CONFORMED COPY



                                CREDIT AGREEMENT

                                      AMONG

                              AGRILINK FOODS, INC.,
                                   as Borrower

                            PRO-FAC COOPERATIVE, INC.
                    and certain other entities as Guarantors

                                       AND

                         HARRIS TRUST AND SAVINGS BANK,
                    Individually and as Administrative Agent

                                       AND

                        BANK OF MONTREAL, CHICAGO BRANCH,
                      Individually and as Syndication Agent

                                       AND

                  THE LENDERS FROM TIME TO TIME PARTIES HERETO

                         Dated as of September 23, 1998




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                                                 TABLE OF CONTENTS


<TABLE>
<S>                        <C>                                                                                                 <C>
SECTION                                                   DESCRIPTION                                                          PAGE

SECTION 1.                 DEFINITIONS; INTERPRETATION OF AGREEMENT..............................................................1

       Section 1.1.            Definitions.......................................................................................1
       Section 1.2.            Accounting Terms.................................................................................16

SECTION 2.                 THE CREDIT FACILITIES................................................................................16

       Section 2.1.            The Revolving Credit.............................................................................16
       Section 2.2.            The Term Credits.................................................................................22
       Section 2.3.            Manner of Borrowing..............................................................................23

SECTION 3.                 INTEREST.............................................................................................24

       Section 3.1.            Options..........................................................................................24
       Section 3.2.            Base Rate Portion................................................................................25
       Section 3.3.            LIBOR Portions...................................................................................25
       Section 3.4.            Interest on Swing Loans..........................................................................25
       Section 3.5.            Computation......................................................................................26
       Section 3.6.            Minimum Amounts..................................................................................26
       Section 3.7.            Manner of Rate Selection.........................................................................26
       Section 3.8.            Funding Indemnity................................................................................26
       Section 3.9.            Change of Law....................................................................................27
       Section 3.10.           Unavailability of Deposits or Inability to Ascertain, or Inadequacy
                               of, LIBOR Rate...................................................................................27
       Section 3.11.           Increased Cost and Reduced Return................................................................28
       Section 3.12.           Lending Offices..................................................................................28
       Section 3.13.           Discretion of Banks as to Manner of Funding......................................................28

SECTION 4.                 FEES, PAYMENTS, REDUCTIONS, APPLICATIONS AND NOTATIONS...............................................29

       Section 4.1.            Commitment Fee...................................................................................29
       Section 4.2.            Letter of Credit Fees............................................................................29
       Section 4.3.            Administrative Agent's Fees......................................................................29
       Section 4.4.            Prepayments......................................................................................30
       Section 4.5.            Terminations.....................................................................................31
       Section 4.6.            Place and Application............................................................................32
       Section 4.7.            Notations and Requests...........................................................................34

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

       Section 4.8.            Capital Adequacy.................................................................................34
       Section 4.10.           Withholding Taxes................................................................................35
       Section 4.11.           Bank Replacement.................................................................................36

SECTION 5.                 THE COLLATERAL.......................................................................................37

       Section 5.1.            The Collateral...................................................................................37
       Section 5.2.            Further Assurances...............................................................................38

SECTION 6.                 REPRESENTATIONS AND WARRANTIES.......................................................................38

       Section 6.1.            Organization and Power...........................................................................38
       Section 6.2.            Subsidiaries.....................................................................................38
       Section 6.3.            Use of Proceeds; Regulation U....................................................................39
       Section 6.4.            Financial Reports................................................................................39
       Section 6.5.            Litigation and Taxes.............................................................................40
       Section 6.6.            Burdensome Contracts with Affiliates.............................................................40
       Section 6.7.            ERISA............................................................................................40
       Section 6.8.            Full Disclosure..................................................................................41
       Section 6.9.            Compliance with Law..............................................................................41
       Section 6.10.           Certain Contracts................................................................................41
       Section 6.11.           Stock Purchase Agreement Warranties..............................................................42
       Section 6.12.           Restrictive Agreements...........................................................................42
       Section 6.13.           No Default under Other Agreements................................................................42
       Section 6.14.           Status under Certain Laws........................................................................42
       Section 6.15.           Year 2000 Compliance.............................................................................42
       Section 6.16.           Solvency, Etc....................................................................................42

SECTION 7.                 CONDITIONS PRECEDENT.................................................................................43

       Section 7.1.            All Advances.....................................................................................43
       Section 7.2.            Initial Advance..................................................................................43
       Section 7.3.            Legal Matters....................................................................................46

SECTION 8.                 COVENANTS............................................................................................47

       Section 8.1.            Maintenance of Business..........................................................................47
       Section 8.2.            Maintenance......................................................................................47
       Section 8.3.            Taxes............................................................................................47
       Section 8.4.            Insurance........................................................................................47
       Section 8.5.            Financial Reports................................................................................48
       Section 8.6.            Compliance with Laws.............................................................................49

</TABLE>

<PAGE>


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

       Section 8.7.            Nature of Business...............................................................................49
       Section 8.8.            Liens............................................................................................49
       Section 8.9.            Indebtedness.....................................................................................50
       Section 8.10.           Consolidated Net Worth...........................................................................51
       Section 8.11.           Leverage Ratio...................................................................................51
       Section 8.12.           Fixed Charge Coverage Ratio......................................................................51
       Section 8.13.           EBITDA...........................................................................................52
       Section 8.14.           Interest Coverage Ratio..........................................................................52
       Section 8.15.           Net Capital Expenditures.........................................................................53
       Section 8.16.           Rentals..........................................................................................53
       Section 8.17.           Acquisitions, Investments, Loans and Advances and Guarantees.....................................53
       Section 8.18.           Restricted Payments..............................................................................55
       Section 8.19.           Mergers..........................................................................................55
       Section 8.20.           Sales of Assets..................................................................................56
       Section 8.21.           Burdensome Contracts with Affiliates.............................................................56
       Section 8.22.           No Change in Fiscal Year.........................................................................56
       Section 8.23.           Formation of Subsidiaries........................................................................56
       Section 8.24.           No Restriction on Subsidiary Dividends...........................................................57
       Section 8.25.           Interest Rate Protection.........................................................................57
       Section 8.26.           Concerning the Subordinated Debt.................................................................57
       Section 8.27.           Concerning the Marketing Agreement...............................................................57
       Section 8.28.           Year 2000 Assessment.............................................................................57
       Section 8.29.           Preservation of Cooperative Status...............................................................58

SECTION 9.                 EVENTS OF DEFAULT AND REMEDIES.......................................................................58


SECTION 10.                THE AGENT AND ISSUING BANK...........................................................................60

       Section 10.1.           Appointment and Authorization....................................................................60
       Section 10.2.           Rights as a Lender...............................................................................61
       Section 10.3.           Standard of Care.................................................................................61
       Section 10.4.           Costs and Expenses...............................................................................62
       Section 10.5.           Indemnity........................................................................................62

SECTION 11.                THE GUARANTEES.......................................................................................63

       Section 11.1.           The Guarantees...................................................................................63
       Section 11.2.           Guarantee Unconditional..........................................................................63
       Section 11.3.           Discharge Only upon Payment in Full; Reinstatement in Certain
                               Circumstances....................................................................................64

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

       Section 11.4.           Subrogation......................................................................................64
       Section 11.5.           Waivers..........................................................................................64
       Section 11.6.           Stay of Acceleration.............................................................................65

SECTION 12.                MISCELLANEOUS........................................................................................65

       Section 12.1.           Waiver of Rights.................................................................................65
       Section 12.2.           Non-Business Day.................................................................................65
       Section 12.3.           Documentary Taxes................................................................................65
       Section 12.4.           Survival of Representations......................................................................65
       Section 12.5.           Set-off Sharing..................................................................................65
       Section 12.6.           Notices..........................................................................................66
       Section 12.7.           Counterparts.....................................................................................66
       Section 12.8.           Successors and Assigns...........................................................................66
       Section 12.9.           Participants.....................................................................................66
       Section 12.10.          Costs and Expenses...............................................................................67
       Section 12.11.          Construction.....................................................................................67
       Section 12.12.          Assignment Agreements............................................................................67
       Section 12.13.          Waivers, Modifications and Amendments............................................................68
       Section 12.14.          Entire Agreement.................................................................................69
       Section 12.15.          Headings.........................................................................................69
       Section 12.16.          Confidentiality..................................................................................69
       Section 12.17.          Jurisdiction.....................................................................................69
       Section 12.18.          Waiver of Jury Trial.............................................................................70
       Section 12.19.          Governing Law....................................................................................70

Exhibit A                 --        Revolving Credit Note
Exhibit B                 --        Swing Credit Note
Exhibit C                 --        A Credit Note
Exhibit D                 --        B Credit Note
Exhibit E                 --        C Credit Note
Exhibit F                 --        Compliance Certificate
Exhibit G                 --        Additional Guarantor Supplement
Exhibit H                 --        Subsidiaries
Exhibit I                 --        Existing Indebtedness
Exhibit J                 --        Existing Liens
Exhibit K                 --        Existing Investments, Loans and Advances
Exhibit L                 --        Scheduled Excluded Assets

Schedule 6.5              --        Disclosed Litigation
</TABLE>



<PAGE>



                                                      


                              AGRILINK FOODS, INC.

                                CREDIT AGREEMENT




To the Agents and each of
 the Lenders which are or
 become Lenders under
 this Agreement

Gentlemen:

         The  undersigned,  Agrilink Foods,  Inc., a New York  corporation  (the
"Company")  applies to you for your several  commitments,  subject to all of the
terms  and  conditions  hereof  and on the  basis  of  the  representations  and
warranties  hereinafter set forth, to extend credit to the Company,  all as more
fully hereinafter set forth.


SECTION 1.               DEFINITIONS; INTERPRETATION OF AGREEMENT.

             Section  1.1.  Definitions.  The  following  terms when used herein
shall have the following  meanings,  such terms to be equally applicable to both
the singular and the plural of the terms defined:

         "A Credit Commitments" is defined is Section 2.2(a) hereof.

         "A  Credit  Lenders"  shall  mean the  Lenders  which at the time  have
unfunded A Credit Commitments or outstanding A Loans.

         "A Credit Notes" defined in Section 2.2(a) hereof.

         "Acquisition"  shall mean the  acquisition by the Company of all of the
outstanding  capital  stock  of  DFVC  and  BEMSA  Holding,   Inc.,  a  Delaware
corporation  ("BEMSA") and of the trademarks  used in the businesses of DFVC and
BEMSA, the transfer by the Company to Dean Foods or a subsidiary  thereof of the
asceptic business of the Company and the assets used in connection therewith and
the related  transactions  provided for in the Stock Purchase  Agreement and the
Asset Transfer Agreement.

         "Acquisition  Closing Date" shall mean the date the Acquisition is
actually consummated.


<PAGE>

         "Additional  Guarantor  Documentation"  shall mean the following,  each
which shall be satisfactory in form and substance to the Administrative Agent:

                 (i) stock  certificates  representing  100% of the issued and
         outstanding  capital  stock  of such  Guarantor  which  is owned by the
         Parent  or  another  Subsidiary,   together  with  blank  stock  powers
         therefor;

                (ii) good standing  certificates  for such Guarantor issued by
         its state of organization, issued not more than 30 days before the date
         of its Additional Guarantor Supplement;

               (iii)  copies of the  Certificates  of  Incorporation,  and all
         amendments  thereto,  of such Guarantor,  certified by the Secretary of
         State of its state of  incorporation  not more than 30 days  before the
         date of its Additional Guarantor Supplement;

                (iv) copies of the by-laws,  and all  amendments  thereto,  of
         such  Guarantor,  certified  as  true,  correct  and  complete  on  the
         effective date of its Additional  Guarantor Supplement by the Secretary
         or Assistant Secretary of such Guarantor;

                 (v) copies,  certified  as true,  correct and complete by the
         Secretary or  Assistant  Secretary of such  Guarantor,  of  resolutions
         regarding the transactions contemplated by this Agreement, duly adopted
         by the Board of Directors or other governing body of such Guarantor;

                (vi) an incumbency and signature certificate for such Guarantor;

               (vii) evidence  satisfactory to the  Administrative  Agent that
         the  Administrative  Agent's security interests in the Collateral to be
         provided  by such  Guarantor  is prior  to all  other  liens,  security
         interests and encumbrances  thereon not permitted hereby or approved by
         the Administrative Agent; and

              (viii) legal  matters  incident to the execution and delivery of
         the  Additional  Guarantor  Supplement  shall  be  satisfactory  to the
         Administrative Agent and its counsel and the Administrative Agent shall
         have  received  the  favorable  written  opinion  of  counsel  for such
         Guarantor  in form and  substance  satisfactory  to the  Administrative
         Agent.

         "Additional Guarantor Supplement" is defined in Section 8.23.



<PAGE>



         "Adjusted LIBOR Rate" shall mean a rate per annum  determined  pursuant
to the following formula:

 Adjusted LIBOR Rate           =                  LIBOR Rate
 
                                           100% - Reserve Percentage

         "Administrative Agent" shall mean Harris and its successors as 
administrative agent hereunder.

         "Affiliate" shall mean, for any Person, any other Person (including all
directors and officers of such Person) that directly or indirectly controls,  or
is under common control with, or is controlled by, such Person.  As used in this
definition,  "control"  means the power,  directly or  indirectly,  to direct or
cause the direction of the management or policies of a Person (through ownership
of voting securities, by contract or otherwise), provided that, in any event for
purposes of the  definition  any Person that owns directly or indirectly  10% or
more of the securities or other  interests  having ordinary voting power for the
election of  directors of a  corporation  or 10% or more of the  partnership  or
other  ownership  interests  of any other  Person will be deemed to control such
corporation or other Person.

         "Agents" shall mean the Administrative  Agent and the Syndication Agent
and their successors hereunder.

         "Aggregate Percentage" shall mean as to each Lender and as to each time
same  is to be  determined  the  percentage  which  the  sum of  its  unutilized
Revolving  Credit  Commitment,  outstanding  balance of Revolving  Credit Loans,
share of the risk  incident  to  outstanding  Letters of Credit,  outstanding  A
Loans, outstanding B Loans and outstanding C Loans bears to the aggregate of all
of the foregoing for all Lenders.

         "Agreement"  shall  mean  this  Credit  Agreement,  as the  same may be
amended, modified or restated from time to time.

         "A Loans" is defined in Section 2.2(a) hereof.

         "Applicable  Margin" shall mean the rate per annum  specified below for
the  Leverage  Ratio and type of Loan,  Portion or fee for which the  Applicable
Margin is being determined:

                   (a) with respect to the commitment  fee, the Letter of Credit
         fee called for by Section 4.2(a) hereof and each type of Portion of the
         Revolving Credit Loans and the A



<PAGE>


         Loans described  below, the rate per annum shown below for the range of
Leverage Ratio specified below:


                          LEVEL I       LEVEL II    LEVEL III     LEVEL IV



Leverage Ratio            3.5 to 1   3.5 to 1 but  4.0 to 1 but    4.5 to 1
                                        4.0 to 1      4.5 to 1
Base Rate Portion           0.00%        0.25%          0.75%        1.00%
LIBOR Portion & L/C Fee     1.75%        2.00%          2.50%        2.75%
   Commitment Fee           0.40%        0.45%          0.50%        0.50%

 

                   (b) with respect to the B Loans,  the  Applicable  Margin for
         LIBOR  Portions  shall be 3.25% and for the Base Rate Portion  shall be
         2.25%; and

                   (c) with respect to the C Loans,  the  Applicable  Margin for
         LIBOR  Portions  shall be 3.50% and for the Base Rate Portion  shall be
         2.50%;

         provided, however that the foregoing are subject to the following:

                   (i) the Leverage Ratio shall be determined as of the last day
         of each fiscal quarter of the Parent  commencing  with the third fiscal
         quarter of fiscal 1999,  with any adjustment in the Applicable  Margins
         resulting  from a  change  in such  Leverage  Ratio to be  effective  5
         Business  Days  after  receipt  by  the  Administrative  Agent  of  the
         financial  statements  for such quarter  called for by Section  8.5(a),
         provided that the Applicable Margins shall be those specified for Level
         IV above for each day from and after the last date when such  financial
         statements were required to be delivered  pursuant to Section 8.5(a) to
         and  including  the date when such  financial  statements  are actually
         delivered pursuant to such section;

                  (ii) if and so long as any Event of Default has  occurred  and
         is continuing,  the Applicable Margins other than the Applicable Margin
         for  the  commitment  fee as  otherwise  computed  hereunder  shall  be
         increased by adding the rate of 2% per annum thereto; and

               (iii)   anything   contained    hereinabove   to   the   contrary
          notwithstanding,  the  Applicable  Margins  for the  period  from  the
          Acquisition Closing Date to the effective date (determined pursuant to
          clause (a) above) of an adjustment in the Applicable Margins resulting
          from a  determination  of the Leverage Ratio as of the last day of the
          third fiscal quarter of fiscal 1999 shall be those specified above for
          Level IV.

          "Applications" is defined in Section 2.1(c)(iii) hereof.


<PAGE>

          "Asset  Transfer  Agreement"  shall mean the Asset Transfer  Agreement
     dated as of July 24, 1998 by and  between  Dean Foods and the  Company,  as
     amended as permitted hereby.

     "Assignment Agreement" is defined in Section 12.12 hereof.

     "Auditors" is defined in Section 8.5(b) hereof.

     "Authorized  Representative"  shall mean those persons shown on the list of
officers provided by the Company pursuant to Section 7.2(a)(ii) hereof or on any
update of any such list provided by the Company to the Administrative  Agent, or
any  further  or  different  officer of the  Company so named by any  Authorized
Representative of the Company in a written notice to the Administrative Agent.

     "B Credit Commitments" is defined is Section 2.2(b) hereof.

     "B Credit Lenders" shall mean the Lenders which at the time have unfunded B
Credit Commitments or outstanding B Loans.

     "B Credit Notes" is defined in Section 2.2(b) hereof.

     "Base Rate" shall mean for any day the rate of interest announced by Harris
from time to time as its prime  commercial  rate as in effect on such day,  with
any change in the Base Rate  resulting  from a change in said  prime  commercial
rate  to be  effective  as of the  date of the  relevant  change  in said  prime
commercial  rate (the "Harris Prime Rate"),  provided that if the rate per annum
determined  by adding 1/2 of 1% to the rate at which  Harris would offer to sell
federal funds in the interbank  market on or about 10:00 a.m.  (Chicago time) on
any day (the "Fed Funds  Rate")  shall be higher  than the Harris  Prime Rate on
such day,  then the Base Rate for such day and for any  succeeding  day which is
not a Business Day shall be such Fed Funds Rate.  The  determination  of the Fed
Funds Rate by the Administrative Agent shall be final and conclusive provided it
has acted in good faith in connection therewith.

     "Base Rate Portions" is defined in Section 3.1 hereof.

     "B Loans" is defined in Section 2.2(b) hereof.

         "Borrowing"  shall mean the total of Loans of a single type made by all
the  Lenders  on a single  date  and,  if such  Loans  are to be part of a LIBOR
Portion, for a single Interest Period.

         "Business  Day" shall mean any day (other than a Saturday or Sunday) on
which  banks are open for  business  in Chicago,  Illinois  and,  when used with



<PAGE>
reference to LIBOR Portions, a day on which banks are also open for business and
dealing in United States Dollar deposits in London, England and Nassau, Bahamas.

         "C Credit Commitments" is defined is Section 2.2(c) hereof.

         "C  Credit  Lenders"  shall  mean the  Lenders  which at the time  have
unfunded C Credit Commitments or outstanding C Loans.

         "C Credit Notes" is defined in Section 2.2(c) hereof.

         "Capitalized Lease" shall mean any lease or other agreement for the use
or  possession  of real or personal  property  the  obligation  for Rentals with
respect to which is required to be  capitalized on a balance sheet of the lessee
in accordance with GAAP.

         "Capitalized  Rentals"  shall mean as of the date of any  determination
the  amount  at  which  the  aggregate  Rentals  due  and to  become  due  under
Capitalized Leases under which the Company or any Subsidiary is a lessee will be
reflected as a liability on a consolidated  balance sheet of the Company and its
Subsidiaries prepared in accordance with GAAP.

         "Change  of  Control"  shall  mean  the  occurrence  of  either  of the
following  events:  (i) any of the capital  stock of the Company shall be owned,
either legally or beneficially, by any Person other than the Parent; or (ii) the
number of the directors of the Company who are not employees,  shareholders  (at
the time of becoming directors) or otherwise Affiliates (other than by reason of
being a director of the  Company)  of the Company or the Parent  ("Disinterested
Directors")  shall not at least equal the number of directors of the Company who
are not  Disinterested  Directors or (iii) more than 20% of the capital stock of
the Parent  entitled at the time to vote for the election of directors  shall be
owned or controlled by a Person or group of Persons acting in concert.

         "Class of Notes" shall mean the Revolving  Credit Notes as a group, the
A Credit Notes as a group,  the B Credit Notes as a group, the C Credit Notes as
a group or the Swing Credit Note.

         "C Loans" is defined in Section 2.2(c) hereof.

         "Code" shall mean the Internal Revenue Code of 1986, as amended.

         "Collateral"   shall  mean  all  properties,   rights,   interests  and
privileges from time to time subject to the liens and security interests granted
to the  Administrative  Agent for the benefit of the  Lenders by the  Collateral
Documents.

<PAGE>
         "Collateral  Documents"  shall  mean all  mortgages,  deeds  of  trust,
security  agreements,  assignments and other  instruments and documents as shall
from time to time be executed and  delivered by the Parent,  the Company  and/or
the Pledging  Guarantors as collateral  security for  obligations of the Company
and/or the Guarantors under the Loan Documents.

         "Commitments" shall mean the Revolving Credit Commitments, the A Credit
Commitments, the B Credit Commitments and the C Credit Commitments.

         "Company" is defined in the introductory paragraph of this Agreement.

         "Consolidated  Net Income" for any period shall mean the gross revenues
from any source of the  Parent and its  Subsidiaries  for such  period  less all
expenses and other proper charges determined for the Parent and its Subsidiaries
on a  consolidated  basis in accordance  with GAAP but computed  prior to giving
effect to gains and  losses  on the  disposition  of  capital  assets  and other
extraordinary  gains and losses (including the write off of debt issuance costs,
the payment of premiums on the retirement of  Indebtedness  and gains  resulting
from pension reversions) as determined in accordance with GAAP.

         Consolidated Net Working Capital" shall mean as of any time the same is
to  be  determined,  the  excess  for  the  Parent  and  its  Subsidiaries  on a
consolidated basis of current assets over current  liabilities as determined and
computed in accordance with GAAP.

         "Consolidated  Net Worth" shall mean, as of any date,  the common stock
and the total  shareholders'  and members'  capitalization of the Parent and its
Subsidiaries  each computed on a consolidated  basis in a manner consistent with
that used in the preparation of the Parents' audited  consolidated balance sheet
for the fiscal year ended June 27, 1998 and heretofore delivered to the Lenders.

         "Consolidated  Total  Indebtedness"  shall mean all Indebtedness of the
Parent and its  Subsidiaries  determined on a  consolidated  basis in accordance
with GAAP.

         "Dean Foods" shall mean Dean Foods Company, a Delaware corporation.

         "Default"  shall mean any event or condition  the  occurrence  of which
would,  with the lapse of time or the giving of notice,  or both,  constitute an
Event of Default.

         "DFVC"   shall  mean  Dean  Foods   Vegetable   Company,   a  Wisconsin
corporation.

         "EBITDA"  shall mean,  with reference to any period,  Consolidated  Net
Income  for  such  period  plus  all  amounts   deducted  in  arriving  at  such
Consolidated Net Income in respect of (i) Interest  Expense,  (ii) taxes imposed
<PAGE>

on or  measured  by  income  or  excess  profits,  and  (iii)  all  charges  for
depreciation of fixed assets and amortization of intangibles,  all determined in
accordance with GAAP.

         "Equity  Offering" shall mean a public offering,  private  placement or
other  issuance or sale of the capital  stock or other equity  interests  (or of
warrants,  options  or  other  rights  therefor)  of  the  Parent  or any of its
Subsidiaries;  provided  that the  issuance by the Parent of common stock to its
producer  members in accord with past  practice  shall not  constitute an Equity
Offering.

         "ERISA" is defined in Section 6.7 hereof.

         "Event of Default"  shall mean any of the events  specified  in Section
9.1 hereof.

         "Excess Cash Flow" shall mean for the Parent and its  Subsidiaries on a
consolidated  basis for any period for which the same is to be computed,  EBITDA
for such period less the sum for such period of  regularly  scheduled  principal
payments and voluntary  prepayments  made on Indebtedness  (other than principal
payments  made on  Revolving  Credit  Loans and on any other loans if and to the
extent that the  borrower  has the  contractual  right to reborrow  the funds so
paid) paid during such period, Interest Expense paid in cash during such period,
cash payments of income and similar  taxes paid during such period,  Net Capital
Expenditures  funded  during such period  (other than such thereof as are funded
out of the proceeds of  Indebtedness)  and Restricted  Payments paid during such
period and minus the amount of any  increase and plus the amount of any decrease
in Consolidated Net Working Capital between the first day of such period and the
last day of such period.

         "Excluded Assets" is defined in Section 5.1 hereof.

         "Existing   Subordinated   Notes"   shall  mean  the   12-1/4%   Senior
Subordinated Notes due 2005 of the Company issued under an indenture dated as of
November  3,  1994 by and  among PF  Acquisition  Corp.  (a  predecessor  to the
Company)  as Issuer,  the Parent as  Guarantor  and IBJ  Schroeder  Bank & Trust
Company as Trustee (the "Existing Subordinated Notes Indenture").

         "Fed Funds Rate"  shall mean the  fluctuating  interest  rate per annum
described in the proviso to the definition of the definition of Base Rate.

         "Fixed Charge  Coverage Ratio" shall mean as of any time the same is to
be determined the ratio for the period of four consecutive  fiscal quarters then
ending of (a) EBITDA less Net Capital  Expenditures (if positive) to (b) the sum
for  such  period  of  Interest  Expense,   regular  payments  of  principal  on
Consolidated  Total  Indebtedness  which are  scheduled to become due during the
period of four consecutive fiscal quarters  commencing on the day after the date
of determination  (provided that principal payments on the note payable to Duane



<PAGE>


Packer shown on Exhibit I shall be excluded)  and  dividends  paid by the Parent
during such period,  all computed on a consolidated basis for the Parent and its
Subsidiaries. The foregoing to the contrary notwithstanding,  the computation of
the Fixed Charge  Coverage Ratio as of the close of the second fiscal quarter of
fiscal 1999 shall be made for the fiscal  quarter then ending,  the  computation
thereof  as of the third  fiscal  quarter  of fiscal  1999 shall be made for the
period of two  consecutive  fiscal  quarters  then  ending  and the  computation
thereof as of the close of the  fourth  fiscal  quarter of fiscal  1999 shall be
made for the period of three consecutive fiscal quarters then ending.

         "Fixed Fed Funds Swing Loan" is defined in Section 3.4 hereof.

         "Fixed Fed Funds Rate" shall mean with  respect to each Fixed Fed Funds
Swing Loan,  the rate of interest per annum as determined by the Swing Lender at
which term  federal  funds would be offered by the Swing Lender on the first day
of such Fixed Fed Funds Swing Loan to major banks in the  interbank  market upon
request  by such  major  banks for a period  equal to the term of such Fixed Fed
Funds Swing Loan and in an amount  equal to the  principal  amount of such Fixed
Fed Funds Swing Loan. Each determination of the Fixed Fed Funds Rate made by the
Swing Lenders in accordance  with this paragraph shall be conclusive and binding
on the Company except in the case of manifest error or willful misconduct.

         "Foreign  Subsidiaries"  shall  mean  all  Subsidiaries  of the  Parent
organized  and  existing  under laws  other  than those of the United  States of
America or a political  subdivision thereof and conducting  substantially all of
their business,  and having  substantially  all of their assets,  outside of the
United States of America.

         "GAAP" shall mean generally accepted accounting principles set forth in
the  opinions  and  pronouncements  of the  Accounting  Principles  Board of the
American   Institute  of  Certified   Public   Accountants  and  statements  and
pronouncements of the Financial  Accounting  Standards Board that are applicable
to the circumstances as of the date of determination and consistently applied.

         "Governmental  Body"  shall  mean the  United  States of America or any
state or  political  subdivision  thereof,  and any other  nation  or  political
subdivision  thereof or any agency,  department,  commission,  board,  bureau or
instrumentality  of any of the foregoing which exercises  jurisdiction  over the
Parent or any of its  Subsidiaries  or any of their assets or the conduct of the
business of the Parent or any of its  Subsidiaries or any of their assets in any
such jurisdiction.
<PAGE>
         "Governmental  Requirements" shall mean any law, ordinance, order, rule
or regulation of a Governmental Body.

         "Guarantors"  shall mean the Parent and all  Subsidiaries of the Parent
in each instance  whether now owned and existing or hereafter formed or acquired
other than (i) Subsidiaries of the Parent whose aggregate  assets,  revenues and
net income  comprise less than 2% of the assets,  revenues and net income of the
Parent and Subsidiaries taken as a whole and (ii) Foreign Subsidiaries.

         "Harris" shall mean Harris Trust and Savings Bank, an Illinois  banking
corporation.

         "Hedging  Liability"  shall  mean  liabilities  of the  Company  to the
Lenders or any of them or to any of their Affiliates  arising in connection with
the interest rate hedging activities constituting part of the Hedging Program.

         "Hedging Program" is defined in Section 8.25 hereof.

         "Indebtedness"  shall mean and include  (but without  duplication)  all
obligations  of the Person in question of the  following  types,  determined  in
accordance  with GAAP: (i)  obligations  (whether  recourse or non recourse) for
borrowed  money or for the  deferred  purchase  price  of,  or which  have  been
incurred in connection  with the  acquisition  of,  Property  other than current
accounts payable, (ii) obligations of others of the type described in clause (i)
secured  by any lien or other  charge  upon  Property  owned  by the  Person  in
question,  even  though  such  Person has not  assumed or become  liable for the
payment of such obligations,  (iii) obligations  payable over a period in excess
of one year to acquire  Property or to obtain the services of another  Person if
the  contract  requires  that  payment  for such  Property  or  services be made
regardless of whether such Property is delivered or such services are performed,
(iv) Capitalized  Rentals of such Person,  (v) obligations in respect of letters
of credit and banker's  acceptances  and (vi), all  liabilities of others of the
type  referred  to in clauses  (i),  (ii),  (iii),  (iv) and (v) above which are
directly or indirectly  guaranteed by such Person,  or as to which it has agreed
(contingently  or otherwise)  to purchase or otherwise  acquire or in respect of
which it has otherwise assured a creditor against loss.

