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such Advance as a Eurodollar Rate Advance upon expiration of successive Interest
Periods applicable thereto, or on the date of Conversion of a Base Rate Advance
into a Eurodollar Rate Advance, and ending on the last day of the period
selected by the Borrower pursuant to the provisions below. The duration of each
such Interest Period shall be one, two, three or six months, as the Borrower may
select in the Notice of Borrowing or the Notice of Conversion/Continuation for
such Advance; provided, however, that:

(i)  the Borrower may not select any Interest Period in respect of Advances
which ends after the earliest Commitment Termination Date of any Lender then in
effect;

(ii)  Interest Periods commencing on the same date for Advances comprising part
of the same Borrowing shall be of the same duration; and

(iii)  whenever the last day of any Interest Period would otherwise occur on a
day other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided, that if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day.

"Lenders" means the Lenders listed on Schedule I hereof and each Eligible
Assignee that shall become a party hereto pursuant to Section 8.07.

"Level" means Level 1, Level 2, Level 3, Level 4 or Level 5, as the case may be.

"Level 1" means that, as of any date of determination, the Long-Term Debt
carries either of the following ratings:

    "A+" from S&P

    "A1" from Moody's

"Level 2" means that, as of any date of determination, the criteria of Level 1
are not satisfied and the Long-Term Debt carries either of the following
ratings:

    "A" from S&P

    "A2" from Moody's

"Level 3" means that, as of any date of determination, the criteria of neither
Level 1 nor Level 2 are satisfied and the Long-Term Debt carries either of the
following ratings:

    "A-" from S&P

    "A3" from Moody's

"Level 4" means that, as of any date of determination, the criteria of neither
Level 1, Level 2 nor Level 3 are satisfied and the Long-Term Debt carries either
of the following ratings:

    "BBB+" from S&P

    "Baa1" from Moody's

"Level 5" means that, as of any date of determination, the criteria of neither
Level 1, Level 2, Level 3 nor Level 4 are satisfied.

"Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind (including any conditional sale or other title retention
agreement and any lease in the nature thereof).

"Loan Documents" means this Agreement and the related documents.

"Long-Term Debt" means senior, unsecured, long term debt securities of the
Borrower.

"Margin Stock" has the meaning assigned to that term in Regulation U promulgated
by the Board of Governors of the Federal Reserve System, as in effect from time
to time.

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"Material Subsidiary" means any Subsidiary of the Borrower having total assets
in excess of $20,000,000.

"Moody's" means Moody's Investors Service, Inc.

"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate of the
Borrower is making, or is obligated to make, contributions or has Withdrawal
Liability.

"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, which (i) is maintained for employees of the
Borrower or an ERISA Affiliate and at least one Person other than the Borrower
and its ERISA Affiliates or (ii) was so maintained and in respect of which the
Borrower or an ERISA Affiliate could have liability under Section 4063, 4064 or
4069 of ERISA in the event such plan has been or were to be terminated.

"Net Debt" means amounts incurred by the Borrower and its subsidiaries and
classified as Debt pursuant to clauses (i) and (ii) of the definition thereof
minus the sum of Cash and Cash Equivalents.

"Net Income" means net income in accordance with GAAP.

"Net Worth" means minority interests, preferred stock and common stock and other
equity, as shown on the consolidated balance sheet of the Borrower and its
Subsidiaries; provided that there shall be excluded from the calculation of Net
Worth any unrealized gains or losses (net of taxes) on securities available for
sale.

"Notice of Borrowing" has the meaning specified in Section 2.02(a).

"Notice of Conversion/Continuation" means a notice substantially in the form of
Exhibit C hereto, delivered to the Administrative Agent by the Borrower pursuant
to Section 2.08.

"Payment Office" means the principal office of CUSA, located on the date hereof
at 2 Penns Way, Suite 200, New Castle, Delaware 19720 (or such other place as
the Administrative Agent may designate by notice to the Borrower and the Lenders
from time to time).

"PBGC" means the U.S. Pension Benefit Guaranty Corporation.

"Pension Plan" means a Single Employer Plan or a Multiple Employer Plan or both.

"Person" means an individual, partnership, limited liability company,
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.

"Potential Event of Default" means a condition or event which, after notice or
lapse of time or both, would constitute an Event of Default if that condition or
event were not cured or removed within any applicable grace or cure period.

"Rating Date" means the date on which a rating on the Long-Term Debt is
established by S&P or Moody's.

"Register" has the meaning specified in Section 8.07(c).

"Requisite Lenders" means at any time Lenders holding greater than 51% of the
then aggregate unpaid principal amount of the Advances held by Lenders, or, if
no such principal amount is then outstanding, Lenders having greater than 51% of
the Commitments (provided that, for purposes hereof, neither the Borrower, nor
any of its Affiliates, if a Lender, shall be included in (i) the Lenders holding
such amount of the Advances or having such amount of the Commitments or
(ii) determining the aggregate unpaid principal amount of the Advances or the
total Commitments).

"S&P" means Standard & Poor's Ratings Group, a division of The McGraw-Hill
Companies.

"SEC" means the Securities and Exchange Commission and any successor agency.

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"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, which (i) is maintained for employees of the
Borrower or any ERISA Affiliate and no Person other than the Borrower and its
ERISA Affiliates or (ii) was so maintained and in respect of which the Borrower
or an ERISA Affiliate could have liability under Section 4062 or 4069 of ERISA
in the event such plan has been or were to be terminated.

"SPV" has the meaning specified in Section 8.07(g).

"SSBI" means Solomon Smith Barney, Inc.

"Subsidiary" of any Person means, as of any time of determination, any
corporation, association, partnership, limited liability company or other
business entity of which more than 50% of the total voting power of shares of
stock or other securities entitled to vote in the election of directors,
managers or trustees thereof is at such time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person or a combination thereof.

"Syndication Agent" means SunTrust Bank, in its capacity as syndication agent
for the Lenders, or any Person serving as its successor.

"Termination Date" means, with respect to any Lender, the earlier of (i) the
Commitment Termination Date of such Lender and (ii) the date of termination in
whole of the Commitments of all Lenders pursuant to Section 2.04 or 6.01.

"Total Utilization of Commitments" means at any date of determination the
aggregate principal amount of all Advances outstanding at such date.

"Type" means, with reference to an Advance, a Base Rate Advance or a Eurodollar
Rate Advance.

"Withdrawal Liability" has the meaning given such term under Part I of
Subtitle E of Title IV of ERISA.

    Section 1.02  Computation of Time Periods.  In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".

    Section 1.03  Accounting Terms.  All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. All computations
determining compliance with financial covenants or terms, including definitions
used therein, shall be prepared in accordance with generally accepted accounting
principles in effect at the time of the preparation of, and in conformity with
those used to prepare, the historical financial statements delivered to the
Lenders pursuant to Section 4.01(e). If at any time the computations for
determining compliance with financial covenants or provisions relating thereto
utilize generally accepted accounting principles different than those then being
utilized in the financial statements being delivered to the Lenders, such
financial statements shall be accompanied by a reconciliation statement.

ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES

    Section 2.01  The Advances.  

    (a) Each Lender severally agrees, on the terms and conditions hereinafter
set forth, to make Advances to the Borrower from time to time on any Business
Day during the period from the Effective Date until the Termination Date of such
Lender in an aggregate amount not to exceed at any time outstanding the amount
set opposite such Lender's name on Schedule II hereof or, if such Lender has
entered into any Assignment and Acceptance, set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 8.07(c), as
such amount may be reduced pursuant to Section 2.04 (such Lender's
"Commitment"); provided that (i) in no event shall the aggregate principal

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amount of Advances from any Lender outstanding at any time exceed its Commitment
then in effect and (ii) the Total Utilization of Commitments shall not exceed
the aggregate Commitments then in effect.

    (b) Each Borrowing shall be in an aggregate amount not less than $5,000,000
or a multiple of $1,000,000 in excess thereof and shall consist of Advances of
the same Type made on the same day by the Lenders ratably according to their
respective Commitments. Within the limits of each Lender's Commitment, the
Borrower may from time to time borrow, prepay pursuant to Section 2.05(b) and
reborrow under this Section 2.01.

    Section 2.02  Making the Advances.  

    (a) Each Borrowing shall be made on notice, given not later than
(x) 11:00 A.M. (New York City time) on the date of a proposed Borrowing
consisting of Base Rate Advances and (y) 11:00 A.M. (New York City time) on the
third Business Day prior to the date of a proposed Borrowing consisting of
Eurodollar Rate Advances, by the Borrower to the Administrative Agent, which
shall give to each Lender prompt notice thereof by telecopier. Each such notice
of a Borrowing (a "Notice of Borrowing") shall be sent by telecopier, confirmed
immediately in writing, in substantially the form of Exhibit D hereto,
specifying therein the requested (i) date of such Borrowing, (ii) Type of
Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing,
and (iv) in the case of a Borrowing comprised of Eurodollar Rate Advances, the
initial Interest Period for each such Advance. The Borrower may, subject to the
conditions herein provided, borrow more than one Borrowing on any Business Day.
Each Lender shall, before 2:00 P.M. (New York City time) in the case of a
Borrowing consisting of Base Rate Advances and before 11:00 A.M. (New York City
time) in the case of a Borrowing consisting of Eurodollar Rate Advances, in each
case on the date of such Borrowing, make available for the account of its
Applicable Lending Office to the Administrative Agent at its address referred to
in Section 8.02, in same day funds, such Lender's ratable portion of such
Borrowing. After the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrower at the
Administrative Agent's aforesaid address.

