SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-K

              Annual Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

   For the fiscal year ended December 31, 1996 Commission file number 0-15584

                            Alpine Lace Brands, Inc.
             (Exact name of registrant as specified in its charter)

         Delaware                                             22-2717823   
(State or other jurisdiction of                              (I.R.S. employer
 incorporation or organization)                              Identification No.)

111 Dunnell Road,  Maplewood,  NJ                             07040 
(Address of principal  executive office)                     (Zip Code)

(Registrant's telephone number, including area code)          201-378-8600

Securities registered pursuant to Section 12(b) of the Act:   NONE

Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $.01 per share

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes x No

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. x

State the aggregate market value of the voting stock held by  non-affiliates  of
the registrant as of March 11, 1997: 

                   Common stock, $.01 par value: $18,646,451

Indicate the number of shares  outstanding  of each of  registrant's  classes of
common stock, as of the close of the period covered by this report:

                                5,106,536 shares

DOCUMENTS INCORPORATED BY REFERENCE:

Portions  of the proxy  statement  to be prepared  in  connection  with the 1997
annual meeting of shareholders are incorporated by reference into Part III.

<PAGE>




                                     PART I
ITEM 1.  BUSINESS

General

Alpine Lace Brands,  Inc.  (the  "Company")  has two principal  businesses.  The
Company's  branded  cheese  and  deli  meat  business   develops,   markets  and
distributes  nutritionally  oriented  cheeses and deli meats under its own label
and  operates  a  converting  and  packaging  facility  through  a  wholly-owned
subsidiary,  Dakota Farms Cheese, Inc. ("DFC"),  formerly known as Marolf Dakota
Farms Cheese, Inc., a Delaware  corporation,  located in Sturgis,  South Dakota.
Through  February 17, 1994,  the Company  packaged  and  converted  cheese under
private labels through the Company's  wholly-owned  subsidiary,  Mountain Farms,
Inc. ("MFI"), a Utah corporation, in which a 65% interest was sold on that date.
The Company's cheese and dairy products trading business is operated through MCT
Dairies, Inc. ("MCT"), a New Jersey corporation and a wholly-owned subsidiary of
the Company.

The Company was incorporated in Delaware on February 14, 1986.

Branded Business

The principal branded cheeses  currently  marketed by the Company are the Alpine
Lace(R) brand line of cheeses,  which are generally lower in sodium and lower in
fat and  cholesterol  than cheeses made from whole milk,  and the Alpine Lace(R)
fat free brand line of fat free cheese  products.  The Company also develops and
markets  deli  meats,  which  are also  generally  lower in  sodium  and fat and
cholesterol  than  other deli  meats.  The  Company  generally  purchases  these
products from independent  manufacturers  who utilize the Company's  proprietary
recipes and markets them  throughout  the United States under its own trademark.
DFC converts and packages  Alpine  Lace(R)  brand dairy case sliced  cheeses for
retail and club store sales and does private-label  packaging.  As a result of a
restructuring  of the  Company's  operations  (See  Note  F to the  Consolidated
Financial  Statements)  in  December  of 1994,  DFC ceased  producing  skim milk
cheese,  including  skim milk cheese used by the Company and  terminated its DFC
product line of DFC brand Colby,  Cheddar, and Monterey Jack cheeses marketed by
the Company.

The Company's branded cheese and deli meat business (excluding DFC) had revenues
before  intercompany  eliminations  in 1996,  1995,  and  1994 of  $130,869,866,
$124,933,243,  and $117,258,595,  respectively. In 1996, 1995, and 1994, DFC had
revenues  before  intercompany  eliminations of  $15,319,946,  $14,353,026,  and
$14,152,399, respectively.

 

                                        2

<PAGE>



Alpine Lace(R) Reduced Fat and Reduced Sodium Swiss Cheese

Alpine  Lace(R)  Reduced Fat and Reduced  Sodium  Swiss  Cheese,  a  pasteurized
part-skim milk cheese,  is the Company's  largest selling  product  constituting
approximately  50% of its branded cheese sales.  The product is offered for sale
to consumers in  supermarkets,  delicatessens,  club stores and  specialty  food
stores, with most sales made in the delicatessen sections of supermarkets. It is
primarily  sold in bulk  quantities  by the  Company  and is  sliced or cut into
chunks for  consumers at the retail  store,  and in retail  packages sold in the
dairy case section of supermarkets, warehouse club stores and grocery stores.

Sales of this product  commenced  in January,  1984,  and the Company  currently
sells  Alpine   Lace(R)   Reduced  Fat  and  Reduced   Sodium  Swiss  Cheese  to
approximately 1,000 customers,  primarily  supermarket chains,  supermarket food
distributors, warehouse club stores and specialty food store distributors.

Alpine  Lace(R)  Reduced Fat and Reduced  Sodium  American and Hot Pepper Flavor
Pasteurized Process Cheese Product; and Reduced Sodium Muenster Cheese,  Reduced
Fat Mozzarella  Cheese,  Reduced Fat and Reduced Sodium Cheddar Cheese,  Reduced
Fat and Reduced  Sodium  Provolone  Cheese,  and Reduced Fat and Reduced  Sodium
Colby Cheese.
 
These  products  (aside  from the  American  and Hot Pepper  Flavor  Pasteurized
Process  Cheese  Product) are natural  cheese  products.  Except for Reduced Fat
Mozzarella  Cheese,  all have up to 50% less  sodium than their  typical  cheese
counterparts.  Aside  from the  Reduced  Sodium  Muenster  Cheese,  all of these
products  are lower in  cholesterol  and lower in fat and  calories  than  their
typical counterparts.

Other Cheeses

Other products  introduced in late 1995 include Alpine Lace(R)  Reduced Fat Feta
Cheese,  which  contains 33% less fat than regular Feta,  and Alpine Lace(R) Fat
Free Shredded Parmesan,  which features 60% less calories,  88% less cholesterol
and 25% less sodium than regular Parmesan cheese.

Alpine Lace(R) Fat Free Cheese Products

The Company  introduced  Alpine Lace(R) fat free cheese  products for the retail
dairy case in the Summer of 1990 and currently sells these products to about 75%
of all major  supermarket  chains in the U.S. and to a lesser  extent into other
trade channels.


                                        3

<PAGE>


Alpine Lace(R) Fat Free Turkey Breast

Alpine  Lace(R) Fat Free Turkey  Breast was  introduced  in May, 1995 and is now
available  in  about  25% of the  nation's  supermarkets.  Besides  the fat free
benefit, this product also contains 63% less sodium than regular turkey breast.

Alpine Lace(R) Deli Hams

The Company now offers two ham products that are sold in the  supermarket  deli:
Alpine  Lace(R)  Boneless  Cooked Ham and Alpine  Lace(R)  Honey Ham,  which was
introduced  in August of 1995.  Both  products are high quality hams and are 97%
Fat Free and offer sodium reductions of 45% and 33%, respectively.

Manufacturing

In 1995,  the  Company  ceased  manufacturing  any of its branded  cheeses.  The
Company  either  owns or has  significant  rights to the  respective  recipes or
manufacturing  processes  for most of its  products,  including  Alpine  Lace(R)
Reduced Fat and Reduced  Sodium  Swiss  Cheese,  which are now  manufactured  by
independent manufacturers.

Alpine Lace(R)  Reduced Fat and Reduced Sodium Swiss Cheese is manufactured in a
privately  owned  facility  under a contract  granting the Company the exclusive
right to purchase the product (with a minor exception).  The agreement  requires
the  manufacturer  to supply the Company's  requirements  of the cheese  through
December,  2000, with successive  five year renewal periods  thereafter,  unless
terminated  by either  party.  The Company  may  purchase,  with the  reasonable
consent of the manufacturer,  up to 10% of its requirements for the product from
another source. As part of the agreement with the primary manufacturer,  entered
into in July,  1988,  the  Company  obtained  an  exclusive  license to use such
manufacturer's  Reduced  Fat and  Reduced  Sodium  Swiss  Cheese  recipe for the
production  of this  cheese  (subject  to paying  license  fees  based on volume
produced) if the  manufacturer  elects not to renew the agreement,  breaches the
agreement,  or  undergoes  a change in control.  The Company  also has a limited
exclusive  license to produce  this cheese to cover  certain  shortfalls  in the
manufacturer's production.

At present,  there are adequate supplies of raw materials,  primarily milk, used
by the Company's suppliers in manufacturing the Company's products.  The average
relevant commodity market prices were at record high levels in 1996. The Company
expects these commodity market prices to decrease in 1997.


                                        4

<PAGE>


Gamay Technology Acquisition

In May,  1990, the Company  acquired all patents  pending and technology for fat
free and low fat cheese and cultured dairy  products as well as certain  assets,
rights and technologies from Gamay Foods,  Inc. for approximately  $1.85 million
in cash and the issuance of restricted special stock warrants to purchase 75,000
shares of the  Company's  common  stock at the stock market price at the time of
the warrants' issuance. Additionally, the Company has agreed to pay a royalty to
Gamay on future sales of products  associated with the acquisition.  On February
24, 1995, the Company and Gamay modified their royalty  agreement (See Note J to
the Consolidated Financial Statements).  The Company has applied this technology
to create its Alpine Lace(R) fat free line of cheeses.

Marketing and Advertising

Alpine  Lace(R)  Reduced Fat and Reduced  Sodium Swiss Cheese was sold in all 70
U.S.  geographic markets at the end of 1996 and was available,  according to the
Company's  estimates,  in  approximately  45,000 retail stores in those markets.
Other Alpine  Lace(R)  brand  cheeses and deli meats were sold in  approximately
30,000 stores  nationwide.  The Company's  marketing program places  substantial
emphasis upon advertising and promotion,  primarily television  advertising,  as
well as point of sale  merchandising  and  cooperative  retailer  promotions and
advertisements.

The Company received Kosher certification for its line of fat free cream cheeses
and  spreads  and its  Reduced  Fat  and  Reduced  Sodium  Swiss  Cheese,  which
represents over 50% of the Company's delicatessen business. Packages bearing the
kosher symbol in the deli case include:  Alpine Lace(R)  Reduced Fat and Reduced
Sodium  Swiss  Cheese,  Fat Free Cream Cheese with Garden  Vegetables,  Fat Free
Cream Cheese with Garlic and Herbs and Fat Free Mexican Nacho Cheese Spread.

The Company also  received  Kosher  approval  from the Union of Orthodox  Jewish
Congregations  of  America  for  industrial  use of its  full  line of Fat  Free
Cheeses. These products bearing the "O-U" label include: Alpine Lace(R) Fat Free
Cheddar, Mozzarella, Swiss and Parmesan flavor skim milk cheeses.

The Company has been actively  selling its products to the food service and club
store industries. Where appropriate, special sized packs of Alpine Lace(R) brand
cheese products have been developed.

Distribution

The  largest  single  customer  of the  Company's  branded  cheese and deli meat
business accounted for approximately 5% of the 1996 branded cheese and deli meat
sales revenues,  and the eight largest customers accounted for approximately 27%
of such sales revenues. Sales, whether to supermarket chains,  distributors,  or
others,  are  typically  made  through  independent  sales  agency  firms  (food
brokers),  which may also deal  with  cheeses  and deli  meats  manufactured  or
distributed by other

                                        5

<PAGE>


companies.  These  sales  agency  firms also  participate  in local  promotional
activities and in-store merchandising for the Company's products.

Cheese Converting, Packaging and Manufacturing Operations

On February 17, 1994, the Company sold 65% of the  outstanding  shares of common
stock of its then wholly owned MFI cheese  converting and packaging  subsidiary.
At December 31, 1994, the Company  recorded a charge of $1,517,757 to write-down
to zero the carrying  value of its investment and related assets and expenses in
MFI. In addition,  the Company  recorded a charge of $1,070,700  relating to the
cancellation of its supply agreement with MFI which was payable over twenty- six
monthly  installments  ending  February,  1997.  Beginning in February 1995, the
Company moved its converting and packaging  requirements  from MFI to an outside
supplier (See Note E to the Consolidated Financial Statements).

In connection with the Company's  restructuring  plan approved in December 1994,
the Company  closed its skim milk cheese  production  facility at DFC in January
1995. In addition,  DFC cheese products were  discontinued in December 1994. DFC
continues to convert and package the  Company's  warehouse  club store and dairy
case sliced cheeses sold under the Alpine  Lace(R) brand and does  private-label
packaging.

Cheese and Dairy Products Trading Business

The Company's cheese and dairy products trading  activities are performed by its
wholly owned  subsidiary,  MCT Dairies,  Inc.  This business  purchases,  almost
always as principal,  bulk packaged  quantities of domestic and imported  cheese
and dairy products.  The size of purchases ranges generally from 3,000 to 42,000
pounds.  Substantially  all of the  products  purchased  and then  sold are bulk
cheese,  butter,  whey,  nonfat dry milk powder,  animal feed, dairy flavorings,
casein and caseinates,  and buttermilk. MCT generally purchases cheese and dairy
products to fill purchase orders  received from its customers,  although it will
buy limited amounts of product without specific sales commitments, to be held in
inventory for future sale (and stored in public warehouses, if necessary).

MCT also exports cheese and dairy products either directly or under the auspices
of various U.S.  government  assisted  programs.  In 1992,  MCT became active in
world market trading of non-cheese  dairy  products.  From time to time MCT will
act as a broker and receive a commission,  although to date commissions have not
been significant.

In 1996, MCT sold to approximately 32 manufacturers/processors, 78 distributors,
and  approximately  31 cheese and dairy products  trading firms. The largest two
customers each accounted for approximately 20% of the Company's cheese and dairy
products trading revenues in 1996.

In 1996,  1995, and 1994, MCT had revenues before  intercompany  eliminations of
$50,994,974, $41,931,335, and $34,864,953, respectively.

                                        6

<PAGE>


Government Regulation

The Company and its  suppliers  are subject to extensive  regulation  by various
government  agencies  which,  pursuant  to  statutes,   rules  and  regulations,
prescribe quality, purity, manufacturing, advertising and labeling requirements.
Food  products are often subject to "standard of identity"  requirements,  which
are  promulgated  at both the  Federal  and  state  level,  that set  forth  the
permissible  qualitative  and  quantitative  ingredient  content  of foods,  and
information  that must be provided on food product labels.  The Federal Food and
Drug Administration  ("FDA"),  United States Department of Agriculture ("USDA"),
Federal Trade Commission and many states review product labels and advertising.

The Company's branded cheese products and deli meats meet the current applicable
FDA, USDA, and state  requirements  and its  advertising  and labels  accurately
describe  its  products.  The Company has made  changes in its  advertising  and
labeling in response to the new labeling laws.

Food manufacturing,  processing and packaging  facilities of the Company and its
suppliers  are subject to  inspection  by various  Federal and state  regulatory
authorities and must comply with various health and safety regulations.

Trademarks and Patents

Product identification is important in marketing the Company's products, and the
Company seeks to protect the brand identification it has developed.  The Company
and its  subsidiaries  own a  number  of  registered  trademarks  including  the
Company's primary trademark, ALPINE LACE(R).

Since 1992, the Company has been issued five U.S. patents for the manufacture of
fat free and low fat cheese and cheese  products.  The Company has also obtained
similar patent protection in New Zealand.  Additionally, the Company either owns
or has  significant  rights  to  the  recipes  and  manufacturing  processes  of
substantially all of its Alpine Lace(R) reduced fat and fat free products.

Competition

The  Company's  Alpine  Lace  branded  products  compete  intensively  with many
established domestic and foreign brands which are, in many cases, less expensive
than the Company's  products.  Many of these  products are marketed by companies
with  greater  financial  and other  resources  than those of the  Company.  The
Company  believes  that the Alpine  Lace(R)  brand is currently  one of the five
largest  advertised brands of cheese in measured media in the United States. The
Company's  primary cheese products have certain  health-related  characteristics
that  the  Company  believes   differentiate   them  from  many  other  cheeses;
nevertheless,  the Company faces  significant  competition  from cheese products
with similar  characteristics.  The  principal  competitors  with the  Company's
products in the reduced  sodium,  fat free and/or  reduced fat cheese fields are
Lorraine(R) cheese, a cheese which the Company

                                        7

<PAGE>


believes  resembles  Swiss cheese in some respects,  which is produced by Stella
Cheese Co., Inc.,  Kraft Free(R) and other reduced fat cheese products  marketed
by Kraft Foods,  Inc.  and Healthy  Choice(R)  marketed by Beatrice  Cheese Co.,
Inc., a division of Con Agra.

The Company's  cheese and dairy products  trading business is subject to intense
competition  from  cheese  and  dairy  products   importers,   distributors  and
manufacturers,  as well as, from other cheese  trading  companies.  In addition,
potential  purchasers' internal buyers can serve many of the functions for which
a cheese and dairy  products  purchaser  might  otherwise use a cheese and dairy
products trading company.  However,  cheese and dairy products trading companies
like the  Company's  offer the advantage of  specialization,  with its resulting
efficiencies.

Employees

The Company and its subsidiaries currently have 134 employees.

Business Segment Information

The  Company's  operations  consist  of two  segments:  (1) The  branded  cheese
business which develops,  markets,  distributes,  packages and converts  branded
cheeses,  deli meats and other  specialty food products;  and (2) the cheese and
dairy products trading business.

Information  about the Company's  operations in different  industry segments for
the years ended December 31, 1996,  1995, and 1994 is disclosed in Note N to the
Consolidated Financial Statements.

ITEM 2.  PROPERTIES

The  Company's  7,575 gross  square foot  administrative  offices,  located in a
modern office building in Maplewood,  New Jersey, are under two leases providing
for annual  rentals of $44,460 and  $100,048,  respectively,  and both  expiring
April 30, 2000.  The Company  believes that this present space is sufficient for
its present business operations (excluding DFC) for the foreseeable future.

DFC's  facilities are located within the incorporated  limits of Sturgis,  South
Dakota. DFC owns 2.25 acres of land and two buildings.  The buildings consist of
a 1,440  square  foot  truck  garage  and a 16,940  square  foot  packaging  and
warehousing  building where cheese is cut into consumer  packaged  products.  An
administrative  office was built atop of the packaging and warehousing  building
due to the sale of the 2,812 square foot administrative office building in 1995.
The 9,370 square foot  production  building was also sold during 1995 due to the
closing of the skim milk cheese operation.

                                        8

<PAGE>


ITEM 3.  LEGAL PROCEEDINGS

During 1996, the Company was joined as a defendant in two separate class actions
pending  in the  United  States  District  Court  for the  Eastern  District  of
Wisconsin. The complaints in these two actions are nearly identical,  were filed
by the same plaintiffs'  lawyers,  and were brought on behalf of the same class.
Both complaints allege conspiracy among the Company,  Kraft Food, Inc.,  Borden,
Inc., and the National Cheese Exchange, Inc. to, among other things,  manipulate
cheese prices and  unreasonably  restrain trade in violation of the Sherman Act.
Both cases also  assert  state law claims for fraud and  misrepresentation,  and
breach of contract. Both complaints seek unspecified actual and punitive damages
and injunctive relief.

In December,  1996, a motion for class  certification was denied in the first of
these  cases,  and that  case is  currently  proceeding  on  behalf of the named
plaintiffs  only. In the second case,  plaintiffs have filed a motion to dismiss
without prejudice;  defendants have opposed dismissal on those terms. The motion
is still  pending.  The Company  intends to continue to vigorously  defend these
actions.

In 1995, the Company  commenced  litigation in the United States  District Court
for the District of New Jersey against Kraft Foods, Inc. Borden,  Inc., Beatrice
Cheese, Inc., and Schreiber Foods, Inc. alleging  infringement of its patent for
the  manufacture  of low fat cheese.  Summary  judgment  was granted in favor of
Kraft in March,  1996 and partial  summary  judgment  regarding  one  production
facility was granted in favor of Borden and Schreiber in September,  1996.  Both
summary  judgment  decisions  have been  appealed to the United  States Court of
Appeals for the Federal Circuit and the appeals have been consolidated. A motion
for partial summary judgment by the fourth  defendant,  Beatrice,  was denied in
September, 1996.

In addition,  in this  litigation,  motions have been filed by Kraft to have the
case declared  exceptional under Section 285 of the Patent Statute and by Borden
and Schreiber to have the case declared  exceptional in part. If the motions are
granted,  it is  anticipated  that  the  Company  would  appeal.  If the case is
ultimately declared exceptional,  the Company may be liable to those parties for
some portion of their reasonable attorneys' fees and expenses.

 

                                        9

<PAGE>


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.
                                     PART II


ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
SECURITY HOLDER MATTERS

The  Company's  common  stock trades on the Nasdaq  National  Market tier of The
Nasdaq Stock Market under the Symbol: LACE.

The Nasdaq Stock Market  quotations set forth in the table reflect  inter-dealer
prices,  without  retail  mark-up,  mark-down  or  commission,   which  may  not
necessarily represent actual transactions.

                                                  COMMON
                                          HIGH               LOW

First Quarter, 1995                       7.63              3.50
Second Quarter, 1995                      9.31              6.50
Third Quarter, 1995                      11.50              7.63
Fourth Quarter, 1995                     12.13              9.50

First Quarter, 1996                      10.63              6.50
Second Quarter, 1996                      6.75              5.13
Third Quarter, 1996                       6.25              4.50
Fourth Quarter, 1996                      6.47              5.13


First Quarter, 1997                       6.50              5.13
 (through March 6, 1997)

As of the close of business on March 6, 1997, there were 216 registered  holders
of record of the Company's  common stock.  The Company  estimates that there are
over 2,835 beneficial owners of its common stock.

