CONFORMED COPY

                              AGRILINK FOODS, INC.,

                                  as Borrower,

                                       and

                           PRO-FAC COOPERATIVE, INC.,
                                  as Guarantor,

                        THE OTHER GUARANTORS PARTY HERETO

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

                                  $200,000,000

                      SENIOR SUBORDINATED CREDIT AGREEMENT

                         Dated as of September 23, 1998

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

                            WARBURG DILLON READ LLC,
                       as Arranger and Syndication Agent,

                                       and

                            UBS AG, STAMFORD BRANCH,
                            as Administrative Agent,

                                       and

                   THE LENDERS FROM TIME TO TIME PARTY HERETO



<PAGE>






                                TABLE OF CONTENTS


                  This Table of Contents is not part of the  Agreement  to which
it is attached but is inserted for convenience of reference only.


<TABLE>
<S>           <C>                                                                                           <C>
                                                                                                            Page
Section 1.    Definitions, Accounting Matters and Rules of Construction.......................................1

     1.01.    Certain Defined Terms...........................................................................1
     1.02.    Accounting Terms...............................................................................20
     1.03.    Rules of Construction..........................................................................20

Section 2.    Amount and Terms of Loan Commitment and Loans; Notes...........................................21

     2.01.    Initial Loan and Initial Note..................................................................21
     2.02.    Term Loan and Term Note........................................................................23
     2.03.    Interest on the Loans..........................................................................24
     2.04.    Fees...........................................................................................25
     2.05.    Prepayments....................................................................................25
     2.06.    Manner and Time of Payment.....................................................................30
     2.07.    Use of Proceeds................................................................................30

Section 3.    Yield Protection, Etc..........................................................................31

     3.01.    Funding Indemnity..............................................................................31
     3.02.    Change of Law..................................................................................31
     3.03.    Unavailability of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR Rate.............32
     3.04.    Increased Cost and Reduced Return..............................................................32
     3.05.    Capital Adequacy...............................................................................33
     3.06.    Withholding Taxes..............................................................................33
     3.07.    Lender Replacement.............................................................................35

Section 4.    Guarantee......................................................................................35

     4.01.    The Guarantee..................................................................................35
     4.02.    Guarantee Unconditional........................................................................35
     4.03.    Discharge Only upon Payment in Full; Reinstatement in Certain Circumstances....................36
     4.04.    Subrogation....................................................................................37
     4.05.    Waivers........................................................................................37
     4.06.    Stay of Acceleration...........................................................................37
     4.07.    General Limitation on Guarantee Obligations....................................................37
     4.08.    Subordination..................................................................................37
</TABLE>
<PAGE>

<TABLE>
<S>           <C>                                                                                           <C>
                                                                                                            Page
Section 5.    Conditions Precedent...........................................................................37

     5.01.    Conditions to Effectiveness of Loan Documents and Obligation to Make Initial Loan..............37
     5.02.    Conditions to Term Loan........................................................................41
     5.03.    Determinations Under Section 5.................................................................42

Section 6.    Representations and Warranties.................................................................42

     6.01.    Organization and Power.........................................................................42
     6.02.    Subsidiaries...................................................................................42
     6.03.    [Reserved].....................................................................................43
     6.04.    Financial Reports..............................................................................43
     6.05.    Litigation and Taxes...........................................................................44
     6.06.    Burdensome Contracts with Affiliates...........................................................44
     6.07.    ERISA..........................................................................................44
     6.08.    Full Disclosure................................................................................44
     6.09.    Compliance with Law............................................................................45
     6.10.    Certain Contracts..............................................................................45
     6.11.    Stock Purchase Agreement Warranties............................................................45
     6.12.    Restrictive Agreements.........................................................................45
     6.13.    No Default Under Other Agreements..............................................................45
     6.14.    Status Under Certain Laws......................................................................46
     6.15.    Year 2000 Compliance...........................................................................46
     6.16.    Solvency, Etc..................................................................................46

Section 7.    Covenants......................................................................................46

     7.01.    Maintenance of Business........................................................................46
     7.02.    Maintenance....................................................................................46
     7.03.    Taxes..........................................................................................47
     7.04.    Insurance......................................................................................47
     7.05.    Financial Reports..............................................................................47
     7.06.    Compliance with Laws...........................................................................48
     7.07.    Nature of Business.............................................................................48
     7.08.    Liens..........................................................................................49
     7.09.    Indebtedness...................................................................................50
     7.10.    Acquisitions, Investments, Loans and Advances and Guarantees...................................50
     7.11.    Restricted Payments............................................................................52
     7.12.    Mergers........................................................................................52
     7.13.    Sales of Assets................................................................................53
     7.14.    Burdensome Contracts with Affiliates...........................................................53
     7.15.    No Change in Fiscal Year.......................................................................53
     7.16.    Formation of Subsidiaries......................................................................53
     7.17.    No Restriction on Subsidiary Dividends.........................................................54
</TABLE>

<PAGE>
<TABLE>
<S>           <C>                                                                                           <C>
                                                                                                            Page

     7.18.    Concerning the Subordinated Debt...............................................................54
     7.19.    Limitation on Senior Subordinated Indebtedness.................................................54
     7.20.    Concerning the Marketing Agreement.............................................................54
     7.21.    Year 2000 Assessment...........................................................................54
     7.22.    Preservation of Cooperative Status.............................................................55
     7.23.    Take-Out Financing.............................................................................55
     7.24.    Exchange of Term Notes.........................................................................56
     7.25.    Register.......................................................................................56
     7.26.    Senior Subordinated Indenture; Etc.............................................................57
     7.27.    Amendments or Waivers of Certain Documents.....................................................57
     7.28.    Release of Covenants upon Conversion; Term Loan Covenants......................................57

Section 8.    Events of Default..............................................................................58

     8.01.    Events of Default..............................................................................58
     8.02.    Non Bankruptcy Defaults........................................................................59
     8.03.    Bankruptcy Defaults............................................................................59
     8.04.    Willful Default................................................................................59

Section 9.    Agents.........................................................................................60

     9.01.    General Provisions.............................................................................60
     9.02.    Indemnification................................................................................62
     9.03.    Consents Under Other Loan Documents............................................................62

Section 10.   Miscellaneous..................................................................................63

     10.01.   Waiver of Rights...............................................................................63
     10.02.   [Reserved].....................................................................................63
     10.03.   Expenses, Indemnification, Etc.................................................................63
     10.04.   Documentary Taxes..............................................................................64
     10.05.   Amendments, Etc................................................................................64
     10.06.   Survival of Representations....................................................................65
     10.07.   Assignments and Participations.................................................................66
     10.08.   Right of Setoff; Sharing of Payments; Etc......................................................67
     10.09.   Lending Offices................................................................................68
     10.10.   Discretion of Banks as to Manner of Funding....................................................68
     10.11.   Notices........................................................................................69
     10.12.   [Reserved].....................................................................................69
     10.13.   [Reserved].....................................................................................69
     10.14.   [Reserved].....................................................................................69
     10.15.   Counterparts; Interpretation; Effectiveness....................................................69
     10.16.   Headings.......................................................................................69
     10.17.   Confidentiality................................................................................70
</TABLE>
<PAGE>

<TABLE>
<S>           <C>                                                                                           <C>
                                                                                                            Page
     10.18.   Waiver of Stay, Extension or Usury Laws........................................................70
     10.19.   Governing Law; Submission to Jurisdiction; Waivers; Etc........................................70
     10.20.   Waiver of Jury Trial...........................................................................71
     10.21.   Independence of Representations, Warranties and Covenants......................................71
     10.22.   Severability...................................................................................71
     10.23.   Acknowledgments................................................................................71

Section 11.   Subordination..................................................................................72

     11.01.   Agreement to Subordinate.......................................................................72
     11.02.   Liquidation; Dissolution; Bankruptcy...........................................................72
     11.03.   No Payment on Loans and Notes in Certain Circumstances.........................................72
     11.04.   Acceleration of Notes..........................................................................73
     11.05.   When Distributions Must Be Paid Over...........................................................74
     11.06.   Notice.........................................................................................74
     11.07.   Subrogation....................................................................................75
     11.08.   Relative Rights................................................................................75
     11.09.   The Company, Guarantors and Lenders May Not Impair Subordination...............................75
     11.10.   Distribution or Notice to Representative.......................................................76
     11.11.   Rights of Administrative Agent.................................................................77
     11.12.   Authorization to Effect Subordination..........................................................77

Signatures..................................................................................................S-1

</TABLE>


<PAGE>





ANNEX A               -   Term Loan Covenants
ANNEX B               -   Definitions Applicable to Term Loan Covenants

SCHEDULE 6.02         -   Subsidiaries
SCHEDULE 6.05         -   Litigation and Taxes
SCHEDULE 7.08         -   Existing Liens
SCHEDULE 7.09         -   Existing Indebtedness
SCHEDULE 7.10         -   Existing Investments

EXHIBIT A-1           -   Form of Initial Note
EXHIBIT A-2           -   Form of Term Note
EXHIBIT B             -   Form of Notice of Borrowing
EXHIBIT C             -   Form of Notice of Conversion
EXHIBIT D             -   Form of Additional Guarantor Supplement
EXHIBIT E             -   Form of Assignment Agreement
<PAGE>


         SENIOR  SUBORDINATED  CREDIT  AGREEMENT dated as of September 23, 1998,
among AGRILINK FOODS,  INC., a New York  corporation  (the  "Company");  PRO-FAC
COOPERATIVE,  INC., as Guarantor; the other Guarantors party hereto; each of the
lenders that is a signatory hereto identified under the caption "LENDERS" on the
signature  pages hereto or that,  pursuant to Section  10.07(b),  shall become a
"Lender" hereunder (individually,  a "Lender" and, collectively, the "Lenders");
WARBURG DILLON READ LLC, as arranger and syndication agent (the "Arranger"); and
UBS AG, Stamford Branch, as administrative agent (the "Administrative Agent").

         The parties hereto agree as follows:

         Section 1. Definitions, Accounting Matters and Rules of Construction.

         1.01.  Certain Defined Terms. As used herein, the following terms shall
have the following meanings:

         "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.

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

                  (i) 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;

                  (ii)  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;

                  (iii) 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;

                  (iv) 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;


<PAGE>

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

                  (vi) 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 7.16.

         "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  have  the  meaning  set  forth  in  the
introduction hereto.

         "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 this  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.

         "Agent" means either of the Administrative Agent or the Arranger.

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

         "Applicable  Spread"  means 5.00% for the period from and including the
Closing Date and to but excluding  the 90th day following the Closing Date,  and
for each  subsequent  90-day  period,  the  Applicable  Spread in effect for the
immediately preceding 90-day period plus 1.00%.

         "Approved  Fund" shall mean,  with respect to any Lender that is a fund
or commingled  investment  vehicle that invests in commercial  loans,  any other
fund that  invests  in  commercial  loans and is  managed or advised by the same
investment advisor as such Lender or by an Affiliate of such investment advisor.

         "Arranger" shall have the meaning set forth in the introduction hereto.

         "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.
<PAGE>

         "Assignment  Agreement"  shall mean an agreement  substantially  in the
form of Exhibit F.

         "Auditors" see Section 7.05(b).

         "Bankruptcy Law" shall mean Title 11 of the United States Code entitled
"Bankruptcy",  as now and hereafter in effect,  or any successor  statute or any
other  United  States  federal,  state  or  local  law or the  law of any  other
jurisdiction  relating  to  bankruptcy,  insolvency,  winding  up,  liquidation,
reorganization  or relief of  debtors,  whether in effect on the date  hereof or
hereafter.

         "Bankruptcy  Order"  shall mean any court  order  made in a  proceeding
pursuant  to or  within  the  meaning  of  any  Bankruptcy  Law,  containing  an
adjudication of bankruptcy or insolvency, or providing for liquidation,  winding
up, dissolution or  reorganization,  or appointing a custodian of a debtor or of
all or any  substantial  part  of a  debtor's  property,  or  providing  for the
staying, arrangement,  adjustment or composition of indebtedness or other relief
of a debtor.

         "BEMSA" see the definition of Acquisition.

         "Business  Day" means any day other than a Saturday,  a Sunday or a day
on which banking  institutions  in the City of New York are authorized by law or
regulation or executive order to remain closed.

         "Capital Stock" shall have the meaning set forth in Annex B.

         "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.

         "Cash Equivalents" shall have the meaning set forth in Annex B.

         "Change  of  Control"  shall  mean prior to the  Conversion  Date,  the
occurrence of any 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
Parent;  (ii) the number of the  directors of the Company who are  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
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.

         "Change of Control  Date"  shall have the  meaning set forth in Section
2.05(a)(iii) (3)(A).
<PAGE>
         "Change of Control  Offer"  shall have the meaning set forth in Section
2.05(a)(iii)(3).

         "Closing  Date" shall mean the date on which the Initial Loans are made
hereunder.

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

         "Commission"  shall  mean the United  States  Securities  and  Exchange
Commission.

         "Commitment  Letter"  shall mean the  Commitment  Letter  among UBS AG,
Stamford  Branch,  Warburg  Dillon  Read LLC and  Agrilink  Foods,  Inc.,  dated
September  14,  1998,  together  with all  exhibits  and  schedules  thereto and
incorporated therein, as such letter has been amended to the date hereof.

         "Commitments" shall mean the Initial Loan Commitments and the Term Loan
Commitments.

         "Company" shall have the meaning set forth in the introduction hereto.

         "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 premium on the  retirement of  Indebtedness  and gains  resulting
from pensions reversions) as determined in accordance with GAAP.

         "Consolidated  Net Worth" shall mean, as of any date,  the common stock
and 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 Parent's 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.

         "Conversion  Date" shall mean the one-year  anniversary  of the Closing
Date.

         "Custodian"   means  any  custodian,   receiver,   trustee,   assignee,
liquidator or similar official under any Bankruptcy Law.

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

         "Debt  Issuance"  shall  mean  the  incurrence  by  the  Parent  or any
Subsidiary of any Indebtedness after the Closing Date.
<PAGE>

         "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.

         "Designated Senior  Indebtedness" shall mean (i) Indebtedness under the
Senior  Credit  Facility  and (ii) any other  Indebtedness  constituting  Senior
Indebtedness  that,  at the date of  determination,  has an aggregate  principal
amount outstanding of at least $25.0 million and that is specifically designated
by  the  Company,   in  the  instrument   creating  or  evidencing  such  Senior
Indebtedness  or in an Officer's  Certificate  delivered  to the  Administrative
Agent, as "Designated Senior Indebtedness."

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

         "Disinterested  Directors"  means  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 either
the Parent or the Company.

         "Disqualified  Capital Stock" shall have the meaning set forth in Annex
B.

         "Dollars"  and "$" shall  mean  lawful  money of the  United  States of
America.

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

         "Eligible  Person" shall mean (i) a commercial bank organized under the
laws of the United States,  or any state thereof,  and having a combined capital
and surplus of at least $100.0  million;  (ii) a commercial bank organized under
the laws of any other country that is a member of the  Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having a combined capital and surplus in a dollar equivalent amount
of at least $100.0 million; provided,  however, that such bank is acting through
a branch or agency  located in the country in which it is  organized  or another
country that is also a member of the OECD;  (iii) an insurance  company,  mutual
fund entity which is  regularly  engaged in making,  purchasing  or investing in
loans or securities or other financial  institution  organized under the laws of
the United States, any state thereof,  any other country that is a member of the
OECD or a political subdivision of any such country with assets, or assets under
management,  in a dollar equivalent amount of at least $100.0 million;  (iv) any
Affiliate of a Lender;  and (v) any other entity  (other than a natural  person)
which  is an  "accredited  investor"  (as  defined  in  Regulation  D under  the
Securities  Act) which  extends  credit or buys  loans as one of its  businesses
including, but not limited to, insurance companies, mutual funds, and investment
funds.  With  respect to any Lender  that is a fund that  invests in loans,  any
other  fund  that  invests  in  loans  and is  managed  or  advised  by the same
investment  advisor of such Lender or by an Affiliate of such investment advisor
shall be treated as a single Eligible Person.

         "Equity  Issuance" means 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
<PAGE>
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
Issuance.

         "Equity  Offering"  shall  mean an  underwritten  primary  offering  of
Capital  Stock  (other than  Disqualified  Capital  Stock) of the Parent (to the
extent that the net cash proceeds  thereof are contributed to the equity capital
of the Company (other than  Disqualified  Capital Stock (as defined in Annex B))
or the Company pursuant to a registration statement filed with the Commission in
accordance with the Securities Act or pursuant to a private  placement  pursuant
to an available  exemption  from  registration  under the  Securities Act to the
extent, in the case of such private placement, such Capital Stock is not sold to
the Parent, the Company,  any Subsidiary or any Affiliate (without giving effect
to clause (ii) in the definition thereof in Annex B) thereof.

         "ERISA" shall have the meaning set forth in Section 6.07.

         "Event of Default" shall have the meaning set forth in Section 8.01.

         "Excess   Proceeds"  shall  have  the  meaning  set  forth  in  Section
2.05(a)(iii)(4).

         "Exchange Act" shall mean the United States Securities  Exchange Act of
1934, as amended.

         "Exchange Note Trustee"  shall mean the trustee in connection  with the
Senior Subordinated Indenture.

         "Exchange Notes" shall have the meaning set forth in Section 7.24.

         "Existing Notes" shall mean the Company's existing $160 million 12 1/4%
Senior Subordinated Notes due 2005.

         "Fair Market Value" shall have the meaning set forth in Annex B.

         "Federal  Funds  Rate"  shall  mean,  for any day,  the rate per  annum
(rounded  upwards,  if  necessary,  to the  nearest  1/100  of 1%)  equal to the
weighted  average of the rates on  overnight  Federal  funds  transactions  with
members of the Federal  Reserve System arranged by Federal funds brokers on such
day, as  published  by the Federal  Reserve Bank of New York on the Business Day
next succeeding such day; provided,  however, that (a) if the day for which such
rate is to be  determined is not a Business Day, the Federal Funds Rate for such
day shall be such rate on such  transactions on the next preceding  Business Day
as so published on the next succeeding  Business Day and (b) if such rate is not
so published  for any Business Day, the Federal Funds Rate for such Business Day
shall be the average rate quoted to Administrative Agent on such Business Day on
such  transactions  by three federal funds  brokers of recognized  standing,  as
determined by Administrative Agent.

         "Fee Letter"  shall mean the Fee Letter dated as of September 14, 1998,
by and among UBS AG,  Stamford  Branch,  Warburg  Dillon  Read LLC and  Agrilink
Foods, Inc.
<PAGE>

         "Fixed  Rate" means a rate of interest  per annum equal to the Ten Year
U.S.  Treasury  Rate (on the first  date  notice is given to the  Administrative
Agent pursuant to Section  2.03(a)(ii) to convert any portion of a Floating Rate
Loan to a Fixed Rate Loan), plus 7.00%.

         "Fixed Rate Loans" means Loans described in Section 2.03(a)(ii).

         "Floating Rate Loans" means Loans described in Section 2.03(a)(i).

         "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.

         "Governmental  Requirements" shall mean any law, ordinance, order, rule
or regulation of a Governmental Body.

         "Guarantee"  shall mean the  guarantee  of each  Guarantor  pursuant to
Section 4.

         "Guarantors"  shall mean the Parent and all  Subsidiaries of the Parent
(other than the  Company)  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  2.00% of the
assets,  revenues and net income of the Parent and Subsidiaries taken as a whole
and (ii) Foreign Subsidiaries.

         "Hedging  Obligations"  of any  Person  means the  obligations  of such
Person  pursuant to (i) any interest rate swap  agreement,  interest rate collar
agreement or other  similar  agreement or  arrangement  designed to protect such
Person against  fluctuations in interest rates,  (ii) agreements or arrangements
designed  to protect  such  Person  against  fluctuations  in  foreign  currency
exchange rates in the conduct of its operations,  or (iii) any forward contract,
commodity swap agreement,  commodity option agreement or other similar agreement
or arrangement designed to protect such Person against fluctuations in commodity
prices,  in each case,  entered into in the ordinary course of business for bona
fide hedging purposes and not for the purpose of speculation.

         "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

<PAGE>
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.

         "Indemnitee" shall have the meaning set forth in Section 10.03(b).

         "Initial Loan Commitment" and "Initial Loan Commitments" shall have the
meanings set forth in Section 2.01(a).

         "Initial Loan" shall have the meaning set forth in Section 2.01(a).

         "Initial Notes" shall have the meaning set forth in Section 2.01(d).

         "Insolvency or Liquidation Proceeding" shall have the meaning set forth
in Section 11.02.

         "Interest Expense" shall mean with reference to any period all interest
charges  (excluding  amortization of debt discount 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 (i) with respect to the Initial Loan, each
period  commencing  on, in the case of the first  Interest  Period,  the Closing
Date,  and  thereafter,  on the  expiry of the  immediately  preceding  Interest
Period,  and ending on the numerically  corresponding  day in the first calendar
month thereafter, and (ii) with respect to the Term Loan, each period commencing
on,  in the  case  of the  first  Interest  Period,  the  Conversion  Date,  and
thereafter,  on the expiry of the immediately  preceding  Interest  Period,  and
ending  on  the  numerically  corresponding  day  in the  third  calendar  month
thereafter;  provided that (w) 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; (x) no
Interest  Period may extend  beyond the final  maturity  date of the  applicable
Loan;  (y) the interest  rate to be applicable  for each  Interest  Period shall
apply from and including the first day of such Interest  Period to but excluding
the last day thereof;  and (z) 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.
<PAGE>

         "Investment" shall have the meaning set forth in Annex B.

         "Lender"  and  "Lenders"  shall  have  the  meanings  set  forth in the
introduction to this Agreement.

         "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  payments 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
Loan, the rate per annum (rounded upwards, if necessary,  to the next higher one
hundred-thousandth  of a percentage  point) for deposits in 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 Rate" shall mean for each Interest Period  applicable to a Loan,
(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 Dollars in  immediately  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 Loan  scheduled  to be made by the
Administrative Agent during such Interest Period.

         "Loan Documents"  shall mean this Agreement,  the Notes and each of the
other  documents,  agreements,  instruments,  opinions and  certificates  now or
hereafter executed and delivered in connection herewith or therewith.

         "Loan Indebtedness" shall have the meaning set forth in Section 11.01.

         "Loan  Obligations"  shall  mean  all  amounts,   direct  or  indirect,
contingent or absolute, of every type or description,  and at any time existing,
owing  to any  Lender  or  any  of  its  Related  Parties  or  their  respective
successors, transferees or assignees pursuant to the terms of any Loan Document,
whether  or not  the  right  of  such  Person  to  payment  in  respect  of such
obligations  and liabilities is reduced to judgment,  liquidated,  unliquidated,
fixed, contingent,  matured, unmatured,  disputed, undisputed, legal, equitable,
secured or  unsecured  and  whether or not such claim is  discharged,  stayed or
otherwise   affected  by  any  bankruptcy  case  or  insolvency  or  liquidation
proceeding.

         "Loans" shall mean the Initial Loan and the Term Loan.
<PAGE>
         "Losses"  of any Person  shall  mean the  losses,  liabilities,  claims
(including  those  based  upon  negligence,  strict or  absolute  liability  and
liability  in  tort),  damages,  reasonable  expenses,  obligations,  penalties,
actions, judgments, encumbrances, liens, penalties, fines, suits, reasonable and
documented costs or disbursements  of any kind or nature  whatsoever  (including
reasonable  fees and  expenses  of counsel  in  connection  with any  Proceeding
commenced  or  threatened  in  writing,  whether  or not  such  Person  shall be
designated a party thereto) at any time (including  following the payment of the
Obligations) incurred by, imposed on or asserted against such Person.

         "Majority  Lenders"  shall  mean (i) at any time  prior to the  Closing
Date, Lenders holding at least a majority of the aggregate amount of the Initial
Loan Commitments,  and (ii) at any time after the Closing Date,  Lenders holding
at least a majority of the outstanding Loans.

         "Marketing   Agreement"  shall  mean  the  Marketing  and  Facilitation
Agreement  dated as of November  3, 1994 by and  between  Parent and the Company
(then known as Curtice-Burns  Foods, Inc.) as amended on September 23, 1998, and
as may be 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  or of the  Lenders
thereunder  or of the Marketing  Agreement,  Stock  Purchase  Agreement or Asset
Transfer Agreement.

         "Maturity Date" shall have the meaning set forth in Section 2.02(d).

         "Maximum  Cash  Interest  Rate"  means an  interest  rate of 13.00% per
annum;  provided that in computing such interest rate,  fees paid to the Lenders
or Agents shall not be deemed an interest payment.

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

         "Net Asset Sale Proceeds"  means,  with respect to any sale or disposal
of property  described in the first  sentence of Section 7.13 (an "Asset  Sale")
(including the provisos thereto, except that the proviso to clause (vi) shall be
excluded),  the  proceeds  thereof  in the  form of  cash  or  Cash  Equivalents
including  payments in respect of deferred payment  obligations when received in
the form of cash or Cash Equivalents (except to the extent that such obligations
are  financed or sold with  recourse to the Parent or any of its  Subsidiaries),
net of (i) brokerage commissions and other fees and expenses (including fees and
expenses of legal counsel,  accountants  and  investment  banks) related to such
Asset Sale, (ii) provisions for all taxes payable as a result of such Asset Sale
(after taking into account any  available tax credits or deductions  and any tax
sharing  arrangements),  (iii) amounts  required to be paid to any Person (other
than the Parent or any of its Subsidiaries)  owning a beneficial interest in the
properties or assets subject to the Asset Sale or having a lien therein and (iv)
appropriate amounts to be provided by the Parent or any of its Subsidiaries,  as
the case may be, as a reserve  required  in  accordance  with GAAP  against  any
liabilities associated with such Asset Sale and retained by the Parent or any of
its Subsidiaries, as the case may be, after such Asset Sale, including, without

<PAGE>

limitation,  pensions and other postemployment benefit liabilities,  liabilities
related to  environmental  matters  and  liabilities  under any  indemnification
obligations  associated  with such Asset Sale,  all as reflected in an Officers'
Certificate delivered to the Administrative Agent;  provided,  however, that any
amounts  remaining  after  adjustments,  revaluations  or  liquidations  of such
reserves shall constitute Net Asset Sale Proceeds.