         "Interest  Coverage  Ratio"  shall mean,  as of any date,  the ratio of
EBITDA of the Parent and its  Subsidiaries for the four fiscal quarters ended on
such  date to  Interest  Expense  for the same  period  except  that,  provided,
however,  that the  calculation  of the close of the  second  fiscal  quarter of
fiscal  1999  shall be made for the  fiscal  quarter  ended  on such  date,  the
calculation  as of the close of the third fiscal quarter of fiscal 1999 shall be
made  for  the  period  of two  fiscal  quarters  ended  on  such  date  and the
calculation as of the close of the fourth fiscal quarter of fiscal 1999 shall be
made for the period of three consecutive fiscal quarters ended on such date.
<PAGE>

         "Interest Expense" shall mean with reference to any period all interest
charges  (excluding  amortization of debt discount and expense and debt issuance
expense and interest  payable at the option of the obligor in  securities of the
same ranking but including imputed interest on Capitalized  Leases,  except that
if and so long as imputed  interest on Capitalized  Leases is less than $250,000
per annum it may be excluded  from  Interest  Expense)  accrued for such period,
whether or not paid, all as computed on a consolidated  basis for the Parent and
its Subsidiaries in accordance with GAAP except as expressly provided for above.

         "Interest Period" shall mean with respect to any LIBOR Portion:

                   (a) initially,  the period commencing on, as the case may be,
         the creation or conversion  date with respect to such LIBOR Portion and
         ending  one,  two,  three or six months  thereafter  as selected by the
         Company in its notice as provided for herein; and

                   (b) thereafter, each period commencing on the last day of the
         immediately  preceding Interest Period applicable to such LIBOR Portion
         and ending one, two, three or six months  thereafter as selected by the
         Company in its notice as provided for herein;

         provided  that, all of the foregoing  provisions  relating to Interest
         Periods are subject to the following:

                   (i) if any Interest Period would otherwise end on a day which
         is not a Business Day,  that  Interest  Period shall be extended to the
         next succeeding Business Day, unless the result of such extension would
         be to carry such Interest  Period into another  calendar month in which
         event  such  Interest  Period  shall end on the  immediately  preceding
         Business Day;

                  (ii) no Interest  Period may extend beyond the final  maturity
date of the applicable Notes;

                 (iii) the interest  rate to be  applicable  to each Portion for
         each  Interest  Period shall apply from and  including the first day of
         such Interest Period to but excluding the last day thereof;

                  (iv) no Interest Period may be selected if after giving effect
         thereto  the  Company  will  be  unable  to  make a  principal  payment
         scheduled to be made during such Interest Period without paying part of
         a LIBOR  Portion  on a date  other  than the  last day of the  Interest
         Period applicable thereto; and




<PAGE>
                   (v) unless and until the  Syndication  Agent has  advised the
         Company  that its  syndication  of the credit  facilities  provided for
         herein is complete or the Syndication Agent otherwise agrees,  Interest
         Periods may not be longer than one month and shall be  co-terminus  and
         may be of any shorter  duration  which is acceptable to the Company and
         the Lenders.

         For purposes of determining an Interest  Period, a month means a period
starting  on  one  day  in a  calendar  month  and  ending  on  the  numerically
corresponding day in the next calendar month, provided,  however, if an Interest
Period  begins  on the  last  day  of a  month  or if  there  is no  numerically
corresponding  day in the month in which an Interest Period is to end, then such
Interest Period shall end on the last Business Day of such month.

         "Issuing Bank" shall mean Harris and its successors as letter of credit
issuer hereunder.

         "Lenders"  shall  mean  the  Revolving  Credit  Lenders,  the A  Credit
Lenders, the B Credit Lenders and the C Credit Lenders.

         "Letters of Credit" is defined in Section 2.1(c)(i) hereof.

         "Leverage  Ratio"  shall  mean,  as  of  any  time  the  same  is to be
determined,  the  ratio  of (a)  Consolidated  Total  Indebtedness  (other  than
Seasonal Debt and liabilities in respect of undrawn letters of credit supporting
insurance and self insurance obligations of the Company and its Subsidiaries and
supporting payment by the Company and its Subsidiaries for goods and services in
the ordinary course of business) as of such time to (b) EBITDA for the period of
twelve calendar months most recently concluded, with EBITDA for any period prior
to the  Acquisition  Closing Date computed as though DFVC were then a Subsidiary
and the Company had not owned its asceptic business.

     "LIBOR Index Rate" shall mean,  for any  Interest  Period  applicable  to a
LIBOR Portion,  the rate per annum (rounded upwards,  if necessary,  to the next
higher  one  hundred-thousandth  of a  percentage  point) for  deposits  in U.S.
Dollars  for a period  equal  to such  Interest  Period,  which  appears  on the
Telerate  Page  3750 as of  11:00  a.m.  (London,  England  time) on the day two
Business Days before the commencement of such Interest Period.

     "LIBOR Portion" is defined in Section 3.1 hereof.

     "LIBOR  Rate" shall mean for each  Interest  Period  applicable  to a LIBOR
Portion,  (a) the LIBOR  Index Rate for such  Interest  Period,  if such rate is
available, and (b) if the LIBOR Index Rate cannot be determined,  the arithmetic
average of the rates of interest per annum (rounded  upwards,  if necessary,  to
the  nearest  1/100 of 1%) at which  deposits  in U.S.  Dollars  in  immediately
<PAGE>
available funds are offered to the  Administrative  Agent at 11:00 a.m. (London,
England time) two (2) Business Days before the beginning of such Interest Period
by three (3) or more major banks in the interbank  eurodollar market selected by
the  Administrative  Agent for a period equal to such Interest  Period and in an
amount  equal  or  comparable  to the  principal  amount  of the  LIBOR  Portion
scheduled to be made by the Administrative Agent during such Interest Period.

     "Loan  Documents" shall mean this Agreement,  the Notes, the  Applications,
the  Collateral  Documents,  all  documents  under which the  Hedging  Liability
arises,  and  each  of the  other  instruments  and  documents  to be  delivered
hereunder or thereunder or otherwise in connection therewith.

     "Marketing  Agreement" shall mean the Marketing and Facilitation  Agreement
dated as of November 3, 1994 by and between  Pro-Fac and the Company (then known
as Curtice-Burns  Foods,  Inc.) as amended by the Amendment to the Marketing and
Facilitation Agreement effective as of September 23, 1998 and as further amended
as permitted hereby.

     "Material  Adverse Effect" shall mean a material  adverse effect on (i) the
business, property, condition (financial or otherwise), or results of operations
of the Parent and its  Subsidiaries  taken as a whole,  (ii) the  ability of the
Parent or any Subsidiary to perform its obligations under the Loan Documents, or
(iii) the validity or  enforceability of any of the Loan Documents or the rights
or  remedies  of the  Administrative  Agent,  Issuing  Bank  or of  the  Lenders
thereunder  or of the Marketing  Agreement,  Stock  Purchase  Agreement or Asset
Transfer Agreement.

     "Merger" shall mean the merger of DFVC with and into the Company,  with the
Company being the surviving corporation.

     "Net Capital  Expenditures"  shall mean for any period all sums paid by the
Parent and its  Subsidiaries  to acquire  assets  which  payments  are not to be
treated as expenses in accordance  with GAAP less up to  $10,000,000  of the net
cash proceeds received by the Parent and its Subsidiaries from the sale or other
disposition  of capital  assets  during the same period,  except that  Permitted
Acquisitions shall be excluded from Net Capital Expenditures.

     "Notes" shall mean the Revolving Credit Notes, the Swing Credit Note, the A
Credit Notes, the B Credit Notes and the C Credit Notes.

     "Offered Rate Swing Loan" is defined in Section 3.4 hereof..




<PAGE>
     "Parent"  shall mean Pro-Fac  Cooperative,  Inc.,  a New York  agricultural
cooperative corporation.

     "Permitted  Acquisition"  shall mean an  acquisition  permitted  by Section
8.17(g) hereof.

     "Permitted Liens" is defined in Section 8.8 hereof.

     "Person" shall mean any individual, trust, partnership,  firm, corporation,
limited liability company, association, unincorporated organization or any other
entity  or   organization,   including  a  government  or  agency  or  political
subdivision thereof.

     "Pledging  Guarantors"  shall  mean all  Guarantors  which are not  Foreign
Subsidiaries or the Parent.

     "Portion" is defined in Section 3.1 hereof.

     "Property"  shall mean all assets and properties of any nature  whatsoever,
whether real or personal,  tangible or intangible,  including without limitation
intellectual property.

     "Rentals"  shall mean and include all rents  (including such payments which
the lessee is  obligated  to make to the lessor on  termination  of the lease or
surrender of the Property)  payable by the Parent or its  Subsidiaries as lessee
or sub-lessee under a lease or other agreement for the use or possession of real
or personal  property but shall be exclusive of any amounts  required to be paid
by  the  Parent  or any  Subsidiary  (whether  or not  designated  as  rents  or
additional  rents) on  account of  maintenance,  repairs,  insurance,  taxes and
similar charges.  Rentals shall be computed for the Parent and Subsidiaries on a
consolidated basis.

     "Required Lenders" shall mean Lenders which,  taken together,  hold (i) 51%
or more in aggregate amount of the sum of (aa) the Revolving Credit  Commitments
or, if the Revolving  Credit  Commitments  have  terminated  or expired,  of the
Revolving Credit Loans (treating the Swing Loans as though they had been ratably
refunded by Revolving  Credit Loans) and the credit risk incident to the Letters
of Credit,  and (ab) the A Loans and (ac) 51% or more in aggregate amount of the
sum of the B Loans and the C Loans.

     "Required  Revolving  Credit  Lenders" shall mean Revolving  Credit Lenders
with Revolving Credit Percentages aggregating at least 51%.

     "Reserve  Percentage" shall mean the daily arithmetic  average maximum rate
at which reserves (including, without limitation, any supplemental, marginal and
emergency  reserves) are imposed on member banks of the Federal  Reserve  System
during the applicable  Interest  Period by the Board of Governors of the Federal
<PAGE>

     Reserve  System (or any  successor)  under  Regulation  D on  "eurocurrency
liabilities"  (as  such  term  is  defined  in  Regulation  D),  subject  to any
amendments of such reserve  requirement by such Board or its  successor,  taking
into  account  any  transitional  adjustments  thereto.  For  purposes  of  this
definition, the LIBOR Portions shall be deemed to be eurocurrency liabilities as
defined in Regulation D without benefit or credit for any prorations, exemptions
or offsets under  Regulation D. The Adjusted LIBOR Rate shall  automatically  be
adjusted as of the date of any change in the Eurodollar Reserve Percentage.

     "Restricted Payments" is defined in Section 8.18.

     "Revolving  Credit" shall mean the credit  facility  established by Section
2.1 hereof.

     "Revolving Credit Commitments" is defined in Section 2.1(a).

     "Revolving Credit Lender" shall mean each Lender from time to time having a
Revolving  Credit  Commitment or  outstanding  Revolving  Credit Loans or a risk
participation in the Letters of Credit.

     "Revolving Credit Loans" is defined in Section 2.1(b).

     "Revolving Credit Notes" is defined in Section 2.1(b).

     "Revolving  Credit  Percentage" shall mean the percentage which a Revolving
Credit Lender's unused Revolving Credit Commitment, outstanding Revolving Credit
Loans and its participated share of the risk incident to outstanding  Letters of
Credit bears to the aggregate of the foregoing for all Revolving Credit Lenders.
Solely for the purpose of computing the foregoing and the Aggregate Percentages,
outstanding  Swing Loans shall be treated as though they were  Revolving  Credit
Loans made pro rata from the Revolving  Credit  Lenders in  accordance  with the
respective amounts of their Revolving Credit Commitments.

     "Seasonal  Debt" shall mean  Indebtedness  for money borrowed of the Parent
and its Subsidiaries  (computed on a consolidated  basis) incurred to meet their
seasonal  working  capital  needs  provided  that (i) no  Indebtedness  shall be
treated as Seasonal Debt during the last fiscal  quarter of each fiscal year and
(ii) the aggregate  amount of  Indebtedness  included in Seasonal Debt as of the
last  day of each  first  fiscal  quarter  of the  Parent  (ending  on or  about
September  30)  shall  not  exceed   $150,000,000,   the  aggregate   amount  of
Indebtedness  included in Seasonal  Debt as of the last day of the second fiscal
quarter of the Parent  (ending on or about  December  31 of each year) shall not
exceed  $175,000,000  and the  aggregate  amount  of  Indebtedness  included  in
Seasonal  Debt as of the last day of the  third  fiscal  quarter  of the  Parent
(ending on or about March 31 of each year) shall not exceed $125,000,000.
<PAGE>
   
     "Stock Purchase Agreement" shall mean the Stock Purchase Agreement dated as
of July 24,  1998 by and  between  Dean  Foods and the  Company  as  amended  as
permitted hereby.

     "Subordinated  Bridge Loan" shall mean a loan in the amount of $200,000,000
maturing  on  September  23,  1999 made to the  Company  pursuant  to the Senior
Subordinated  Credit Agreement dated as of September 23, 1998 among the Company,
the Guarantors,  Warburg Dillon Read LLC as Arranger and Syndication  Agent, UBS
AG, Stanford Branch as  Administrative  Agent and the lenders named therein (the
"Bridge Credit Agreement").

     "Subordinated  Debt" shall mean (i) the  Subordinated  Bridge Loan and (ii)
any other  Indebtedness of the Company and guaranties  thereof by the Guarantors
which are subject to and subordinate in right of payment to the prior payment of
the Parents' and its  Subsidiaries'  indebtedness and obligations under the Loan
Documents  pursuant  to  written  subordination  provisions  acceptable  to  the
Required Lenders,  having other terms and conditions  acceptable to the Required
Lenders,  maturing no earlier than September 30, 2006 and bearing interest at an
interest rate approved by the Required  Lenders  provided  that, no such consent
shall be required if (y) the net proceeds of such  Indebtedness  will be used to
refinance,  in whole or in part, the  Subordinated  Bridge Loan and (z) (A) such
indebtedness  contains no covenants  requiring  the  maintenance  of  particular
levels of financial or balance sheet condition or of financial performance or of
other financial ratios,  (B) the subordination  provisions and events of default
contained in such  Indebtedness  are not materially worse to the Borrower or the
Lenders than the terms contained in the Subordinated  Bridge Loan, (C) the terms
of any limitation on Indebtedness will not restrict  Revolving Credit Borrowings
under the terms of this Agreement as amended (but not amendments  increasing any
of the Commitments), (D) such Indebtedness matures no earlier than September 30,
2006 and (E) bearing  except for a conversion  of the  Subordinated  Bridge Loan
into a term loan pursuant to the Bridge Credit Agreement (such term loan to bear
interest as provided for in the Bridge Credit  Agreement as originally  executed
and delivered)  interest at a rate not in excess of 15% per annum, with not more
than  interest  at the  rate of 13% per  annum  payable  in  cash,  and with the
remainder  of  such  interest   being  payable  only  through  the  issuance  of
subordinated payment in kind securities satisfying the foregoing requirements.

         "Subsidiary"  shall mean, any corporation or other entity of which more
than fifty percent (50%) of the outstanding stock or comparable equity interests
having  ordinary voting power for the election of the Board of Directors of such
corporation  or  similar  governing  body  in  the  case  of  a  non-corporation
(irrespective of whether or not, at the time, stock or other equity interests of
any other class or classes of such  corporation  or other  entity  shall have or
might have voting power by reason of the happening of any contingency  which has
not  occurred)  is at the time  directly  or  indirectly  owned by the Person in



<PAGE>



question or by one or more of its  Subsidiaries.  Unless the  context  otherwise
requires,  references herein to Subsidiaries shall be references to Subsidiaries
of the Parent.

     "Swing Credit Note" is defined in Section 2.1(d) hereof.

     "Swing Lender" shall mean Harris and any successor  thereto as swing lender
hereunder.

     "Swing Loans" is defined in Section 2.1(d).

     "Syndication Agent" shall mean Bank of Montreal in its capacity as such.

     "Telerate  Page 3750" shall mean the display  designated  as "Page 3750" on
the  Telerate  Service  (or such  other  page as may  replace  Page 3750 on that
service  or such other  service  as may be  nominated  by the  British  Bankers'
Association  as the  information  vendor for the purpose of  displaying  British
Bankers' Association Interest Settlement Rates for U.S. Dollar deposits).

     "Term Loans" shall mean the A Loans, the B Loans and the C Loans.

     "Termination  Date" shall mean  September 30, 2003, or such earlier date on
which the Commitments are terminated in whole pursuant to Section 4.5 or Section
9 hereof.

     "Withholding Taxes" is defined in Section 4.9 hereof.

     "Year 2000 Problem" shall mean any significant risk that computer hardware,
software,  or equipment containing embedded microchips essential to the business
or operations of the Parent or any of its Subsidiaries  will not, in the case of
dates or time periods  occurring  after December 31, 1999,  function at least as
efficiently  and  reliably  as in the case of times  or time  periods  occurring
before January 1, 2000, including the making of accurate leap year calculations.

     Capitalized terms defined in any provision of this Agreement shall have the
meanings so ascribed to them in all provisions of this Agreement.

     Section  1.2.  Accounting  Terms.  For  purposes  of  this  Agreement,  all
accounting terms not otherwise  defined herein shall have the meanings  assigned
to  such  terms  in  conformity  with  GAAP.   Financial  statements  and  other
information  furnished to the Administrative Agent pursuant to Section 8.5 shall
be  prepared  in  accordance  with  GAAP  (as in  effect  at the  time  of  such
preparation) on a consistent  basis.  In the event any "Accounting  Changes" (as
defined  below)  shall  occur  and  such  changes  affect  financial  covenants,
standards  or terms  in this  Agreement,  then  the  Parent,  the  Company,  the
Administrative  Agent and the Lenders agree to enter into  negotiations in order
<PAGE>
to amend such  provisions  of this  Agreement  so as to  equitably  reflect such
Accounting  Changes with the desired result that the criteria for evaluating the
financial  condition of the Parent and its Subsidiaries  shall be the same after
such  Accounting  Changes as if such  Accounting  Changes had not been made, and
until such time as such an amendment  shall have been  executed and delivered by
the  Company,  the  Guarantors  and the  Required  Lenders,  (A)  all  financial
covenants,  standards and terms in this  Agreement  shall be  calculated  and/or
construed as if such  Accounting  Changes had not been made, and (B) the Company
shall  prepare  footnotes  to each  compliance  certificate  and  the  financial
statements  required to be delivered hereunder that show the differences between
the financial  statements  delivered (which reflect such Accounting Changes) and
the basis for calculating financial covenant compliance (without reflecting such
Accounting  Changes).  "Accounting  Changes"  means:  (a) changes in  accounting
principles required by GAAP since the close of the Parent's 1998 fiscal year and
implemented by the Parent or any of its Subsidiaries;  (b) changes in accounting
principles  recommended by certified public  accountants of the Parent or any of
its  Subsidiaries;  and (c) changes in carrying value of the Parents' (or any of
its  Subsidiaries')  assets,  liabilities or equity accounts  resulting from the
application of purchase accounting  principles.  All references herein to fiscal
years,  fiscal  quarters or fiscal periods shall,  unless the context  otherwise
requires,  be references to fiscal years,  fiscal  quarters or fiscal periods of
the Parent.

SECTION 2. THE CREDIT FACILITIES.

     Section 2.1. The Revolving Credit.

     (a) General Terms.  Subject to all of the terms and conditions  hereof, the
Revolving Credit Lenders agree to extend a Revolving Credit to the Company which
may be availed of by the  Company  from time to time,  be repaid and used again,
during the period from the date hereof to the  Termination  Date.  The Revolving
Credit may be utilized by the Company in the form of Loans or Letters of Credit,
all as more fully hereinafter set forth,  provided that (i) the aggregate amount
of Revolving Credit Loans,  Swing Loans and Letters of Credit outstanding at any
one time shall not exceed the Revolving  Credit  Commitments  (ii) the aggregate
amount  of  Letters  of Credit  outstanding  at any one time  shall  not  exceed
$40,000,000  through November 30, 1998 or $25,000,000  thereafter or, if less in
any instance,  the aggregate  Revolving  Credit  Commitments  then in effect and
(iii) the aggregate amount of Swing Loans  outstanding at any one time shall not
exceed $15,000,000 or, if less, the aggregate  Revolving Credit Commitments then
in effect.  The maximum  amount of the  Revolving  Credit  which each  Revolving
Credit Lender agrees to extend hereunder shall be as set forth under the heading
"Revolving Credit Commitment"  opposite its signature hereto or on an Assignment
Agreement  to which it is a party and as the same is  reduced  from time to time
pursuant  hereto (its  "Revolving  Credit  Commitment").  The obligations of the
Revolving  Credit  Lenders  hereunder are several and not joint and no Revolving
Credit Lender shall under any  circumstance  be obligated to extend credit under



<PAGE>



the  Revolving  Credit in  excess  of its  Revolving  Credit  Commitment  or its
Revolving Credit Percentage of the credit outstanding thereunder.

     (b) Revolving Credit Loans. Subject to all of the terms and
conditions  hereof, the Revolving Credit may be availed of by the Company in the
form of Loans made pursuant to this Section  2.1(b)  (individually  a "Revolving
Credit Loan" and collectively the "Revolving  Credit Loans").  Each Borrowing of
Revolving  Credit  Loans  shall  be  in a  minimum  amount  of  $15,000,000  and
thereafter in integral  multiples of $1,000,000  and shall be made pro rata from
the Revolving  Credit Lenders in accordance  with the amounts of their Revolving
Credit  Percentages.  All Revolving  Credit Loans made by each Revolving  Credit
Lender  shall  be  made  against  and  evidenced  by  a  Revolving  Credit  Note
(individually a "Revolving  Credit Note" and collectively the "Revolving  Credit
Notes") in the form (with appropriate  insertions)  annexed hereto as Exhibit A.
Each Revolving Credit Note shall mature on the Termination Date.

     (c) Letters of Credit.

          (i) General Terms.  Subject to all of the terms and conditions hereof,
     the  Revolving  Credit  may be  availed  of by the  Company  in the form of
     letters of credit  issued to Persons  other than  Affiliates of the Company
     (the  "Letters  of  Credit").  The  amount of any  Letter of Credit for all
     purposes of this Agreement shall be the maximum amount which could be drawn
     thereunder  under any  circumstances  and over any  period of time plus all
     unreimbursed  drawings then outstanding  with respect thereto.  The Issuing
     Bank shall  issue the  Letters of Credit for the  account of the  Revolving
     Credit Lenders and,  accordingly,  each Letter of Credit shall be deemed to
     utilize  a pro  rata  share  of the  Revolving  Credit  Commitment  of each
     Revolving Credit Lender.

          (ii) General  Characteristics.  Each Letter of Credit issued hereunder
     shall  expire or be  terminable  by the Issuing Bank within one year of the
     date of issuance but not later than the  Termination  Date.  Each Letter of
     Credit issued  hereunder  shall conform to the general  requirements of the
     Issuing  Bank  for the  issuance  of  letters  of  credit  as to  form  and
     substance,  shall be a letter of credit which the Issuing Bank may lawfully
     issue and shall be  governed  by the  Uniform  Customs  and  Practices  for
     Documentary  Credits,  1993  Revision  (International  Chamber of  Commerce
     Publication 500) or any successor  thereto  acceptable to the Issuing Bank.
     If the Issuing  Bank issues any Letter of Credit  with an  expiration  date
     that is  automatically  extended unless such Issuing Bank gives notice that
     the expiration date will not so extend beyond its then scheduled expiration
     date, the Issuing Bank will give notice of such non-renewal before the time
     necessary  to prevent  such  automatic  extension  if before such  required
     notice  date  (aa) the  expiration  date of such  Letter  of  Credit  if so
<PAGE>
     extended  would be after  the  Termination  Date then in  effect,  (ab) the
     Revolving Credit Commitments have been terminated,  or (ac) a Default or an
     Event of Default  exists and the  Required  Lenders  have given the Issuing
     Bank  instructions not to so permit the extension of the expiration date of
     such Letter of Credit.

          (iii) Applications and Agreements.  At the time the Company requests a
     Letter of Credit to be issued (or prior to the first  issuance  of a Letter
     of Credit, in the case of a continuing  application),  it shall execute and
     deliver to the Issuing Bank an application for such Letter of Credit in the
     form then  prescribed  by the Issuing Bank (the  "Applications").  Anything
     contained  in the  Applications  to the contrary  notwithstanding  (aa) the
     Company  shall pay fees in  connection  with  Letters of Credit only as set
     forth in Section 4 hereof,  (ab) in the event that the Issuing  Bank is not
     promptly  reimbursed  for the amount of any draft  drawn  under a Letter of
     Credit  issued  hereunder  after  notice to the Company that such draft has
     been received,  the obligation of the Company to reimburse the Issuing Bank
     for the amount of such draft shall bear interest  (which the Company hereby
     promises to pay) from and after the date the draft is paid at a fluctuating
     rate  per  annum  equal to the sum of the Base  Rate  from  time to time in
     effect  plus the  Applicable  Margin  for the  Revolving  Credit  Base Rate
     Portion as from time to time in effect, (ac) so long as no Event of Default
     has  occurred  and is  continuing,  the  Issuing  Bank  will  not  call for
     additional collateral security for the obligations of the Company under the
     Applications  other  than  the  collateral  security  contemplated  by this
     Agreement,  and (ad) so long as no Event of  Default  has  occurred  and is
     continuing,  the Issuing  Bank will not call for the funding of a Letter of
     Credit  prior  to  being  presented  with a draft  or  demand  for  payment
     thereunder  (or, in the event the draft is a time  draft,  prior to its due
     date).  Reimbursement  of a drawing  paid under a Letter of Credit shall be
     made to the Issuing  Bank (with notice to the  Administrative  Agent) by no
     later than 1:00 p.m.  (Chicago  time) on the date when such drawing is paid
     and any  payment  of a  reimbursement  obligation  relating  to a Letter of
     Credit  received  after such time shall be deemed to have been  received by
     the Issuing Bank on the next Business Day.

          (iv)  Change in Laws.  If the  Issuing  Bank or any  Revolving  Credit
     Lender shall determine in good faith that any applicable law, regulation or
     guideline  (including,  without  limitation,  Regulation  D of the Board of
     Governors of the Federal  Reserve System) or any  interpretation  of any of
     the foregoing by any governmental authority charged with the administration
     thereof or any central bank or other  fiscal,  monetary or other  authority
     having  jurisdiction  over the Issuing Bank or such Revolving Credit Lender
     (whether or not having the force of law) shall after the date hereof:

               (aa)  impose,  modify or deem  applicable  any  reserve,  special
          deposit or similar  requirements  against the Letters of Credit or the
          Issuing  Bank's or such  Revolving  Credit  Lender's or the  Company's
          liability with respect thereto; or

<PAGE>
     
               (bb) impose on the Issuing Bank or such  Revolving  Credit Lender
          any  penalty  with  respect to the  foregoing  or any other  condition
          regarding this Agreement, the Applications or the Letters of Credit; 

         and the Issuing Bank or such Revolving Credit Lender shall determine in
         good faith that the result of any of the  foregoing  is to increase the
         cost  (whether by  incurring a cost or adding to a cost) to the Issuing
         Bank or  such  Revolving  Credit  Lender  of  issuing,  maintaining  or
         participating in the Letters of Credit  hereunder  (without benefit of,
         or credit for, any  prorations,  exemptions,  credits or other  offsets
         available   under   any   such   laws,   regulations,   guidelines   or
         interpretations  thereof),  then the Company  shall pay within  fifteen
         (15) days following demand by the Issuing Bank or such Revolving Credit
         Lender  from  time to time as  specified  by the  Issuing  Bank or such
         Revolving Credit Lender such additional  amounts as the Issuing Bank or
         such  Revolving  Credit  Lender  shall  in  good  faith  determine  are
         sufficient to compensate and indemnify it for such  increased  cost. If
         the Issuing Bank or any Revolving  Credit Lender makes such a claim for
         compensation,  it shall  provide to the Company and the  Administrative
         Agent a written  explanation of the  circumstances  giving rise to such
         claim and a certificate  setting forth such increased costs as a result
         of any event mentioned herein in reasonable detail and such certificate
         shall be deemed prima facie correct.



<PAGE>



               (v)  Participations  in Letters of Credit.  Each Revolving Credit
          Lender shall  participate  on a pro rata basis based on its  Revolving
          Credit Percentage in the Letters of Credit issued by the Issuing Bank,
          which  participation  shall  automatically  arise upon the issuance of
          each such Letter of Credit (such  participations  to ratably (based on
          the Revolving Credit  Percentages)  count against the Revolving Credit
          Commitments of the Revolving Credit Lenders when the Letters of Credit
          are issued). Each Revolving Credit Lender  unconditionally agrees that
          whether  or not a Default  or Event of  Default  has  occurred  and is
          continuing,   in  the  event  the  Issuing  Bank  is  not  immediately
          reimbursed  by the Company for the amount paid by the Issuing  Bank on
          any draft  presented to it under a Letter of Credit issued by it, then
          the Issuing Bank shall give prompt  notice  thereof to each  Revolving
          Credit  Lender and in that event each  Revolving  Credit  Lender shall
          thereafter  pay to the Issuing Bank an amount equal to such  Revolving
          Credit   Lender's   Revolving   Credit   Percentage   of  such  unpaid
          reimbursement  obligation,  such  payment  to be made  in  immediately
          available funds at the Issuing Bank's lending office designated on its
          signature  page  hereof  (or  on  an  Assignment  Agreement  delivered
          pursuant to Section  12.12  hereof),  together  with  interest on such
          amount  accrued  from  the date the  related  payment  was made by the
          Issuing  Bank  to the  date  of such  payment  by  such  participating
          Revolving Credit Lender at a rate per annum equal to (x) from the date
          the related  payment was made by the  Issuing  Bank or, if later,  the
          date of the Issuing  Bank's notice  thereof to such  Revolving  Credit
          Lender,  to the date two (2) Business  Days after payment by such Bank
          is due  hereunder,  the Fed Funds  Rate for each such day and (y) from
          the date two (2) Business Days after the date such payment is due from
          
<PAGE>
          such Bank to the date such payment is made by such Bank, the Base Rate
          plus the Applicable  Margin for the Revolving Credit Base Rate Portion
          in effect for each such day.  In the event that any  Revolving  Credit
          Lender fails to honor its obligation to reimburse the Issuing Bank for
          its pro rata share of the amount of any such draft, then in that event
          the  defaulting  Revolving  Credit  Lender  shall  have  no  right  to
          participate  in any  recoveries  from the  Company  in respect of such
          draft,  and  (without  limiting  the other  rights of the Issuing Bank
          against such defaulting  Revolving Credit Lender) all amounts to which
          the  defaulting  Revolving  Credit Lender would  otherwise be entitled
          under  the  terms  of  this  Agreement   shall  first  be  applied  to
          reimbursing  the  Issuing  Bank for the  defaulting  Revolving  Credit
          Lender's  portion of the draft,  together with interest thereon at the
          rate  provided  for herein.  Upon  reimbursement  to the Issuing  Bank
          (pursuant to the above or  otherwise)  of the amount due it in respect
          of the  defaulting  Revolving  Credit  Lender's  share  of the  draft,
          together with interest thereon, the defaulting Revolving Credit Lender
          shall  thereupon  be entitled  to its  participation  in such  Issuing
          Bank's rights of recovery  against the Company in respect of the draft
          paid by the Issuing Bank.