The Company has never  declared  cash  dividends  on its common stock and has no
present  intention of declaring such cash dividends in the  foreseeable  future.
Cash dividends are restricted by the Company's bank credit  facility  agreement;
see Note G to the Consolidated Financial Statements.

                                       10

<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA1

<TABLE>
<S>                                             <C>             <C>             <C>              <C>              <C>    
                                                        
                                                Dec. 31, 1996   Dec. 31, 1995   Dec. 31, 1994    Dec. 31, 1993    Dec. 31, 1992

Selected Data from Statement
   of Operations:
   Net sales ................................   $ 161,896,522   $ 145,043,395   $ 132,354,808    $ 180,745,614    $ 167,306,297
   Earnings (Loss) before
     cumulative effect
     of an accounting
     change & extraordinary
     item ...................................       1,902,004       3,912,028      (3,122,989)      (4,040,254)           8,723
   Extraordinary item2 ......................            --           103,760            --               --               --
   Cumulative effect of an
     accounting change3 .....................            --              --              --               --            (49,000)
   Net earnings (loss) ......................       1,902,004       4,015,788      (3,122,989)      (4,040,254)         (40,277)
   Preferred stock dividends ................         168,750         121,513            --               --               --
   MCT Dairies, Inc. option .................         107,751            --              --               --               --
   Net earnings (loss)
     applicable to common
     shareholders ...........................       1,625,503       3,894,275      (3,122,989)      (4,040,254)         (40,277)
   Net earnings (loss) per share
     of common stock:
        Earnings (Loss)
        before cumulative
        effect of an accounting
        change & extraordinary item .........             .31             .72            (.62)            (.81)            --4
        Extraordinary item ..................            --               .02            --               --               --
        Cumulative effect of an
        accounting change3 ..................            --              --              --               --               (.01)
   Net earnings (loss) per share ............             .31             .74            (.62)            (.81)            (.01)

   Selected Balance Sheet Data5:
     Current assets .........................      23,045,979      20,422,667      22,916,704       28,619,853       24,008,873
     Current liabilities ....................      13,368,157      15,363,586      18,751,765       18,949,907       13,401,972
     Working capital ........................       9,677,822       5,059,081       4,164,939        9,669,946       10,606,901
     Total assets ...........................      28,571,335      26,276,701      28,936,515       38,056,602       35,896,521
     Long-term liabilities
        (less current
            maturities) .....................       7,903,878       5,817,868      10,716,233       16,515,189       15,843,190
     Stockholders equity
        (deficiency) ........................       7,299,300       5,095,247        (531,483)       2,591,506        6,651,359
</TABLE>


NOTES TO SELECTED FINANCIAL DATA

1 The comparability of the selected  financial data is affected by the Company's
sale of 65% of MFI on February 17, 1994. The operations of MFI were consolidated
with that of the Company through December 31, 1993.
 
2 On March 27, 1995,  the Company  redeemed  its  $3,000,000  subordinated  note
payable and common stock purchase  warrants for $3,000,150 plus accrued interest
of $42,750.  The redemption  resulted in a net extraordinary gain of $103,760 to
the Company.

3 Effective  January 1, 1992, the Company adopted the provisions of Statement of
Financial  Accounting Standards No. 109, "Accounting for Income Taxes." See Note
H to the Consolidated Financial Statements.

4 Rounds to less than one cent earnings per share.

5 The  comparability  of the  selected  balance  sheet data is  affected  by the
reclassification of net assets of MFI to Investment in and advances to MFI as of
December 31,1993. See "Business - Cheese Converting, Packaging and Manufacturing
Operations."


                                       11

<PAGE>


ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS

Results of Operations


1996 versus 1995

The Company's sales increased by $16,853,127 or 11.6% from  $145,043,395 in 1995
to  $161,896,522  in  1996.  Sales  in  the  branded  cheese  segment  increased
$4,910,476  or 4.5%  from  $108,752,854  in 1995 to  $113,663,330  in 1996.  The
increase in branded  business  resulted from increased  selling prices partially
offset by a 2.2%  volume  decrease.  The  Company's  cheese  and dairy  products
trading business sales for 1996 were $48,233,192,  an increase of $11,942,651 or
32.9% from  $36,290,541 in 1995 primarily due to increased sales unit volume and
higher average selling prices.

As a percentage of sales,  gross profit decreased from 24.7% in 1995 to 21.8% in
1996.  This  decrease  was the result of the  increased  sales at the  Company's
cheese and dairy products trading  business,  where gross profit as a percent of
sales is lower,  and the higher cost to purchase  cheese  resulting  from higher
commodity prices. Gross profit decreased by $599,960 or 1.7% from $35,823,401 in
1995 to $35,223,441 in 1996 primarily due to the higher cost to purchase  cheese
resulting  from  higher  commodity  prices and  decreased  volume in the branded
division.

Operating expenses increased by $860,401 from $30,470,848 in 1995 to $31,331,249
in 1996 representing an increase of 2.8%. The major  contributors to the selling
expense  increase of  $893,074  were from  promotion  and  commission  expenses.
Administrative  expenses decreased $32,673 from $4,854,554 in 1995 to $4,821,881
in 1996.

Interest  expense (net)  decreased by $155,077 or 15.6% from $995,649 in 1995 to
$840,572  in 1996,  as a result of the  Company's  decreased  use of its working
capital credit line and lower interest rates.

The  provision  for income taxes  increased  $704,740  from  $444,876 in 1995 to
$1,149,616  in  1996.  The  1995  effective  tax  rate  of  10.1%  included  the
utilization of net operating loss  carry-forwards  generated in prior years. The
1996 effective tax rate is 37.7%.


                                       12

<PAGE>



1995 versus 1994

The Company's sales  increased by $12,688,587 or 9.6% from  $132,354,808 in 1994
to  $145,043,395  in  1995.  Sales  in  the  branded  cheese  segment  increased
$4,748,681  or 4.6%  from  $104,004,173  in 1994 to  $108,752,854  in 1995.  The
increase in branded  business  resulted from increased  sales in the Alpine Lace
Branded  Division  offset by a slight  decrease in sales from DFC. The Company's
cheese and dairy products trading business sales for 1995 were  $36,290,541,  an
increase  of  $7,939,906  or 28.0% from  $28,350,635  in 1994  primarily  due to
increased sales of commodity cheddar cheese.

As a percentage of sales,  gross profit decreased from 24.8% in 1994 to 24.7% in
1995.  Gross profit as a percent of sales  decreased  principally as a result of
the 28% sales increase in the cheese and dairy products trading business,  which
has lower gross profit margins than the branded division. Gross profit increased
by $2,988,544 or 9.1% from  $32,834,857 in 1994 to $35,823,401 in 1995 primarily
due to the 9.6% increase in sales,  along with the lower cost to purchase cheese
resulting from lower commodity prices and continuing manufacturing efficiencies.

Operating   expenses  decreased  by  $3,850,358  from  $34,321,206  in  1994  to
$30,470,848  in 1995  representing  a decrease of 11.2%.  The operating  expense
decrease is due to the 1994 restructuring charge of $2,640,238 associated with a
plan to cease  production  of skim  milk  cheese at its DFC  subsidiary  and the
termination of its supply agreement with MFI. In addition,  in 1994, the Company
recorded  a charge  of  $1,517,757  to  write  down  the  carrying  value of its
investment  and related  assets in MFI and related  expenses  (See Note E to the
Consolidated Financial  Statements).  Selling expenses remained the same in 1995
and 1994 at $25,600,000.

Administrative expenses increased by $308,049 or 6.8% from $4,546,505 in 1994 to
$4,854,554 in 1995.

Interest expense (net) decreased by $587,391 or 37.1% from $1,583,040 in 1994 to
$995,649  in 1995,  as a result of the  Company's  decreased  use of its working
capital  credit  line and the  redemption  of the  Company's  subordinated  note
payable, partially offset by higher interest rates.

On March 27, 1995, the Company redeemed its $3,000,000 subordinated note payable
and common stock  purchase  warrants  for  $3,000,150  plus accrued  interest of
$42,750.  The redemption resulted in a net extraordinary gain of $103,760 to the
Company.

                                       13

<PAGE>


The  provision  for income  taxes  increased  $391,276  from  $53,600 in 1994 to
$444,876 in 1995.  The 1994 tax provision  included  minimal state taxes for MCT
Dairies,  Inc. due to the pre-tax loss of $3,069,389.  The 1995 tax provision is
due to federal net operating loss carry-forwards utilized in 1995.

Inflation

The  Company  believes  that in 1997 it will be able to pass raw  material  cost
increases  of  approximately  up to  10%  on  to  its  customers,  as  will  its
competitors.  However,  the Company believes that substantial price increases of
over 10% might have a negative  impact on demand  for all  cheese  purchases  by
consumers and may be borne in part by the Company, thereby reducing earnings.

Liquidity; Capital Resources

The major  uses of cash for 1996  were to fund  increased  inventory,  decreased
accounts payable,  increased accounts receivable,  and treasury stock purchases.
These  expenditures  were  financed by increased  drawings  under the  Company's
revolving  credit  facility,  net  earnings,  and  proceeds  from  stock  option
exercises.

In October 1996, the Company reduced its revolving  credit and equipment  credit
facility  by a total of $4  million  to  $13,500,000  for the  revolving  credit
facility and  $1,500,000 for the equipment  facility.  The term of the agreement
was also  extended  from March 1998 to March 2000.  This  amendment  resulted in
reduced  interest and service charges to the Company.  While the Company expects
that this facility will be sufficient to finance currently  anticipated  working
capital and equipment requirements generally, a temporary increase of $2,000,000
was provided by the lender in early 1997 in order to purchase  excess  inventory
and will be repaid as the inventory is sold.  As of March 13, 1997,  the Company
had  approximately  $3,500,000  available on its  $15,500,000  revolving  credit
facility (See Note G to the Consolidated Financial Statements).

The major  providers of cash for 1995 came from net earnings and the decrease in
accounts  receivable.  On March 27, 1995, the Company  redeemed its subordinated
note  payable and common stock  purchase  warrants  for  $3,000,150  and accrued
interest of $42,750.  The majority of the funds for the redemption came from the
issuance of $2,250,000  of 7.5%  cumulative  preferred  stock on March 22, 1995,
which resulted in net proceeds of approximately  $2,000,000.  The securities are
convertible into common stock of the Company at a conversion price of $7 3/8 for
five years,  at which time the Company must either force a conversion  at market
price of the common stock or redeem the preferred  stock. On March 27, 1995, the
Company used the proceeds (along with cash made available  through the Company's
revolving  credit  facility) to repurchase $3 million in  subordinated  debt and
353,895 warrants.
                                       14

<PAGE>

Fixed asset  acquisitions for 1995 were $995,196 mainly due to the purchase of a
high-speed slicer at the Company's DFC facility. Proceeds from the sale of fixed
assets were  $452,812  due to the sale of  equipment  and  buildings  at the DFC
facility in connection with the closing of the skim milk cheese operation.

As a result of the  Company's  restructuring  announced in December,  1994,  the
Company was in default under the revolving  credit  facility.  The lender waived
the default as of December 31, 1994, and modified those  covenants as of January
1, 1995. The Company has been in compliance since January 1, 1995.
 
The  major  providers  of cash for  1994  were  from the sale of MFI,  decreased
inventory, and income tax refunds. On February 17, 1994, the Company sold common
stock  representing  65% of the outstanding  shares of MFI resulting in net cash
received  of  $3,530,013.   The  Company's  inventory  decreased  by  $2,105,000
primarily  due to tighter  control of  inventory  levels.  The Company  received
income tax  refunds of  approximately  $1,015,000  due to the  federal and state
carry-back  claims  associated  with the 1993 pre-tax loss of  $5,163,148.  Cash
provided  during 1994 decreased the  borrowings of the Company by  approximately
$9,000,000 in 1994.

 


                                       15

<PAGE>


ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                            ALPINE LACE BRANDS, INC.
                          INDEX TO FINANCIAL STATEMENTS


                                                                           Page




Report of Independent Certified Public Accountants                          F-2

Consolidated Financial Statements

Consolidated Balance Sheets as of December 31, 1996 and 1995                F-3
 
Consolidated Statements of Operations
for the Three Years Ended
December 31, 1996, 1995 and 1994                                            F-5

Consolidated Statement of Stockholders'
Equity (Deficiency) for the Three Years
Ended December 31, 1996, 1995 and 1994                                      F-6

Consolidated Statements of Cash Flows
for the Three Years Ended
December 31, 1996, 1995 and 1994                                            F-7

Notes to Consolidated Financial Statements                                  F-9

 

                                       16

<PAGE>



ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
              ACCOUNTING AND FINANCIAL DISCLOSURE

              None.


                                    PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The  information  regarding  directors  and  executive  officers  of the Company
contained in the Company's  Proxy Statement for its Annual Meeting to be held on
May 22,  1997,  to be filed  within 120 days of December  31,  1996  pursuant to
Regulation  14A under the  Securities  Act of 1934 (the  "Company's  1997  Proxy
Statement") is incorporated herein by reference.


ITEM 11.      EXECUTIVE COMPENSATION

The information  regarding  remuneration of and transactions  with management in
the Company's 1997 Proxy Statement is incorporated herein by reference.


ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The information regarding ownership of the Company's securities by certain other
beneficial  owners and  management  in the  Company's  1997 Proxy  Statement  is
incorporated herein by reference.


ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information regarding relationships and related transactions with management
and others in the  Company's  1997 Proxy  Statement  is  incorporated  herein by
reference.

                                       17

<PAGE>

                                     PART IV

ITEM 14.     EXHIBITS, FINANCIAL STATEMENTS AND
                      REPORTS ON FORM 10-K.                                     

     (a) Financial Statements:

                  The following consolidated financial statements of
                  Alpine Lace Brands, Inc. and Subsidiaries required
                  by Part II, Item 8, are included in Part IV  of this
                  report.
                                                                           PAGE

                    -  Report of Independent Certified Public
                       Accountants.                                        F-2

                    -  Consolidated Balance Sheets as of
                       December 31, 1996 and 1995.                         F-3

                    -  Consolidated Statements of Operations
                       for the Three Years Ended December
                       31, 1996, 1995 and 1994.                            F-5

                    -  Consolidated Statement of Stock-holders'
                       Equity (Deficiency) for the Three Years
                       Ended December 31, 1996, 1995 and 1994.             F-6

                    -  Consolidated Statements of Cash
                       Flows for the Three Years Ended
                       December 31, 1996, 1995 and 1994.                   F-7

                    -  Notes to Consolidated Financial
                       Statements.                                         F-9

 

                                       18

<PAGE>



 
Schedules  other than those listed above have been omitted as not being required
or because the  information  required to be submitted  has been  included in the
financial statements or notes thereto.

(b) The Company filed the following  Reports on Form 8-K during the last quarter
of 1996:

- None

(c)Exhibits:

(3.1) Certificate of Incorporation, as amended

(3.2) By-Laws 8

(4.1)(a)  Loan and  Security  Agreement,  dated  March 3, 1993,  among  Barclays
Business Credit,  Inc., the Company,  Market Cheese Traders,  Inc., and Mountain
Farms, Inc. 8

(b) $1,000,000  Secured  Promissory Note (Term Loan),  dated March 3, 1993, from
the Company,  Market Cheese Traders,  Inc., and Mountain Farms, Inc. to Barclays
Business Credit, Inc. 8

(c) $3,500,000  Secured  Promissory Note (Equipment Loan),  dated March 3, 1993,
from the Company,  Market Cheese  Traders,  Inc.,  and Mountain  Farms,  Inc. to
Barlcays Business Credit, Inc. 8

(d)  Amendment to Loan and Security  Agreement,  dated  October 17, 1996,  among
Fleet Capital  Corporation  (successor to Barclays  Business  Credit,  Inc.) and
Alpine Lace Brands,  Inc., MCT Dairies,  Inc.  (formerly  Market Cheese Traders,
Inc.) and Marolf Dakota Farms Cheese, Inc. (now Dakota Farms Cheese, Inc.)

(e) Letter Agreement dated February 10, 1997,  among Fleet Capital  Corporation,
the Company, MCT Dairies, Inc., and Dakota Farms Cheese, Inc.


                                       19

<PAGE>


(4.2) Registration  Rights Agreement,  dated March 21, 1995, between the Company
and the holders designated therein 10

(10.1)(a)  Agreement,  dated July 18, 1988,  regarding  supply of Alpine Lace(R)
Reduced Fat Swiss Cheese 1

(b)  Amendment  to  Agreement,  dated March 1, 1994  regarding  supply of Alpine
Lace(R) Reduced Fat Swiss Cheese 9

(10.2) Employment Agreement, dated January 4, 1993, between the Company and Carl
T. Wolf 8
 
(10.3)(a) Employment Agreement, dated February 24, 1986, between the Company and
Kenneth E. Meyers 8

(b)  Amendment,  dated  December  10,  1986,  between the Company and Kenneth E.
Meyers amending the terms of Exhibit 10.3(a) 8

(c) Second  Amendment,  dated as of  January 1,  1988,  between  the Company and
Kenneth E. Meyers extending the term of Exhibits 10.3(a) and 10.3(b) 2

(d) Third Amendment  dated December 5, 1989,  between the Company and Kenneth E.
Meyers  extending  and  amending  the terms of  Exhibits  10.3(a),  10.3(b)  and
10.3(c) 5

(e) Amendment, dated November 8, 1991, between the Company and Kenneth E. Meyers
extending the term of Exhibit 10.3(a), 10.3(b), 10.3(c) and 10.3(d) 7

(f) Employment Agreement, dated January 1, 1995, between the Company and Kenneth
E. Meyers 11

(g) Amendment to Employment Agreement, dated March 27, 1996, between the Company
and Kenneth E. Meyers

(h) Royalty Agreement, dated January 9, 1997, between the Company and Kenneth E.
Meyers


                                       20

<PAGE>


(10.4)(a) Employment  Agreement,  dated January 4, 1993, between the Company and
George Wenger 8

(b) Employment Agreement,  dated January 4, 1993, between the Company and Marion
F. Wolf

(c) Employment Agreement,  dated January 4, 1993, between the Company and Arthur
Karmel

(10.5)(a)  Lease and Lease  Modification,  both dated November 1, 1988,  between
Dunnell Associates and First World Cheese, Inc. 4

(b) Lease  dated July 31,  1990,  between  Dunnell  Associates  and First  World
Cheese, Inc. 5

(c) Lease Modification,  dated December 30, 1992, between Dunnell Associates and
Alpine Lace Brands, Inc. (Formerly First World Cheese, Inc.) 8

(d) Lease Modification,  dated March 23, 1995, between Dunnell  Associates,  and
Alpine Lace Brands, Inc. 11

(10.6) 1987 Stock Option Plan (As Amended)

(10.7)  Stock  Purchase  Agreement,  dated as of November 7, 1989,  among Marolf
Dakota Farms Cheese,  Inc., and Michael F. Marolf, plus First Amendment to Stock
Purchase Agreement, dated as of November 27, 1989 3

(10.8)(a)  Asset  Purchase  Agreement  dated April 16, 1990, as amended by First
Amendment dated May 21, 1990, between the Company, Gamay Foods, Inc. and Dr. Aly
Gamay 5

(b)  Restricted  Special Stock  Warrant dated May 21, 1990,  from the Company to
Gamay Foods, Inc. 5

(c) Gamay License Agreement dated May 21, 1990, among the Company,  Gamay Foods,
Inc. and Dr. Aly Gamay 5


                                       21

<PAGE>


(d) Independent  Consulting  Agreement,  dated May 21, 1990, between the Company
and Dr. Aly Gamay 5

(e) Modification Agreements, dated May 14, 1993, between the Company and Dr. Aly
Gamay 9

(10.9) Restricted Special Stock Warrant, dated May 28, 1991, from the Company to
Pleasant View Cheeses Corporation (amended and restated) 6

(10.10)(a) Stock Purchase Agreement, dated January 20, 1994, between the Company
and Simplot Dairy Products, Inc. 9

(b) First Option to Purchase Stock, dated February 17, 1994, between the Company
and Simplot Dairy Products, Inc. 9

(c)  Noncompete  Agreement,  dated  February 17,  1994,  between the Company and
Simplot Dairy Products, Inc. 9

(10.11) Securities Purchase Agreement, dated March 24, 1995, between the Company
and RFE Investment Partner IV L.P. 10

(11) Computation of Earnings (Loss) per Share of Common Stock

(21) Subsidiaries of Registrant

(23) Consent of Independent Certified Public Accountants


1.  Indicates  that the exhibit is  incorporated  by reference to the  indicated
exhibit of Post-Effective  Amendment No. 2 to the Registration Statement on Form
S-18 of the Company, Registration No. 33-4622-NY.

2.  Indicates  that the exhibit is  incorporated  by reference to the  indicated
exhibit of the Annual  Report on Form 10-K of the  Company,  for the fiscal year
ended December 31, 1988.

3.  Indicates  that the exhibit is  incorporated  by reference to the  indicated
exhibit of the  Current  Report on Form 8-K of the  Company,  dated  January 10,
1990.

                                       22

<PAGE>



4.  Indicates  that the exhibit is  incorporated  by reference to the  indicated
exhibit of the Annual  Report on Form 10-K of the  Company,  for the fiscal year
ended December 31, 1989.

5.  Indicates  that the exhibit is  incorporated  by reference to the  indicated
exhibit of the Annual  Report on Form 10-K of the  Company,  for the fiscal year
ended December 31, 1990.