         "Net Available Proceeds" shall mean, in the case of any Equity Issuance
or any Debt Issuance, the aggregate amount of all cash received by Parent or any
Subsidiary in respect thereof net of all investment banking fees,  discounts and
commissions,  legal  fees,  consulting  fees,  accountants'  fees,  underwriting
discounts  and  commissions  and other  customary  fees and  expenses,  actually
incurred and satisfactorily documented in connection therewith.

         "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.

         "Net Proceeds  Deficiency"  shall have the meaning set forth in Section
2.05(a)(iii)(4).

         "Net  Proceeds  Offer"  shall  have the  meaning  set forth in  Section
2.05(a)(iii)(4).

         "Non-payment  Default"  shall  have the  meaning  set forth in  Section
11.03(b).

         "Note   Amount"   shall   have  the   meaning   set  forth  in  Section
2.05(a)(iii)(4).

         "Note Portion of Excess  Proceeds"  shall have the meaning set forth in
Section 2.05(a)(iii)(4).

         "Notes" shall mean the Initial Notes and the Term Notes.

         "Notice of Borrowing" shall mean a notice of borrowing substantially in
the form of Exhibit B.

         "Notice of Conversion" shall mean a notice of conversion  substantially
in the form of Exhibit C.

         "Obligation" means any principal,  interest (including,  in the case of
Senior Indebtedness, interest accruing subsequent to the filing of a petition in
bankruptcy or insolvency at the rate specified in the document  relating to such
Senior Indebtedness,  whether or not such interest is an allowed claim permitted
to be enforced  against the obligor  under  applicable  law),  penalties,  fees,
indemnification,  reimbursements, costs, expenses, damages and other liabilities
payable under the documentation governing any Indebtedness.
<PAGE>

         "Offer to Purchase" shall mean a written offer (the "Offer") sent by or
on behalf of the Company by first-class mail, postage prepaid, to each Lender at
his  notice  for  address  pursuant  to  Section  10.11 on the date of the Offer
offering to purchase up to the principal amount of Notes specified in such Offer
at the purchase  price  specified in such Offer.  Unless  otherwise  required by
applicable  law, the Offer shall  specify an  expiration  date (the  "Expiration
Date") of the Offer to Purchase,  which shall be not less than 20 Business  Days
nor more than 60 days after the date of such Offer,  and a settlement  date (the
"Purchase Date") for purchase of Notes to occur no later than five Business Days
after the Expiration Date. The Company shall notify the Administrative  Agent at
least  15  Business  Days  (or  such  shorter  period  as is  acceptable  to the
Administrative  Agent)  prior  to the  mailing  of the  Offer  of the  Company's
obligation  to make an Offer to  Purchase,  and the Offer shall be mailed by the
Company or, at the Company's request,  by the  Administrative  Agent in the name
and  at  the  expense  of the  Company.  The  Offer  shall  contain  information
concerning the business of Parent and its Subsidiaries which the Company in good
faith  believes  will enable  such  Lenders to make an  informed  decision  with
respect to the Offer to Purchase  (which at a minimum  will include (i) the most
recent annual and quarterly  consolidated financial statements of Parent and the
Company  and a  financial  analysis  substantially  similar  to a  "Management's
Discussion  and  Analysis of  Financial  Condition  and  Results of  Operations"
contained in a Form S-1 registration  statement filed by an issuer on its behalf
with the  Commission  (which  requirements  may be satisfied by delivery of such
documents together with the Offer), (ii) a description of material  developments
in Parent's or the  Company's  business  subsequent to the date of the latest of
such financial  statements referred to in clause (i) (including a description of
the  events  requiring  the  Company  to make the Offer to  Purchase),  (iii) if
applicable,  appropriate pro forma financial information concerning the Offer to
Purchase and the events  requiring the Company to make the Offer to Purchase and
(iv) any other information  required by applicable law to be included  therein).
The Offer shall contain all instructions and materials  necessary to enable such
Lenders to tender Notes pursuant to the Offer to Purchase.  The Offer shall also
state:

                  (1) the Section of this Agreement  pursuant to which the Offer
         to Purchase is being made;

                  (2) the Expiration Date and the Purchase Date;

                  (3) the aggregate  principal  amount of the outstanding  Notes
         offered  to be  purchased  by the  Company  pursuant  to the  Offer  to
         Purchase (including, if less than 100%, the manner by which such amount
         has been determined pursuant to the Section of this Agreement requiring
         the Offer to Purchase) (the "Purchase Amount");

                  (4) the  purchase  price  to be paid by the  Company  for each
         $1,000  aggregate  principal  amount of Notes accepted for payment (the
         "Purchase Price");

                  (5) the place or places where Notes are to be surrendered  for
         tender pursuant to the Offer to Purchase;


<PAGE>

                  (6) that interest on any Note not tendered or tendered but not
         purchased  by the  Company  pursuant  to the  Offer  to  Purchase  will
         continue to accrue;

                  (7) that on the Purchase  Date the Purchase  Price will become
         due and payable upon each Note being  accepted for payment  pursuant to
         the Offer to Purchase and that  interest  thereon shall cease to accrue
         on and after the Purchase Date;

                  (8) that each holder  electing to tender all or any portion of
         a Note  pursuant to the Offer to Purchase will be required to surrender
         such Note at the place or places  specified  in the Offer  prior to the
         close of  business  on the  Expiration  Date (such Note  being,  if the
         Company or the Administrative  Agent so requires,  duly endorsed by, or
         accompanied by a written instrument of transfer in form satisfactory to
         the Company and the  Administrative  Agent duly executed by, the holder
         thereof or his attorney duly authorized in writing);

                  (9) that  Lenders  will be  entitled  to  withdraw  all or any
         portion of Notes tendered if the Company  receives,  not later than the
         close  of  business  on the  fifth  Business  Day  next  preceding  the
         Expiration Date, a telegram,  telex,  facsimile  transmission or letter
         setting forth the name of the holder,  the principal amount of the Note
         the  holder  tendered,  the  certificate  number of the Note the holder
         tendered  and a  statement  that such  holder is  withdrawing  all or a
         portion of his tender;

                  (10)  that (a) if Notes in an  aggregate  principal  amount at
         maturity  less than or equal to the Purchase  Amount are duly  tendered
         and not withdrawn pursuant to the Offer to Purchase,  the Company shall
         purchase  all such  Notes  and (b) if Notes in an  aggregate  principal
         amount in excess of the Purchase  Amount are tendered and not withdrawn
         pursuant to the Offer to Purchase,  the Company  shall  purchase  Notes
         having an aggregate  principal amount equal to the Purchase Amount on a
         pro rata basis (with such  adjustments as may be deemed  appropriate so
         that only Notes in denominations of $1,000 principal amount at maturity
         or integral multiples thereof shall be purchased); and

                  (11) that in the case of any holder  whose  Note is  purchased
         only in part,  the Company  shall  execute and deliver to the holder of
         such  Note  without  service  charge,  a new  Note  or  Notes,  of  any
         authorized  denomination  as requested by such holder,  in an aggregate
         principal  amount equal to and in exchange for the unpurchased  portion
         of the Note so tendered.

            An Offer to Purchase shall be governed by and effected in accordance
with the provisions above pertaining to any Offer.

         "Offered   Price"   shall  have  the   meaning  set  forth  in  Section
2.05(a)(iii)(4).
<PAGE>

         "Officer" shall mean any of the following of the Company:  the Chairman
of the Board,  the Chief Executive  Officer,  the Chief Financial  Officer,  the
President, any Vice President, the Treasurer or the Secretary.

         "Officers'  Certificate"  shall  mean a  certificate  signed by any two
Officers.

         "Original  Initial  Notes"  shall have the meaning set forth in Section
2.01(d).

         "Original  Term  Notes"  shall  have the  meaning  set forth in Section
2.02(e).

         "Other  Indebtedness"  shall  have the  meaning  set  forth in  Section
2.05(a)(iii)(4).

         "Parent"  means  Pro-Fac  Cooperative,  Inc.,  a New York  agricultural
cooperative corporation.

         "Participant" shall have the meaning set forth in Section 10.07(c).

         "Payment   Amount"   shall  have  the  meaning  set  forth  in  Section
2.05(a)(iii)(4).

         "Payment  Blockage  Notice" shall have the meaning set forth in Section
11.03(b).

         "Payment  Blockage  Period" shall have the meaning set forth in Section
11.03(b).

         "Payment Default" shall have the meaning set forth in Section 11.03(a).

         "PBGC" shall have the meaning set forth in Section 6.07.

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

         "Permitted Junior  Securities" shall mean any securities of the Company
or a Guarantor provided for by a plan of reorganization or readjustment that are
subordinated  in right of payment to all Senior  Indebtedness  of the Company or
such  Guarantor,  as the case may be,  that  may at the time be  outstanding  to
substantially  the same extent as, or to a greater extent than, the Notes or the
Guarantee  of  such  Guarantor,  as  applicable,   are  subordinated  to  Senior
Indebtedness.

         "Permitted  Liens" prior to the Conversion  Date shall have the meaning
set forth in Section  7.08 and on and after the  Conversion  Date shall have the
meaning set forth in Annex B.

         "Person" shall mean any  individual,  corporation,  company,  voluntary
association,  partnership,  joint venture, trust, unincorporated organization or
government (or any agency, instrumentality or political subdivision thereof).

         "PIK  Interest  Amount"  shall  have the  meaning  set forth in Section
2.03(b).

         "Primary Lender" shall mean UBS AG, Stamford Branch.


<PAGE>

         "Principal   Office"   shall   mean  the   principal   office   of  the
Administrative  Agent,  located on the date hereof at 677 Washington  Boulevard,
Stamford,  Connecticut  06912,  or such other office as may be designated by the
Administrative Agent.

         "Proceeding"  shall mean any  claim,  counterclaim,  action,  judgment,
suit,   hearing,   arbitration  or  proceeding,   including  by  or  before  any
Governmental Body and whether judicial or administrative.

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

         "Refinancing"  shall mean the public offering or private  placement and
sale by the Company of the Refinancing Securities  contemplated by Section 7.23,
in order to  refinance,  as  applicable,  the Initial  Notes,  Term  Notes,  the
Exchange Notes and all Loan  Obligations  owing in respect of this Agreement and
the other Loan  Documents  and all  obligations  under the  Senior  Subordinated
Indenture.

         "Refinancing  Indebtedness"  means Indebtedness of the Parent or any of
its  Subsidiaries  issued in exchange for, or the proceeds from the issuance and
sale or  disbursement  of which are used  substantially  concurrently  to repay,
redeem, refund, refinance,  discharge or otherwise retire for value, in whole or
in part (collectively,  "repay"), or constituting an amendment,  modification or
supplement to or a deferral or renewal of  (collectively,  an "amendment"),  any
Indebtedness  of  the  Parent  or  any  of  its  Subsidiaries  (the  "Refinanced
Indebtedness")  in a principal  amount not in excess of the principal  amount of
the Refinanced  Indebtedness  (or, if such Refinancing  Indebtedness  refinances
Indebtedness  under a revolving  credit facility or other agreement  providing a
commitment for subsequent  borrowings,  with a maximum  commitment not to exceed
the maximum commitment under such revolving credit facility or other agreement),
plus the amount of accrued  but unpaid  interest  thereon  and the amount of any
reasonably   determined   prepayment   premium   necessary  to  accomplish  such
refinancing  and  such  reasonable  fees and  expenses  incurred  in  connection
therewith;  provided that: (i) the Refinancing Indebtedness is the obligation of
the same Person as that of the Refinanced  Indebtedness;  (ii) if the Refinanced
Indebtedness was subordinated to or pari passu with the Loan Indebtedness,  then
such  Refinancing  Indebtedness,  by its terms, is expressly pari passu with (in
the  case of  Refinanced  Indebtedness  that  was  pari  passu  with)  the  Loan
Indebtedness,  or  subordinate in right of payment to (in the case of Refinanced
Indebtedness  that was  subordinated  to) the Loan  Indebtedness at least to the
same extent as the Refinanced  Indebtedness;  (iii) the portion,  if any, of the
Refinancing Indebtedness that is scheduled to mature on or prior to the maturity
date of the Initial Loan or the Term Loan, as applicable, has a Weighted Average
Life to Maturity at the time such  Refinancing  Indebtedness is incurred that is
equal to or greater than the Weighted Average Life to Maturity of the portion of
the Refinanced Indebtedness being repaid that is scheduled to mature on or prior
to the maturity  date of the Initial Loan or the Term Loan, as  applicable;  and
(iv) the Refinancing  Indebtedness is secured only to the extent, if at all, and
by the assets (which may include  after-acquired  assets),  that the  Refinanced
Indebtedness is secured.
<PAGE>

         "Refinancing  Securities" shall mean the unsecured senior  subordinated
notes of the Company or any of its Subsidiaries  proposed to be sold in order to
consummate the Refinancing pursuant to Section 7.26.

         "Refinancing  Securities  Demand"  shall have the  meaning set forth in
Section 7.23.

         "Register" shall have the meaning set forth in Section 7.25.

         "Registration  Rights  Agreement"  shall  mean  a  registration  rights
agreement in the form of the Arrangers  customary high yield registration rights
agreement.

         "Regulation  D" shall mean  Regulation  D (12  C.F.R.  Part 204) of the
Board of Governors of the United States Federal Reserve System.

         "Regulations  T, U and X" shall mean,  respectively,  Regulation  T (12
C.F.R. Part 220),  Regulation U (12 C.F.R. Part 221) and Regulation X (12 C.F.R.
Part 224) of the Board of Governors of the United States Federal  Reserve System
(or any successor),  as the same may be modified and  supplemented and in effect
from time to time.

         "Related   Business"  means  any  business  in  which  Parent  and  its
Subsidiaries  operate on the  Closing  Date,  or that is  closely  related to or
complements the business of Parent and its Subsidiaries, as such business exists
on the Closing Date.

         "Related Business  Investment" means any Investment  directly by Parent
or its Subsidiaries in any Related Business.

         "Related Parties" shall have the meaning set forth in Section 9.01.

         "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.

         "Replaceable Lender" shall have the meaning set forth in Section 3.07.

         "Replacement Lender" shall have the meaning set forth in Section 3.07.

         "Representative" means, with respect to any Senior Indebtedness, the
indenture trustee or other trustee, agent or other representative(s), if any, of
holders of such Senior Indebtedness.

         "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


<PAGE>

of  the  Federal  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 Loans 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 Reserve Percentage.

         "Revolving  Loan Facility"  means the revolving loan facility  provided
under the Senior Credit Facility.

         "Sale and  Leaseback  Transaction"  shall have the meaning set forth in
Annex B.

         "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.

         "Securities Act" means the U.S. Securities Act of 1933, as amended.

         "Senior  Credit  Facility"  means  the  Credit  Agreement,  dated as of
September  23, 1998,  by and among the Company,  Parent,  the other  Guarantors,
Harris Trust and Savings Bank, individually and as Administrative Agent, Bank of
Montreal,  Chicago Branch,  individually and as Syndication Agent, and the other
lenders party  thereto,  together with any  guarantees,  security  agreements or
other  collateral  documents  and any  other  related  documents,  as any of the
foregoing may be subsequently amended,  restated,  refinanced,  or replaced from
time to time,  and shall include  agreements  in respect of Hedging  Obligations
designed to protect against fluctuations in interest rates and entered into with
respect to loans thereunder.

         "Senior Indebtedness" shall mean all Indebtedness and other Obligations
specified below payable  directly or indirectly by the Company or any Guarantor,
as the  case may be,  whether  outstanding  on the  Closing  Date or  thereafter
created, incurred or assumed by the Company or such Guarantor: (i) the principal
of and interest on and all other  Indebtedness  and  Obligations  related to the
Senior Credit Facility  (including,  without limitation,  all loans,  letters of
credit and unpaid drawings with respect  thereto and other  extensions of credit
under the  Senior  Credit  Facility,  and all  expenses,  fees,  reimbursements,
indemnities  and other  amounts owing  pursuant to the Senior Credit  Facility),
(ii) amounts payable in respect of any Hedging Obligations, (iii) in addition to


<PAGE>

the amounts  described in (i) and (ii), all  Indebtedness  not prohibited by, if
incurred prior to the Conversion Date, Section 7.09, and if incurred on or after
the  Conversion  Date,  Section A-1 of Annex A, that is not expressly pari passu
with, or subordinated to, the Notes or the Guarantees,  as the case may be, (iv)
all Capitalized Rentals outstanding on the Closing Date, and (v) all Refinancing
Indebtedness permitted under this Agreement of Indebtedness specified in clauses
(i) through (iv).  Notwithstanding anything to the contrary, Senior Indebtedness
will  not  include  (a) any  Indebtedness  which  by the  express  terms  of the
agreement or instrument creating,  evidencing or governing the same is junior or
subordinate  in right of  payment  to any item of Senior  Indebtedness,  (b) any
trade  payable  arising  from the purchase of goods or materials or for services
obtained in the ordinary course of business, (c) Indebtedness incurred (but only
to the extent  incurred) in violation of this Agreement as in effect at the time
of the respective  incurrence,  (d) any  Indebtedness  of the Company that, when
incurred,  was without  recourse to the  Company,  (e) any  Indebtedness  to any
employee of the Company or any of its respective Subsidiaries, (f) any liability
for taxes owned or owing by the Company, (g) any Indebtedness represented by the
Existing  Notes  and  any  guarantee   thereof  by  any  Guarantor  or  (h)  any
Subordinated  Debt.  Indebtedness  represented  by the  Existing  Notes  and any
guarantee  thereof by any Guarantor shall be pari passu with the Loans and Notes
and the Guarantees, respectively.

         "Senior  Subordinated  Indenture"  shall mean an indenture  between the
Company and a trustee substantially in the form of the Arranger's customary high
yield  indenture  (which  shall  include  guarantees  by the  Guarantors  of the
Exchange  Notes),  modified as  appropriate  for the  Exchange  Notes and having
principal negative covenants  substantially identical to the covenants set forth
in Annex A, principal events of default substantially identical to Section 8 and
subordination  provisions  substantially  identical  to  Section  11 (with  such
changes  therein as the Majority  Lenders (which  consent shall be  conclusively
deemed  given if a Lender  does not  object to the  draft  thereof  within  five
Business Days of receipt  thereof) and the Company shall  approve,  and, at such
time as  notes  issued  thereunder  are sold in a public  offering,  with  other
appropriate  changes to reflect  such public  offering),  as the same may at any
time be amended, modified and supplemented and in effect.

         "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  Debt"  shall mean any  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  Parent's  and its  Subsidiaries'
indebtedness  and  obligations  under the Loan  Documents  pursuant  to  written
subordination provisions and having other terms and conditions acceptable to the
Majority Lenders,  including without limitation the Subordinated Promissory Note
issued by the Company to Dean Foods in connection  with the  Acquisition  in the
principal amount of $30,000,000,  and additional notes issued in accordance with
the terms thereof.

         "Subsequent  Initial  Note" shall have the meaning set forth in Section
2.01(d).

         "Subsequent  Term  Note"  shall have the  meaning  set forth in Section
2.02(e).


<PAGE>
         "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
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.

         "Take-Out Bank" shall mean Warburg Dillon Read LLC.

         "Telerate  Page 3750" shall mean the display  designated as "Page 3750"
on the  Telerate  Servce (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 Dollar deposits).

         "Ten Year U.S.  Treasury  Rate" means the  average of the annual  yield
rate,  on the date to which such Ten Year U.S.  Treasury  Rate  relates,  of the
three actively traded U.S. Treasury  securities  having a remaining  duration to
maturity  closest  to ten  years,  as such  rate is  published  under  "Treasury
Constant Maturities" in Federal Reserve Statistical Release H.15(519).

         "Term  Loan  Commitment"  shall have the  meaning  set forth in Section
2.02(a).

         "Term Notes" shall have the meaning set forth in Section 2.02(e).

         "Term Loan" shall have the meaning set forth in Section 2.02(a).

         "Term Loan  Facilities"  means the term loan facilities  provided under
the Senior Credit Facility.

         "Weighted  Average Life to Maturity," when applied to any  Indebtedness
at any date,  means the number of years  obtained by dividing (i) the sum of the
products  obtained  by  multiplying  (a)  the  amount  of  each  then  remaining
installment,  sinking  fund,  serial  maturity  or  other  required  payment  of
principal,  including payment at final maturity,  in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment by (ii) the then outstanding  principal
amount of such Indebtedness.

         "Withholding Taxes" shall have the meaning set forth in Section 3.06.

         "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.

         1.02 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 7.05 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 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 Majority 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 Parent's (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.

         1.03. Rules of Construction. 

                  (a) In this Agreement and each other Loan Document, unless the
         context clearly requires otherwise (or such other Loan Document clearly
         provides otherwise), references to (i) the plural include the singular,
         the  singular the plural and the part the whole;  (ii) Persons  include
         their  respective  permitted  successors and assigns or, in the case of
         governmental  Persons,  Persons succeeding to the relevant functions of
         such Persons;  (iii) agreements (including this Agreement),  promissory
         notes and other contractual  instruments include subsequent amendments,
         assignments,  and other modifications  thereto,  but only to the extent
         such  amendments,  assignments or other  modifications  thereto are not
         prohibited  by their  terms or the  terms  of any Loan  Document;  (iv)
         statutes and related regulations include any amendments of same and any
         successor  statutes and regulations;  and (v) time shall be a reference
         to New York City time.  Where any provision  herein refers to action to
         be taken by any Person, or which such Person is prohibited from taking,
         such  provision  shall  be  applicable  whether  such  action  is taken
         directly or indirectly by such Person.

                  (b) In this Agreement and each other Loan Document, unless the
         context clearly requires otherwise (or such other Loan Document clearly
         provides otherwise),  (i) "amend" shall mean "amend, restate, amend and
         restate,   supplement  or  modify";  and  "amended,"   "amending,"  and
         "amendment" shall have meanings  correlative to the foregoing;  (ii) in
         the  computation  of periods of time from a  specified  date to a later
         specified  date,  "from"  shall  mean  "from and  including";  "to" and
         "until" shall mean "to but excluding"; and "through" shall mean "to and
         including"; (iii) "hereof," "herein" and "hereunder" (and

<PAGE>

         similar  terms) in this  Agreement or any other Loan Document  refer to
         this  Agreement or such other Loan  Document,  as the case may be, as a
         whole and not to any  particular  provision  of this  Agreement or such
         other Loan Document;  (iv)  "including"  (and similar terms) shall mean
         "including  without  limitation" (and similarly for similar terms); (v)
         "or" has the inclusive meaning represented by the phrase "and/or"; (vi)
         "satisfactory  to" any Lender or Agent  shall  mean in form,  scope and
         substance and on terms and  conditions  satisfactory  to such Lender or
         Agent;  (vii) references to "the date hereof" shall mean the date first
         set forth above;  and (viii) "asset" and "Property" shall have the same
         meaning and effect and refer to all tangible and intangible  assets and
         property,  whether  real,  personal  or  mixed  and of  every  type and
         description.

                  (c) In this  Agreement  unless the  context  clearly  requires
         otherwise,  any reference to (i) an Annex, Exhibit or Schedule is to an
         Annex,  Exhibit  or  Schedule,  as the  case may be,  attached  to this
         Agreement and  constituting a part hereof,  and (ii) a Section or other
         subdivision  is  to  a  Section  or  such  other  subdivision  of  this
         Agreement.

                  (d) No doctrine of  construction  of ambiguities in agreements
         or  instruments  against the  interests  of the party  controlling  the
         drafting thereof shall apply to any Loan Document.

         Section 2. Amount and Terms of Loan Commitment and Loans; Notes.

         2.01. Initial Loan and Initial Notes.

                  (a)  Initial  Loan  Commitment.   Subject  to  the  terms  and
         conditions of this  Agreement and in reliance upon the  representations
         and warranties of the Company and Parent herein set forth,  the Lenders
         hereby  severally  agree to lend to the  Company  on the  Closing  Date
         $200,000,000  in the aggregate (the "Initial  Loan"),  each such Lender
         committing  to lend the amount set forth next to such  Lender's name on
         the  signature  pages  hereto.  The  Lenders'  commitments  to make the
         Initial Loan to the Company pursuant to this Section 2.01(a) are herein
         called  individually,  the "Initial Loan Commitment" and  collectively,
         the "Initial Loan Commitments."

                  (b) Notice of  Borrowing.  When the Company  desires to borrow
         under this Section 2.01, it shall deliver to the Administrative Agent a
         Notice of Borrowing no later than 11:00 A.M. (New York time),  at least
         three  Business  Days in advance of the Closing Date or such later date
         as shall be  agreed  to by the  Administrative  Agent.  The  Notice  of
         Borrowing shall specify the applicable  date of borrowing  (which shall
         be a Business  Day).  Upon  receipt of such  Notice of  Borrowing,  the
         Administrative  Agent shall promptly notify each Lender of its share of
         the  Initial  Loan and the  other  matters  covered  by the  Notice  of
         Borrowing.