               (vi) Payment and Reimbursement. The responsibility of the Issuing
          Bank to the Company and the Revolving  Credit Lenders shall be only to
          determine that the documents  (including  each draft)  delivered under
          each Letter of Credit in connection with each  presentment  thereunder
          shall be in  conformity  in all material  respects with such Letter of
          Credit.  The  Company's  obligation  to reimburse the Issuing Bank for
          drafts  paid  under   Letters  of  Credit   shall  be   absolute   and
          unconditional  under any and all circumstances and irrespective of the
          occurrence  of any  Default  or  Event  of  Default  or any  condition
          precedent whatsoever or any setoff, counterclaim or defense to payment
          which the  Company  may have or have had  against  the  Administrative
          Agent,  any  Lender  or any  beneficiary  of a Letter of  Credit.  The
          Company further agrees that the Issuing Bank and the Revolving  Credit
          Lenders shall not be responsible for, and the Company's  reimbursement
          obligations shall not be affected by, among other things, the validity
          or genuineness of documents or of any  endorsements  thereon,  even if
          such  documents  should  in fact  prove  to be in any or all  respects
          invalid,  fraudulent or forged, or any dispute between or among any of
          the Company,  the beneficiary of any Letter of Credit or any financing
          institution  or other  party to which  any  Letter  of  Credit  may be
          transferred  or any  claims  or  defenses  whatsoever  of the  Company
          against  the   beneficiary  of  any  Letter  of  Credit  or  any  such
          transferee.  The Issuing Bank and the Revolving  Credit  Lenders shall
          not be  liable  for any  error,  omission,  interruption  or  delay in
          transmission,  dispatch or delivery of any message or advice,  however
          transmitted, in connection with any Letter of Credit.



<PAGE>
     
     (d) Swing Loans.  Subject to all of the terms and  conditions  hereof,  the
Revolving  Credit  may be  availed  of by the  Company in the form of Loans made
pursuant to this Section 2.1(d) ("Swing Loans") which shall be made available to
the Company by the Swing Lender. Each Swing Loan shall be in a minimum amount of
$250,000 unless the Swing Lender otherwise approves and the aggregate  principal
balance of Swing Loans at any one time  outstanding  shall not exceed the lesser
of $15,000,000 or the amount of the Revolving Credit Commitments not utilized in
the form of  Revolving  Credit  Loans or Letters of Credit.  Swing  Loans  shall
mature and be due and  payable on the date  selected by the Company but (i) such
date  shall not be beyond the  Termination  Date and (ii) shall not be more than
seven days from the date of funding of such Swing Loan  unless  consented  to by
the Swing Lender.  No more than five Swing Loans may be  outstanding  at any one
time. The Swing Loans shall be made against and evidenced by a Swing Credit Note
(the "Swing  Credit  Note") in the form (with  appropriate  insertions)  annexed
hereto as Exhibit B. The Swing  Lender may at any time on behalf of the  Company
(which  hereby  irrevocably  authorizes  the Swing Lender so to do) request that
each Revolving  Credit Lender make a Revolving Credit Loan in an amount equal to
such Revolving Credit Lender's  Revolving Credit Percentage of the amount of the
Swing Loans  outstanding on the date such notice is given, such Revolving Credit
Loans to be made without  regard to the minimum  amount  restrictions  otherwise
applicable to Revolving  Credit Loans.  Each Revolving  Credit Lender shall make
the  proceeds of its  requested  Revolving  Credit Loan  available  to the Swing
Lender in immediately  available funds at its office before noon Chicago time on
the  Business Day  following  the date such notice is given and the Swing Lender
shall apply the proceeds of such Revolving  Credit Loans to the repayment of the
outstanding  Swing Loans. The Company  authorizes the Swing Lender to charge its
accounts with the Swing Lender (up to the amount  available in such accounts) to
pay the  amount of any such  outstanding  Revolving  Credit  Loans to the extent
amounts  received from the Revolving  Credit Lenders are  insufficient  for that
purpose.  If any Revolving  Credit Lender fails or is unable to make a Revolving
Credit  Loan to refund  its  Revolving  Credit  Percentage  of the  Swing  Loans
pursuant to the foregoing, whether because the conditions precedent to Borrowing
have  not been met or  otherwise,  such  Revolving  Credit  Lender  shall at the
request  of the  Swing  Lender  purchase  from the  Swing  Lender  an  undivided
participating  interest in the outstanding Swing Loans in an amount equal to its
Revolving  Credit  Percentage  thereof promptly upon demand by the Swing Lender.
Each  Revolving  Credit  Lender that so purchases a  participation  in the Swing
Loans shall thereafter be entitled to receive its Revolving Credit Percentage of
each payment of principal  thereafter received by the Swing Lender in respect of
such Swing Loans and of each payment of interest so received  which accrued from
and after the date such Revolving  Credit Lender funded its  participation.  The
obligation of the Revolving Credit Lenders to the Swing Lender to fund refunding
Revolving  Credit Loans and purchase  participations  in Swing Loans pursuant to
the foregoing shall be absolute and  unconditional  and shall not be effected or
impaired by any Default or Event of Default or any other circumstance.
<PAGE>
     
     (e) Cleanup. Anything contained elsewhere in this Agreement to the contrary
notwithstanding,  the  Company  shall  for a  period  of not less  than  fifteen
consecutive  days  falling  between  May 1 and  July  15 of  each  year  have no
Revolving Credit Loans or Swing Loans  outstanding  (each such period of fifteen
consecutive  days in each  year  being  hereinafter  referred  to as a  "Cleanup
Period")  and unless the  Company  has  selected  and  complied  with an earlier
Cleanup  Period  then (i) on July 1st of each  year the  Company  shall  pay all
Revolving  Credit  Loans and Swing Loans then  outstanding  and (ii) the Company
shall not be permitted to borrow  Revolving Credit Loans or Swing Loans prior to
July 16 of such year.

     Section 2.2. The Term Credits.

     (a) The A Credit. Subject to all of the terms and conditions hereof, each A
Credit Lender agrees to make a Loan to the Company (individually an "A Loan" and
collectively  the "A  Loans") in the amount  set forth  opposite  its  signature
hereto under the heading "A Credit Commitment" or on an Assignment  Agreement to
which it is party  (its "A Credit  Commitment"  and  collectively  the "A Credit
Commitments").  There  shall  be a  single  Borrowing  of the A  Loans  and  the
obligations  of the A  Credit  Lenders  to make  the A  Loans  shall  expire  on
September 30, 1998 unless sooner terminated as herein provided.  The obligations
of the A Credit  Lenders  hereunder  are  several  and not joint and no A Credit
Lender shall under any circumstances be obligated to make an A Loan in excess of
its A  Credit  Commitment.  The A Loan  made by each A  Credit  Lender  shall be
evidenced by an A Credit Note  (individually an "A Credit Note" and collectively
the "A Credit Notes") in the form (with appropriate  insertions)  annexed hereto
as Exhibit C. Unless required to be sooner paid, the Company promises to pay the
A Loans in seventeen quarterly installments commencing on September 30, 1999 and
continuing on the last day of each calendar quarter  thereafter to and including
September 30, 2003. The first sixteen of such installments  shall each aggregate
the lesser of  $5,000,000 or 5% of the Adjusted  Initial  Balance of the A Loans
and the seventeenth and final  installment  shall be in the amount  necessary to
pay the A Loans in full.  Each A Credit Lender shall be entitled to its pro rata
share of each such payment of principal.  The Adjusted  Initial Balance of the A
Loans shall equal the original aggregate principal amount thereof reduced by the
amount, if any, of A Loans converted into B Loans or C Loans pursuant to Section
2.2(d) hereof.

     (b) The B Credit. Subject to all of the terms and conditions hereof, each B
Credit Lender agrees to make a Loan to the Company  (individually a "B Loan" and
collectively  the "B  Loans") in the amount  set forth  opposite  its  signature
hereto under the heading "B Credit Commitment" or on an Assignment  Agreement to
which it is party  (its "B Credit  Commitment"  and  collectively  the "B Credit
Commitments").  There  shall  be a  single  Borrowing  of the B  Loans  and  the
obligations  of the B Lenders to make the B Loans shall expire on September  30,
1998 unless  sooner  terminated as herein  provided.  The  obligations  of the B
Credit Lenders  hereunder are several and not joint and no B Credit Lender shall
under any  circumstances be obligated to make a B Loan in excess of its B Credit

<PAGE>

Commitment.  The B Loans made by each B Credit  Lender to the  Company  shall be
evidenced by a B Credit Note  (individually  a "B Credit Note" and  collectively
the "B Credit Notes") in the form (with appropriate  insertions)  annexed hereto
as Exhibit D. Unless required to be sooner paid, the Company promises to pay the
B Loans in twenty-four  quarterly  installments  commencing on December 31, 1998
and  continuing  on the  last day of each  calendar  quarter  thereafter  to and
including  September 30, 2004. The first twenty-three of such installments shall
each aggregate  $100,000 and the twenty-fourth and final installment shall be in
the amount  necessary to pay the B Loans in full.  Each B Credit Lender shall be
entitled to its pro rata share of each such payment of principal.

     (c) The C Credit. Subject to all of the terms and conditions hereof, each C
Credit Lender agrees to make a Loan to the Company  (individually a "C Loan" and
collectively  the "C  Loans") in the amount  set forth  opposite  its  signature
hereto under the heading "C Credit Commitment" or on an Assignment  Agreement to
which it is party  (its "C Credit  Commitment"  and  collectively  the "C Credit
Commitments").  There  shall  be a  single  Borrowing  of the C  Loans  and  the
obligations  of the C  Credit  Lenders  to make  the C  Loans  shall  expire  on
September 30, 1998 unless sooner terminated as herein provided.  The obligations
of the C Credit  Lenders  hereunder  are  several  and not joint and no C Credit
Lender shall under any  circumstances be obligated to make a C Loan in excess of
its C Credit Commitment.  The C Loan made by each C Credit Lender to the Company
shall be  evidenced  by a C Credit  Note  (individually  a "C  Credit  Note" and
collectively  the "C Credit  Notes") in the form (with  appropriate  insertions)
annexed  hereto as Exhibit E.  Unless  required to be sooner  paid,  the Company
promises to pay the C Loans in twenty-eight quarterly installments commencing on
December  31,  1998 and  continuing  on the last  day of each  calendar  quarter
thereafter to and including  September 30, 2005. The first  twenty-seven of such
installments  shall each  aggregate  $100,000  and the  twenty-eighth  and final
installment  shall be in the amount necessary to pay the C Loans in full. Each C
Credit  Lender  shall be entitled to its pro rata share of each such  payment of
principal.

     (d)  Conversion  of Bank of  Montreal A Loans into B Loans  and/or C Loans.
Bank of Montreal may at any time on or before  December  30, 1998,  by notice to
the Company and the Administrative  Agent, elect to convert up to $50,000,000 of
its A Loans into B Loans and/or C Loans,  such  conversion to be accomplished by
written notice from Bank of Montreal to the Company and the Administrative Agent
specifying  the amount of the A Loans to be so converted  (which shall not be in
excess of  $50,000,000)  and  whether  such A Loans are to be  converted  into B
Loans, C Loans or a combination of both. Such conversion  shall become effective
fifteen  days  after  the  sending  by Bank of  Montreal  of  such  notice  (the
"Conversion Date") and each of Bank of Montreal,  the  Administrative  Agent and
the  Company  shall mark their  books and  records  to reflect  the  conversion.
Effective on the  Conversion  Date the portion of the A Loan of Bank of Montreal
converted  into a B Loan and/or C Loan shall (ii) be deemed  evidenced  by the B
<PAGE>

Credit Note and/or C Credit Note of Bank of Montreal (as  appropriate) and shall
thereafter bear interest and mature as in the case of all other B Loans and/or C
Loans, as appropriate, and the aggregate outstanding principal balances of the A
Loans, the B Loans and the C Loans shall be adjusted to reflect such conversion.

     Section  2.3.  Manner of  Borrowing.  The  Company  shall  give  written or
telephonic notice to the Administrative Agent (which notice shall be irrevocable
once given and, if given by telephone,  shall be promptly  confirmed in writing)
by no later than 11:00 a.m. (Chicago time) on the date the Company requests that
any  Borrowing  of  Loans  be  made  to  it  under  the  Commitments,   and  the
Administrative   Agent  shall  promptly  notify  the  relevant  Lenders  of  the
Administrative  Agent's  receipt of each such  notice.  Each such  notice  shall
specify the date of the Borrowing of Loans  requested  (which must be a Business
Day and which date shall be at least three (3) Business  Days  subsequent to the
date of such notice in the case of any Borrowing of Loans  constituting  a LIBOR
Portion),  the amount of such  Borrowing  and the  Commitments  being  utilized.
Except in the case of Swing  Loans,  each  Borrowing  of Loans  shall  initially
constitute  part of the  applicable  Base Rate Portion  except to the extent the
Company has otherwise  timely elected that such Borrowing  constitute  part of a
LIBOR  Portion as  provided  in Section 3 hereof.  The  Company  agrees that the
Administrative Agent may rely upon any written or telephonic notice given by any
person  the  Administrative  Agent  in  good  faith  believes  is an  Authorized
Representative  without the necessity of independent  investigation  and, in the
event any  telephonic  notice  conflicts  with the  written  confirmation,  such
telephonic notice shall govern if the  Administrative  Agent and/or Lenders have
acted in reliance  thereon.  Not later than 1:00 p.m. (Chicago time) on the date
specified for any Borrowing of Loans to be made hereunder,  each relevant Lender
shall make the proceeds of its Loan comprising part of such Borrowing  available
to the Administrative Agent in Chicago, Illinois in immediately available funds.
Subject to the  provisions of Section 7 hereof,  the proceeds of each Loan shall
be made available to the Company at the principal  office of the  Administrative
Agent in Chicago,  Illinois, in immediately available funds, upon receipt by the
Administrative  Agent  from each  relevant  Lender of its pro rata share of such
Borrowing.  Unless the Administrative Agent shall have been notified by a Lender
prior  to  1:00  p.m.  (Chicago  time)  on the  date a  Borrowing  is to be made
hereunder  that such  Lender  does not intend to make its pro rata share of such
Borrowing  available to the Administrative  Agent, the Administrative  Agent may
assume  that such  Lender has made such share  available  to the  Administrative
Agent on such date and the Administrative  Agent may (but shall not be obligated
to)  in  reliance  upon  such   assumption  make  available  to  the  Company  a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Lender and the Administrative Agent has made
such amount available to the Company, the Administrative Agent shall be entitled
to receive such amount from such Lender forthwith upon its demand, together with
interest thereon in respect of each day during the period commencing on the date
such amount was made  available to the Company and ending on but  excluding  the
date the Administrative  Agent recovers such amount at a rate per annum equal to
(x) from the date the related payment was due to the Administrative Agent to the
date two (2)  Business  Days after the date such  payment was due, the Fed Funds
<PAGE>
Rate for such day (or in the case of a day which is not a Business Day, then for
the preceding day) and (y)  thereafter  until payment of such amount is received
by the Administrative  Agent from such Lender, the Base Rate plus the Applicable
Margin in effect for each such day for the Base Rate Portion of Revolving Credit
Loans.


SECTION 3. INTEREST.

     Section 3.1.  Options.  Subject to all of the terms and  conditions of this
Section 3,  portions of the  principal  indebtedness  evidenced by each Class of
Notes (all of the indebtedness evidenced by each Class of Notes bearing interest
at the same rate for the same period of time being hereinafter  referred to as a
"Portion") shall, at the option of the Company,  bear interest with reference to
the Base Rate (the "Base Rate Portions") or with reference to the Adjusted

LIBOR Rate ("LIBOR  Portions"),  and Portions shall be convertible  from time to
time from one basis to the  other.  All of the  indebtedness  evidenced  by each
Class of Notes which is not part of a LIBOR  Portion  shall  constitute a single
Base Rate  Portion.  All of the  indebtedness  evidenced  by each Class of Notes
which bears  interest with  reference to a particular  Adjusted LIBOR Rate for a
particular  Interest  Period shall  constitute a single LIBOR Portion.  Anything
contained herein to the contrary  notwithstanding,  there shall not be more than
fifteen (15) LIBOR Portions outstanding at any one time and each Bank shall have
a ratable  interest in each  Portion  based on its  applicable  Commitment.  The
Company  promises  to pay  interest  on each  Portion  at the  rates  and  times
specified in this Section 3.

     Section 3.2. Base Rate Portion.  Each Base Rate Portion shall bear interest
(which the Company promises to pay at the times herein provided) at the rate per
annum  determined by adding the Applicable  Margin to the Base Rate as in effect
from time to time.  Interest on the Base Rate Portions shall be payable  monthly
in arrears on the last day of month and at maturity of the applicable Notes, and
interest after maturity shall be due and payable upon demand.

     Section 3.3. LIBOR Portions.  Each LIBOR Portion shall bear interest (which
the Company  promises to pay at the times  herein  provided)  for each  Interest
Period  selected  therefor at a rate per annum equal to the Adjusted  LIBOR Rate
for such  Interest  Period plus the  Applicable  Margin.  Interest on each LIBOR
Portion  shall  be due and  payable  on the  last  day of each  Interest  Period
applicable  thereto and, if an Interest  Period is longer than three (3) months,
then at the end of  each  three  month  period  and at the end of such  Interest
Period,  and interest after  maturity shall be due and payable upon demand.  The
Company  shall give written or  telephonic  notice to the  Administrative  Agent
(which notice shall be irrevocable once given and, if given by telephone,  shall
be promptly  confirmed in writing) on or before 11:00 a.m. (Chicago time) on the
third Business Day preceding the end of an Interest Period applicable to a LIBOR

<PAGE>

Portion  whether such LIBOR Portion is to continue as a LIBOR Portion,  in which
event the Company  shall  notify the  Administrative  Agent of the new  Interest
Period selected  therefor,  and in the event the Company shall fail to so notify
the  Administrative  Agent, such LIBOR Portion shall  automatically be converted
into and added to the applicable  Base Rate Portion as of and on the last day of
such  Interest  Period.  The  Administrative  Agent shall  promptly  notify each
relevant  Lender  of each  notice  received  from the  Company  pursuant  to the
foregoing provisions. Anything contained herein to the contrary notwithstanding,
the  obligation  of the  Lenders to create or continue  any LIBOR  Portion or to
convert  any  part of the  Base  Rate  Portion  into a LIBOR  Portion  shall  be
suspended  if a  Default  or  Event  of  Default  shall  have  occurred  and  be
continuing.

     Section 3.4.  Interest on Swing Loans.  Swing Loans shall not bear interest
as provided  for in  Sections  3.1  through  3.3 hereof but shall  instead  bear
interest (which the Company hereby promises to pay at the times herein provided)
at (i) the Fixed Fed Funds Rate for the  maturity  requested as in effect on the
date such Swing Loan is funded plus the Applicable  Margin for Revolving  Credit
Loans which are LIBOR Portions (a "Fixed Fed Funds Swing Loan"),  or (ii) at the
fixed rate  otherwise  agreed to by the Swing Lender and the Company on the date
of funding (an "Offered Rate Swing Loan"). Swing Loans shall bear interest after
maturity (whether by lapse of time, acceleration or otherwise) and until payment
in full  hereof  at the rate  per  annum  determined  by  adding  2% to the rate
otherwise  applicable  thereto  through the express  maturity  date  thereof and
thereafter  at the interest  rate from time to time  applicable to the Base Rate
Portion for Revolving Credit Loans. All interest on Swing Loans shall be due and
payable monthly on the last day of each month and on the Termination Date (or on
the  maturity  date of each  Swing  Loan if the Swing  Lender so  requests)  and
interest  accruing  thereafter  shall be due and payable upon demand.  The Swing
Lender shall note the amount, interest rate and maturity date of each Swing Loan
in its books and records and such books and records  shall be deemed prima facie
correct. Swing Loans may not be prepaid prior to their express maturity date.

     Section 3.5.  Computation.  All interest on the Notes and all fees, charges
and  commissions  due hereunder  shall be computed on the basis of a year of 360
days for the actual  number of days  elapsed,  except that  interest on the Base
Rate  Portions and on Fixed Fed Funds Swing Loans,  the  commitment  fee and the
Letter of Credit fee shall be computed on the basis of a year of 365 or 366 days
(as the case may be) for the actual number of days elapsed.

     Section 3.6.  Minimum  Amounts.  Each LIBOR  Portion  shall be in a minimum
amount of $15,000,000 and thereafter in integral multiples of $1,000,000.

     Section  3.7.  Manner of Rate  Selection.  The  Company  shall  notify  the
Administrative  Agent by 11:00 a.m.  (Chicago  time) at least three (3) Business
Days prior to the date upon which it requests  that any LIBOR Portion be created



<PAGE>



or that any part of a Base Rate Portion be converted  into a LIBOR Portion (such
notice to specify in each  instance the amount  thereof and the Interest  Period
selected  therefor)  and the  Administrative  Agent shall  promptly  advise each
relevant  Lender of each such notice.  If any request is made to convert a LIBOR
Portion into the applicable  Base Rate Portion,  such  conversion  shall only be
made  so as to  become  effective  as of the  last  day of the  Interest  Period
applicable thereto. All requests for the creation,  continuance or conversion of
Portions under this Agreement shall be irrevocable. Such requests may be written
or telephonic  (provided that if such notice is given by telephone,  the Company
shall promptly confirm such notice to the Administrative Agent in writing),  and
the Administrative  Agent is hereby authorized to honor telephonic  requests for
creations,  continuances  and  conversions  received  by it from any  person the
Administrative Agent reasonably believes to be an Authorized Representative, the
Company hereby  indemnifying the  Administrative  Agent and the Lenders from any
liability or loss ensuing from so acting.

     Section  3.8.  Funding  Indemnity.  In the event any Lender shall incur any
loss, cost or expense (including,  without limitation, any loss, cost or expense
incurred  by reason of the  liquidation  or  re-employment  of deposits or other
funds  acquired  by such  Lender to fund or  maintain  any LIBOR  Portion or the
relending  or  reinvesting  of such  deposits or amounts paid or prepaid to such
Lender, and any loss of profit) as a result of:

          (a) any payment or  prepayment of a LIBOR Portion on a date other than
     the last day of its Interest Period for any reason, whether before or after
     default,  and  whether  or  not  such  payment  is  required  by any of the
     provisions of this Agreement;

          (b) any  failure  (because  of a  failure  to meet the  conditions  of
     Section 7 hereof or otherwise) by the Company to create,  borrow,  continue
     or effect by conversion a LIBOR  Portion on the date  specified in a notice
     given pursuant to this Agreement; or

          (c) any failure by the Company to make any payment of principal on any
     LIBOR Portion when due (whether by  acceleration,  mandatory  prepayment or
     otherwise),

then, upon the demand of such Lender,  the Company shall pay to such Lender such
amount as will  reimburse  such Lender for such loss,  cost or  expense.  If any
Lender makes such a claim for  compensation,  it shall  provide to the Company a
certificate  executed by an officer of such Lender  setting  forth the amount of
such loss, cost or expense in reasonable detail (including an explanation of the
basis  for  and the  computation  of  such  loss,  cost  or  expense)  and  such
certificate shall be deemed prima facie correct.

     Section 3.9. Change of Law.  Notwithstanding  any other  provisions of this
Agreement or any Note, if at any time any change in applicable law or regulation
or in the official  interpretation  thereof  makes it unlawful for any Lender to
make or continue to maintain LIBOR Portions or to give effect to its obligations

<PAGE>
to make LIBOR  Portions  available  as  contemplated  hereby,  such Lender shall
promptly  give notice  thereof to the Company and the  Administrative  Agent and
such  Lender's  obligations  to make  or  maintain  LIBOR  Portions  under  this
Agreement shall terminate until it is no longer unlawful for such Lender to make
or maintain LIBOR  Portions.  To the extent required to comply with any such law
as changed, the Company shall prepay on demand the outstanding  principal amount
of any such affected LIBOR Portions,  together with all interest accrued thereon
and all other amounts then due and payable to such Lender under this  Agreement;
provided, however, subject to all of the terms and conditions of this Agreement,
the Company may then elect to convert the principal amount of the affected LIBOR
Portion from such Lender into the Base Rate Portion from such Lender which shall
not be made ratably by the Lenders but only from such  affected  Lender.  During
the period  when it is  unlawful  for any Lender to make LIBOR  Portions,  Loans
shall  continue  to be made in such a  manner  so that  the  percentage  of each
Lender's relevant  Commitments in use is identical,  but the Lenders affected by
such  illegality  shall  make  their  share  of each  Borrowing  which  has been
requested  in the form of a LIBOR  Portion  available in the form of a Base Rate
Portion. Each Lender agrees (to the extent consistent with internal policies) to
designate  a  different  lending  office  if such  designation  would  avoid the
illegality  described  in  this  Section  3.9;  provided,   however,  that  such
designation  need  not be made  if it  would  result  in any  additional  costs,
expenses or risks to such Lender that are not reimbursed by the Company pursuant
hereto or  would,  in the  reasonable  judgment  of such  Lender,  be  otherwise
disadvantageous to such Lender.

     Section  3.10.  Unavailability  of Deposits or Inability to  Ascertain,  or
Inadequacy  of,  LIBOR  Rate.  If on or prior to the first  day of any  Interest
Period for any LIBOR Portion the  Administrative  Agent determines that deposits
in United States Dollars (in the applicable amounts) are not being offered to it
or to banks  generally  in the  offshore  eurodollar  market  for such  Interest
Period, then the Administrative Agent shall forthwith give notice thereof to the
Company and the Lenders,  whereupon until the Administrative  Agent notifies the
Company that the  circumstances  giving rise to such suspension no longer exist,
the  obligations  of the Lenders to make any further  LIBOR  Portions  available
shall be suspended.

     Section 3.11.  Increased Cost and Reduced Return.  If, on or after the date
hereof,  the adoption of any applicable  law, rule or regulation,  or any change
therein, or any change in the official  interpretation or administration thereof
by any governmental  authority,  central bank or comparable  agency charged with
the  interpretation or administration  thereof,  or compliance by any Lender (or
its lending  office)  with any request or  directive  (whether or not having the
force of law) of any such authority, central bank or comparable agency:

          (a) shall subject any Lender (or its lending office) to any charges of
     any kind (other than Withholding  Taxes covered by Section 4.9 hereof) with
     respect to its interest in the LIBOR Portions,  its Notes or its obligation
     to make LIBOR Portions available,  or shall change the basis of taxation of

<PAGE>
     payments  to any Lender (or its  lending  office)  of the  principal  of or
     interest on LIBOR Portions or any other amounts due under this Agreement in
     respect of its LIBOR Portions or its obligation to make LIBOR Portions; or

          (b) shall  impose,  modify or deem  applicable  any  reserve,  special
     deposit or similar requirements  (including,  without limitation,  any such
     requirement  imposed  by the  Board of  Governors  of the  Federal  Reserve
     System,  but  excluding  any such  requirement  included  in an  applicable
     Eurodollar Reserve  Percentage) against assets of, deposits with or for the
     account of, or credit  extended  by, any Lender (or its lending  office) or
     shall  impose  on any  Lender  (or  its  lending  office)  or the  offshore
     interbank market any other condition affecting LIBOR Portions, its Notes or
     its obligation to make LIBOR Portions available;

and the result of any of the  foregoing  is to increase  the cost to such Lender
(or its lending office) of making or maintaining any LIBOR Portion, or to reduce
the amount of any sum  received  or  receivable  by such  Lender (or its lending
office)  under this  Agreement  or under its Notes with respect  thereto,  by an
amount  deemed by such Lender to be  material,  then,  within  fifteen (15) days
after  demand by such  Lender  (with a copy to the  Administrative  Agent),  the
Company  shall pay to such  Lender  such  additional  amount or  amounts as will
compensate  such Lender for such increased  cost or reduction.  A certificate of
any Lender claiming  compensation  under this Section 3.11 and setting forth the
additional  amount or amounts in reasonable  detail (including an explanation of
the  basis  therefor  and  the  computation  of  such  amount)  to be paid to it
hereunder shall be deemed prima facie correct.  In determining such amount, such
Lender may use reasonable averaging and attribution methods.

     Section 3.12.  Lending  Offices.  Each Lender may, at its option,  elect to
make its Loans  hereunder at the branch,  office or  affiliate  specified on the
appropriate  signature page hereof (each a "lending office") or at such other of
its  branches,  offices  or  affiliates  as it may from  time to time  elect and
designate  in a notice to the  Company  and the  Administrative  Agent (but such
funds shall in any event be made  available  to the Company at the office of the
Administrative Agent as herein provided for).

     Section 3.13. Discretion of Banks as to Manner of Funding.  Notwithstanding
any other provision of this Agreement, each Lender shall be entitled to fund and
maintain  its funding of all or any part of its Loans in any manner it sees fit,
it being  understood,  however,  that for the  purposes  of this  Agreement  all
determinations under this Agreement (including, without limitation, calculations
under Sections 3.8 and 3.11 hereof) shall be made as if each Lender had actually
funded and maintained its interest in each LIBOR Portion through the purchase of
deposits in the offshore  interbank  market having a maturity  corresponding  to
such LIBOR Portion's Interest Period and bearing an interest rate equal to LIBOR
for such Interest Period.
<PAGE>
     

SECTION 4. FEES, PAYMENTS, REDUCTIONS, APPLICATIONS AND NOTATIONS.