6.  Indicates  that the exhibit is  incorporated  by reference to the  indicated
exhibit of the  Quarterly  Report on Form 10-Q of the  Company  for the  quarter
ended June 30, 1991.

7.  Indicates  that the exhibit is  incorporated  by reference to the  indicated
exhibit of the annual  report on form 10-K of the  Company,  for the fiscal year
ended December 31, 1991.

8.  Indicates  that the exhibit is  incorporated  by reference to the  indicated
exhibit of the annual  report on form 10-K of the  Company,  for the fiscal year
ended December 31, 1992.

9.  Indicates  that the exhibit is  incorporated  by reference to the  indicated
exhibit of the annual  report on form 10-K of the  Company,  for the fiscal year
ended December 31, 1993.

10.  Indicates  that the exhibit is  incorporated  by reference to the indicated
exhibit of the annual  report on form 10-K of the  Company,  for the fiscal year
ended December 31, 1994.

11.  Indicates  that the exhibit is  incorporated  by reference to the indicated
exhibit of the  Quarterly  Report on Form 10-Q of the  Company  for the  quarter
ended March 31, 1995.

                                       23

<PAGE>








                       This page left blank intentionally.




































                                       F-1


<PAGE>






                         REPORT OF INDEPENDENT CERTIFIED
                               PUBLIC ACCOUNTANTS





Board of Directors and Stockholders
    Alpine Lace Brands, Inc.


We have  audited the  accompanying  consolidated  balance  sheets of Alpine Lace
Brands,  Inc. (a Delaware  corporation) and Subsidiaries as of December 31, 1996
and 1995, and the related consolidated  statements of operations,  stockholders
equity and cash flows for each of the three years in the period  ended  December
31, 1996.  These financial  statements are the  responsibility  of the company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  consolidated  financial  position  of Alpine Lace
Brands,  Inc.  and  Subsidiaries  as of  December  31,  1996 and  1995,  and the
consolidated  results of their operations and their  consolidated cash flows for
each of the three years in the period ended  December 31,  1996,  in  conformity
with generally accepted accounting principles.




/s/Grant Thornton LLP
GRANT THORNTON LLP

New York, New York
February 7, 1997



                                      F-2

<PAGE>


                                                 Alpine Lace Brands, Inc.

                                                CONSOLIDATED BALANCE SHEETS

                                                       December 31,


<TABLE>
<S>                                                            <C>           <C>

                                    ASSETS                            1996          1995 



CURRENT ASSETS
    Cash and cash equivalents ..............................   $   393,173   $   459,610
    Accounts receivable - net ..............................    13,431,641    13,068,356
    Inventories ............................................     8,502,197     6,213,256
    Prepaid expenses and other current assets ..............       689,385       681,445
    Deferred tax asset .....................................        29,583

           Total current assets ............................    23,045,979    20,422,667







PROPERTY, PLANT AND EQUIPMENT - AT COST,
    less accumulated depreciation and amortization .........     2,250,086     2,335,654








OTHER ASSETS
    Note receivable - Mountain Farms, Inc. .................     1,675,948     1,675,948
    Trademarks, trade names and technology, less accumulated
      amortization of $1,019,739 and $865,061 in 1996
      and 1995, respectively ...............................     1,421,882     1,556,240
    Other ..................................................       177,440       286,192

                                                                 3,275,270     3,518,380

                                                               $28,571,335   $26,276,701
</TABLE>





        The accompanying notes are an integral part of these statements.


                                       F-3


<PAGE>

                                                 Alpine Lace Brands, Inc.

                                                CONSOLIDATED BALANCE SHEETS

                                                       December 31,



<TABLE>
<S>                                                              <C>           <C>

                     LIABILITIES AND STOCKHOLDERS  EQUITY               1996          1995 


CURRENT LIABILITIES
   Current maturities of obligations under capital leases ....   $   147,519   $   143,083
   Accounts payable ..........................................    11,685,587    12,844,895
   Accrued expenses and other ................................     1,328,328     1,995,784
   Income taxes payable ......................................       206,723       379,824

          Total current liabilities ..........................    13,368,157    15,363,586

LONG-TERM LIABILITIES, less current maturities
   Long-term debt ............................................     7,521,566     5,325,945
   Obligations under capital leases ..........................       281,847       409,561
   Deferred tax liability ....................................       100,465
   Other long-term liability .................................                      82,362

                                                                   7,903,878     5,817,868

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS  EQUITY
    Preferred stock, par value $.01 per share; authorized
       1,000,000 shares; 45,000 shares issued and outstanding;
       at liquidation amount of $50 per share ................     2,250,000     2,250,000
    Common stock, par value $.01 per share; authorized
       10,000,000 shares; issued and outstanding,
       5,176,636 shares in 1996 and 5,050,136 shares in 1995 .        51,767        50,501
    Additional paid-in capital ...............................     3,602,141     2,611,966
    Retained earnings ........................................     1,916,034       182,780

                                                                   7,819,942     5,095,247
Less
    Common stock in treasury - at cost at December 31, 1996 ..       387,290
    Unearned compensation ....................................       133,352

                                                                   7,299,300     5,095,247

                                                                 $28,571,335   $26,276,701
</TABLE>



        The accompanying notes are an integral part of these statements.


                                       F-4


<PAGE>


                                                 Alpine Lace Brands, Inc.

                                           CONSOLIDATED STATEMENTS OF OPERATIONS

                                                  Year ended December 31,

<TABLE>
<S>                                                          <C>             <C>             <C>

                                                                      1996            1995            1994 


Net sales ................................................   $ 161,896,522   $ 145,043,395   $ 132,354,808
Cost of goods sold .......................................     126,673,081     109,219,994      99,519,951

          Gross profit ...................................      35,223,441      35,823,401      32,834,857

Operating expenses
   Selling ...............................................      26,509,368      25,616,294      25,616,706
   Administrative ........................................       4,821,881       4,854,554       4,546,505
   Restructuring charge ..................................                                       2,640,238
   Write-down of Mountain Farms, Inc. ....................                                       1,517,757
                                                                31,331,249      30,470,848      34,321,206
          Operating profit (loss) ........................       3,892,192       5,352,553      (1,486,349)
Interest expense - net ...................................         840,572         995,649       1,583,040
          Earnings (loss) before income tax provision
             and extraordinary item ......................       3,051,620       4,356,904      (3,069,389)
Income tax provision .....................................       1,149,616         444,876          53,600
          Earnings (loss) before extraordinary item ......       1,902,004       3,912,028      (3,122,989)
Extraordinary item
    Gain from extinguishment of debt, net of income
      taxes of $7,451 ....................................                         103,760

          NET EARNINGS (LOSS) ............................       1,902,004       4,015,788      (3,122,989)

Preferred stock dividends ................................         168,750         121,513
MCT Dairies, Inc. option .................................         107,751

    Net earnings (loss) applicable to common shareholders    $   1,625,503   $   3,894,275   $  (3,122,989)

Earnings (loss) per share of common stock
   Earnings (loss) before extraordinary item .............   $         .31   $         .72   $        (.62)
   Extraordinary item ....................................            --               .02            --   

          Net earnings (loss) per share ..................   $         .31   $         .74   $        (.62)

Weighted average number of common and common
    equivalent shares outstanding ........................       5,239,417       5,289,275       5,012,419
</TABLE>



        The accompanying notes are an integral part of these statements.


                                       F-5


<PAGE>



                            Alpine Lace Brands, Inc.

           CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)

                  Years ended December 31, 1996, 1995 and 1994
<TABLE>
<S>                                           <C>          <C>      <C>      <C>        <C>            <C>       <C>      <C>


                                                                               Additional  Retained    Unearned  Treasury
                                                Preferred    Common stock      paid-in     earnings    compen-   stock -
                                                    stock   Shares    Amount   capital    (deficit)    sation    at cost       Total


Balance at December 31, 1993 ..................            5012419  $ 50124  $ 3129888  $  (588506)                       $ 2591506
Net loss for the year ended December 31, 1994 .                                           (3122989)                        (3122989)
Balance at December 31, 1994 ..................            5012419    50124    3129888    (3711495)                         (531483)
Proceeds from preferred stock offering, net
   of offering costs of $234,768 .............. $ 2250000                      (234768)                                     2015232
Warrants received on debt repurchase ..........                                (212337)                                     (212337)
Reduction in nonemployee stock option .........                                (275386)                                     (275386)
Exercise of stock options, including income
    tax benefit of $29,000 ....................              37717      377     204569                                       204946
Preferred stock dividends .....................                                            (121513)                         (121513)
Net earnings for the year ended December 31,
    1995                                                                                   4015788                          4015788
Balance at December 31, 1995 ..................   2250000  5050136    50501    2611966      182780                          5095247
Purchase of treasury stock ....................                                                                $(387290)    (387290)
Unearned compensation .........................                                                     $(133352)               (133352)
Exercise of stock options, including income  
    tax benefit of $236,359 ...................             126500     1266     990175                                       991441
Preferred stock dividends .....................                                            (168750)                         (168750)
Net earnings for the year ended December 31,
    1996                                                                                   1902004                          1902004
Balance at December 31, 1996 .................. $ 2250000  5176636  $ 51767  $ 3602141  $  1916034  $(133352)  $(387290)  $ 7299300
</TABLE>





The accompanying notes are an integral part of this statement.


                                       F-6


<PAGE>


                                                 Alpine Lace Brands, Inc.

                                           CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                  Year ended December 31,


<TABLE>
<S>                                                            <C>            <C>            <C>


                                                                      1996           1995           1994 


Cash flows from operating activities
    Net earnings (loss) ....................................   $ 1,902,004    $ 4,015,788    $(3,122,989)
    Adjustments to reconcile net earnings (loss) to net cash
      (used in) provided by operating activities
          Write-down of Marolf Dakota Farms fixed assets ...          --             --        1,251,618
          Write-down of investment in Mountain Farms, Inc. .          --             --        1,333,696
          Write-down of Marolf Dakota Farms trademark ......          --             --          243,680
          Extraordinary item ...............................          --         (103,760)          --   
          Depreciation and amortization ....................       625,133        566,251        824,369
          Provision for losses on accounts receivable ......        66,194        200,884        150,956
          Other ............................................       105,455           --             --   
          (Gain) loss on sale of fixed assets ..............          --           24,233         (3,718)
          Changes in operating assets and liabilities
               Accounts receivable .........................      (429,479)     2,959,544     (1,107,663)
               Inventories .................................    (2,288,941)      (765,754)     2,104,792
               Prepaid expenses and other current assets ...        (7,940)       120,559        112,546
               Refundable income taxes .....................          --             --        1,014,795
               Other assets ................................        92,717        139,452        184,425
               Accounts payable ............................    (1,159,308)    (1,765,957)     1,519,095
               Accrued expenses and other ..................      (667,456)      (570,018)     1,139,589
               Income taxes payable ........................        63,258        369,374         30,430
               Other long-term liability ...................       (82,362)      (494,169)       576,531

                                                                (3,682,729)       680,639      9,375,141

       Net cash (used in) provided by operating activities .    (1,780,725)     4,696,427      6,252,152

Cash flows from investing activities
   Proceeds from notes receivable ..........................        16,035         14,385         12,907
   Proceeds from sale of Mountain Farms, Inc. ..............          --             --        3,530,013
   Purchase of property, plant and equipment ...............      (384,887)      (995,196)      (275,701)
   Payments for trademarks, trade names
     and technology ........................................       (20,320)        (2,047)       (56,281)
   Proceeds from sale of fixed assets ......................          --          452,812           --   

       Net cash (used in) provided by investing activities .      (389,172)      (530,046)     3,210,938

</TABLE>





                                      F-7

<PAGE>


                            Alpine Lace Brands, Inc.

                CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

                             Year ended December 31,


<TABLE>
<S>                                                            <C>            <C>            <C>
                                                                      1996           1995           1994 


Cash flows from financing activities
    Payment of obligations under capital leases - net ......   $  (123,278)   $  (218,292)   $  (191,943)
    Costs from issuance or reduction of common stock,
      options and warrants .................................                     (275,386)
    Preferred stock dividends ..............................      (168,750)      (121,513)
    Purchase of treasury stock .............................      (387,290)
    Net proceeds (payments) of notes payable ...............     2,195,621     (5,721,172)    (9,071,670)
    Proceeds from exercise of stock options ................       587,157        175,946
    Net proceeds from issuance of preferred stock ..........                    2,015,232

       Net cash (used in) provided by financing activities .     2,103,460     (4,145,185)    (9,263,613)

       NET (DECREASE) INCREASE IN CASH AND
          CASH EQUIVALENTS .................................       (66,437)        21,196        199,477

Cash and cash equivalents at beginning of year .............       459,610        438,414        238,937

Cash and cash equivalents at end of year ...................   $   393,173    $   459,610    $   438,414


Supplemental disclosures of cash flow information:
    Cash paid during the year for
      Interest .............................................   $   842,619    $ 1,177,079    $ 1,602,511

      Income taxes .........................................   $ 1,056,321    $    59,549    $   103,246
</TABLE>



In connection with the sale of 65% of the outstanding  shares of Mountain Farms,
Inc.  in February  1994,  the  Company  has a note  receivable  in the amount of
$1,675,948 (Note E).






        The accompanying notes are an integral part of these statements.


                                      F-8

<PAGE>


                            Alpine Lace Brands, Inc.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           December 31, 1996 and 1995



NOTE A - SUMMARY OF ACCOUNTING POLICIES

A summary of the significant  accounting  policies  consistently  applied in the
preparation of the accompanying consolidated financial statements follows:
 
1. Business and Principles of Consolidation
 
The  consolidated  financial  statements  include  the  accounts  of Alpine Lace
Brands,  Inc. (the "Company") and its  wholly-owned  subsidiaries,  MCT Dairies,
Inc. ("MCT") and Dakota Farms Cheese, Inc. ("DFC"), formerly Marolf Dakota Farms
Cheese,  Inc. All material  intercompany  accounts  and  transactions  have been
eliminated.
 
The Company is engaged in the development, marketing and distribution of branded
cheeses  and deli  meats  and  other  specialty  food  products.  Sales of these
products  are  primarily  to   supermarket   chains,   food   distributors   and
delicatessens located throughout the United States. MCT is engaged in cheese and
dairy products  commodity  trading.  DFC currently  converts and packages Alpine
Lace(R) brand dairy case sliced  cheeses.  Prior to 1995, DFC produced skim milk
cheese used by the Company in its product line.  In addition,  DFC converted and
packaged DFC brand Colby,  Cheddar,  and Monterey  Jack cheeses  marketed by the
Company.
 
2. Revenue Recognition
 
Sales and  related  cost of sales are  recognized  upon  shipment  of  products.
Promotional allowances are charged to selling expense.
 
3. Inventories
 
Inventories  consisting  primarily  of bulk  cheese,  cheese  products  held for
resale,  raw materials and packaging supplies are stated at the lower of cost or
market. Cost is determined using the first-in, first- out method.
 
4. Property, Plant and Equipment
 
Property,  plant and equipment are depreciated over periods sufficient to relate
the cost of such  assets to  operations  over the  following  estimated  service
lives:
 
Building and improvements                              25-31 years
Leasehold improvements                                  3-20 years
Furniture, fixtures and equipment                       3-10 years


 



                                      F-9

<PAGE>


                            Alpine Lace Brands, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1996 and 1995



NOTE A (continued)

The  straight-line  method of  depreciation  is followed for  substantially  all
assets for financial reporting  purposes;  but accelerated methods are generally
used for tax purposes.
 
5. Earnings Per Share of Common Stock
 
Earnings per share of common  stock was computed by dividing net earnings  after
deducting preferred dividend  requirements and earnings applicable to MCT option
(see Note M) by the weighted average number of shares of common stock and common
equivalent shares outstanding  during the period,  including the dilutive effect
of warrants and stock options outstanding, if applicable.
 
6. Income Taxes
 
The Company and its wholly-owned subsidiaries file a consolidated Federal income
tax return.  Deferred income taxes are recognized in the accompanying  financial
statements due to differences between financial and tax reporting.
 
7. Cash and Cash Equivalents
 
For purposes of the  statement of cash flows,  the Company  considers all highly
liquid debt instruments  purchased with an original  maturity of three months or
less to be cash equivalents.
 
8. Other Assets
 
The costs of  patents,  trademarks,  trade  names and  technology  acquired  are
amortized by the  straight-line  method over their estimated useful lives, up to
20 years. On an ongoing basis, management reviews the valuation and amortization
of intangibles to determine possible  impairment by comparing the carrying value
to the  undiscounted  cash  flows of the  related  assets.  Should  the  Company
determine that the intangibles are impaired,  it would adjust the intangibles to
reflect the fair value at that time.
 
 
9. Use of Estimates
 
In  preparing  financial   statements  in  conformity  with  generally  accepted
accounting principles,  management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of
contingent  assets and  liabilities at the date of the financial  statements and
revenues and expenses during the reporting  period.  Actual results could differ
from those estimates.


                                      F-10

<PAGE>


                            Alpine Lace Brands, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1996 and 1995



NOTE A (continued)

10. Fair Value of Financial Instruments
 
Based on rates  currently  available  to the Company for bank loans and deposits
with similar terms and  maturities,  the fair value of the  company's  long-term
debt and notes  receivable  approximate  the carrying  value.  Furthermore,  the
carrying  value  of all  other  financial  instruments  potentially  subject  to
valuation risk (principally  consisting of cash and cash  equivalents,  accounts
receivable, and accounts payable) also approximate fair value.


NOTE B - PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are summarized as follows:
 
                                                        1996           1995 


Leasehold improvements .......................   $   121,115    $   106,176
Furniture, fixtures and equipment ............     2,731,754      2,389,337
Equipment under capital lease ................       973,795        973,795
Land, building and improvements ..............       314,418        289,314

                                                   4,141,082      3,758,622
Less accumulated depreciation and amortization    (1,890,996)    (1,422,968)

                                                 $ 2,250,086    $ 2,335,654



NOTE C - INVENTORIES

Inventories are summarized as follows:
 
                                                         1996         1995 


Cheese inventory..............................     $7,977,847   $5,880,513
Packaging supplies............................        524,350      332,743

                                                   $8,502,197   $6,213,256





                                      F-11

<PAGE>


                            Alpine Lace Brands, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1996 and 1995



NOTE C (continued)

In  connection  with  the  purchase  of  cheese  for  anticipated  manufacturing
requirements,  the  Company  purchases  cheese  futures  and  options  as deemed
appropriate to reduce the risk of future cheese price  increases.  These futures
and options are  accounted  for as hedges.  Under  hedge  accounting,  gains and
losses  are  deferred  and  recognized  in the cost of goods sold as part of the
product   cost.   The  Company  can  be  exposed  to  losses  in  the  event  of
nonperformance  by the other  parties to the  futures or options.  However,  the
Company does not anticipate nonperformance by the parties. At December 31, 1996,
the Company did not own any futures and options contracts.


NOTE D - CAPITALIZED LEASES

The  following is a schedule by years of future  minimum  lease  payments  under
capital  leases,  together  with  the  present  value of the net  minimum  lease
payments as of December 31, 1996:

Year ended December 31,
1997 ......................................   $177,498
1998 ......................................    171,875
1999 ......................................    122,583
2000 ......................................      9,165

Net minimum lease payments ................    481,121
Less amount representing interest .........     51,755

Present value of net minimum lease payments   $429,366

Current portion ...........................   $147,519
Noncurrent portion ........................    281,847

                                              $429,366


Equipment under capitalized  leases at December 31, 1996 and 1995 of $974,000 is
presented   net  of   accumulated   amortization   of  $544,000  and   $421,000,
respectively.




                                      F-12

<PAGE>


                            Alpine Lace Brands, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1996 and 1995



NOTE E - MOUNTAIN FARMS, INC.

On February 17, 1994,  the Company  sold common  stock  representing  65% of the
outstanding  shares of MFI.  After the sale,  MFI owed the  Company  $1,675,948,
which is evidenced by an unsecured note payable, due ten years from closing with
accrued  interest  at LIBOR  plus 1/4%.  The sales  proceeds,  net of  expenses,
approximated the company's proportionate investment in MFI at December 31, 1993.
In addition,  the Company  entered into a three-year  supply  agreement with MFI
whereby MFI was to convert  products  for the Company in an amount not less than
3,000,000 pounds annually.  In December 1994, in connection with a restructuring
of the  company's  operations  (Note  F),  the  Company  terminated  the  supply
agreement with MFI. In addition, based on an evaluation of the recoverability of
its  investment  in MFI, the Company  recorded a charge of $1,517,757 in 1994 to
write down to zero the  carrying  value of its  investment  and certain  related
assets in MFI and related expenses.
     
During 1996 and 1995,  MFI continued to incur  operating  losses and the Company
was notified that MFI was closing its production  facility and restructuring its
business  (including  converting cheese at an affiliate of MFI) in an attempt to
improve  operations.  Although MFI has taken steps that it believes will improve
operations,  there can be no assurance  that they will be  successful  and it is
reasonably  possible that, in the near term, the Company may incur a loss on the
MFI note of $1,675,948.  The Company has not accrued any interest  receivable on
this note. The Company is pursuing its  alternatives  in receiving full value of
the note.