                  (c)  Disbursement of Funds.  (i) No later than 12:00 Noon (New
         York time) on the Closing Date, each Lender will make available its pro
         rata share of the Initial Loan requested to be made on such date in the
         manner  provided  below.  All amounts  shall be made  available  to the
         Administrative Agent in Dollars and immediately  available funds at the
         Principal  Office  and the  Administrative  Agent  promptly  will  make
         available to the Company by  depositing to its account at the Principal
         Office the  aggregate  of the amounts so made  available in the type of
         funds  received.  Unless  the  Administrative  Agent  shall  have  been
         notified by any Lender  prior to the Closing Date that such Lender does
         not intend to make available to the Administrative Agent its portion of
         the


<PAGE>

         Initial  Loan to be made on such  date,  the  Administrative  Agent may
         assume  that  such  Lender  has  made  such  amount  available  to  the
         Administrative  Agent on such date, and the  Administrative  Agent,  in
         reliance upon such assumption,  may (in its sole discretion and without
         any obligation to do so) 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 available the same to the Company,  the  Administrative  Agent
         shall be  entitled  to  recover  such  corresponding  amount  from such
         Lender. If such Lender does not pay such corresponding amount forthwith
         upon the  Administrative  Agent's demand therefor,  the  Administrative
         Agent  shall  promptly  notify  the  Company,  and  the  Company  shall
         immediately pay such corresponding amount to the Administrative  Agent.
         The  Administrative  Agent shall also be  entitled to recover  from the
         Lender  or  the  Company,   as  the  case  may  be,  interest  on  such
         corresponding  amount  in  respect  of each  day  from  the  date  such
         corresponding  amount was made available by the Administrative Agent to
         the Company to the date such  corresponding  amount is recovered by the
         Administrative  Agent, at a rate per annum equal to (x) if paid by such
         Lender, the overnight Federal Funds Rate or (y) if paid by the Company,
         the then applicable rate of interest on the Loans.

                           (ii)  Nothing  herein  shall be deemed to relieve any
                  Lender  from  its  obligation  to  fulfill  its  Initial  Loan
                  Commitment  hereunder  or to  prejudice  any rights  which the
                  Company may have against any Lender as a result of any default
                  by such Lender hereunder.

                  (d) Initial  Notes.  The Company  shall execute and deliver to
         each Lender on the Closing  Date an Initial Note dated the Closing Date
         substantially in the form of Exhibit A-1 annexed hereto to evidence the
         portion of the  Initial  Loan made on such date by such Lender and with
         appropriate  insertions  ("Original  Initial Notes").  On each interest
         payment date prior to the  Conversion  Date on which the Company elects
         to pay a PIK Interest Amount pursuant to Section  2.03(b),  the Company
         shall execute and deliver to each Lender on such interest  payment date
         an Initial Note dated such interest  payment date  substantially in the
         form of Exhibit A-1 annexed hereto in a principal  amount equal to such
         Lender's pro rata  portion of such PIK  Interest  Amount and with other
         appropriate  insertions (each a "Subsequent Initial Note" and, together
         with the Original  Initial Notes,  the "Initial  Notes").  A Subsequent
         Initial Note shall bear  interest  from the date of its issuance at the
         same rate borne by all Initial Notes.

                  (e)  Scheduled  Payment  of Initial  Loan.  Subject to Section
         2.02,  the  Company  shall  pay in full the  outstanding  amount of the
         Initial Loan and all other Loan  Obligations  owing  hereunder no later
         than the  Conversion  Date unless the Initial Loan is converted  into a
         Term Loan.

                  (f) Termination of Initial Loan  Commitment.  The Initial Loan
         Commitments hereunder shall terminate on the earlier of (i) the date on
         which the Stock Purchase Agreement is terminated in accordance with its
         terms or (ii) October 31,  1998,  if the Initial Loan is not made on or
         before such date. The Company shall have the right,  without premium or
         penalty,  to reduce or  terminate  the Initial Loan  Commitment  of the
         Lenders hereunder at any time.

<PAGE>

                  (g) Pro Rata  Borrowings.  The  Initial  Loan made  under this
         Agreement  shall be made by the  Lenders pro rata on the basis of their
         respective  Initial Loan  Commitments.  It is understood that no Lender
         shall  be  responsible  for any  default  by any  other  Lender  of its
         obligation  to make its portion of the Initial Loan  hereunder and that
         each Lender  shall be obligated to make its portion of the Initial Loan
         hereunder, regardless of the failure of any other Lender to fulfill its
         commitments hereunder.

         2.02. Term Loan and Term Notes.

                  (a) Term Loan Commitment.  Subject to the terms and conditions
         of  this  Agreement  and  in  reliance  upon  the  representations  and
         warranties  of the  Company  and Parent  herein set forth,  the Lenders
         hereby severally agree, on the Conversion Date, upon the request of the
         Company,  to  convert  the then  outstanding  principal  amount  of the
         Initial Notes into a term loan (the "Term Loan"),  such Term Loan to be
         in the aggregate  principal  amount of the then  outstanding  principal
         amount of the  Initial  Notes.  The  Lenders'  commitments  under  this
         Section  2.02(a)  are  herein  called  collectively,   the  "Term  Loan
         Commitment."

                  (b) Notice of  Conversion/Borrowing.  If the  Company  has not
         repaid the  Initial  Loan in full on or prior to the  Conversion  Date,
         then the Company shall convert the then outstanding principal amount of
         the Initial Notes into a Term Loan under this Section 2.02. The Company
         shall deliver to the Lenders a Notice of Conversion no later than 11:00
         A.M.  (New York  time),  at least two  Business  Days in advance of the
         Conversion  Date. The Notice of Conversion  shall specify the principal
         amount of the Initial Notes  outstanding on the  Conversion  Date to be
         converted into a Term Loan.

                  (c) Making of Term Loan.  Upon  satisfaction  or waiver of the
         conditions  precedent  specified in Section  5.02  hereof,  each Lender
         shall  extend  to  the  Company  the  Term  Loan  to be  issued  on the
         Conversion  Date  by  such  Lender  by  cancelling  on  its  records  a
         corresponding  principal  amount  of the  Initial  Notes  held  by such
         Lender.

                  (d) Maturity of Term Loan.  The Term Loan shall mature and the
         Company shall pay in full the outstanding  principal amount thereof and
         accrued interest thereon on September 23, 2006 (the "Maturity Date").

                  (e) Term Notes.  The Company shall execute and deliver to each
         Lender on the  Conversion  Date a Term Note dated the  Conversion  Date
         substantially in the form of Exhibit A-2 annexed hereto to evidence the
         Term Loan made on such date,  in the  principal  amount of the  Initial
         Notes  held by such  Lender  on such  date and with  other  appropriate
         insertions  (collectively  the "Original Term Notes").  On or after the
         Conversion  Date,  on each  interest  payment date on which the Company
         elects to pay a PIK Interest  Amount pursuant to Section  2.03(b),  the
         Company  shall  execute  and  deliver to each  Lender on such  interest
         payment date a Term Note dated such interest payment date substantially
         in the form of Exhibit A-2 annexed  hereto in a principal  amount equal
         to such Lender's pro rata portion of such PIK Interest  Amount and with
         other  appropriate  insertions  (each a  "Subsequent  Term  Note"  and,
         together with the Original Term Notes, the "Term Notes").  A Subsequent
         Term Note shall bear interest from the date of its issuance at the same
         rate borne by all Term Notes.



<PAGE>

         2.03. Interest on the Loans.

                  (a) Rate of  Interest.  The Loans  shall bear  interest on the
         unpaid  principal  amount  thereof from the date made through  maturity
         (whether by prepayment, acceleration or otherwise) at a rate determined
         as set forth below.

                           (i)   Floating   Rate   Loans.   Subject  to  Section
                  2.03(a)(ii),  the Loans shall bear  interest for each Interest
                  Period at a rate per annum  equal to the  Adjusted  LIBOR Rate
                  for such Interest Period, plus the Applicable Spread.

                           (ii)  Fixed Rate  Loans.  At any time on or after the
                  Conversion  Date,  at the  request of any  Lender,  all or any
                  portion  of the Term  Loan  owing to such  Lender  shall  bear
                  interest  at a fixed rate per annum  equal to the Fixed  Rate,
                  effective as of the first  interest  payment date with respect
                  to such Term Loan after such notice so long as the 10 Business
                  Days' notice set forth below is given;  provided  that no such
                  conversion  shall be  permitted  in  respect  of amounts to be
                  voluntarily   prepaid   following   receipt  of  a  notice  of
                  prepayment  pursuant  to  Section  2.05(a)(ii).  In  order  to
                  request the conversion of a Floating Rate Loan to a Fixed Rate
                  Loan,  the Lender  shall  notify the  Administrative  Agent in
                  writing of its  intention  to do so at least 10 Business  Days
                  prior to an interest payment date indicating the amount of the
                  Term Loan for  which it is  requesting  conversion  to a Fixed
                  Rate  Loan,  which  shall  be not  less  than  $5,000,000  and
                  increments of $500,000 in excess  thereof (or, in the case any
                  Lender holds a Term Loan with an outstanding  amount less than
                  $5,000,000,  such remaining  amount),  and the  Administrative
                  Agent  shall so notify  the  Company  in writing at least five
                  Business Days prior to such next succeeding  interest  payment
                  date. Upon the conversion of a portion of a Floating Rate Loan
                  to a Fixed Rate Loan an  appropriate  notation will be made on
                  the Term Note and,  on and  after the first  interest  payment
                  date  following  the  receipt  by the  Company  of the  notice
                  referenced in the preceding sentence, such portion of the Term
                  Loan  which is  converted  to a Fixed  Rate  Loan  shall  bear
                  interest at the Fixed Rate until repaid.

                           (iii)  Notwithstanding  clause  (i) or  (ii)  of this
                  Section  2.03(a) or any other  provision  herein,  in no event
                  will the combined sum of interest  (cash or  otherwise) on the
                  Loans exceed 16.00% per annum.

                  (b)  Interest  Payments.  Interest  shall be payable  (i) with
         respect  to the  Initial  Loan,  in  arrears  on the  23nd  day of each
         calendar  month and upon any  prepayment  of the  Initial  Loan (to the
         extent  accrued on the amount  being  prepaid)  and at  maturity of the
         Initial  Loan in  respect  of any  amounts  paid on such  date  and not
         converted  to Term Loans and (ii) with  respect  to the Term  Loan,  in
         arrears on each March 23, June 23, September 23 and December 23 of each
         year,  commencing  on the first of such dates to follow the  Conversion
         Date,  upon any  prepayment of the Term Loan (to the extent  accrued on
         the amount being  prepaid) and at maturity of the Term Loan;  provided,
         however, that if, on any interest payment date, the interest rate borne
         by the Initial Loan or the Term Loan,  as the case may be,  exceeds the
         Maximum Cash Interest Rate, the Company may pay all or a portion of the
         interest  payable (other than interest payable on the Maturity Date) in
         excess of the amount of interest  that would be payable on such date at
         the Maximum Cash Interest Rate by issuance of Subsequent Initial


<PAGE>

         Notes or  Subsequent  Term Notes,  as the case may be, in an  aggregate
         principal  amount equal to the amount of such excess (the "PIK Interest
         Amount").

                  (c)  Post-Maturity  Interest.  Any  principal  payments on the
         Loans not paid when due and, to the extent permitted by applicable law,
         any  interest  payment  on the Loans  not paid  when due,  in each case
         whether at stated maturity, by notice of prepayment, by acceleration or
         otherwise, shall thereafter bear interest payable upon demand at a rate
         which is 2.00% per annum in  excess of the rate of  interest  otherwise
         payable under this Agreement for the Loans.  Interest  payable pursuant
         to  this  Section  2.03(c)  shall  not  be  included  for  purposes  of
         determining  whether the  interest on the Loans  exceeds the amount set
         forth in Section 2.03(a)(iii) or the amount set forth in the proviso to
         Section 2.03(b).

                  (d)  Computation  of Interest.  Interest on the Loans shall be
         computed on the basis of a 360-day year and, with respect to any amount
         of the Loans which are Floating  Rate Loans,  the actual number of days
         elapsed in the period  during  which it accrues or, with respect to any
         amount of the Loans which are Fixed Rate Loans,  twelve 30-day  months.
         In computing interest on the Loans, the date of the making of the Loans
         shall be included and the date of payment shall be excluded;  provided,
         however,  that if a Loan is repaid on the same day on which it is made,
         one day's interest shall be paid on that Loan.

         2.04. Fees.

                  (a) In the event that the Initial Loan is  converted  into the
         Term Loan  pursuant  to  Section  2.02,  the  Company  shall pay to the
         Lenders,  pro rata in accordance with their respective principal amount
         of the Initial Notes then  outstanding,  on the Conversion  Date, a fee
         equal to 6.00% of the initial principal amount of the Term Loan.

                  (b) On each  anniversary of the  Conversion  Date, the Company
         shall pay to the Lenders,  pro rata in accordance with their respective
         principal  amount of the Term  Notes then  outstanding,  a fee equal to
         1.00%  of the  aggregate  principal  amount  of  the  Term  Notes  then
         outstanding.

                  (c) The Company agrees to pay to the Agents all fees and other
         obligations in accordance  with, and at the times specified by, the Fee
         Letter.

         2.05. Prepayments.

                  (a) Prepayments.

                           (i)  Voluntary   Prepayments  of  Initial  Loan.  The
                  Company  may,  upon not less than three  Business  Days' prior
                  written  or  telephonic  notice  confirmed  in  writing to the
                  Administrative Agent at any time and from time to time, prepay
                  the Initial Loan, in whole or in part, in an aggregate minimum
                  amount of  $500,000  and  integral  multiples  of  $100,000 in
                  excess of such amount,  at a  prepayment  price of 100% of the
                  principal  amount  thereof,  plus accrued and unpaid  interest
                  thereon to the date of prepayment.
<PAGE>

         Notice of  prepayment  having been given as  aforesaid,  the  principal
amount of the Loans to be prepaid shall become due and payable on the prepayment
date. Amounts of the Loans so prepaid may not be reborrowed.

         (ii) Voluntary Prepayments of Term Loan.

                  (1)  Optional  Prepayment.  Except as provided in this Section
         2.05(a)(ii),  the  Company  may not  prepay  the  Term  Loan  prior  to
         September  23, 2003.  The Company  may,  upon not less than 20 Business
         Days' prior  written or telephonic  notice  confirmed in writing to the
         Administrative  Agent at any time  and from  time to time on and  after
         September  23, 2003,  prepay the Term Loan,  in whole or in part, in an
         aggregate minimum amount of $500,000 and integral multiples of $100,000
         in  excess  of  such  amount,  at a  prepayment  price  of  100% of the
         principal amount thereof, plus a premium equal to, for each Lender, the
         interest  rate in effect on such  Lender's  portion of the Term Loan on
         the date notice of  prepayment  is given  multiplied  by the  following
         factor,  plus accrued and unpaid interest thereon,  if any, to the date
         of prepayment,  if prepaid during the twelve-month period commencing on
         September 23 of the year set forth below:

                           Year                             Premium Factor
                           2003..........................        1/2
                           2004..........................        1/3
                           2005..........................        1/6
                           2006 and thereafter...........          0

                  (2) Optional Prepayment upon Equity Offering.  Notwithstanding
         the foregoing, at any time on or before September 23, 2001, the Company
         may prepay up to an aggregate  principal  amount of the Term Loan equal
         to 35% of the aggregate  principal  amount of the Term Loan outstanding
         on the  Conversion  Date at a prepayment  price equal to the  principal
         amount of the Term Loan so prepaid,  plus a premium  equal to, for each
         Lender,  the rate of interest in effect on such Lender's portion of the
         Term Loan on the date notice of prepayment  is given,  plus accrued and
         unpaid  interest  thereon,  if any, to the prepayment date with the net
         cash proceeds of one or more Equity Offerings;  provided, however, that
         (a) at least an  aggregate  principal  amount of the Term Loan equal to
         65% of the aggregate  principal  amount of the Term Loan outstanding on
         the Conversion Date would remain  outstanding  immediately after giving
         effect to any such prepayment; and (b) such prepayment occurs within 60
         days of the date of the closing of any such Equity Offering.

                  (3) Pro Rata Prepayment Under Senior  Subordinated  Indenture.
         If any  Exchange  Notes are  outstanding,  any  prepayment  pursuant to
         Section  2.05(a)(ii)(1)  or (2) shall be made pro rata with an optional
         redemption of Exchange Notes under the Senior Subordinated Indenture.

<PAGE>

         Notice of  prepayment  having been given as  aforesaid,  the  principal
amount  of the Term Loan to be  prepaid  shall  become  due and  payable  on the
prepayment date. Amounts of the Term Loan so prepaid may not be reborrowed.

                  (iii)  Mandatory  Prepayments.  The Company  shall  prepay the
         Initial Loan or Term Loan as follows:

                           (1) Mandatory  Prepayment of Initial Loan upon Equity
                  Issuance. Upon any Equity Issuance after the Closing Date, the
                  Initial Loan shall be prepaid in an aggregate principal amount
                  equal to 100% of the Net  Available  Proceeds  of such  Equity
                  Issuance.


                           (2)  Mandatory  Prepayment  of Initial Loan upon Debt
                  Issuance.  Upon any Debt Issuance (other than Revolving Credit
                  Loans under the Senior Credit Facility  (without giving effect
                  to any increases  thereof) and Indebtedness  incurred pursuant
                  to Section  7.09(e) and 7.09(h))  after the Closing Date,  the
                  Initial Loan shall be prepaid in an aggregate principal amount
                  equal  to 100%  of the Net  Available  Proceeds  of such  Debt
                  Issuance.

                           (3) Mandatory  Offer to Purchase Term Notes on Change
                  of  Control.  (A)  Following  the  occurrence  of a Change  of
                  Control  on or after  the  Conversion  Date  (the date of such
                  occurrence  being the "Change of Control  Date"),  the Company
                  shall notify the Administrative  Agent and the Lenders of such
                  occurrence  in the manner  prescribed  by this  Agreement  and
                  shall,  within 30 days after the Change of Control Date,  make
                  an Offer to Purchase  (the "Change of Control  Offer") for all
                  Term Notes then outstanding, at a purchase price in cash equal
                  to  101%  of the  aggregate  principal  amount  thereof,  plus
                  accrued and unpaid interest  thereon,  if any, to the Purchase
                  Date.  Each  Lender  shall be  entitled  to tender  all or any
                  portion of the Term Notes owned by such Lender pursuant to the
                  Change of Control Offer,  subject to the requirement  that any
                  portion  of a  Term  Note  tendered  must  be  tendered  in an
                  integral multiple of $1,000 principal amount.

                  (B) On or prior to the Purchase  Date  specified in the Change
         of Control  Offer,  the  Company  shall (i) accept for payment all Term
         Notes or portions  thereof validly  tendered  pursuant to the Change of
         Control  Offer,  (ii)  deposit  with  the  Administrative  Agent  money
         sufficient  to pay the  Purchase  Price of all Term  Notes or  portions
         thereof so accepted  and (iii)  deliver or cause to be delivered to the
         Administrative Agent an Officers' Certificate stating the Term Notes or
         portions   thereof   accepted   for   payment  by  the   Company.   The
         Administrative  Agent shall  promptly  mail or deliver to Lenders whose
         Term Notes are so accepted  payment in an amount  equal to the Purchase
         Price for such Term Notes, and the Administrative  Agent shall promptly
         mail or  deliver  to each  Lender a new Term  Note  equal in  principal
         amount  to any  unpurchased  portion  of the Term Note  surrendered  as
         requested by the Lender.  Any Term Note not accepted for payment  shall
         be promptly mailed or delivered by the Company to the Lender thereof.

                           (4)  Mandatory  Offer to Purchase  Initial  Notes and
                  Term Notes on Asset Sale. If Parent or any Subsidiary  engages
                  in an Asset Sale (as

<PAGE>

                  defined in the definition of Net Asset Sale Proceeds),  Parent
                  or any  Subsidiary  shall,  no later  than 270 days after such
                  Asset Sale (a) apply all or any of the Net Asset Sale Proceeds
                  therefrom to repay amounts outstanding under the Senior Credit
                  Facility or any other Senior Indebtedness;  provided,  in each
                  case,  that  the  related  loan  commitment  (if  any)  of any
                  Indebtedness  constituting  revolving  credit  debt is thereby
                  permanently  reduced  by the  amount of such  Indebtedness  so
                  repaid;  and/or  (b)  invest  all or any part of the Net Asset
                  Sale  Proceeds  thereof in the  purchase of fixed assets to be
                  used by the Parent and its  Subsidiaries in a Related Business
                  (together with any short-term assets incidental  thereto),  or
                  the  making of a Related  Business  Investment.  The amount of
                  such Net Asset  Sale  Proceeds  not  applied  or  invested  as
                  provided in this paragraph will constitute "Excess Proceeds."

                  When the aggregate  amount of Excess Proceeds equals or exceed
         $10.0  million,  the  Company  will be  required  to make an  Offer  to
         Purchase,  from all  holders  of the  Initial  Notes or Term Notes then
         outstanding,  as the case may be,  an  aggregate  principal  amount  of
         Initial Notes or Term Notes, as applicable, equal to the amount of such
         Excess Proceeds as follows:

                  (i)  The  Company  will  make an  Offer  to  Purchase  (a "Net
         Proceeds  Offer")  from all holders of the Notes the maximum  principal
         amount  (expressed  as a  multiple  of  $1,000)  of  Notes  that may be
         purchased  out of the amount  (the  "Payment  Amount")  of such  Excess
         Proceeds.

                 (ii) The offer  price for the Notes  will be payable in cash in
         an amount equal to 100% of the principal  amount of the Notes  tendered
         pursuant to a Net Proceeds Offer, plus accrued and unpaid interest,  if
         any, to the Purchase  Date. To the extent that the  aggregate  Purchase
         Price of Notes  tendered  pursuant to a Net Proceeds Offer is less than
         the Payment Amount relating thereto (such shortfall constituting a "Net
         Proceeds   Deficiency"),   the  Company  may  use  such  Net   Proceeds
         Deficiency,  or a portion  thereof,  for  general  corporate  purposes,
         subject to the limitations herein.

                (iii) If the aggregate  Purchase Price of Notes validly tendered
         and not withdrawn by holders thereof exceeds the Payment Amount,  Notes
         to be purchased will be selected on a pro rata basis.

                 (iv) Upon  completion of such Net Proceeds  Offer in accordance
         with the foregoing provisions, the amount of Excess Proceeds in respect
         of such Net Proceeds Offer shall be deemed to be zero.

                  (v) On or  prior to the  Purchase  Date  specified  in the Net
         Proceeds  Offer,  the Company shall (i) accept for payment all Notes or
         portions thereof validly  tendered  pursuant to the Net Proceeds Offer,
         (ii) deposit with the Administrative  Agent money sufficient to pay the
         Purchase  Price of all Notes or portions  thereof so accepted and (iii)
         deliver  or  cause  to be  delivered  to the  Administrative  Agent  an
         Officers' Certificate stating the Notes or portions thereof accepted

<PAGE>

         for payment by the Company.  The  Administrative  Agent shall  promptly
         mail or deliver to Lenders  whose Notes are so  accepted  payment in an
         amount   equal  to  the  Purchase   Price  for  such  Notes,   and  the
         Administrative  Agent shall  promptly  mail or deliver to each Lender a
         new Note equal in principal  amount to any  unpurchased  portion of the
         Note surrendered as requested by the Lender.  Any Note not accepted for
         payment  shall be promptly  mailed or  delivered  by the Company to the
         Lender thereof.

                  Notwithstanding  the  foregoing,  in the event  that any other
         Indebtedness  of the Company which ranks pari passu with the Notes (the
         "Other  Indebtedness")  requires  an  offer to  purchase  to be made to
         repurchase such Other  Indebtedness  upon the  consummation of an Asset
         Sale, the Company may apply the Excess Proceeds  otherwise  required to
         be  applied to a Net  Proceeds  Offer to offer to  purchase  such Other
         Indebtedness  and to a Net Proceeds Offer so long as the amount of such
         Excess Proceeds applied to purchase the Notes is not less than the Note
         Portion of Excess Proceeds.  With respect to any Excess  Proceeds,  the
         Company  shall make the Net  Proceeds  Offer in respect  thereof at the
         same time as the  analogous  offer to purchase is made  pursuant to any
         Other Indebtedness and the purchase date in respect of the Net Proceeds
         Offer shall be the same as the purchase date in respect of the offer to
         purchase pursuant to such Other Indebtedness.

                  For  purposes  of  this  covenant,  "Note  Portion  of  Excess
         Proceeds,"  in respect of a Net Proceeds  Offer,  means (1) if no Other
         Indebtedness is concurrently being offered to be purchased,  the amount
         of the Excess Proceeds in respect of such Net Proceeds Offer and (2) if
         Other  Indebtedness is concurrently  being offered to be purchased,  an
         amount  equal to the  product of (x) the Excess  Proceeds in respect of
         such Net Proceeds  Offer and (y) a fraction  the  numerator of which is
         the  principal  amount  of all  Notes  tendered  pursuant  to such  Net
         Proceeds Offer (the "Note Amount") and the  denominator of which is the
         sum of the Note Amount and the lesser of the aggregate  principal  face
         amount or accreted value as of the relevant  purchase date of all Other
         Indebtedness  tendered  pursuant to a concurrent offer to purchase such
         Other Indebtedness made at the time of such Net Proceeds Offer.

                  (5)  Prepayments  from  Issuances of  Refinancing  Securities.
         Concurrently  with the  receipt  by the  Company of  proceeds  from the
         issuance of Refinancing Securities,  the Company shall prepay the Loans
         in a principal  amount equal to the lesser of the proceeds thereof (net
         of  expenses  payable  by the  Company  to any  Person  other  than  an
         Affiliate of the Company in  connection  with the issuance  thereof) or
         the aggregate principal amount of the Notes then outstanding.

                           (b) Notice. The Company shall notify the Agent of any
                  prepayment to be made pursuant to Section 2.05(a)(i),  (ii) or
                  (iii) at least two Business Days prior to such prepayment date
                  (unless   shorter  notice  is  satisfactory  to  the  Majority
                  Lenders).

                           (c)  Company's   Mandatory   Prepayment   Obligation;
                  Application  of  Prepayments.  All  prepayments  shall include
                  payment of accrued interest on the principal amount so prepaid
                  and shall be applied to payment of interest before application
                  to principal.