     Section  4.1.  Commitment  Fee.  For the period from the date hereof to and
including the  Termination  Date,  the Company  shall pay to the  Administrative
Agent for the ratable  account of the Revolving  Credit Lenders a commitment fee
at the  Applicable  Margin on the average  daily unused  amount of the Revolving
Credit Commitments hereunder, such fee to be payable quarterly in arrears on the
last  day of each  March,  June,  September  and  December  in each  year to and
including,  and on, the Termination  Date. Swing Loans shall not be treated as a
utilization of the Revolving Credit Commitments for the foregoing purpose.

     Section 4.2. Letter of Credit Fees.

     (a) Shared Fees. The Company shall pay to the Administrative  Agent for the
ratable account of the Revolving  Credit Lenders a letter of credit fee computed
at the  Applicable  Margin on the  maximum  amount of the Letters of Credit from
time to time  outstanding,  such fee to be paid quarterly in arrears on the last
day of each December,  March,  June and September in each year to and including,
and on, the Termination Date.

     (b) Issuing Bank  Fronting  Fees. On the date of issuance of each Letter of
Credit,  and as a condition  thereto,  the Company shall pay to the Issuing Bank
for its own account a non-refundable  letter of credit issuance fee in an amount
equal to 0.125% of the amount of the relevant Letter of Credit to be issued.  In
addition, the Company further agrees to pay the Issuing Bank for its own account
such amendment,  processing and transaction fees and charges as the Issuing Bank
from  time to  time  customarily  imposes  in  connection  with  any  amendment,
cancellation,  negotiation  and/or  payment of Letters of Credit  issued by such
Issuing Bank and drafts drawn  thereunder.  The Company also agrees to reimburse
the Issuing Bank for the amount of any taxes,  fees,  charges or other costs and
expenses  incurred by the Issuing Bank in connection with any payment made under
or with respect to a Letter of Credit.

     Section 4.3.  Administrative Agent's Fees. On the Acquisition Closing Date,
and on each  anniversary  date thereof when any credit or  commitment  to extend
credit is  outstanding  hereunder,  the Company shall pay to the  Administrative
Agent,  for its own use and benefit,  such fees as may be agreed upon in writing
by the Company and the  Administrative  Agent,  as the same may be amended  from
time to time.

     Section 4.4. Prepayments.

     (a) Optional Prepayments. The Company shall have the privilege (upon notice
to the  Administrative  Agent  by  11:00  a.m.  (Chicago  Time)  on the  date of
prepayment,  which  must be a  Business  Day) of  prepaying  without  premium or
penalty  and in whole or in part  (but,  if in part,  then in an amount not less



<PAGE>



than  $10,000,000  and  thereafter  in integral  multiples of $100,000) (or such
lesser  amount as will  prepay the  relevant  Class of Notes in full) a Class of
Notes  at any  time,  each  such  prepayment  to be made by the  payment  of the
principal  amount to be prepaid,  any amount due the Lenders  under  Section 3.8
hereof  (any  failure  of the  Administrative  Agent or the  Lenders  to require
payment of any amount due under  Section 3.8 not to preclude a later demand that
the  amount so due be paid) and,  in the case of a  prepayment  which  prepays a
Class of Notes in full (after  which the  Revolving  Credit  Commitments  are no
longer  outstanding in the case of a prepayment of the Revolving  Credit Notes),
accrued interest thereon to the date fixed for prepayment.  The foregoing to the
contrary notwithstanding, Swing Loans may not be prepaid.

     (b) Mandatory Prepayments.

          (i) Fixed  Asset  Proceeds.  An  amount  equal to any and all net cash
     proceeds  (i.e.,  gross cash  proceeds  net of  out-of-pocket  expenses and
     property  and  transfer  taxes  incurred  in  effecting  the  sale or other
     disposition  and net of proceeds  applied to the  repayment of liens on the
     assets sold or disposed of) received by the Parent or its Subsidiaries from
     the sale or  disposition  (whether  voluntary or  involuntary)  of fixed or
     capital   assets   (including   the  proceeds  of  a  sale  as  part  of  a
     sale/leaseback   transaction)   shall  be   promptly   paid   over  to  the
     Administrative  Agent as and for a mandatory  prepayment on the Term Loans;
     provided,  however, that (i) the foregoing provisions shall be inapplicable
     to  funds  received  by  the  Administrative  Agent  under  the  Collateral
     Documents  if and so long  as,  pursuant  to the  terms  of the  Collateral
     Documents,  the  same  are to be  held  by  the  Administrative  Agent  and
     disbursed for (or to reimburse the Parent and its Subsidiaries for the cost
     of) the  restoration,  repair or  replacement of the property in respect of
     which such proceeds  were  received,  (ii) no prepayment  shall be required
     with respect to net cash  proceeds  received  from the  ordinary  course of
     business  sale or other  disposition  of  Property  which is worn  out,  or
     obsolete if and to the extent that such cash  proceeds  would not cause Net
     Capital  Expenditures  for the fiscal  year of receipt to be  negative  and
     (iii) no  prepayment  shall be required out of the first  $5,000,000 of net
     cash  proceeds  received by the Parent and its  Subsidiaries  in any fiscal
     year which are not otherwise excepted from prepayment hereunder.  If and to
     the extent that the purchase price for the sale or other  disposition of an
     asset  is  deferred  (whether  or not  evidenced  by a  note),  it shall be
     included  in net cash  proceeds  as and when paid in cash.  Nothing  herein
     contained shall in any manner impair or otherwise  affect the  prohibitions
     against the sale or other  disposition  of Collateral  or assets  contained
     herein.

          (ii) Excess Cash Flow. On the last day of each  September of each year
     (commencing  September  30,  1999)  the  Company  shall  pay  over  to  the
     Administrative Agent as and for a mandatory prepayment on the Term Loans an
     amount equal to 75% (66-2/3% if the Leverage  Ratio computed as of the last
<PAGE>
     day of the  immediately  preceding  fiscal  year was less than 4.5 to 1) of
     Excess Cash Flow for the immediately  preceding fiscal year,  provided that
     if subsequent  to the close of the Parent's 1999 fiscal year,  the Leverage
     Ratio  shall be less than  3.00 to 1 as of the last day of two  consecutive
     fiscal  quarters,  no prepayments  shall  thereafter be required under this
     subpart.

          (iii) Equity  Offerings.  Promptly upon receipt  thereof,  the Company
     shall  pay  over  to  the  Administrative  Agent  as  and  for a  mandatory
     prepayment  on the Term Loans,  an amount equal to fifty percent of all net
     cash proceeds received by the Parent from Equity  Offerings,  provided that
     (i) no such  prepayment  shall  be  required  out of or in  respect  of the
     portion  of  such  net  cash  proceeds   applied  to  the  payment  of  the
     Subordinated  Bridge  Loan  and  (ii) if  subsequent  to the  close  of the
     Parent's 1999 fiscal year,  the Leverage Ratio shall be less than 3.00 to 1
     as of the last day of two consecutive fiscal quarters, no prepayments shall
     thereafter be required  under this  subpart.  If and to the extent that the
     proceeds of the Equity  Offering in question are applied to the  prepayment
     of indebtedness  included in Consolidated  Total  Indebtedness which is not
     revolving  and is not Seasonal  Debt,  the Leverage  Ratio may be computed,
     solely for purposes of the foregoing requirement,  by reducing Consolidated
     Total Indebtedness as of the test date by the amount of the prepayment.

          (iv) Pension  Reversions.  Promptly upon each receipt by the Parent or
     any  Subsidiary of any amounts from or out of any pension or other employee
     benefit  plan  covering  any  officers  or  employees  of the Parent or any
     Subsidiary or of their  predecessors,  the Company shall pay over an amount
     equal the amount so received (net of taxes (including excise taxes) payable
     in respect of such reversion) as and for a mandatory prepayment on the Term
     Loans.

          (v)  Debt  Issuances.  Promptly  upon  receipt  by the  Parent  or any
     Subsidiary  of any  amounts  from or out of the  issuance  of  Indebtedness
     included in Consolidated Total Indebtedness,  the Company shall pay over to
     the  Administrative  Agent as and for a  mandatory  prepayment  on the Term
     Loans an amount  equal to the net cash  proceeds  received by the Parent or
     its Subsidiaries therefrom except that no such prepayment shall be required
     to be made out of (i) the proceeds of Subordinated  Debt to the extent that
     the same is applied to the  repayment  or  retirement  of the  Subordinated
     Bridge Loan or other  Subordinated  Debt, (ii) the proceeds of indebtedness
     consisting of a Capitalized  Lease or incurred to finance the purchase of a
     fixed or  capital  asset  (iii)  the  proceeds  of a  Borrowing  under  the
     Revolving  Credit  Commitments  or  (iv)  out of the  first  $5,000,000  of
     Indebtedness  proceeds  received in any fiscal year which is not  otherwise
     excepted pursuant to clauses (i) through (iii) hereof.

<PAGE>
     Section 4.5. Terminations. The Company shall have the privilege at any time
and  from  time  to  time  upon  five   Business   Days'  prior  notice  to  the
Administrative  Agent (which shall promptly notify the Revolving Credit Lenders)
to ratably terminate the Revolving Credit  Commitments in whole or in part (but,
if in part, then in a minimum amount of $10,000,000) provided that the Revolving
Credit  Commitments  may not be  reduced  to an amount  less than the  aggregate
principal  amount of Revolving  Credit Loans,  Swing Loans and Letters of Credit
then  outstanding.  No termination of the Revolving  Credit  Commitments  may be
reinstated.

     Section 4.6. Place and Application.

     (a) General. Except as otherwise provided in Section 2.1(c) with respect to
Letters of Credit, all payments of principal, interest and fees shall be made to
the  Administrative  Agent at its office at 115 South LaSalle  Street,  Chicago,
Illinois  (or at such other place as the  Administrative  Agent may  specify) in
immediately available and freely transferable funds at the place of payment. All
payments  due from  the  Company  hereunder  shall be made  without  set-off  or
counterclaim  and without  reduction  for, and free from, any and all present or
future taxes, levies, imposts, duties, fees, charges, deductions,  withholdings,
restrictions  or conditions of any nature imposed by any government or political
subdivision or taxing authority thereof. Except as otherwise provided in Section
2.1(c)   with   respect  to  Letters  of  Credit,   payments   received  by  the
Administrative  Agent after 1:00 p.m. (Chicago time) shall be deemed received as
of the  opening  of  business  on the next  Business  Day.  Except as  otherwise
provided in this Agreement, all payments shall be received by the Administrative
Agent for the  ratable  account of the Lenders  entitled  to share in same,  and
shall be promptly distributed by the Administrative Agent ratably to them except
that payments  which pursuant to the terms hereof are for the use and benefit of
the Administrative Agent, the Swing Lender or the Issuing Bank shall be retained
by the intended recipient for its own account and payments received to reimburse
an Issuing  Bank or a Lender for a fee or cost  peculiar to that Issuing Bank or
Lender,  as the case  may be,  shall  be  remitted  to it.  Unless  the  Company
otherwise directs, principal payments on the Notes shall be first applied to the
applicable  Base Rate Portion and then to the  applicable  LIBOR Portions in the
order in which their  Interest  Periods  expire.  Prepayments  on the Term Loans
shall be applied to the scheduled installment  maturities thereof in the inverse
order of maturity.  Reimbursements  of drawings under Letters of Credit shall be
promptly  remitted  to the  Issuing  Bank for  remittance  to the Lenders to the
extent they have previously reimbursed the Issuing Bank therefor. Prepayments in
full of LIBOR Portions shall be accompanied by accrued  interest  thereon to the
date fixed for prepayment.

     (b) Term  Loan  Prepayments.  Except  as  otherwise  herein  provided,  all
prepayments of the Term Loans shall be applied pro rata as among the Term Loans.
The foregoing to the contrary notwithstanding, each B Credit Lender and C Credit



<PAGE>



Lender shall have the right to waive receipt of any mandatory prepayment payable
hereunder  in respect  of its B Loan or C Loan in which  event the amount of the
prepayment  so waived shall be added pro rata to the amount to be prepaid on the
A Loans and those B Loans and C Loans as to which  the  holder  thereof  has not
waived  receipt of the  prepayment.  In order to enable the B Credit Lenders and
the C Credit  Lenders  to avail  themselves  of the right to waive a  prepayment
pursuant to this  subsection  (b), the Company  shall notify the  Administrative
Agent of each  mandatory  prepayment  made or anticipated to be made pursuant to
Section 4.4(b) hereof (which notice may be given up to 30 days in advance of the
date of the  prepayment)  specifying  its  good  faith  estimate  of the  amount
thereof.  The  Administrative  Agent shall within 5 Business  Days of receipt of
each such notice notify the B Credit Lenders and C Credit Lenders thereof.  Such
Lenders  shall then each have 5 Business  Days to make an election not to accept
such prepayment by a written notice to that effect to the Administrative  Agent.
Unless  and until the  period  in which  the B Credit  Lenders  and the C Credit
Lenders may elect to waive a mandatory  prepayment under this subsection (b) has
elapsed,  the proceeds of any mandatory  prepayment otherwise payable in respect
of the B Loans and the C Loans shall be held by the Administrative Agent.

     (c) Applications of Payments after an Event of Default.  Anything contained
herein to the contrary notwithstanding, all payments and collections received in
respect of the  indebtedness  evidenced by the Notes or the Applications and all
proceeds of the Collateral  received,  in each instance,  by the  Administrative
Agent or any of the Lenders after the occurrence of an Event of Default shall be
distributed as follows:

          (a)  first,  to the  payment  of any  outstanding  costs and  expenses
     incurred  by the  Administrative  Agent  or  Issuing  Bank  in  monitoring,
     verifying, protecting,  preserving or enforcing the liens on the Collateral
     or in protecting,  preserving or enforcing  rights under the Loan Documents
     and in any event  including all costs and expenses of a character which the
     Company  has agreed to pay under  Section  12.10  hereof  (such funds to be
     retained by the  Administrative  Agent or Issuing  Bank for its own account
     unless it has previously been reimbursed for such costs and expenses by the
     Lenders,  in which event such  amounts  shall be remitted to the Lenders to
     reimburse them for payments theretofore made to the Administrative Agent or
     Issuing Bank);

          (b) second,  to the payment of any outstanding  interest or other fees
     or amounts  due under the Loan  Documents  other than for  principal  or in
     reimbursement  of the principal  amount of drafts  presented and paid under
     Letters of Credit or in respect of the Hedging Liability,  ratably as among
     the  Lenders in accord with the amount of such  interest  and other fees or
     amounts owing each;

          (c) third,  to the payment of the principal of the Notes,  the amounts
     of all drafts presented and paid under Letters of Credit, to be held by the
     Administrative   Agent  to  secure   payment  of  any  amount  which  could



<PAGE>



     subsequently  be drawn on Letters of Credit (up to the full amount thereof)
     and to the Hedging Liability, ratably as among all of such; and

          (d) fourth, to whoever may be lawfully entitled thereto.

     The  foregoing  to the  contrary  notwithstanding,  the  proceeds  received
through the enforcement of the Administrative Agent's lien on real property (but
not personal property or fixtures) located in the state of New York shall not be
applied to the payment of the principal of or interest on the  Revolving  Credit
Loans or in  reimbursement  of the principal amount of drafts presented and paid
under Letters of Credit.  However,  if as a result of the foregoing,  any Lender
receives a  disproportionately  smaller allocation of the proceeds of Collateral
than would have been the case but for this  paragraph  and but for the fact that
the  Revolving  Credit Loans are not secured with real  property  located in the
State of New York, the Revolving Credit Lenders shall receive a disproportionate
share of the proceeds of the other  Collateral  to the extent  necessary so that
after  giving  effect  to  such  applications  each  Lender  receives  the  same
percentage  recovery out of the  Collateral  as would have been the case but for
this  paragraph  and had the  Revolving  Credit  Loans  been  secured  with  the
Collateral consisting of real property located in the State of New York.

     Section 4.7.  Notations and Requests.  All advances made against the Notes,
interest rates, Interest Periods and maturities shall be recorded by the Lenders
on their books or, at their option in any instance, endorsed on the reverse side
of the Notes and the unpaid  principal  balances  so recorded or endorsed by the
Lenders shall be prima facie evidence in any court or other  proceeding  brought
to enforce the Notes as to such matters.  Prior to any  negotiation of any Note,
the  Lender  holding  such Note  shall  endorse  thereon  the  principal  amount
remaining unpaid thereon. The Administrative Agent shall maintain at its address
referred to herein a copy of each Assignment Agreement delivered to and accepted
by it and a  register  for the  recordation  of the names and  addresses  of the
Lenders and of each  Commitment,  extended by each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Company, the Agents and the Lenders may
treat each Person whose name is recorded in the  Register as a Lender  hereunder
for all  purposes  of this  Agreement.  The  Register  shall  be  available  for
inspection by the Company or any Lender at any reasonable  time and from time to
time upon reasonable prior notice.  Upon its receipt of an Assignment  Agreement
executed by an assigning Lender and an assignee, the Administrative Agent shall,
if such Assignment  Agreement acceptance has been completed and is acceptable to
the Administrative  Agent in form and substance,  (a) accept such assignment and
acceptance, (b) record the information contained therein in the Register and (c)
give prompt written notice thereof to the Company.
<PAGE>
     Section  4.8.  Capital  Adequacy.  If any Lender shall  determine  that any
change after the date hereof in any applicable law, rule or regulation regarding
capital adequacy, or any change in the interpretation or administration  thereof
by any governmental  authority,  central bank or comparable  agency charged with
the  interpretation or  administration  thereof or compliance by such Lender (or
its lending  office) with any request or directive  regarding  capital  adequacy
(whether or not having the force of law) of any such authority,  central bank or
comparable  agency,  has or would have the effect of reducing the rate of return
on such Lender's  capital as a consequence of its  obligations  hereunder or the
Letters of Credit or credit extended by it hereunder to a level below that which
such Lender could have achieved but for such law,  rule,  regulation,  change or
compliance  (taking into  consideration  such Lender's  policies with respect to
capital  adequacy) by an amount deemed by such Lender to be material,  then from
time to time as specified by such Lender the Company  shall pay such  additional
amount or amounts as will  compensate  such Lender for such reduction in rate of
return. A certificate of any Lender claiming compensation under this Section and
setting  forth the  additional  amount or amounts to be paid to it  hereunder in
reasonable  detail  shall be deemed prima facie  correct.  In  determining  such
amount, such Lender may use any reasonable averaging and attribution methods.

     Section 4.9. The Register.  The Administrative  Agent shall maintain at its
address referred to herein, a copy of each Assignment Agreement delivered to and
accepted by it and a register for the  recordation of the names and addresses of
the Lenders and each Commitment of, and principal  amount of the Loans owing to,
each Lender  from time to time (the  "Register").  The  entries in the  Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Company, the Agents and the Lenders may treat each Person whose name is recorded
in the Register as a Lender  hereunder for all purposes of this  Agreement.  The
Register  shall be available for  inspection by the Company or any Lender at any
reasonable  time and from time to time upon  reasonable  prior notice.  Upon its
receipt  of an  Assignment  Agreement  executed  by an  assigning  Lender and an
assignee,  the Administrative Agent shall, if such Assignment Agreement has been
completed  and is  acceptable  to it in form  and  substance,  (a)  accept  such
assignment and acceptance,  and (b) record the information  contained therein in
the Register and (c) give promptly written notice thereof to the Company.

     Section 4.10. Withholding Taxes.

     (a) Payments Free of Withholding.  Except as otherwise  required by law and
subject to Section  4.10(b) and (c) hereof,  each payment by the Company and the
Guarantors  under  this  Agreement  or the other  Loan  Documents  shall be made
without withholding for or on account of any present or future taxes (other than
overall net income taxes on the recipient) imposed by or within the jurisdiction
in which the Company or any Guarantor is domiciled,  any jurisdiction from which
the Company or any Guarantor makes any payment,  or (in each case) any political
subdivision  or  taxing  authority  thereof  or  therein  (herein,  "Withholding
Taxes").  If any such  Withholding  Tax is so required,  the Company or relevant
Guarantor, as applicable shall make the withholding,  pay the amount withheld to

<PAGE>

the  appropriate  governmental  authority  before  penalties  attach  thereto or
interest  accrues  thereon,  and forthwith pay such additional  amount as may be
necessary to ensure that the net amount  actually  received by each Lender,  the
Administrative  Agent and the  Issuing  Bank free and clear of such  Withholding
Taxes  (including such taxes on such  additional  amount) is equal to the amount
which that Lender, the Issuing Bank or the Administrative Agent (as the case may
be)  would  have   received  had  such   withholding   not  been  made.  If  the
Administrative  Agent, the Issuing Bank or any Lender pays any amount in respect
of any  such  Withholding  Taxes,  penalties  or  interest,  the  Company  shall
reimburse  the  Administrative  Agent,  the Issuing Bank or such Lender for that
payment on demand in the currency in which such payment was made. If the Company
or a Guarantor  pays any such taxes,  penalties  or interest,  it shall  deliver
official tax receipts evidencing that payment or certified copies thereof to the
Lender,  the  Issuing  Bank  or  Administrative  Agent  on  whose  account  such
withholding  was  made  (with  a copy  to the  Administrative  Agent  if not the
recipient of the original) on or before the thirtieth day after payment.

     (b) U.S.  Withholding  Tax  Exemptions.  Each  Lender  that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Company and the  Administrative  Agent on or before the earlier of
the date of the initial Borrowing is made hereunder or thirty (30) days after it
becomes a Lender,  two duly  completed  and  signed  copies of either  Form 1001
(relating  to  such  Lender  and  entitling  it  to a  complete  exemption  from
withholding  under  the  Code on all  amounts  to be  received  by such  Lender,
including  fees,  pursuant  to the Loan  Documents  and the  Loans) or Form 4224
(relating to all amounts to be received by such Lender, including fees, pursuant
to the Loan  Documents  and the Loans) of the  United  States  Internal  Revenue
Service  or,  solely if such  Lender is claiming  exemption  from United  States
withholding  tax under  Section  871(h) or  881(c) of the Code with  respect  to
payments of "portfolio  interest",  a Form W-8, or any successor form prescribed
by the Internal Revenue Service, and a certificate representing that such Lender
is not a bank for  purposes of Section  881(c) of the Code,  is not a 10-percent
shareholder  (within the meaning of Section  871(h)(3)(B)  of the Code),  of the
Parent or the Company and is not a controlled foreign corporation related to the
Parent or the  Company  (within the  meaning of Section  864(d)(4)  of the Code.
Thereafter  and from time to time,  each Lender  shall submit to the Company and
the Administrative Agent such additional duly completed and signed copies of one
or the other of such forms (or such  successor  forms as shall be  adopted  from
time to time by the relevant  United  States taxing  authorities)  as may be (i)
requested  by  the  Company  in  a  written  notice,  directly  or  through  the
Administrative Agent, to such Lender and (ii) required under then-current United
States law or regulations to avoid or reduce United States  withholding taxes on
payments  in respect of all amounts to be  received  by such  Lender,  including
fees, pursuant to the Loan Documents or the Loans.

<PAGE>

           (c) Inability of Bank to Submit Forms. If any Lender determines, as a
result of any change in applicable law, regulation or treaty, or in any official
application  or  interpretation  thereof,  that it is  unable  to  submit to the
Company or the Administrative  Agent any form or certificate that such Lender is
obligated to submit pursuant to subsection (b) of this Section 4.10 or that such
Lender is required to withdraw or cancel any such form or certificate previously
submitted  or any such form or  certificate  otherwise  becomes  ineffective  or
inaccurate,  such Lender shall  promptly  notify the Company and  Administrative
Agent of such fact and the  Lender  shall to that  extent  not be  obligated  to
provide any such form or certificate  and will be entitled to withdraw or cancel
any affected form or certificate, as applicable.

     Section  4.11.  Bank  Replacement.  If the  Company is required to make any
reduction  or  withholding  with  respect to any  payment  due any Lender  under
Section  4.10  hereof  or is  required  to make any  payment  to a Lender  under
Sections  2.1(c)(iv),  3.11 or 4.8  hereof or a Lender's  obligation  to make or
maintain LIBOR Portions is suspended pursuant to Section 3.9 hereof (in any such
case  a  "Replaceable   Bank"),  the  Company  may,  with  the  consent  of  the
Administrative  Agent and the  Issuing  Bank,  propose  that  another  lender (a
"Replacement  Bank"), which lender may be an existing Lender, be substituted for
and  replace  the  Replaceable  Bank  for  purposes  of  this  Agreement.  If  a
Replacement  Bank is so substituted  for the  Replaceable  Bank, the Replaceable
Bank shall enter into an Assignment  Agreement  with the  Replacement  Bank, the
Company and the  Administrative  Agent to assign and transfer to the Replacement
Bank the Replaceable  Bank's  Commitments and Loans and credit risk with respect
to Letters of Credit hereunder pursuant to and in accordance with the provisions
and  requirements  of  Section  12.12  hereof  (except  that  no  processing  or
recordation  fee  shall  be  payable  to the  Administrative  Agent)  and,  as a
condition to its execution  thereof,  the  Replaceable  Bank shall  concurrently
receive the full amount of its Loans, interest thereon, and all accrued fees and
other amounts to which it is entitled under this  Agreement,  including  amounts
which  would  have been due it under  Section  3.9  hereof if its Loans had been
prepaid rather than assigned.


SECTION 5. THE COLLATERAL.

     Section 5.1. The  Collateral.  The Notes and the other  obligations  of the
Company and the Guarantors to the Administrative Agent, the Issuing Bank and the
Lenders under the Loan  Documents  shall be secured by (a) valid,  perfected and
enforceable  liens in all right,  title and  interest  of the Parent and of each
Subsidiary  in all capital  stock or other  equity  interests in the Company and
each  Subsidiary  (except  that  only  65%  of  the  capital  stock  of  Foreign
Subsidiaries  need be  pledged  and the  capital  stock  of  those  Subsidiaries
designated  as  inactive  on Exhibit H hereto need not be pledged so long as the
same are inactive and the capital stock of Birds Eye de Mexico SA de CV need not
be pledged),  in each instance whether now owned or hereafter acquired,  and all
proceeds  thereof and (b) valid,  perfected and enforceable  liens in all right,
title  and  interest  of the  Company  and of  each  Pledging  Guarantor  in all
accounts,   chattel   paper,   general   intangibles   (including   trademarks),

<PAGE>

     instruments, securities, documents, contract rights, including rights under
the Marketing  Agreement and payment rights under the Stock  Purchase  Agreement
and Asset Transfer  Agreement,  inventory,  equipment and real property of every
kind and description whether now owned or hereafter  acquired,  and all proceeds
thereof; provided,  however, that (i) until a Default or an Event of Default has
occurred  and is  continuing  and  thereafter  until  otherwise  required by the
Required  Lenders or the  Administrative  Agent,  liens need not be perfected on
notes  receivable  having a fair  market  value of less than  $1,000,000  in any
instance and  $5,000,000 in the  aggregate,  (ii) liens on the plants located in
Montezuma,  Georgia  and  Uvalde,  Texas may be subject to prior  liens  thereon
securing  indebtedness in the amounts of $195,000,  and $431,221,  respectively,
(iii) liens need not be perfected outside of the United States on trademarks and
patents  unless and until the  Administrative  Agent or the Required  Lenders so
request  and (iv) the  Revolving  Credit  Loans  need not be  secured  with real
property  located in the State of New York. The liens in the Collateral shall be
granted to the  Administrative  Agent for the ratable account of the Lenders and
shall be valid and  perfected  first liens  subject,  however,  to the rights of
lessors  under  permitted  leases  and  purchase  money  liens  held by  vendors
providing  permitted purchase money financing.  Notwithstanding  anything to the
contrary  contained  herein,  in no event will any of the  Collateral  described
above be deemed to include (aa) any interests in equipment  owned by the Company
or any Subsidiary  which is subject to a permitted  purchase money lien in favor
of any third  party  (other than the  Company or any of its  Affiliates)  to the
extent the granting of a security  interest or lien therein is prohibited by the
agreement(s)  pursuant to which such equipment is financed and such  prohibition
has not been or is not  waived or the  consent of the  applicable  party has not
been or is not  obtained,  (ab) any  interests  in any leases or licenses to use
Property  under which the Company or any  Subsidiary is lessee or licensee and a
Person  other  than the  Company  or an  Affiliate  of the  Company is lessor or
licensor to the extent the  granting of a security  interest or lien  therein is
prohibited  by the  agreement(s)  pursuant  to which such  property is leased as
licensed  and such  prohibition  has not been or is not waived or the consent of
the  applicable  party has not been or is not  obtained,  (ac) any rights  under
other  contracts  (other than contracts with Affiliates of the Company) to which
the  Company or a Pledging  Guarantor  is a party  (other than rights to receive
money due and to become due) to the extent the  granting of a security  interest
or lien  thereon is  prohibited  by such  contracts or  applicable  law and such
prohibition has not been or is not waived or the consent of the applicable party
has not been or is not  obtained  and (ad) the other  assets  shown on Exhibit L
hereto (collectively, the "Excluded Assets").

             Section 5.2. Further  Assurances.  The Company covenants and agrees
that it shall,  and shall cause each  Subsidiary  to,  comply with all terms and
conditions of each of the Collateral  Documents and that the Company shall,  and
shall cause each Subsidiary to, at any time and from time to time at the request
of the  Administrative  Agent or the Required  Lenders  execute and deliver such

<PAGE>

instruments  and  documents  and do such acts and  things as the  Administrative
Agent or the Required Lenders may reasonably  request in order to provide for or
protect  or  perfect  the lien of the  Administrative  Agent in the  Collateral,
subject to the terms of Section 5.1 above.


SECTION 6. REPRESENTATIONS AND WARRANTIES.

     The Company and the Parent represent and warrant to the Lenders as follows:

     Section 6.1.  Organization  and Power.  The Parent and the Company are duly
organized and existing  under the laws of the state of their  organization,  and
after giving effect to the  Acquisition  and the Merger will be duly licensed or
qualified  to do business in each state where the nature of the assets  owned or
leased  by  them or  business  conducted  by them  requires  such  licensing  or
qualification  and in which the  failure to be so licensed  or  qualified  could
reasonably be expected to have a Material  Adverse Effect and have all necessary
power to carry on their present and contemplated businesses.  The Parent and the
Company have full right,  power and authority to enter into this  Agreement,  to
make the borrowings herein provided for, to issue the Notes in evidence thereof,
to execute and deliver the  Applications  and the other Loan Documents  executed
and delivered or to be executed and  delivered by them,  and to perform each and
all of the matters and things herein and therein  provided  for. Each  Guarantor
has, or upon its  acquisition  or  formation  will have,  full right,  power and
authority  to enter into the Loan  Documents  executed by it and to perform each
and all of the matters and things  therein  provided for. The Loan  Documents do
not, and the performance or observance by the Parent or any Subsidiary of any of
the matters and things herein or therein  provided for will not,  contravene any
provision  of law or any charter,  by-law or similar  agreement of the Parent or
any such  Subsidiary  or  constitute  a breach or  default  under any  covenant,
indenture or agreement of or affecting the Parent or any such  Subsidiary  where
such breach or default could  reasonably be expected to have a Material  Adverse
Effect.