NOTE F - RESTRUCTURING CHARGE

In December 1994, the Company  approved a restructuring  plan in connection with
the company's cheese production, conversion and packaging operations relating to
its Alpine  Lace  products.  In  addition,  DFC cheese  products  converted  and
packaged at DFC were  discontinued  in December  1994.  In  connection  with the
restructuring,  the  Company,  in  January  1995,  closed  its skim milk  cheese
production facility at DFC and terminated its supply agreement with MFI, and has
utilized  other  manufacturers  to perform these  functions.  As a result of the
restructuring, all cheese production is performed at outside suppliers. Included
in the restructuring charge for the year ended December 31, 1994 is a write-down
of the  DFC  plant  and  equipment  of  $1,252,000,  the  write-down  of the DFC
trademark of $244,000,  termination  pay  obligations of $55,000,  an accrual of
$1,070,700  relating to the  cancellation of the supply agreement with MFI which
is payable in 26 monthly  installments  ending  February 1997 and other items of
$18,000.  In 1995, the Company sold the assets of DFC not used at their carrying
value.




                                      F-13

<PAGE>


                            Alpine Lace Brands, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1996 and 1995



NOTE G - LONG-TERM DEBT

The Company has a long-term  bank credit  facility  that  provides for revolving
credit loans of up to $13,500,000  through March 2000 subject to availability of
eligible  accounts  receivable  and  inventory;  and the  availability  of up to
$1,500,000 to purchase  equipment subject to certain  limitations  through March
2000. The credit facility contains certain covenants and restrictions on capital
expenditures,  indebtedness, the declaration of future dividends and maintenance
of certain financial  ratios,  including,  adjusted tangible net worth,  current
ratio and cash flow. Interest on the revolving credit loan is payable monthly at
the  company's  option of either LIBOR plus 3% or the banks base rate (8.25% at
December  31,  1996)  plus 1/2%,  and a facility  fee of 3/16% is payable on the
unused balance.  The borrowings are  collateralized by all assets of the Company
and its subsidiaries.  At December 31, 1996 and 1995, the outstanding balance of
the facility was $7,521,566 and $5,325,945, respectively.
     
On March 27, 1995, the Company redeemed its $3,000,000 subordinated note payable
and common stock  purchase  warrants  for  $3,000,150  plus accrued  interest of
$42,750.  The redemption resulted in a net extraordinary gain of $103,760 to the
Company.  A portion of the funds for the  redemption  came from the  issuance of
$2,250,000 of convertible preferred stock (Note M) on March 22, 1995.
             

NOTE H - INCOME TAXES

Income tax expense for the years ended December 31, 1996, 1995 and 1994 consists
of:
 
                                   1996           1995          1994 


Current
    Federal .............   $   843,438    $   405,654   $    10,000
    State ...............       235,296         46,673        43,600

                              1,078,734        452,327        53,600

    Deferred income taxes
    Federal .............        82,332
    State ...............       (11,450)

                                 70,882           --            --   


                            $ 1,149,616    $452,327 (a)  $    53,600



(a) Includes $7,451 net in extraordinary item.




                                      F-14

<PAGE>


                            Alpine Lace Brands, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1996 and 1995



NOTE H (continued)

During the year ended  December  31,  1995,  income tax  expense  was reduced by
approximately  $414,000  resulting  from the benefit of utilizing  net operating
loss carryforwards.
     
The Company  accounts  for income taxes in  accordance  with the  provisions  of
Statement of Financial  Accounting  Standards  No. 109,  "Accounting  for Income
Taxes"  ("SFAS No.  109").  SFAS No. 109  requires  recognition  of deferred tax
liabilities and assets for the expected  future tax  consequences of events that
have been  included  in the  financial  statements  or tax  returns.  Under this
method,  deferred  tax  liabilities  and  assets  are  determined  based  on the
difference  between  the  financial  statement  and  tax  bases  of  assets  and
liabilities  using  enacted  tax  rates in  effect  for the  year in  which  the
differences are expected to reverse.
     
Deferred tax assets and liabilities at December 31, 1996 and 1995 consist of the
following:
     
                                                         1996        1995 


Current
    Deferred tax assets
       Allowance for doubtful accounts ...........   $  9,850    $ 17,210
       Inventory .................................       --        82,663
       Capitalized package design costs ..........     63,865      72,328
       Alternative minimum tax credit carryforward       --        27,828
       Charitable contributions ..................       --        12,768
       Cancellation of contract ..................       --        10,063

            Total current deferred tax assets ....     73,715     222,860

    Deferred tax liabilities
      Inventory ..................................    (41,238)       --   
      Charitable contributions ...................     (2,894)       --   

           Total current deferred tax liabilities     (44,132)       --   

           Net current deferred tax asset ........     29,583     222,860





                                      F-15

<PAGE>

                            Alpine Lace Brands, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1996 and 1995



NOTE H (continued)

                                                             1996         1995 


Noncurrent
    Deferred tax assets
       Patent amortization ..........................   $  96,058    $  88,484
       State net operating loss carryforwards .......       1,038       26,602

            Total noncurrent deferred tax assets ....      97,096      115,086

    Deferred tax liabilities
       Depreciation of property, plant and equipment     (197,561)    (149,156)

            Total noncurrent deferred tax liabilities    (197,561)    (149,156)

            Net noncurrent deferred tax liability ...    (100,465)     (34,070)

       Less valuation allowance .....................        --       (188,790)

            Net deferred tax liabilities ............   $ (70,882)   $    --   


During the year ended December 31, 1996,  the change in the valuation  allowance
was approximately $189,000.
     
The  differences  (expressed  as a  percentage  of pretax  income)  between  the
statutory Federal income tax rate and the effective income tax rate as reflected
in the accompanying consolidated statements of earnings are as follows:
     
                                               1996       1995       1994 


Statutory Federal income tax rate ........       34.0%      34.0%     (34.0)%
State income taxes, net of Federal benefit        4.8         .7         .9
Permanent differences ....................        1.0         .6       (1.1)
Write-down of investment in MFI ..........         --         --       16.5
Alternative minimum tax credit ...........         --       (1.1)        .3
Change in deferred tax valuation allowance       (6.2)     (22.9)      19.3
Other ....................................        4.1       (1.2)       (.2)

Effective tax rate .......................       37.7%      10.1%       1.7%






                                      F-16

<PAGE>


                            Alpine Lace Brands, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1996 and 1995



NOTE I - RELATED PARTY TRANSACTIONS

Market Finders  Brokerage,  Inc. ("MFBI") is a company  100%-owned by a Director
and Vice  President of the Company,  who is also the wife of the  President  and
principal  stockholder  of the  Company.  MFBI and the Director  introduced  the
Company  to a broker  and  receives  a  percentage  commission  from the  broker
(subject to a specified  minimum and maximum) based on commissions  generated by
this business.
     
During the years ended  December  31,  1996,  1995 and 1994,  the  Company  made
purchases  of $539,181,  $126,729  and  $181,742,  respectively,  from MFBI.  In
addition,  during the years ended  December  31, 1995 and 1994,  the Company had
sales of, $115,632 and $155,210,  respectively, to MFBI. Commissions paid to the
purchaser of MFBIs commission brokerage business amounted to $215,951, $231,370
and $215,258,  respectively,  during the years ended December 31, 1996, 1995 and
1994.
     
In December 1991, MCT loaned its current president $65,000 which was repaid over
five years at an interest  rate of 11%. As a condition of the loan the president
purchased  all the  outstanding  common  stock of Herbloc Inc.  ("Herbloc")  for
$60,000, and entered into a five-year supply agreement through December 31, 1996
with MCT, which is automatically renewed for an additional five years unless MCT
elects to  terminate.  MCT did not elect to terminate  the agreement at December
31,  1996.  The  supply  agreement  guarantees  that each  year MCT will  either
purchase at least 86% of Herblocs "quota share" for cheese and cheese products,
or notify  Herbloc by  September  15 of such year of the  amount of each  quota
share  which MCT does not yet plan to  purchase  during  such year  imported by
Herbloc.  MCT has  guaranteed  Herbloc an aggregate  mark-up of $18,000 per year
during the initial five-year term. The Company estimates its purchase commitment
for 1997 amounts to approximately $550,000.


NOTE J - COMMITMENTS AND CONTINGENCIES

The  Company  leases   administrative   offices  for  annual  rentals  totalling
approximately  $144,508 and expiring on April 30, 2000.  The lease  provides for
escalation charges for operating expenses and real estate property taxes.
     
The  Company  has a  two-year  agreement  with a  public  warehouse  to  provide
refrigerated  warehouse space for a minimum monthly fee of $30,000 which expires
on March 31, 1998.
     



                                      F-17

<PAGE>


                            Alpine Lace Brands, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1996 and 1995



NOTE J (continued)

The Company is a party to an agreement  for the  manufacture  of Alpine  Lace(R)
reduced  fat swiss  cheese.  The  initial  term of the  agreement  continues  to
December 31, 2000, with five-year  renewal periods  thereafter unless terminated
by either  party.  The price to be paid by the  Company is based on a  specified
commodity  block  market  price on the date the product is  manufactured  plus a
fixed premium (subject to periodic adjustment by mutual agreement). Although the
manufacturer is to be the primary source of supply of this product,  the Company
is not obligated to purchase any specific  quantities of the product. As part of
the cheese  manufacture  agreement,  the Company made a $300,000  advance to the
manufacturer, which the manufacturer may use at any time to credit the company's
current obligation.  The $300,000 advance must be maintained at all times during
the duration of this agreement.
     
The Company has an  employment  agreement  with its  President  providing  for a
minimum  annual base salary of  $325,000.  The term of the  agreement is through
January 3, 2000.  The Company has one agreement  with an officer that expires in
April 1997 and three  agreements  with officers that expire in December 1997 and
three  agreements  with officers  that expire in January 1998.  The terms of the
agreements  provide for minimum  salaries  totalling  $870,800.  The  agreements
automatically  renew  at the end of the  period,  in the  absence  of  specified
advance notice of intention not to renew and  automatically  renew upon a change
in control of the Company.
     
The Company is a party to a consulting  agreement  expiring on November 7, 1999.
The consulting fee is based upon varying rates per pound produced, by or for the
Company or any of its affiliates, of certain of the company's cheese products up
to a maximum of $375,000 per year. The minimum payment required in the agreement
is $132,000 per year.
     
In connection  with the  acquisition of certain rights and technology from Gamay
Foods, Inc. ("Gamay"),  the Company entered into a consulting agreement with the
principal  shareholder of Gamay for an initial term of ten years expiring on May
21, 2000. The consulting fee is $200,000 per year. The Company also pays Gamay a
royalty  based on pounds sold of its Fat Free and Low-Fat  cheese  products.  On
February 24, 1995, the Company and Gamay modified this agreement as follows: (i)
the consulting agreement was extended for another four-year term expiring on May
20, 2004 at a fee of $100,000 per year; (ii) the royalty  payments were extended
for a four-year term from the original  fifteen-year  period; (iii) in the event
the Company  receives any licensing  revenues,  the Company shall pay to Gamay a
licensing  royalty of 25% of the company's net licensing  revenue;  and (iv) the
Company  has a call  option  whereby,  upon  the sale of the  company's  branded
division, the Company can cancel all agreements with Gamay and the Company shall
pay to Gamay the  greater  of either 7% of the sales  proceeds  or a minimum  of
$5,000,000 to a maximum of $6,000,000.
     
     


                                      F-18

<PAGE>


                            Alpine Lace Brands, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1996 and 1995



NOTE J (continued)

During 1996, the Company was joined as a defendant in two separate class actions
pending  in the  United  States  District  Court  for the  Eastern  District  of
Wisconsin. The complaints in these two actions are nearly identical,  were filed
by the same plaintiffs  lawyers,  and were brought on behalf of the same class.
Both complaints allege conspiracy among the Company,  Kraft Foods, Inc., Borden,
Inc. and the National Cheese Exchange,  Inc. to, among other things,  manipulate
cheese prices and  unreasonably  restrain trade in violation of the Sherman Act.
Both cases also  assert  state law claims for fraud and  misrepresentation,  and
breach of contract. Both complaints seek unspecified actual and punitive damages
and injunctive relief.
     
In December  1996, a motion for class  certification  was denied in the first of
these  cases,  and that  case is  currently  proceeding  on  behalf of the named
plaintiffs  only. In the second case,  plaintiffs have filed a motion to dismiss
without prejudice;  defendants have opposed dismissal on those terms. The motion
is still  pending.  The Company  intends to continue to vigorously  defend these
actions.
     
In 1995, the Company commenced  litigation  against Kraft Foods,  Inc.,  Borden,
Inc., Beatrice Cheese,  Inc. and Schreiber Foods, Inc. alleging  infringement of
its patent for the manufacture of low fat cheese.  Summary  judgment was granted
in favor of Kraft in March  1996 and  partial  summary  judgment  regarding  one
production  facility  was granted in favor of Borden and  Schreiber in September
1996.  Both summary  judgment  decisions have been appealed to the United States
Court of Appeals for the Federal Circuit and the appeals have been consolidated.
A motion for partial summary  judgment by the fourth  defendant,  Beatrice,  was
denied in September 1996.
     
In addition,  in this  litigation,  motions have been filed by Kraft to have the
case declared  exceptional under Section 285 of the Patent Statute and by Borden
and Schreiber to have the case declared  exceptional in part. If the motions are
granted,  it is  anticipated  that  the  Company  would  appeal.  If the case is
ultimately declared exceptional,  the Company may be liable to those parties for
some portion of their reasonable attorneys fees and expenses.


NOTE K - RETIREMENT PLAN

The Company has a defined  contribution 401(k) plan.  Eligible  participants may
contribute a fixed weekly  dollar  amount or a percentage  of their basic annual
salary  as  contributions.  The  Company  may  contribute  to  the  Plan  at the
discretion of the Board of Directors. The Company has not made any contributions
to the Plan.




                                      F-19

<PAGE>


                            Alpine Lace Brands, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1996 and 1995



NOTE L - STOCK OPTIONS

The  Company  has a  stock  option  plan  (the  "Plan")  for its  employees  and
directors.  Under the Plan,  1,000,000  shares of the company's common stock are
reserved for issuance.  The options granted to date generally become exercisable
over  three  years  commencing  one year  after  the date of grant  and upon the
occurrence of certain  corporate  transactions  the options  become  immediately
exercisable. The following table summarizes the options granted under the plan:
     
                                               Weighted
                                                average
                                     Shares       price  

Outstanding at December 31, 1993    296,650    $   5.02

Options granted ................    121,000        3.72
Options expired ................    (53,632)       4.74

Outstanding at December 31, 1994    364,018        4.63

Options granted ................    179,700        9.94
Options expired ................     (3,200)       3.88
Option exercised ...............    (36,717)       4.68

Outstanding at December 31, 1995    503,801        6.53

Options granted ................    166,500        6.03
Options expired ................     (7,166)       7.51
Options exercised ..............     (6,500)       4.29

Outstanding at December 31, 1996    656,635        6.41

Exercisable at December 31, 1996    341,031    $   5.67


The Company has adopted the disclosure-only provisions of Statement of Financial
Accounting  Standards No. 123, "Accounting for Stock-Based Compensation."  The
Company  accounts for its option plan under APB Opinion No. 25,  "Accounting for
Stock Issued to Employees," and related  interpretations  and,  accordingly,  no
compensation   cost  has  been   recognized  for  the  stock  option  plan.  Had
compensation  cost for the company's stock option plan been determined  based on
the fair value at the grant date for awards in 1995 and 1996 consistent with the
provisions  of SFAS No. 123, the  company's  net earnings and earnings per share
would have been reduced to the pro forma amounts indicated below:



                                      F-20

<PAGE>


                            Alpine Lace Brands, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1996 and 1995



NOTE L (continued)

                                  1996            1995 


Net earnings
    As reported ......   $   1,902,004   $   4,015,788
    Pro forma ........       1,584,457       3,740,400

    Earnings per share
    As reported ......   $         .31   $         .74
    Pro forma ........             .25             .71


These pro forma amounts may not be representative of future disclosures  because
they do not take into effect pro forma  compensation  expense  related to grants
made before  1995.  The fair value of each option grant is estimated on the date
of grant  using  the  Black-Scholes  option-pricing  model  with  the  following
weighted average assumptions for grants in 1995 and 1996: expected volatility of
40%; weighted average risk-free rate of 6.1%; and weighted average expected life
of 7.09 years.
     
The weighted  average grant date fair value of options  granted  during 1996 and
1995 was $3.43 and $5.17, respectively.
     
The following table summarizes  information about the stock options  outstanding
at December 31, 1996:
<TABLE>
<S>                                   <C>          <C>                     <C>            <C>               <C>
     
                                                   Options outstanding                         Options exercisable       

                                           Number       Weighted                               Number
                                      outstanding        average           Weighted       exercisable       Weighted
                                               at      remaining            average                at        average
                                      December 31,   contractual           exercise       December 31,      exercise
Range of exercise prices                     1996           life              price              1996          price     

   $0.00  -  $ 4.00                       127,001           6.57            $  3.30            91,516        $  3.21
   $4.01  -  $ 8.00                       359,934           7.44               5.75           192,934           5.53
   $8.01  -  $12.00                       169,700           8.90              10.14            56,581          10.14

                                          656,635                                             341,031

</TABLE>



NOTE M - STOCKHOLDERS EQUITY

During  the  years  ended  December  31,  1996,  1995  and  1994,  warrants  and
nonemployee stock options to purchase 102,500 shares,  30,500 shares,  and 5,000
shares of  common  stock at an  average  of  $5.25,  $7.47 and $4.50 per  share,
respectively,  were  issued,  subject to  customary  terms and  conditions.  The
102,500 stock options  issued in 1996 were in connection  with certain  purchase
arrangements for inventory and as sales incentives to food brokers.


                                      F-21

<PAGE>


                            Alpine Lace Brands, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1996 and 1995



NOTE M (continued)

The options  generally  become  exercisable over three years commencing one year
after the date of grant  and have a term of ten  years.  The fair  value of each
option is estimated on the date of grant using the Black-Scholes option pricing
model.  The  Company  recorded an increase  in  additional  paid-in  capital and
unearned  compensation of $167,925 which will be amortized over three years. The
Company  recorded  expense in 1996 of $34,573 in connection  with these options.
During 1995, the 160,000  nonemployee stock options were reduced by 40,000,  and
the Company  made a payment of  $240,000  which was  recorded as a reduction  of
additional paid-in capital.
 
The following table  summarizes  shares of common stock reserved for issuance in
connection with the warrants and nonemployee options at December 31, 1996:
 
Number of shares issuable                                        228,152

Weighted average price                                             $6.97

Exercisable                                                      178,152


The warrants have varying expiration dates through August 1, 2006.
 
On January 1, 1995,  the  President of MCT obtained an option to purchase 20% of
MCT for approximately  $97,000.  Thirty percent of the option vested immediately
and the remaining  seventy percent vests over three and one-half  years.  Upon a
change in control (as defined), the President of MCT will have the option to put
the  shares  back to the  Company  at a premium  of  approximately  $257,644  at
December 31, 1996.
 
On March 22, 1995,  the Company  completed a private  placement of $2,250,000 of
7.5% cumulative  convertible  preferred stock,  resulting in net proceeds to the
Company of approximately $2 million.  The securities are convertible into common
stock of the Company at a  conversion  price of $7-3/8 for five years,  at which
time the Company must either  force a  conversion  at market price of the common
stock or redeem the  preferred  stock.  In the event of a change in control  (as
defined),  the Company is required to make an offer to purchase the  convertible
preferred stock.
 

NOTE N - BUSINESS SEGMENT INFORMATION

The  company's   operations   consist  of  two  segments:   (1)  the  marketing,
distributing,  packaging,  and converting of branded cheeses and other specialty
food products and (2) cheese and dairy products trading.
 



                                      F-22

<PAGE>

                            Alpine Lace Brands, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1996 and 1995



NOTE N (continued)

Operating  profit is total revenue less operating costs and expenses  related to
each segment net of certain unallocated corporate expenses.  Identifiable assets
are those  used in each  segment.  For  consolidated  purchases,  two  suppliers
accounted  for 40%,  52% and 37% of total  purchases  in  1996,  1995 and  1994,
respectively.
 
During 1996, 1995 and 1994,  cheese and dairy products trading had inter-segment
sales  of   $2,761,782,   $5,640,794   and   $6,483,344  to  cheese   marketing,
distributing,  packaging and converting of branded  cheeses and other  specialty
food  products.  During 1996,  1995 and 1994,  cheese  marketing,  distributing,
packaging and converting of branded cheese and other specialty food products had
intersegment  sales of  $251,831,  $108,729  and $ 172,131  to cheese  and dairy
products trading, respectively.
 