         2.06. Manner and Time of Payment

                  (a) All payments of principal and interest hereunder and under
         the Notes by the  Company  shall be made  without  defense,  set-off or
         counterclaim and in same-day funds and delivered to the  Administrative
         Agent, unless otherwise specified,  not later than 12:00 Noon (New York
         time) on the date due at the  Principal  Office for the  account of the
         Lenders;  funds  received by the  Administrative  Agent after that time
         shall be deemed to have been paid by the Company on the next succeeding
         Business Day. The Company hereby authorizes the Administrative Agent to
         charge  its  account  with the  Administrative  Agent in order to cause
         timely  payment  to be made of all  principal,  interest  and  fees due
         hereunder  (subject to sufficient  funds being available in its account
         for that purpose).

                  (b) Payments on Non-Business Days.  Whenever any payment to be
         made  hereunder  or under the Notes  shall be stated to be due on a day
         which is not a  Business  Day,  the  payment  shall be made on the next
         succeeding Business Day and such extension of time shall be included in
         the computation of the payment of interest hereunder or under the Notes
         or of the commitment and other fees hereunder, as the case may be.

                  (c) Payments Pro Rata.  The  Administrative  Agent agrees that
         promptly  after its receipt of each  payment of any interest or premium
         on or  principal  of the Notes from or on behalf of the  Company or any
         Guarantor,  it shall,  except as otherwise  provided in this Agreement,
         distribute  such payment to the Lenders (other than any Lender that has
         consented  in writing to waive its pro rata share of such  payment) pro
         rata based upon  their  respective  pro rata  shares,  if any,  of such
         payment.

                  (d)  Notation  of  Payment.  Each  Lender  agrees  that before
         disposing  of any Note held by it, or any part  thereof  (other than by
         granting  participations  therein),  such  Lender  will make a notation
         thereon of all principal  payments  previously  made thereon and of the
         date to which  interest  thereon  has been  paid  and will  notify  the
         Company  of the  name  and  address  of the  transferee  of that  Note;
         provided, however, that the failure to make (or any error in the making
         of) such a notation or to notify the Company of the name and address of
         such transferee  shall not limit or otherwise  affect the obligation of
         the Company hereunder or under such Notes with respect to the Loans and
         payments of principal or interest on any such Note.

         2.07. Use of Proceeds

                  (a) Initial  Loan.  The  proceeds of the Initial Loan shall be
         applied  by the  Company,  together  with  borrowings  under the Senior
         Credit Facility,  to pay the  consideration  for the Acquisition and to
         repay certain  indebtedness of the Company and its  Subsidiaries and to
         pay certain fees and expenses.

                  (b) Term Loan.  The proceeds of the Term Loan shall be used to
         cancel any outstanding  amount of Initial Notes converted to Term Notes
         on such date.

                  (c) Margin  Regulations.  No portion  of the  proceeds  of any
         borrowing  under  this  Agreement  shall be used by the  Company in any
         manner  which  might cause the  borrowing  or the  application  of such
         proceeds to violate the

<PAGE>

         applicable  requirements  of  Regulations  T,  U  and  X or  any  other
         regulation of the Board of Governors or to violate the Exchange Act, in
         each case as in effect on the date or dates of such  borrowing and such
         use of proceeds.

         Section 3. Yield Protection, Etc.

         3.01. 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 Loan 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 or purchase of a Loan or Note on
         a date other than the last day of an  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 5 hereof or  otherwise) by the Company to create or borrow a
         Loan  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 Loan when due  (whether  by  acceleration,  mandatory
         prepayment  or purchase 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.

         3.02.  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 the Loans or to give effect to its  obligations  to
make the Loans 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 the Loans under this Agreement  shall  terminate
until it is no longer unlawful for such Lender to make or maintain the Loans. 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 portion
of the Loans,  together with all interest  accrued thereon and all other amounts
then due and  payable to such  Lender  under this  Agreement  and such  Lender's
Commitment  shall be canceled and the  obligations  of the Lender to the Company
hereunder  shall  cease.  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 3.02;  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.

<PAGE>

         3.03.   Unavailability  of  Deposits  or  Inability  to  Ascertain,  or
Inadequacy  of, LIBOR Rate.  (a) If on or prior to the first day of any Interest
Period the  Administrative  Agent  determines  that  deposits in 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.

                  (b) After any notification under paragraph (a) above:

                           (i) if the Company so requires,  within five Business
                  Days of receipt of any such notification,  the Company and the
                  Administrative Agent (on behalf of the Lenders) shall, in good
                  faith,  enter into  negotiations for a period of not more than
                  30 days with a view to  agreeing  to a  substitute  basis (the
                  "Substitute Basis") for determining the rate of interest;

                           (ii) any Substitute  Basis agreed under  subparagraph
                  (i) above shall be, with the prior consent of all the Lenders,
                  binding on the parties; and

                           (iii)  until  and  unless  a  Substitute  Basis is so
                  agreed,  each Lender's  participation  in the Loans shall bear
                  interest  during  the  current  Interest  Period  at the  rate
                  certified  by such  Lender to be its cost of funds  (from such
                  source as it may reasonably  select) for such Interest  Period
                  plus the Applicable Spread.

                  (c) The Administrative Agent, in consultation with the Company
         shall,  not  less  often  than  monthly,  review  whether  or  not  the
         circumstances referred to in paragraph (a) still prevail with a view to
         returning to the normal interest provisions of this Agreement.

         3.04.  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
         3.06 hereof) with respect to the Loans,  its Notes or its obligation to
         make the Loans  available,  or shall  change the basis of  taxation  of
         payments to any Lender (or its lending  office) of the  principal of or
         interest on the Loans or any other amounts due under this  Agreement in
         respect of the Loans or its obligation to make the Loans; 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 Reserve  Percentage) against assets of, deposits with or for
         the account of, or credit extended by, any Lender (or its lending

<PAGE>
         office) or shall  impose on any Lender (or its  lending  office) or the
         offshore interbank market any other condition  affecting the Loans, its
         Notes or its obligation to make the Loans 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  the Loans,  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 3.04 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.

         3.05.  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 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 3.05 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.

         3.06. Withholding Taxes.

                  (a) Payments Free of Withholding. Except as otherwise required
         by law and subject to Section  3.06(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 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  and  the
         Administrative   Agent  free  and  clear  of  such  Withholding   Taxes
         (including such taxes on such additional amount) is equal to the amount
         which  that  Lender  or the  Administrative  Agent (as the case may be)
         would have


<PAGE>
         received  had such  withholding  not been made.  If the  Administrative
         Agent or any Lender pays any amount in respect of any such  Withholding
         Taxes,   penalties  or  interest,   the  Company  shall  reimburse  the
         Administrative  Agent 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 or the  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 Closing  Date 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.

                  (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 3.06 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.

         3.07.  Lender  Replacement.  If the  Company  is  required  to make any
reduction  or  withholding  with  respect to any  payment  due any Lender  under
Section 3.06 hereof or is required to make any payment to a Lenders under

<PAGE>

Sections 3.04 or 3.05 hereof or a Lender's  obligation to make or maintain Loans
is suspended  pursuant to Section  3.02 hereof (in any such case a  "Replaceable
Lender"), the Company may, with the consent of the Administrative Agent, propose
that another lender (a  "Replacement  Lender"),  which lender may be an existing
Lender,  be substituted for and replace the  Replaceable  Lender for purposes of
this  Agreement.  If a Replacement  Lender is so substituted for the Replaceable
Lender, the Replaceable Lender shall enter into an Assignment Agreement with the
Replacement  Lender,  the  Company  and the  Administrative  Agent to assign and
transfer to the  Replacement  Lender the  Replaceable  Lender's  Commitments and
portion of the Loans  pursuant  to and in  accordance  with the  provisions  and
requirements   of  Section   10.07(a)  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  Lender shall concurrently
receive the full amount of its portion of the 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 3.02 hereof if its
portion of the Loans had been prepaid rather than assigned.

         Section 4. Guarantee.

         4.01.  The  Guarantee.  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 Loans 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 Lenders and
each  other  holder  of any of the  Company's  Loan  Obligations  under the Loan
Documents,  the due and punctual payment of all present and future indebtedness,
Loan  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 the due and punctual  payment of
all other Loan  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.

         4.02. Guarantee  Unconditional.  The obligations of each Guarantor as a
guarantor under this Section 4 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 Loan  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;



<PAGE>

                  (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  assets,  or any resulting  release or discharge of
         any Loan 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 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 or any other Guarantor;

                  (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 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 4.

         4.03.  Discharge  Only upon Payment in Full;  Reinstatement  in Certain
Circumstances. Each Guarantor's obligations under this Section 4 shall remain in
full force and effect until the  Commitments are terminated and the principal of
and interest on the Notes and all other Loan Obligations then due and payable by
the Company under this  Agreement and all other Loan  Documents  shall have been
paid in full.  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 4 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.

         4.04.  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
the Loan Documents  shall have been paid in full. If any amount shall be paid to
a  Guarantor  on  account  of such  subrogation  rights at any time prior to the
payment in full of the Notes and all other  amounts  payable  by such  Guarantor
hereunder,  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  Loan  Obligations  under  the  Loan  Documents,  whether  matured  or
unmatured, in accordance with the terms of this Agreement.

<PAGE>
         4.05.  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 any Agent, any Lender or
any other Person against the Company, another Guarantor or any other Person.

         4.06. 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.

         4.07. General Limitation on Guarantee Obligations.  Notwithstanding any
other provision of this Section 4, the right to recovery  against each Guarantor
under this  Section 4 shall not exceed  $1.00 less than the amount  which  would
render such Guarantor's  obligations under this Section 4 void or voidable under
applicable law.

         4.08. Subordination. The Guarantee of each Guarantor is subordinated to
the prior  payment in full in cash when due of all  existing  and future  Senior
Indebtedness  of such  Guarantor  to the  extent  and in the manner set forth in
Section 11.

         Section 5. Conditions Precedent.

         5.01.  Conditions to  Effectiveness of Loan Documents and Obligation to
Make Initial Loan. The effectiveness of the Loan Documents and the obligation of
the Lenders to make an Initial Loan hereunder is subject to the  satisfaction of
the conditions precedent that:

                  (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:

                           (i) this Agreement and the Initial 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 Company
                  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;

<PAGE>

                           (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  (i)  with  the
                  Company's  asceptic  business having been  transferred to Dean
                  Foods or a  Subsidiary  thereof  and 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,  (ii) 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  5.01(a)(vi)  hereof plus financing costs and costs
                  of retiring  Indebtedness  funded through borrowings under the
                  Senior Credit Facility not to exceed  $560,000,000,  and (iii)
                  immediately after  consummation of the Acquisition and Merger,
                  the Parent shall have  Consolidated Net Worth of not less than
                  $160,000,000;

                           (iv)  evidence of the  maintenance  of  insurance  as
                  required hereby;

                           (v) 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 6.08
                  hereof,  is accurate in all  material  respects as of the date
                  the other  conditions  precedent to the initial  advance under
                  this Section 5.01 are satisfied or, if not,  setting forth the
                  differences,  and (ii) that the conditions set forth in clause
                  (iii) above have been satisfied;

                           (vi) a pay-off  letter or  letters  from all  lenders
                  under  loan  arrangements  not  permitted  to exist  after the
                  Closing  Date  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 the same have been
                  or will be released, as the Administrative Agent may require;

                           (vii) (1) executed or conformed  copies of the Senior
                  Credit Facility and any amendments thereto made on or prior to
                  the  Closing  Date,  (2) an  Officers'  Certificate  from  the
                  Company  stating  that the Senior  Credit  Facility is in full
                  force and effect on the Closing  Date and no material  term or
                  condition  thereof has been  amended,  modified or waived from
                  the form most recently  provided to the Lenders and the Agents
                  a  reasonable  time prior to the Closing  Date except with the
                  prior written consent of the Majority  Lenders and the Agents,
                  (3) an  Officers'  Certificate  from the Company  stating that
                  Parent  and  each  of  its  Subsidiaries   party  thereto  has
                  performed  or  complied  with all  agreements  and  conditions
                  contained in the Senior Credit  Facility and any agreements or
                  documents  referred  to therein  required to be  performed  or
                  complied with by such party on or before the Closing Date, and
                  neither the Company nor any of its  Subsidiaries is in default
                  in the  performance  or  compliance  with any of the  terms or
                  provisions  thereof,  (4) an  Officers'  Certificate  from the
                  Company  stating that after giving effect to borrowings on the
                  Closing Date to effect the  Acquisition and the Merger and the
                  refinancing of all  indebtedness  being refinanced as required
                  by  Section  5.01(a)(vi)  and  to pay  all  related  fees  and
                  expenses, the Company shall have at least $60 million

<PAGE>
                  of borrowing  availability under the Revolving Credit Facility
                  and (5) all closing  documents  relating to the Senior  Credit
                  Facility  and all  such  counterpart  originals  or  certified
                  copies  of  such  documents,  instruments,   certificates  and
                  opinions as the Majority  Lenders or the Agents may reasonably
                  request;

                           (viii) a completed  year 2000  questionnaire  in form
                  and substance satisfactory to the Agents; and

                           (ix) an amendment to the Marketing Agreement;

                  (b) 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 the 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;

                  (c) 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;

                  (d) 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  balance
         sheet and such projections shall be satisfactory to the  Administrative
         Agent;

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

                  (f) The Agents  shall have  received for their own account the
         fees to be received by them at such time under the Fee Letter;

                  (g) The Company  shall have  accepted for payment all Existing
         Notes tendered by the holders  thereof and consummated the tender offer
         and consent  solicitation for such Existing Notes  (including,  without
         limitation,  by paying all amounts due to the holders  thereof) without
         modification or waiver of the terms or conditions thereof, and not more
         than $16.0 million in principal  amount of Existing  Notes shall remain
         outstanding after giving effect to such consummation, and the Indenture
         for the  Existing  Notes  shall have  been,  amended in the form of the
         Third Supplemental  Indenture  heretofore  delivered to the Agents, and
         the  Company  shall  have  provided  an  Officers'  Certificate  to the
         foregoing effect;

                  (h)  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 the Initial Loan (except the representations and warranties
         made in Section 6.04 hereof shall be deemed to refer to the most recent
         financial  statements delivered to the Lenders pursuant to Section 7.05
         hereof);
<PAGE>

                  (i) No Default or Event of Default  shall have occurred and be
         continuing;

                  (j) 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 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:

                           (i) 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 the failure to be so qualified could have
                  a Material Adverse Effect;

                           (ii) 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;

                           (iii) the due  authorization for and the validity and
                  enforceability of the Loan Documents;

                           (iv) 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;

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

                           (vi) except to the extent set forth on Schedule 6.05,
                  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

                           (vii) such other matters as the Administrative  Agent
                  or its counsel may reasonably require; and


<PAGE>

                  (k) 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.

         5.02.  Conditions to Term Loan.  The  obligation of the Lenders to make
the Term Loan on the  Conversion  Date is  subject  to the  prior or  concurrent
satisfaction or waiver of the following conditions precedent:

                  (a) The Agents  shall have  received  in  accordance  with the
         provisions of Section 2.02 an originally executed Notice of Conversion;

                  (b)  None of the  Company,  Parent  or any of its  Significant
         Subsidiaries  shall be subject to a Bankruptcy Order or a bankruptcy or
         other  insolvency  proceeding  and no Default or Event of Default shall
         have occurred under Section 8.01(j);

                  (c) No Event of Default or  Default  (whether  matured or not)
         under Section 8.01(a) or (b) shall have occurred;

                  (d) No Event of Default  shall have occurred and be continuing
         under Section 8.01(f);

                  (e) On or prior to the Conversion  Date, the Agents shall have
         received a form of Senior  Subordinated  Indenture and the Registration
         Rights Agreement satisfactory in form and substance to the Agents;

                  (f) On the Conversion  Date, the Agents shall have received an
         Officers'  Certificate  from the Company dated the Conversion  Date and
         satisfactory  in form and  substance to the Agents,  to the effect that
         the  conditions  in this  Section  5.03 are  satisfied on and as of the
         Conversion Date;

                  (g) The  Company  shall have  executed  and  delivered  to the
         Administrative Agent on the Conversion Date for delivery to the Lenders
         Term  Notes  dated the  Conversion  Date  substantially  in the form of
         Exhibit  A-2 to  evidence  the Term Loan,  in the  principal  amount of
         (which principal amount shall be the aggregate  principal amount of the
         Initial Notes  outstanding  on the  Conversion  Date) the Term Loan and
         with other appropriate insertions;

                  (h) The Agents and the Lenders  shall have  received for their
         respective  accounts the fees to be received by them at such time under
         the Fee Letter and hereunder; and

                  (i) The making of the Term Loan shall not  violate  Regulation
         T, U or X or any other regulation of the Board of Governors.

         5.03.  Determinations  Under  Section 5. For  purposes  of  determining
compliance with the conditions  specified in Sections 5.01 and 5.02, each Lender
shall be deemed to have  consented  to,  approved or accepted or to be satisfied
with each  document or other matter  required  thereunder  to be consented to or
approved by or acceptable or  satisfactory  to the Lenders  unless an officer of
the Administrative  Agent responsible for the transactions  contemplated by this


<PAGE>
Agreement shall have received notice from such Lender prior to the date that the
Company,  by notice  to the  Lenders,  designates  as the  proposed  date of the
extension of credit, specifying its objection thereto.

         Section 6.  Representations and Warranties.  The Company and the Parent
represent and warrant to the Lenders as follows:

         6.01.  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 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.

         6.02.  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.  Schedule  6.02  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
interests in each  Subsidiary  indicated on Schedule 6.02 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 securing the Senior Credit Facility. 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.

                                       26
<PAGE>
         6.03. [Reserved].

         6.04.  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 member's  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 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.

         6.05.  Litigation  and Taxes.  Except as is set forth on Schedule 6.05,
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
<PAGE>

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.

         6.06. 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.

         6.07.  ERISA.  The Parent and each  Subsidiary are 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.

         6.08.  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 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.

                  6.09.  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
 <PAGE>
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).

         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.

         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.

         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 or
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.

         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.

         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.

         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


<PAGE>

review,  assessment and inquiry, the Parent and the Company believe that no such
defect could reasonably be expected to have a Material Adverse Effect.

         6.16. Solvency, Etc. On the Closing 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 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. Covenants. The Parent and the Company agree that, so long as
any credit is in use by the Company  hereunder,  except to the extent compliance
in any case or cases is waived in writing by the Majority Lenders:

         7.01.  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.

         7.02. 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.

         7.03.  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.

         7.04.  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) with good
and  responsible  insurance  companies as and to the extent  usually  insured by
<PAGE>

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.

         7.05.   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
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 Majority
         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:  (i) the information and computations (in sufficient
         detail)  required to  establish  whether the Company was in  compliance
         with the requirements of Sections 7.08, 7.09, 7.10, 7.11, 7.12 and 7.13
         hereof at the end of the  period  covered by the  financial  statements
         then being furnished, and (ii) 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 statements 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;

                  (d) no later than the date  provided  to any lender  under the
         Senior Credit  Facility,  any certificate in respect of compliance with
         the covenants in the Senior  Credit  Facility  (including  computations
         with respect thereto) or the existence of a default or event of default
         thereunder; and

<PAGE>

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

         7.06.  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.

         7.07.  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.

         7.08. 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;

                  (c) liens securing Indebtedness permitted by Section 7.09(b);

<PAGE>

                  (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 8.01(g);

                  (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  Schedule  7.08  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  7.09(h)  hereof and not  aggregating in excess of
         $10,000,000 at any one time outstanding.

         7.09.  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 and the
         Lenders under this Agreement or any of the other Loan Documents;

                  (b) Indebtedness of the Company and the related  guarantees of
         the  Guarantors  under  the  Senior  Credit  Facility  in an  aggregate
         principal  amount at any time  outstanding  not to exceed (a) under the
         Term Loan  Facilities,  $455.0  million,  less any  required  permanent
         repayments  thereunder  (excluding  any such  repayment  to the  extent
         refinanced  and  replaced  at the time of  payment),  and (b) under the
         Revolving  Loan  Facility,  $200.0  million,  reduced  by any  required
         permanent   repayments  actually  made  (which  are  accompanied  by  a
         corresponding   permanent  commitment  reduction)  in  respect  of  the
         Revolving  Loan Facility  (excluding  any such repayment and commitment
         reductions  to the  extent  refinanced  and  replaced  at the  time  of
         payment);

                  (c)  Indebtedness described on Schedule 7.09 attached hereto;

                                       33
<PAGE>

                  (d)  Subordinated Debt;

                  (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 on the Closing Date;

                  (g) Existing Notes (and guarantees  thereof by the Guarantors)
         in an aggregate principal amount not in excess of $16.0 million; and

                  (h)  Capitalized   Lease   Indebtedness   and  purchase  money
         Indebtedness not exceeding $10,000,000 at any one time outstanding.

         7.10. 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  (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

<PAGE>

         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  7.12  hereof;
         provided that (i) immediately after giving effect thereto no Default or
         Event of Default has 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  (i)  $10,000,000  or,  (ii)  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 on 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 7.09;

                  (i) existing  investments,  loans and advances  identified  on
         Schedule 7.10 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,  and loans and advances  shall be taken at the  principal
amount thereof.

         7.11. 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


<PAGE>
continuing (i) pay dividends on its noncumulative  preferred stock at the annual
rate of $1.50 per share, (ii) pay dividends on its Class A cumulative  preferred
stock at 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 "Earning 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.

         7.12.  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 7.10(g) hereof.

         7.13.  Sale 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  $1,000,000;  (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  from  and  after  the  first  such  transfer  and
continuously   thereafter  Linden  Oaks  Corporation   remains  a  wholly  owned
Subsidiary of the Company and a Guarantor hereunder;  and (vi) sales, leases and
other  dispositions  of Property  not  otherwise  permitted by this Section 7.13
aggregating not more than $2,500,000 in any fiscal year; provided, however, that
there shall be excluded from such $2,500,000  limitation  amounts  reinvested in
other productive  assets within 120 days of the receipt of the funds in question
if after giving effect thereto Net Capital  Expenditures  for the fiscal year in
question  will not be negative and proceeds of sales or  dispositions  which are
used within 120 days of receipt to permanently retire Indebtedness of the Parent
and its  Subsidiaries  (other  than  Indebtedness  owing  to the  Parent  or any
Subsidiary and Subordinated  Debt).  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 Majority  Lenders,  sell (or, in the case of the
Company, issue) capital stock of the Company (other than to the Parent).

         7.14.  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


                                       36
<PAGE>

the  Parent or such  Subsidiary  than  would be usual and  customary  in similar
contracts or agreements between Persons not affiliated with each other.

         7.15. 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 Majority 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.

         7.16. 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 of 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  D  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;
provided,  however,  that  the  foregoing  shall  not  apply  on and  after  the
Conversion  Date to any  Subsidiary  designated  as an  Unrestricted  Subsidiary
pursuant to and in accordance with the terms of this Agreement.

         7.17. 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.

         7.18. 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  redemption  (whether  mandatory  or  optional)  or  prepayment  of the
Subordinated  Promissory  Note  issued  to Dean  Foods  in  connection  with the
Acquisition (or any promissory notes issued  thereunder as interest) 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.

         7.19. Limitation on Senior Subordinated Indebtedness. The Company shall
not,  directly or  indirectly,  incur any  Indebtedness  that by its terms would
expressly  rank  senior in right of  payment  to the Loans  and  expressly  rank
subordinate in right of payment to any Senior Indebtedness of the Company.

<PAGE>
         The Parent shall not, and shall not permit any other  Guarantor to, and
no Guarantor shall,  directly or indirectly,  incur any Indebtedness that by its
terms would  expressly  rank senior in right of payment to the Guarantee of such
Guarantor  and  expressly  rank  subordinate  in right of  payment to any Senior
Indebtedness of such Guarantor.

         7.20.  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  the same in any  material
respect or terminate the same.

         7.21. 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.

         7.22.  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.

         7.23. Take-Out Financing. The Parent and the Company shall take any and
every action necessary or desirable, to the extent within the power of either of
them,  so that the Take-Out Bank can, as soon as  practicable  after the Closing
Date, publicly sell or privately place the Refinancing  Securities.  Such action
shall include,  without  limitation,  the preparation of an offering  memorandum
relating to the sale of the  Refinancing  Securities  in a form and with content
satisfying the requirements of a registration  statement on Form S-1,  including
audited  and  unaudited  financial  statements  for the Company and DFVC and pro
forma financial statements  reflecting the Acquisition and related transactions,
which offering memorandum shall be reasonably satisfactory to the Take-Out Bank,
and the full cooperation of senior management of each of the Company, Parent and
DFVC  in  marketing  the  Refinancing   Securities  pursuant  to  such  offering
memorandum  for such a period as is customary to complete the sale of securities
such as the Securities  (which shall include the participation of members of the
senior  management  of each of the Company,  Parent and DFVC  designated  by the
Take-Out Bank in "road-show" and other investor  meetings,  whether by telephone
or in person, in connection with the marketing of the Financing Securities).  If
the  Initial  Loan shall not have been  refinanced  in full prior  thereto,  the
Company  shall  agree  that upon  notice by the  Take-Out  Bank (a  "Refinancing
Securities  Demand"),  at any  time  and from  time to time  prior to the  first


<PAGE>
anniversary  of the Closing  Date,  the Parent and/or the Company will cause the
issuance and sale of  Refinancing  Securities  upon such terms and conditions as
specified in the Refinancing  Securities Demand;  provided that (i) the interest
rates  (whether  floating or fixed) shall be  determined by the Take-Out Bank in
light  of the then  prevailing  market  conditions;  (ii)  the  maturity  of any
Refinancing  Securities shall not be earlier than the eighth  anniversary of the
Closing Date; (iii) the Refinancing Securities will be issued pursuant to one or
more indentures  substantially in the form of the Senior Subordinated  Indenture
and which shall  contain  such other  terms,  conditions  and  covenants  as are
customary  for similar  financings  and as are  reasonably  satisfactory  in all
respects to the  Take-Out  Bank and its counsel and the Company and its counsel;
and (iv) all other arrangements with respect to the Refinancing Securities shall
be reasonably  satisfactory in all respects to the Take-Out Bank in light of the
then prevailing market conditions;  provided, further, that in no event will the
Company or Parent be required to issue  equity  interests in  connection  with a
Refinancing  Securities  Demand.  7.24.  Exchange of Term Notes. The Company and
Parent  will,  on the fifth  Business  Day  following  the written  request (the
"Exchange  Request")  of the holder of any Term Note (or  beneficial  owner of a
portion thereof):

                  (i) Execute and deliver,  cause each  Guarantor to execute and
         deliver, and cause a bank or trust company acting as trustee thereunder
         to execute and  deliver,  the Senior  Subordinated  Indenture,  if such
         Senior  Subordinated  Indenture  has not  previously  been executed and
         delivered;

                 (ii) Execute and deliver to such holder or beneficial  owner in
         accordance  with the Senior  Subordinated  Indenture a note in the form
         attached to the Senior  Subordinated  Indenture (the "Exchange  Notes")
         bearing interest at the Fixed Rate in exchange for such Term Note dated
         the date of the issuance of such Exchange Note, payable to the order of
         such holder or owner, as the case may be, in the same principal  amount
         as such Term Note (or portion thereof) being exchanged,  and cause each
         Guarantor to endorse its guarantee thereon; and

                (iii) Execute and deliver,  and cause each  Guarantor to execute
         and  deliver,  to such  holder  or  owner,  as the  case  may  be,  the
         Registration Rights Agreement, if the Registration Rights Agreement has
         not  previously  been executed and  delivered  or, if the  Registration
         Rights  Agreement has  previously  been executed and delivered and such
         holder or owner is not already a party  thereto,  permit such holder or
         owner to become a party thereto.