    (b) Anything in subsection (a) above to the contrary notwithstanding,

    (i)  the Borrower may not select Eurodollar Rate Advances for any Borrowing
or with respect to the Conversion or continuance of any Borrowing if the
aggregate amount of such Committed Borrowing or such Conversion or continuance
is less than $10,000,000;

    (ii) there shall be no more than five Interest Periods relating to Committed
Borrowings consisting of Eurodollar Rate Advances outstanding at any time;

    (iii) if any Lender shall, at least one Business Day before the date of any
requested Borrowing, notify the Administrative Agent that the introduction of or
any change in or in the interpretation of any law or regulation makes it
unlawful, or that any central bank or other governmental authority asserts that
it is unlawful, for such Lender or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances hereunder, the Commitment of such Lender to make
Eurodollar Rate Advances or to Convert all or any portion of Base Rate Advances
shall forthwith be suspended until the Administrative Agent shall notify the
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist and such Lender's then outstanding Eurodollar Rate
Advances, if any, shall be converted to Base Rate Advances as of the end of any
applicable Interest Period or at such earlier time as may be legally required;
to the extent that such affected Eurodollar Rate Advances become Base Rate
Advances, all payments of principal that would have been otherwise applied to
such Eurodollar Rate Advances shall be applied instead to such Lender's Base
Rate Advances; provided that if Requisite Lenders are subject to the same

9

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illegality or assertion of illegality, then the right of the Borrower to select
Eurodollar Rate Advances for such Borrowing or any subsequent Borrowing or to
Convert all or any portion of Base Rate Advances shall forthwith be suspended
until the Administrative Agent shall notify the Borrower that the circumstances
causing such suspension no longer exist, and each Advance comprising such
Borrowing shall be a Base Rate Advance; and

    (iv) if the Requisite Lenders shall, at least one Business Day before the
date of any requested Borrowing, notify the Administrative Agent that the
Adjusted Eurodollar Rate for Eurodollar Rate Advances comprising such Borrowing
will not adequately reflect the cost to such Requisite Lenders of making,
funding or maintaining their respective Eurodollar Rate Advances for such
Borrowing, the right of the Borrower to select Eurodollar Rate Advances for such
Borrowing or any subsequent Borrowing shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be made as a Base Rate Advance.

    (c) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing which the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Lender against any loss, cost or expense incurred by such Lender
by reason of the liquidation or reemployment of deposits or other funds acquired
by such Lender to fund the Advance to be made by such Lender as part of such
Borrowing or by reason of the termination of hedging or other similar
arrangements, in each case when such Advance is not made on such date (other
than by reason of (i) a breach of a Lender's obligations hereunder or (ii) a
suspension of Eurodollar Rate Advances under clauses (iii), (iv) or (v) of
paragraph (b) of this Section 2.02), including without limitation, as a result
of any failure to fulfill on or before the date specified in such Notice of
Borrowing for such Borrowing the applicable conditions set forth in Article III.

    (d) Unless the Administrative Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make available to
the Administrative Agent such Lender's ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to Advances comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount so repaid shall constitute such Lender's Advance as part of such
Borrowing for purposes of this Agreement.

    (e) The failure of any Lender to make the Advance to be made by it as part
of any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.

    Section 2.03  Fees.  

    (a) Facility Fees. The Borrower agrees to pay to the Administrative Agent
for the account of each Lender a facility fee on such Lender's daily average
Commitment, whether used or unused, from the Effective Date in the case of each
Lender and from the effective date specified in the Assignment and Acceptance
pursuant to which it became a Lender in the case of each other Lender until the
Termination Date of such Lender, payable quarterly in arrears on the last day of
each March, June, September and December during the term of such Lender's
Commitment, commencing December 31,

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2000, and on the Termination Date of such Lender, in an amount equal to the
product of (i) such Lender's daily average Commitment, whether used or unused,
in effect during the period for which such payment that is to be made times
(ii) the weighted average rate per annum that is derived from the rates
determined pursuant to the table set forth below based upon ratings on the
Long-Term Debt:

Level

--------------------------------------------------------------------------------

  Facility Fee Rate

--------------------------------------------------------------------------------

1   0.07% 2   0.085% 3   0.10% 4   0.15% 5   0.20%

provided that, (i) until the earlier of (a) the Rating Date or (b) July 1, 2001,
the applicable Level shall be deemed to be Level 3 and (ii), on and after
July 1, 2001, unless and until the Rating Date has occurred (or if, for any
reason, a rating, once established, is unavailable), the applicable Level shall
be deemed to be Level 5; provided further that, on and after July 1, 2001, if
the Rating Date has not occurred, but a rating has been established by Moody's
or S&P for the short-term, unsecured Debt of the Borrower, the applicable Level
shall be deemed to be Level 3. If any change in the rating established by S&P or
Moody's with respect to Long-Term Debt shall result in a change in the Level,
the change in the facility fee shall be effective as of the date on which such
rating change is publicly announced.

    (b) Agents' Fees. The Borrower agrees to pay to the Administrative Agent and
the Arranger the fees payable to each such Agent pursuant to the fee letter
dated as of June 29, 2000 among the Borrower, CUSA and SSBI, in the amounts and
at the times specified in such letter.

    Section 2.04  Optional Termination and Reduction of the Commitments.  The
Borrower shall have the right, upon at least three (3) Business Days' notice to
the Administrative Agent, to terminate in whole or reduce ratably in part the
unused portions of the respective Commitments of the Lenders; provided that
(i) each partial reduction shall be in the aggregate amount of $10,000,000 or a
multiple of $1,000,000 in excess thereof, and (ii) the aggregate of the
Commitments of the Lenders shall not be reduced to an amount which is less than
the Total Utilization of Commitments. Once so reduced or terminated pursuant to
this Section 2.04, Commitments of the Lenders shall not be reinstated.

    Section 2.05  Repayment and Prepayment of Advances.  

    (a) Mandatory Repayment on Certain Date. The Borrower shall repay the
outstanding principal amount of each Advance made by each Lender on the
Termination Date of such Lender.

    (b) Voluntary Prepayments of Borrowings.

    (i)  The Borrower shall have no right to prepay any principal amount of any
Advances other than as provided in this subsection (b).

    (ii) The Borrower may, upon notice to the Administrative Agent no later than
11:00 A.M. (New York time) (A) on the date the Borrower proposes to prepay, in
the case of Base Rate Advances and (B) at least five (5) Business Days' notice
to the Administrative Agent in the case of Eurodollar Rate Advances, stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay the outstanding principal amounts of
the Advances comprising part of the same Borrowing in whole or ratably in part;
provided, however, that (x) each partial prepayment shall be in an aggregate
principal amount not less than $2,000,000 and multiples of $1,000,000 in excess
thereof, and (y) in the case of any such prepayment of any Eurodollar Rate
Advance, the Borrower shall pay all accrued interest to the date of such
prepayment on the portion of such Eurodollar Rate Advance being prepaid and
shall be obligated to reimburse the Lenders in respect thereof pursuant to
Section 8.04(b).

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    Section 2.06  Interest on Advances.  The Borrower shall pay to each Lender
interest accrued on the principal amount of each Advance outstanding from time
to time from the date of such Advance until such principal amount shall be paid
in full, at the following rates per annum:

    (a) Base Rate Advances. If such Advance is a Base Rate Advance, a rate per
annum equal at all times to (i) the Base Rate in effect from time to time plus
(ii) the Applicable Margin, if any, payable quarterly in arrears on the last day
of each March, June, September and December during the term of this Agreement,
commencing December 31, 2000, and on the Termination Date of the applicable
Lender; provided that any amount of principal, interest, fees and other amounts
payable under this Agreement (including, without limitation, the principal
amount of Base Rate Advances, but excluding the principal amount of Eurodollar
Rate Advances) which is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest from the date on which such
amount is due until such amount is paid in full, payable on demand, at a rate
per annum equal at all times to 2% per annum above the Base Rate in effect from
time to time.

    (b) Eurodollar Rate Advances. If such Advance is a Eurodollar Rate Advance,
a rate per annum equal at all times during the Interest Period for such Advance
to the sum of (i) the Adjusted Eurodollar Rate for such Interest Period plus
(ii) the Applicable Margin, payable in arrears on the last day of such Interest
Period and, if such Interest Period has a duration of more than three months, on
the day which occurs during such Interest Period three months from the first day
of such Interest Period; provided that any principal amount of any Eurodollar
Rate Advance which is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest from the date on which such
amount is due until such amount is paid in full, payable on demand, at a rate
per annum equal at all times to (A) during the Interest Period applicable to
such Eurodollar Rate Advance, the greater of (x) 2% per annum above the Base
Rate in effect from time to time and (y) 2% per annum above the rate per annum
required to be paid on such amount immediately prior to the date on which such
amount became due and (B) after the expiration of such Interest Period, 2% per
annum above the Base Rate in effect from time to time.

    Section 2.07  Interest Rate Determination.  The Administrative Agent shall
give prompt notice to the Borrower and the Lenders of the applicable interest
rate determined by the Administrative Agent for purposes of Section 2.06(a) or
2.06(b).

    Section 2.08  Voluntary Conversion or Continuation of Advances.  

    (a) The Borrower may on any Business Day, upon notice given to the
Administrative Agent not later than 12:00 noon (New York City time) on the third
Business Day prior to the date of the Notice of Conversion/Continuation, and
subject to the provisions of Section 2.02(b), (1) Convert all Advances of one
Type comprising the same Borrowing into Advances of another Type and (2) upon
the expiration of any Interest Period applicable to Advances which are
Eurodollar Rate Advances, continue all (or, subject to Section 2.02(b), any
portion of) such Advances as Eurodollar Rate Advances and the succeeding
Interest Period(s) of such continued Advances shall commence on the last day of
the Interest Period of the Advances to be continued; provided, however, that any
Conversion of any Eurodollar Rate Advances into Base Rate Advances shall be made
on, and only on, the last day of an Interest Period for such Eurodollar Rate
Advances. Each such Notice of Conversion/Continuation shall, within the
restrictions specified above, specify (i) the date of such continuation or
Conversion, (ii) the Advances (or, subject to Section 2.02(b), any portion
thereof) to be continued or Converted, (iii) if such continuation is of, or such
Conversion is into, Eurodollar Rate Advances, the duration of the Interest
Period for each such Advance, and (iv) in the case of a continuation of or a
Conversion into a Eurodollar Rate Advance, that no Potential Event of Default or
Event of Default has occurred and is continuing.

    (b) If upon the expiration of the then existing Interest Period applicable
to any Advance which is a Eurodollar Rate Advance, the Borrower shall not have
delivered a Notice of Conversion/

12

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Continuation in accordance with this Section 2.08, then such Advance shall upon
such expiration automatically be Converted to a Base Rate Advance.

    (c) After the occurrence of and during the continuance of a Potential Event
of Default or an Event of Default, the Borrower may not elect to have an Advance
be made or continued as, or Converted into, a Eurodollar Rate Advance after the
expiration of any Interest Period then in effect for that Advance.

    Section 2.09  Increased Costs.  