Information  about the company's  operations in different  business segments for
the years ended December 31, 1996, 1995and 1994 is as follows:

<TABLE>
<S>                                       <C>              <C>              <C>
 
                                                   1996             1995             1994 


Net sales
   Marketing, distributing, packaging
      and converting of branded cheeses
      and other specialty food products   $ 113,915,161    $ 108,861,583    $ 104,145,329
   Cheese and dairy products
      trading .........................      50,994,974       41,931,335       34,864,953
   Elimination of intersegment
      sales ...........................      (3,013,613)      (5,749,523)      (6,655,474)

          Total net sales .............   $ 161,896,522    $ 145,043,395    $ 132,354,808
</TABLE>

                                      F-23
<PAGE>


                            Alpine Lace Brands, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1996 and 1995



NOTE N (continued)
<TABLE>
<S>                                         <C>             <C>             <C>    

                                                    1996            1995            1994 


Operating profit (loss)
   Marketing, distributing, packaging,
      and converting of branded cheeses
      and other specialty food products .   $  3,508,068    $  5,805,840    $ (1,195,974)
   Cheese and dairy products
      trading ...........................      1,182,163         275,615         359,350

          Operating profit (loss) .......      4,690,231       6,081,455        (836,624)

Corporate expenses ......................       (798,039)       (728,902)       (649,725)
Interest income .........................          1,117           2,122           8,406
Interest expense ........................       (841,689)       (997,771)     (1,591,446)

          Earnings (loss) before income
             taxes and extraordinary item   $  3,051,620    $  4,356,904    $ (3,069,389)


Identifiable assets
   Marketing, distributing, packaging,
      and converting of branded cheeses
      and other specialty food products .   $ 22,109,642    $ 21,828,300    $ 21,783,851
   Cheese and dairy products
      trading ...........................      6,461,693       4,448,401       7,152,664

          Total assets ..................   $ 28,571,335    $ 26,276,701    $ 28,936,515
</TABLE>





                                      F-24

<PAGE>

                            Alpine Lace Brands, Inc.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

                           December 31, 1996 and 1995



NOTE N (continued)

<TABLE>
<S>                                       <C>            <C>            <C>  
                                                 1996           1995           1994 


Depreciation and amortization
   Marketing, distributing, packaging,
      and converting of branded cheeses
      and other specialty food products   $   625,133    $   566,251    $   824,369

Capital expenditures
   Marketing, distributing, packaging,
      and converting of branded cheeses
      and other specialty food products   $   384,887    $   995,196    $   317,917
</TABLE>



NOTE O - INTEREST EXPENSE - NET
<TABLE>
<S>                                       <C>            <C>            <C>   

                                                 1996           1995           1994 


Interest expense - net
   Interest expense ...................   $   841,689    $   997,771    $ 1,591,446
   Interest income ....................        (1,117)        (2,122)        (8,406)

                                          $   840,572    $   995,649    $ 1,583,040

</TABLE>




                                      F-25

<PAGE>



                                                                  Exhibit 4.1(d)
                                  AMENDMENT TO
                           LOAN AND SECURITY AGREEMENT


THIS AMENDMENT TO LOAN AND SECURITY  AGREEMENT  (this  "Agreement")  is made and
executed  this day of  October,  1996,  by and among FLEET  CAPITAL  CORPORATION
("Lender"),  a Rhode  Island  corporation  with  an  office  at 200  Glastonbury
Boulevard,  Glastonbury,  Connecticut  06033 (as  successor by  assignment  from
Barclays  Business  Credit,  Inc.),  and ALPINE LACE  BRANDS,  INC.  ("ALB"),  a
Delaware  corporation  with its chief  executive  office and principal  place of
business at 111 Dunnell Road,  Maplewood,  New Jersey 07040,  MCT DAIRIES,  INC.
("MCT"),  a New Jersey corporation with its chief executive office and principal
place of business at 111 Dunnell  Road,  Maplewood,  New Jersey 07040  (formerly
known as Market Cheese  Traders,  Inc.),  and MAROLF  DAKOTA FARMS CHEESE,  INC.
("MDFC"),  a Delaware  corporation with its chief executive office and principal
place of business at 2350 Main Street, Sturgis, South Dakota 57785.

                                R E C I T A L S:

1. Lender,  ALB and MCT are parties to that certain Loan and Security  Agreement
(as amended from time to time, the "Loan Agreement") dated March 3, 1993.

2. Pursuant to the terms of the Loan Agreement, Lender has made available to ALB
and MCT a credit facility in the total amount of $20,000,000.00.

3.  Lender,  ALB,  MCT and MDFC  have  agreed to amend  the Loan  Agreement  for
purposes of,  among other  things,  (a)  reducing the amount of credit  facility
established thereunder,  (b) modifying certain terms and conditions thereof, and
(c) adding MDFC as a borrower in connection therewith.

                              A G R E E M E N T S:

Now  therefore,  in  consideration  of the foregoing and other good and valuable
consideration,  the receipt and  sufficiency  of which are hereby  acknowledged,
Lender, ALB, MCT and MDFC agree as follows:

1.  MDFC is  hereby  made a  party  to the  Loan  Agreement  and all  references
contained  therein and herein to the term "Borrower"  shall be deemed to include
MDFC in all respects.  All terms and  conditions set forth in the Loan Agreement
shall be  binding  upon and inure to the  benefit  of MDFC  with full  force and
effect as though  MDFC were an  original  signatory  to the Loan  Agreement.  In
addition,  but without limiting the generality of the foregoing,  the provisions
of  Section  2.7 of the Loan  Agreement  are hereby  acknowledged  to be for the
benefit  of,  and  binding  upon,  MDFC as though  MDFC was  specifically  named
therein.

<PAGE>

2. Mountain Farms,  Inc.  ("MFI"),  a Utah  corporation with its chief executive
office and principal  place of business at 915 East Karcher Road,  Nampa,  Idaho
83687, is hereby deleted as a party to the Loan Agreement. All references in the
Loan Agreement and in this Agreement to the term  "Borrower"  shall be deemed to
exclude MFI in all respects.

3.  Capitalized  terms used but not defined herein shall have the meanings given
to them in the Loan Agreement.

4.       Section 1.1 of the Loan Agreement is hereby amended as follows:

(a) The  definition  of the term "Bank" is hereby  deleted in its  entirety  and
replaced by the following:

"Bank - Fleet National Bank."

(b) The  definition  of the term  "Borrowing  Base"  is  hereby  deleted  in its
entirety and replaced by the following:

"Borrowing Base - as at any date of  determination  thereof,  an amount equal to
the lesser of:

(a) $13,500,000.00; or

(b) an amount equal to:

(i) Eighty-five  percent (85%),  or such lesser  percentage as Lender may in its
reasonable  credit  judgment  determine  from time to time, of the net amount of
Eligible Accounts of ALB and MDFC outstanding at such date;

                                      PLUS

(ii)  Ninety  percent  (90%),  or such  lesser  percentage  as Lender may in its
reasonable credit judgment determine from time to time, of the Eligible Accounts
of MCT outstanding at such date;

                                      PLUS

(iii) the lesser of (A)  $6,500,000.00  or (B) seventy  percent  (70%),  or such
lesser  percentage as Lender may in its reasonable  credit  judgement  determine
from time to time,of the value of Eligible  Inventory at such date consisting of
raw

<PAGE>

materials  or finished  goods,  calculated  on the basis of the lower of cost or
market  with  the cost of raw  materials  and  finished  goods  calculated  on a
first-in, first- out basis, provided,  however, that at no time shall the amount
advanced  or to be  advanced  in respect of  Eligible  Inventory  consisting  of
consigned Inventory exceed the aggregate outstanding amount of $500,000.00,  and
provided, further that at no time shall the amount advanced or to be advanced in
respect of Eligible  Inventory  consisting  of  trimmings  exceed the  aggregate
outstanding amount of $750,000.00;

MINUS (subtract from the sum of clause (i), (ii) and (iii) above.

(iv) an amount  equal to the sum of (A) the face amount (or such other amount as
Lender may in its reasonable credit judgment determine) of all LC Guaranties and
Letters of Credit issued by Lender or Affiliates  of Lender and  outstanding  at
such date, (B) the amount of any mandatory  prepayment  paid pursuant to Section
2.2(c) and applied by Lender to the Revolving Credit Loans outstanding,  and (C)
any amounts  which Lender will be obligated to pay in the future for the account
of Borrower.

For purposes  hereof,  the net amount of Eligible  Accounts at any time shall be
the face amount of such  Eligible  Accounts  less any and all returns,  rebates,
discounts  (which may, at Lender's  option,  be calculated  on shortest  terms),
credits,  allowances  or excise taxes of any nature at any time  issued,  owing,
claimed by Account Debtors,  granted,  outstanding or payable in connection with
such Accounts at such time."

(c) The definition of the term "Eligible Packaging  Materials" is hereby deleted
in its entirety.

(d) The definition of the term "Term Loan" is hereby deleted in its entirety. In
addition, all references to the term "Term Loan" contained in the Loan Agreement
are hereby deleted in their entirety.

(e) The definition of the term "Term Note" is hereby deleted in its entirety. In
addition, all references to the term "Term Note" contained in the Loan Agreement
are hereby deleted in their entirety.

5. Section 1.1 of the Loan  Agreement is further  amended by adding  thereto the
following definitions,  each in its appropriate alphabetical order: 

<PAGE>

"Libor - the rate per annum  established  by Bank each day in  respect of United
States Dollar deposits in immediately  available  funds in the London  interbank
eurodollar market for a period of thirty (30) days."

6. Section 2 of the Loan Agreement is hereby  amended by deleting  therefrom the
words and figure  "Twenty  Million  and  No/100  Dollars  ($20,000,000.00)"  and
inserting  in place  thereof  the  words and  figure  "Fifteen  Million  Dollars
($15,000,000.00)."


7. Section  2.2(A) of the Loan  Agreement is hereby  deleted in its entirety and
replaced by the following:

"(A) Intentionally Omitted."

8. Section  2.2(B) of the Loan  Agreement is hereby  deleted in its entirety and
replaced by the following:

"(B) Equipment Loans. Lender shall from time to time, from and after the Closing
Date  through  March 2, 2000,  make  Loans to  Borrower  to  finance  Borrower's
purchase of Equipment for use in Borrower's  business.  All such Equipment Loans
shall be in such  amounts as may be  mutually  agreed  upon,  but in no event to
exceed  in  the   aggregate   One  Million   Five   Hundred   Thousand   Dollars
($1,500,000.00),  shall be  secured  by the  Collateral,  and shall be repaid in
accordance  with the terms of the Equipment Note. Each such Equipment Loan shall
be in an amount of not less than  $500,000.00,  but no such Equipment Loan shall
exceed eighty percent (80%) of the purchase price  (exclusive of freight,  taxes
and installation costs) of the subject Equipment."

9. Section  3.1(A) of the Loan  Agreement is hereby  deleted in its entirety and
replaced by the following:

"(A) Interest.  Interest shall accrue on the Equipment  Loans in accordance with
the terms of the Equipment  Note.  Interest  (calculated on the actual number of
days elapsed over a year of 360 days) shall  accrue on the  principal  amount of
the Revolving  Credit Loans  outstanding at the end of each day at a fluctuating
rate per annum equal to either (i) one half of one percent  (0.5%) plus the Base
Rate, or (ii) three percent  (3.0%) plus LIBOR,  as either such rate is selected
at Borrower's option.  Borrower shall notify Lender of the rate selected two (2)
days prior to the effective date of such selection,  provided,  however, that no
such  selection  shall be effective  retroactively.  After the date hereof,  the
applicable rate of interest shall be increased or decreased, as the case may be,
by an amount equal to any

<PAGE>

increase  or  decrease  in the Base  Rate or  LIBOR,  as  applicable,  with such
adjustments  to be  effective  as of the opening of business on the day that any
such change in the Base Rate or LIBOR, as applicable, becomes effective."

10.  Section  3.1(B) of the Loan Agreement is hereby deleted in its entirety and
replaced by the following:

"(B)  Default  Rate of Interest.  Upon and after the  occurrence  of an Event of
Default,  and during  the  continuation  thereof,  the  principal  amount of the
Obligations shall bear interest, calculated daily (computed on the actual number
of days elapsed over a year of 360 days), at a fluctuating  rate per annum equal
to two and one half percent (2.5%) above the Base Rate with respect to Revolving
Credit Loans and three and one quarter  percent (3.25%) above the Base Rate with
respect to the Equipment Loans (collectively, the "Default Rate")."

11.  Section 3.3 of the Loan  Agreement  is hereby  deleted in its  entirety and
replaced by the following:

"3.3 Term of  Agreement.  Subject to  Lender's  right to cease  making  Loans to
Borrower  at any time upon or after the  occurrence  of a Default or an Event of
Default, this Agreement shall be in effect for the period commencing on the date
hereof and ending on March 2, 2000 (the  "Original  Term"),  and this  Agreement
shall  automatically  renew itself for one (1) year periods  thereafter  (each a
"Renewal Term"), unless terminated as provided in Section 3.4 hereof."

12.  Section  3.4(B) of the Loan Agreement is hereby deleted in its entirety and
replaced by the following:

"(B) At the  effective  date of  termination  of this  Agreement for any reason,
Borrower  shall pay to Lender (in  addition to the then  outstanding  principal,
accrued  interest and other charges owing under the terms of this  Agreement and
any  of the  other  Loan  Documents  including  prepayment  premiums  under  any
promissory note from Borrower to Lender),  as liquidated damages for the loss of
the  bargain  and not as a penalty,  an amount  equal to  three-quarters  of one
percent (0.75%) of the highest of the Average Monthly Loan Balances  outstanding
pursuant  to  Section  2.1 during the six (6)  months  prior to  termination  if
termination  occurs during the period from October , 1996 through March 2, 1997,
one half of one  percent  (0.50%) of the  highest of the  Average  Monthly  Loan
Balances  outstanding pursuant to Section 2.1 during the six (6) months prior to
termination if  termination  occurs during the period from March 3, 1997 through
March 2, 1998, and one quarter of one percent (0.25%) of the highest of the

<PAGE>

Average Monthly Loan Balances outstanding pursuant to Section 2.1 during the six
(6) months prior to  termination  if  termination  occurs during the period from
March 3,  1998  through  March 2,  1999.  The  termination  charge  for  amounts
outstanding  on the  Equipment  Loan shall be  computed in  accordance  with the
provisions of the Equipment Note."

13.  Section  9.3(A) of the Loan Agreement is hereby deleted in its entirety and
replaced by the following:

"(A) Intentionally Omitted."

14.  Section  9.3(B) of the Loan Agreement is hereby deleted in its entirety and
replaced by the following:

"(B) Minimum Adjusted  Tangible Net Worth.  Maintain at all times a Consolidated
Adjusted  Tangible  Net Worth of not less than the  amount  shown  below for the
period corresponding thereto:

Period Amount

Borrower's fiscal year                       $1,250,000.00 
ending December 31, 1996

Each of  Borrower's  fiscal                  $500,000.00  above the amount  
years ending on each                         required for  Borrower's
December 31 thereafter                       immediately  preceding  fiscal
                                             year."

15.  Section  9.3(C) of the Loan Agreement is hereby deleted in its entirety and
replaced by the following:

"(C) Current Ratio. Maintain at all times a ratio of Consolidated Current Assets
to Consolidated  Current  Liabilities of not less than the ratio shown below for
the period corresponding thereto:

Period                                       Ratio

October 17, 1996 through                     0.95 to 1.00
November 30, 1997

December 1, 1997 and at                      1.00 to 1.00."
all times thereafter.

<PAGE>

16.  Exhibit H to the Loan  Agreement  is hereby  deleted  in its  entirety  and
replaced by a new Exhibit H in the form of Annex 1 attached hereto.
 
17.  Exhibit N to the Loan  Agreement  is hereby  deleted  in its  entirety  and
replaced  by a new  Exhibit N in the form of Annex 2 attached  hereto.  Borrower
represents  and  warrants to Lender that such Annex 2 sets forth a complete  and
accurate listing of all warehouse and other locations where Borrower's Inventory
is kept as of the date thereof.

18. MDFC warrants, represents and covenants to Lender the following:

(a) MDFC is a corporation duly organized,  validly existing and in good standing
under the laws of the State of Delaware,

(b) MDFC's federal tax identification number is 35-1386386, and

(c) as of the date of this  Agreement,  all  representations  and  warranties of
Borrower  set  forth  in the Loan  Agreement  are  true as to  MDFC,  except  as
expressly set forth herein.

19. The effectiveness of this Agreement is expressly condition upon satisfaction
of each of the following conditions precedent:

(a)  Borrower  shall have duly  executed  and  delivered  to Lender an  original
counterpart of this Agreement;

(b) Borrower  shall have duly  executed  and  delivered to Lender an Amended and
Restated Secured  Promissory Note (Equipment Loan)  substantially in the form of
Exhibit "A" attached hereto;

(c) MDFC  shall have  executed  and  delivered  to Lender  such UCC-1  financing
statements provided for by the Code or otherwise together with any and all other
instruments, assignments or documents and shall take such other action as may be
required to perfect or to continue the perfection of Lender's  security interest
in the  Collateral,  including,  without  limitation,  the execution at Lender's
request of all documents deemed necessary by Lender to cause Lender's Lien to be
noted on any motor vehicle title  certificates for motor vehicles forming a part
of the Collateral.

20.  Lender  hereby  acknowledges  that it has been kept  apprised of Borrower's
business and changes thereto since the date of the Loan Agreement. Lender agrees
that, except as set forth in this Agreement,  further  modification or amendment
of the Loan  Agreement or the exhibits and schedules  thereto for the purpose of
describing the changes to date in Borrower's business is presently  unnecessary,
provided, however, that nothing contained

<PAGE>

herein  shall be construed  to amend or limit any  requirement  set forth in the
Loan Agreement that Lender be notified of changes in Borrower's business.

21.  Borrower   represents  and  warrants  to  Lender  that  Borrower  has  duly
authorized,  by all necessary  corporate action,  the execution and delivery of,
and  performance  under,  the Loan Agreement as amended hereby and each document
and instrument executed and delivered in connection herewith.

22. The  provisions of this  Agreement  shall be severable  and the  illegality,
unenforceability  or  invalidity of any  provision of this  Agreement  shall not
affect or impair the remaining  provisions  hereof,  and each  provision of this
Agreement  shall be construed to be valid and  enforceable to the fullest extent
permitted by law.

23. This Agreement may be executed in any number of  counterparts  each of which
shall  constitute  an  original,  but all of which  when  taken  together  shall
constitute one and the same agreement.

24. Except as expressly set forth in this  Agreement,  all terms and  conditions
set forth in the Loan  Agreement  shall remain in full force and effect  without
amendment, modification, waiver or limitation of any kind.

IN WITNESS  WHEREOF,  the parties have caused this Agreement to be duly executed
in their corporate names by their duly authorized  corporate officers on the day
and year first above written.

                                                ALPINE LACE BRANDS, INC.


                                                By:/s/ Arthur Karmel           
                                                       VP-Finance

                                                MCT DAIRIES, INC.


                                                By:/s/ Arthur Karmel           
                                                       Treasurer 

                                                MAROLF DAKOTA FARMS CHEESE, INC.

 
                                                By:/s/ Arthur Karmel           
                                                       Treasurer
                       [Signatures Continued on Next Page]

<PAGE>

                                                FLEET CAPITAL CORPORATION


                                                By:/s/ Howard Handman         
                                                       Vice-President 


<PAGE>

                                    EXHIBIT H

                                   LITIGATION

The only pending or threatened litigation (other than collection type matters in
the  ordinary  course  of  business)  of which  Borrower  is aware  and to which
Borrower is a party is as follows:

Alpine Lace Brands, Inc. v. Kraft Foods, Inc. et al.  Civil No. 95-1131-JWB 
U.S. District Court, District of New Jersey
Alpine Lace Brand, Inc. commenced  litigation in 1995 against Kraft Foods, Inc.,
Borden,   Inc.,  Beatrice  Cheese,  Inc.  and  Schreiber  Foods,  Inc.  alleging
infringement  of its  patent  for the  manufacture  of low fat  cheese.  Summary
judgment  was  granted  in favor of Kraft in  March,  1996 and  partial  summary
judgment  regarding one  production  facility was granted in favor of Borden and
Schreiber in September 1996. The decision in favor of Kraft is being appealed to
the U. S. District Court for the Federal Circuit and it is anticipated  that the
decision in favor of Borden and  Schreiber  will also be appealed.  A motion for
partial  summary  judgment  by the  fourth  defendant  Beatrice  was  denied  in
September 1996.

Proceedings  are  continuing in the District  Court as to Borden,  Schreiber and
Beatrice  and in  relation  to the  motion  by Kraft  to have the case  declared
exceptional under Section 285 of the Patent Statute.


Stuart, et al. v. Kraft Foods, Inc., Case No. 96-C-391 U.S. District Court, 
Eastern District of Wisconsin
Alpine Lace was joined as a  defendant  in this class  action in July 1996.  The
complaint alleges conspiracy among Alpine Lace, Kraft Food, Inc.,  Borden,  Inc.
and the National Cheese Exchange, Inc. to, among other things, manipulate cheese
prices and  unreasonably  restrain  trade in violation of the Sherman Act, fraud
and  misrepresentation,  and breach of contract. The complaint seeks unspecified
actual and punitive  damages and injunctive  relief.  A motion to transfer venue
and motions to dismiss are  pending.  To counter the transfer  motion,  the same
plaintiff's  lawyer  recently filed and served a nearly  identical  complaint on
behalf of the same class naming Wisconsin  plaintiffs as class  representatives.
Their stated  intent is to  consolidate  the two cases and try to keep them from
being transferred to Illinois


Alpine Lace Brands, Inc. v. New Horizon Warehouse & Distribution  Center,  Inc.,
No. 95 CV 4345, U.S.  District  Court,  Northern  District of Illinois,  Eastern
Division
Alpine Lace  commenced this action in 1995 to recover  damages  sustained as the
result of a breach of a warehouse agreement. Discovery is proceeding.