         The Exchange  Request shall  specify the  principal  amount of the Term
Notes to be  exchanged  pursuant  to this  Section  7.24 which shall be at least
$5,000,000  and  integral  multiples of $500,000 in excess  thereof.  Term Notes
delivered to the Company under this Section 7.24 in exchange for Exchange  Notes
shall be cancelled by the Company and the corresponding  amount of the Term Loan
shall be deemed repaid and the Exchange Notes shall be governed by and construed
in accordance with the terms of the Senior Subordinated Indenture.

         The  bank  or  trust  company   acting  as  trustee  under  the  Senior
Subordinated  Indenture shall at all times be a corporation  organized and doing
business  under the laws of the  United  States of  America  or the State of New
York,  in good  standing  and having  its  principal  offices in the  Borough of
Manhattan,  in The City of New  York,  which is  authorized  under  such laws to


<PAGE>

exercise  corporate trust powers and is subject to supervision or examination by
Federal or State  authority and which has a combined  capital and surplus of not
less than $50,000,000.

         7.25. Register.  The Company hereby designates the Administrative Agent
to serve as the  Company's  agent,  solely for purposes of this Section 7.25, to
maintain a register (the  "Register")  on which it will record the Loans made by
each of the Lenders and each repayment in respect of the principal amount of the
Loans of each Lender. Failure to make any such recordation, or any error in such
recordation shall not affect the Company's obligations in respect of such Loans.
With respect to any Lender,  the transfer of the  Commitments of such Lender and
the rights to the  principal of, and interest on, any Loan made pursuant to such
Commitments  shall not be  effective  until such  transfer  is  recorded  on the
Register  maintained  by the  Administrative  Agent with respect to ownership of
such  Commitments  and Loans and prior to such  recordation all amounts owing to
the transferor with respect to such  Commitments and Loans shall remain owing to
the transferor. The registration of assignment or transfer of all or part of any
Commitments  and Loans  shall be  recorded  by the  Administrative  Agent on the
Register  only  upon the  receipt  by the  Administrative  Agent  of a  properly
executed  and  delivered  Assignment  Agreement  pursuant  to Section  10.07(a).
Coincident   with  the  delivery  of  such  an   Assignment   Agreement  to  the
Administrative  Agent for acceptance and  registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning or
transferor  Lender shall  surrender the Note evidencing such Loan, and thereupon
one or more  new  Notes of the same  type  and in the same  aggregate  principal
amount shall be issued to the  assigning  or  transferor  Lender  and/or the new
Lender.

         7.26. Senior Subordinated  Indenture;  Etc. Each of the Company and the
Guarantors  shall, on the date it executes and delivers the Senior  Subordinated
Indenture  and  the  Exchange  Notes  and  the  Refinancing  Securities  and the
indenture  governing  the  Refinancing  Securities  (or the  guarantees  related
thereto,  as the case may be),  have the full  corporate  power,  authority  and
capacity  to do so  and  to  perform  all of  its  obligations  to be  performed
thereunder;  all corporate and other acts,  conditions and things required to be
done and performed or to have occurred  prior to such  execution and delivery to
constitute  them  as  valid  and  legally  binding  obligations  of the  Company
enforceable  against the Company and the  Guarantors  in  accordance  with their
respective  terms  except to the extent that the  enforceability  thereof may be
limited by applicable  bankruptcy,  insolvency,  reorganization  or similar laws
affecting  the  enforcement  of  creditors'   rights  generally  or  by  general
principles of equity  (regardless of whether such enforcement is considered in a
proceeding  in equity or at law),  shall have been done and  performed and shall
have occurred in due compliance  with all  applicable  laws; on the date of such
execution  and  delivery  by  the  Company  and  the   Guarantors,   the  Senior
Subordinated  Indenture and the Exchange  Notes and the  Refinancing  Securities
(and the  guarantees)  and the indenture  governing the  Refinancing  Securities
shall constitute  legal,  valid,  binding and  unconditional  obligations of the
Company and the Guarantors,  as the case may be, enforceable against the Company
and the  Guarantors,  as the case may be, in  accordance  with their  respective
terms,  except to the extent that the  enforceability  thereof may be limited by
applicable bankruptcy, insolvency,  reorganization or similar laws affecting the
enforcement of creditors'  rights  generally or by general  principles of equity
(regardless of whether such  enforcement is considered in a proceeding in equity
or at law).



                                       40
<PAGE>

         7.27.  Amendments  or Waivers of Certain  Documents.  The  Company  and
Parent  shall  not,  nor shall it cause or permit  any of its  Subsidiaries  to,
directly or indirectly,  enter into any amendment,  modification,  supplement or
waiver with  respect to the Senior  Credit  Facility as in effect on the Closing
Date that would modify any of the provisions  thereof or any of the  definitions
relating  to the  provisions  thereof  in respect of  issuances  of  Refinancing
Securities,  the Term  Notes or the  Exchange  Notes in a manner  adverse to the
Lenders.

         7.28. Release of Covenants upon Conversion;  Term Loan Covenants.  Upon
any  conversion of the Initial  Loans into Term Loans  pursuant to Section 2.02,
Sections  7.08-7.15  and  7.17-7.20 of this  Agreement  shall no longer apply to
Parent or any Subsidiary. On and after the conversion of Initial Loans into Term
Loans,  Parent and Company  agree  that,  so long as any credit is in use by the
Company  hereunder,  Parent will, and will cause each Subsidiary to, comply with
the covenants  set forth in Annex A (which  incorporates  certain  defined terms
listed in Annex B).

         Section 8. Events of Default.

         8.01. Events of Default.  Each of the following constitutes an event of
default (an "Event of Default"):

                  (a) failure by the Company to pay interest on any Note when it
         becomes due and payable and the  continuance  of such  failure  for, if
         such failure occurs prior to the Conversion  Date, three Business Days,
         and, if such failure occurs on or after the Conversion Date, 30 days or
         failure by the Company to pay any fee or any other amount payable by it
         hereunder or under any other Loan Document when due and the continuance
         of any such failure for 30 days  (whether or not such payment  shall be
         prohibited by Section 11);

                  (b) failure by the Company to pay the principal or premium, if
         any,  on any Note when it becomes  due and  payable,  whether at stated
         maturity, upon redemption (including,  without limitation,  the failure
         to make a payment  to  purchase  or prepay  Notes  pursuant  to Section
         2.05(a)(iii)),  upon  acceleration  or  otherwise  (whether or not such
         payment shall be prohibited by Section 11);

                  (c) failure by Parent or any  Subsidiary to comply with any of
         its  agreements or covenants  described in Sections  2.5(a)(iii)(3)  or
         (4);

                  (d)  failure by Parent or any  Subsidiary  to comply  with any
         other  covenant  herein or in another Loan Document and  continuance of
         such failure for 60 days after notice of such failure has been given to
         the Company by the Administrative Agent or any Lender;

                  (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;



<PAGE>
                  (f) failure by Parent or any  Subsidiary to make any principal
         payment when due after the expiration of any applicable grace period in
         respect  of  any  Indebtedness  of  Parent  or any  Subsidiary,  or the
         acceleration  of the  maturity  of  such  Indebtedness  by the  holders
         thereof because of a default,  with an aggregate  outstanding principal
         amount for all such Indebtedness  under this clause (f) of $7.5 million
         or more;

                  (g) one or more final, non-appealable judgments or orders that
        exceed $7.5 million in the  aggregate for the payment of money have been
        entered by a court or courts of competent jurisdiction against Parent or
        any Subsidiary  and such judgment or judgments have not been  satisfied,
        stayed, annulled or rescinded within 60 days of being entered;

                  (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 prior to the  Conversion  Date;
         and

                  (j) if under any  Bankruptcy  Law, (A) the Company,  Parent or
         any Subsidiary  commences a voluntary case, consents to the entry of an
         order for relief  against it in an  involuntary  case,  consents to the
         appointment of a Custodian of it or for all or substantially all of its
         property,  or  makes  a  general  assignment  for  the  benefit  of its
         creditors,  or (B) a court of competent jurisdiction enters an order or
         decree,  and such order or decree remains unstayed and in effect for 60
         days, that is for relief against the Company,  Parent or any Subsidiary
         in an involuntary case, appoints a Custodian of the Company,  Parent or
         any Subsidiary or for all or  substantially  all of the property of the
         Company,  Parent or any  Subsidiary,  or orders the  liquidation of the
         Company, Parent or any Subsidiary.

         8.02.  Non-Bankruptcy  Defaults. When any Event of Default described in
subsections 8.01(a) to 8.01(i),  inclusive,  or Section 8.01(j) (other than with
respect to the  Company or the  Parent)  has  occurred  and is  continuing,  the
Administrative  Agent may (and shall, upon request of the Majority Lenders),  by
notice to the Company, take any or all of the following actions:

                  (a) 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; and

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

         8.03.  Bankruptcy  Defaults.  When any Event of  Default  described  in
subsection  8.01(j) (with respect to the Company or the Parent) 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,


                                       42
<PAGE>

shall immediately become due and payable without presentment, demand, protest or
notice of any kind and (b) the  Administrative  Agent may  exercise all remedies
available to it under the Loan Documents or applicable law.

         8.04.  Willful  Default.  In the case of an Event of Default  occurring
after the Conversion  Date by reason of any willful  action (or inaction)  taken
(or not taken) by or on behalf of the  Company  with the  intention  of avoiding
payment of the  premium  that the  Company  would have had to pay if the Company
then had  elected  to prepay  the Term  Loan  under the  provisions  of  Section
2.05(a)(ii)(1),  an equivalent  premium shall also become and be immediately due
and payable,  to the extent  permitted by law, upon the acceleration of the Term
Loan. If an Event of Default occurs prior to September 23, 2003 by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the  intention of avoiding the  prohibition  on prepayment of the Term Loan
prior to September  23,  2003,  then,  upon  acceleration  of the Term Loan,  an
additional premium shall also become and be immediately due and payable,  to the
extent permitted by law, in an amount equal to 10.0%.

         Section 9. Agents.

         9.01.  General  Provisions.  Each  of the  Lenders  and  Agents  hereby
irrevocably  appoints the  Administrative  Agent as its agent and authorizes the
Administrative  Agent to take such  actions on its behalf and to  exercise  such
powers  as are  delegated  to the  Administrative  Agent  by the  terms  hereof,
together with such actions and powers as are reasonably  incidental thereto. The
Administrative  Agent  agrees  to give  promptly  to each  Lender a copy of each
notice or other  document  received by it pursuant to any Loan  Document  (other
than any that are  required to be delivered to the Lenders by the Company or any
Guarantor).

         The  Lender  or  other  financial  institution  serving  as  any  Agent
hereunder  shall have the same rights and powers in its  capacity as a Lender as
any other Lender and may exercise the same as though it were not such Agent, and
such  bank and its  Affiliates  may  accept  deposits  from,  lend  money to and
generally  engage in any kind of business  with any  Company or other  Affiliate
thereof as if it were not such Agent hereunder.

         No Agent shall have any duties or  obligations  except those  expressly
set forth herein. Without limiting the generality of the foregoing, (a) no Agent
shall be subject to any fiduciary or other implied duties, regardless of whether
a Default has  occurred and is  continuing,  (b) no Agent shall have any duty to
take any  discretionary  action or exercise  any  discretionary  powers,  except
discretionary rights and powers expressly contemplated hereby that such Agent is
required to exercise in writing by the Majority Lenders (or such other number or
percentage  of the  Lenders as shall be  necessary  under the  circumstances  as
provided in Section  10.05),  and (c) except as expressly set forth  herein,  no
Agent shall have any duty to  disclose,  and shall not be liable for the failure
to disclose,  any  information  relating to the Parent or any Subsidiary that is
communicated to or obtained by the financial  institution  serving as such Agent
or any of its  Affiliates  in any  capacity.  No Agent  shall be liable  for any
action  taken or not  taken  by it with the  consent  or at the  request  of the
Majority  Lenders (or such other number or percentage of the Lenders as shall be
necessary  under the  circumstances  as  provided  in  Section  10.05) or in the


<PAGE>
absence of its own gross  negligence  or willful  misconduct.  No Agent shall be
deemed to have  knowledge of any Default unless and until written notice thereof
is given to Administrative  Agent and such Agent by the Company or a Lender, and
no Agent shall be responsible  for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement  or any other Loan  Document,  (ii) the  contents of any  certificate,
report or other document delivered hereunder or under any other Loan Document or
in  connection  herewith,  (iii) the  performance  or  observance  of any of the
covenants,  agreements or other terms or conditions  set forth herein,  (iv) the
validity, enforceability,  effectiveness or genuineness of this Agreement or any
other Loan Document or any other agreement,  instrument or document,  or (v) the
satisfaction of any condition set forth in Section 5 or elsewhere herein,  other
than to confirm  receipt of items  expressly  required to be  delivered  to such
Agent.

         Each Agent  shall be  entitled  to rely  upon,  and shall not incur any
liability  for  relying  upon,  any  notice,  request,   certificate,   consent,
statement, instrument, document or other writing reasonably believed by it to be
genuine  and to have been signed or sent by the proper  Person.  Each Agent also
may rely upon any statement made to it orally or by telephone and believed by it
to be made by the proper  Person,  and shall not incur any liability for relying
thereon.  Each Agent may consult with legal  counsel (who may be counsel for the
Company),  independent  accountants and other experts reasonably selected by it,
and shall not be liable  for any action  taken or not taken by it in  accordance
with the advice of any such counsel, accountants or experts. Each Agent may deem
and treat the payee of any Note as the owner  thereof for all purposes  unless a
written  notice of assignment,  negotiation or transfer  thereof shall have been
filed  with such  Agent.  Each  Agent  shall be fully  justified  in  failing or
refusing  to take any action  under this  Agreement  or any other Loan  Document
unless it shall first receive such advice or concurrence of the Majority Lenders
(or, if so specified by this Agreement,  all Lenders) as it deems appropriate or
it shall first be indemnified to its 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.  Each  Agent  shall in all  cases be fully
protected in acting, or in refraining from acting,  under this Agreement and the
other Loan Documents in accordance  with a request of the Majority  Lenders (or,
if so specified by this Agreement, all Lenders), and such request and any action
taken or failure to act pursuant  thereto  shall be binding upon all the Lenders
and all future holders of the Loans.

         Each Agent may perform any and all its duties and  exercise  its rights
and powers by or through  any one or more  sub-agents  appointed  by such Agent.
Each  Agent  and any such  sub-agent  may  perform  any and all its  duties  and
exercise its rights and powers through their respective  Affiliates,  directors,
officers,  employees,  agents and advisors ("Related Parties").  The exculpatory
provisions of the preceding  paragraphs shall apply to any such sub-agent and to
the  Related  Parties of each Agent and any such  sub-agent,  and shall apply to
their  respective  activities in connection  with the  syndication of the credit
facilities provided for herein as well as activities as such Agent.

         Subject to the  appointment  and  acceptance  of a  successor  Agent as
provided in this  paragraph,  any Agent may resign at any time by notifying  the
Lenders and the Company.  Upon any such resignation,  the Majority Lenders shall
have  the  right  to  appoint  a  successor  which,  so  long as no  Default  is
continuing, shall be reasonably acceptable to the Company. If no successor shall
have been so  appointed  by the Majority  Lenders and shall have  accepted  such


<PAGE>

appointment  within  30 days  after  the  retiring  Agent  gives  notice  of its
resignation,  then the retiring  Agent may, on behalf of the Lenders,  appoint a
successor  Agent which shall be a bank with an office in New York,  New York, or
an Affiliate of any such bank.  Upon the acceptance of its  appointment as Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights,  powers,  privileges and duties of the retiring  Agent,  and the
retiring Agent shall be discharged  from its duties and  obligations  hereunder.
The fees payable by the Company to a successor  Agent shall be the same as those
payable to its predecessor  unless otherwise agreed between the Company and such
successor.  After the Agent's  resignation  hereunder,  the  provisions  of this
Section 9.01 shall  continue in effect for the benefit of such  retiring  Agent,
its sub-agents and their  respective  Related  Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as such Agent.

         Each  Lender  acknowledges  that  it  has,  independently  and  without
reliance  upon any Agent or any other  Lender  and based on such  documents  and
information  as it has  deemed  appropriate,  made its own credit  analysis  and
decision to enter into this  Agreement.  Each Lender also  acknowledges  that it
will,  independently and without reliance upon any Agent or any other Lender and
based on such  documents  and  information  as it shall  from  time to time deem
appropriate,  continue to make its own  decisions in taking or not taking action
under or based  upon this  Agreement,  any  related  agreement  or any  document
furnished  hereunder or thereunder.  No Agent shall be deemed a trustee or other
fiduciary on behalf of any party.

         9.02.  Indemnification.  Each  Lender  agrees  to  indemnify  and  hold
harmless each Agent (to the extent not promptly  reimbursed under Section 10.03,
but without  limiting  the  obligations  of the Company  under  Section  10.03),
ratably in accordance  with the  aggregate  principal  amount of the  respective
Commitments  of and/or  Loans held by the Lenders,  for any and all  liabilities
(including pursuant to any environmental  law),  obligations,  losses,  damages,
penalties, actions, judgments,  deficiencies,  suits, costs, expenses (including
reasonable  attorney's fees) or disbursements of any kind and nature  whatsoever
that may be imposed on, incurred by or asserted against such Agent (including by
any Lender)  arising out of or by reason of any  investigation  in or in any way
relating  to or  arising  out of  any  Loan  Document  or  any  other  documents
contemplated  by or referred  to therein  for any action  taken or omitted to be
taken by such Agent  under or in respect of any of the Loan  Documents  or other
such documents or the transactions contemplated thereby (including the costs and
expenses  that  the  Company  is  obligated  to pay  under  Section  10.03,  but
excluding,   unless  a  Default  has   occurred   and  is   continuing,   normal
administrative  costs and  expenses  incident to the  performance  of its agency
duties hereunder) or the enforcement of any of the terms hereof or thereof or of
any such other documents;  provided, however, that no Lender shall be liable for
any of the  foregoing to the extent they are  determined by a court of competent
jurisdiction  in a final and  nonappealable  judgment to have  resulted from the
gross  negligence  or willful  misconduct  of the party to be  indemnified.  The
agreements set forth in this Section 9.02 shall survive the payment of all Loans
and other  obligations  hereunder and shall be in addition to and not in lieu of
any other indemnification agreements contained in any other Loan Document.

         9.03. Consents Under Other Loan Documents. Except as otherwise provided
in this Agreement and the other Loan Documents,  Administrative  Agent may, with

<PAGE>

the prior consent of the Majority  Lenders (but not  otherwise),  consent to any
modification, supplement or waiver under any of the other Loan Documents.

         Section 10. Miscellaneous.

         10.01.  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 Agents, 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.

         10.02. [Reserved].

         10.03.  Expenses,  Indemnification,  Etc.  (a)  The  Company  and  each
Guarantor, jointly and severally, agree to pay or reimburse:

                  (i) the  Arranger  and  Administrative  Agent for all of their
         reasonable  out-of-pocket  costs and expenses (including the reasonable
         fees  and  expenses  of  legal  counsel)  in  connection  with  (1) the
         negotiation,  preparation, execution and delivery of the Loan Documents
         and  the  extension  of  credit  hereunder,   (2)  the  negotiation  or
         preparation  of any  modification,  supplement  or waiver of any of the
         terms of any Loan Document  (whether or not  consummated  or effective)
         and (3) the primary syndication of the Loans and Commitments;

                  (ii) each of the Lenders and the Administrative  Agent for all
         reasonable  out-of-pocket  costs and  expenses  of the  Lenders and the
         Administrative  Agent  (including the  reasonable  fees and expenses of
         legal counsel) in connection  with (1) any Default and any  enforcement
         or collection proceedings resulting therefrom,  including all manner of
         participation in or other involvement with (x) bankruptcy,  insolvency,
         receivership,  foreclosure,  winding up or liquidation proceedings, (y)
         judicial or regulatory  proceedings and (z) workout,  restructuring  or
         other  negotiations  or  proceedings   (whether  or  not  the  workout,
         restructuring or transaction contemplated thereby is consummated),  (2)
         the  enforcement of this Section 10.03 and (3) any  documentary  taxes;
         and

                  (iii) each of the Lenders and the Administrative Agent for all
         reasonable  costs,  expenses,  taxes,  assessments  and  other  charges
         incurred in  connection  with any filing,  registration,  recording  or
         perfection of any security  interest  contemplated by any Loan Document
         or any other document referred to therein.

                           (b) The  Company  and  each  Guarantor,  jointly  and
                  severally,  hereby  agree to  indemnify  each  Agent  and each
                  Lender and their respective Affiliates,  directors,  trustees,
                  officers,  employees and agents (each, an "Indemnitee")  from,
<PAGE>
                  and hold each of them harmless against, and that no Indemnitee
                  will have any  liability  for, any and all Losses  incurred by
                  any  of  them  (including  any  and  all  Losses  incurred  by
                  Administrative Agent or Arranger to any Lender, whether or not
                  any  Creditor  is a  party  thereto)  directly  or  indirectly
                  arising out of or by reason of or relating to the negotiation,
                  execution,    delivery,    performance,    administration   or
                  enforcement  of any  Loan  Document,  any of the  transactions
                  contemplated by the Loan Documents,  any breach by the Company
                  or any Guarantor of any representation,  warranty, covenant or
                  other agreement  contained in any of the Loan Documents or the
                  use or proposed  use of any of the Loans,  but  excluding  any
                  such  Losses to the extent  finally  determined  by a court of
                  competent  jurisdiction in a final and nonappealable  judgment
                  to have arisen from the gross  negligence  or bad faith of the
                  Indemnitee.

         To the extent that the  undertaking  to indemnify and hold harmless set
forth  in this  Section  10.03  or any  other  provision  of any  Loan  Document
providing for  indemnification  is unenforceable  because it is violative of any
law or public policy or otherwise,  the Company and each Guarantor,  jointly and
severally,  shall  contribute the maximum portion that each of them is permitted
to pay and satisfy under  applicable law to the payment and  satisfaction of all
indemnified liabilities incurred by any of the Persons indemnified hereunder.

         The Company and each Guarantor also agree that no Indemnitee shall have
any liability (whether direct or indirect, in contract or tort or otherwise) for
any Losses to the Company or any Guarantor or any Guarantor's  security  holders
or creditors  resulting from, arising out of, in any way related to or by reason
of any  matter  referred  to in any  indemnification  or  expense  reimbursement
provisions set forth in this Agreement or any other Loan Document, except to the
extent that any Loss is  determined  by a court of competent  jurisdiction  in a
final  nonappealable  judgment to have resulted from the gross negligence or bad
faith of such Indemnitee.

         The Company and each  Guarantor  agree that,  without the prior written
consent of the Administrative  Agent,  Arranger and the Majority Lenders,  which
consent  shall  not be  unreasonably  withheld,  neither  the  Company  nor  any
Guarantor will settle, compromise or consent to the entry of any judgment in any
pending  or  threatened  Proceeding  in  respect  of  which  indemnification  is
reasonably  likely to be sought  under the  indemnification  provisions  of this
Section 10.03 (whether or not any Indemnitee is an actual or potential  party to
such  Proceeding),  unless such  settlement,  compromise or consent  includes an
unconditional  written release of each Indemnitee from all liability arising out
of such  Proceeding  and does not include any  statement  as to an  admission of
fault,  culpability or failure to act by or on behalf of any Indemnitee and does
not  involve  any  payment  of  money or other  value by any  Indemnitee  or any
injunctive relief or factual findings or stipulations binding on any Indemnitee.

         10.04.  Documentary  Taxes.  The Company agrees to pay any documentary,
stamp or similar  taxes  payable in respect of 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.