    (a) If, due to either (i) the introduction of or any change (other than any
change by way of imposition or increase of reserve requirements in the case of
Eurodollar Rate Advances included in the Eurodollar Rate Reserve Percentage) in
or in the interpretation of any law or regulation or (ii) the compliance with
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time, upon demand
by such Lender (with a copy of such demand to the Administrative Agent), pay to
the Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost; provided that
Borrower shall have no obligation to pay an additional amount in respect of any
increased cost attributable to the period before 90 days prior to the date of
such demand. A certificate as to the amount and manner of calculation of such
increased cost, submitted to the Borrower and the Administrative Agent by such
Lender, shall be conclusive and binding for all purposes, absent manifest error.

    (b) If any Lender determines that compliance with any law or regulation or
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of such Lender's commitment to lend hereunder and other
commitments of this type, then, upon demand by such Lender (with a copy of such
demand to the Administrative Agent), the Borrower shall immediately pay to the
Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender or such corporation in the light of such circumstances, to the extent
that such Lender reasonably determines such increase in capital to be allocable
to the existence of such Lender's commitment to lend hereunder; provided that
Borrower shall have no obligation to pay an additional amount in respect of any
additional amount attributable to the period before 90 days prior to the date of
such demand. A certificate as to such amounts and the manner of calculation
thereof submitted to the Borrower and the Administrative Agent by such Lender
shall be conclusive and binding for all purposes, absent manifest error.

    (c) If a Lender shall change its Applicable Lending Office, such Lender
shall not be entitled to receive any greater payment under Section 2.09 or 2.11
than the amount such Lender would have been entitled to receive if it had not
changed its Applicable Lending Office, unless such change was made at the
request of the Borrower or at a time when the circumstances giving rise to such
greater payment did not exist.

    Section 2.10  Payments and Computations.  

    (a) The Borrower shall make each payment hereunder not later than 1:00 P.M.
(New York City time) on the day when due in Dollars to the Administrative Agent
at its address referred to in Section 8.02 in same day funds. Subject to the
immediately succeeding sentence, the Administrative Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest or facility fees ratably (other than amounts payable
pursuant to Section 2.09 or 2.11 or, to the extent the Termination Date is not
the same for all Lenders, pursuant to Section 2.05(a)) to the

13

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Lenders for the account of their respective Applicable Lending Offices, and like
funds relating to the payment of any other amount payable to any Lender to such
Lender for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement. Upon receipt of
principal or interest paid after an Event of Default and an acceleration or a
deemed acceleration of amounts due hereunder, the Administrative Agent will
promptly thereafter cause to be distributed like funds relating to the payment
of principal or interest ratably in accordance with each Lender's outstanding
Advances (other than amounts payable pursuant to Section 2.09 or 2.11) to the
Lenders for the account of their respective Applicable Lending Offices. Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 8.07(c), from and after
the effective date specified in such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder in respect of the
interest assigned thereby to the Lender assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.

    (b) All computations of interest based on the Base Rate shall be made by the
Administrative Agent on the basis of a year of 365 or 366 days, as the case may
be, and all computations of interest based on the Adjusted Eurodollar Rate or
the Federal Funds Rate and of facility fees shall be made by the Administrative
Agent on the basis of a year of 360 days, in each case for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such interest or such fees are payable. Each determination by
the Administrative Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.

    (c) Whenever any payment hereunder shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of payment of interest or facility fee, as the case may be;
provided, however, if such extension would cause payment of interest on or
principal of Eurodollar Rate Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.

    (d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent that the Borrower
shall not have so made such payment in full to the Administrative Agent, each
Lender shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent, at the Federal Funds Rate.

    Section 2.11  Taxes.  

    (a) Any and all payments by the Borrower hereunder shall be made, in
accordance with Section 2.10, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding (i) in the
case of each Lender and each Agent, taxes imposed on its income, and franchise
taxes imposed on it, by the jurisdiction under the laws of which such Lender or
such Agent (as the case may be) is organized or any political subdivision
thereof or in which its principal office is located, (ii) in the case of each
Lender taxes imposed on its net income, and franchise taxes imposed on it, by
the jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof and (iii) in the case of each Lender and each Agent, taxes
imposed by the United States by means of withholding at the source if and to the
extent that such taxes shall be in effect and shall be applicable on the date
hereof

14

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in the case of each Bank and on the effective date of the Assignment and
Acceptance pursuant to which it became a Lender in the case of each other
Lender, on payments to be made to the Agents or such Lender's Applicable Lending
Office (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If the
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder to any Lender or either Agent, (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 2.11) such Lender or such Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law.

    (b) In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from the execution, delivery or registration of, or otherwise
with respect to, this Agreement (hereinafter referred to as "Other Taxes").

    (c) The Borrower will indemnify each Lender and each Agent for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.11) paid by such Lender or such Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within 30 days from the
date such Lender or such Agent (as the case may be) makes written demand
therefor.

    (d) Within 30 days after the date of any payment of Taxes, the Borrower will
furnish to the Administrative Agent, at its address referred to in Section 8.02,
the original or a certified copy of a receipt evidencing payment thereof.

    (e) Each Lender organized under the laws of a jurisdiction outside the
United States, on the date of the Assignment and Acceptance pursuant to which it
becomes a Lender, and from time to time thereafter if requested in writing by
the Borrower (but only so long as such Lender remains lawfully able to do so),
shall provide the Borrower with Internal Revenue Service form W-8BEN or W-8EC1,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, to establish that such Lender is not subject to United States
withholding tax with respect to any payments to such Lender of interest payable
under this Agreement. If the form provided by a Lender at the time such Lender
first becomes a party to this Agreement indicates a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall be
considered excluded from "Taxes" as defined in Section 2.11(a).

    (f)  For any period with respect to which a Lender has failed to provide the
Borrower with the appropriate form described in Section 2.11(e) (other than if
such failure is due to a change in law occurring subsequent to the date on which
a form originally was required to be provided, or if such form otherwise is not
required under the first sentence of subsection (e) above), such Lender shall
not be entitled to indemnification under Section 2.11(a) with respect to Taxes
imposed by the United States; provided, however, that should a Lender become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall, at the expense of such Lender, take such steps as the Lender
shall reasonably request to assist the Lender to recover such Taxes.

    (g) Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 2.11 shall survive the payment in full of principal and interest
hereunder.

    Section 2.12  Sharing of Payments, Etc.  If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the

15

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Advances made by it (other than pursuant to Section 2.09 or 2.11 or, to the
extent the Termination Date is not the same for all Lenders, pursuant to
Section 2.05(a)) in excess of its ratable share of payments on account of the
Advances obtained by all the Lenders, such Lender shall forthwith purchase from
the other Lenders such participations in the Advances made by them as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery together with an amount
equal to such Lender's ratable share (according to the proportion of (i) the
amount of such Lender's required repayment to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.12 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.

    Section 2.13  Evidence of Debt.  

    (a) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Advance owing to such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.

    (b) The Register maintained by the Administrative Agent pursuant to
Section 8.07(c) shall include a control account, and a subsidiary account for
each Lender, in which accounts (taken together) shall be recorded (i) the date,
amount and tenor, as applicable, of each Borrowing, the Type of Advances
comprising such Borrowing and the Interest Period applicable thereto, (ii) the
terms of each Assignment and Acceptance delivered to and accepted by it,
(iii) the amount of any principal or interest due and payable or to become due
and payable from the Borrower to each Lender hereunder, and (iv) the amount of
any sum received by the Administrative Agent from the Borrower hereunder and
each Lender's share thereof.

    (c) The entries made in the Register shall be conclusive and binding for all
purposes, absent manifest error.

    (d) If, in the opinion of any Lender, a promissory note or other evidence of
debt is required, appropriate or desirable to reflect or enforce the
indebtedness of the Borrower resulting from the Advances made, or to be made, by
such Lender to the Borrower, then, upon request of such Lender, the Borrower
shall promptly execute and deliver to such Lender a promissory note
substantially in the form of Exhibit E, payable to the order of such Lender in
an amount up to the maximum amount of Advances payable or to be payable by the
Borrower to the Lender from time to time hereunder.

    Section 2.14  Use of Proceeds.  

    (a) Advances shall be used by the Borrower for commercial paper backup and
for general corporate purposes; provided that proceeds of Advances and proceeds
of commercial paper as to which this Agreement provides backup shall not be used
for any Hostile Acquisition.

    (b) No portion of the proceeds of any Advances under this Agreement shall be
used by the Borrower or any of its Subsidiaries in any manner which might cause
the Advances or the application of such proceeds to violate, or require any
Lender to make any filing or take any other action under, Regulation U,
Regulation T, or Regulation X of the Board of Governors of the Federal Reserve
System or any other regulation of such Board or to violate the Securities
Exchange Act of 1934, in each case as in effect on the date or dates of such
Advances and such use of proceeds.

16

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    Section 2.15  Extension of the Commitment Termination Date.  The Borrower
may, upon not less than 30 days (but not more than 45 days) notice prior to the
then current Commitment Termination Date to the Administrative Agent (which
shall notify each Lender of receipt of such request), propose to extend the
Commitment Termination Date for an additional 364 days measured from the
Commitment Termination Date then in effect. Each Lender shall endeavor to
respond to such request, whether affirmatively or negatively (such determination
to be in the sole discretion of such Lender), by notice to the Borrower and the
Administrative Agent no earlier than 30 days prior to the then current
Commitment Termination Date (but in any event no later than 20 days prior to the
then current Commitment Termination Date). Subject to the execution by the
Borrower, the Administrative Agent and such Lenders of a duly completed
Extension Agreement in substantially the form of Exhibit F hereto, the
Commitment Termination Date applicable to the Commitment of each Lender so
affirmatively notifying the Borrower and the Administrative Agent shall be
extended for the period specified above; provided that no Commitment Termination
Date of any Lender shall be extended unless by the date 10 days prior to the
Termination Date then in effect Lenders having more than 51% in aggregate amount
of the Commitments in effect at the time any such extension is requested shall
have elected so to extend their Commitments. Any Lender which does not give such
notice to the Borrower and the Administrative Agent by the date 10 days prior to
the Commitment Termination Date then in effect shall be deemed to have elected
not to extend as requested, and the Commitment of each non-extending Lender
shall terminate on its Termination Date determined without giving effect to such
requested extension.