<PAGE>

                                                                    PREPARED
ALPINE LACE BRANDS, INC.                                            LMF 12/4/96
WAREHOUSES
<TABLE>
<S> <C>                                  <C>                                 <C>                <C>  <C>   <C>          <C>
WHS NAME                                 STREET                              CITY               ST   ZIP   CONTACT      COUNTY
000 GREAT LAKES                          11 INDUSTRIAL ROAD                  HAMMOND            IN   46320              LAKE
007 MONROE CHEESE                        112 PRATT ROAD                      MONTICELLO         WI   53570              GREEN
008 TAYLOR CHEESE CORP                   508 NORTH MILL ROAD                 WEYAWEGA           WI   54983              WAUPECA
018 PORT JERSEY DIST.                    2 COLONY ROAD, BLD. #2              JERSEY CITY        NJ   07305              HUDSON
019 PRICE CLUB RIVERSIDE                 2321 THIRD STREET                   RIVERSIDE          CA   92501              FRESNO
022 MARATHON CHEESE CORP.                304 EAST STREET                     MARATHON           WI   54448              MARATHON
023 WOHLT CHEESE CORP.                   508 NORTHMILL STREET                WEYAWEGA           WI   54983              WAUPACA
025 SAM'S ATLANTA/UNITED REF.SERV.       1740A WESTGATE PKWY                 ATLANTA.           GA   30336              FULTON
026 ATLAS COLD STORAGE                   1731 MORROW                         GREEN BAY          WI   54302 LARRY JONES  BROWN
028 DAIRYLAND SALES                      1700 CAMPBELL RUN ROAD              PITTSBURG          PA   15205 PETE DURKIN  ALLEGHENY
034 PFS COSTCO                           6030 E. SHEILA STREET               CITY OF COMMERCE   CA   90091              LOS ANGELES
039 PRICE CLUB-FEDERALSBURG              RT. 313 NORTH, P.O. BOX 340         FEDERALSBURG       MD   21632              CAROLINE
040 GLACIER TRANSIT & STORAGE            128 APPLETON STREET                 PLYMOUTH           WI   53073              SHEBOYGEN
044 COSTCO-FLORIDA PROF.FOOD SYST.       501 NE 183RD STREET, P.O. BOX 640352MIAMI              FL   33269              DADE
045 SAMS INDIANAPOLIS-UNTD.MON.REF.      3320 SOUTH ARLINGTON AVENUE         INDIANAPOLIS       IN   46203              LAKE
048 GAMAY FLAVORS                        2770 S. 171 STREET                  NEW BERLIN         WI   53151              WAUKESHA
052 EXPORT TRANSPORT(LUKAL)              2260 D EGYPT ST                     ELIZABETH          NJ   07201              UNION
054 WASHINGTON WHOLESALE                 999 MONTAGUE EXPRESSWAY             MILPITAS           CA   95035              SANTA CLARA
055 SAM'S-DALLAS /US COLD STORAGE        3300 EAST PARK ROW-PO BOX 3424      ARLINGTON          TX   76010              TARRANT
058 SAFEWAY FOODS                        2200 ENTERPRISE AVENUE              LACROSSE           WI   54603              LACROSSE
059 US COLD STORAGE                      33400 DOWE AVENUE/PO BOXW 1106      UNION CITY         CA   94587              ALAMEDA
061 FOREMOST COLD STORAGE                220 ELLISON STREET                  PATTERSON          NJ   07501              PASSIAC
063 COGNATI/CONCORDE                     414 13TH STREET                     UNION CITY         NJ   07087              HUDSON
064 COSTCO-NORTHWEST/K&N MEATS           601 S.W. SENECE                     RENTON             WA   98005              KING
065 SAMS' LEESPORT, PA/DAYMARK CO UTD    RD #2 ORCHARD LANE                  LEESPORT           PA   19533              BERKS
069 CURRANS CHEESE PLANT                 HWY 83 MILES SOUTH HWY 11           BROWTOWN           WI   53522              GREEN
071 C&S WHOLESALE                        95 NORTH HATFIELD ROAD              HATFIELD           MA   01862              HATFIELD
072 CONCORD MARKETING                    8 EMPIRE BOULEVARD                  MOONACHIE          NJ                      BERGEN
074 COSTCO NORTHEAST-COLUMBIA FARMS      16 SUTTON ROAD                      WORCESTER          MA   01570              WORCESTER
075 SAMS-ILLINOIS WISCOLD, ROCHELLE COLD 60 WISCOLD DRIVE                    ROCHELLE           IL   61608              OGLE
079 RASKAS                               P.O. OX 952176                      ST. LOUIS          MO   63195              ST. LOUIS
083 LEMKE CHEESE & PKG CO                P.O. BOX 688                        WAUSAU             WI   54402              MARATHON
085 SAMS-LAS VEGAS-HENDERSON COLD        830 HORIZON DRIVE                   HENDERSON          NV   89014              CLARK
096 CSW-MADISON                          4309 COLLEGE GROVE ROAD POBOX 70    MADISON            WI   53707              DANE
105 SAMS ORLANDO/DAYMARK ORLANDO         2292 SAND LAKE ROAD                 ORLANDO            FL   32809              ORANGE
123 WOHLT CHEESE CORP                    508 NORTHMILL STREET                WEYAUWEGA          WI   54983              WAUPACA
128 DAIRYLAND SALES                      4700 CAMPBELL RUN ROAD              PITTSBURG          PA   15205              ALLEGHANY
706 GREAT LAKES/LIQUIDATION              11 INDUATRIAL ROAD                  HAMMOND            IN   46320              LAKE
708 GREAT LAKES QUALITY ISSUES           11 INDUSTRIAL ROAD                  HAMMOND            IN   46320              LAKE
714 GREAT LAKES PACKAGING                11 INDUSTRIAL ROAD                  HAMMOND            IN   46320              LAKE
</TABLE>

MCT DAIRIES, INC.
<TABLE>
<S> <C>                                  <C>                                 <C>                <C>  <C>    <C>
WHS NAME                                 STREET                              CITY               ST   ZIP   CONTACT      COUNTY
026 ATLAS COLD STORAGE                   1731 MORROW                         GREEN BAY          WI   54302 LARRYJONES   BROWN
028 DAIRYLAND SALES                      4700 CAPMBELL'S RUN ROAD            PITTSBURGH         PA   15205 PETE DURKIN  ALLEGHANY
211 LEMKE CHEESE & PKG CO                P.O. BOX 688                        WAUSAU             WI   54402              MARATHON
211 GREEN BAY CHEESE                     13190 VELP AVE., P.O. BOX 11766     GREEN BAY          WI   54307              BROWN
213 CAINE WAREHOUSING LTD.               P.O. BOX 402                        REESEVILLE         WI                      DODGE
217 MARSHFIELD COLD STORAGE              15 N CENTRAL AVE                    MARSHFIELD         WI   54449              WOOD
219 EXPORT TRANSPORT(LUKAL)              2260 D EGYPT ST                     ELIZABETH          NJ   72019              UNION
223 ARMOUR DAIRY STORAGE                 149 NEW DUTCH LANE                  FAIRFIELD          NJ                      ESSEX
234 NEW CASTLE COLD STORAGE              FREW MILL RD & CASCADE ST           NEW CASTLE         PA   16107              LAWRENCE
240 CURRAN'S WAREHOUSE                   W-8098 COUNTY B                     BROWNTOWN          WI   53522 SHORTY       GREEN
242 TRIPLE SEVEN WAREHOUSING             P.O. BOX 13657                      PHILADELPHIA       PA   19101              PHILADELPHIA
248 NARDONE BROTHERS                     123 HAZLE AVE.                      WILKES-BARRE       PA   18702              LUZERNE
249 NEW ULM COLD STORAGE                 ROUTE 1, BOX 1542                   NEW ULM            MN   56073              BROWN
250 FORRESTON CHEESE                     307 S. WABASH AVENUE                FORRESTON          IL   61030 MIKE HOWARD  OOGLE
252 SPENCER COLD STORAGE                 113 LOUIZA STREET                   SPENCER            WI   54479 DOUGLAS      MARATHON
254 MOSINEE COLD STORAGE                 751 MAPPLE RIDGE RD.                MOSINEE            WI   54455              MARATHON
255 FORRESTON CHEESE COMPANY             307 S. WABASH AVENUE                FORRESTON          IL   61030              OOGLE
</TABLE>
<PAGE>

                              AMENDED AND RESTATED
                             SECURED PROMISSORY NOTE
                                (Equipment Loan)

$1,500,000.00                                                    October , 1996


FOR VALUE RECEIVED,  the undersigned  (hereinafter  collectively  referred to as
"Borrower"),  hereby jointly and severally  promise to pay to the order of FLEET
CAPITAL CORPORATION, a Rhode Island corporation (hereinafter "Lender") successor
by assignment from Barclays  Business Credit,  Inc., in such coin or currency of
the United  States which shall be legal tender in payment of all debts and dues,
public and private,  at the time of payment,  the  principal  sum of One Million
Five Hundred Thousand and No/100 Dollars  ($1,500,000.00)  or so much thereof as
may be advanced by Lender to Borrower, together with interest from and after the
date hereof on the unpaid principal  balance  outstanding at a variable rate per
annum  equal to either (i) one and one  quarter  percent  (1.25%)  plus the Base
Rate, or (ii) three and three  quarters  percent  (3.75%) plus LIBOR,  as either
such rate is selected at Borrower's option.  Borrower shall notify Lender of the
rate  selected  two (2) days  prior  to the  effective  date of such  selection,
provided, however, that no such selection shall be effective retroactively.

This Amended and Restated Secured  Promissory Note (the "Note") is the Equipment
Note  referred to in, and is issued  pursuant to, that certain Loan and Security
Agreement  between  Borrower  and Lender  dated March 3, 1993  (hereinafter,  as
amended from time to time, the "Loan Agreement"),  and is entitled to all of the
benefits and security of the Loan  Agreement.  All of the terms,  covenants  and
conditions  of the  Loan  Agreement  and all  other  instruments  evidencing  or
securing  the  indebtedness  hereunder  (including,   without  limitation,   the
"Security Documents" as defined in the Loan Agreement) are hereby made a part of
this Note and are deemed incorporated herein in full. All capitalized terms used
herein,  unless  otherwise  specifically  defined in this  Note,  shall have the
meanings ascribed to them in the Loan Agreement.

After the date hereof, the applicable rate of interest in effect hereunder shall
be  increased  or  decreased,  as the case  may be,  by an  amount  equal to any
increase  or  decrease  in the Base  Rate or  LIBOR,  as  applicable,  with such
adjustments  to be  effective as of the opening of business on the date that any
such change in the Base Rate or LIBOR, as applicable, becomes effective.

In no contingency or event  whatsoever,  whether by reason of advancement of the
proceeds  hereof or  otherwise,  shall the  amount  paid or agreed to be paid to
Lender for the use,  forbearance or detention of money advanced hereunder exceed
the highest  lawful rate  permissible  under any law which a court of  competent
jurisdiction  may  deem  applicable  hereto.  In the  event  that  such a  court
determines that Lender has charged or received  interest  hereunder in excess of
the highest  applicable  rate, such rate shall  automatically  be reduced to the
maximum rate  permitted by applicable  law and Lender shall  promptly  refund to
Borrower  any interest  received by Lender in excess of the maximum  lawful rate
or, if so  requested  by  Borrower,  shall  apply such  excess to the  principal
balance of this Note.  It is the intent hereof that Borrower not pay or contract
to pay,  and that  Lender not  receive  or  contract  to  receive,  directly  or
indirectly  in any manner  whatsoever,  interest  in excess of that which may be
paid by Borrower under applicable law.

<PAGE>

For so long as no Event of Default shall have occurred under the Loan Agreement,
the principal  amount and accrued interest of this Note shall be due and payable
on the dates and in the manner hereinafter set forth:

(a) Interest shall be due and payable monthly,  in arrears,  on the first day of
each month,  commencing on November 1, 1996, and  continuing  until such time as
the full  principal  balance,  together with all other amounts owing  hereunder,
shall have been paid in full;

(b)  Commencing  on November 1, 1996,  and  continuing  on the first day of each
month  thereafter  to and  including  the first day of  March,  2000,  principal
payments each in an amount equal to one eighty-fourth  (1/84) of the outstanding
principal amount of this Note;

(c) On March 2, 2000,  a final  principal  payment  equal to the  entire  unpaid
principal balance hereof, together with any and all other amounts due hereunder.

Notwithstanding  the foregoing,  the entire unpaid principal balance and accrued
interest on this Note shall be due and payable  immediately upon any termination
of the Loan Agreement pursuant to Section 3.4 thereof.

This Note  shall be subject  to  mandatory  prepayment  in  accordance  with the
provisions  of Section  2.2(C) of the Loan  Agreement.  Borrower may prepay this
Note in whole at any time or in part from time to time upon  ninety  (90)  days'
prior written notice to Lender, provided that each such prepayment shall be made
together  with  accrued  interest  on the  principal  amount so  prepaid  at the
prepayment  date plus a premium at the applicable  percentage set forth below of
the principal amount prepaid:

If Prepayment is Made Between
the Following Dates, Inclusive:                            The Premium Shall Be:

 October, 1996 and                                         0.75% of principal
 March 2, 1997                                             amount prepaid

 March 3, 1997 and                                         0.50% of principal
 March 2, 1998                                             amount prepaid

 March 3, 1998 and                                         0.25% of the 
                                                           principal amount 
                                                           prepaid

All partial  prepayments,  whether  mandatory or voluntary,  shall be applied to
installment of principal in the inverse order of their maturities.

The  occurrence  of an Event of  Default  under the Loan  Agreement,  including,
without limitation,  the failure to pay any installment of principal or interest
on this Note in full on,  or  within  ten (10)  Business  Days of,  the due date
thereof in accordance with the terms of this Note,  shall constitute an event of
default under this Note and shall entitle Lender, at its option,  upon or 

<PAGE>

at any time after the  occurrence  of any such  Event of Default to declare  the
then  outstanding  principal  balance and accrued interest hereof to be, and the
same shall  thereupon  become,  immediately due and payable without notice to or
demand upon Borrower,  all of which Borrower hereby  expressly  waives.  If this
Note is  collected  by or through an attorney  at law,  then  Borrower  shall be
obligated to pay, in addition the principal balance and accrued interest hereof,
reasonable  attorney's  fees,  not to  exceed  fifteen  percent  (15%)  of  such
principal and interest, and court costs.

Time  is of the  essence  of this  Note.  To the  fullest  extent  permitted  by
applicable law, Borrower, for itself and its legal  representatives,  successors
and assigns, expressly waives presentment,  demand, protest, notice of dishonor,
notice of non-payment,  notice of maturity,  notice of protest,  presentment for
the purpose of accelerating maturity,  diligence in collection,  and the benefit
of any exemption or insolvency laws.

Wherever  possible,  each  provision of this Note shall be interpreted in such a
manner as to be effective and valid under  applicable  law, but if any provision
of this Note shall be prohibited or invalid under applicable law, such provision
shall be  ineffective to the extent of such  prohibition  or invalidity  without
invalidating  the  remainder of such  provision or remaining  provisions of this
Note.  No delay or failure on the part of Lender in the exercise of any right or
remedy  hereunder shall operate as a waiver  thereof,  nor as an acquiescence in
any default,  nor shall any single or partial exercise by Lender of any right or
remedy  preclude any other right or remedy.  Upon the  occurrence of an Event of
Default,  Lender,  at its option,  may enforce its rights against any collateral
securing this Note without enforcing its rights against Borrower,  any guarantor
of the  indebtedness  evidenced hereby or any other property or indebtedness due
or to become  due to  Borrower.  Borrower  agrees  that,  without  releasing  or
impairing  Borrower's  liability  hereunder,  Lender  may at any  time  release,
surrender,  substitute or exchange any collateral  securing this Note and may at
any time release any party primarily or secondarily  liable for the indebtedness
evidenced by this Note.

This Note is executed and delivered as an amendment and  restatement of, but not
in repayment of, that certain Secured  Promissory  Note (Equipment  Loan) in the
original principal amount of $3,500,000.00,  dated March 3, 1993, made by Alpine
Lace Brands,  Inc.,  Market Cheese Traders,  Inc., and Mountain  Farms,  Inc. in
favor of Lender.
<PAGE>

This Note shall be governed by, and construed  and enforced in accordance  with,
the internal laws of the State of Connecticut, and is intended to take effect as
an instrument under seal. 

IN WITNESS  WHEREOF,  Borrower has caused this Note to be duly executed,  sealed
and delivered as of the date first above written.

ATTEST:                                             ALPINE LACE BRANDS, INC.,
                                                    a Delaware corporation


                                                    By:                        
Secretary
[CORPORATE SEAL]                                    Title:                     


ATTEST:                                             MCT DAIRIES, Inc.,
                                                    a New Jersey corporation


                                                    By:                        
Secretary
[CORPORATE SEAL]                                    Title:                     


ATTEST:                                             MAROLF DAKOTA FARMS CHEESE,
                                                    INC., a Delaware corporation


                                                    By:                        
Secretary
[CORPORATE SEAL]                                    Title:                     


<PAGE>

FED EX

February 10, 1997

Alpine Lace Brands, Inc.
MCT Dairies, Inc.
Dakota Farms Cheese, Inc.
111 Dunnell Road
Maplewood, NJ 07040

                                                 Letter Agreement

Ladies and Gentlemen:

Please refer to that certain Loan and Security  Agreement  (as amended from time
to time, the "Loan  Agreement")  dated March 3, 1993, by and among Fleet Capital
Corporation  ("Lender")  and Alpine Lace Brands,  Inc.,  MCT  Dairies,  Inc. and
Dakota Farms Cheese,  Inc.,  formerly known as Marolf Dakota Farms Cheese,  Inc.
(collectively, "Borrower").

Borrower and Lender have agreed to amend certain terms of the Loan  Agreement on
a  temporary  basis  as more  fully  set  forth  in this  Letter  Agreement.  In
consideration  of the mutual benefits to be derived hereby,  Borrower and Lender
agree as follows:

1.  Capitalized  terms used but not defined herein shall have the meanings given
to them in the Loan Agreement.

2. The  definition of the term  "Borrowing  Base" set forth in subsection 1.1 of
the Loan Agreement is hereby amended as follows:

(a) Subpart (a) of such  definition is hereby amended by deleting  therefrom the
figure   "$13,500,000.00"   and   inserting   in  place   thereof   the   figure
"$15,500,000.00," and

(b)  Subpart  (b)(iii)(A)  of such  definition  is hereby  amended  by  deleting
therefrom the figure  "$6,500,000.00"  and inserting in place thereof the figure
"$8,500,000.00"

3. Section 2 of the Loan Agreement is hereby  amended by deleting  therefrom the
words and figure  "Fifteen  Million Dollars  ($15,000,000.00)"  and inserting in
place  thereof  the words and figure  "Fifteen  Million  Five  Hundred  Thousand
Dollars  ($15,500,000.00)."  In addition,  the  Equipment  Loan  provided for in
Section  2.2(B) of the Loan Agreement is hereby reduced dollar for dollar to the
extent that the principal amount that the Revolving Credit Loans provided for in
Section 2.1 exceeds $13,500,000.00.

4. The  provisions  of this Letter  Agreement  shall be effective for the period
commencing on the date hereof and  continuing  until the earlier of (i) the date
that is 90 days after the principal amount  outstanding under the Loan Agreement
first exceeds $13,500,000.00, or (ii) May 31, 1997,

<PAGE>

Alpine Lace Brands, Inc.
February10, 1997
Page 2

and for no other  period.  Not later the  earlier  of the dates set forth in the
preceding sentence, all sums advanced by Lender to Borrower in reliance upon the
terms of this Letter Agreement shall be repaid in full and may not be reborrowed
thereafter.  The  failure of  Borrower  to repay all such sums by May 31,  1997,
shall  constitute  an Event of  Default.  The  terms of this  paragraph  4 shall
survive the expiration or other termination of this Letter Agreement.

5. Borrower  represents and warrants to Lender that Borrower has authorized,  by
all necessary  corporate action,  the execution and delivery of, and performance
under, the Loan Agreement as amended hereby.

6. Except as expressly  set forth herein,  all terms and  conditions of the Loan
Agreement shall remain in full force and effect without amendment,  modification
or limitation of any kind.

If the  foregoing  terms are  acceptable  to  Borrower,  please so  indicate  by
executing  this Letter  Agreement in the space  provided  below and  returning a
fully executed original  counterpart hereof to the attention of the undersigned.
This Letter  Agreement  shall be of no force or effect until such time as Lender
shall have received a fully executed original counterpart hereof.

Very truly yours,

Fleet Capital Corporation

By/s/ Howard I. Handman
      Howard I. Handman


Accepted and Agreed:

Alpine Lace Brands, Inc.

By/s/ Arthur Karmel

MCT Dairies, Inc.

By/s/ Arthur Karmel

Dakota Farms Cheese, Inc.

By/s/ Arthur Karmel


<PAGE>
                                                                 Exhibit 10.3(g)



                                                              March 27,1996



Mr. Kenneth E. Meyers
8 Darby Terrace
Livingston, NJ 07039

Dear Ken:

I am writing in reference to the  Employment  Agreement,  dated January 1, 1995,
between  you  and MCT  Dairies,  Inc.  It has  come to our  attention  that  one
provision,  which we intended  to include in the  agrrement,  was  inadvertently
omitted.  Therefore,  Section 2 of the  agreement  hereby is  amended to add the
following sentence just before the last sentence of that section:

Notwithstanding anything to the contrary, in the event of a Change in Ownership,
as defined below, of the Company,  the term of this Agreement shall  re-commence
as of the effective date of such Change of Ownership.

If you agree with this  amendment,  please sign the enclosed copy of this letter
and return it to me.