         10.05.  Amendments,  Etc. (i) Any provision of any Loan Document may be
amended,  modified or  supplemented  by an instrument  in writing  signed by the
Company and the  Guarantors  party thereto and the Majority  Lenders,  or by the
Company and the Guarantors  party thereto and  Administrative  Agent acting with
the written  consent of the  Majority  Lenders,  and any  provision  of any Loan


<PAGE>

Document may be waived by an instrument in writing signed by the Company and the
Guarantors  party  thereto and the Majority  Lenders,  or by the Company and the
Guarantors  party  thereto  and  Administrative  Agent  acting  with the written
consent of the Majority Lenders; provided, however, that:

                  (a) no  amendment  or waiver  shall,  unless by an  instrument
         signed by all of the Lenders or by Administrative Agent acting with the
         written consent of each Lender: (I) extend the scheduled final maturity
         of any Loan or Note, or reduce the rate of interest or fees thereon, or
         extend the time of payment of interest or fees  thereon,  or reduce the
         principal  amount  thereof,  or make any  change to the  definition  of
         Applicable  Spread,   (II)  change  the  currency  in  which  any  Loan
         Obligation  is payable,  (III) amend the terms of this Section 10.05 or
         Section  3 or 10.07,  (IV)  reduce  the  percentages  specified  in the
         definition of the term "Majority Lenders" or amend any provision of any
         Loan  Document  requiring  the consent of all the Lenders or reduce any
         other percentage of the Lenders required to make any  determinations or
         waive any rights  hereunder  or to modify  any  provision  hereof,  (V)
         release any  Guarantor  from its  obligations  under  Section 4 (unless
         permitted  by  this  Agreement),  (VI)  consent  to the  assignment  or
         transfer  by the  Company  or any  Guarantor  of any of its  rights and
         obligations  under any Loan Document,  (VII) amend Section 10.03 or any
         other indemnification and expense reimbursement  provision set forth in
         any Credit Document,  (VIII) modify the provisions of Section 11 or any
         of the  defined  terms  related  thereto in any  manner  adverse to the
         Lenders,  (IX) waive  performance  by the  Company or the Parent of its
         obligations  under,  or consent to any departure  from any of the terms
         and provisions of, Section  2.05(a)(iii)  (it being understood that any
         prepayment required by Section  2.05(a)(iii)(1) or (2) may be waived or
         amended by the  Majority  Lenders)  or (X) so long as any Lender  holds
         more than 50% of the outstanding Loans, waive a Default hereunder; and

                  (b) any  modification  or supplement of or waiver with respect
         to Section 9 which affects any Agent in their respective  capacities as
         such shall require the consent of such Agent.

                           (ii) If,  in  connection  with any  proposed  change,
                  waiver,  discharge or  termination of any of the provisions of
                  this Agreement as contemplated by Section  10.05(i)(a)  (other
                  than clause (I) of such section),  the consent of the Majority
                  Lenders  is  obtained  but the  consent of one or more of such
                  other Lenders whose consent is required is not obtained,  then
                  the  Company  shall  have  the  right  to  replace  each  such
                  non-consenting   Lender   or   Lenders   (so   long   as   all
                  non-consenting  Lenders  are so  replaced)  with  one or  more
                  Replacement  Lenders  in  accordance  with the  provisions  of
                  Section 3.07 so long as at the time of such replacement,  each
                  such  Replacement  Lender  consents  to the  proposed  change,
                  waiver, discharge or termination;  provided, however, that the
                  Company shall not have the right to replace a Lender solely as
                  a result of the  exercise  of such  Lender's  rights  (and the
                  withholding of any required  consent by such Lender)  pursuant
                  to clause (I) of Section 10.05(i)(a).

         10.06. 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.

<PAGE>

         10.07. Assignments and Participations.  (a) Neither the Company nor any
Guarantor may assign its respective rights or obligations hereunder or under the
Notes or any other Loan Document without the prior written consent of all of the
Lenders.

         (b) Each Lender may assign to any Eligible Person any of its Loans, its
Notes  and its  Commitments  (but  only  with the  consent  (which  shall not be
unreasonably  withheld,  delayed or  conditioned) of the Company and the Primary
Lender);  provided,  however,  that (i) no such  consent  by the  Company or the
Primary Lender shall be required in the case of any assignment to another Lender
or any Lender's  Affiliate or an Approved Fund of any Lender (in which case, the
assignee and assignor  Lenders shall give notice of the assignment to Arranger);
(ii) no  consent of the  Company  need be  obtained  if any  Default  shall have
occurred and be continuing; (iii) each assignment, other than to a Lender or any
Lender's  Affiliate  or an  Approved  Fund of any  Lender  and  other  than  any
assignment effected by the Primary Lender or any of its Affiliates in connection
with the syndication of the Commitments  and/or Loans,  shall be in an aggregate
amount at least equal to $5.0 million unless the assigning  Lender's exposure is
reduced to $0 or unless the Company and Arranger  otherwise agree and (iv) in no
event may any such  assignment be made to the Company or any Guarantor or any of
its Affiliates without consent of all Lenders. Any assignment of a Loan shall be
effective only upon  appropriate  entries with respect thereto being made in the
Register (and each Note shall expressly so provide).  Any assignment or transfer
of a  Loan  shall  be  registered  on  the  Register  only  upon  surrender  for
registration  of  assignment  or  transfer  of the Note  evidencing  such  Loan,
accompanied by an instrument in writing  substantially in the form of Exhibit E,
and upon  consent  thereto by the  Company and  Arranger to the extent  required
above,  one or more new Notes in the same  aggregate  principal  amount shall be
issued to the  designated  assignee  and the old Notes  shall be returned by the
Administrative  Agent to the  Company  marked  "canceled".  Upon  execution  and
delivery by the assignee to the Company and Arranger of an instrument in writing
substantially  in the form of Exhibit E, and upon consent thereto by the Company
and  Arranger  to the extent  required  above,  and in the case of a Loan,  upon
appropriate entries being made in the Register,  the assignee shall have, to the
extent of such assignment (unless otherwise provided in such assignment with the
consent of  Administrative  Agent),  the  obligations,  rights and benefits of a
Lender  hereunder  holding the  Commitment(s)  and Loans (or  portions  thereof)
assigned to it (in addition to the Commitment(s) and Loans, if any,  theretofore
held by such  assignee)  and the assigning  Lender shall,  to the extent of such
assignment,  be  released  from the  Commitment(s)  (or  portion(s)  thereof) so
assigned. Upon any such assignment (other than to a Lender or any Affiliate of a
Lender or an Approved  Fund of any Lender and other than any  assignment  by the
Primary Lender or any of its  Affiliates) the assignee Lender shall pay a fee of
$3,500 to  Administrative  Agent.  Upon any such assignment,  certain rights and
obligations of the assigning Lender shall survive as set forth in Section 10.13.

         (c) A Lender may sell or agree to sell to one or more  other  Persons a
participation in all or any part of any Loans held by it, or in its Commitments,
in which event each  purchaser of a  participation  (a  "Participant")  shall be
entitled to the rights and  benefits of the  provisions  of Section 3 (provided,
however,  that no  Participant  shall be entitled to receive any greater  amount
pursuant to Section 3 than the  transferor  Lender  would have been  entitled to
receive in respect of the  participation  effected by such transferor Lender had
no participation  occurred) with respect to its  participation in such Loans and
Commitments as if such Participant were a "Lender" for purposes of said Section,

<PAGE>

but, except as otherwise provided in Section 10.08(c),  shall not have any other
rights or benefits  under this  Agreement or any Note or any other Loan Document
(the  Participant's  rights against such Lender in respect of such participation
to be those set forth in the agreements  executed by such Lender in favor of the
Participant).  All amounts  payable by the Company to any Lender under Section 3
in respect of Loans and its Commitments shall be no greater than the amount that
would  have  applied  if  such  Lender  had  not  sold or  agreed  to  sell  any
participation in such Loans and Commitments,  and as if such Lender were funding
each of such Loan and Commitments in the same way that it is funding the portion
of such Loan and  Commitments in which no  participations  have been sold. In no
event shall a Lender that sells a  participation  agree with the  Participant to
take or  refrain  from  taking  any  action  hereunder  or under any other  Loan
Document,  except that such Lender may agree with the  Participant  that it will
not,  without  the  consent of the  Participant,  agree to any  modification  or
amendment set forth in subclauses (I), (II), (III) or (VII) of clause (a) of the
proviso to Section 10.05.

         (d) In addition to the assignments and  participations  permitted under
the foregoing provisions of this Section 10.07, any Lender may assign and pledge
all or any  portion  of its  Loans and its Notes to any  United  States  Federal
Reserve Bank as  collateral  security  pursuant to  Regulation A of the Board of
Governors of the Federal  Reserve  System and any Operating  Circular  issued by
such  Federal  Reserve  Bank and, in the case of a Lender that is an  investment
fund,  any such  Lender may assign or pledge all or any portion of its Loans and
its Notes to its trustee in support of its  obligations to its trustee,  without
notice to or consent of the Company,  Administrative Agent or Arranger.  No such
assignment shall release the assigning Lender from its obligations hereunder.

         (e) A Lender  may  furnish  any  information  concerning  Parent or any
Subsidiary  in the  possession of such Lender from time to time to assignees and
participants   (including   prospective  assignees  and  participants)  subject,
however,  to  the  provisions  of  Section  10.17.  In  addition,  each  of  the
Administrative  Agent and Arranger may furnish any  information  concerning  the
Company or any Guarantor or any of its Affiliates in the Administrative  Agent's
or  Arranger's  possession  to any  Affiliate  of the  Administrative  Agent  or
Arranger,  subject, however, to the provisions of Section 10.17. The Company and
each  Guarantor  shall  assist  any Lender in  effectuating  any  assignment  or
participation  pursuant to this Section 10.07 (including during  syndication) in
whatever manner such Lender reasonably deems necessary,  including participation
in meetings with prospective transferees.

         (f) The Primary  Lender shall  receive a  processing  fee of $3,500 per
each assignment payable by the assignor and/or the assignee.

         10.08. Right of Setoff;  Sharing of Payments;  Etc. (a) If any Event of
Default  shall have  occurred  and be  continuing,  each of the  Company and the
Guarantors agrees that, in addition to (and without  limitation of) any right of
setoff,  banker's lien or  counterclaim a Lender may otherwise have, each Lender



<PAGE>

shall be entitled,  at its option (to the fullest  extent  permitted by law), to
set off and apply any deposit (general or special,  time or demand,  provisional
or final),  or other  indebtedness,  held by it for the credit or account of the
Company  or such  Guarantor  at any of its  offices,  in Dollars or in any other
currency,  against any principal of or interest on any of such Lender's Loans or
any other  amount  payable to such  Lender  hereunder  that is not paid when due
(regardless  of whether  such deposit or other  indebtedness  is then due to the
Company or such  Guarantor),  in which case it shall promptly notify the Company
or such Guarantor and the Administrative Agent thereof; provided,  however, that
such Lender's failure to give such notice shall not affect the validity thereof.

         (b) Each of the Lenders  agrees that, if it should  receive (other than
pursuant to Section 3) any amount hereunder  (whether by voluntary  payment,  by
the exercise of the right of setoff or banker's lien, by  counterclaim  or cross
action, by the enforcement of any right under the Loan Documents,  or otherwise)
which is  applicable  to the payment of the  principal  of, or interest  on, the
Loans or fees,  of a sum which with respect to the related sum or sums  received
by other Lenders is in a greater  proportion than the total of such amounts then
owed and due to such Lender bears to the total of such amounts then owed and due
to all of the  Lenders  immediately  prior to such  receipt,  then  such  Lender
receiving  such excess  payment  shall  purchase  for cash  without  recourse or
warranty  from the other  Lenders an  interest  in the Loan  Obligations  of the
Company or such  Guarantor  to such  Lenders in such amount as shall result in a
proportional  participation  by all of the  Lenders  in such  amount;  provided,
however,  that  if all or any  portion  of  such  excess  amount  is  thereafter
recovered  from such Lender,  such purchase  shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest. The Company
consents to the foregoing arrangements.

         (c)  The  Company   agrees  that  any  Lender  so  purchasing   such  a
participation may exercise all rights of setoff,  banker's lien, counterclaim or
similar  rights with  respect to such  participation  as fully as if such Lender
were a direct  holder  of Loans or other  amounts  (as the case may be) owing to
such Lender in the amount of such participation.

         (d) Nothing  contained  herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to  exercise,  and retain the
benefits of exercising, any such right with respect to any other Indebtedness or
obligation of the Company or any Guarantor. If, under any applicable bankruptcy,
insolvency or other similar law, any Lender  receives a secured claim in lieu of
a setoff to which this Section 10.08 applies,  such Lender shall,  to the extent
practicable,  exercise its rights in respect of such  secured  claim in a manner
consistent  with the rights of the Lenders  entitled under this Section 10.08 to
share in the benefits of any recovery on such secured claim.

         10.09.  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).

         10.10. 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  3.01  and 3.04  hereof)  shall  be made as if each  Lender  had
actually funded and maintained its interest in each Loan through the purchase of
deposits in the offshore  interbank  market having a maturity  corresponding  to
such Loan's Interest Period and bearing an interest rate equal to LIBOR Rate for
such Interest Period.

<PAGE>
         10.11.  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 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 10.11.
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  Section 2 hereof shall
only be effective upon receipt.

         10.12. [Reserved].

         10.13. [Reserved].

         10.14. [Reserved].

         10.15. Counterparts; Interpretation;  Effectiveness. This Agreement may
be  executed in  counterparts  (and by  different  parties  hereto on  different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement,  any separate
letter agreements with respect to fees payable to Administrative Agent and those
certain assignment agreements each dated as of September 17, 1998 by and between
USB AG, Stamford Branch,  and Harris Trust and Savings Bank and UBS AG, Stamford
Branch,  and Bank of Montreal,  Chicago Branch  constitute  the entire  contract
among the parties  relating to the subject  matter  hereof and supersede any and
all previous  agreements and  understandings,  oral or written,  relating to the
subject matter hereof, other than the indemnity, confidentiality, waiver of jury
trial and  governing  law  provisions of the  Commitment  Letter,  which are not
superseded and survive. Except as provided in Section 5.01, this Agreement shall
become  effective when it shall have been executed by  Administrative  Agent and
when  Administrative  Agent shall have received  counterparts hereof which, when
taken  together,  bear the signatures of each of the other parties  hereto,  and
thereafter  shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.

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

         10.17. 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



<PAGE>
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 to those of this  Section,  to any
participant in or assignee of, or prospective participant in or assignee of, any
Obligation or Loan.

         10.18. Waiver of Stay, Extension or Usury Laws. Each of the Company and
the Guarantors covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon,  plead, or in any manner  whatsoever  claim or take
the benefit or advantage of, any stay or extension law or any usury law or other
law that would prohibit or forgive the Company or such Guarantor from paying all
or any portion of the  principal  of or  interest  on the Loans as  contemplated
herein,  wherever  enacted,  now or at any time hereafter in force, or which may
affect the covenants or the  performance of this  Agreement;  and (to the extent
that it may  lawfully  do so)  each of the  Company  and the  Guarantors  hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder,  delay or impede the  execution of any power herein  granted to
the Administrative Agent, but will suffer and permit the execution of every such
power as though no such law had been enacted.  10.19.  Governing Law; Submission
to  Jurisdiction;  Waivers;  Etc. Each Loan  Document  shall be governed by, and
construed in accordance  with, the law of the State of New York,  without regard
to the principles of conflicts of laws thereof  (except in the case of the other
Loan Documents,  to the extent otherwise expressly stated therein).  The Company
and each  Guarantor  hereby  irrevocably  and  unconditionally:  (I) submits for
itself and its Property in any Proceeding relating to any Loan Document to which
it is a party,  or for  recognition  and  enforcement of any judgment in respect
thereof, to the non-exclusive  general  jurisdiction of the Supreme Court of the
State of New York sitting in New York County, the courts of the United States of
America for the Southern  District of New York,  and  appellate  courts from any
thereof; (II) consents that any such Proceeding may be brought in any such court
and waives trial by jury and any objection  that it may now or hereafter have to
the venue of any such  Proceeding in any such court or that such  Proceeding was
brought  in an  inconvenient  court and  agrees  not to plead or claim the same;
(III) agrees that service of process in any such  Proceeding  may be effected by
mailing a copy thereof by  registered  or certified  mail (or any  substantially
similar form of mail),  postage prepaid, to the Company at its address set forth
in Section  10.11 or at such other address of which  Administrative  Agent shall
have been notified pursuant  thereto;  and (IV) agrees that nothing herein shall
affect the right to effect  service of process in any other manner  permitted by
law or shall limit the right to sue in any other jurisdiction.

         10.20.  WAIVER OF JURY TRIAL. THE COMPANY,  THE GUARANTORS,  THE AGENTS
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


<PAGE>
EITHER OF THEM, 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 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.

         10.21.  Independence of Representations,  Warranties and Covenants. The
representations,  warranties and covenants contained herein shall be independent
of each other and no exception to any representation, warranty or covenant shall
be deemed to be an exception to any other  representation,  warranty or covenant
contained  herein unless  expressly  provided,  nor shall any such  exception be
deemed to permit  any  action or  omission  that  would be in  contravention  of
applicable  law.  Notwithstanding  anything  herein to the contrary,  any matter
identified  on a Schedule to this  Agreement  shall be deemed to be set forth on
all other  Schedules to this  Agreement for purposes of  determining  compliance
with any of the representations, warranties or covenants contained herein.

         10.22.   Severability.   Wherever  possible,  each  provision  of  this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under  applicable law, such provision  shall be ineffective  only to the
extent of such prohibition or invalidity,  without invalidating the remainder of
such provisions or the remaining provisions of this Agreement.

         10.23.  Acknowledgments.  Each of the Company and the Guarantors hereby
acknowledge  that:  (a) each of them has been  advised by counsel in  connection
with the  negotiation,  execution  and  delivery of the Loan  Documents;  (b) no
Lender or Agent has any fiduciary or similar  relationship to the Company or any
Guarantor  and the  relationship  between the Lenders and Agent on the one hand,
and the Company and Guarantors,  on the other hand, is solely that of debtor and
creditor;  and (c) no joint venture  exists among the Lenders and Agent or among
the Company and Guarantors and the Lenders and Agent.

         Section 11. Subordination.

         11.01. Agreement to Subordinate. The Company and each Guarantor agrees,
and each Lender by accepting a Note  agrees,  that the payment by the Company of
principal of, and premium,  if any, and interest on the Loans and Notes,  and by
each  Guarantor of such amounts  under its  Guarantee  (collectively,  the "Loan
Indebtedness"),  are  subordinated to the prior payment in full in cash when due
of the principal of, and premium, if any, and accrued and unpaid interest on and


<PAGE>

all  other   amounts  owing  in  respect  of  all  existing  and  future  Senior
Indebtedness of the Company and of such Guarantor, as the case may be.

         11.02.  Liquidation;  Dissolution;  Bankruptcy.  Upon  any  payment  or
distribution  to creditors of the Company or any  Guarantor of the assets of the
Company or such  Guarantor,  as the case may be, of any kind or  character  in a
total or partial liquidation or dissolution of the Company or such Guarantor, as
the case may be, or in a bankruptcy, reorganization, insolvency, receivership or
similar  proceeding  relating to the Company or such Guarantor,  as the case may
be, whether  voluntary or involuntary  (including any assignment for the benefit
of creditors and  proceedings  for  marshaling of assets and  liabilities of the
Company or such  Guarantor,  as the case may be) (a  "Insolvency  or Liquidation
Proceeding"),  the  holders of all Senior  Indebtedness  of the  Company or such
Guarantor,  as the case may be, then  outstanding will be entitled to payment in
full in cash (including  interest accruing  subsequent to the filing of petition
of bankruptcy or  insolvency at the rate  specified in the document  relating to
the applicable Senior  Indebtedness,  whether or not such interest is an allowed
claim  enforceable  against the Company or such  Guarantor,  as the case may be,
under  applicable law) before the Lenders are entitled to receive any payment on
or with respect to the Loan Indebtedness from the Company or such Guarantor,  as
the case may be,  and until  all  Senior  Indebtedness  of the  Company  or such
Guarantor,  as  the  case  may  be,  receives  payment  in  full  in  cash,  any
distribution  to which the Lenders  would be entitled will be made to holders of
Senior Indebtedness of the Company or such Guarantor, as the case may be.

         11.03. No Payment on Loans and Notes in Certain Circumstances. (a) Upon
the  occurrence of any default in the payment of any principal of or interest on
or other amounts due on any Designated Senior Indebtedness of the Company or any
Guarantor (a "Payment  Default"),  no payment of any kind or character  shall be
made by the  Company  or such  Guarantor,  as the case  may be (or by any  other
Person on its or their behalf), with respect to the Loan Indebtedness unless and
until (i) such  Payment  Default  shall have been cured or waived in  accordance
with the instruments governing such Designated Senior Indebtedness or shall have
ceased to exist, (ii) such Designated Senior Indebtedness has been discharged or
paid in  full  in  cash  in  accordance  with  the  instruments  governing  such
Designated Senior  Indebtedness or (iii) the benefits of this sentence have been
waived  by  the  holders  of  such  Designated  Senior   Indebtedness  or  their
representative  immediately  after which the Company or such  Guarantor,  as the
case may be, must resume making any and all required payments,  including missed
payments, in respect of its obligations under the Loans and Notes.

         (b) Upon (i) the  occurrence  and  continuance  of an event of  default
(other than a Payment Default) relating to Designated Senior Indebtedness of the
Company or any Guarantor,  as such event of default is defined therein or in the
instrument  or agreement  under which such  Designated  Senior  Indebtedness  is
outstanding,  which event of default, pursuant to the instruments governing such
Designated Senior Indebtedness,  entitles the holders (or a specified portion of
the  holders)  of  such  Designated  Senior  Indebtedness  or  their  designated
representative  to immediately  accelerate  without  further notice (except such
notice as may be required to effect such  acceleration) or the expiration of any
applicable  grace period the  maturity of such  Designated  Senior  Indebtedness
(whether  or not  such  acceleration  has  actually  occurred)  (a  "Non-payment
Default")  and (ii) the receipt by the  Administrative  Agent and the Company or
such Guarantor,  as the case may be, from the trustee or other representative of

<PAGE>
holders of such  Designated  Senior  Indebtedness  of written notice (a "Payment
Blockage Notice") of such occurrence,  no payment is permitted to be made by the
Company or such Guarantor,  as the case may be (or by any other Person on its or
their  behalf),  in respect of the Loan  Indebtedness  for a period (a  "Payment
Blockage Period") commencing on the date of receipt by the Administrative  Agent
of such  notice  and ending on the  earliest  to occur of the  following  events
(subject to any blockage of payments that may then be in effect due to a Payment
Default on Designated  Senior  Indebtedness):  (w) such Non-payment  Default has
been cured or waived or has ceased to exist;  (x) a  179-consecutive-day  period
commencing  on the date such  written  notice is received by the  Administrative
Agent has  elapsed;  (y) such Payment  Blockage  Period has been  terminated  by
written  notice  to  the   Administrative   Agent  from  the  trustee  or  other
representative of holders of such Designated Senior Indebtedness, whether or not
such  Non-payment  Default has been cured or waived or has ceased to exist;  and
(z) such Designated  Senior  Indebtedness has been discharged or paid in full in
cash,  immediately  after which, in the case of clause (w), (x), (y) or (z), the
Company or such  Guarantor,  as the case may be, must resume  making any and all
required  payments,  including  missed  payments,  in respect of its obligations
under the Loans and Notes.  Notwithstanding the foregoing, (A) not more than one
Payment  Blockage Period may be commenced in any period of 360 consecutive  days
and (B) no default or event of default  with  respect to the  Designated  Senior
Indebtedness of the Company or such Guarantor,  as the case may be, that was the
subject of a Payment Blockage Notice which existed or was continuing on the date
of the giving of any Payment  Blockage Notice shall be or serve as the basis for
the  giving of a  subsequent  Payment  Blockage  Notice  whether or not within a
period of 360  consecutive  days unless such  default or event of default  shall
have been  cured or waived  for a period of at least 90  consecutive  days after
such date.  Notwithstanding  anything to the contrary, in no event may the total
number of days during which any Payment Blockage Period or Periods are in effect
exceed 179 days in the aggregate during any 360 day consecutive period.

         (c) Notwithstanding  the foregoing,  the Lenders may receive and retain
Permitted  Junior  Securities,   and  no  such  receipt  or  retention  will  be
contractually  subordinated  in right of payment to any Senior  Indebtedness  or
subject to the restrictions described in this Section 11.

         11.04.  Acceleration  of Notes.  If  payment  of the Loans and Notes is
accelerated  because of an Event of Default,  the Company shall promptly  notify
the  administrative  agent under the Senior Credit  Facility and each holder (or
Representative  thereof)  of  the  Senior  Indebtedness  of the  Company  or any
Guarantor of the acceleration.

         11.05.  When  Distributions  Must Be Paid  Over.  In the event that any
payment or  distribution  of assets of the Company or any Guarantor,  whether in
cash, property or securities,  shall be received by the Administrative  Agent or
the Lenders at a time when such payment or  distribution  is  prohibited by this
Section 11, such payment or distribution shall be segregated from other funds or
assets and held in trust for the benefit of the  holders of Senior  Indebtedness
of the  Company  or such  Guarantor,  as the case may be,  and  shall be paid or


<PAGE>
delivered by the  Administrative  Agent or such Lenders,  as the case may be, to
the holders of the Senior Indebtedness of the Company or such Guarantor,  as the
case may be,  remaining  unpaid or  unprovided  for or their  representative  or
representatives,  or to the trustee or trustees under any indenture  pursuant to
which any instruments  evidencing any of such Senior Indebtedness of the Company
or such Guarantor,  as the case may be, may have been issued,  ratably according
to the aggregate amounts remaining unpaid on account of the Senior  Indebtedness
of the Company or such  Guarantor,  as the case may be, held or  represented  by
each, for  application to the payment of all Senior  Indebtedness of the Company
or such Guarantor, as the case may be, remaining unpaid, to the extent necessary
to pay or to  provide  for the  payment  in full  in  cash  of all  such  Senior
Indebtedness  after giving effect to any concurrent  payment or  distribution to
the holders of such Senior Indebtedness.