     Section 6.2.  Subsidiaries.  Each  Subsidiary  is, or upon  acquisition  or
formation   will  be,  duly  organized  and  existing  under  the  laws  of  the
jurisdiction of its organization,  and duly licensed or qualified to do business
in each state or other  jurisdiction  where the  nature of the  assets  owned or
leased  by  it  or  business   conducted  by  it  requires  such   licensing  or
qualification  and in which the  failure to be so licensed  or  qualified  could
reasonably be expected to have a Material  Adverse  Effect and has all necessary
corporate power to carry on its present  business.  Exhibit H hereto  identifies
each Subsidiary, the jurisdiction of its organization,  the percentage of issued
and outstanding  shares of each class of its capital stock or other equity owned
by the  Parent  and  the  Subsidiaries  and,  if  such  percentage  is not  100%
(excluding  directors'  qualifying  shares as required by law), a description of
each class of its  authorized  capital  stock or other  equity  interest and the
number of shares of each class issued and  outstanding.  All of the  outstanding
shares of capital  stock of or other  equity  interest  in each  Subsidiary  are
validly issued and outstanding and fully paid and, subject to Section 630 of the
New York Business Corporation Law, nonassessable, and all shares or other equity

<PAGE>

interests in each Subsidiary  indicated on Exhibit H as owned by the Parent or a
Subsidiary  are  owned,  beneficially  and of  record,  by the  Parent  or  such
Subsidiary  free  and  clear  of all  liens,  security  interests,  charges  and
encumbrances,  other than the lien of the Administrative  Agent required hereby.
There are no outstanding  commitments or other  obligations of any Subsidiary to
issue,  and no options,  warrants or other rights of any Person to acquire,  any
shares  of any  class  of  capital  stock  of or other  equity  interest  in any
Subsidiary. The Company is a wholly owned Subsidiary of the Parent.

     Section 6.3. Use of Proceeds;  Regulation U. The Company shall use proceeds
of the Loans and other extensions of credit made available  hereunder solely for
the purpose of funding  the  Acquisition  and for its working  capital and other
general corporate purposes. Neither the Company nor any Subsidiary is engaged in
the  business  of  extending  credit for the purpose of  purchasing  or carrying
margin  stocks  (within the meaning of Regulation U of the Board of Governors of
the  Federal  Reserve  System),  and no  part  of the  proceeds  of any  loan or
extension of credit hereunder will be used to purchase or carry any margin stock
or extend  credit to others for the purpose of purchasing or carrying any margin
stock if as a result  thereof  such  loan or other  extension  of  credit  would
violate Regulation U or any interpretation thereof.

     Section 6.4.  Financial  Reports.  (a) The Parent and the Company have each
heretofore  delivered to each Lender a copy of their  annual  audit  reports for
their 1994,  1995,  1996,  1997,  and 1998,  fiscal  years and the  accompanying
consolidated  financial  statements of the Parent and its  Subsidiaries  and the
Company and its Subsidiaries,  and their unaudited interim  consolidated balance
sheets as at  August  29,  1998,  and the  related  consolidated  statements  of
operations,  changes in members'  and  shareholder's  capitalization  (as to the
Parent  and its  Subsidiaries)  and  cash  flows  of each of them  and of  their
Subsidiaries for the two months then ended. Such financial  statements have been
prepared in accordance with GAAP (except for the omission of footnotes from such
unaudited statements) and fairly reflect the consolidated  financial position of
the Parent and its  Subsidiaries  and of the Company and its  Subsidiaries as of
the dates thereof and the results of their  operations  for the periods  covered
thereby. The Parent and its Subsidiaries have no material contingent liabilities
that are  required to be disclosed on such  financial  statements  other than as
indicated on said financial statements.  Since the date of the fiscal 1998 audit
report,  there has been no material adverse change in the financial condition or
results of operations,  or with respect to the Properties,  of the Parent or any
of its  Subsidiaries,  except those disclosed in writing to the Lenders prior to
the date of this Agreement.

     (b) The Company  has  delivered  to the  Lenders  the audited  consolidated
balance sheets of DFVC and its Subsidiaries as of the close of their 1996, 1997,
and 1998  fiscal  years,  and the audited  consolidated  income  statements  and

<PAGE>

statements of cash flow of DFVC and its  Subsidiaries  for their 1996,  1997 and
1998 fiscal  years,  and the  unaudited  interim  balance  sheet of DFVC and its
Subsidiaries  as of August 30, 1998 and unaudited  interim  income  statement of
DFVC and its  Subsidiaries  for the three  month  period  ended  August 30, 1998
(collectively,  the "DFVC Financial Statements").  Based on the Company's review
of the DFVC Financial Statements and other financial information obtained by the
Company  in  connection  with  the  DFVC  Acquisition,  nothing  has come to the
Company's  attention  that  would  cause it to believe  that the DFVC  Financial
Statements  are  inaccurate in any material  respect or that the DFVC  Financial
Statements do not present fairly,  in all materials  respects,  the consolidated
financial  position of DFVC and its  Subsidiaries  as the dates  thereof and the
consolidated  results of operations of DFVC and its Subsidiaries for the periods
covered thereby in conformity with GAAP or that DFVC has any material contingent
liabilities  not  disclosed  in the DFVC  Financial  Statements,  except  (i) as
otherwise indicated in the DFVC Financial Statements,  and (ii) for such matters
as would not individually or in the aggregate have a Material Adverse Effect.

     Section 6.5.  Litigation and Taxes. Except as is set forth on Schedule 6.5,
there is no litigation or governmental  proceeding pending, nor to the knowledge
of the Parent or the Company threatened, against the Parent or any Subsidiary or
DFVC,  BEMSA or their  Subsidiaries  or for which any of them is liable which if
adversely  determined  could  reasonably  be  expected  to result in a  Material
Adverse  Effect  after  giving  effect  to the  Acquisition.  No  authorization,
consent,  license,  or exemption from, or filing or registration with, any court
or governmental department,  agency or instrumentality,  is or will be necessary
to the valid execution,  delivery or performance by the Parent or any Subsidiary
of any Loan Document or the Stock Purchase  Agreement,  Asset Transfer Agreement
or Marketing  Agreement or to the consummation of the Acquisition or the Merger,
except  for  such  consents,  exemptions  and  approvals  with  respect  to  the
Acquisition which will have been obtained and remain in full force and effect.

     Section 6.6. Burdensome  Contracts with Affiliates.  All material contracts
and agreements  between the Company and/or its Subsidiaries and their Affiliates
are on terms and  conditions  which are no less favorable to the Company or such
Subsidiary than would be usual and customary in similar  contracts or agreements
between Persons not affiliated with each other.

     Section 6.7. ERISA.  The Parent and each Subsidiary is in compliance in all
material  respects  with the  Employee  Retirement  Income  Security Act of 1974
("ERISA")  to the  extent  applicable  to it and has  received  no notice to the
contrary from the Pension Benefit  Guaranty  Corporation  ("PBGC"),  and, in the
event of the Parent's or any  Subsidiary's  partial or total withdrawal from any
pension  plans,  multi-employer  pension plans or  non-payment by other employer
participants  therein,  the liability of the Parent and its Subsidiaries for any
unfunded  vested  benefits  thereunder  would not result in a  Material  Adverse
Effect.

<PAGE>

     Section 6.8. Full Disclosure.  The statements and information  furnished to
either Agent or the Lenders in connection with the negotiation of this Agreement
and the  commitments  by the  Lenders  to provide  all or part of the  financing
contemplated hereby do not, taken as a whole,  contain any untrue statement of a
material fact or omit a material fact necessary to make the material  statements
contained  therein or herein  not  misleading,  except for such  thereof as were
corrected in subsequent  written  statements  furnished the Lenders prior to the
date hereof (the Lenders  acknowledging that as to any projections  furnished to
the  Lenders,  the  Parent and the  Company  only  represent  that the same were
prepared  on  the  basis  of  information  and  estimates  they  believe  to  be
reasonable).  There is no fact peculiar to the Parent or any Subsidiary, DFVC or
BEMSA  which the  Company  has not  disclosed  to the  Lenders in writing  which
materially  adversely  affects the Parent or its Subsidiaries nor, so far as the
Parent or the Company now can reasonably foresee, is reasonably likely to have a
Material Adverse Effect. The unaudited pro forma consolidated  balance sheet for
the  Parent  and  its  Subsidiaries  and for the  Company  and its  Subsidiaries
heretofore  delivered to the Lenders fairly presents the financial  condition of
the  Parent  and  its  Subsidiaries  immediately  after  giving  effect  to  the
Acquisition and the Merger, based upon the best information  currently available
to the Parent and the Company with respect to the Acquisition.

     Section 6.9. Compliance with Law. (a) Neither the Parent nor any Subsidiary
is or will  after  giving  effect to the  Acquisition  and the  Merger be (i) in
default with respect to any order, writ, injunction or decree or (ii) in default
in any material respect under any Governmental Requirement (including ERISA, the
Occupational Safety and Health Act of 1970 and laws and regulations establishing
quality  criteria and  standards  for air,  water,  land and toxic waste) of any
Governmental  Body if, in the case of either clause (i) or (ii), such default is
reasonably  likely to result  in a  Material  Adverse  Effect;  and (b)  without
limiting the generality of the foregoing, the Parent and each Subsidiary are and
after  giving  effect  to the  Acquisition  and the  Merger  will  each  be,  in
compliance  with all  applicable  state and  federal  environmental,  health and
safety statutes and  regulations,  including,  without  limitation,  regulations
promulgated under the Resource  Conservation and Recovery Act of 1976, 42 U.S.C.
ss.ss.6901  et seq.,  except where  failure to be in  compliance  is  reasonably
likely not to have a Material Adverse Effect, and, to the Company's and Parent's
knowledge, neither the Parent nor any Subsidiary will have acquired, incurred or
assumed, directly or indirectly, any contingent liability in connection with the
release of any toxic or hazardous waste or substance into the environment  which
is reasonably likely to have a Material Adverse Effect.  Insofar as known to the
responsible  officers of the Company and the Parent,  and after giving effect to
the Merger and the Acquisition  neither the Parent nor any Subsidiary is liable,
in whole or in part, for, nor are any of the assets or property of the Parent or
any  Subsidiary  subject  to a lien in  favor of any  Governmental  Body for any
material liability arising from or in any way relating to, the costs of cleaning
up, remediating or responding to a release of hazardous  substances  (including,
without  limitation,   petroleum,  its  by-products  or  derivatives,  or  other
hydrocarbons).
<PAGE>

     Section 6.10. Certain  Contracts.  The Company has delivered true copies of
the Stock Purchase  Agreement,  the Asset  Transfer  Agreement and the Marketing
Agreement and all amendments thereto to the Lenders.

     Section 6.11. Stock Purchase Agreement Warranties.  Nothing has come to the
attention  of  the  Company  or  the  Parent  that  would   indicate   that  any
representation of Dean Foods contained in the Stock Purchase Agreement is untrue
in any respect which would have a Material Adverse Effect.

     Section 6.12. Restrictive Agreements. Neither the Parent nor any Subsidiary
nor, to their  knowledge,  DFVC,  is a party to any  contract or  agreement,  or
subject to any charge or other corporate restriction,  which affects its ability
to execute,  deliver and perform the Loan  Documents  to which it is a party and
repay its indebtedness,  obligations and liabilities under the Loan Documents or
which materially and adversely affects or, insofar as the Parent and the Company
can reasonably foresee,  could reasonably be expected to have a Material Adverse
Effect.

     Section 6.13. No Default under Other Agreements. Neither the Parent nor any
Subsidiary is in default with respect to any note,  indenture,  loan  agreement,
mortgage,  lease, deed, or other agreement to which it is a party or by which it
or its Property is bound,  which default could  reasonably be expected to have a
Material Adverse Effect.

     Section  6.14.  Status  under  Certain  Laws.  Neither  the  Parent nor any
Subsidiary  is an  "investment  company"  or a  person  directly  or  indirectly
controlled by or acting on behalf of an "investment  company" within the meaning
of the Investment Company Act of 1940, as amended,  or a "holding Company," or a
"subsidiary  company" of a "holding  company," or an  "affiliate"  of a "holding
company" or a "subsidiary company" of a "holding company," within the meaning of
the Public Utility Holding Company Act of 1935, as amended.

     Section  6.15.  Year 2000  Compliance.  The  Parent  and the  Company  have
conducted a comprehensive review and assessment of the computer  applications of
the  Parent  and its  Subsidiaries  and  has  made  inquiry  of  their  material
suppliers,  vendors  (including data processors) and customers,  with respect to
any defect in computer software, data bases, hardware,  controls and peripherals
related  to the  occurrence  of the year 2000 or the use at any time of any date
which is before, on or after December 31, 1999, in connection  therewith.  Based
on the  foregoing  review,  assessment  and inquiry,  the Parent and the Company
believe  that no such  defect  could  reasonably  be expected to have a Material
Adverse Effect.

     Section 6.16. Solvency, Etc. On the initial Borrowing date and after giving
effect to the  Acquisition  and the Merger and the  financing  thereof,  (i) the
assets of the Parent and of each  Subsidiary,  at a fair valuation,  will exceed
<PAGE>

its liabilities, including contingent liabilities, (ii) the remaining capital of
the Parent and of each Subsidiary will not be unreasonably small to conduct,  or
in relation to, its business or any  transaction  in which it intends to engage,
and (iii) the Parent and each Subsidiary will not have incurred debts,  and does
not intend to incur debts,  beyond its ability to pay such debts as they mature.
For purposes of this Section, "debt" means any liability on a claim, and "claim"
means (i) right to  payment,  whether or not such right is reduced to  judgment,
liquidated,  unliquidated,  fixed,  contingent,  matured,  unmatured,  disputed,
undisputed,  legal,  equitable,  secured,  or  unsecured;  or (ii)  right  to an
equitable  remedy  for  breach of  performance  if such  breach  gives rise to a
payment,  whether  or not such  right  to an  equitable  remedy  is  reduced  to
judgment, fixed, contingent,  matured, unmatured, disputed, undisputed, secured,
or unsecured.


SECTION 7. CONDITIONS PRECEDENT.

     Section  7.1.  All  Advances.  The  obligation  of the  Lenders to make any
Borrowing available hereunder  (including the first Borrowing) or of the Issuing
Bank to issue  any  Letter of  Credit  shall be  subject  to the  provisions  of
Sections 9.2 and 9.3 hereof and shall also be subject to the satisfaction of the
following  conditions  precedent at the time of the making of each  Borrowing or
the issuance of a Letter of Credit under the Revolving Credit:

          (a) each of the representations and warranties set forth herein and in
     the other Loan  Documents  shall be true and correct as of the date of such
     Borrowing or issuance  (except the  representations  and warranties made in
     Section 6.4 hereof  shall be deemed to refer to the most  recent  financial
     statements delivered to the Lenders pursuant to Section 8.5 hereof); and

          (b) no  Default  or  Event  of  Default  shall  have  occurred  and be
     continuing.

Any request made by the Company for a Borrowing or a Letter of Credit  hereunder
shall be deemed to constitute a  representation  and warranty that the foregoing
statements are true and correct.  In addition,  in the case of the issuance of a
Letter of Credit,  the  Issuing  Bank shall have  received a properly  completed
Application therefor and its fee therefor.

     Section  7.2.  Initial  Advance.  At or prior  to the  time of the  initial
Borrowing  hereunder  or the  issuance  of the  initial  Letter of  Credit,  the
following conditions precedent shall also have been satisfied:

          (a) The Administrative Agent shall have received the following for the
     account of the Lenders (each to be properly executed and completed) and the
     same shall have been approved as to form and substance by the Agents:

<PAGE>
               (i) this Agreement and the Notes;

               (ii) copies  (executed or certified  as may be  appropriate)  for
          each Lender of the articles of  incorporation  and by-laws of and good
          standing  certificates  for the Parent and each  Guarantor  and of all
          legal documents or proceedings  taken in connection with the execution
          and delivery of the Loan  Documents  to the extent the  Administrative
          Agent  or its  counsel  may  reasonably  request,  including,  without
          limitation,  certificates  as to the  incumbency and authority of, and
          setting forth a specimen signature of, each officer who is to sign any
          Loan Document;

               (iii) the Acquisition and the Merger shall have been  consummated
          without  material  deviation  from  the  terms of the  Stock  Purchase
          Agreement  and  Asset  Transfer  Agreement  and  without  modification
          thereto or  waivers of the terms or  conditions  thereof  (except  for
          modifications  and waivers approved by the  Administrative  Agent) and
          with the Company's  asceptic  business having been transferred to Dean
          Foods or a  Subsidiary  thereof  and  (aa)  with  the  amount  of cash
          expended  by the  Parent  and  its  Subsidiaries  in  respect  of such
          Acquisition not being in excess of  $360,000,000  plus amounts payable
          pursuant to the working  capital  adjustment  provisions  of the Stock
          Purchase  Agreement,  (ab) with the sum of such  amounts  plus amounts
          required to refinance indebtedness of the Company and DFVC required to
          be repaid  pursuant  to the terms of Section  7.2(a)(vii)  hereof plus
          financing  costs and costs of  retiring  Indebtedness  funded  through
          borrowings under this Agreement not to exceed  $560,000,000,  and (ac)
          immediately  after  consummation of the  Acquisition  and Merger,  the
          Parent   shall   have   Consolidated   Net  Worth  of  not  less  than
          $160,000,000;

               (iv) the Collateral Documents and any documentation  necessary to
          perfect the liens thereby created (including,  without limitation, all
          certificates  of  capital  stock  of  the  Company  and  the  Pledging
          Guarantors which are  corporations  together with executed blank stock
          powers therefor,  and with all financing  statements  requested by the
          Administrative  Agent in connection with the Collateral  Documents) to
          the extent required by Section 5.1 hereof;

               (v) evidence of the  maintenance of insurance as required  hereby
          or by the Collateral Documents;

               (vi) a  certificate  from an  authorized  officer of the  Company
          stating (i) whether the pro forma  consolidated  balance  sheet of the
          Parent and its  Subsidiaries  delivered to the Lenders and referred to
          in the last  sentence  of  Section  6.8  hereof,  is  accurate  in all
 
<PAGE>

          material respects as of the date the other conditions precedent to the
          initial  advance  under this  Section  7.2 are  satisfied  or, if not,
          setting forth the differences,  and (ii) that the conditions set forth
          in clause (iii) above have been satisfied;

               (vii) a pay-off  letter or letters  from all  lenders  under loan
          arrangements  not  permitted  to exist after the initial  Borrowing or
          Letter of Credit  hereunder in form and substance  satisfactory to the
          Administrative  Agent and such other evidence that all of the Parent's
          and its Subsidiaries'  indebtedness thereunder has been fully paid and
          that the liens  securing  same have been or will be  released,  as the
          Administrative Agent may require;

               (viii) with respect to the liens on real property (the "Mortgaged
          Premises"),  a commitment or commitments  from Lawyers Title Insurance
          Corporation (the "Title Company") stating that it is prepared to issue
          its standard  form of ALTA  mortgagee's  title policy or policies with
          such  endorsements as the  Administrative  Agent reasonably  requests,
          such policy showing title to the Mortgaged  Premises in the Company or
          Guarantors  and  insuring  such  Mortgages  as a first lien (except as
          otherwise  permitted  by Section  5.1  hereof),  without  unacceptable
          encroachments  or prior  rights of others on the  Mortgaged  Premises,
          subject  only  to  current  general  taxes  and  assessments  not  yet
          delinquent   and  other   exceptions   which  are  acceptable  to  the
          Administrative  Agent and with the  amount  of  coverages  under  such
          policies to be acceptable to the Administrative Agent;

               (ix) such additional  documents,  opinions or undertakings as may
          be required by the Title  Company in order to provide the insurance to
          be afforded to the Administrative Agent pursuant to this Section 7.2;

               (x) a Phase I environmental  assessment of the Mortgaged Premises
          (other than properties of DFVC) prepared by environmental  consultants
          selected by the Company and  acceptable  to the  Administrative  Agent
          showing no  condition  that is not  acceptable  to the  Administrative
          Agent; and

               (xi) satisfactory appraisal reports with respect to the Mortgaged
          Premises from  appraisers  satisfactory  to the  Administrative  Agent
          which meet or exceeds the requirements of FIRREA.

          (b) The liens and  security  interests  granted to the  Administrative
     Agent  under the  Collateral  Documents  shall have been  perfected  to the
     
<PAGE>

     extent  required by Section 5.1 hereof or such  perfection  shall have been
     provided for in a manner satisfactory to the Administrative Agent;

          (c) The  Company and Dean Foods shall have  received  such  approvals,
     exemptions,  consents or withholdings of objection from Governmental Bodies
     as are necessary in order to lawfully  consummate the  Acquisition  and the
     Merger and same shall not have been stayed,  revoked or  overturned  and no
     petition or application shall be pending,  seeking to modify,  stay, revoke
     or  overturn  the same  except for such  thereof as are  acceptable  to the
     Agents;

          (d) The Administrative Agent shall have received a solvency opinion as
     to the Company and its Subsidiaries  after giving effect to the Acquisition
     and the Merger from Houlihan Lokey Howard & Zukin Financial Advisors,  Inc.
     satisfactory in form and substance to the Administrative Agent;

          (e) The Company shall have delivered to the Administrative Agent (i) a
     pro forma  balance  sheet of the Parent and its  Subsidiaries  after giving
     effect to the  Acquisition  and the Merger;  and (ii)  projections  for the
     ensuing five years, and such pro forma consolidating balance sheet and such
     projections shall be satisfactory to the Administrative Agent; 

          (f) No material  litigation  or  administrative  proceedings  shall be
     pending or threatened against the Parent or its Subsidiaries;

          (g) The Agents  shall have  received for their own account the fees to
     be received by them at such time by agreement with the Company;

          (h) the Subordinated Bridge Loan shall have been funded;

          (i) not less than $1,000,000 of the Existing  Subordinated Notes shall
     have  been   purchased   by  the  Company  or  redeemed  and  the  Existing
     Subordinated  Notes  Indenture  shall have been  amended as provided in the
     form of Third Supplemental  Indenture  heretofore  delivered to the Agents;
     and

          (j) The  Administrative  Agent shall have  received for the account of
     the Lenders such other agreements, instruments, documents, certificates and
     opinions as the Administrative Agent may reasonably request.

     Section 7.3.  Legal  Matters.  Legal matters  incident to the execution and
delivery  of  the  Loan  Documents  and  the  other  instruments  and  documents
contemplated  hereby and the Acquisition and the Merger shall be satisfactory to

<PAGE>

the Agents and their counsel,  and the Lenders shall have received the favorable
written opinions of acceptable  counsel for the Parent and each Subsidiary party
to the  Loan  Documents,  in form  and  substance  and  with  such  limitations,
assumptions and  qualifications  as shall be satisfactory to the  Administrative
Agent and its counsel, with respect to:

          (a) the due  organization  and  existence  of the Parent and each such
     Subsidiary  and the due licensing or  qualification  of the Parent and each
     such  Subsidiary  in  all  jurisdictions  where  a  material  part  of  the
     Collateral is located or where the failure to be so qualified  could have a
     Material Adverse Effect;

          (b) the power and authority of the Parent and each such  Subsidiary to
     enter  into  the Loan  Documents  (and of the  Company  to  consummate  the
     Acquisition  and the Merger) and to perform and observe all the matters and
     things herein and therein  provided for and the fact that the execution and
     delivery of the Loan Documents and the  consummation of the Acquisition and
     the Merger will not, nor will the  observance or  performance of any of the
     matters or things therein or herein provided for,  contravene any provision
     of law or of the  charter or by-laws,  operating  agreement  or  management
     agreement of the Parent or any such Subsidiary;

          (c) the due authorization  for and the validity and  enforceability of
     the Loan Documents (other than of mortgages);

          (d) the fact that no governmental authorization, consent, exemption or
     withholding of objection is required with respect to the lawful  execution,
     delivery  and  performance  of the Loan  Documents or  consummation  of the
     Acquisition  and Merger other than such  thereof as have been  obtained and
     are in full force and effect;

          (e) the fact that the Merger and Acquisition have been consummated;

          (f) except to the extent set forth on Schedule  6.5, the lack,  to the
     knowledge  of such  counsel,  of any  legal or  administrative  proceedings
     pending or threatened against DFVC (but without  independent  inquiry as to
     matters  affecting only DFVC),  the Parent or any Subsidiary which seeks to
     prevent the  consummation  of the  Acquisition  or the Merger or which,  if
     adversely  determined,  would  result in a Material  Adverse  Effect  after
     giving effect to the Acquisition and Merger; and

          (g) such other matters as the Administrative  Agent or its counsel may
     reasonably require.

<PAGE>

SECTION 8. COVENANTS.

     The Parent and the Company  agree that,  so long as any credit is available
to or in use by the Company  hereunder,  except to the extent  compliance in any
case or cases is waived in writing by the Required Lenders:

     Section 8.1. Maintenance of Business.  The Parent will, and will cause each
Subsidiary  to,  preserve  and keep in force and effect all licenses and permits
necessary to the proper conduct of their respective  businesses except where the
failure  to do so could not  reasonably  be  expected  to  result in a  Material
Adverse Effect.

     Section 8.2.  Maintenance.  The Parent will, and will cause each Subsidiary
to,  maintain,  preserve and keep their plant,  properties and equipment  (other
than obsolete or worn out equipment held for sale or  disposition) in reasonably
good repair,  working order and condition  (ordinary wear and tear excepted) and
the Parent will,  and will cause each  Subsidiary to, from time to time make all
needful and proper repairs,  renewals,  replacements,  additions and betterments
thereto  so that at all  times the  efficiency  thereof  shall be  substantially
preserved and maintained,  in each case where the failure to do so is reasonably
likely to have a Material Adverse Effect.

     Section 8.3.  Taxes.  The Parent will,  and will cause each  Subsidiary to,
duly pay and  discharge all taxes,  rates,  assessments,  fees and  governmental
charges upon or against any of them or against their respective  properties,  in
each case before the same become delinquent and before penalties accrue thereon,
unless and to the extent that the same are being  contested in good faith and by
appropriate  proceedings,  in each case where the failure to do so is reasonably
likely to have a Material Adverse Effect.

     Section 8.4. Insurance. The Parent will, and will cause each Subsidiary to,
insure and keep insured,  with good and  responsible  insurance  companies,  all
insurable  property  owned by them which is of a  character  usually  insured by
companies similarly situated and operating like properties; and the Parent will,
and will  cause  each  Subsidiary  to,  insure  such  other  hazards  and  risks
(including employers', product liability and public liability risks) in good and
responsible  insurance  companies  as and  to  the  extent  usually  insured  by
companies similarly situated and conducting similar businesses.  The Parent will
upon request of the Administrative  Agent furnish a certificate setting forth in
summary form the nature and extent of the insurance  maintained pursuant to this
Section.

     Section  8.5.  Financial  Reports.  The  Parent  will,  and will cause each
Subsidiary to, maintain a standard and modern system of accounting in accordance
with sound  accounting  practice  and will furnish to the Lenders and their duly
authorized   representatives  such  information   respecting  the  business  and

<PAGE>

financial  condition of the Parent and its  Subsidiaries  as any Lender  (acting
through  the  Administrative  Agent) may  reasonably  request;  and  without any
request, will furnish to the Lenders:

          (a) within 45 days after the close of each quarterly  fiscal period of
     the Parent and the Company,  a copy of the balance  sheets,  statements  of
     operations and  statements of cash flow of the Parent and its  Subsidiaries
     and of the  Company and its  Subsidiaries  for such  period,  prepared on a
     consolidated  basis in accordance  with GAAP,  and the notes  thereto,  all
     certified  (subject to year end audit adjustments which are not expected to
     be material) by the chief financial officers of the Company and the Parent;

          (b) within 90 days after the close of each  fiscal year of the Company
     and the Parent,  a copy of the audit report for such year and  accompanying
     financial  statements,  including balance sheets,  statements of operations
     and statements of cash flow on a consolidated  basis for the Parent and its
     Subsidiaries  and the Company and its Subsidiaries in accordance with GAAP,
     and the notes  thereto,  certified  without  qualification  by  independent
     public  accountants of recognized  standing  selected by the Parent and the
     Company and satisfactory to the Required Lenders (the "Auditors");

          (c) within the periods  provided in  paragraphs  (a) and (b) above,  a
     certificate of an authorized  financial officer of the Company stating that
     such officer has  reviewed the  provisions  of this  Agreement  and setting
     forth:  (aa)  the  information  and  computations  (in  sufficient  detail)
     required  in order to compute  the  Leverage  Ratio and (in the case of the
     year end  statements  only) Excess Cash Flow and to  establish  whether the
     Company was in compliance with the requirements of Sections 8.8, 8.9, 8.10,
     8.11,  8.12,  8.13, 8.14, 8.15, 8.17 8.18 and 8.20 hereof at the end of the
     period covered by the financial  statements then being furnished,  and (ab)
     to the best of such officer's  knowledge,  whether there exists on the date
     of the certificate or existed at any time during the period covered by such
     financial  statement  any  Default  or Event of  Default  and,  if any such
     condition or event exists on the date of the  certificate or existed during
     such period,  specifying the nature and period of existence thereof and the
     action the Company is taking,  has taken or  proposes to take with  respect
     thereto; and

          (d) within the period provided in paragraph (b) above, a business plan
     for the  Parent  and its  Subsidiaries  for the  ensuing  fiscal  year  and
     projections for the Parent and its Subsidiaries for the ensuing five fiscal
     years, all in detail reasonably acceptable to the Administrative Agent.

         The  Parent  will,   and  will  cause  each   Subsidiary   to,   permit
representatives  of any  Lenders,  upon  reasonable  notice  and  during  normal
business  hours,  to examine and make extracts from the books and records of the

<PAGE>

Parent and its Subsidiaries and to examine their assets and access thereto shall
be permitted for such purpose.