                                                      Very truly yours,

                                                      MCT DAIRIES, INC.


                                                      By:/s/ Carl T. Wolf
                                                             Carl T. Wolf
                                                               Chairman
AGREED:


/s/ Kenneth E. Meyers
    Kenneth E. Meyers


<PAGE>
                                                                 Exhibit 10.3(h)
                                    AGREEMENT


THIS  AGREEMENT  made as of the 9th day of January,  1997 by and between  ALPINE
LACE, INC., a Delaware corporation,  having its principal offices at 111 Dunnell
Road, Maplewood, New Jersey 07040 (hereinafter referred to as the "Company") and
KENNETH E.  MEYERS  residing  at 8 Darby  Lane,  Livingston,  New  Jersey  07039
(hereinafter referred to as the "Employee").

                              W I T N E S S E T H:

WHEREAS,  the  Employee  is the  President  and Chief  Operating  Officer of the
Company's wholly owned subsidiary MCT Dairies,  Inc.  ("MCT"),  which engages in
the cheese and commodity trading business,  pursuant to an Employment  Agreement
between  the  Employee  and MCT dated as of  January  1,  1995 (the  "Employment
Agreement"), and, under the Employment Agreement, the Employee's compensation is
based upon ceratin defined business activity of such subsidiary;

WHEREAS,  the  Employee  has also been  managing the  Company's  pending  patent
litigation  against four defendants and other matters  relating to the Company's
patents and other proprietary matters;

WHEREAS,  the  extensive  time spent by the Employee on such matters has limited
the time he has spent on the  business  of MCT and has had a negative  impact on
MCT's business and on the Employee's compensation.

NOW, THEREFORE, the parties agree a follows:


1. Employment Agreement. The Employment Agreement shall remain in full force and
effect and all of the terms and conditions of the Employee's employment shall be
governed by the terms of the  Employment  Agreement.  This  Agreement  is not an
employment  agreement;  it does not  constitute a promise of  employment  or any
additional  terms and conditions of employment  above and beyond those contained
in the Employment Agreement.

2. Duties.

(a) In consideration  of the compensation to be paid to the Employee  hereunder,
the Employee  agrees to devote all of his business time and effort to the patent
litigation and other matters relating to the Company's patents and other similar
proprietary matters (referred to generally hereinafter as "proprietary matters")
as may be necessary in the best

<PAGE>

interest of the Company  including  all time and effort that may be necessary to
bring the pending patent litigation to a satisfactory  conclusion.  The Employee
shall  continue  to manage  proprietary  matters  to the  extent and in a manner
consistent  with his past  performance  and shall also  undertake such duties in
relation to proprietary matters as may be reasonably  requested by the President
of the Company.

(b) Employee  agrees that the duties  performed  or to be  performed  under this
Agreement or in relation to proprietary  matters generally are duties within the
scope of his  employment  and that the  provisions of the  Employment  Agreement
(such as, for  example,  "Non-Disclosure  Covenant,"  " Covenant Not to Compete;
Non-Interference;"  "Covenant to Report;  Ownership of Trade Secrets,  etc." and
the  definition of "cause"  contained in paragraph  8(c)) are applicable to such
duties.


3.  Compensation.  In consideration of the time and effort spent by the Employee
on  proprietary  matters  to date and of his  continuing  time and  effort,  the
Company  shall pay to the  Employee an amount  equal to five percent (5%) of the
amounts received by the Company in connection with the pending patent litigation
and/or in connection with the other proprietary matters, as set forth below.

(a) For purposes of this Section 3, the "amounts  received by the Company" shall
equal:

Net  Licensing  Revenue as that term is defined in the  Modification  Agreement,
dated  February 24, 1995 to the Asset  Purchase  Agreement  dated April 16, 1990
between the Company and Gamay Foods,  Inc. and Dr. Aly Gamay (jointly,  "Gamay")
(such agreements referred to hereinafter as the "Modification Agreement").

                                   REDUCED BY

Any "Licensing Royalty," as defined in the Modification Agreement, paid to Gamay
under the Modification Agreement.


(b) Any amounts  payable to the Employee  hereunder shall be paid within 30 days
after  payment is made to, or due to  (whichever  is  sooner),  Gamay  under the
Modification Agreement.

(c) In the event that the Modification  Agreement is subsequently  terminated or
is  modified  or  amended  in such a manner so as to  substantially  change  the
definitions  incorporated by reference herein or so as to  substantially  reduce
the  compensation  to the Employee  hereunder,  the parties agree to renegotiate
this  Agreement so as to fulfill the intention of this Agreement and provide the
compensation the Employee is intended to receive hereunder.

<PAGE>

4. Termination.

(a) Except as set forth in  sub-paragraph  (b) below, all rights of the Employee
to receive payments under this Agreement shall continue in full force and effect
even if the Employee's  employment  terminates  under the  Employment  Agreement
and/or he is no longer performing the duties set forth in paragraph 2 hereof.

(b) Notwithstanding the provisions of sub-paragraph (a) above, all rights of the
Employee to receive  payments under this Agreement  shall terminate in the event
that the Employee's  employment is terminated under the Employment Agreement for
cause.

5. Waiver of Breach. The waiver by any party hereto of a breach of any provision
of this  Agreement  shall  not  operate  nor be  construed  as a  waiver  of any
subsequent breach.

6. Binding  Effect.  This Agreement  shall inure to the benefit of, and shall be
binding upon, the parties hereto and their respective successors, assigns, heirs
and legal representatives, including any entity with which the Company may merge
or  consolidate  or to which it may  transfer  all or  substantially  all of its
assets.  Insofar as the Executive is concerned,  the Agreement,  being personal,
may not be assigned.

7. Notices.  All notices and other  communications  which are required or may be
given under this Agreement  shall be in writing and shall be deemed to have been
duly given when  delivered  in person,  or three (3) days after being  mailed by
registered  or  certified  first class mail,  postage  prepaid,  return  receipt
request, to the parties hereto at the addresses set forth above (as the same may
be  changed  from time to time by  notice  similarly  given)  or the last  known
business or residence address or such parties.

8.  Entire  Agreement;  Amendments.  This  Agreement  (i)  contains  the  entire
agreement  between  the  Employee  and the Company  with  respect to the subject
matter hereof, (ii) supersedes all prior agreements and understandings,  oral or
written,  with respect to the subject  matter  hereof,  and (iii) may be changed
only by an  agreement  in writing  signed by the party  against whom any waiver,
change, amendment, modification or discharge is sought.

9.  Severability.  The  invalidity  of all or any part of any  provision of this
Agreement  shall not render  invalid  the  remainder  of this  Agreement  or the
remainder of such  provision.  If any provision of this Agreement is so broad as
to be unenforceable,  such provision shall be interpreted to be only so broad as
is enforceable.

10. Disputes and  Arbitration.  All disputes  concerning this Agreement shall be
settled by arbitration;  provided,  however,  that the Company and the Executive
shall  first  attempt to settle any dispute  arising  out of,  relating to or in
connection with this Agreement by negotiation and mutual agreement. In the event
a resolution cannot be

<PAGE>

reached  within sixty (60) days of written  notice  reciting this  paragraph 10,
then such  dispute  shall be  settled  by  arbitration  in  accordance  with the
commercial  arbitration  rules of the American  Arbitration  Association then in
effect  and  arbitration  shall  take  place in New York  City,  New  York.  The
arbitrator's  decision shall be final, binding on the Company and the Executive,
not subject to appeal, and shall deal with the question of costs and expenses of
arbitration,  pre-award interest and all matters related thereto.  Judgment upon
the award rendered may be entered in any applicable  jurisdiction or application
may be made to such court for judicial  recognition of the award or any order of
enforcement thereof, as the case may be.

11. Governing Law; Consent to Jurisdiction.  This Agreement shall be governed by
and  construed in accordance  with the laws of the State of New Jersey,  without
giving effect to the principles of conflicts of law thereof. The Company and the
Employee  each hereby  submits  itself or himself  for the sole  purpose of this
Agreement and any controversy rising hereunder to the exclusive  jurisdiction of
the state courts in the State of New Jersey,  and waives any  objection  (on the
grounds of lack of jurisdiction  or forum non  conveniens,  or otherwise) to the
exercise of such  jurisdiction over it or him by any state court in the State of
New Jersey.


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

ATTEST:                                          ALPINE LACE BRANDS, INC.


BY:/s/ Arthur Karmel                             BY:/s/ Carl T. Wolf
       Arthur Karmel, Vice-President                    Carl T. Wolf, President

WITNESS:

/s/ Stephanie Angelis                               /s/ Kenneth E. Meyers
                                                        Kenneth E. Meyers


<PAGE>
                                                                 Exhibit 10.4(b)

                              EMPLOYMENT AGREEMENT


THIS AGREEMENT made as of the 4th day of January 1993 by and between ALPINE LACE
BRANDS, INC., a Delaware corporation having its principal offices located at 111
Dunnell  Road,  Maplewood,  New Jersey  07040  (hereinafter  referred  to as the
"Company"),  and MARION F. WOLF,  residing at 627 Inwood Land, South Orange,  NJ
07079 (hereinafter referred to as the "Executive").


                              W I T N E S S E T H:

 
WHEREAS,  the Company is engaged in the development,  marketing and distribution
of  nutritional  cheeses and other  specialty  food  products  (the "ALPINE LACE
Business"),  and the Company's wholly owned  subsidiary,  Market Cheese Traders,
Inc., a New Jersey  corporation  is engaged in cheese  commodity  trading  ("the
Cheese Trading Business");

WHEREAS, the Executive is Vice President Food Service Division of the Company in
connection with its ALPINE LACE Business; and

WHEREAS,  the Company desires to employ the Executive as its Vice President Food
Service  Division,  and the Executive  desires to be so employed by the Company,
upon all the terms and conditions hereinafter set forth below.

NOW, THEREFORE, the parties agree as follows:

1. Employment. The Company hereby employs the Executive and the Executive hereby
accepts employment by the Company upon the terms and conditions  hereinafter set
forth.

2.  Term.  Subject  to the  provisions  of  Paragraph  8  hereof,  the  term  of
Executive's employment by the Company under this Agreement shall commence on the
date hereof and shall  continue for a period of one (1) year;  and,  thereafter,
the term  hereof  shall be  automatically  renewed for  successive  one (1) year
renewal terms unless,  prior to the  expiration of the original term or the then
current renewal term hereof, (a) the Executive shall give the Company sixty (60)
days notice of his  intention  not to renew the term,  or (b) the Company  shall
give the Executive a minimum six (6) months notice of its intention not to renew
the  term.  The term of the  Executive's  employment  hereunder,  including  the
original term and any renewal terms hereof,  is  hereinafter  referred to as the
"Employment Period." Notwithstanding anything to the contrary, in the event of a
change of control of the Company,  the term of this Agreement shall  re-commence
as of the effective date of such change of control.





                                        1

<PAGE>

3. Compensation.  For all services to be rendered  hereunder,  the Company shall
pay the following compensation with respect to the initial term and each renewal
term hereof during the Employment Period a salary of $75,000 per year.

4. Duties.  The Executive shall be employed as an Executive of the Company,  and
shall have such duties as are assigned or  delegated to him by the  President of
the Company.  The Executive shall also, upon the request of the President of the
Company,  perform  services for any  Affiliate (as  hereinafter  defined) of the
Company without further compensation;  provided, however, that any such services
to be performed for any Affiliate of the Company do not  unreasonably  interfere
with  the  services  rendered  on  behalf  of the  Company  so as to  materially
adversely  affect the  Executive's  compensation  under Section 3. The Executive
shall devote his entire business time,  attention and energy  exclusively to the
business of the Company and its  Affiliates and shall  cooperate  fully with the
President of the Company in the advancement of the best interests of the Company
and its Affiliates. The Executive will be Vice President -Branded Division.

5. Expenses. Subject to compliance by the Executive with such policies regarding
expenses  and expense  reimbursement  as may be adopted from time to time by the
Company,  the  Executive  is  authorized  to incur  reasonable  expenses  in the
performance  of his duties  hereunder in furtherance of the business and affairs
of the Company and its  Affiliates,and  the Company will reimburse the Executive
for all such reasonable expenses of an extraordinary nature, including,  without
limitation,  expenses incurred in connection with out-of-pocket  business travel
and in all cases upon the  presentation by the Executive of an itemized  account
satisfactory  to the Company in  substantiation  of such  expenses when claiming
reimbursement.

6.  Vacation.  The  Executive  shall be  entitled  to two (2) weeks  vacation in
accordance  with the Company's  vacation policy in effect from time to time. Any
unused vacation days may not be carried over from one period to the next without
the  prior  written  approval  of the  President  or Board of  Directors  of the
Company.

7. Company  Benefits.  The Executive  shall,  during the Employment  Period,  be
eligible to participate in such pension,  profit sharing, bonus, life insurance,
medical and other  employee  benefit plans of the Company which may be in effect
form time to time, to the extent he is eligible  under the terms of those plans,
on the same basis as other executive officers of the Company; provided, however,
that the allocation of benefits  under any plan which provides that  allocations
thereunder  shall be in the  discretion of the Board of Directors of the Company
shall be determined from time to time by such Board of Directors.








                                        2

<PAGE>

8. Termination.

(a) The  Employment  Period,  the  Executive's  salary and bonus and any and all
rights under this  Agreement  or  otherwise as an employee of the Company  shall
terminate (except as to salary accrued prior to such termination):  (i) upon the
death of the  Executive;  (ii) upon the  physical  or mental  disability  of the
Executive (as defined in Paragraph  8(b) below);  or (iii) for cause (as defined
in Paragraph 8(c) below),  immediately upon the giving of written notice thereof
by the  Company  to the  Executive,  or at such  later  time as such  notice may
specify.

(b) For  purposes  of this  Agreement,  the  Executive  shall  be  deemed  to be
"physically or mentally  disabled" if (i) for medical reasons he has been unable
to perform his duties for forty five (45)  consecutive days or seventy five (75)
days in any twelve (12) month  period,  all as  determined  in good faith by the
Board of Directors of the Company,  and supported by medical evidence,  and (ii)
the Company  notifies the Executive of the termination of the Employment  Period
as a result of such disability.

(c) For purposes of this Agreement, the term "cause" shall be deemed to mean any
reason  materially and adversely  affecting the best interests of the Company or
any of its Affiliates or such as to make it  unreasonable  to expect the Company
to  continue  to  employ  the  Executive,  including,  without  limitation,  the
conviction of any crime,  the  commission or attempted  commission of any act of
wilful misconduct or dishonesty, malfeasance or gross negligence, the failure or
neglect by the Executive to perform his duties  hereunder or any other breach or
attempted breach of any of the terms or provisions of this Agreement.

9. Non-Disclosure Covenant. The Executive covenants and agrees that he will not,
during his employment with the Company,  except in the performance of his duties
hereunder,  or at any time  after the  termination  of his  employment  with the
Company,  communicate  or disclose to any person  (other than the Company or its
Affiliates),  or use for his own  account or the  benefit  of any other  person,
without the prior written consent of the Company,  any Confidential  Information
(as hereinafter  defined) which was obtained or acquired by the Executive during
the term of his employment with the Employer.  The Executive  further  covenants
and agrees that he shall retain all such  Confidential  Information in trust for
the sole  benefit of the Company and its  Affiliates  and their  successors  and
assigns. For purposes of this Agreement,  "Confidential  Information" shall mean
any and all  knowledge and  information  relating to the business and affairs of
the Company or any of its Affiliates,  their products, processes and/or services
and their customers, suppliers, creditors,  shareholders,  contractors,  agents,
consultants and employees (hereinafter referred to as "Related Persons"),  which
is or is intended by any of them to be of a confidential nature,  including, but
not limited to, any and all  knowledge  and  information  relating to  research,
development, inventions, manufacture,






                                        3

<PAGE>

purchasing,  accounting,  finances, costs, profit margins, patents,  copyrights,
trademarks,  trade names,  marketing,  merchandising,  selling,  customer lists,
customer  requirements  and  personnel,   pricing,   pricing  methods  and  data
processing  and any and all other such  knowledge,  information  and  materials,
heretofore or hereafter during the term of this Agreement,  conceived, designed,
created,  used or developed by or relating to the Company, any of its Affiliates
or any Related Person;  provided,  however, that Confidential  Information shall
not include any information  which may be in the public domain or comes into the
public  domain not as a result of a breach by the  Executive of any of the terms
or provisions of this Agreement.

10. Covenant Not to Compete; Non-Interference.

(a) The Executive  covenants and agrees that,  during the Employment  Period and
for a period of two (2) years thereafter, except in the course of his employment
hereunder,  he will not, directly or indirectly,  engage in the sale, marketing,
distribution or trading of any Similar  Branded Cheese (as hereinafter  defined)
within the geographical  territories in which the Company at any time during the
Employment Period conducts its business.  For purposes hereof, the term "Similar
Branded  Cheese"  means any  cheese or cheese  food  product  having the same or
similar characteristics, in terms of type (e.g., Swiss) or other characteristics
such as sodium,  cholesterol  and/or fat  content,  as any Branded  Cheese sold,
marketed,  distributed  or traded by the  Company at any time during the one (1)
year period immediately preceding the termination of the Employment Period.

(b) The  Executive  covenants  and agrees that he will not,  whether for his own
account or the account of any other person (i) at any time during the Employment
Period  and for a  period  of two  (2)  years  thereafter,  solicit,  employ  or
otherwise  engage,  as an employee,  independent  consultant or  otherwise,  any
person who is or was an employee of or independent  consultant to the Company or
any of its  Affiliates  to terminate  his  employment  with or engagement by the
Company or such  Affiliate  (as the case may be),  or (ii) at any time during or
after the termination of the Employment Period,  interfere with the relationship
of the Company or any of its  Affiliates  with any person,  including any person
who at any time  during the  Employment  Period was an employee or a customer or
supplier  of,  or in the  habit  of  dealing  with,  the  Company  or any of its
Affiliates.

(c) It is  understood  and agreed by and  between  the  parties  hereto that the
foregoing  covenants  by the  Executive  set  forth  in  this  Paragraph  10 are
essential  elements of this  Agreement  and that,  but for the  agreement of the
Executive to comply with such covenants, the Company would not have entered into
this Agreement.








                                        4

<PAGE>

11. Covenant to Report; Ownership of Trade Secrets, etc.
 
(a) The Executive  shall  promptly  communicate  and disclose to the Company all
observations  made and data obtained by him in the course of his employment with
the Company. All written materials,  records and documents made by the executive
or coming materials,  records and documents made by the Executive or coming into
his possession  during the Employment  Period concerning the business or affairs
of the  Company  of any of its  Affiliates  shall  be the sole  property  of the
Company and its Affiliates; and upon the termination of the Employment Period or
upon the  earlier  request of the  Company  during the  Employment  Period,  the
Executive shall promptly deliver the same to the Company (or its designee).  The
Executive  agrees to  render to the  Company  or to any of its  Affiliates  such
reports of the  activities  undertaken by the  Executive or conducted  under the
Executive's  direction during the Employment  Period, as the Company of any such
Affiliate may reasonably request.

(b) The Executive agrees that any trade secret, invention,  improvement, patent,
patent  application  or  writing,  and any  program,  system or novel  technique
(whether  or  not  capable  of  being  trademarked,   copyrighted  or  patented)
conceived, devised, developed or otherwise obtained by him during the Employment
Period relating to the business,  property,  methods,  suppliers or customers of
the  Company or any of its  Affiliates  shall be and become the  property of the
Company and its Affiliates;  and the Executive agrees to give the Company prompt
written  notice  of  his  conception,  invention,  authorship,   development  or
acquisition of any such trade secret,  invention,  improvement,  patent,  patent
application,  writing,  program,  system or novel  technique and to execute such
instruments of transfer,  assignment,  conveyance or confirmation and such other
documents  and to do all  appropriate  lawful  acts  as may be  required  by the
Company to  transfer,  assign,  confirm  and  perfect  the  Company  all legally
protectable  rights in any such trade secret,  invention,  improvement,  patent,
patent application, writing, program, system or novel technique.

12. Remedies.  The Executive acknowledges that the Company will have no adequate
remedy at law if the Executive  violates any of the terms of this Agreement.  In
such event, the Company shall have the right, in addition to any other rights it
may have, to obtain, in any court of competent  jurisdiction,  injunctive relief
to restrain any breach or threatened  breach hereof or otherwise to specifically
enforce any of the provisions of this Agreement.

13. Definitions.

(a) The term  "Affiliate" of another  person means any person that directly,  or
indirectly through one or more  intermediaries,  controls or is controlled by or
is under common control with such other person.

(b) The term "person" shall mean any individual, corporation, firm, association,
partnership, other legal entity or other form of business organization.



                                        5

<PAGE>

14. Compliance with Other Agreements. The Executive represents and warrants that
the execution and delivery by him of this  Agreement and the  performance by him
of his  obligations  hereunder will not, with or without the giving of notice of
the passage of time, (i) violate any judgement, writ, injunction or order of any
court,  arbitrator or  governmental  agency  applicable to him, or (ii) conflict
with,  result  in the  breach of any  provisions  of or the  termination  of, or
constitute  default under, any agreement to which the Executive is a party or by
which he is or may be bound.

15.  Waiver  of  Breach.  The  waiver  by any  party  hereto  of a breach of any
provision  of this  Agreement  shall not operate nor be construed as a waiver of
any subsequent breach.