         With  respect to the holders of Senior  Indebtedness  of the Company or
any  Guarantor,  the  Administrative  Agent  undertakes  to  perform  only  such
obligations on its part as are specifically set forth in this Section 11, and no
implied  covenants  or  obligations  with  respect to any  holders of the Senior
Indebtedness  of the Company or any Guarantor  shall be read into this Agreement
against the Administrative  Agent. The Administrative  Agent shall not be deemed
to owe any  fiduciary  duty to the  holders  of the Senior  Indebtedness  of the
Company or any  Guarantor  and shall not be liable to any holders of such Senior
Indebtedness if the Administrative  Agent shall pay over or distribute to, or on
behalf of, the  Lenders or the Company or any other  Person,  money or assets to
which any  holders of such Senior  Indebtedness  are  entitled  pursuant to this
Section  11,  except if such  payment is made at a time when the  Administrative
Agent has knowledge that the terms of this Section 11 prohibit such payment.

         11.06.  Notice.  The  Administrative  Agent  shall  not at any  time be
charged with the knowledge of the existence of any facts that would prohibit the
making of any payment to or by the  Administrative  Agent under this Section 11,
unless and until the  Administrative  Agent shall have received  written  notice
thereof from the Company or such  Guarantor or one or more holders of the Senior
Indebtedness  of the  Company  or such  Guarantor,  as the  case  may  be,  or a
Representative  of any holders of such Senior  Indebtedness;  and,  prior to the
receipt of any such written notice, the  Administrative  Agent shall be entitled
to assume conclusively that no such facts exist. The Administrative  Agent shall
be  entitled  to  rely on the  delivery  to it of  written  notice  by a  Person
representing  itself to be a holder of the Senior Indebtedness of the Company or
a Guarantor (or a Representative thereof) to establish that such notice has been
given.

         The Company shall promptly notify the  Administrative  Agent in writing
of any facts it knows that would cause a payment of principal of, or premium, if
any, or interest on, the Loans and Notes to violate this Section 11, but failure
to give such notice shall not affect the subordination of the Loans and Notes to
the Senior Indebtedness of the Company or any Guarantor provided in this Section
11 or the rights of holders of such Senior Indebtedness under this Section 11.

         11.07. Subrogation. After all Senior Indebtedness of the Company or any
Guarantor  has been  paid in full in cash and until the Loans and Notes are paid
in full,  the Lenders  shall be  subrogated  (equally and ratably with all other
Indebtedness  pari  passu  with the Loans and Notes) to the rights of holders of
such Senior  Indebtedness  to receive  distributions  applicable  to such Senior
Indebtedness to the extent that  distributions  otherwise payable to the Lenders
have been  applied to the payment of such Senior  Indebtedness.  A  distribution
<PAGE>
made under this Section 11 to holders of the Senior  Indebtedness of the Company
or any  Guarantor  that  otherwise  would have been made to  Lenders is not,  as
between the Company or such  Guarantor,  as the case may be, and the Lenders,  a
payment  by the  Company  or such  Guarantor,  as the case may be, on its Senior
Indebtedness.

         11.08.  Relative Rights. This Section 11 defines the relative rights of
the  Lenders  and  holders  of the  Senior  Indebtedness  of the  Company or any
Guarantor.  Nothing in this Agreement shall: (1) impair,  as between the Company
or a Guarantor,  as the case may be, and the  Lenders,  the  obligations  of the
Company or any Guarantor, which are absolute and unconditional, to pay principal
of, and premium,  if any, and interest on the Loans and Notes in accordance with
their terms;  (2) affect the relative rights of the Lenders and the creditors of
the Company or any  Guarantor  other than their rights in relation to holders of
the Senior  Indebtedness  of the  Company or any  Guarantor;  or (3) prevent the
Administrative Agent or any Lender from exercising its available remedies upon a
Default  or Event of  Default,  subject  to the  rights of holders of the Senior
Indebtedness  of the  Company  or any  Guarantor  to receive  distributions  and
payments otherwise payable to the Lenders.

         Nothing contained in this Section 11 or elsewhere herein or in any Note
is intended to or shall  impair,  as between the Company,  any Guarantor and the
Lenders,  the obligations of the Company and the Guarantors,  which are absolute
and unconditional,  to pay to the Lenders the principal of, and premium, if any,
and  interest  on the Loans and Notes as and when the same shall  become due and
payable in  accordance  with their terms,  or is intended to or shall affect the
relative  rights of the Lenders and creditors of the Company and the  Guarantors
other  than  the  holders  of the  Senior  Indebtedness  of the  Company  or any
Guarantor, nor shall anything herein or therein prevent the Administrative Agent
or any Lender from exercising all remedies otherwise permitted by applicable law
upon Default hereunder,  subject to the rights, if any, under this Section 11 of
the holders of such Senior Indebtedness.

         The failure to make a payment on account of  principal  of, or interest
on the Loans and Notes by reason of any  provision  of this Section 11 shall not
be construed as preventing  the  occurrence of an Event of Default under Section
8.01.

         11.09.   The   Company,   Guarantors   and   Lenders   May  Not  Impair
Subordination.  (a) No right of any  holder of the  Senior  Indebtedness  of the
Company or any  Guarantor  to enforce  the  subordination  as  provided  in this
Section 11 shall at any time or in any way be  prejudiced or impaired by any act
or failure to act by the Company or any Guarantor or by any noncompliance by the
Company  or any  Guarantor  with the terms,  provisions  and  covenants  of this
Agreement  or the  Notes or any  other  agreement  regardless  of any  knowledge
thereof with which any such holder may have or be otherwise charged.

         (b) Without in any way limiting  Section  11.09(a),  the holders of any
Senior  Indebtedness  of the Company or any Guarantor  may, at any time and from
time to time to the extent not otherwise  prohibited by this Agreement,  without
the consent of or notice to any Lenders,  without  incurring any  liabilities to
any Lender and  without  impairing  or  releasing  the  subordination  and other
benefits  provided in this Agreement or the Lenders'  obligations to the holders
of such Senior  Indebtedness,  even if any Lender's  right of  reimbursement  or
subrogation  or other  right or remedy is  affected,  impaired  or  extinguished
thereby,  do any one or more  of the  following:  (i)  amend,  renew,  exchange,


<PAGE>
extend,  modify,  increase or supplement (to the extent permitted  hereunder) in
any manner such Senior Indebtedness or any instrument evidencing or guaranteeing
or securing such Senior  Indebtedness  or any agreement  under which such Senior
Indebtedness is outstanding (including, but not limited to, changing the manner,
place or terms of payment or  changing or  extending  the time of payment of, or
renewing, exchanging,  amending, increasing or altering (to the extent permitted
hereunder), (x) the terms of such Senior Indebtedness,  (y) any security for, or
any guarantee of, such Senior Indebtedness,  (z) any liability of any obligor on
such Senior Indebtedness  (including any guarantor) or any liability incurred in
respect of such Senior  Indebtedness) (ii) sell, exchange,  release,  surrender,
realize upon,  enforce or otherwise deal with in any manner and in any order any
property pledged,  mortgaged or otherwise  securing such Senior  Indebtedness or
any liability of any obligor thereon,  to such holder, or any liability incurred
in respect thereof;  (iii) settle or compromise any such Senior  Indebtedness or
any other liability of any obligor of such Senior Indebtedness to such holder or
any security therefor or any liability incurred in respect thereof and apply any
sums by  whomsoever  paid and  however  realized  to any  liability  (including,
without limitation,  payment of any of the Senior Indebtedness) in any manner or
order; and (iv) fail to take or to record or otherwise  perfect,  for any reason
or  for  no  reason,   any  lien  or  security  interest  securing  such  Senior
Indebtedness  by  whomsoever  granted,  exercise  or  delay in or  refrain  from
exercising any right or remedy against any obligor or any guarantor or any other
Person,  elect any remedy and  otherwise  deal  freely  with any obligor and any
security  for such Senior  Indebtedness  or any  liability of any obligor to the
holders of such Senior Indebtedness or any liability incurred in respect of such
Senior Indebtedness.

         11.10.   Distribution   or  Notice  to   Representative.   Whenever   a
distribution is to be made, or a notice given, to holders of Senior Indebtedness
of the Company or any  Guarantor,  the  distribution  may be made and the notice
given to their  Representative,  if any. If any payment or  distribution  of the
Company's  assets  is  required  to be  made  to  holders  of any of the  Senior
Indebtedness  of the Company or any  Guarantor  pursuant to this Section 11, the
Administrative Agent and the Lenders shall be entitled to rely upon any order or
decree of any court of  competent  jurisdiction,  or upon any  certificate  of a
Representative  of  such  Senior  Indebtedness  or  a  custodian  therefor,   in
ascertaining the holders of such Senior Indebtedness  entitled to participate in
any such  payment  or  distribution,  the  amount to be paid or  distributed  to
holders  of such  Senior  Indebtedness  and all other  facts  pertinent  to such
payment or distribution or to this Section 11.

         11.11.  Rights of Administrative  Agent. The  Administrative  Agent may
continue  to make  payments on the Loans and Notes  unless  prior to any payment
date it has  received  written  notice of facts  that  would  cause a payment of
principal of, or premium,  if any, or interest on the Loans and Notes to violate
this  Section 11. Only the  Company,  a Guarantor,  a  Representative  of Senior
Indebtedness,  or a holder of Senior Indebtedness that has no Representative may
give such notice.

         The  Administrative  Agent in its  individual or any other capacity may
hold   Indebtedness   of  the  Company  or  any  Guarantor   (including   Senior
Indebtedness)   with  the  same  rights  it  would  have  if  it  were  not  the
Administrative Agent.

         11.12.  Authorization  to  Effect  Subordination.  Each  Lender  by its
acceptance  of a Note  authorizes  and directs the  Administrative  Agent on its
<PAGE>
behalf to take such action as may be necessary or  appropriate to effectuate the
subordination  as provided in this Section 11, and  appoints the  Administrative
Agent  as  such  Lender's   attorney-in-fact  for  any  and  all  such  purposes
(including,  without  limitation,  the  timely  filing of a claim for the unpaid
balance  of the  Loan  and  Note of such  Lender  in the  form  required  in any
Insolvency or Liquidation Proceeding and causing such claim to be approved).

         If a  proper  claim  or  proof  of debt in the  form  required  in such
proceeding  is not filed by or on behalf of all Lenders  prior to 30 days before
the expiration of the time to file such claims or proofs,  then the holders or a
Representative  of any Senior  Indebtedness  of the Company or any Guarantor are
hereby  authorized,  and shall have the right  (without  any  duty),  to file an
appropriate claim for and on behalf of the Lenders.

                                           [Signature Pages Follow]


<PAGE>


                                       S-1

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.



                                    AGRILINK FOODS, INC., as the Company


                                    By:  /s/ Earl L. Powers
                                         Name:   Earl L. Power
                                         Title:  Chief Financial Officer


                                    PRO-FAC COOPERATIVE, INC., as a Guarantor


                                    By:  /s/ Earl L. Powers
                                         Name:  Earl L. Powers
                                         Title: Vice President Finance and
                                                Assistant Treasurer


                                    LINDEN OAKS CORPORATION


                                    By:  /s/ Timothy J. Benjamin
                                         Name:   Timothy J. Benjamin
                                         Title:  Pesident  


                                    KENNEDY ENDEAVORS, INCORPORATED


                                    By:  /s/ Earl L. Powers
                                         Name:  Earl L. Powers
                                         Title: Vice President and Secretary





<PAGE>




                                    UBS AG, Stamford Branch,
                                      as Administrative Agent


                                    By:   /s/ James J. Diaz
                                          Name:  James J. Diaz
                                          Title: Executive Director Loan
                                                 Portfolio Support, US

                                    By:   /s/ David C. Hemingway 
                                          Name:  David C. Hemingway
                                          Title: Director Global Project Finance


                                    Address for Notices:

                                    UBS AG, Stamford Branch
                                      677 Washington Blvd.
                                      Stamford, CT  06901

                                      Attention:



<PAGE>


                                    WARBURG DILLON READ LLC,
                                      as Syndication Agent, and Arranger


                                    By:  /s/ Robert Parsons
                                         Name:  Robert Parsons
                                         Title: Managing Director
                                                Leveraged Finance


                                    By:   /s/ Marco Bizzozero
                                          Name:  Associate Director
                                          Title: Leveraged Finance


                                    Address for Notices:

                                    Warburg Dillon Read LLC
                                    535 Madison Avenue
                                    New York, New York  10022

                                    Attention:




<PAGE>




                                           LENDER:

Initial Commitment Amount:  $140,000,000   UBS AG, Stamford Branch


                                           By:  /s/ James J. Diaz
                                                Name:  James J. Diaz
                                                Title: Executive Director Loan
                                                       Portfolio Support US
                                                         

                                           By:  /s/ David C. Hemingway
                                                Name:  David C. Hemingway
                                                Title: Director Global Project
                                                       Finance


                                           Address for Notices:

                                           UBS AG, Stamford Branch
                                             677 Washington Blvd.
                                             Stamford, CT  06901

                                             Attention:





<PAGE>




                                           LENDER:

Initial Commitment Amount:  $20,000,000    HARRIS TRUST AND SAVINGS BANK


                                           By:  /s/ H. Glen Clarke
                                                Name:  H. Glen Clarke
                                                Title: Vice President


                                           Address for Notices:


                                             111 West Monroe Street
                                             Chicago, Illinois  60690

                                             Attention:  Agribusiness Division





<PAGE>




                                           LENDER:

Initial Commitment Amount:  $40,000,000    BANK OF MONTREAL, Chicago Branch


                                           By:  /s/ Leon H. Sinclair
                                                Name:  Leon H. Sinclair  
                                                Title: Director


                                           Address for Notices:


                                             115 South LaSalle Street
                                             Chicago, Illinois  60603

                                             Attention:  Global Distribution



<PAGE>


                                                      A-7


                                                                         Annex A


                               Term Loan Covenants


         Section A-1.  Limitations on Additional  Indebtedness.  (a) The Company
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly,  incur  any  Indebtedness  (including  without  limitation  Acquired
Indebtedness); provided that (i) the Company and its Restricted Subsidiaries may
incur  Permitted  Indebtedness  and (ii) if no Default or Event of Default shall
have  occurred  and be  continuing  at the  time of or as a  consequence  of the
incurrence  of  any  such   Indebtedness,   the  Company  may  incur  additional
Indebtedness  if,  after  giving  effect  thereto,  the  Company's  Consolidated
Interest  Coverage  Ratio on the  date  thereof  would  be at least  2.0 to 1.0,
determined  on a pro  forma  basis  as if  the  incurrence  of  such  additional
Indebtedness, and the application of the net proceeds therefrom, had occurred at
the  beginning  of the  four-quarter  period  used to  calculate  the  Company's
Consolidated Interest Coverage Ratio.

         (b) Anything contained in this Section A-1 notwithstanding, the Company
may make demand loans to the Parent for working capital purposes  aggregating in
an amount not exceeding $40.0 million at any time outstanding,  each such demand
loan bearing an interest  rate equal to the interest  rate in effect on the date
of such loan under the Revolving  Loan  Facility;  provided,  however,  that the
aggregate loan balance of such demand loans must be reduced to zero for a period
of not less than 15  consecutive  days in each fiscal  year.  Except for (i) the
demand loans described in the preceding  sentence,  (ii) the Parent's  guarantee
under the Senior Credit Facility,  and (iii) the Parent's  Guarantee of the Loan
Obligations under this Agreement,  as long as the Parent has the right to borrow
under the Marketing  Agreement,  the Parent shall not incur any Indebtedness (it
being understood that the Parent's  obligations in respect of retained  earnings
allocated to its members shall not be deemed to be Indebtedness).

         Section   A-2.   Payments   Pursuant   to  the   Marketing   Agreement;
Reinvestments by the Parent. As promptly as practicable, and in any event within
ten Business Days,  after receipt from the Company of any payment made in excess
of the  Commercial  Market  Value for crops and other  services  pursuant to the
Marketing  Agreement,  the Parent will invest in cash as common equity interests
(other than Disqualified Capital Stock) in the Company an amount equal to 70% of
such  excess.  Without the  consent of the holders of at least 75% in  principal
amount of the Term Notes then  outstanding,  the Company will not: (a) amend the
calculation of amounts payable to the Parent under the Marketing  Agreement in a
manner which would  increase  the  payments  made to the Parent or (b) amend the
Marketing Agreement to require that Affiliate  Transactions involving the Parent
be approved by less than a majority of the Disinterested Directors.

         Section A-3.  Limitation on the Issuance of Capital Stock of Restricted
Subsidiaries. The Company will not permit any Restricted Subsidiary, directly or
indirectly, to issue or sell any shares of its Capital Stock (including options,
warrants or other rights to purchase shares of such Capital Stock) except (i) to
the Company or a Wholly-Owned Restricted Subsidiary,  (ii) if, immediately after
giving  effect to such issuance or sale,  such  Restricted  Subsidiary  would no
longer  constitute  a Restricted  Subsidiary  or (iii) to the extent such shares

<PAGE>

represent  directors'  qualifying shares or shares required by applicable law to
be  held by a  Person  other  than  the  Company  or a  Wholly-Owned  Restricted
Subsidiary.  The proceeds of any sale of Capital Stock  permitted  hereunder and
referred  to in clauses  (ii) and (iii)  above will be treated as Net Asset Sale
Proceeds and must be applied in a manner  consistent  with the provisions of the
Section 2.05 (a) (iii) (4).

         Section A-4.  Limitations on Layering Debt. Neither the Company nor any
Guarantor will incur any Indebtedness  that is subordinate or junior in right of
payment to any Senior Indebtedness of the Company or such Guarantor, as the case
may  be,  unless  such  Indebtedness  by  its  terms  is  pari  passu  with,  or
subordinated  to,  the Term  Loans  and  Term  Notes  or the  Guarantee  of such
Guarantor, as the case may be.

         Section A-5. Limitations on Restricted  Payments.  (a) The Company will
not,  and will not permit any of its  Restricted  Subsidiaries  to,  directly or
indirectly,  make any Restricted  Payment (except as permitted  below) if at the
time of such Restricted Payment:

                  (1) a Default or Event of Default  shall have  occurred and be
         continuing or shall occur as a consequence thereof;

                  (2) the  Company  would be unable to meet the  Coverage  Ratio
         Incurrence Condition; or

                  (3) the amount of such Restricted  Payment,  when added to the
         aggregate amount of all other Restricted  Payments (except as expressly
         provided in the second  paragraph  under  paragraph (b) of this Section
         A-5)  made on or  after  the  first  day of the last  completed  fiscal
         quarter of the  Company,  exceeds  the sum of (A) 50% of the  Company's
         Consolidated Net Income (taken as one accounting period) from the first
         day of the last  completed  fiscal quarter of the Company to the end of
         the Company's most recently  ended fiscal  quarter for which  financial
         statements are available at the time of such Restricted Payment (or, if
         such aggregate  Consolidated Net Income shall be a deficit,  minus 100%
         of such  aggregate  deficit)  plus (B) the net cash  proceeds  from the
         issuance  and sale  (other than to a  Subsidiary  of the Company or the
         Parent) after the  Conversion  Date of (1) the Company's  Capital Stock
         that is not Disqualified  Capital Stock (excluding amounts  contributed
         to the Company  pursuant to clause (E) of this  paragraph and excluding
         Capital Stock  purchased with the proceeds of loans from the Company or
         any of its  Subsidiaries)  or (2) debt  securities  of the Company that
         have  been  converted  into the  Company's  Capital  Stock  that is not
         Disqualified Capital Stock and that is not then held by a Subsidiary of
         the Company, plus (C) to the extent that any Restricted Investment that
         was made  after  the  Conversion  Date is sold  for  cash or  otherwise
         liquidated  or repaid for cash,  the  lesser of (x) the cash  return of
         capital with respect to such  Restricted  Investment  (less the cost of
         disposition,  if any) and (y) the  initial  amount  of such  Restricted
         Investment,   plus  (D)  the  amount  of  any   Restricted   Investment
         outstanding in an Unrestricted Subsidiary at the time such Unrestricted
         Subsidiary  is  designated  a Restricted  Subsidiary  of the Company in


<PAGE>
         accordance with the definition of "Unrestricted  Subsidiary" in Annex B
         plus  (E)  40% of the  aggregate  contributions  by the  Parent  to the
         Company pursuant to Section A-2 subsequent to the Conversion Date, plus
         (F) $7.5 million.

         (b) The  provisions  of clauses (ii) and (iii) of paragraph (a) of this
Section A-5 will not  prohibit (1) the payment of any dividend by the Company or
any Restricted  Subsidiary within 60 days after the date of declaration thereof,
if at said  date of  declaration  such  payment  would  have  complied  with the
provisions of this  Agreement;  (2) the  redemption,  repurchase,  retirement or
other acquisition of any Capital Stock of the Company in exchange for, or out of
the proceeds of, the  substantially  concurrent sale (other than to a Subsidiary
of the Company or the Parent) of other Capital Stock of the Company  (other than
any Disqualified Capital Stock); (3) the defeasance,  redemption,  repurchase or
other  retirement of  Subordinated  Indebtedness  in exchange for, or out of the
proceeds of, the substantially concurrent issue and sale of Capital Stock of the
Company (other than (x) Disqualified  Capital Stock, (y) Capital Stock sold to a
Subsidiary of the Company or the Parent and (z) Capital Stock purchased with the
proceeds of loans from the Company or any of its Subsidiaries);  (4) the payment
of amounts required to fund the Parent's reasonable  operating expenses,  not in
excess of $250,000,  as adjusted to reflect  changes in the Consumer Price Index
between  the  Conversion  Date and the date of any such  payment,  in any fiscal
year;  (5) the payments of dividends or  distributions  to the Parent  solely in
amounts and at the times  necessary  to permit the Parent to  purchase,  redeem,
acquire,  cancel or otherwise  retire for value  Capital Stock of the Parent (i)
held by  officers,  directors  or  employees  or former  officers,  directors or
employees (or their transferees,  estates or beneficiaries under their estates),
or a trust  established for the benefit of any of the foregoing,  of the Parent,
the Company or its Subsidiaries, upon death, disability,  retirement,  severance
or termination of employment or service or pursuant to any agreement under which
such  Capital  Stock or related  rights  were  issued or (ii) held by members or
former  members of the Parent,  upon the departure of such Persons as members of
the Parent or upon the  discontinuance  by any such Person of one or more crops;
provided that the amount of such payments  under this clause (5) does not exceed
in the aggregate $2.0 million in any fiscal year; or (6) Restricted  Investments
the  amount  of  which,  together  with  the  amount  of  all  other  Restricted
Investments made pursuant to this clause (6) after the Conversion Date, does not
exceed $15.0 million.

         Each Restricted Payment permitted  pursuant to the preceding  paragraph
(other than the Restricted  Payments referred to in clauses (2) and (3) thereof,
and,  to the  extent  deducted  in  determining  Consolidated  Net Income in any
period,  the  Restricted  Payments  referred to in clause (5) thereof)  shall be
included once in calculating whether the conditions of clause (iii) of paragraph
(a) of  this  Section  A-5 of have  been  met  with  respect  to any  subsequent
Restricted  Payments.  For purposes of determining  compliance with this Section
<PAGE>
A-5, in the event that a transaction  meets the criteria of more than one of the
types  of  Restricted  Payments  described  in the  clauses  of the  immediately
preceding paragraph or of the clauses of the definition of "Restricted Payment,"
the Company, in its sole discretion, shall classify such transaction and only be
required  to  include  the amount  and type of such  transaction  in one of such
clauses.  If an  issuance  of Capital  Stock of the Company is applied to make a
Restricted  Payment  pursuant to clause (2) or (3) above,  then, in  calculating
whether the conditions of clause (iii) of paragraph (a) of this Section A-5 have
been met with respect to any subsequent Restricted Payments, the proceeds of any
such issuance  shall be included under such clause (iii) only to the extent such
proceeds are not applied as so described in this sentence.

         (c) Not  later  than the date of making  any  Restricted  Payment,  the
Company  shall  deliver to the  Administrative  Agent an  Officers'  Certificate
stating that such  Restricted  Payment is permitted  and setting forth the basis
upon which the  calculations  required by this Section A-5 were computed,  which
calculations  shall  be based  upon the  Company's  latest  available  financial
statements.

         Section  A-6.   Limitations  on  Restrictions  on  Distributions   from
Restricted  Subsidiaries.  The Company  will not, and will not permit any of its
Restricted  Subsidiaries  to,  create or  otherwise  cause or suffer to exist or
become  effective any Payment  Restriction with respect to any of its Restricted
Subsidiaries,  except  for (a) any such  Payment  Restriction  in  effect on the
Closing Date under the Senior Credit Facility or any similar Payment Restriction
under any similar  credit  facility,  or any  amendment,  restatement,  renewal,
replacement or  refinancing of any of the foregoing,  provided that such similar
Payment Restrictions are not, taken as a whole, materially more restrictive than
the Payment  Restrictions  in effect on the Closing Date under the Senior Credit
Facility;  (b) any such Payment  Restriction under any agreement  evidencing any
Acquired  Indebtedness  that  was  permitted  to be  incurred  pursuant  to  the
Agreement  in  effect  at the  time  of  such  incurrence  and  not  created  in
contemplation  of such event,  provided  that such  Payment  Restriction  is not
extended to apply to any of the assets of the  entities not  previously  subject
thereto; (c) any such Payment Restriction arising in connection with Refinancing
Indebtedness;  provided that any such Payment Restrictions that arise under such
Refinancing  Indebtedness are not, taken as a whole, materially more restrictive
than those under the agreement  creating or evidencing  the  Indebtedness  being
refunded  or  refinanced;  (d) any  such  restriction  by  reason  of  customary
provisions restricting  assignments,  subletting or other transfers contained in
leases,  licenses and similar  agreements entered into in the ordinary course of
business; and (e) Payment Restrictions arising under applicable law.