    Section 2.16  Substitution of Lenders.  If any Lender requests compensation
from the Borrower under Section 2.09(a) or (b) or Section 2.11 or if any Lender
declines to extend its Commitment Termination Date pursuant to Section 2.15, the
Borrower shall have the right, with the assistance of the Agents, to seek one or
more Eligible Assignees (which may be one or more of the Lenders) reasonably
satisfactory to the Administrative Agent and the Borrower to purchase the
Advances and assume the Commitments of such Lender, and the Borrower, the
Administrative Agent, such Lender, and such Eligible Assignees shall execute and
deliver an appropriately completed Assignment and Acceptance pursuant to
Section 8.07(a) hereof to effect the assignment of rights to and the assumption
of obligations by such Eligible Assignees; provided that (i) such requesting
Lender shall be entitled to compensation under Section 2.09 and 2.11 for any
costs incurred by it prior to its replacement, (ii) no Event of Default, or
Potential Event of Default, has occurred and is continuing, (iii) the Borrower
has satisfied all of its obligations under the Loan Documents relating to such
Lender, including without limitation obligations, if any, under Section 8.04(b),
(iv) in the case of the Commitments of any Lenders that have declined to extend
their Commitment Termination Date pursuant to Section 2.15, the Lenders that
have extended their Commitment Termination Date pursuant to Section 2.15 shall
on a ratable basis have the right (but no obligation), for a period of seven
days following receipt of notice from the Administrative Agent at the request of
the Borrower that the Commitments of non-extending Lenders may be assumed, to
assume the Commitments of such declining Lenders before any other Eligible
Assignees assume such Commitments, and (v) the Borrower shall have paid the
Administrative Agent a $3,500 administrative fee if such replacement Lender is
not an existing Lender.

ARTICLE III
CONDITIONS OF EFFECTIVENESS AND LENDING

    Section 3.01  Conditions Precedent to Effectiveness.  

    (a) The effectiveness of the Agreement is subject to the prior or concurrent
satisfaction of the following conditions and the Administrative Agent shall
receive for the account of each Lender party to

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the Agreement the following, each, unless otherwise noted, dated the Effective
Date, and in form and substance satisfactory to the Administrative Agent and the
Arranger:

     (i) Copies of resolutions of the Board of Directors of the Borrower (or its
Executive Committee, together with evidence of the authority of the Executive
Committee) approving this Agreement, and of all documents evidencing other
necessary corporate action and governmental approvals, if any, with respect to
this Agreement, certified as of a recent date prior to the Effective Date.

    (ii) A certificate of the Secretary or an Assistant Secretary of the
Borrower certifying the names and true signatures of the officers of the
Borrower authorized to sign this Agreement and the other documents to be
delivered by the Borrower hereunder.

    (iii) Certified copies of the Borrower's Certificate of Incorporation,
together with good standing certificates from the state of Delaware and the
State of Minnesota, each to be dated a recent date prior to the Effective Date;

    (iv) Copies of the Borrower's Bylaws, certified as of the Effective Date by
their respective Secretary or an Assistant Secretary;

    (v) Executed originals of this Agreement and the other documents to be
delivered by the Borrower hereunder;

    (vi) A favorable opinion of Mahlon C. Schneider, General Counsel to the
Borrower, substantially in the form of Exhibit G hereto;

   (vii) A favorable opinion of O'Melveny & Myers LLP, counsel for the Agents,
substantially in the form of Exhibit H hereto;

   (viii) A certificate of an authorized officer of the Borrower to the effect
that since October 30, 1999, there has been no material adverse change in the
operations, business or financial or other condition or properties of the
Borrower and its Subsidiaries, taken as a whole;

    (ix) Payment of up front fees to the Lenders, as agreed by and among the
Arranger, Lenders and the Borrower.

    (b) The Administrative Agent shall have received such other approvals,
opinions or documents as the Requisite Lenders through the Administrative Agent
may reasonably request (which request shall be made in sufficient time to allow
the Borrower to comply therewith).

    Section 3.02  Conditions Precedent to Each Borrowing.  The obligation of
each Lender to make an Advance on the occasion of a Borrowing (including the
initial Borrowing) shall be subject to the further conditions precedent that
(x) the Administrative Agent shall have received a Notice of Borrowing with
respect thereto in accordance with Section 2.02 and (y) on the date of such
Borrowing (a) the following statements shall be true (and each of the giving of
the applicable Notice of Borrowing and the acceptance by the Borrower of the
proceeds of such Borrowing shall constitute a representation and warranty by the
Borrower that on the date of such Borrowing such statements are true):

    (i)  The representations and warranties of the Borrower contained in
Section 4.01 (other than in Section 4.01(e)(ii)) are correct on and as of the
date of such Borrowing, before and after giving effect to such Borrowing and to
the application of the proceeds therefrom, as though made on and as of such
date, except to the extent that any such representation or warranty expressly
relates only to an earlier date, in which case they were correct as of such
earlier date;

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    (ii) No event has occurred and is continuing, or would result from such
Borrowing or from the application of the proceeds therefrom, which constitutes
an Event of Default or a Potential Event of Default.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES

    Section 4.01  Representations and Warranties of the Borrower.  The Borrower
represents and warrants as follows:

    (a) Due Organization, etc. The Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation. Each Material Subsidiary is listed in Schedule 4.01(a) and is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation in which failure to be so duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation would have a material adverse effect on the
Borrower and its Subsidiaries, taken as a whole. The Borrower and each of its
Material Subsidiaries are qualified to do business in and are in good standing
under the laws of each jurisdiction in which failure to be so qualified would
have a material adverse effect on the Borrower and its Subsidiaries, taken as a
whole.

    (b) Due Authorization, etc. The execution, delivery and performance by the
Borrower of this Agreement and the other Loan Documents are within the
Borrower's corporate powers, have been duly authorized by all necessary
corporate action, and do not contravene (i) the Borrower's Certificate of
Incorporation or (ii) applicable law or any material contractual restriction
binding on or affecting the Borrower or any of its Material Subsidiaries.

    (c) Governmental Consent. No authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by the Borrower of
this Agreement and the other Loan Documents, other than those that have been
obtained, all of which are listed on Schedule 4.01(c).

    (d) Validity. This Agreement is the legal, valid and binding obligation of
the Borrower enforceable against the Borrower in accordance with its terms
subject to the effect of applicable bankruptcy, insolvency, arrangement,
moratorium and other similar laws affecting creditors' rights generally and to
the application of general principles of equity.

    (e) Condition of the Borrower. (i) The consolidated balance sheet of the
Borrower and its Subsidiaries as at October 30, 1999, and the related
consolidated statements of income and retained earnings of the Borrower and its
Subsidiaries for the fiscal year then ended, copies of which have been
previously furnished to each Bank, fairly present the consolidated financial
condition of the Borrower and its Subsidiaries as at such date and the results
of the operations of the Borrower and its Subsidiaries for the periods ended on
such dates, all in accordance with GAAP consistently applied, and (ii) since
October 30, 1999, there has been no material adverse change in the business,
condition (financial or otherwise), results of operations or prospects of the
Borrower and its Subsidiaries, taken as a whole.

    (f)  Litigation. (i) There is no pending action or proceeding against the
Borrower or any of its Subsidiaries before any court, governmental agency or
arbitrator, and (ii) to the knowledge of the Borrower, there is no pending or
threatened action or proceeding affecting the Borrower or any of its
Subsidiaries before any court, governmental agency or arbitrator, which in
either case, in the reasonable judgement of the Borrower could reasonably be
expected to materially adversely affect the financial condition or operations of
the Borrower and its Subsidiaries, taken as a whole, or with respect to actions
of third parties which purports to affect the legality, validity or
enforceability of this Agreement or the other Loan Documents.

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    (g) Margin Regulations. The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System), and no proceeds of any Advance will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock in any manner that violates, or would
cause a violation of Regulation T, Regulation U or Regulation X. Less than
10 percent of the fair market value of the assets of (i) the Borrower or
(ii) the Borrower and its Subsidiaries consists of Margin Stock.

    (h) Payment of Taxes. The Borrower and each of its Subsidiaries have filed
or caused to be filed all material tax returns (federal, state, local and
foreign) required to be filed and paid all material amounts of taxes shown
thereon to be due, including interest and penalties, except for such taxes as
are being contested in good faith and by proper proceedings and with respect to
which appropriate reserves are being maintained by the Borrower or any such
Subsidiary, as the case may be.

    (i)  Governmental Regulation. The Borrower is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940, each as amended,
or to any Federal or state statute or regulation limiting its ability to incur
indebtedness for money borrowed. No Subsidiary of the Borrower is subject to any
regulation that would limit the ability of the Borrower to enter into or perform
its obligations under this Agreement.

    (j)  ERISA.

    (i)  No ERISA Event which might result in liability of the Borrower or any
of its ERISA Affiliates in excess of $10,000,000 (or, in the case of an event
described in clause (v) of the definition of ERISA Event, $750,000) (other than
for premiums payable under Title IV of ERISA) has occurred or is reasonably
expected to occur with respect to any Pension Plan.

    (ii) Schedule B (Actuarial Information) to the most recently completed
annual report prior to the Effective Date (Form 5500 Series) for each Pension
Plan, which report has been filed with the Internal Revenue Service by the
Borrower or an ERISA Affiliate, copies of which have been furnished to the
Agents, is complete and, to the best knowledge of the Borrower, accurate, and
since the date of such Schedule B there has been no material adverse change in
the funding status of any such Pension Plan.

    (iii) Neither the Borrower nor any ERISA Affiliate has incurred, or, to the
best knowledge of the Borrower, is reasonably expected to incur, any Withdrawal
Liability to any Multiemployer Plan which has not been satisfied or which is or
might be in excess of $10,000,000.

    (iv) Neither the Borrower nor any ERISA Affiliate has been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of ERISA,
and, to the best knowledge of the Borrower, no Multiemployer Plan is reasonably
expected to be in reorganization or to be terminated within the meaning of Title
IV of ERISA.

    (k) Environmental Matters. (i) The Borrower and each of its Subsidiaries is
in compliance in all material respects with all Environmental Laws the
non-compliance with which could reasonably be expected to have a material
adverse effect on the financial condition or operations of the Borrower and its
Subsidiaries, taken as a whole, and (ii) there has been no "release or
threatened release of a hazardous substance" (as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
42 U.S.C. §9601 et seq.) or any other release, emission or discharge into the
environment of any hazardous or toxic substance, pollutant or other materials
from the Borrower's or its Subsidiaries' property other than as permitted under
applicable Environmental Law and other than those which would not have a
material adverse effect on the financial condition or operations of the Borrower
and its Subsidiaries, taken as a whole. Other than disposals (A) for which

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the Borrower has been indemnified in full or (B) which would not have a material
adverse effect on the financial condition or operations of the Borrower and its
Subsidiaries, taken as a whole, all "hazardous waste" (as defined by the
Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq. (1976) and the
regulations thereunder, 40 CFR Part 261 ("RCRA")) generated at the Borrower's or
any Subsidiaries' properties have in the past been and shall continue to be
disposed of at sites which maintain valid permits under RCRA and any applicable
state or local Environmental Law.