     Section 8.6.  Compliance  with Laws.  The Parent will,  and will cause each
Subsidiary  to,  comply  with all  Governmental  Requirements  to which they are
subject,  including,  without limitation, the Occupational Safety and Health Act
of 1970, as amended,  ERISA, and all laws,  ordinances,  governmental  rules and
regulations   relating   to   environmental   protection   in   all   applicable
jurisdictions,  the violation of which is  reasonably  likely to have a Material
Adverse  Effect or would  result in any lien or charge upon any  property of the
Parent or any Subsidiary which is not a Permitted Lien.

     Section 8.7.  Nature of  Business.  The Parent will not, nor will it permit
any  Subsidiary  to,  engage in any  business or activity  if, as a result,  the
general  nature of the business which would then be engaged in by the Parent and
its  Subsidiaries  taken as a whole  would  be  substantially  changed  from the
business in which they are engaged after giving effect to the Acquisition.

     Section 8.8. Liens.  The Parent will not, nor will it permit any Subsidiary
to,  pledge,  mortgage or  otherwise  encumber or subject to, or permit to exist
upon or be subjected to, any lien,  security interest or charge upon, any assets
of the Parent or any Subsidiary; provided, however, that nothing in this Section
contained  shall  operate  to  prevent  any  of  the  following   (collectively,
"Permitted Liens"):

          (a)  liens,   pledges  or  deposits  in  connection   with   workmen's
     compensation,  unemployment insurance, social security obligations,  taxes,
     assessments,  statutory  obligations or other similar  charges,  good faith
     deposits  in  connection  with  tenders,  contracts  or leases to which the
     Parent or any of its Subsidiaries is a party or other deposits  required to
     be made in the  ordinary  course of  business  and not in  connection  with
     borrowing money or obtaining advances or credit; provided in each case that
     the obligation or liability  arises in the ordinary  course of business and
     is not  overdue,  or if  overdue,  is  being  contested  in good  faith  by
     appropriate  proceedings  which  prevent  enforcement  of the matter  under
     contest and adequate reserves have been established  therefor to the extent
     required by GAAP;

          (b) inchoate statutory, construction, common carrier's, materialmen's,
     landlord's,  warehousemen's,  mechanics,  producers'  or  operator's  liens
     securing  obligations not overdue,  or if overdue,  being contested in good
     faith by appropriate  proceedings  which prevent  enforcement of the matter
     under contest and adequate  reserves have been established  therefor to the
     extent required by GAAP;

<PAGE>

          (c) the liens created by the Loan Documents;

          (d)  attachment  or  judgment  liens  to the  extent,  but only to the
     extent,  the  attachment or judgment in question is not an Event of Default
     under Section 9.1(f);

          (e) liens for taxes, assessments or other governmental charges not yet
     due and payable or which are being  diligently  contested  in good faith by
     the  Parent  or  its  applicable  Subsidiary  by  appropriate  proceedings,
     provided that in any such case an adequate  reserve is being  maintained by
     the Parent or such Subsidiary for the payment of same;

          (f) easements,  licenses, permits,  rights-of-way,  rights of entry or
     passage,  rights of lessees,  restrictions  and other similar  encumbrances
     incurred in the  ordinary  course of business  which do not secure debt for
     money borrowed or its equivalent,  and which do not materially detract from
     the value of the Property subject thereto or materially  interfere with the
     ordinary  conduct of the business of the Parent or any Subsidiary or use of
     the assets in question for their intended purposes;

          (g) liens  described  on Exhibit J attached  hereto,  encumbering  the
     assets  noted  thereon  opposite the  description  of the  indebtedness  or
     obligation  secured  thereby and  extensions  and renewals of the foregoing
     Permitted  Liens,  provided that the aggregate  amount of such  liabilities
     secured by such extended or renewed lien is not increased and such extended
     or renewed  liabilities secured by such lien are on terms and conditions no
     more  restrictive  than the terms and conditions of the same being extended
     or renewed;

          (h) liens securing  indebtedness  which is paid in full at the time of
     the initial Borrowing and which are promptly discharged; and

          (i)  liens  not  otherwise   permitted  hereby  securing   obligations
     permitted  by  Section  8.9(g)  hereof  and not  aggregating  in  excess of
     $20,000,000 ($10,000,000 while the Subordinated Bridge Loan is outstanding)
     at any one time outstanding.

     Section  8.9.  Indebtedness.  The Parent  will not,  nor will it permit any
Subsidiary  to,  issue,   incur,   assume,   create,  or  have  outstanding  any
Indebtedness;  provided,  however,  that  the  foregoing  provisions  shall  not
restrict nor operate to prevent:

          (a) Indebtedness owing to the  Administrative  Agent, the Issuing Bank
     and the Lenders under this Agreement or any of the other Loan Documents;

          (b) Indebtedness described on Exhibit I attached hereto;

        
<PAGE>

          (c) Subordinated Debt;

          (d)  Existing  Subordinated  Notes  (and  guarantees  thereof  by  the
     Guarantors) in an aggregate principal amount not in excess of $1,000,000;

          (e)  Indebtedness  of the Parent and the  Company to each other and to
     the  Guarantors  and  Indebtedness  of the  Guarantors  to the Parent,  the
     Company and each other, provided that the Indebtedness of the Parent to the
     Company shall not exceed $40,000,000 at any one time outstanding;

          (f) Indebtedness  which is paid in full  concurrently with the initial
     Borrowing; and

          (g)  Indebtedness  in addition  to that  otherwise  permitted  by this
     Section 8.9 aggregating not more than  $25,000,000  ($10,000,000  while the
     Subordinated Bridge Loan is outstanding) at any time outstanding.

     Section 8.10. Consolidated Net Worth. The Parent will at all times maintain
Consolidated Net Worth of not less than the Minimum Required Amount. The Minimum
Required Amount shall be $150,000,000  provided that (i) on the last day of each
fiscal year of the Parent  (commencing  with the 1999  fiscal  year) the Minimum
Required  Amount  as  then in  effect  shall  be  increased  by 50% of  positive
Consolidated  Net  Income for such  fiscal  year and (ii) the  Minimum  Required
Amount  shall be  increased  effective  upon,  and by,  90% of the amount of any
increase in  Consolidated  Net Worth  resulting from the issuance and/or sale of
equity  securities  or  interests  by the Parent or any  Subsidiary  (other than
issuances  by  the  Parent  of  common  equity  to  producers  of   agricultural
commodities  purchased by it which  issuances  are in  accordance  with its past
practices).

     Section 8.11.  Leverage  Ratio.  The Parent will as of the last day of each
fiscal quarter  (commencing with the second fiscal quarter of fiscal 1999), have
a Leverage Ratio of not more than that specified for such fiscal quarter below:

                                              MAXIMUM LEVERAGE RATIO
      FOR FISCAL QUARTERS :                         SHALL BE

Second Fiscal Quarter of Fiscal 1999                6.00 to 1
 
Third Fiscal Quarter of Fiscal 1999                 5.75 to 1
Fourth Fiscal Quarter of Fiscal 1999                5.5  to 1
All Fiscal Quarters of Fiscal 2000                  5.0  to 1
All Fiscal Quarters of Fiscal 2001                  4.5  to 1
All Fiscal Quarters of Fiscal 2002                  4.0  to 1
All Fiscal Quarters Thereafter                      3.5  to 1
<PAGE>

     The foregoing to the contrary notwithstanding, if the Parent has a Leverage
Ratio of 3.0 to 1 or less computed as of the last day of two consecutive  fiscal
quarters ending subsequent to the close of its 1999 fiscal year, then the Parent
shall have a Leverage  Ratio as of the last day of each  fiscal  quarter  ending
thereafter of not less than 3.5 to 1.

     Section 8.12.  Fixed Charge Coverage Ratio.  The Parent will as of the last
day of each fiscal quarter  (commencing with the second fiscal quarter of fiscal
1999) have a Fixed Charge  Coverage  Ratio of not less than that  specified  for
such fiscal quarter below:
<TABLE>
<S>                                                                         <C>        
                  As of the last day of the                       Fixed Charge Coverage Ratio
                   following fiscal quarters                         shall not be less than

Second through Fourth of fiscal 1999                                        1.05 to 1
First through Fourth of fiscal 2000 and First of fiscal 2001                1.15 to 1
Second through Fourth of fiscal 2001 and First of fiscal 2002               1.20 to 1
all fiscal quarters thereafter                                              1.25 to 1
</TABLE>
            Section  8.13.  EBITDA.  The Parent  will as of the last day of each
fiscal quarter have EBITDA for the period of four fiscal  quarters then ended of
not less than that  specified  for such fiscal  quarter  below (with  EBITDA for
periods  prior to the  Acquisition  Closing Date computed as though DFVC were at
all times a  Subsidiary  of the  Company and as though the Company had not owned
its asceptic business):


    For fiscal quarters:                           EBITDA shall not be less than

First and second of fiscal 1999                             $115,000,000

Third of fiscal 1999                                        $120,000,000

Fourth of fiscal 1999                                       $125,000,000

First and second of fiscal 2000                             $130,000,000

Third and fourth of fiscal 2000                             $135,000,000

First and second of fiscal 2001                             $140,000,000

all fiscal quarters ended after the second fiscal           $145,000,000
quarter of fiscal 2001

<PAGE>

     Section 8.14.  Interest  Coverage Ratio. The Parent will as of the last day
of each fiscal  quarter  (commencing  with the second  fiscal  quarter of fiscal
1999) have an Interest  Coverage  Ratio of not less than that specified for such
quarter below:

                                                         Interest Coverage Ratio
             For fiscal quarters:                         shall not be less than

Second through fourth of fiscal 1999 and First of               1.90 to 1
fiscal 2000

Second of fiscal 2000                                           2.05 to 1

Third and fourth of fiscal 2000 and first of fiscal             2.20 to 1
2001

Second and Third of fiscal 2001                                 2.30 to 1

Fourth of fiscal 2001                                           2.40 to 1

First and Second of fiscal 2002                                 2.50 to 1

Third of fiscal 2002                                            2.60 to 1

Fourth of fiscal 2002 and First of fiscal 2003                  2.70 to 1

Second and Third of fiscal 2003                                 2.80 to 1

all fiscal quarters thereafter                                  3.00 to 1


     Section 8.15. Net Capital Expenditures.  The Parent shall not and shall not
permit its  Subsidiaries  to expend for Net Capital  Expenditures  in any fiscal
year in excess of (a)  $25,000,000  plus (b) (in the case of fiscal 1999 and all
subsequent  fiscal years) the lesser of  $10,000,000  or the amount by which Net
Capital  Expenditures  for  the  immediately   preceding  year  were  less  than
$25,000,000.

     Section  8.16.  Rentals.  The  Parent  will not,  and will not  permit  any
Subsidiary to, enter into any lease or other agreement for the use or possession
of Property if after giving effect thereto the aggregate liability of the Parent
and its Subsidiaries for Rentals (other than Capitalized  Rentals) in any fiscal
year would exceed $25,000,000.

     Section 8.17. Acquisitions, Investments, Loans and Advances and Guarantees.
The  Parent  will  not,  nor will it  permit  any  Subsidiary  to,  directly  or
indirectly,  make,  retain  or have  outstanding  any  interest  or  investments

<PAGE>
(whether  through purchase of stock or obligations or otherwise) in, or loans or
advances to, any other  Person,  or acquire all or any  substantial  part of the
assets or business of any other Person;  provided,  however,  that the foregoing
provisions shall not apply to nor operate to prevent:

          (a) investments by the Parent or any Subsidiary in direct  obligations
     of the United States of America or of any agency or instrumentality thereof
     whose  obligations  constitute  full  faith and credit  obligations  of the
     United States of America,  provided that any such obligations  shall mature
     within  twelve  months from the date the same are acquired by the Parent or
     such Subsidiary;

          (b)  investments  by the Parent or any Subsidiary in  certificates  of
     deposit or time  deposits  issued by any  Lender,  or by any United  States
     commercial  bank having  capital and surplus of not less than  $100,000,000
     and having a maturity of twelve months or less;

          (c)  investments by the Parent or any  Subsidiary in commercial  paper
     maturing  270 days or less from the date of  issuance  which at the time of
     acquisition  is rated A-1 or better by Standard & Poor's  Ratings  Services
     Group, a division of the McGraw-Hill Companies and P-1 or better by Moody's
     Investors Service, Inc.;

          (d)  investments  by the Parent or any  Subsidiary in debt  securities
     issued by U.S.  corporations or states of the United States maturing within
     twelve  months  from  the  date of  acquisition  thereof  if at the time of
     acquisition  the  investment  in question  has a rating of not less than AA
     from  Standard  &  Poor's  Ratings   Services  Group,  a  division  of  The
     McGraw-Hill  Companies,  Inc. and/or Aa2 from Moody's  Investors  Services,
     Inc.;

          (e)  investments by the Parent or any Subsidiary in preferred stock of
     any corporation  organized under the laws of any state of the United States
     which is subject to a  remarketing  undertaking  at intervals not exceeding
     twelve  months  issued by any  substantial  broker and which is rated AA or
     better by  Standard & Poor's  Ratings  Services  Group,  a division  of The
     McGraw-Hill  Companies,  Inc.  and/or  Aa2 or better by  Moody's  Investors
     Services, Inc.;

          (f) the Acquisition;

          (g) other  acquisitions by the Parent or any Subsidiary of the capital
     stock of or  assets  or  business  of any  Person,  including  acquisitions
     accomplished  by a merger of the  Parent or any  Subsidiary  with any other
     Person  which is  permitted  by  Section  8.19  hereof,  provided  that (i)
     immediately  after giving effect thereto no Default or Event of Default has

<PAGE>

     occurred and is continuing,  (ii)  immediately  after giving effect thereto
     the aggregate amount expended by the Parent and its Subsidiaries on account
     of all such acquisitions (including in such amounts expended, the amount of
     all  indebtedness  assumed by the Parent and its Subsidiaries in connection
     therewith, all indebtedness secured by liens on the assets acquired and all
     indebtedness of the Person in question, (in the event the acquisition is of
     an equity  interest in such Person)) during the period from the date hereof
     to and including  the last day of fiscal 1999 shall not exceed  $10,000,000
     and during each period of twelve consecutive  months concluding  thereafter
     shall not exceed the greater (aa)  $10,000,000  or, (ab) if but only if the
     acquisition  occurs subsequent to the first date after the date hereof when
     the Leverage  Ratio  computed as of the last day of each of the four fiscal
     quarters of the Parent most recently concluded prior to the consummation of
     the  Acquisition  in question has been equal to or less than 3.5 to 1, (but
     in the case of the last of such fiscal quarters,  substituting Consolidated
     Total  Indebtedness  as it exists on the date of and after giving effect to
     the  consummation  of the  acquisition in question for  Consolidated  Total
     Indebtedness  as it  existed  an the  last  day  of  such  fiscal  quarter)
     $25,000,000, and (iii) the acquisition in question shall have been approved
     by the board of directors or similar governing body of the Person being, or
     whose assets are being, acquired;

          (h) loans and advances by the Parent or any  Subsidiary to the Parent,
     the  Company,   and/or  any  Guarantor   provided  that  the  corresponding
     Indebtedness is permitted by Section 8.9 hereof;

          (i) existing  investments,  loans and advances identified on Exhibit K
     hereto; and

                   (j)  investments  in, and loans and  advances  to Persons not
         otherwise  permitted by this Section at no time  aggregating  more than
         $10,000,000.

In determining  the amount of  investments,  loans and advances  permitted under
this  Section,  investments  shall always be taken at the original cost thereof,
regardless  of any  subsequent  appreciation  (including  retained  earnings) or
depreciation therein,  loans and advances shall be taken at the principal amount
thereof.

     Section 8.18.  Restricted Payments.  The Parent shall not during any fiscal
year (a) declare or pay any  distributions  in respect of any equity interest in
the Parent or (b) directly or indirectly  purchase,  redeem or otherwise acquire
or  retire  any  equity  interest  in  the  Parent  (collectively,   "Restricted
Payments");  provided,  however,  that the Parent may, provided in each instance
that after giving effect thereto no Default or Event of Default has occurred and
is continuing  (i) pay dividends on its non  cumulative  preferred  stock at the
annual  rate of $1.50 per share  (ii) pay  dividends  on its Class A  cumulative

<PAGE>

preferred  stock of the annual rate of up to $2.00 per share (iii) pay dividends
on its Class B cumulative  preferred stock at the annual rate of $1.00 per share
(iv) pay  dividends  on its common stock at a rate not in excess of 8% per annum
(v)  make  distributions  to its  members  of up to 30% of  each  fiscal  year's
"Earnings  on  Pro-Fac  Products"  as such  term  is  defined  in the  Marketing
Agreement  as in effect on the date  hereof and  computed  consistent  with past
practice  and (vi) expend up to  $2,000,000  in any fiscal  year to  repurchase,
redeem or otherwise  acquire or retire its common and/or  preferred  stock or to
pay nonqualified retains.

     Section  8.19.  Mergers.  The  Parent  will  not,  nor will it  permit  any
Subsidiary  to,  consolidate  or be a party to a merger  with any other  Person,
except  that so long as no  Default  or Event of  Default  has  occurred  and is
continuing or would arise as a result  thereof (i) any  Subsidiary of the Parent
may merge with and into the Parent or the  Company if the Parent or the  Company
is the surviving  corporation,  (ii) any  Subsidiary may merge with and into any
other  Subsidiary  if and  so  long  as if  either  of  such  Subsidiaries  is a
Guarantor,  the  Guarantor  is the  survivor  thereof,  (iii) the  Merger may be
consummated  and (iv) the  Parent or any  Subsidiary  may  merge  with any other
Person if the Parent or the relevant  Subsidiary  is the survivor and the merger
is permitted by and treated as an  acquisition  for purposes of Section  8.17(g)
hereof.

     Section 8.20. Sales of Assets.  The Parent will not, nor will it permit any
Subsidiary  to,  sell,  lease  or  otherwise  dispose  of any  of  its  Property
(including  any  disposition  of  Property  as  part  of a  sale  and  leaseback
transaction);  provided, that nothing contained therein shall prohibit (i) sales
of inventory in the ordinary  course of business;  (ii) sales or dispositions of
obsolete or worn out Property  disposed of in the  ordinary  course of business;
(iii) sales as part of sale and  leaseback  transactions  provided that the fair
value of all Property  subject to such  transactions  consummated  in any fiscal
year of the Parent  shall not exceed  $10,000,000;  (iv)  transfers of assets of
Subsidiaries  to  the  Company  in  connection   with  the  liquidation   and/or
dissolution  of  such  Subsidiaries;   (v)  transfers  of  patents,  trademarks,
copyrights  and other  intellectual  property  from the  Company to Linden  Oaks
Corporation  provided that (aa) such steps are taken as the Administrative Agent
may  reasonably  require  in order to  assure  that its  liens  thereon  are not
impaired by such  transfers  and (ab) from and after the first such transfer and
continuously   thereafter  Linden  Oaks  Corporation   remains  a  wholly  owned
subsidiary  of the Company and a Pledging  Guarantor  hereunder  and (vi) sales,
leases and other  dispositions  of  Property  not  otherwise  permitted  by this
Section  8.20  aggregating  in any fiscal year not more than five percent of the
consolidated  tangible assets of the Parent and its Subsidiaries as of the first
day of such fiscal year.  Anything  contained in this  Agreement to the contrary
notwithstanding,  the Parent will not nor will it permit the Company to, without
the consent of the Required Lenders, sell (or in the case of the Company, issue)
capital stock of the Company  (other than to the Parent).  At the request of the
Company, so long as no Default or Event of Default then exists or would arise as

<PAGE>

a result of such disposition,  the Administrative  Agent is hereby authorized to
release its lien on any Property sold pursuant to the foregoing provisions.

     Section 8.21.  Burdensome  Contracts with Affiliates.  The Parent will not,
nor will it permit any  Subsidiary  to, enter into or be a party to any contract
or agreement with an Affiliate on terms and conditions materially less favorable
to the Parent or such  Subsidiary  than would be usual and  customary in similar
contracts or agreements between Persons not affiliated with each other.

     Section  8.22.  No Change in Fiscal Year.  The Parent will not, nor will it
permit any  Subsidiary to, have a fiscal year other than the present fiscal year
of the Parent (i.e., fiscal years ending on the last Saturday of June and fiscal
quarters of thirteen  calendar weeks,  provided that the Required  Lenders shall
not  unreasonably  withhold  their  consent  to such a change  if in  connection
therewith the  provisions of this  Agreement  measuring  covenant  compliance or
payments  with  reference  to  fiscal  periods  are  renegotiated  in  a  manner
reasonably acceptable to them.

     Section 8.23.  Formation of  Subsidiaries.  In the event any  Subsidiary is
formed or acquired  after the date hereof which meets the definition of the term
"Guarantor"  herein or any  Subsidiary  which did not formerly meet the criteria
for treatment as a Guarantor  meets such  requirements,  the Parent shall within
thirty (30) Business Days thereof cause such Subsidiary to execute an Additional
Guarantor  Supplement  in the  form  annexed  hereto  as  Exhibit  G  with  such
modifications  as may be approved by the  Administrative  Agent (an  "Additional
Guarantor  Supplement")  and cause such  Guarantor to execute and deliver to the
Administrative Agent Additional Guarantor  Documentation with respect to it and,
if such Guarantor is a Pledging Guarantor, cause such Pledging Guarantor to take
such  actions as the  Administrative  Agent may require to subject  those of its
assets  included  within  the  term  "Collateral"  to  liens  in  favor  of  the
Administrative Agent of the priority required by this Agreement.

     Section 8.24. No  Restriction on Subsidiary  Dividends.  Neither the Parent
nor any Subsidiary is a party to, nor will the Parent or any Subsidiary become a
party to, any agreement  prohibiting or otherwise restricting the declaration or
payment of any dividends or equity distributions by any such Subsidiary provided
that the foregoing  restrictions shall not apply to debt agreements in effect on
the date hereof which are terminated  concurrently  with the first  extension of
credit hereunder.

     Section 8.25.  Interest Rate Protection.  Within 90 days of the date hereof
the Company shall enter into and continuously  maintain an interest rate hedging
program with parties and on terms  reasonably  acceptable to the Agents pursuant
to which the Company will be protected against increases in the LIBOR Rate above
a rate acceptable to the Administrative Agent for a period of four years and for

<PAGE>

an amount  approximating  50% of the  amount of the Term Loans  scheduled  to be
outstanding during such four year period (the "Hedging Program").

     Section 8.26.  Concerning the Subordinated Debt. The Parent and the Company
will not make (or give any notice  for) any  voluntary  or  optional  payment or
prepayment on or redemption or acquisition for value of any Subordinated Debt or
make  any  payment  of  principal  or  interest  thereon  in  violation  of  the
subordination  provisions thereof or amend or modify in any material respect any
term,  covenant or  provision  of any  Subordinated  Debt or set off any amounts
against any  Subordinated  Debt provided,  however that the foregoing  shall not
apply to or restrict the payment or retirement of  Subordinated  Debt out of the
net proceeds  received from any concurrent  issuance of additional  Subordinated
Debt or the payment or retirement of the Subordinated Bridge Loan.

     Section  8.27.  Concerning  the  Marketing  Agreement.  The  Parent and the
Company will comply in all material  respects with their respective  obligations
under the Marketing  Agreement and will not amend or modify same in any material
respect or terminate the same.

     Section  8.28.  Year 2000  Assessment.  The Parent  shall take all  actions
necessary and commit adequate  resources to assure that its  computer-based  and
other systems (and those of all  Subsidiaries)  are able to effectively  process
dates,   including  dates  before,  on  and  after  January  1,  2000,   without
experiencing any Year 2000 Problem that could cause a material adverse effect on
the business or financial affairs of the Parent and its Subsidiaries  taken on a
consolidated  basis. At the request of the Administrative  Agent, the Parent and
the Company will provide the  Administrative  Agent with written  assurances and
substantiations  (including,  but not  limited  to, the  results of  internal or
external audit reports  prepared in the ordinary course of business)  reasonably
acceptable to the  Administrative  Agent as to the  capability of the Parent and
its Subsidiaries to conduct its and their businesses and operations  before,  on
and after January 1, 2000,  without  experiencing a Year 2000 Problem  causing a
Material Adverse Effect.

     Section 8.29. Preservation of Cooperative Status. The Parent will preserve,
renew and keep in full force and effect its corporate  existence and status as a
cooperative association as defined in Section 1141j(a) of Title 12 of the United
States Code.


SECTION 9. EVENTS OF DEFAULT AND REMEDIES.

     Section  9.1.  Events of  Default  Any one or more of the  following  shall
constitute an "Event of Default" hereunder:

          (a) default in the payment of any amount of the  principal of any Note
     or any  amount  due under an  Application  when due,  whether at the stated
     maturity  thereof or at any other time provided for in this  Agreement,  or

<PAGE>

     default  in the  payment  when due of any  interest,  fee,  charge or other
     amount  payable by the Company  hereunder or under any other Loan  Document
     and the  continuance  of such default for three  Business Days after notice
     thereof to the Company from the Administrative Agent or any Lender;

          (b) default in the observance or performance of any covenant set forth
     in Sections 8.5, 8.9, 8.10, 8.11,  8.12,  8.13, 8.14, 8.15, 8.16,  8.17(g),
     8.18,  8.19,  8.23,  8.24,  8.25,  8.26 or 8.27 hereof or of any Collateral
     Document dealing with the use, disposition or remittance of the proceeds of
     Collateral or the maintenance of insurance thereon;

          (c) default in the observance or  performance  of any other  provision
     hereof or any of the other Loan Documents  which is not remedied  within 30
     days after  written  notice  thereof to the Company by any Lender or by the
     holder of any Note;

          (d) default  shall occur in the payment  when due (whether by lapse of
     time, acceleration or otherwise) of any indebtedness (including as such all
     obligations  included in Consolidated  Total  Indebtedness)  aggregating in
     excess of  $5,000,000  issued,  assumed or  guaranteed by the Parent or any
     Subsidiary  or any other event of default  shall occur with  respect to any
     such indebtedness  beyond any period of grace provided  therefor  (provided
     that if the  default  in  question  can result in the  acceleration  of the
     maturity of  Subordinated  Debt,  then it shall in any event  constitute an
     Event of Default hereunder two Business Days prior to the date on which the
     Subordinated Debt in question will become due by acceleration);

          (e) any  representation or warranty made herein or in any of the other
     Loan Documents or in any statement or certificate furnished pursuant hereto
     or thereto, or in connection with any advance or issuance made hereunder or
     by any Person in  connection  with the  transactions  contemplated  hereby,
     proves  untrue in any  material  respect as of the date of the  issuance or
     making thereof;

          (f) any judgment or judgments, writ or writs or warrant or warrants of
     attachment,  or any similar process or processes in an aggregate  amount in
     excess of  $5,000,000  shall be entered or filed  against the Parent or any
     Subsidiary  or  against  any of the  property  or assets of any of them and
     remains  undischarged,  unvacated,  unbonded or unstayed for a period of 30
     days;

          (g) any event  occurs or  condition  exists  which is  specified as an
     event of default under any of the other Loan Documents after the expiration
     of any applicable notice or grace periods;

<PAGE>
          (h) any of the Loan Documents or the Marketing Agreement shall for any
     reason not be or shall cease to be in full force and effect,  or any of the
     Loan  Documents or the Marketing  Agreement is declared to be null and void
     as to any party,  or the Parent or any Subsidiary  takes any action for the
     purpose of repudiating  or rescinding  any Loan Document  executed by it or
     the Marketing Agreement;

          (i) a Change of Control occurs;

          (j) the Parent or any  Subsidiary  becomes  insolvent  or  bankrupt or
     bankruptcy,   reorganization,   arrangement,   insolvency  or   liquidation
     proceedings  or other  proceedings  for relief under any  bankruptcy law or
     laws for the relief of debtors  are  instituted  against  the Parent or any
     Subsidiary and are not dismissed within 60 days after such institution or a
     decree or order of a court  having  jurisdiction  in the  premises  for the
     appointment  of a trustee or  receiver or  custodian  for the Parent or any
     Subsidiary  or for the major part of any of their  property  is entered and
     the trustee or receiver or custodian  appointed  pursuant to such decree or
     order is not discharged within 60 days after such appointment; or

          (k)  the  Parent  or  any  Subsidiary   shall  institute   bankruptcy,
     reorganization, arrangement, insolvency or liquidation proceedings or other
     proceedings  for relief under any  bankruptcy law or laws for the relief of
     debtors or shall consent to the institution of such proceedings  against it
     by others or to the entry of any decree or order  adjudging  it bankrupt or
     insolvent or approving as filed any petition seeking  reorganization  under
     any  bankruptcy  or similar law or shall apply for or shall  consent to the
     appointment  of a receiver or trustee or custodian  for it or for the major
     part of any of their  property or shall make an assignment  for the benefit
     of  creditors  or shall admit in writing its  inability to pay its debts as
     they  mature or shall  take any  corporate  action in  contemplation  or in
     furtherance of any of the foregoing purposes.

     Section 9.2. Non Bankruptcy  Defaults.  When any Event of Default described
in subsections 9.1(a) to 9.1(i), both inclusive, has occurred and is continuing,
the  Administrative  Agent may (and shall,  upon request of the Required Lenders
or, in the case of clause (a) below, the Required Revolving Credit Lenders),  by
notice to the Company, take any or all of the following actions:

          (a)  terminate  the  obligation  of the  Lenders to extend any further
     credit hereunder on the date (which may be the date thereof) stated in such
     notice (such termination shall be effective upon verbal  notification,  the
     Administrative  Agent  hereby  agreeing  to  provide  written  notification
     thereof to the Company as soon as practical thereafter);

<PAGE>

          (b) declare the principal of and the accrued  interest on the Notes to
     be  forthwith  due and  payable and  thereupon  the Notes,  including  both
     principal  and  interest,  and all fees,  charges and  commissions  payable
     hereunder,  shall be and become immediately due and payable without further
     demand, presentment, protest or notice of any kind;

          (c) demand that the Company  immediately provide to the Administrative
     Agent cash  collateral for the full amount of each Letter of Credit and the
     Company agrees to immediately provide such cash collateral and acknowledges
     and agrees that the  Revolving  Credit  Lenders  would not have an adequate
     remedy at law for  failure by the Company to honor any such demand and that
     the Lenders  shall have the right to require  the  Company to  specifically
     perform such undertaking  whether or not any draws have been made under the
     Letters of Credit; and

          (d) enforce any and all rights and remedies  available  under the Loan
     Documents or applicable law.