16. Binding Effect; Benefits. This Agreement shall insure to the benefit of, and
shall be binding  upon,  the  parties  hereto and their  respective  successors,
assigns,  heirs and legal  representatives,  including any entity with which the
Company  may  merge  or   consolidate  or  to  which  it  may  transfer  all  or
substantially  al of its assets.  Insofar as the  Executive is  concerned,  this
Agreement, being personal, may not be assigned.

17. Notices.  All notices and other  communications which are required or may be
given under this Agreement  shall be in writing and shall be deemed to have been
duly given when  delivered  in  person,  transmitted  by telex or three (3) days
after being mailed by registered or certified first class mail, postage prepaid,
return receipt  request,  to the parties hereto at the addresses set forth above
(as the same may be changed from time to time by notice  similarly given) or the
last known business or residence address of such parties.

18.  Entire  Agreement;  Amendments.  This  Agreement  (i)  contains  the entire
agreement  and  supersedes  all  prior  agreements  and  understanding,  oral or
written,  with respect to the subject matter hereof,  including any agreement or
understanding  between the Executive and Alpine Lace and/or any other  Affiliate
of the Company,  and (ii) may not be changed orally, but only by an agreement in
writing  signed  by the  party  against  whom  any  waiver,  change,  amendment,
modification or discharge is sought.

19.  Severability.  The  invalidity  of all or any part of any provision of this
Agreement  shall not render  invalid  the  remainder  of this  Agreement  or the
remainder of such  provision.  If any provision of this Agreement is so broad as
to be unenforceable,  such provision shall be interpreted to be only so broad as
is enforceable.

20. Governing Law; Consent to Jurisdiction.  This Agreement shall be governed by
and  construed in accordance  with the laws of the State of New Jersey,  without
giving effect to the principles of conflicts of law thereof. The Company and the
Executive  each hereby  submits  itself or himself for the sole  purpose of this
Agreement and any controversy arising hereunder to the exclusive jurisdiction of
the state courts in the State of New Jersey,  and waives any  objection  (on the
grounds of lack of jurisdiction  or forum non  conveniens,  or otherwise) to the
exercise of such  jurisdiction over it or him by any state court in the State of
New Jersey.


                                        6

<PAGE>

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the
date above first written.


ATTEST:                                          ALPINE LACE BRANDS, INC.


BY:/s/ Kenneth E. Meyers                         BY:/s/ Carl T. Wolf
       Kenneth E. Meyers, Secretary                     Carl T. Wolf, President


WITNESS:


/s/ Neyda L. Parrilla                               /s/ Marion F. Wolf
                                                        Marion F. Wolf









                                        7

<PAGE>
                                                                 Exhibit 10.4(c)


                              EMPLOYMENT AGREEMENT


THIS AGREEMENT made as of the 4th day of January 1993 by and between ALPINE LACE
BRANDS, INC., a Delaware corporation having its principal offices located at 111
Dunnell  Road,  Maplewood,  New Jersey  07040  (hereinafter  referred  to as the
"Company"),  and ARTHUR KARMEL, residing at 4 Gary Drive, Englishtown,  NJ 07726
(hereinafter referred to as the "Executive").


                              W I T N E S S E T H:

 
WHEREAS,  the Company is engaged in the development,  marketing and distribution
of  nutritional  cheeses and other  specialty  food  products  (the "ALPINE LACE
Business"),  and the Company's wholly owned  subsidiary,  Market Cheese Traders,
Inc., a New Jersey  corporation  is engaged in cheese  commodity  trading  ("the
Cheese Trading Business");

WHEREAS,  the  Executive  is Vice  President  and  Controller  of the Company in
connection with its ALPINE LACE Business; and

WHEREAS,  the Company  desires to employ the Executive as its Vice President and
Controller, and the Executive desires to be so employed by the Company, upon all
the terms and conditions hereinafter set forth below.

NOW, THEREFORE, the parties agree as follows:

1. Employment. The Company hereby employs the Executive and the Executive hereby
accepts employment by the Company upon the terms and conditions  hereinafter set
forth.

2.  Term.  Subject  to the  provisions  of  Paragraph  8  hereof,  the  term  of
Executive's employment by the Company under this Agreement shall commence on the
date hereof and shall  continue for a period of one (1) year;  and,  thereafter,
the term  hereof  shall be  automatically  renewed for  successive  one (1) year
renewal terms unless,  prior to the  expiration of the original term or the then
current renewal term hereof, (a) the Executive shall give the Company sixty (60)
days notice of his  intention  not to renew the term,  or (b) the Company  shall
give the Executive a minimum six (6) months notice of its intention not to renew
the  term.  The term of the  Executive's  employment  hereunder,  including  the
original term and any renewal terms hereof,  is  hereinafter  referred to as the
"Employment Period." Notwithstanding anything to the contrary, in the event of a
change of control of the Company,  the term of this Agreement shall  re-commence
as of the effective date of such change of control.



                                        1

<PAGE>

3. Compensation.  For all services to be rendered  hereunder,  the Company shall
pay the following compensation with respect to the initial term and each renewal
term hereof during the Employment Period a salary of $73,000 per year.

4. Duties.  The Executive shall be employed as an Executive of the Company,  and
shall have such duties as are assigned or  delegated to him by the  President of
the Company.  The Executive shall also, upon the request of the President of the
Company,  perform  services for any  Affiliate (as  hereinafter  defined) of the
Company without further compensation;  provided, however, that any such services
to be performed for any Affiliate of the Company do not  unreasonably  interfere
with  the  services  rendered  on  behalf  of the  Company  so as to  materially
adversely  affect the  Executive's  compensation  under Section 3. The Executive
shall devote his entire business time,  attention and energy  exclusively to the
business of the Company and its  Affiliates and shall  cooperate  fully with the
President of the Company in the advancement of the best interests of the Company
and its Affiliates. The Executive will be Vice President -Branded Division.

5. Expenses. Subject to compliance by the Executive with such policies regarding
expenses  and expense  reimbursement  as may be adopted from time to time by the
Company,  the  Executive  is  authorized  to incur  reasonable  expenses  in the
performance  of his duties  hereunder in furtherance of the business and affairs
of the Company and its  Affiliates,and  the Company will reimburse the Executive
for all such reasonable expenses of an extraordinary nature, including,  without
limitation,  expenses incurred in connection with out-of-pocket  business travel
and in all cases upon the  presentation by the Executive of an itemized  account
satisfactory  to the Company in  substantiation  of such  expenses when claiming
reimbursement.

6.  Vacation.  The  Executive  shall be  entitled  to two (2) weeks  vacation in
accordance  with the Company's  vacation policy in effect from time to time. Any
unused vacation days may not be carried over from one period to the next without
the  prior  written  approval  of the  President  or Board of  Directors  of the
Company.

7. Company  Benefits.  The Executive  shall,  during the Employment  Period,  be
eligible to participate in such pension,  profit sharing, bonus, life insurance,
medical and other  employee  benefit plans of the Company which may be in effect
form time to time, to the extent he is eligible  under the terms of those plans,
on the same basis as other executive officers of the Company; provided, however,
that the allocation of benefits  under any plan which provides that  allocations
thereunder  shall be in the  discretion of the Board of Directors of the Company
shall be determined from time to time by such Board of Directors.






                                        2

<PAGE>

8. Termination.

(a) The  Employment  Period,  the  Executive's  salary and bonus and any and all
rights under this  Agreement  or  otherwise as an employee of the Company  shall
terminate (except as to salary accrued prior to such termination):  (i) upon the
death of the  Executive;  (ii) upon the  physical  or mental  disability  of the
Executive (as defined in Paragraph  8(b) below);  or (iii) for cause (as defined
in Paragraph 8(c) below),  immediately upon the giving of written notice thereof
by the  Company  to the  Executive,  or at such  later  time as such  notice may
specify.

(b) For  purposes  of this  Agreement,  the  Executive  shall  be  deemed  to be
"physically or mentally  disabled" if (i) for medical reasons he has been unable
to perform his duties for forty five (45)  consecutive days or seventy five (75)
days in any twelve (12) month  period,  all as  determined  in good faith by the
Board of Directors of the Company,  and supported by medical evidence,  and (ii)
the Company  notifies the Executive of the termination of the Employment  Period
as a result of such disability.

(c) For purposes of this Agreement, the term "cause" shall be deemed to mean any
reason  materially and adversely  affecting the best interests of the Company or
any of its Affiliates or such as to make it  unreasonable  to expect the Company
to  continue  to  employ  the  Executive,  including,  without  limitation,  the
conviction of any crime,  the  commission or attempted  commission of any act of
wilful misconduct or dishonesty, malfeasance or gross negligence, the failure or
neglect by the Executive to perform his duties  hereunder or any other breach or
attempted breach of any of the terms or provisions of this Agreement.

9. Non-Disclosure Covenant. The Executive covenants and agrees that he will not,
during his employment with the Company,  except in the performance of his duties
hereunder,  or at any time  after the  termination  of his  employment  with the
Company,  communicate  or disclose to any person  (other than the Company or its
Affiliates),  or use for his own  account or the  benefit  of any other  person,
without the prior written consent of the Company,  any Confidential  Information
(as hereinafter  defined) which was obtained or acquired by the Executive during
the term of his employment with the Employer.  The Executive  further  covenants
and agrees that he shall retain all such  Confidential  Information in trust for
the sole  benefit of the Company and its  Affiliates  and their  successors  and
assigns. For purposes of this Agreement,  "Confidential  Information" shall mean
any and all  knowledge and  information  relating to the business and affairs of
the Company or any of its Affiliates,  their products, processes and/or services
and their customers, suppliers, creditors,  shareholders,  contractors,  agents,
consultants and employees (hereinafter referred to as "Related Persons"),  which
is or is intended by any of them to be of a confidential nature,  including, but
not limited to, any and all  knowledge  and  information  relating to  research,
development, inventions, manufacture,





                                        3

<PAGE>

purchasing,  accounting,  finances, costs, profit margins, patents,  copyrights,
trademarks,  trade names,  marketing,  merchandising,  selling,  customer lists,
customer  requirements  and  personnel,   pricing,   pricing  methods  and  data
processing  and any and all other such  knowledge,  information  and  materials,
heretofore or hereafter during the term of this Agreement,  conceived, designed,
created,  used or developed by or relating to the Company, any of its Affiliates
or any Related Person;  provided,  however, that Confidential  Information shall
not include any information  which may be in the public domain or comes into the
public  domain not as a result of a breach by the  Executive of any of the terms
or provisions of this Agreement.

10. Covenant Not to Compete; Non-Interference.

(a) The Executive  covenants and agrees that,  during the Employment  Period and
for a period of two (2) years thereafter, except in the course of his employment
hereunder,  he will not, directly or indirectly,  engage in the sale, marketing,
distribution or trading of any Similar  Branded Cheese (as hereinafter  defined)
within the geographical  territories in which the Company at any time during the
Employment Period conducts its business.  For purposes hereof, the term "Similar
Branded  Cheese"  means any  cheese or cheese  food  product  having the same or
similar characteristics, in terms of type (e.g., Swiss) or other characteristics
such as sodium,  cholesterol  and/or fat  content,  as any Branded  Cheese sold,
marketed,  distributed  or traded by the  Company at any time during the one (1)
year period immediately preceding the termination of the Employment Period.

(b) The  Executive  covenants  and agrees that he will not,  whether for his own
account or the account of any other person (i) at any time during the Employment
Period  and for a  period  of two  (2)  years  thereafter,  solicit,  employ  or
otherwise  engage,  as an employee,  independent  consultant or  otherwise,  any
person who is or was an employee of or independent  consultant to the Company or
any of its  Affiliates  to terminate  his  employment  with or engagement by the
Company or such  Affiliate  (as the case may be),  or (ii) at any time during or
after the termination of the Employment Period,  interfere with the relationship
of the Company or any of its  Affiliates  with any person,  including any person
who at any time  during the  Employment  Period was an employee or a customer or
supplier  of,  or in the  habit  of  dealing  with,  the  Company  or any of its
Affiliates.

(c) It is  understood  and agreed by and  between  the  parties  hereto that the
foregoing  covenants  by the  Executive  set  forth  in  this  Paragraph  10 are
essential  elements of this  Agreement  and that,  but for the  agreement of the
Executive to comply with such covenants, the Company would not have entered into
this Agreement.







                                        4

<PAGE>

11. Covenant to Report; Ownership of Trade Secrets, etc.
 
(a) The Executive  shall  promptly  communicate  and disclose to the Company all
observations  made and data obtained by him in the course of his employment with
the Company. All written materials,  records and documents made by the executive
or coming materials,  records and documents made by the Executive or coming into
his possession  during the Employment  Period concerning the business or affairs
of the  Company  of any of its  Affiliates  shall  be the sole  property  of the
Company and its Affiliates; and upon the termination of the Employment Period or
upon the  earlier  request of the  Company  during the  Employment  Period,  the
Executive shall promptly deliver the same to the Company (or its designee).  The
Executive  agrees to  render to the  Company  or to any of its  Affiliates  such
reports of the  activities  undertaken by the  Executive or conducted  under the
Executive's  direction during the Employment  Period, as the Company of any such
Affiliate may reasonably request.

(b) The Executive agrees that any trade secret, invention,  improvement, patent,
patent  application  or  writing,  and any  program,  system or novel  technique
(whether  or  not  capable  of  being  trademarked,   copyrighted  or  patented)
conceived, devised, developed or otherwise obtained by him during the Employment
Period relating to the business,  property,  methods,  suppliers or customers of
the  Company or any of its  Affiliates  shall be and become the  property of the
Company and its Affiliates;  and the Executive agrees to give the Company prompt
written  notice  of  his  conception,  invention,  authorship,   development  or
acquisition of any such trade secret,  invention,  improvement,  patent,  patent
application,  writing,  program,  system or novel  technique and to execute such
instruments of transfer,  assignment,  conveyance or confirmation and such other
documents  and to do all  appropriate  lawful  acts  as may be  required  by the
Company to  transfer,  assign,  confirm  and  perfect  the  Company  all legally
protectable  rights in any such trade secret,  invention,  improvement,  patent,
patent application, writing, program, system or novel technique.

12. Remedies.  The Executive acknowledges that the Company will have no adequate
remedy at law if the Executive  violates any of the terms of this Agreement.  In
such event, the Company shall have the right, in addition to any other rights it
may have, to obtain, in any court of competent  jurisdiction,  injunctive relief
to restrain any breach or threatened  breach hereof or otherwise to specifically
enforce any of the provisions of this Agreement.

13. Definitions.

(a) The term  "Affiliate" of another  person means any person that directly,  or
indirectly through one or more  intermediaries,  controls or is controlled by or
is under common control with such other person.

(b) The term "person" shall mean any individual, corporation, firm, association,
partnership, other legal entity or other form of business organization.



                                        5

<PAGE>

14. Compliance with Other Agreements. The Executive represents and warrants that
the execution and delivery by him of this  Agreement and the  performance by him
of his  obligations  hereunder will not, with or without the giving of notice of
the passage of time, (i) violate any judgement, writ, injunction or order of any
court,  arbitrator or  governmental  agency  applicable to him, or (ii) conflict
with,  result  in the  breach of any  provisions  of or the  termination  of, or
constitute  default under, any agreement to which the Executive is a party or by
which he is or may be bound.

15.  Waiver  of  Breach.  The  waiver  by any  party  hereto  of a breach of any
provision  of this  Agreement  shall not operate nor be construed as a waiver of
any subsequent breach.

16. Binding Effect; Benefits. This Agreement shall insure to the benefit of, and
shall be binding  upon,  the  parties  hereto and their  respective  successors,
assigns,  heirs and legal  representatives,  including any entity with which the
Company  may  merge  or   consolidate  or  to  which  it  may  transfer  all  or
substantially  al of its assets.  Insofar as the  Executive is  concerned,  this
Agreement, being personal, may not be assigned.

17. Notices.  All notices and other  communications which are required or may be
given under this Agreement  shall be in writing and shall be deemed to have been
duly given when  delivered  in  person,  transmitted  by telex or three (3) days
after being mailed by registered or certified first class mail, postage prepaid,
return receipt  request,  to the parties hereto at the addresses set forth above
(as the same may be changed from time to time by notice  similarly given) or the
last known business or residence address of such parties.

18.  Entire  Agreement;  Amendments.  This  Agreement  (i)  contains  the entire
agreement  and  supersedes  all  prior  agreements  and  understanding,  oral or
written,  with respect to the subject matter hereof,  including any agreement or
understanding  between the Executive and Alpine Lace and/or any other  Affiliate
of the Company,  and (ii) may not be changed orally, but only by an agreement in
writing  signed  by the  party  against  whom  any  waiver,  change,  amendment,
modification or discharge is sought.

19.  Severability.  The  invalidity  of all or any part of any provision of this
Agreement  shall not render  invalid  the  remainder  of this  Agreement  or the
remainder of such  provision.  If any provision of this Agreement is so broad as
to be unenforceable,  such provision shall be interpreted to be only so broad as
is enforceable.

20. Governing Law; Consent to Jurisdiction.  This Agreement shall be governed by
and  construed in accordance  with the laws of the State of New Jersey,  without
giving effect to the principles of conflicts of law thereof. The Company and the
Executive  each hereby  submits  itself or himself for the sole  purpose of this
Agreement and any controversy arising hereunder to the exclusive jurisdiction of
the state courts in the State of New Jersey,  and waives any  objection  (on the
grounds of lack of jurisdiction  or forum non  conveniens,  or otherwise) to the
exercise of such  jurisdiction over it or him by any state court in the State of
New Jersey.


                                        6

<PAGE>

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the
date above first written.


ATTEST:                                          ALPINE LACE BRANDS, INC.


BY:/s/ Kenneth E. Meyers                         BY:/s/ Carl T. Wolf
       Kenneth E. Meyers, Secretary                     Carl T. Wolf, President


WITNESS:


/s/ Neyda L. Parrilla                               /s/ Arthur Karmel
                                                        Arthur Karmel








                                        7

<PAGE>


                                                                      Exhibit 11
                            ALPINE LACE BRANDS, INC.

            COMPUTATION OF EARNINGS (LOSS) PER SHARE OF COMMON STOCK

                         For the Year Ended December 31,
<TABLE>
<S>                                                             <C>                   <C>                   <C>


                                                                    1996                 1995                   1994   

Net earnings (loss) for the year
  applicable to common stock (1):

Earnings (loss) before extraordinary
 item                                                            $1,902,004            $3,912,028           $(3,122,989)

Extraordinary item                                                     ---               $103,760                   ---

NET EARNINGS (LOSS)                                              $1,902,004            $4,015,788           $(3,122,989)

Preferred stock dividends                                          $168,750              $121,513                   ---

MCT Dairies, Inc. option                                           $107,751                   ---                   ---

Net earnings (loss) applicable to
 common shareholders                                             $1,625,503            $3,894,275           $(3,122,989)
 
Weighted average number of
  common shares outstanding:

Issued and outstanding common
  shares (2)                                                     5,106,536              5,050,136             5,012,419

Incremental shares attributable to
  assumed exercise of stock options
  and warrants (3)                                                 132,881                239,139                   ---

Weighted average number of common
  shares (2) + (3)                                               5,239,417              5,289,275             5,012,419

Earnings (loss) per common and common
  equivalent share                                                    $.31                   $.74                 $(.62)

Earnings (loss) before
  extraordinary item                                                  $.31                   $.72                 $(.62)

Extraordinary item                                                     ---                   $.02                   ---

       NET EARNINGS (LOSS) PER SHARE                                  $.31                   $.74                 $(.62)
</TABLE>


<PAGE>

                                                                     Exhibit 21





             Subsidiaries of Registrant

             (1)      MCT Dairies, Inc., a New Jersey corporation

             (2)      Dakota Farms Cheese, Inc., a Delaware corporation.

<PAGE>
                                                                      Exhibit 23


               CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS





We have issued our report dated February 7, 1997,  accompanying the consolidated
financial  statements  included in the Annual Report of Alpine Lace Brands, Inc.
on Form 10-K for the year ended  December  31,  1996.  We hereby  consent to the
incorporation  by reference  of said report in the  Registration  Statements  of
Alpine Lace Brands, Inc. on Form S-3 (File No. 33-53942,  effective November 18,
1992) and on Form S-8 (as filed with the Securities  and Exchange  Commission on
May 18, 1993, File No. 33-62948).




/s/ Grant Thornton LLP
GRANT THORNTON LLP


Parsippany, New Jersey
March 20, 1997

<PAGE>

                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

ALPINE LACE BRANDS, INC.

By: /s/ Carl T. Wolf Carl T. Wolf, President and Chairman of the Board

Dated: March 10, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.

SIGNATURE                            TITLE                                  DATE

 /s/ Carl T. Wolf          President and Chairman of the          March 10, 1997
Carl T. Wolf               Board of Directors (Principal
                           executive officer)

 /s/ Marion F. Wolf        Director                               March 10, 1997
Marion F. Wolf

 /s/ Richard Cheney        Director                               March 10, 1997
Richard Cheney

 /s/ Richard S. Hickok     Director                               March 10, 1997
Richard S. Hickok

 /s/ Howard M. Lorber      Director                               March 10, 1997
Howard Lorber

 /s/ Joseph Rosetti        Director                               March 10, 1997
Joseph Rosetti

 /s/ Stephen I. Sadove     Director                               March 10, 1997
Stephen I. Sadove

 /s/ Marvin Schiller       Director                               March 10, 1997
Marvin Schiller

 /s/ Arthur Karmel         Vice President - Finance &             March 10, 1997
Arthur Karmel              Chief Accounting Officer