    (l)  Disclosure. As of the Effective Date, to the best of the Borrower's
knowledge, no representation or warranty of the Borrower or any of its
Subsidiaries contained in this Agreement or any other Loan Document or in any
other document, certificate or written statement furnished to the Banks by or on
behalf of the Borrower or any of its Subsidiaries contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements contained in such agreements, documents, certificates and
statements not misleading in light of the circumstances in which the same were
made.

ARTICLE V
COVENANTS OF THE BORROWER

    Section 5.01  Affirmative Covenants.  So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will,
unless the Requisite Lenders shall otherwise consent in writing:

    (a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to
comply, with all applicable laws, rules, regulations and orders, such compliance
to include, without limitation, (i) complying with all Environmental Laws and
(ii) paying before the same become delinquent all taxes, assessments and
governmental charges imposed upon it or upon its property except to the extent
contested in good faith, except where failure to so comply would not have a
material adverse effect on the business, condition (financial or otherwise),
operations or properties of the Borrower and its Subsidiaries, taken as a whole.

    (b) Reporting Requirements. Furnish to the Administrative Agent (in
sufficient quantity for delivery to each Lender) for prompt distribution by the
Administrative Agent to the Lenders:

    (i)  as soon as available and in any event within 55 days after the end of
each of the first three quarters of each fiscal year of the Borrower,
consolidated balance sheets as of the end of such quarter and consolidated
statements of source and application of funds of the Borrower and its
Subsidiaries and consolidated statements of income and retained earnings of the
Borrower and its Subsidiaries for such quarter and the period commencing at the
end of the previous fiscal year and ending with the end of such quarter and
certified by the chief financial officer or chief accounting officer of the
Borrower;

    (ii) as soon as available and in any event within 100 days after the end of
each fiscal year of the Borrower, a copy of the annual audit report for such
year for the Borrower and its Subsidiaries, containing financial statements
(including a consolidated balance sheet and consolidated statement of income and
cash flows of the Borrower and its Subsidiaries) for such year, certified by and
accompanied by an opinion of Ernst & Young LLP or other nationally recognized
independent public accountants. The opinion shall be unqualified (as to going
concern, scope of audit and disagreements over the accounting or other treatment
of offsets) and shall state that such consolidated financial statements present
fairly in all material respects the financial position of the Borrower and its
Subsidiaries as at the dates indicated and the results of their operations and
cash flow for the periods indicated in conformity with GAAP and that the
examination by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards;

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    (iii) together with each delivery of the report of the Borrower and its
Subsidiaries pursuant to subsections (i) and (ii) above, a Compliance
Certificate for the relevant accounting period executed by the chief financial
officer, treasurer or assistant treasurer of the Borrower demonstrating in
reasonable detail compliance during and at the end of such accounting periods
with the restriction contained in Section 5.02(d) (and setting forth the
arithmetical computation required to show such compliance) and stating that the
signer has reviewed the terms of this Agreement and has made, or caused to be
made under his or her supervision, a review in reasonable detail of the
transactions and condition of the Borrower and its Subsidiaries during the
accounting period covered by such financial statements and that such review has
not disclosed the existence at the end of such accounting period, and that the
signer does not have knowledge of the existence as at the date of the compliance
certificate, of any condition or event that constitutes an Event of Default or
Potential Event of Default or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action the
Borrower has taken, is taking and proposes to take with respect thereto;

    (iv) as soon as possible and in any event within five days after the
occurrence of each Event of Default and each Potential Event of Default,
continuing on the date of such statement, a statement of an authorized financial
officer of the Borrower setting forth details of such Event of Default or event
and the action which the Borrower has taken and proposes to take with respect
thereto;

    (v) promptly after any material change in accounting policies or reporting
practices, notice and a description in reasonable detail of such change;

    (vi) promptly and in any event within 30 days after the Borrower or any
ERISA Affiliate knows or has reason to know that any ERISA Event referred to in
clause (i) of the definition of ERISA Event with respect to any Pension Plan has
occurred which might result in liability to the PBGC in excess of $500,000 a
statement of the chief accounting officer of the Borrower describing such ERISA
Event and the action, if any, that the Borrower or such ERISA Affiliate has
taken or proposes to take with respect thereto;

   (vii) promptly and in any event within 15 days after the Borrower or any
ERISA Affiliate knows or has reason to know that any ERISA Event (other than an
ERISA Event referred to in (vi) above) with respect to any Pension Plan has
occurred which might result in liability to the PBGC in excess of $500,000, a
statement of the chief accounting officer of the Borrower describing such ERISA
Event and the action, if any, that the Borrower or such ERISA Affiliate has
taken or proposes to take with respect thereto;

   (viii) promptly and in any event within five Business Days after receipt
thereof by the Borrower or any ERISA Affiliate from the PBGC, copies of each
notice from the PBGC of its intention to terminate any Pension Plan or to have a
trustee appointed to administer any Pension Plan;

    (ix) promptly and in any event within 15 days after receipt thereof by the
Borrower or any ERISA Affiliate from the sponsor of a Multiemployer Plan, a copy
of each notice received by the Borrower or any ERISA Affiliate concerning
(w) the imposition of Withdrawal Liability by a Multiemployer Plan in excess of
$500,000, (x) the determination that a Multiemployer Plan is, or is expected to
be, in reorganization within the meaning of Title IV of ERISA, (y) the
termination of a Multiemployer Plan within the meaning of Title IV of ERISA or
(z) the amount of liability incurred, or expected to be incurred, by the
Borrower or any ERISA Affiliate in connection with any event described in
clause (w), (x) or (y) above;

    (x) promptly after the commencement thereof, notice of all material actions,
suits and proceedings before any court or government department, commission,
board, bureau, agency or

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instrumentality, domestic or foreign, affecting the Borrower or any of its
Subsidiaries, of the type described in Section 4.01(f);

    (xi) promptly after the occurrence thereof, notice of (A) any event which
makes any of the representations contained in Section 4.01(k) inaccurate in any
material respect or (B) the receipt by the Borrower of any notice, order,
directive or other communication from a governmental authority alleging
violations of or noncompliance with any Environmental Law which could reasonably
be expected to have a material adverse effect on the financial condition of the
Borrower and its Subsidiaries, taken as a whole;

   (xii) promptly after any change in the rating established by S&P or Moody's,
as applicable, with respect to Long-Term Debt, a notice of such change, which
notice shall specify the new rating, the date on which such change was publicly
announced, and such other information with respect to such change as any Lender
through either Agent may reasonably request;

   (xiii) promptly after the sending or filing thereof, copies of all reports
which the Borrower sends to any of its public security holders, and copies of
all reports and registration statements which the Borrower files with the SEC or
any national security exchange;

   (xiv) promptly after the Borrower or any ERISA Affiliate creates any employee
benefit plan to provide health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former employee of the Borrower or
any of its ERISA Affiliates (except as provided in Section 4980B of the Code and
except as provided under the terms of any employee welfare benefit plans
provided pursuant to the terms of collective bargaining agreements) under the
terms of which the Borrower and/or any of its ERISA Affiliates are not permitted
to terminate such benefits, a notice detailing such plan; and

   (xv) such other information respecting the condition or operations, financial
or otherwise, of the Borrower or any of its Subsidiaries as any Lender through
either Agent may from time to time reasonably request.

    (c) Corporate Existence, Etc. Preserve and maintain, and cause each of its
Material Subsidiaries to preserve and maintain, at all times its fundamental
business and preserve and keep in full force and effect its corporate existence
(except as permitted under Section 5.02(b) hereof) and all rights, franchises
and licenses necessary or desirable in the normal conduct of its business;
provided, however, that this paragraph (c) shall not apply in any case when, in
the good faith business judgment of the Borrower, such preservation or
maintenance is neither necessary nor appropriate for the prudent management of
the business of the Borrower.

    (d) Inspection. Permit, and cause each of its Material Subsidiaries to
permit, any authorized representative designated by the Administrative Agent or
any Lender; at the expense of the Administrative Agent or such Lender, to visit
and inspect any of the properties of the Borrower or any of its Material
Subsidiaries, including its and their financial and accounting records, and to
take copies and to take extracts therefrom, and discuss its and their affairs,
finances and accounts with its and their officers and independent public
accountants, all during normal hours, upon reasonable notice and as often as may
be reasonably requested.

    (e) Insurance. Maintain, and cause each of its Material Subsidiaries to
maintain, insurance to such extent and covering such risks as is usual for
companies engaged in the same or similar business and on request will advise the
Lenders of all insurance so carried.

    (f)  Taxes. Pay and discharge, and cause each of its Subsidiaries to pay and
discharge, before the same shall become delinquent, (x) all taxes, assessments
and governmental charges or levies imposed upon it or upon its property and
(y) all lawful claims that, if unpaid, might by law become a lien upon their
property; provided, however, that neither the Borrower nor any such Subsidiary
shall be required

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to pay or discharge any such tax, assessment, charge or levy (A) that is being
contested in good faith and by proper proceedings and for which appropriate
reserves are being maintained, or (B) the failure to pay or discharge which
would not have a material adverse effect on the financial condition or
operations of the Borrower and its Subsidiaries taken as a whole.

    (g) Maintenance of Books, Etc. Keep, and cause each of its Subsidiaries to
keep, proper books of records and accounts, in which full and correct entries
shall be made of all financial transactions and the assets and business of the
Borrower and each of its domestic Subsidiaries in accordance with GAAP and with
respect to foreign Subsidiaries in accordance with customary accounting
standards in the applicable jurisdiction, in each case consistently applied and
consistent with prudent business practices.