     Section 9.3.  Bankruptcy  Defaults.  When any Event of Default described in
subsections  9.1(j) or (k) has  occurred  and is  continuing,  then (a) the then
unpaid  balance of the Notes,  including  both  principal and interest,  and all
fees, charges and commissions payable hereunder or under the Applications, shall
immediately  become due and  payable  without  presentment,  demand,  protest or
notice of any kind,  (b) the  obligation of the Lenders to extend further credit
pursuant  to  any  of the  terms  hereof  shall  immediately  and  automatically
terminate, (c) the Company shall immediately provide to the Administrative Agent
cash  collateral  for the full amount of all  Letters of Credit,  whether or not
draws have been made  thereon,  the  Company  acknowledging  that the  Revolving
Credit  Lenders  would not have an  adequate  remedy at law for  failure  by the
Company to honor any such demand,  and the Revolving  Credit  Lenders shall have
the right to  require  the  Company to  specifically  perform  such  undertaking
whether or not any draws have been made under the Letters of Credit, and (d) the
Administrative  Agent may exercise  all remedies  available to it under the Loan
Documents or applicable law.


SECTION 10. THE AGENT AND ISSUING BANK.

     Section 10.1.  Appointment and  Authorization.  Each Lender hereby appoints
and  authorizes  the  Administrative  Agent to take such  action as agent on its
behalf and to exercise such powers hereunder and under the Loan Documents as are
delegated to the  Administrative  Agent by the terms hereof and thereof together
with such powers as are reasonably  incidental thereto. The Administrative Agent
may delegate or perform any of its responsibilities  hereunder to or through its
affiliates.  The Administrative  Agent or Issuing Bank may resign at any time by
sending twenty (20) days prior written notice to the Company and the Lenders and
may be removed by the  Required  Lenders  upon  twenty  (20) days prior  written

<PAGE>

notice to the Company and the Lenders.  In the event of any such  resignation or
removal the Required Lenders may appoint a new  Administrative  Agent or Issuing
Bank as applicable,  which shall succeed to all the rights, powers and duties of
the  Administrative  Agent or Issuing  Bank  hereunder  and under the other Loan
Documents.  If the  Administrative  Agent  resigns or is removed,  it shall also
cease to be the Swing Lender  hereunder and its  replacement  as  Administrative
Agent shall become the Swing  Lender.  Any  resigning or removed  Administrative
Agent or Issuing  Bank or Swing  Lender  shall be entitled to the benefit of all
the protective provisions hereof with respect to its acts as an agent, issuer or
swing  lender  hereunder,  but no  successor  shall in any  event be  liable  or
responsible  for any actions of its  predecessor.  If the  Administrative  Agent
resigns or is removed and no successor is appointed,  the rights and obligations
of the  Administrative  Agent  shall be  automatically  assumed by the  Required
Lenders and (i) the Company  shall be  directed  to make all  payments  due each
Lender  hereunder  directly to each Lender and (ii) the  Administrative  Agent's
rights in the Loan Documents shall be assigned without representation,  recourse
or  warranty  to  the  Lenders  as  their  interests  may  appear.  The  parties
acknowledge that the Syndication Agent has no continuing  responsibilities under
the Loan Documents other than as a Lender.

     Section 10.2. Rights as a Lender. The Agents and the Issuing Bank each have
and reserve all of the rights,  powers and duties  hereunder and under the other
Loan  Documents  as any Lender may have and may exercise the same as though they
were not an Agent or the Bank and the terms "Lender" or "Lenders" as used herein
and in all of such  documents  shall,  unless the  context  otherwise  expressly
indicates, include the Agents and Issuing Bank in their individual capacities as
Lenders. The Agents and Issuing Bank reserve the right to extend other credit to
or engage in other business  transactions with the Parent,  the Subsidiaries and
their Affiliates.

     Section  10.3.  Standard of Care.  The Lenders  acknowledge  that they have
received  and  approved  copies  of  the  Loan  Documents,  the  Stock  Purchase
Agreement,  the Asset Transfer Agreement, the Marketing Agreement and such other
information and documents concerning the transactions  contemplated and financed
hereby as they have  requested  to receive  and/or  review.  The Agents  make no
representations  or  warranties  of any kind or  character  to the Lenders  with
respect to the validity, enforceability,  genuineness,  perfection, value, worth
or collectibility hereof or of the other Loan Documents or of the liens provided
for  thereby  or of any other  documents  called for hereby or thereby or of the
Collateral. The Agents need not verify the worth or existence of the Collateral.
The Lenders agree that neither the Agents nor the Issuing Bank nor any director,
officer,  employee,  agent or  representative  thereof  (including  any security
trustee therefor) shall in any event be liable for any clerical errors or errors
in judgment,  inadvertence  or  oversight,  or for action taken or omitted to be
taken by it or them  hereunder  or under  the Loan  Documents  or in  connection
herewith or therewith  except for its or their own gross  negligence  or willful
misconduct.  The  Administrative  Agent  shall  incur no  liability  under or in

<PAGE>

respect of this Agreement or the other Loan Documents by acting upon any notice,
certificate,  warranty,  instruction  or  statement  (oral or written) of anyone
(including anyone in good faith believed by it to be authorized to act on behalf
of the  Company  or any other  Person),  unless it has actual  knowledge  of the
untruthfulness  of same.  The  Administrative  Agent shall be entitled to assume
that no Default or Event of Default exists unless  notified to the contrary by a
Lender.  The Lenders  acknowledge  that the  Administrative  Agent may limit its
right of recovery  against  particular  items of Collateral in order to minimize
recording,  mortgage,  intangibles,  documentary  and similar  taxes and that it
shall incur no  liability to the Lenders in doing so. The  Administrative  Agent
shall in all  events be fully  protected  in acting or  failing to act in accord
with the instructions of the Required  Lenders.  Upon the occurrence of an Event
of Default  hereunder,  the  Administrative  Agent  shall take such  action with
respect to the  enforcement of its liens on the Collateral and the  preservation
and protection  thereof as it shall be directed to take by the Required  Lenders
(and shall  consult  with the  Lenders as to actions to be taken) but unless and
until the Required  Lenders have given such direction the  Administrative  Agent
shall take or refrain  from taking such actions as it deems  appropriate  and in
the best interest of all Lenders. The Administrative Agent shall in all cases be
fully  justified  in failing or  refusing  to act  hereunder  unless it shall be
indemnified to its reasonable  satisfaction  by the Lenders  against any and all
liability  and  expense  which  may be  incurred  by it by  reason  of taking or
continuing to take any such action. The Administrative Agent may treat the owner
of any Note as the holder  thereof until written  notice of transfer  shall have
been filed with it as provided in Section  12.12 hereof  signed by such owner in
form satisfactory to the Administrative  Agent. Each Lender acknowledges that it
has  independently  and without  reliance on the Agents or any other  Lender and
based  upon  such  information,   investigations   and  inquiries  as  it  deems
appropriate  made its own credit  analysis and decision to extend  credit to the
Company.  It shall be the  responsibility of each Lender to keep itself informed
as to the  creditworthiness  of the Company,  the Parent and each Subsidiary and
the Agents shall have no liability to any Lender with respect thereto.

     Section  10.4.  Costs and  Expenses.  Each Lender  agrees to reimburse  the
Administrative Agent and the Issuing Bank for all reasonable out of pocket costs
and  expenses  suffered or incurred by the  Administrative  Agent or the Issuing
Bank or any security  trustee in performing  its duties  hereunder and under the
other  Loan  Documents  or in the  exercise  of any  right or power  imposed  or
conferred upon the  Administrative  Agent or the Issuing Bank hereby or thereby,
to the extent that the Administrative  Agent or the Issuing Bank is not promptly
reimbursed for same by the Company or out of the Collateral,  all such costs and
expenses to be borne by the Lenders  ratably in  accordance  with the amounts of
their respective Aggregate Percentages.

            Section 10.5.  Indemnity.  The Lenders shall ratably (in accord with
their Aggregate Percentages) indemnify and hold the Agents and Issuing Bank, and
each  of  their  directors,   officers,  employees,  agents  or  representatives
(including as such any security trustee therefor)  harmless from and against any

<PAGE>

liabilities,  losses,  costs or  expenses  suffered or incurred by them in their
capacities as such under this Agreement or any of the other Loan Documents or in
connection with the transactions  contemplated hereby or thereby,  regardless of
when asserted or arising,  except to the extent they are promptly reimbursed for
the same by the Company or out of the  Collateral  and except to the extent that
any event giving rise to a claim was caused by the gross  negligence  or willful
misconduct of the party seeking to be indemnified.


SECTION 11. THE GUARANTEES.

     Section 11.1. The Guarantees.  To induce the Lenders to provide the credits
described  herein and in  consideration  of benefits  expected to accrue to each
Guarantor  by  reason  of the  Commitments  and  for  other  good  and  valuable
consideration,  receipt of which is hereby  acknowledged,  each Guarantor hereby
unconditionally and irrevocably  guarantees jointly and severally to the Agents,
the Issuing  Bank,  the Lenders  and each other  holder of any of the  Company's
obligations  under  the Loan  Documents,  the due and  punctual  payment  of all
present and future  indebtedness,  obligations  and  liabilities  of the Company
evidenced by or arising out of the Loan  Documents,  including,  but not limited
to, the due and  punctual  payment of principal of and interest on the Notes and
amounts due on the Applications and in respect of the Hedging  Liability and the
due and punctual  payment of all other  obligations now or hereafter owed by the
Company  under the Loan  Documents  as and when the same  shall  become  due and
payable, whether at stated maturity, by acceleration or otherwise,  according to
the terms hereof and thereof.  In case of failure by the Company  punctually  to
pay any indebtedness  guaranteed hereby,  each Guarantor hereby  unconditionally
agrees jointly and severally to make such payment or to cause such payment to be
made  punctually  as and when the same shall become due and payable,  whether at
stated maturity, by acceleration or otherwise,  and as if such payment were made
by the Company.

     Section 11.2. Guarantee Unconditional. The obligations of each Guarantor as
a guarantor  under this  Section 11 shall be  unconditional  and  absolute  and,
without  limiting  the  generality  of the  foregoing,  shall  not be  released,
discharged or otherwise affected by:

          (a) any extension, renewal, settlement,  compromise, waiver or release
     in respect of any obligation of the Company or of any other Guarantor under
     this  Agreement or any other Loan  Document  whether by operation of law or
     otherwise;

          (b) any  modification  or amendment of or supplement to this Agreement
     or any other Loan Document;

          (c) any change in the corporate existence,  structure or ownership of,
     or any insolvency,  bankruptcy,  reorganization or other similar proceeding
     affecting,  the Company,  any other  Guarantor,  or any of their respective

<PAGE>

     assets,  or any  resulting  release or discharge of any  obligation  of the
     Company or of any other Guarantor contained in any Loan Document;

          (d) the  existence  of any claim,  set-off or other  rights  which the
     Guarantor  may have at any time  against any Agent or Lender or the Issuing
     Bank or any other Person, whether or not arising in connection herewith;

          (e) any failure to assert, or any assertion of, any claim or demand or
     any exercise of, or failure to exercise, any rights or remedies against the
     Company, any other Guarantor or any Collateral;

          (f) any  application  of any  sums  by  whomsoever  paid or  howsoever
     realized to any obligation of the Company,  regardless of what  obligations
     of the Company remain unpaid,

          (g) any  invalidity  or  unenforceability  relating  to or against the
     Company or any other  Guarantor for any reason of this  Agreement or of any
     other Loan  Document  or any  provision  of  applicable  law or  regulation
     purporting  to prohibit  the payment by the Company of the  principal of or
     interest  on any Note,  or any other  amount  payable  by it under the Loan
     Documents; or

          (h) any other act or omission to act or delay of any kind by any Agent
     or Lender or the Issuing Bank or any other Person or any other circumstance
     whatsoever that might, but for the provisions of this paragraph, constitute
     a legal or equitable  discharge of the  obligations of the Guarantor  under
     this Section 11.

     Section 11.3. Discharge Only upon Payment in Full; Reinstatement in Certain
Circumstances.  Each Guarantor's  obligations under this Section 11 shall remain
in full force and effect until the  Commitments are terminated and the principal
of and  interest on the Notes and all other  amounts then due and payable by the
Company under this Agreement and all other Loan  Documents  shall have been paid
in full and all  Letters of Credit have  expired.  If at any time any payment of
the  principal  of or  interest on any Note or any other  amount  payable by the
Company under the Loan  Documents is rescinded or must be otherwise  restored or
returned upon the insolvency,  bankruptcy or reorganization of the Company or of
a Guarantor,  or otherwise,  each Guarantor's  obligations under this Section 11
with respect to such  payment  shall be  reinstated  at such time as though such
payment had become due but had not been made at such time.

     Section 11.4.  Subrogation.  No Guarantor will exercise any rights which it
may acquire by way of subrogation as a result of any payment made hereunder,  or
otherwise,  until the Notes and all other  amounts  payable by the Company under

<PAGE>

the Loan Documents shall have been paid in full and after the termination of the
Commitments and expiration of the Letters of Credit. If any amount shall be paid
to a Guarantor  on account of such  subrogation  rights at any time prior to the
later of (a) the payment in full of the Notes and all other  amounts  payable by
such Guarantor  hereunder and (b) the termination of all the Commitments and the
expiration  of all Letter of Credit,  such amount shall be held in trust for the
benefit of the Administrative  Agent and the Lenders and shall forthwith be paid
to the Administrative  Agent and the Lenders or be credited and applied upon the
Company's'  obligations under the Loan Documents,  whether matured or unmatured,
in  accordance  with the  terms of this  Agreement.  Notwithstanding  any  other
provision  hereof,  the right to  recovery  against  each  Guarantor  under this
Section 11 shall not exceed  $1.00 less than the amount  which would render such
Guarantor's  obligations under this Section 11 void or voidable under applicable
law.

     Section 11.5. Waivers. Each Guarantor irrevocably waives acceptance hereof,
presentment,  demand, protest and any notice not provided for herein, as well as
any requirement that at any time any action be taken by the Administrative Agent
the Issuing  Bank any Lender or any other Person  against the  Company,  another
Guarantor or any other Person.

     Section 11.6. Stay of Acceleration. If acceleration of the time for payment
of any amount  payable by the  Company  under this  Agreement  or any other Loan
Document is stayed upon the  insolvency,  bankruptcy  or  reorganization  of the
Company  or  any  other  Guarantor,   all  such  amounts  otherwise  subject  to
acceleration under the terms of this Agreement or the other Loan Documents shall
nonetheless  be  payable  jointly  and  severally  by the  Guarantors  hereunder
forthwith on demand by the Administrative Agent.


SECTION 12. MISCELLANEOUS.

     Section  12.1.  Waiver of  Rights.  No delay or  failure on the part of any
Lender or the  holder or  holders  of any Note in the  exercise  of any power or
right shall operate as a waiver  thereof or as an  acquiescence  in any default,
nor shall any single or partial exercise  thereof,  or the exercise of any other
power or right,  preclude  any other right or the further  exercise of any other
rights.  The rights and remedies  hereunder of the Lenders,  the  Administrative
Agent, the Issuing Bank, the Syndication Agent, the Lenders and of the holder or
holders  of any Note are  cumulative  to,  and not  exclusive  of, any rights or
remedies which any of them would otherwise have.

     Section 12.2.  Non-Business Day. If any payment of principal shall fall due
on a day which is not a Business Day,  interest at the rate such principal bears
for the period prior to maturity shall continue to accrue on such principal from
the stated due date thereof to and including the next succeeding Business Day on
which the same is payable.
<PAGE>

     Section 12.3. Documentary Taxes. The Company agrees to pay any documentary,
stamp or similar  taxes  payable in respect to this  Agreement or any other Loan
Document,  including  interest  and  penalties,  in the event any such taxes are
assessed  irrespective  of when such  assessment  is made and whether or not any
credit is then in use or available hereunder.

     Section  12.4.  Survival  of   Representations.   All  representations  and
warranties  made in the Loan  Documents or pursuant  thereto or in  certificates
given  pursuant  hereto or thereto  shall  survive the execution and delivery of
this Agreement and of the other Loan Documents, and shall continue in full force
and  effect  with  respect to the date as of which they were made as long as any
credit is in use or available hereunder.

            Section 12.5.  Set-off  Sharing.  Each Lender agrees with each other
Lender a party hereto that in the event such Lender shall receive and retain any
payment,  whether by set-off or  application  of deposit  balances or  otherwise
("Set-off"),  on or in respect of any Note or other obligation outstanding under
the Loan  Documents  in excess of the amount to which it is entitled  under this
Agreement,  then such Lender shall purchase for cash at face value,  but without
recourse,  ratably  from each of the other  Lenders  such amount of the Notes or
other  obligations held by each such other Lender (or interest therein) as shall
be  necessary  to cause such  payment to be shared in accord  with  Section  4.6
hereof; provided,  however, that if any such purchase is made by any Lender, and
if such  excess  payment  or part  thereof  is  thereafter  recovered  from such
purchasing  Lender,  the  related  purchases  from the  other  Lenders  shall be
rescinded  ratably  and the  purchase  price  restored as to the portion of such
excess payment so recovered, but without interest.

     Section 12.6. Notices.  All communications  provided for herein shall be in
writing  or  by  telecopy,   except  as  otherwise   specifically  provided  for
hereinabove,  addressed,  if to the Parent,  the Company or the Guarantors at 90
Linden Oaks, Rochester, New York 14625, Attention: Chief Financial Officer or if
to the  Administrative  Agent,  the Issuing Bank or Lenders at their  respective
addresses set forth opposite their respective signatures hereto or an Assignment
Agreement  to which  they  are a party,  or at such  other  address  as shall be
designated by any party hereto in a written  notice to each other party pursuant
to this Section  12.6.  Any notice in writing shall be deemed to have been given
or made when served  personally  or three (3) days after being mailed  (properly
addressed) if sent by United  States mail or upon receipt,  if sent by telecopy;
provided  that  any  notice  to the  Administrative  Agent or any  Lender  under
Sections 2 and 3 hereof shall only be effective upon receipt.

     Section 12.7. Counterparts. This Agreement may be executed in any number of
counterparts,  and by the different parties on different  counterparts,  each of
which when executed shall be deemed an original, but all such counterparts taken
together shall constitute one and the same instrument.

<PAGE>
     Section 12.8.  Successors and Assigns. This Agreement shall be binding upon
the Company and the  Guarantors and their  successors and assigns,  and shall be
binding  upon and inure to the  benefit of the Agents and the  Lenders and their
respective successors and assigns,  including any subsequent holder of any Note.
The Company and Guarantors may not assign their rights or obligations  hereunder
without the prior written consent of the Banks.

     Section  12.9.  Participants.  Each Lender  shall have the right at its own
cost to grant  participations  (to be  evidenced  by one or more  agreements  or
certificates of participation) in the Loans made by such Lender and credit risks
in  Letters of Credit  held by such  Lender at any time and from time to time to
one or more other  Persons,  provided  that no such  participant  shall have any
rights under this Agreement or any other Loan Document (the participant's rights
against  the  Lender  granting  its  participation  to be those set forth in the
participation  agreement  between the  participant  and such Lender);  provided,
further,  that no Lender shall transfer or grant any  participation  under which
the participant  shall have rights to approve any amendment to or waiver of this
Agreement  or any other Loan  Document  except to the extent such  amendment  or
waiver would extend a scheduled  maturity of any Loan,  Note or Letter of Credit
(unless such Letter of Credit is not extended  beyond the  Termination  Date) in
which such participant is  participating,  or reduce the rate or extend the time
of payment of interest or fees thereon  (except in  connection  with a waiver of
applicability  of any  post-default  increase in  interest  rates) or reduce the
principal  amount  thereof,   or  increase  the  amount  of  the   participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory prepayment shall not
constitute a change in the terms of such participation,  and that an increase in
any Commitment or Loan shall be permitted without the consent of any participant
if the participant's  participation is not increased as a result thereof).  Each
such  Lender  selling a  participation  shall be  entitled  to the  benefits  of
Sections 2.1(c)(iv),  3, 4.8 and 4.9 hereof to the extent such Lender would have
been so entitled had no such participation been sold.

     Section 12.10. Costs and Expenses. The Company agrees to pay within 10 days
of demand therefor all reasonable out of pocket costs and out of pocket expenses
incurred by the Agents in connection with the preparation,  execution, delivery,
recording  and/or  filing  and/or  release of the Loan  Documents  and the other
instruments  and  documents  to  be  delivered  hereunder  or  thereunder  or in
connection  with  the  transactions   contemplated  hereby  or  thereby  or  the
syndication of the credit  facilities  provided for herein or in connection with
any consents hereunder or thereunder or waivers or amendments hereto or thereto,
including  the  reasonable  fees and  out-of-pocket  expenses of counsel for the
Agents with respect to all of the foregoing,  and all  recording,  registration,
filing or other fees,  costs and taxes  incident to  perfecting  a lien upon the
collateral  security for the Notes and other  obligations  of the  Company,  all
appraisal, environmental, title insurance and similar costs and charges incurred
by the Agents, all costs of the Administrative Agent in examining, monitoring or
auditing  the  Collateral,  and all  reasonable  costs and  expenses  (including

<PAGE>

reasonable  attorneys' fees), incurred by the Administrative Agent, any security
trustee for the Lenders, the Issuing Bank, the Lenders or any other holders of a
Note  in  connection  with a  default  or  the  enforcement  of any of the  Loan
Documents and the other  instruments and documents to be delivered  hereunder or
thereunder  or the  preservation,  protection or sale of  Collateral,  including
allocated  costs of in-house  counsel.  The Company agrees to indemnify and save
the  Lenders,  the Agents,  the Issuing  Bank and any  security  trustee for the
Lenders  harmless  from any and all  liabilities,  losses,  costs  and  expenses
incurred by any Lender,  either Agent, the Issuing Bank or such security trustee
in connection with any action,  suit or proceeding brought against either Agent,
a security  trustee,  the Issuing  Bank or any Lender by any Person which arises
out of the  transactions  contemplated  or financed  hereby or by the other Loan
Documents or out of any action or inaction by an Agent,  the Issuing  Bank,  any
security trustee or any Lender hereunder or thereunder,  except for such thereof
as is  caused  by the  gross  negligence  or  willful  misconduct  of the  party
indemnified.  The provisions of this Section 12.10 and the protective provisions
of  Section  3 and 4 hereof  shall  survive  payment  of the Notes and the other
obligations owing to the Lenders hereunder.

     Section 12.11. Construction.  The parties hereto acknowledge and agree that
the Loan  Documents  shall not be construed  more favorably in favor of one than
the other based upon which party  drafted the same, it being  acknowledged  that
all  parties  hereto  contributed  substantially  to  the  negotiation  of  this
Agreement.

     Section 12.12.  Assignment Agreements.  Each Lender may, from time to time,
with the consent of the Company (but no such Company  consent  shall be required
if a  Default  or  Event  of  Default  has  occurred  and  is  continuing),  the
Administrative  Agent  and the  Issuing  Bank,  which  will not be  unreasonably
withheld,  assign to other Persons part of the indebtedness  evidenced by any of
its Notes and credit  risks with  respect to Letters of Credit  then owned by it
and/or any of its Commitments  pursuant to an assignment  agreement  executed by
the assignor,  the assignee,  the Company  (unless a Default or Event of Default
has occurred and is continuing),  the Issuing Bank and the Administrative  Agent
(an  "Assignment  Agreement"),   specifying  the  portion  of  the  indebtedness
evidenced  by the Notes and  Applications  which is to be  assigned to each such
assignee and the portion of the Commitments of the assignor to be assumed by it;
provided,  however,  that unless each of the  Administrative  Agent, the Issuing
Bank and the Company  (unless a Default or Event of Default has  occurred and is
continuing),   otherwise   consents,   the  aggregate  amount  of  the  unfunded
Commitments,  Loans,  and credit risk with respect to Letters of Credit retained
by the assigning  Lender shall not be less than  $10,000,000  and the assignee's
unfunded  Commitments,  Loans and risk  participation  in the  Letters of Credit
shall not be less than  $5,000,000,  and the  assigning  Lender shall pay to the
Administrative  Agent a processing and  recordation fee of $3,500 ($2,500 in the
case of  assignments  to a Person who is a Lender prior to giving  effect to the
assignment in question) for each assignment and any extraordinary  out-of-pocket
attorney's fees and expenses incurred by the Administrative  Agent in connection

<PAGE>

with each such  Assignment  Agreement and,  notwithstanding  Section 12.10,  the
Company shall have no liability therefor. The foregoing amount limitations shall
not apply in the  circumstance  where a Lender is assigning its entire remaining
amount of a given  Commitment  and all of the  extensions  of credit which arose
under such  Commitment to an assignee nor shall such minimum amount  limitations
be  applicable  to Bank of  Montreal.  Upon  the  execution  of each  Assignment
Agreement by the assignor,  the assignee,  the Administrative Agent, the Issuing
Bank and the  Company  and  satisfaction  of the  foregoing  conditions  and any
conditions set forth therein (i) such assignee shall thereupon become a "Lender"
for all purposes of this Agreement with  Commitments in the amounts set forth in
such  Assignment  Agreement  and with all the  rights,  powers  and  obligations
afforded a Lender hereunder, provided that the assigning Lender shall retain the
benefit of all  indemnities of the Company with respect to matters arising prior
to the  effective  date of such  Assignment  Agreement,  which shall survive and
inure to the benefit of the assigning  Lender,  (ii) such assigning Lender shall
have no further liability for funding the portion of its Commitments  assumed by
such other Lender,  and (iii) the address for notices to such assignee  shall be
as specified in the Assignment  Agreement executed by it.  Concurrently with the
execution  and  delivery  of such  Assignment  Agreement  by the  assignor,  the
assignee,  the  Company,  the Issuing  Bank and the  Administrative  Agent,  the
Company shall execute and deliver Notes to the assignee Lender all such notes to
constitute "Notes" for all purposes of the Loan Documents.

     Section 12.13. Waivers,  Modifications and Amendments. Any provision hereof
or of any of the  other  Loan  Documents  may be  amended,  modified,  waived or
released  and any  Default  or  Event of  Default  and its  consequences  may be
rescinded  and  annulled  upon the  written  consent  of the  Required  Lenders;
provided,  however,  that without the consent of all Lenders no such  amendment,
modification  or waiver  shall  increase  the  amount or extend the terms of any
Lender's  Commitment  or reduce the interest  rate  applicable  to or extend the
express  maturity of any Loan, fee or other  obligation owed to it or reduce the
amount of the fees to which it is entitled  hereunder  or release any  Guarantor
from its obligations  hereunder (except for releases in connection with the sale
or  liquidation  of  a  Subsidiary  other  than  the  Company)  or  release  any
substantial  (in  value)  part  of  the  collateral  security  afforded  by  the
Collateral  Documents  (except in  connection  with a sale or other  disposition
permitted by this  Agreement) or change the definition of "Required  Lenders" or
amend this Section 12.13; it being  understood (i) that waivers or modifications
of  covenants,  Defaults  or Events of  Default  (other  than those set forth in
Section  9.1(j) and (k) hereof) or of a mandatory  prepayment may be made at the
discretion  of the Required  Lenders and shall not  constitute  an increase of a
Commitment  of  any  Lender,  and  (ii)  any  waiver  of  applicability  of  any
post-default  increase in interest  rates may be made at the  discretion  of the
Required  Lenders.  No  amendment,  modification  or waiver of an Agent's or the
Issuing  Bank's  protective  provisions  shall be  effective  without  the prior
written  consent of the affected  Agents or the Issuing Bank, as applicable.  No
change may be made in the rights or  obligations of the Swing Lender without its

<PAGE>

consent  and no  change  may be made in the  definition  of the  term  "Required
Revolving Credit Lenders" without the consent of all Revolving Credit Lenders.

     Section  12.14.  Entire  Agreement.  The Loan  Documents  and any  separate
agreement  concerning fees  constitutes the entire  understanding of the parties
with  respect to the subject  matter  hereof and any prior  agreements,  whether
written or oral,  with respect  thereto are  superseded  hereby.  All provisions
hereof are severable.

     Section 12.15.  Headings.  Section  headings used in this Agreement are for
reference only and shall not affect the construction of this Agreement.

     Section 12.16. Confidentiality.  Any information disclosed by the Parent or
any of its Subsidiaries to the Administrative  Agent or any of the Lenders shall
be used solely for purposes of this Agreement and for the purpose of determining
whether or not to extend other credit or financial accommodations to the Company
or its  Subsidiaries  and, if such  information  is not  otherwise in the public
domain, shall not be disclosed by the Administrative Agent or such Lender to any
other Person  except (i) to its  independent  accountants  and legal counsel (it
being  understood  that the  Persons  to whom  such  disclosure  is made will be
informed of the  confidential  nature of such information and instructed to keep
such  information  confidential),  (ii)  pursuant to  statutory  and  regulatory
requirements,  (iii)  pursuant to any mandatory  court order,  subpoena or other
legal  process,  provided  that such  Lender  or the  Administrative  Agent,  as
applicable,  shall give the Company prior written notice of any such  disclosure
if lawful, (iv) to the Administrative Agent or any other Lender, (v) pursuant to
any agreement  heretofore or hereafter  made between such Lender and the Company
which permits such disclosure, (vi) in connection with the exercise of any right
or remedy under the Loan Documents,  or (vii) subject to an agreement containing
provisions  substantially  similar  in  effect  those  of this  Section,  to any
participant in or assignee of, or prospective participant in or assignee of, any
obligation or Commitment.

     SECTION  12.17.  JURISDICTION.  (A) EACH PARTY HERETO HEREBY SUBMITS TO THE
NONEXCLUSIVE  JURISDICTION  OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS (EASTERN  DIVISION) AND OF ANY ILLINOIS STATE COURT SITTING
IN CHICAGO FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS  ARISING OUT OF OR RELATING
TO THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO
IRREVOCABLY  WAIVES,  TO THE FULLEST  EXTENT  PERMITTED BY  APPLICABLE  LAW, ANY
OBJECTION  WHICH IT MAY NOW OR HEREAFTER  HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH  PROCEEDING  BROUGHT IN SUCH A COURT AND ANY CLAIM THAN ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
<PAGE>



     (B) THE COMPANY AND THE GUARANTORS AGREE THAT THE ADMINISTRATIVE AGENT, THE
ISSUING  BANK AND THE LENDERS  SHALL EACH HAVE THE RIGHT TO PROCEED  AGAINST THE
COMPANY AND THE GUARANTORS OR THEIR  PROPERTY IN A COURT IN ANY OTHER  LOCATION.
THE COMPANY AND THE  GUARANTORS  AGREE THAT THEY SHALL NOT ASSERT ANY PERMISSIVE
COUNTERCLAIMS IN ANY PROCEEDING BROUGHT IN ACCORDANCE WITH THIS PROVISION BY THE
ADMINISTRATIVE  AGENT,  THE  ISSUING  BANK  OR ANY  LENDER  TO  REALIZE  ON SUCH
PROPERTY,  OR TO  ENFORCE  A  JUDGMENT  OR  OTHER  COURT  ORDER  IN FAVOR OF THE
ADMINISTRATIVE  AGENT,  THE  ISSUING  BANK OR ANY  LENDER.  THE  COMPANY AND THE
GUARANTORS  WAIVE ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH  THE  ADMINISTRATIVE  AGENT  OR ANY  LENDER  HAS  COMMENCED  A  PROCEEDING
DESCRIBED IN THIS SUBSECTION.