    Section 5.02  Negative Covenants.  So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, without the written
consent of the Requisite Lenders:

    (a) Liens, Etc. The Borrower will not create or suffer to exist, or permit
any of its Subsidiaries to create or suffer to exist, any Lien, upon or with
respect to any of its properties, whether now owned or hereafter acquired, or
assign, or permit any of its Subsidiaries to assign, any right to receive
income, in each case to secure or provide for the payment of any Debt of any
Person, unless the Borrower's obligations hereunder shall be secured equally and
ratably with, or prior to, any such Debt; provided however that the foregoing
restriction shall not apply to the following Liens which are permitted:

     (i) Liens on assets of any Subsidiary of the Borrower existing at the time
such Person becomes a Subsidiary (other than any such Lien created in
contemplation of becoming a Subsidiary);

    (ii) purchase money Liens upon or in any property acquired or held by the
Borrower or any Subsidiary in the ordinary course of business to secure the
purchase price of such property or to secure Debt incurred solely for the
purpose of financing the acquisition of such property (provided that the amount
of Debt secured by such Lien does not exceed 100% of the purchase price of such
property and transaction costs relating to such acquisition) and Liens existing
on such property at the time of its acquisition (other than any such Lien
created in contemplation of such acquisition); and the interest of the lessor
thereof in any property that is subject to a Capital Lease;

    (iii) any Lien securing Debt that was incurred prior to or during
construction or improvement of property for the purpose of financing all or part
of the cost of such construction or improvement, provided that the amount of
Debt secured by such Lien does not exceed 100% of the fair market value of such
property after giving effect to such construction or improvement;

    (iv) any Lien securing Debt of a Subsidiary owing to the Borrower;

    (v) Liens resulting from any extension, renewal or replacement (or
successive extensions, renewals or replacements), in whole or in part, of any
Debt secured by any Lien referred to in clauses (i), (ii) and (iii) above so
long as (x) the aggregate principal amount of such Debt shall not increase as a
result of such extension, renewal or replacement and (y) Liens resulting from
any such extension, renewal or replacement shall cover only such property which
secured the Debt that is being extended, renewed or replaced;

    (vi) Liens on accounts receivable resulting from the sale of such accounts
receivable by the Borrower or a Subsidiary of the Borrower, so long as, at any
time, the aggregate outstanding amount of such accounts receivable does not,
together with the amount of Debt secured by Liens permitted by clause (vii),
exceed 10% of the consolidated stockholder's equity of the Borrower and its
consolidated subsidiaries; and

   (vii) Liens other than Liens described in clauses (i) through (vi) hereof,
whether now existing or hereafter arising, securing Debt in an aggregate amount
that does not, together with the

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amount of accounts receivable subject to Liens permitted by clause (vi), exceed
10% of the consolidated stockholder's equity of the Borrower and its
consolidated subsidiaries.

    (b) Restrictions on Fundamental Changes. The Borrower will not, and will not
permit any of its Material Subsidiaries to, merge or consolidate with or into,
or convey, transfer, lease or otherwise dispose of (whether in one transaction
or in a series of transactions) all or a substantial portion of its assets
(whether now owned or hereafter acquired) to any Person, or enter into any
partnership, joint venture, syndicate, pool or other combination, unless no
Event of Default or Potential Event of Default has occurred and is continuing or
would result therefrom and, in the case of a merger or consolidation of the
Borrower, (i) the Borrower is the surviving entity or (ii) the surviving entity
assumes all of the Borrower's obligations under this Agreement in a manner
satisfactory to the Requisite Lenders.

    (c) Plan Terminations. The Borrower will not, and will not permit any ERISA
Affiliate to, terminate any Pension Plan so as to result in liability of the
Borrower or any ERISA Affiliate to the PBGC in excess of $25,000,000, or permit
to exist any occurrence of an event or condition which reasonably presents a
material risk of a termination by the PBGC of any Pension Plan with respect to
which the Borrower or any ERISA Affiliate would, in the event of such
termination, incur liability to the PBGC in excess of $25,000,000.

    (d) Maximum Debt Ratio. The Borrower will not permit the ratio of (i) Net
Debt as of the end of any fiscal quarter to (ii) EBITDA, for each period
consisting of the four consecutive fiscal quarters then ended, to exceed 2.50 to
1.00.

ARTICLE VI
EVENTS OF DEFAULT

    Section 6.01  Events of Default.  If any of the following events ("Events of
Default") shall occur and be continuing:

    (a) The Borrower shall fail to pay any principal of any Advance when the
same becomes due and payable or the Borrower shall fail to pay any interest on
any Advance or any fees or other amounts payable hereunder within five Business
Days of the date due; or

    (b) Any representation or warranty made or deemed made by the Borrower
herein or by the Borrower pursuant to this Agreement (including any notice,
certificate or other document delivered hereunder) shall prove to have been
incorrect in any material respect when made; or

    (c) The Borrower shall fail to perform or observe (i) any term, covenant or
agreement contained in this Agreement (other than any term, covenant or
agreement contained in Section 5.01(b)(iv), 5.01(c) or 5.02) on its part to be
performed or observed and the failure to perform or observe such other term,
covenant or agreement shall remain unremedied for 30 days after the Borrower
obtains knowledge of such breach or (ii) any term, covenant or agreement
contained in Section 5.01(b)(iv), 5.01(c) or 5.02; or

    (d) The Borrower or any of its Subsidiaries shall fail to pay any principal
of or premium or interest on any Debt that is outstanding in a principal amount
at least equal to 2% of consolidated net worth of the Borrower and its
consolidated Subsidiaries in the aggregate (but excluding Debt arising under
this Agreement) of the Borrower or such Subsidiary (as the case may be), when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or the Borrower or any of its Subsidiaries
shall fail to perform or observe any other agreement, term or condition
contained in any agreement or instrument relating to any such Debt (or if any
other event or condition of default under any such agreement or instrument shall
exist) and such failure, event or condition shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such failure, event or

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condition is to accelerate, or to permit the acceleration of, the maturity of
such Debt; or any such Debt shall be declared to be due and payable as a result
of such failure, event or condition; or

    (e) The Borrower or any of its Material Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Borrower or
any of its Material Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for a substantial part of
its property and, in the case of any such proceeding instituted against it (but
not instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 60 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property) shall occur; or
the Borrower or any of its Material Subsidiaries shall take any corporate action
to authorize any of the actions set forth above in this subsection (e); or

    (f)  Any judgment or order for the payment of money in excess of 2% of
consolidated net worth of the Borrower and its consolidated Subsidiaries,
individually or in the aggregate, shall be rendered against the Borrower or any
of its Material Subsidiaries and either (i) enforcement proceedings shall have
been commenced by any creditor upon a final or nonappealable judgment or order
or (ii) there shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

    (g) 

    (i)  Any ERISA Event with respect to a Pension Plan shall have occurred and,
30 days after notice thereof shall have been given to the Borrower by either of
the Agents, (x) such ERISA Event shall still exist and (y) the sum (determined
as of the date of occurrence of such ERISA Event) of the Insufficiency of such
Pension Plan and the Insufficiency of any and all other Pension Plans with
respect to which an ERISA Event shall have occurred and then exist (or in the
case of a Pension Plan with respect to which an ERISA Event described in
clause (iii) through (vi) of the definition of ERISA Event shall have occurred
and then exist, the liability related thereto) is equal to or greater than
$25,000,000; or

    (ii) The Borrower or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred an aggregate Withdrawal
Liability for all years to such Multiemployer Plan in an amount that, when
aggregated with all other amounts then required to be paid to Multiemployer
Plans by the Borrower and its ERISA Affiliates as Withdrawal Liability
(determined as of the date of such notification), exceeds $25,000,000 and it is
reasonably likely that all amounts then required to be paid to Multiemployer
Plans by the Borrower and its ERISA Affiliates as Withdrawal Liability will
exceed $25,000,000; or

    (iii) The Borrower or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
and it is reasonably likely that as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and its ERISA
Affiliates to all Multiemployer Plans that are then in reorganization or being
terminated have been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan year of such Multiemployer Plan immediately
preceding the plan year in which the reorganization or termination occurs by an
amount exceeding $25,000,000; or

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    (h) 

    (i)  any Person or two or more Persons (other than the Hormel Foundation)
acting in concert shall have acquired beneficial ownership or the right to
acquire beneficial ownership (within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Securities Exchange Act of 1934), directly or
indirectly, of securities of the Borrower (or other securities convertible into
such securities) representing 35% or more of the combined voting power of all
securities of the Borrower entitled to vote in the election of directors, other
than securities having such power only by reason of the happening of a
contingency ("Share Acquisition"); or

    (ii) individuals who either (1) have been directors of the Borrower for the
prior 24-month period or (2) were nominated or elected by directors in office
during such period (but prior to any Share Acquisition) shall cease for any
reason to constitute a majority of the board of directors of the Borrower;

then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Requisite Lenders, by notice to the Borrower,
declare the obligation of each Lender to make Advances to be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the request, or
may with the consent, of the Requisite Lenders, by notice to the Borrower,
declare the Advances, all interest thereon and all other amounts payable under
this Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided, however, that in the
event of an actual or deemed entry of an order for relief with respect to the
Borrower or any of its Subsidiaries under the Bankruptcy Code or the expiration
of the 60-day grace period provided in Section 6.01(e), (A) the obligation of
each Lender to make Advances shall automatically be terminated and (B) the
Advances, all such interest and all such amounts shall automatically become and
be due and payable, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Borrower.

ARTICLE VII
ADMINISTRATIVE AGENT

    Section 7.01  Authorization and Action.  Each Lender hereby appoints and
authorizes CUSA to act as the Administrative Agent under this Agreement and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
the Loan Documents (including, without limitation, enforcement or collection of
the Advances and other amounts owing hereunder), the Administrative Agent shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Requisite
Lenders, and such instructions shall be binding upon all Lenders; provided,
however, that the Administrative Agent shall not be required to take any action
which exposes the Administrative Agent to personal liability or which is
contrary to any of the Loan Documents or applicable law. The Administrative
Agent agrees to give to each Lender prompt notice of each notice given to it by
the Borrower pursuant to the terms of the Loan Documents.

    Section 7.02  Agents' Reliance, Etc.  Neither the Agents nor any of their
respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
any of the Loan Documents, except for their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the Agents:
(i) may treat the Lender that made any Advance as the payee thereof until the
Administrative Agent receives and accepts an Assignment and Acceptance entered
into by such Lender, as assignor, and an Eligible Assignee, as assignee, as
provided in Section 8.07; (ii) may consult with legal counsel (including counsel
for the Borrower), independent public accountants and other experts selected by
it and shall not be

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liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii) make
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations (whether written or
oral) made in or in connection with any of the Loan Documents; (iv) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of any of the Loan Documents on the
part of the Borrower or to inspect the property (including the books and
records) of the Borrower; (v) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any of the Loan Documents or any other instrument or document furnished
pursuant hereto; and (vi) shall incur no liability under or in respect of any of
the Loan Documents by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier) believed by it to be genuine
and signed or sent by the proper party or parties.

    Section 7.03  CUSA and Affiliates.  With respect to its respective
Commitment and the respective Advances made by it, CUSA shall have the same
rights and powers under this Agreement as any other Lender and may exercise the
same as though it were not an Agent; and the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated, include CUSA respectively in its
individual capacity. CUSA and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, acquire equity interests in and
generally engage in any kind of commercial banking, investment banking, trust,
financial advisory, underwriting or other business with, the Borrower, any of
its Subsidiaries and other Affiliates and any Person who may do business with or
own securities of the Borrower or any such Subsidiary or Affiliate, all as if
CUSA was not an Agent and without any duty to account therefor or provide notice
thereof, to the Lenders. The Lenders acknowledge that, pursuant to such
activities, CUSA and its Affiliates may receive information regarding the
Borrower or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Borrower or an Affiliate) and
acknowledge that the Administrative Agent shall not be under any obligation to
provide such information to them.

    Section 7.04  Lender Credit Decision.  Each Lender acknowledges that it has,
independently and without reliance upon any Agent or any other Lender and based
on the financial statements referred to, and the representations and warranties
contained, in Section 4.01 and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Agents or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement.

    Section 7.05  Indemnification.  The Lenders agree to indemnify the Agents
(to the extent not reimbursed by the Borrower), ratably according to the
respective principal amounts of the Advances then held by each of them (or if no
such Advances are at the time outstanding or if any such Advances are held by
Persons which are not Lenders, ratably according to the respective amounts of
their Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against any such Agent in any way relating to or arising out of
any of the Loan Documents or any action taken or omitted by such Agent under any
of the Loan Documents, provided that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such Agent's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender agrees to reimburse such Agent promptly upon demand for its ratable
share of any reasonable out-of-pocket expenses (including counsel fees) incurred
by the Agent in connection with the preparation, execution, delivery,
administration, syndication, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or

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responsibilities under, the Loan Documents, to the extent that such Agent is not
reimbursed for such expenses by the Borrower.

    Section 7.06  Successor Administrative Agent.  The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrower and may be removed at any time with or without cause by the Requisite
Lenders. Upon any such resignation or removal, the Requisite Lenders shall have
the right to appoint a successor Administrative Agent (such Administrative
Agent, so long as no Event of Default has occurred and is continuing, being
reasonably acceptable to the Borrower). If no successor Administrative Agent
shall have been so appointed by the Requisite Lenders, and shall have accepted
such appointment, within 30 days after the retiring Administrative Agent's
giving of notice of resignation or the Requisite Lenders' removal of the
retiring Administrative Agent, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent which shall be a
commercial bank organized under the laws of the United States of America or of
any State thereof or any Bank and, in each case having a combined capital and
surplus of at least $50,000,000 (and so long as no Event of Default has occurred
and is continuing, that is reasonably acceptable to the Borrower). Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under the Loan Documents.
After any retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under the Loan Documents.

    Section 7.07  Other Agents.  None of the Lenders identified on the facing
page of this Agreement or elsewhere herein as a "Syndication Agent", a
"Documentation Agent", or an "Arranger" shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such. Without limiting the foregoing, none of the
Lenders so identified shall have or be deemed to have any fiduciary relationship
with any Lender. Each Lender acknowledges that it has not relied, and will not
rely, on any of the Lenders so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.

ARTICLE VIII
MISCELLANEOUS

    Section 8.01  Amendments, Etc.  No amendment or waiver of any provision of
this Agreement, nor consent to any departure by the Borrower therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Borrower and the Requisite Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders, do any of the following: (a) waive any of
the conditions specified in Section 3.01, (b) increase the Commitments of the
Lenders or subject the Lenders to any additional obligations, (c) reduce the
principal of, or interest on, the Advances or any fees or other amounts payable
hereunder, (d) postpone any date fixed for any payment of principal of, or
interest on, the Advances or any fees or other amounts payable hereunder,
(e) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Advances, or the number of Lenders, which shall be
required for the Lenders or any of them to take any action hereunder or
(f) amend Section 2.14 or this Section 8.01; and provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by an Agent in
addition to the Lenders required above to take such action, affect the rights or
duties of such Agent under this Agreement.

    Section 8.02  Notices, Etc.  All notices and other communications provided
for hereunder shall be in writing (including telecopier communication) and
mailed, telecopied or delivered, if to the Borrower,

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at its address at 1 Hormel Place, Austin, Minnesota 55912-3690, Attn: Chief
Financial Officer, Telecopier (507) 434-6981, Telephone (507) 437-5663; if to
any Bank, at its Domestic Lending Office specified opposite its name on
Schedule I hereto; if to any other Lender, at its Domestic Lending Office
specified in the Assignment and Acceptance pursuant to which it became a Lender;
if to the Administrative Agent at its address at Citicorp USA, Inc., Global
Loans Operations, 2 Penns Way, Suite 200, New Castle, Delaware 19720; Attention:
Brian Maxwell, Telecopier (302) 894-6120, Telephone (302) 894-6023 (with copy of
notices, other than those given pursuant to Sections 2.1 through 2.13 hereof, to
Citicorp USA, Inc., 500 W. Madison Street, 7th Floor, Chicago, Illinois;
Attention: Shafique Janmohamed), Telecopier (312) 627-3990, Telephone
(312) 627-5164, or, as to the Borrower or the Administrative Agent, at such
other address as shall be designated by such party in a written notice to the
Borrower and the Administrative Agent. All such notices and communications
shall, when personally delivered, mailed or telecopied, be effective when
personally delivered, after five (5) days after being deposited in the mails, or
when confirmed by telecopy response, respectively, except that notices and
communications to the Administrative Agent pursuant to Article II or VII shall
not be effective until received by the Administrative Agent.

    Section 8.03  No Waiver; Remedies.  No failure on the part of any Lender or
the Administrative Agent to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

    Section 8.04  Costs, Expenses and Indemnification.  

    (a) The Borrower agrees, regardless of whether the Effective Date occurs, to
pay promptly on demand all reasonable costs and out-of-pocket expenses of the
Administrative Agent in connection with the preparation, execution, delivery,
administration, syndication, modification and amendment of this Agreement, and
the other documents to be delivered hereunder or thereunder, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Administrative Agent (including the allocated time charges of the Administrative
Agent's legal departments, as their respective internal counsel) with respect
thereto and with respect to advising the Administrative Agent as to its rights
and responsibilities under this Agreement. The Borrower further agrees to pay
promptly on demand all costs and expenses of the Agents and of each Lender, if
any (including, without limitation, reasonable counsel fees and out-of-pocket
expenses), in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement and the other documents to be
delivered hereunder or thereunder, including, without limitation, reasonable
counsel fees and out-of-pocket expenses in connection with the enforcement of
rights under this Section 8.04(a).

    (b) If any payment of principal of any Eurodollar Rate Advance is made other
than on the last day of the interest period for such Advance, as a result of a
payment pursuant to Section 2.05 or acceleration of the maturity of the Advances
pursuant to Section 6.01 or for any other reason, the Borrower shall, upon
demand by any Lender (with a copy of such demand to the Administrative Agent),
pay to the Administrative Agent for the account of such Lender any amounts
required to compensate such Lender for any additional losses, costs or expenses
which it may reasonably incur as a result of such payment, including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Advance; provided that conversion of a Eurodollar Rate Advance to
a Base Rate Advance in accordance with the provisions of
Section 2.02(b)(iii) shall not be considered a payment for purposes of this
Section 8.04(b).

    (c) The Borrower agrees to indemnify and hold harmless each Agent, each
Lender and each director, officer, employee, agent, attorney and affiliate of
each Agent and each Lender (each an

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"indemnified person") in connection with any expenses, losses, claims, damages
or liabilities to which an Agent, a Lender or such indemnified persons may
become subject, insofar as such expenses, losses, claims, damages or liabilities
(or actions or other proceedings commenced or threatened in respect thereof)
arise out of the transactions referred to in this Agreement or arise from any
use or intended use of the proceeds of the Advances, or in any way arise out of
activities of the Borrower that violate Environmental Laws, and to reimburse
each Agent, each Lender and each indemnified person, upon their demand, for any
reasonable legal or other out-of-pocket expenses incurred in connection with
investigating, defending or participating in any such loss, claim, damage,
liability, or action or other proceeding, whether commenced or threatened
(whether or not such Agent, such Lender or any such person is a party to any
action or proceeding out of which any such expense arises). Notwithstanding the
foregoing, the Borrower shall have no obligation hereunder to an indemnified
person with respect to indemnified liabilities which have resulted from the
gross negligence, bad faith or willful misconduct of such indemnified person.

    Section 8.05  Right of Set-off.  Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Advances due and payable pursuant to the
provisions of Section 6.01, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (time or demand, provisional or final, or general, but not
special) at any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of the Borrower against any and all
of the obligations of the Borrower now or hereafter existing under this
Agreement that are then due and payable, whether or not such Lender shall have
made any demand under this Agreement. Each Lender agrees promptly to notify the
Borrower after any such set-off and application made by such Lender; provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which such Lender may have.

    Section 8.06  Binding Effect; Entire Agreement.  

    (a) This Agreement shall be deemed to have been executed and delivered when
it shall have been executed by the Borrower and the Administrative Agent and
when the Administrative Agent shall have been notified by each Bank that such
Bank has executed it and thereafter shall be binding upon and inure to the
benefit of the Borrower, the Administrative Agent and each Lender and their
respective successors and permitted assigns, except that the Borrower shall not
have the right to assign its rights hereunder or any interest herein without the
prior written consent of all Lenders.

    (b) This Agreement (including the Schedules and Exhibits attached hereto)
shall constitute the entire agreement among the parties hereto with respect to
the subject matter hereof and supersede all prior agreements, understandings and
negotiations, both written and oral, among the parties with respect to such
subject matter.

    Section 8.07  Assignments and Participations.  