     SECTION  12.18.  WAIVER OF JURY TRIAL.  THE COMPANY,  THE  GUARANTORS,  THE
AGENTS,  THE ISSUING  BANK AND THE  LENDERS  EACH WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE  IN RESOLVING  ANY DISPUTE,  WHETHER  SOUNDING IN CONTRACT,  TORT OR
OTHERWISE,  BETWEEN THE AGENTS OR EITHER OF THEM, THE ISSUING BANK OR ANY LENDER
AND THE COMPANY AND/OR ANY OF THE  GUARANTORS  ARISING OUT OF,  CONNECTED  WITH,
RELATED  TO  OR  INCIDENTAL  TO  THE  RELATIONSHIP  ESTABLISHED  AMONG  THEM  IN
CONNECTION  WITH THIS AGREEMENT OR ANY OTHER  INSTRUMENT,  DOCUMENT OR AGREEMENT
EXECUTED  OR  DELIVERED  IN  CONNECTION  HEREWITH  OR THE  TRANSACTIONS  RELATED
THERETO.  THE  COMPANY,  THE  GUARANTORS,  THE AGENTS,  THE ISSUING BANK AND THE
LENDERS  EACH HEREBY AGREE AND CONSENT  THAT ANY SUCH CLAIM,  DEMAND,  ACTION OR
CAUSE OF ACTION  SHALL BE DECIDED BY COURT TRIAL  WITHOUT A JURY AND THAT ANY OF
THEM MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT
AS WRITTEN  EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.

     SECTION 12.19.  GOVERNING LAW. THIS AGREEMENT AND THE NOTES, AND THE RIGHTS
AND  DUTIES  OF THE  PARTIES  HERETO,  SHALL  BE  CONSTRUED  AND  DETERMINED  IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF ILLINOIS  WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS.

                                            [SIGNATURE PAGE TO FOLLOW]



<PAGE>



         Upon your acceptance  hereof in the manner  hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove set forth.

         Executed and delivered as of this 23rd day of September, 1998.



                       AGRILINK FOODS, INC.


                       By   /s/ Earl L. Powers
                            Its Vice President Finance and 
                            Chief Financial Officer


                       PRO-FAC COOPERATIVE, INC.


                       By   /s/ Earl L. Powers
                            Its Vice President Finance and
                            Assistant Treasurer


                       LINDEN OAKS CORPORATION


                       By   /s/ Timothy J. Benjamin
                            Its President

                       KENNEDY ENDEAVORS, INCORPORATED


                       By   /s/ Earl L. Powers
                            Its Vice President and Secretary

<PAGE>


     Accepted and Agreed to as of the day and year last above written.

Revolving Credit Commitment:      HARRIS TRUST AND SAVINGS BANK,
$26,666,666.67                       Individually and as Administrative Agent,
                                     Issuing Bank and Swing Lender
A Credit Commitment:
$13,333,333.33

B Credit Commitment:              By  /s/ H. Glen Clarke
            -0-                       Its Vice President

C Credit Commitment:              Address:             111 West Monroe Street
            -0-                                        Chicago, Illinois  60690
                                  Attention:           Agribusiness Division

                                  Eurodollar Lending Office:
                                  Nassau Branch
                                  111 West Monroe Street
                                  Chicago, Illinois  60603


Revolving Credit Commitment:      BANK OF MONTREAL,
$173,333,333.33                      Individually and as Syndication Agent

A Credit Commitment:
$86,666,666.67
                                  By  /s/ Michael W. Hedrick
B Credit Commitment:                  Its Director
$175,000,000
                                  Address:             115 South LaSalle Street
                                                       Chicago, Illinois  60603
C Credit Commitment:              Attention:           Global Distribution
$180,000,000
                                     Eurodollar Lending Office:
                                     115 South LaSalle Street
                                     Chicago, Illinois  60603



<PAGE>



                                   EXHIBIT A

                              AGRILINK FOODS, INC.

                              REVOLVING CREDIT NOTE

                                                               ___________, 1998

         FOR VALUE RECEIVED,  the undersigned,  AGRILINK FOODS, INC., a New York
corporation   (the   "Company"),   hereby  promises  to  pay  to  the  order  of
__________________  (the  "Lender") on the  Termination  Date (as defined in the
Credit  Agreement  hereinafter  referred to), at the principal  office of Harris
Trust and Savings Bank in Chicago,  Illinois,  the  aggregate  unpaid  principal
amount of all Revolving Credit Loans made by the Lender to the Company under the
Credit Agreement  hereinafter  mentioned and remaining unpaid on the Termination
Date,  together with interest on the principal  amount of each Revolving  Credit
Loan from time to time  outstanding  hereunder at the rates,  and payable in the
manner and on the dates, specified in said Credit Agreement.

         The Lender  shall  record on its books or records or on the schedule to
this Note which is a part hereof the principal  amount of each Revolving  Credit
Loan made by it to the  Company  under the Credit  Agreement,  all  payments  of
principal  and interest  thereon and the  principal  balances  from time to time
outstanding;  provided  that prior to the transfer of this Note all such amounts
shall be recorded on the  schedule  attached to this Note.  The record  thereof,
whether shown on such books or records or on the schedule to this Note, shall be
prima facie evidence as to all such amounts; provided, however, that the failure
of the Lender to record any of the foregoing shall not limit or otherwise affect
the obligation of the Company to repay all Revolving  Credit Loans made to under
the Credit Agreement, together with accrued interest thereon.

         This  Note is one of the  Revolving  Credit  Notes  referred  to in and
issued under that certain Credit Agreement dated as of September 23, 1998, among
the Company,  Pro-Fac  Cooperative,  Inc. and certain other  Guarantors,  Harris
Trust and Savings Bank, as  Administrative  Agent and Issuing Bank,  and Bank of
Montreal,  as  Syndication  Agent and the  Lenders  from time to time as parties
thereto,  as amended  from time to time (the  "Credit  Agreement").  All defined
terms used in this Note, except terms otherwise  defined herein,  shall have the
same meaning as such terms have in said Credit Agreement.

         Prepayments may be made, and are sometimes  required to be made, on any
Loan evidenced  hereby and this Note (and the Revolving  Credit Loans  evidenced
hereby) may be declared due prior to the expressed maturity thereof,  all in the
events, on the terms and in the

<PAGE>



manner  as  provided  for in said  Credit  Agreement.  This Note is  secured  as
provided for in the Credit Agreement.

         The undersigned hereby waive presentment for payment and demand.

         This Note is governed by and shall be construed in accordance  with the
internal laws of the State of Illinois.

                                     AGRILINK FOODS, INC.



                                     By
                                          Its__________________________________



<PAGE>

                                    EXHIBIT B


                              AGRILINK FOODS, INC.


                                SWING CREDIT NOTE

                                                             _____________, 1998

         FOR VALUE RECEIVED,  the undersigned,  AGRILINK FOODS, INC., a New York
corporation (the "Company"), hereby promises to pay to the order of Harris Trust
and Savings Bank (the  "Lender"),  at the  principal  office of Harris Trust and
Savings Bank in Chicago, Illinois, the aggregate unpaid principal amount of each
Swing  Loan  made by the  Lender  to the  Company  under  the  Credit  Agreement
hereinafter  mentioned  on the due date  therefor as  specified  pursuant to the
Credit Agreement hereinafter identified, together with interest on the principal
amount of each Swing Loan from time to time outstanding  hereunder at the rates,
and payable in the manner and on the dates, specified in said Credit Agreement.

         The Lender  shall  record on its books or records or on the schedule to
this Note which is a part hereof the principal amount and due date of each Swing
Loan made by it to the  Company  under the Credit  Agreement,  all  payments  of
principal  and interest  thereon and the  principal  balances  from time to time
outstanding;  provided  that  prior  to the  transfer  of this  Note all of such
amounts  shall be recorded  on the  schedule  attached to this Note.  The record
thereof, whether shown on such books or records or on the schedule to this Note,
shall be prima facie evidence as to all such amounts;  provided,  however,  that
the  failure  of the Lender to record  any of the  foregoing  shall not limit or
otherwise  affect the obligation of the Company to repay all Swing Loans made to
it, under the Credit Agreement, together with accrued interest thereon.

         This Note is the Swing Credit Note referred to in and issued under that
certain  Credit  Agreement  dated as of September  23, 1998,  among the Company,
Pro-Fac Cooperative, Inc. and certain other Guarantors, Harris Trust and Savings
Bank,  as  Administrative  Agent and  Issuing  Bank,  and Bank of  Montreal,  as
Syndication  Agent and the Lenders named  therein,  as amended from time to time
(the  "Credit  Agreement").  All defined  terms used in this Note,  except terms
otherwise defined herein, shall have the same meaning as such terms have in said
Credit Agreement.

         Prepayments may be made, and are sometimes  required to be made, on any
Loan evidenced  hereby and this Note (and the Swing Loans evidenced  hereby) may
be declared due prior to the expressed  maturity thereof,  all in the events, on
the terms and in the manner as provided for in said Credit Agreement.  This Note
is secured as provided for in the Credit Agreement.


<PAGE>

         The undersigned hereby waive presentment for payment and demand.

         This Note is governed by and shall be construed in accordance  with the
internal laws of the State of Illinois.

                                        AGRILINK FOODS, INC.



                                        By
                                             Its_______________________________



<PAGE>


                                    EXHIBIT C

                              AGRILINK FOODS, INC.

                                  A CREDIT NOTE

                                                             _____________, 1998

         FOR VALUE RECEIVED,  the undersigned,  AGRILINK FOODS, INC., a New York
corporation   (the   "Company"),   hereby  promises  to  pay  to  the  order  of
__________________  (the "Lender"),  at the principal office of Harris Trust and
Savings Bank in Chicago, Illinois, the aggregate principal amount of the A Loans
made by the Lender to the Company under the Credit  Agreement  referred to below
in seventeen (17) consecutive  quarterly  installments,  commencing on September
30, 1999, and continuing on the last day of every September, December, March and
June thereafter to and including September 30, 2003, in the amounts specified in
the Credit  Agreement  hereinafter  referred to,  together  with interest on the
amount of the principal  indebtedness from time to time outstanding hereunder at
the rates,  and payable in the manner and on the dates  specified in said Credit
Agreement.

         The Lender  shall  record on its books or records or on the schedule to
this Note which is a part hereof the principal  amount of the A Loans made by it
to the  Company  under the Credit  Agreement,  all  payments  of  principal  and
interest  thereon  and the  principal  balances  from time to time  outstanding;
provided  that  prior to the  transfer  of this Note all such  amounts  shall be
recorded on a schedule attached to this Note. The record thereof,  whether shown
on such books or records or on the  schedule to this Note,  shall be prima facie
evidence  as to all such  amounts;  provided,  however,  that the failure of the
Lender to record any of the  foregoing  shall not limit or otherwise  affect the
obligation  of the  Company  to repay all A Loans  made to it under  the  Credit
Agreement, together with accrued interest thereon.

         This Note is one of the A Credit Notes  referred to in and issued under
that certain Credit Agreement dated as of September 23, 1998, among the Company,
Pro-Fac Cooperative, Inc. and certain other Guarantors, Harris Trust and Savings
Bank, as Administrative Agent and Issuing Bank, Bank of Montreal, as Syndication
Agent, and the Lenders named therein,  as amended from time to time (the "Credit
Agreement"). All defined terms used in this Note, except terms otherwise defined
herein, shall have the same meaning as such terms have in said Credit Agreement.
This Note is secured as provided for in the Credit Agreement.

         Prepayments may be made, and are sometimes  required to be made, on the
A Loans evidenced hereby and this Note (and the A Loans evidenced hereby) may be
declared due prior

<PAGE>



to the expressed  maturity  thereof,  all in the events, on the terms and in the
manner as provided for in said Credit Agreement.

         The undersigned hereby waive presentment for payment and demand.

         This Note is governed by and shall be construed in accordance  with the
internal laws of the State of Illinois.

                                     AGRILINK FOODS, INC.



                                     By
                                          Its__________________________________



<PAGE>



                                    EXHIBIT D

                              AGRILINK FOODS, INC.


                                  B CREDIT NOTE

                                                             _____________, 1998

         FOR VALUE RECEIVED,  the undersigned,  AGRILINK FOODS, INC., a New York
corporation   (the   "Company"),   hereby  promises  to  pay  to  the  order  of
__________________  (the "Lender"),  at the principal office of Harris Trust and
Savings Bank in Chicago, Illinois, the aggregate principal amount of the B Loans
made by the Lender to the Company under the Credit  Agreement  referred to below
in twenty-four (24) consecutive quarterly  installments,  commencing on December
31, 1998, and continuing on the last day of every September, December, March and
June thereafter to and including September 30, 2004, in the amounts specified in
the Credit  Agreement  hereinafter  referred to,  together  with interest on the
amount of the principal  indebtedness from time to time outstanding hereunder at
the rates,  and payable in the manner and on the dates  specified in said Credit
Agreement.

         The Lender  shall  record on its books or records or on the schedule to
this Note which is a part hereof the principal  amount of the B Loans made by it
to the  Company  under the Credit  Agreement,  all  payments  of  principal  and
interest  thereon  and the  principal  balances  from time to time  outstanding;
provided  that  prior to the  transfer  of this Note all such  amounts  shall be
recorded on a schedule attached to this Note. The record thereof,  whether shown
on such books or records or on the  schedule to this Note,  shall be prima facie
evidence  as to all such  amounts;  provided,  however,  that the failure of the
Lender to record any of the  foregoing  shall not limit or otherwise  affect the
obligation  of the  Company  to repay all B Loans  made to it under  the  Credit
Agreement, together with accrued interest thereon.

         This Note is one of the B Credit Notes  referred to in and issued under
that certain Credit Agreement dated as of September 23, 1998, among the Company,
Pro-Fac Cooperative, Inc. and certain other Guarantors, Harris Trust and Savings
Bank, as Administrative Agent and Issuing Bank, Bank of Montreal, as Syndication
Agent, and the Lenders named therein,  as amended from time to time (the "Credit
Agreement"). All defined terms used in this Note, except terms otherwise defined
herein, shall have the same meaning as such terms have in said Credit Agreement.
This Note is secured as provided for in the Credit Agreement.

         Prepayments may be made, and are sometimes  required to be made, on the
B Loans evidenced hereby and this Note (and the B Loans evidenced hereby) may be
declared due prior

<PAGE>



to the expressed  maturity  thereof,  all in the events, on the terms and in the
manner as provided for in said Credit Agreement.

         The undersigned hereby waive presentment for payment and demand.

         This Note is governed by and shall be construed in accordance  with the
internal laws of the State of Illinois.

                                         AGRILINK FOODS, INC.



                                         By
                                              Its______________________________



<PAGE>



                                                          
                                    EXHIBIT E

                              AGRILINK FOODS, INC.


                                  C CREDIT NOTE

                                                             _____________, 1998

         FOR VALUE RECEIVED,  the undersigned,  AGRILINK FOODS, INC., a New York
corporation   (the   "Company"),   hereby  promises  to  pay  to  the  order  of
__________________  (the "Lender"),  at the principal office of Harris Trust and
Savings Bank in Chicago, Illinois, the aggregate principal amount of the C Loans
made by the Lender to the Company under the Credit  Agreement  referred to below
in twenty-eight (28) consecutive quarterly installments,  commencing on December
31, 1998, and continuing on the last day of every September, December, March and
June thereafter to and including September 30, 2005, in the amounts specified in
the Credit  Agreement  hereinafter  referred to,  together  with interest on the
principal  amount of the principal  indebtedness  from time to time  outstanding
hereunder at the rates,  and payable in the manner and on the dates specified in
said Credit Agreement.

         The Lender  shall  record on its books or records or on the schedule to
this Note which is a part hereof the principal  amount of the C Loans made by it
to the  Company  under the Credit  Agreement,  all  payments  of  principal  and
interest  thereon  and the  principal  balances  from time to time  outstanding;
provided  that  prior to the  transfer  of this Note all such  amounts  shall be
recorded on a schedule attached to this Note. The record thereof,  whether shown
on such books or records or on the  schedule to this Note,  shall be prima facie
evidence  as to all such  amounts;  provided,  however,  that the failure of the
Lender to record any of the  foregoing  shall not limit or otherwise  affect the
obligation  of the  Company  to repay all C Loans  made to it under  the  Credit
Agreement, together with accrued interest thereon.

         This Note is one of the C Credit Notes  referred to in and issued under
that certain Credit Agreement dated as of September 23, 1998, among the Company,
Pro-Fac Cooperative, Inc. and certain other Guarantors, Harris Trust and Savings
Bank, as Administrative Agent and Issuing Bank, Bank of Montreal, as Syndication
Agent, and the Lenders named therein,  as amended from time to time (the "Credit
Agreement"). All defined terms used in this Note, except terms otherwise defined
herein, shall have the same meaning as such terms have in said Credit Agreement.
This Note is secured as provided for in the Credit Agreement.

         Prepayments may be made, and are sometimes  required to be made, on the
C Loans evidenced hereby and this Note (and the C Loans evidenced hereby) may be
declared due prior

<PAGE>



to the expressed  maturity  thereof,  all in the events, on the terms and in the
manner as provided for in said Credit Agreement.

         The undersigned hereby waive presentment for payment and demand.

         This Note is governed by and shall be construed in accordance  with the
internal laws of the State of Illinois.

                                        AGRILINK FOODS, INC.



                                        By
                                             Its_______________________________



<PAGE>
                                    EXHIBIT F

                              AGRILINK FOODS, INC.

                             COMPLIANCE CERTIFICATE

         This Compliance  Certificate is furnished to the lenders (collectively,
the  "Lenders") and Harris Trust and Savings Bank as  Administrative  Agent (the
"Administrative   Agent")  for  the  Lenders,  and  the  Bank  of  Montreal,  as
Syndication  Agent,  pursuant  to that  certain  Credit  Agreement  dated  as of
September 23, 1998, by and among Agrilink  Foods,  Inc., a New York  corporation
(the "Company"),  Pro-Fac Cooperative, Inc. and certain other Guarantors and the
Lenders (the  "Agreement").  Unless otherwise defined herein,  the terms used in
this Compliance Certificate have the meanings ascribed thereto in the Agreement.

            THE UNDERSIGNED HEREBY CERTIFIES THAT:

            1.  I am  the  duly  elected  chief  financial  officer  of  Pro-Fac
Cooperative, Inc.;

            2. I have  reviewed the terms of the  Agreement  and I have made, or
have  caused  to be  made  under  my  supervision,  a  detailed  review  of  the
transactions  and  condition  of the  Parent  and its  Subsidiaries  during  the
accounting period covered by the attached financial statements sufficient for me
to provide this Certificate;

            3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which  constitutes
a Default  or Event of  Default  during or at the end of the  accounting  period
covered  by  the  attached  financial  statements  or as of  the  date  of  this
Certificate, except as set forth below; and

            4. If attached financial  statements are being furnished pursuant to
the  Agreement,  Schedule  I  attached  hereto  sets  forth  financial  data and
computations  evidencing the Parent's and the Company's  compliance with certain
covenants  of the  Agreement,  all of which  data  and  computations  are  true,
complete and correct.

         Described below are the exceptions,  if any, to paragraph 3 by listing,
in detail,  the nature of the condition or event, the period during which it has
existed and the action which the Parent and the Company  have taken,  are taking
or propose to take with respect to each such condition or event:





<PAGE>





         The foregoing certifications,  together with the computations set forth
in  Schedule  I  hereto  and  the  financial   statements  delivered  with  this
Certificate  in  support  hereof,  are  made and  delivered  this  _____  day of
_______________________, 19___.







<PAGE>


                                   SCHEDULE 1
                            TO COMPLIANCE CERTIFICATE


                              AGRILINK FOODS, INC.


                           COMPLIANCE CALCULATIONS FOR
                 CREDIT AGREEMENT DATED AS OF SEPTEMBER 23, 1998


                  CALCULATIONS AS OF ____________________, 19__







<PAGE>




                                    EXHIBIT G

                         ADDITIONAL GUARANTOR SUPPLEMENT

                                                           ______________, 19___

HARRIS TRUST AND SAVINGS BANK, as
Administrative Agent for the Lenders
under the Credit Agreement dated as of
September 23, 1998, among Agrilink
Foods, Inc., Pro-Fac Cooperative, Inc.
and certain other Guarantors, Bank of
Montreal as Syndication Agent and such
Administrative Agent (the "Credit
Agreement")

Dear Sirs:

         Reference is made to the Credit Agreement  described  above.  Terms not
defined  herein  which are  defined in the Credit  Agreement  shall have for the
purposes hereof the meaning provided therein.

         The  undersigned,  [name of Subsidiary  Guarantor],  a [jurisdiction of
incorporation]  corporation,  hereby elects to be a "Guarantor" for all purposes
of the  Credit  Agreement,  effective  from the  date  hereof.  The  undersigned
confirms  that the  representations  and  warranties  set  forth  in the  Credit
Agreement are true and correct as to the undersigned as of the date hereof.

         Without  limiting the  generality  of the  foregoing,  the  undersigned
hereby agrees to perform all the  obligations  of a Guarantor  under,  and to be
bound in all respects by the terms of, the Credit  Agreement,  including without
limitation  Section 11  thereof,  to the same extent and with the same force and
effect as if the undersigned were a signatory party thereto.

         This  Agreement  shall be construed in accordance  with and governed by
the internal laws of the State of Illinois.

                                  Very truly yours,

                                  [NAME OF SUBSIDIARY GUARANTOR]


                                  By
                                  Name
                                  Title________________________________________


<PAGE>




                                    EXHIBIT H

                                  SUBSIDIARIES

Pro-Fac Cooperative, Inc., a New York cooperative corporation (P)



<TABLE>
<S>                                      <C>               <C>               <C>          
                                     JURISDICTION OF         
NAME                                   ORGANIZATION    PERCENTAGE OWNED      STATUS


Agrilink Foods, Inc. (A)                 New York          100%(P)           Active


Curtice-Burns Express, Inc.              New York          100%(A)           Active


Kennedy Endeavors, Inc.                  Washington        100%(A)           Active


Seasonal Employers, Inc.                 New York          100%(A)           Active


Linden Oaks Corporation                  Delaware          100%(A)           Active


Curtice Burns Foods of Canada Limited    Canada            100%(A)           Active


Curtice Burns Export Corporation         US Virgin Islands 100%(A)           Active


Snyder Distributing, Inc.                Pennsylvania      100%(A)           Active


Quality Snax of Maryland, Inc.           Pennsylvania      100%(A)          Inactive (1)


LaRestaurant of Altoona, Inc.            Pennsylvania      100%(A)          Inactive (1)


Convenient Product Sales Corp.           Pennsylvania      100%(A)          Inactive (1)


BEMSA Holding, Inc.                      Delaware          100%(A)              (2)


<FN>
1.   In process of being dissolved and liquidated.

2.   Upon  consummation of the acquisition of all the outstanding  capital stock
     of Dean Foods Vegetable Company and all of the outstanding capital stock of
     BEMSA  Holding,  Inc.,  as  contemplated  in the Stock  Purchase  Agreement
     between Dean Foods Company and Agrilink Foods,  Inc.,  dated as of July 24,
     1998,  Agrilink  Foods,  Inc.,  will own 100% of the issued and outstanding
     capital stock of BEMSA Holding, Inc.
</FN>
</TABLE>

<PAGE>
                                    EXHIBIT I
                              EXISTING INDEBTEDNESS

<TABLE>
<S>                                               <C>             <C>              <C>       
                                                               Balance as of
                                                              August 31, 1998

                                                  Current         Long-Term          Total

Note Payable -Duane Packer3                            --         $5,400,000       $5,400,000


Note Payable - John A. Hopay, Sr.,                $250,000        $1,113,000       $1,363,000
John A. Hopay, Jr. and Joseph C. Hopay4


Note Payable - State of Georgia5                    20,034           137,179        157,213


Note Payable - Des Moines Area                      50,953                --         50,953
Community College6


Note Payable - DelAgra Corp.7                      425,000                --        425,000


Note Payable - Fairwater, WI8                                      2,450,000      2,450,000


Various Capitalized Leases9                        776,000
                                              (current and long)

Note Payable - MN Dept. of                          10,000
 Transportation10

Albrecht Land11                                     44,876

John Hancock Insurance12                            431,221

Guarantee of loans to Great Lakes Kraut Company                              up to $8,000,000

Subordinated Promissory Note due Dean Foods Company                             $30,000,000
<FN>
3.   Packer Foods Acquisition.

4.   Snyder  Distributing,  Inc.  (formerly  known as J. A. Hopay  Distributing,
     Inc.)  Acquisition.

5.   Development  Authority of Macon  County,  Georgia  obligation  Revenue Bond
     dated  12/01/84.

6.   Agrilink Foods, Inc. guarantor of Des Moines Area Community  College's bond
     repayment obligations.

7.   Del Agra Corp. Acquisition.

8.   Acquired with Dean Foods Vegetable Company,  balance as of May 31, 1998.

9.   Agrilink  capital leases as of June 27, 1998 total $759,000.  Acquired with
     Dean Foods Vegetable Company: IBM Leases of $17,000 as of May 31, 1998.

10.  Acquired with Dean Foods Vegetable Company, balance as of May 31, 1998.

11.  Acquired with Dean Foods Vegetable Company, balance as of May 31, 1998.

12.  Acquired with Dean Foods Vegetable Company, balance as of May 31, 1998.
</FN>
</TABLE>
<PAGE>



                                    EXHIBIT J

                                 EXISTING LIENS

1.   Industrial Revenue Bonds.  Development  Authority of Macon County,  Georgia
     Limited  Obligation  Revenue Bond,  dated December 1984,  secured by a deed
     covering 321 Plant Street, Montezuma, Georgia (the "Montezuma Facility").

2.   Pursuant to an Agreement  for Sale of Stock and Assets dated July 21, 1995,
     between  Agrilink  Foods,  Inc.  and Duane  Packer,  Agrilink  Foods,  Inc.
     acquired Packer Foods.  In connection with the transaction  Agrilink Foods,
     Inc. delivered a $5,400,000 promissory note, which is secured by a mortgage
     on real property located at 73309 South M-40, Lawton, Michigan (the "Lawton
     Facility") and a security  interest in equipment and proceeds at the Lawton
     Facility.

3.   Assignment  of leases  and  rents in favor of John  Hancock  Insurance  Co.
     ($431,221  balance as of May 31, 1998) recorded  against the Uvalde,  Texas
     facility acquired with Dean Foods Vegetable Company.

4.   Capitalized leases referred to on Exhibit I.

5.   Albrecht land contract with respect to Cambria, Wisconsin real property.



<PAGE>



                                    EXHIBIT K

                    EXISTING INVESTMENTS, LOANS AND ADVANCES



<TABLE>
                                                        Balance as of
                                                       August 31, 1998


                                          Current         Long-Term        Total

Investments:
<S>                                      <C>             <C>            <C>        
    Co-Bank, ACB                         $1,329,513      $22,377,434    $23,706,947
    Great Lakes Kraut Company LLC13              --        6,732,000      6,732,000
    Farmers Processing, Inc.14                   --               --             --


      Total Investments                   $1,329,513     $29,109,434    $30,438,947
                                          ==========     ===========    ===========


Loans:
Notes Receivable
    Hoopeston15                              125,587       1,427,919      1,553,506
    Garden Gallery16                          22,192              --         22,192
    Lucca17                                   10,000              --         10,000

      Total Notes Receivable              $  157,779     $ 1,427,919    $ 1,585,698
                                          ==========     ===========    ===========

<FN>
13   Represents a 50%  membership  interest (50 Units).  Represents  July,  1998
     balance.

14   Represents one-half of the outstanding capital stock; nominal investment.

15   Pursuant  to a Note and  Security  Agreement  dated as of April  30,  1997,
     between  Hoopeston Foods, Inc.  ("Hoopeston") and Agrilink Foods,  Inc., in
     the original  principal amount of $1,700,000,  Hoopeston is required to pay
     Agrilink  quarterly  $62,150 until maturity on May 10, 2007. The promise to
     pay is secured by a security interest in certain equipment.

16   Loan to Garden Galleries, Inc.

17   Sale of Lucca. In connection with the sale of the Lucca Mexican and Italian
     Frozen  Foods  Business to Alex Foods  Incorporated  ("Alex"),  the Company
     entered into a Trademark and License and Option Agreement dated December 7,
     1992,  between the Company and Alex  pursuant to which the Company  agreed,
     subject  to the terms of such  agreement,  to sell  after  June 7, 1997 the
     indicated  trademarks  to Alex  ("Reds,"  "Mexican  Holiday"  and  "Mexican
     Classics").
</FN>
</TABLE>
<PAGE>
                                 
                                    EXHIBIT L

                            SCHEDULED EXCLUDED ASSETS

1.   Lawton Facility,  73309 South M-40, Lawton,  Michigan,  plant and equipment
     located therein  (encumbered by $5.4 million non prepayable  mortgage which
     forbids junior liens).

2.   Wall Lake, Iowa popcorn coloring plant (insignificant plant).

3.   Alton, New York, plant but not adjacent warehouse (held for sale).

4.   Rushville, New York plant (closed and for sale).

5.   Mount Summit, Indiana plant (closed and for sale).

6.   Brillion, Wisconsin plant (closed).

7.   Cedar Grove, Wisconsin plant (closed).

8.   Bellinghham, Washington plant (under contract for sale).

9.   McAllen, Texas plant (under contract for sale).

10.  Fort Atkinson, Wisconsin plant (closed).

11.  Rights as lessee under real property leases except for future ground leases
     and other non-operating leases requested by the Administrative Agent.

12.  Railroad rolling stock and vehicles subject to a certificate of title law.

13.  Equity interest in Great Lakes Kraut Company, LLC.

14.  Shares of capital stock of CoBank, ACB


<PAGE>



                              DISCLOSED LITIGATION


NONE