    (a) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment and the Advances owing to it);
provided, however, that (i) each such assignment shall be of a constant, and not
a varying, percentage of all of the assigning Lender's rights and obligations
under this Agreement, (ii) after giving effect to any such assignment, (1) the
assigning Lender shall no longer have any Commitment or (2) the amount of the
Commitment of both the assigning Lender and the Eligible Assignee party to such
assignment (in each case determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall not be less than $5,000,000
and assigned amounts must be in increments of $1,000,000, (iii) each such
assignment shall be to an Eligible Assignee, (iv) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its

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acceptance and recording in the Register, an Assignment and Acceptance, and a
processing and recordation fee of $3,500 to the Administrative Agent, and
(v) the Borrower (unless an Event of Default shall exist and be continuing) and
the Administrative Agent shall have consented to such assignment, which consent
shall not be unreasonably withheld, unless such assignment is to an Affiliate of
a Lender, in which case no such consent shall be necessary (but such Lender
shall notify the Borrower and the Administrative Agent of any such assignment to
an Affiliate of an Assigning Lender). Upon such execution, delivery, acceptance
and recording, from and after the effective date specified in each Assignment
and Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto); provided that with respect to any amounts payable as of the date of
such assignment pursuant to Sections 2.09, 2.11 or 8.04, the Borrower shall have
no greater obligation to the assignee then it had to the assignor. Any Lender
may at any time pledge or assign all or any portion of its rights hereunder to a
Federal Reserve Bank; provided, that no such pledge or assignment shall release
such Lender from any of its obligations hereunder.

    (b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with any of the Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of any of the Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (ii) such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under any of the Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; (iii) such assignee
confirms that it has received a copy of the Loan Documents, together with copies
of the financial statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agents, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents; (v) such assignee confirms that it
is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to the Administrative
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

    (c) Within five (5) days of its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee representing that it is an
Eligible Assignee (together with a processing and recordation fee of $3,500 with
respect thereto) and upon evidence of consent of the Borrower and the
Administrative Agent thereto, which consent shall not be unreasonably withheld,
the Administrative Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit A hereto, (1) accept such
Assignment and Acceptance and (2) record the information contained therein in
the Register. All communications with the Borrower with respect to such consent
of the Borrower shall be sent pursuant to Section 8.02.

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    (d) The Administrative Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, the Commitment Termination Date of, and principal
amount of the Advances owing to, each such Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of the Loan Documents. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.

    (e) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment and
the Advances owing to it; provided, however, that (i) such Lender's obligations
under this Agreement (including, without limitation, its Commitment to the
Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Advance for all purposes
of this Agreement, (iv) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Loan Documents,
(v) no Lender shall grant any participation under which the participant shall
have rights to require such Lender to take or omit to take any action hereunder
or under the other Loan Documents or approve any amendment to or waiver of this
Agreement or the other Loan Documents, except to the extent such amendment or
waiver would: (A) extend the Termination Date of such Lender; or (B) reduce the
interest rate or the amount of principal or fees applicable to Advances or the
Commitment in which such participant is participating or change the date on
which interest, principal or fees applicable to Advances or the Commitment in
which such participant is participating are payable, and (vi) the Person
purchasing such participation shall agree to customary provisions relating to
the confidentiality of non-public information received by such Person in
connection with its purchase of the participation.

    (f)  Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower; provided that, prior to any such disclosure, the assignee or
Participant or proposed assignee or participant shall agree to preserve the
confidentiality of any confidential information relating to the Borrower
received by it from such Lender.

    (g) 

     (i) Notwithstanding anything to the contrary contained herein, any Lender
(a "Designating Lender") may grant to one or more special purpose funding
vehicles (each, an "SPV"), identified as such in writing from time to time by
the Designating Lender to the Administrative Agent and the Borrowers, the option
to provide to the Borrower all or any part of any Loan that such Designating
Lender would otherwise be obligated to make to the Borrower pursuant to this
Agreement; provided that (1) nothing herein shall constitute a commitment by any
SPV to make any Loan, (2) if an SPV elects not to exercise such option or
otherwise fails to provide all or any part of such Loan, the Designating Lender
shall be obligated to make such Loan pursuant to the terms hereof and (3) the
Designating Lender shall remain liable for any indemnity or other payment
obligation with respect to its Commitment hereunder. The making of a Loan by an
SPV hereunder shall utilize the Commitment of the Designating Lender to the same
extent, and as if, such Loan were made by such Designating Lender;

    (ii) As to any Loans or portion thereof made by it, each SPV shall have all
the rights that a Lender making such Loans or portion thereof would have had
under this Agreement; provided,

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however, that each SPV shall have granted to its Designating Lender an
irrevocable power of attorney to deliver and receive all communications and
notices under this Agreement (and any related documents) and to exercise on such
SPV's behalf, all of such SPV's voting rights under this Agreement. No
additional Note shall be required to evidence the Loans or portion thereof made
by an SPV; and the related Designating Lender shall be deemed to hold its Note
(if any) as agent for such SPV to the extent of the Loans or portion thereof
funded by such SPV. In addition, any payments for the account of any SPV shall
be paid to its Designating Lender as agent for such SPV;

    (iii) Each party hereto hereby agrees that no SPV shall be liable for any
indemnity or payment under this Agreement for which a Lender would otherwise be
liable; if an SPV, but for the operation of this sentence, would have liability
for any such indemnity or payment, the Designating Lender shall be liable;

    (iv) In addition, notwithstanding anything to the contrary contained in this
Section 8.07(g) or otherwise in this Agreement, any SPV may (1) at any time and
without paying any processing fee therefore, assign or participate all or a
portion of its interest in any Loans to the Designating Lender or to any
financial institutions providing liquidity and/or credit support to or for the
account of such SPV to support the funding or maintenance of Loans; provided
that the Designating Lender in the event of an assignment or participation to
any other financial institution shall remain liable for any indemnity or other
payment obligation with respect to its Commitment, and shall be obligated to
make such Loan pursuant to the terms hereof and of its Commitment and
(2) disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancements to such SPV.

    Section 8.08  Confidentiality.  Each Agent and each Lender agrees, insofar
as is legally possible, to use its reasonable best efforts to keep in confidence
all financial data and other information relative to the affairs of the Borrower
heretofore furnished or which may hereafter be furnished to it pursuant to the
provisions of this Agreement; provided, however, that this Section 8.08 shall
not be applicable to information which is or becomes available to a Lender from
a source other than the Borrower; and provided further that such obligation of
each Agent and each Lender shall be subject to each Agent's and each Lender's
(a) obligation to disclose such information pursuant to a request or order under
applicable laws and regulations or pursuant to a subpoena or other legal
process, (b) right to disclose any such information to bank examiners, its
affiliates, bank, auditors, accountants and its counsel and other Agents and
Lenders, and (c) right to disclose any such information, (i) in connection with
the transactions set forth herein including assignments and sales of
participation interests pursuant to Section 8.07 hereof or (ii) in or in
connection with any litigation or dispute involving the Agents, the Lenders and
the Borrower or any transfer or other disposition by such Lender of any of its
Advances or other extensions of credit by such Lender to the Borrower or any of
its Subsidiaries, provided that information disclosed pursuant to this proviso
shall be so disclosed subject to such procedures as are reasonably calculated to
maintain the confidentiality thereof.

    Section 8.09  Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.

    Section 8.10  Execution in Counterparts.  This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

    Section 8.11  Consent to Jurisdiction; Waiver of Immunities.  The Borrower
hereby irrevocably submits to the jurisdiction of any New York state or Federal
court sitting in New York, New York in any action or proceeding arising out of
or relating to this Agreement, and the Borrower hereby

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irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such New York state or Federal court. The Borrower
hereby irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding. The Borrower agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Section 8.11 shall affect the right of any Lender or Agent to serve legal
process in any other manner permitted by law or affect the right of any Lender
or Agent to bring any action or proceeding against the Borrower or its property
in the courts of any other jurisdiction.

    Section 8.12  Waiver of Trial by Jury.  THE BORROWER, THE BANKS, THE AGENTS
AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, OTHER LENDERS EACH HEREBY AGREES
TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims and all
other common law and statutory claims. The Borrower, the Banks, the Agents and,
by its acceptance of the benefits hereof, other Lenders each (i) acknowledges
that this waiver is a material inducement for the Borrower, the Lenders and the
Agents to enter into a business relationship, that the Borrower, the Lenders and
the Agents have already relied on this waiver in entering into this Agreement or
accepting the benefits thereof, as the case may be, and that each will continue
to rely on this waiver in their related future dealings and (ii) further
warrants and represents that each has reviewed this waiver with its legal
counsel, and that each knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.

[Remainder of page intentionally left blank]

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    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

    HORMEL FOODS CORPORATION  
   
   
By:  
/s/ Joel W. Johnson
Name: Joel W. Johnson
Title: Chairman, President & CEO
Notice Address:
Attn: Chief Financial Officer
1 Hormel Place
Austin, Minnesota 55912-3690

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      CITICORP USA, INC., as Administrative Agent and a Lender  
   
   
By:  
/s/ Henry J. Matthews
Name: Henry J. Matthews
Title: Vice President
Notice Address:
Global Loans Operations
Attn: Brian Maxwell
2 Penns Way, Suite 200
New Castle, Delaware 19702

S-2

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      SUNTRUST BANK
(As a Lender)  
   
   
By:  
/s/ Brian M. Davis
Name: Brian M. Davis
Title: Director
Notice Address:
Attn:

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      U.S. BANK NATIONAL ASSOCIATION  
   
   
By:  
/s/ Noel Austin
Name: Noel Austin
Title: President—Austin Minnesota Office
Notice Address: U.S. Bank
301 North Main Street
Austin, Minnesota 55912
Attn: Noel Austin

S-4

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      FUJI BANK  
   
   
By:  
/s/ Peter L. Chinnici
Name: Peter L. Chinnici
Title: Senior Vice President & Group Head
Notice Address:
Corporate Banking Division
Attn: James S. Bell
225 W. Wacker Drive, Suite 2000
Chicago, Illinois 60606

S-5

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      BANK ONE, NA (Main Office Chicago)
(As a Lender)  
   
   
By:  
Sabir A. Hashmy
Name: Sabir A. Hashmy
Title: Authorized Officer
Notice Address:
1 Bank One Plaza
Attn: J. Garland Smith
IL1-0364
Chicago, IL 60670

S-6

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QUICKLINKS

U.S. $425,000,000 CREDIT AGREEMENT (SHORT TERM FACILITY)