         Section A-7.  Limitations on Transactions with Affiliates.  The Company
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, in one transaction or a series of related transactions, sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any   property   or  assets  from  or  enter  into  any   contract,   agreement,
understanding,  loan,  advance or  guarantee  with,  or for the  benefit of, any
Affiliate (each of the foregoing, an "Affiliate  Transaction"),  unless (i) such
Affiliate  Transaction  is on terms that are no less favorable to the Company or
the relevant Restricted Subsidiary than those that would have been obtained in a
comparable  transaction  by the Company or such  Restricted  Subsidiary  with an
unrelated Person and (ii) the Company delivers to the  Administrative  Agent (a)
with respect to any Affiliate  Transaction  (or series of related  transactions)
involving the Parent (including,  without limitation, any amendment to or waiver
under the  Marketing  Agreement  and any  agreement  for the  purchase  of crops
entered  into  pursuant  to the  Marketing  Agreement)  or  involving  aggregate
payments in excess of $1.0 million,  an Officers'  Certificate  certifying  that
such Affiliate  Transaction  complies with clause (i) above and which sets forth
and  authenticates a resolution that has been adopted by a vote of a majority of
the Disinterested  Directors  approving such Affiliate  Transaction and (b) with
respect  to any  Affiliate  Transaction  (or  series  of  related  transactions)
involving  aggregate  payments in excess of $5.0 million (other than relating to
the Marketing  Agreement or any agreement for the purchase of crops entered into


<PAGE>
pursuant to the Marketing Agreement), the Officers' Certificate described in the
preceding  clause (a) and an opinion as to the  fairness  to the Company or such
Subsidiary  from a financial  point of view of such  Affiliate  Transaction  (or
series of related  transactions)  issued by an  Independent  Financial  Advisor;
provided,  however,  that the  following  shall not be  deemed  to be  Affiliate
Transactions:  (i) transactions exclusively between or among (1) the Company and
one or more Restricted Subsidiaries or (2) Restricted Subsidiaries, provided, in
each case,  that no  Affiliate  of the Company  (other than  another  Restricted
Subsidiary)  owns  Capital  Stock  of  any  such  Restricted  Subsidiary;   (ii)
transactions between the Company or any Restricted  Subsidiary and any qualified
employee  stock  ownership  plan  established  for the benefit of the  Company's
employees,  or  the  establishment  or  maintenance  of  any  such  plan;  (iii)
reasonable  director,  officer and employee  compensation  and other benefit and
indemnification arrangements entered into in the ordinary course of business and
consistent  with past practice;  (iv)  transactions  permitted by Section A-5 or
excluded from the definition of "Restricted Payments;" (v) the pledge of Capital
Stock of Unrestricted  Subsidiaries to support the  Indebtedness  thereof;  (vi)
transactions between the Company or any Restricted  Subsidiary and any Affiliate
of the Company or such Restricted  Subsidiary that is a joint venture,  provided
that no direct or indirect  holder of an equity  interest in such joint  venture
(other than the  Company or a  Restricted  Subsidiary)  is an  Affiliate  of the
Company or such Restricted  Subsidiary;  and (vii) except as set forth in clause
(a)  above,  the  Marketing  Agreement  and any  transaction  effected  pursuant
thereto.

         Section A-8.  Limitations on Liens.  (a) The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly,  incur
or permit to exist any Lien of any  nature  whatsoever  on any  property  of the
Company or any Restricted  Subsidiary  (including  Capital Stock of a Restricted
Subsidiary),  or any proceeds, income or profit therefrom,  whether owned at the
Conversion Date or thereafter  acquired,  which secures Indebtedness that is not
Senior  Indebtedness unless  contemporaneously  therewith effective provision is
made to secure the Term Loan and Term Notes equally and ratably with (or if such
Lien secures  Indebtedness that is subordinated to the Term Loan and Term Notes,
prior to) such  Indebtedness  for so long as such  Indebtedness  is secured by a
Lien.

         (b) The  restrictions  in  paragraph  (a) of this Section A-8 shall not
apply  to (i)  Liens  existing  on the  Conversion  Date  securing  Indebtedness
outstanding on the Conversion  Date;  (ii) Liens in favor of the Company;  (iii)
Liens to secure Non-Recourse  Purchase Money  Indebtedness;  (iv) Liens securing
Acquired  Indebtedness  permitted to be incurred under the  Indenture,  provided
that the Liens do not extend to  property  or assets not subject to such Lien at
the time of  acquisition  (other  than  improvements  thereon);  or (v) Liens on
property of a Person existing at the time such Person is acquired or merged with
or into or consolidated with the Company or any such Restricted  Subsidiary (and
not created in  anticipation  or  contemplation  thereof);  (vi) Liens to secure
Refinancing  Indebtedness  of  Indebtedness  secured by Liens referred to in the
foregoing  clauses  (iv) and (v),  provided  that in each case such Liens do not
extend to any additional property or assets (other than improvements thereon).

         Section A-9. Limitations on Mergers and Certain Other Transactions. (a)
The  Company  will  not,  in  a  single  transaction  or  a  series  of  related
transactions,  (i) consolidate or merge with or into (other than a merger with a
Wholly-Owned  Restricted  Subsidiary  solely  for the  purpose of  changing  the
Company's  jurisdiction of  incorporation to another State of the United States;
<PAGE>
provided  that clauses (a) and (d) below are  complied  with),  or sell,  lease,
transfer,  convey or otherwise  dispose of or assign all or substantially all of
the  assets of the  Company  or the  Company  and its  Subsidiaries  (taken as a
whole),  or  permit  any  of  its  Restricted  Subsidiaries  to do  so  if  such
transaction  would  result in the  transfer of all or  substantially  all of the
assets of the Company and its Subsidiaries  (taken as a whole), or assign any of
its obligations  under the Term Loan and Term Notes and this  Agreement,  to any
Person or (ii)  adopt a Plan of  Liquidation  unless,  in either  case:  (a) the
Person formed by or surviving  such  consolidation  or merger (if other than the
Company)  or to which such  sale,  lease,  conveyance  or other  disposition  or
assignment  shall be made (or, in the case of a Plan of Liquidation,  any Person
to  which  assets  are  transferred)  (collectively,   the  "Successor"),  is  a
corporation  organized  and  existing  under the laws of any State of the United
States of America or the  District of  Columbia,  and the  Successor  assumes by
agreement  Term Loan and Term Notes a form  satisfactory  to the  Administrative
Agent all of the  obligations  of the Company under the Term Loan and Term Notes
and this Agreement; (b) immediately prior to and immediately after giving effect
to such transaction and the assumption of the obligations as set forth in clause
(a) above and the  incurrence of any  Indebtedness  to be incurred in connection
therewith, no Default or Event of Default shall have occurred and be continuing;
and  (c)  immediately  after  and  giving  effect  to such  transaction  and the
assumption of the  obligations  set forth in clause (a) above and the incurrence
of any Indebtedness to be incurred in connection  therewith,  and the use of any
net proceeds  therefrom on a pro forma basis,  the Company or the Successor,  as
the case may be, could meet the Coverage  Ratio  Incurrence  Condition;  and (d)
each  Guarantor,  unless it is the  other  party to the  transactions  described
above,  shall have by amendment to its  Guarantee  confirmed  that its Guarantee
shall apply to the  obligations  of the Company or the Successor  under the Term
Loan and Term Notes.  For purposes of this  covenant,  any  Indebtedness  of the
Successor  which was not  Indebtedness of the Company  immediately  prior to the
transaction  shall be deemed  to have  been  incurred  in  connection  with such
transaction.

         (b) No Guarantor may consolidate with or merge with or into (whether or
not such Subsidiary Guarantor is the surviving Person) another Person whether or
not affiliated with such Guarantor  unless (i) the Person formed by or surviving
any such  consolidation or merger (if other than such Guarantor)  assumes all of
the  obligations  of  such  Guarantor   pursuant  to  an  Additional   Guarantor
Supplement,  in form and substance  satisfactory  to the  Administrative  Agent,
under this Agreement,  (ii) immediately after giving effect to such transaction,
no Default or Event of Default exists; and (iii) immediately after giving effect
to such transaction, the Coverage Ratio Incurrence Condition would be met.

         Section  A-10.  Limitations  on Asset Sales.  The Company will not, and
will not permit any of its Restricted Subsidiaries to, consummate any Asset Sale
(as  defined in the  definition  of "Net Asset  Sale  Proceeds")  unless (i) the
Company or such Restricted Subsidiary receives consideration at the time of such
Asset Sale at least  equal to the Fair  Market  Value of the assets  included in
such Asset Sale (evidenced by the delivery by the Company to the  Administrative
Agent of an Officers' Certificate  certifying that such Asset Sale complies with
this clause (i),  (ii)  immediately  after giving effect to such Asset Sale, no
Default or Event of Default shall have occurred and be continuing,  and (iii) at
least  80% of the  consideration  received  by the  Company  or such  Restricted
Subsidiary  therefor  is in the form of cash paid at the  closing  thereof.  The
amount (without  duplication) of any (x) Indebtedness  (other than  Subordinated
Indebtedness)  of the Company or such  Restricted  Subsidiary  that is expressly

<PAGE>
assumed  by the  transferee  in such  Asset  Sale and with  respect to which the
Company or such Restricted  Subsidiary,  as the case may be, is  unconditionally
released by the holder of such  Indebtedness,  and (y) any Cash Equivalents,  or
other notes,  securities or items of property received from such transferee that
are promptly (but in any event within 15 days)  converted by the Company or such
Restricted  Subsidiary to cash (to the extent of the cash actually so received),
shall be  deemed  to be cash  for  purposes  of  clause  (iii) of the  preceding
sentence  and,  in the  case of  clause  (x)  above,  shall  also be  deemed  to
constitute  a  repayment  of, and a permanent  reduction  in, the amount of such
Indebtedness  for  purposes  of  Section  2.05(a)(iii)(4).  If at any  time  any
non-cash  consideration  received by the Company or any Restricted Subsidiary of
the Company,  as the case may be, in connection with any Asset Sale is converted
into or sold or  otherwise  disposed of for cash (other than  interest  received
with  respect  to any  such  non-cash  consideration),  then  the  date  of such
conversion or  disposition  shall be deemed to  constitute  the date of an Asset
Sale  hereunder  and the Net Asset  Sale  Proceeds  thereof  shall be applied in
accordance with Section 2.05(a)(iii)(4).  A transfer of assets by the Company to
a Restricted  Subsidiary  or by a Restricted  Subsidiary  to the Company or to a
Restricted  Subsidiary will not be deemed to be an Asset Sale, and a transfer of
assets that is excluded  from the  definition of  "Restricted  Payments" or that
constitutes a Restricted Investment and that is permitted under Section A-5 will
not be deemed  to be an Asset  Sale.  The  Company  shall  comply  with  Section
2.05(a)(iii)(4) with respect to the Net Asset Sale Proceeds of any Asset Sale.
<PAGE>
                                                                         Annex B


                  Definitions Applicable to Term Loan Covenants


         Set forth below is certain of the defined terms used in Annex A. To the
extent  that a term is  defined  in both  Section  1.01  and  this  Annex B, for
purposes  of the  provisions  of  Annex A the term as  defined  in Annex B shall
govern.

         "Acquired  Indebtedness"  means (a) with  respect  to any  Person  that
becomes a Restricted Subsidiary after the Conversion Date,  Indebtedness of such
Person  and  its  Subsidiaries  existing  at the  time  such  Person  becomes  a
Restricted   Subsidiary  that  was  not  incurred  in  connection  with,  or  in
contemplation  of, such Person  becoming a  Restricted  Subsidiary  and (b) with
respect to the Company or any of its Restricted  Subsidiaries,  any Indebtedness
of a Person (other than the Company or a Restricted  Subsidiary) existing at the
time such Person is merged with or into the Company or a Restricted  Subsidiary,
or Indebtedness assumed by the Company or any of its Restricted  Subsidiaries in
connection with the acquisition of an asset or assets from another Person, which
Indebtedness  was not, in any case,  incurred by such other Person in connection
with, or in contemplation of, such merger or acquisition.

         "Affiliate" of any specified Person means (i) any other Person directly
or indirectly  controlling  or controlled by or under direct or indirect  common
control with such  specified  Person and (ii) with respect to the Parent and the
Company,  any member of the Parent  that is a director of the Parent or that has
beneficial ownership of more than 1% of the outstanding voting securities of the
Parent. For purposes of this definition,  "control" (including, with correlative
meanings,  the terms  "controlling,"  "controlled  by" and under "common control
with"), as used with respect to any Person, shall mean the possession,  directly
or  indirectly,  of the power to direct or cause the direction of the management
or policies of such Person,  whether through the ownership of voting securities,
by agreement or otherwise;  provided,  however, that beneficial ownership of 10%
or more of the voting securities of a Person shall be deemed to be control.

         "Attributable  Indebtedness,"  when used with  respect  to any Sale and
Leaseback Transaction, means, as at the time of determination, the present value
(discounted at a rate equivalent to the Company's  then-current weighted average
cost of funds for borrowed money as at the time of determination,  compounded on
a semi-annual  basis) of the total obligations of the lessee for rental payments
during the remaining  term of the lease  included in any such Sale and Leaseback
Transaction.

         "Board  Resolution"  means a duly  adopted  resolution  of the Board of
Directors of the Company.

         "Capital  Stock" of any  Person  means (i) any and all  shares or other
equity interests (including without limitation common stock, preferred stock and
partnership interests) in such Person and (ii) all rights to purchase,  warrants
or options  (whether  or not  currently  exercisable),  participations  or other


<PAGE>
equivalents  of or  interests  in  (however  designated)  such  shares  or other
interests in such Person.

         "Capitalized  Lease Obligations" of any Person means the obligations of
such  Person to pay rent or other  amounts  under a lease that is required to be
capitalized  for financial  reporting  purposes in accordance with GAAP, and the
amount of such obligation shall be the capitalized  amount thereof determined in
accordance with GAAP.

         "Cash Equivalents" means (i) marketable  obligations with a maturity of
360 days or less  issued or  directly  and fully  guaranteed  or  insured by the
United States of America or any agency or instrumentality thereof (provided that
the full faith and credit of the United  States of America is pledged in support
thereof); (ii) U.S. dollar denominated time deposits and certificates of deposit
of any financial  institution (a) that is a member of the Federal Reserve System
having combined capital and surplus and undivided  profits of not less than $500
million or (b) whose  short-term  commercial  paper rating or that of its parent
company  is at  least  A-1  or the  equivalent  thereof  from  S&P or P-1 or the
equivalent  thereof from Moody's (any such bank,  an "Approved  Bank"),  in each
case with a  maturity  of 360 days or less from the date of  acquisition;  (iii)
commercial  paper  issued by any Approved  Bank or by the parent  company of any
Approved Bank and  commercial  paper issued by, or guaranteed by, any industrial
or financial  company with a short-term  commercial paper rating of at least A-1
or the equivalent  thereof by S&P or at least P-1 or the  equivalent  thereof by
Moody's, or guaranteed by any industrial company with a long term unsecured debt
rating  of at least A or A2,  or the  equivalent  of each  thereof,  from S&P or
Moody's,  as the case may be,  and in each case  maturing  no more than 360 days
from the date of  acquisition;  (iv) repurchase  obligations  with a term of not
more than seven days for underlying  securities of the types described in clause
(i) above entered into with any commercial  bank meeting the  specifications  of
clause (ii)(a) above;  and (v) investments in money market or other mutual funds
substantially all of whose assets comprise  securities of the types described in
clauses (i) through (iv) above.

         "Change of Control"  means the occurrence of any of the following on or
after the Conversion Date: (i) the sale,  lease or transfer,  in one or a series
of related  transactions,  of all or  substantially  all of the  Parent's or the
Company's  assets  to any  Person  or  group  (as such  term is used in  Section
13(d)(3) of the Exchange Act);  (ii) the  consummation  of any  transaction  the
result of which is that any  Person  or group  (as such term is used in  Section
13(d)(3) of the Exchange  Act) (other than the Parent in the case of clause (y))
owns,  directly  or  indirectly,  (A) more than 50% of the  voting  power of the
voting stock of either (x) the Parent or (y) the Company or (B) more than 30% of
the voting power of the voting stock of the Company if the Parent owns, directly
or indirectly, a lesser percentage than such Person or group of the voting power
of the voting stock of the Company;  (iii) the first date on which any Person or
group (as  defined  above)  shall  have  elected,  or caused  to be  elected,  a
sufficient  number of its or their  nominees  to the Board of  Directors  of the
Parent or the  Company  such that the  nominees so elected  (regardless  of when
elected) shall  collectively  constitute a majority of the Board of Directors of
the  Parent  or the  Company,  as the case may be;  or (iv) for a period  of 120
consecutive  days,  the  number  of  Disinterested  Directors  on the  Board  of
Directors  of the  Company  being  less than the  greater of (A) two and (B) the
number of directors of the Company who are the Parent Directors. For purposes of
this definition, any transfer of an equity interest of an entity that was formed
for the purpose of acquiring  voting stock of the Parent or the Company shall be


<PAGE>
deemed to be a transfer of such portion of the voting stock owned by such entity
as  corresponds  to the  portion of the equity of such  entity  that has been so
transferred.

         "Commercial  Market Value" means Commercial  Market Value determined in
accordance with the Marketing Agreement.

         "Consolidated Amortization Expense" for any period means the
amortization  expense of the Company and its  Restricted  Subsidiaries  for such
period (to the extent included in the  computation of Consolidated  Net Income),
determined on a consolidated basis in accordance with GAAP.

         "Consolidated   Depreciation   Expense"   for  any  period   means  the
depreciation  expense of the Company and its  Restricted  Subsidiaries  for such
period (to the extent included in the  computation of Consolidated  Net Income),
determined on a consolidated basis in accordance with GAAP.

         "Consolidated  Income Tax Expense"  for any period means the  provision
for  taxes  based on  income  and  profits  of the  Company  and its  Restricted
Subsidiaries  to the extent such income or profits  were  included in  computing
Consolidated Net Income for such period.

         "Consolidated  Interest  Coverage  Ratio"  means,  with  respect to any
determination  date,  the ratio of (a) EBITDA for the four full fiscal  quarters
immediately  preceding  the  determination  date  (for  any  determination,  the
"Reference  Period"),  to (b)  Consolidated  Interest Expense for such Reference
Period.  In making  such  computations,  (i)  EBITDA and  Consolidated  Interest
Expense  shall  be  calculated  on a pro  forma  basis  assuming  that  (A)  the
Indebtedness to be incurred or the Disqualified  Capital Stock to be issued (and
all other Indebtedness  incurred or Disqualified  Capital Stock issued after the
first day of such Reference Period referred to in Section A-1 of Annex A through
and including the date of determination), and (if applicable) the application of
the net proceeds therefrom (and from any other such Indebtedness or Disqualified
Capital  Stock),  including  the  refinancing  of other  Indebtedness,  had been
incurred on the first day of such Reference  Period and, in the case of Acquired
Indebtedness,  on the assumption that the related transaction  (whether by means
of  purchase,  merger or  otherwise)  also had occurred on such date with EBITDA
(including  any pro forma  expense  and cost  reductions  calculated  on a basis
consistent  with  Regulation S-X under the Securities  Act)  attributable to the
assets  which are the  subject of such  acquisition  being  included in such pro
forma  calculation  and (B) any acquisition or disposition by the Company or any
Restricted Subsidiary of any properties or assets outside the ordinary course of
business or any repayment of any  principal  amount of any  Indebtedness  of the
Company or any Restricted  Subsidiary prior to the stated maturity  thereof,  in
either case since the first day of such  Reference  Period through and including
the  date of  determination,  had been  consummated  on such  first  day of such
Reference  Period;  (ii)  the  Consolidated  Interest  Expense  attributable  to
interest  on any  Indebtedness  required  to be computed on a pro forma basis in
accordance with Section A-1 of Annex A and (A) bearing a floating  interest rate
shall be computed as if the rate in effect on the date of  computation  had been
the  applicable  rate for the entire  period  and (B) which was not  outstanding
during the period for which the  computation  is being made but which bears,  at
the  option of the  Company,  a fixed or  floating  rate of  interest,  shall be
computed by applying, at the option of the Company, either the fixed or floating
rate;  (iii) the Consolidated  Interest Expense  attributable to interest on any
<PAGE>
Indebtedness  under a revolving credit facility required to be computed on a pro
forma basis in  accordance  with Section A-1 of Annex A shall be computed  based
upon the  average  daily  balance of such  Indebtedness  during  the  applicable
period,  provided that such average daily balance shall be reduced by the amount
of any repayment of  Indebtedness  under a revolving  credit facility during the
applicable  period,  which  repayment  permanently  reduced the  commitments  or
amounts available to be reborrowed under such facility; (iv) notwithstanding the
foregoing  clauses  (ii) and (iii),  interest on  Indebtedness  determined  on a
floating  rate  basis,  to the extent  such  interest  is covered by  agreements
relating to Hedging Obligations, shall be deemed to have accrued at the rate per
annum resulting after giving effect to the operation of such agreements; and (v)
if after the first day of the applicable Reference Period and before the date of
determination,  the Company has permanently  retired any Indebtedness out of the
net  proceeds of the  issuance  and sale of shares of Capital  Stock (other than
Disqualified  Capital  Stock) of the Company within 60 days of such issuance and
sale,  Consolidated Interest Expense shall be calculated on a pro forma basis as
if such Indebtedness had been retired on the first day of such period.

         "Consolidated  Interest  Expense" for any period means the sum, without
duplication,  of the total interest  expense of the Company and its consolidated
Restricted  Subsidiaries for such period,  determined on a consolidated basis in
accordance with GAAP and including,  without  limitation (i) imputed interest on
Capitalized Lease Obligations and Attributable  Indebtedness;  (ii) commissions,
discounts  and other  fees and  charges  owed with  respect to letters of credit
securing financial obligations and bankers' acceptance financing;  (iii) the net
costs associated with Hedging Obligations;  (iv) amortization of other financing
fees and expenses; (v) the interest portion of any deferred payment obligations;
(vi) amortization of debt discount or premium,  if any; (vii) all other non-cash
interest expense;  (viii) capitalized interest,  (ix) all cash dividend payments
(and non-cash dividend  payments in the case of a Restricted  Subsidiary) on any
series of preferred stock of the Company or any Restricted  Subsidiary;  (x) all
interest payable with respect to discontinued operations;  and (xi) all interest
on any  Indebtedness  of any  other  Person  guaranteed  by the  Company  or any
Restricted  Subsidiary  to the extent  paid by the  Company  or such  Restricted
Subsidiary.

         "Consolidated Net Income" for any period means the net income (or loss)
of the  Company and its  consolidated  Restricted  Subsidiaries  for such period
determined on a consolidated basis in accordance with GAAP;  provided that there
shall be  excluded  from  such net  income  (to the  extent  otherwise  included
therein),  without duplication (i) the net income (or loss) of any Person (other
than a Restricted Subsidiary) in which any Person other than the Company and its
Restricted Subsidiaries has an ownership interest, except to the extent that any
such  income has  actually  been  received  by the  Company  and its  Restricted
Subsidiaries (unless and to the extent such Restricted  Subsidiary is subject to
clause (iii) below) in the form of cash dividends or  distributions  during such
period;  (ii) except to the extent  includible in the consolidated net income of
the Company  pursuant to the  foregoing  clause (i), the net income (or loss) of
any  Person  that  accrued  prior to the date  that (a) such  Person  becomes  a
Restricted  Subsidiary or is merged into or consolidated with the Company or any
Restricted  Subsidiary  or (b) the  assets of such  Person are  acquired  by the
Company or any  Restricted  Subsidiary;  (iii) the net income of any  Restricted
Subsidiary  during such period to the extent that the  declaration or payment of
dividends or similar  distributions by such Restricted Subsidiary of that income
(a) is not permitted by operation of the terms of its charter or any  agreement,


<PAGE>
instrument,  judgment,  decree, order, statute, rule or governmental  regulation
applicable  to such  Restricted  Subsidiary  during  such period or (b) would be
subject to any taxes  payable on such  dividend or  distribution;  (iv) any gain
(or, only in the case of a determination  of Consolidated  Net Income as used in
EBITDA,  any loss),  together with any related  provisions for taxes on any such
gain (or, if  applicable,  the tax effects of such loss),  realized  during such
period by the Company or any Restricted  Subsidiary  upon (a) the acquisition of
any securities, or the extinguishment of any Indebtedness, of the Company or any
Restricted  Subsidiary  or (b)  any  Asset  Sale  by the  Company  or any of its
Restricted  Subsidiaries;  provided,  however, that there shall be excluded from
Consolidated Net Income for all purposes any loss realized by the Company or any
Restricted   Subsidiary  upon  the   acquisition  of  any  securities,   or  the
extinguishment of any Indebtedness, of the Company or any Restricted Subsidiary,
or the write-off of deferred financing costs, in connection with the Acquisition
and all refinancings of Indebtedness  consummated in connection  therewith;  (v)
any extraordinary  gain (or, only in the case of a determination of Consolidated
Net Income as used in EBITDA, any extraordinary loss), together with any related
provision for taxes on any such extraordinary  gain (or, if applicable,  the tax
effects of such extraordinary  loss),  realized by the Company or any Restricted
Subsidiary  during  such  period;  and  (vi) in the case of a  successor  to the
Company by consolidation,  merger or transfer of its assets, any earnings of the
successor  prior to such  merger,  consolidation  or  transfer  of  assets;  and
provided,  further, that any gain referred to in clauses (iv) and (v) above that
relates to a Restricted  Investment and which is received in cash by the Company
or a  Restricted  Subsidiary  during  such  period  shall  be  included  in  the
Consolidated Net Income of the Company.

         "Consolidated  Net Worth"  means,  with respect to any Person as of any
date, the consolidated  equity of the common stockholders of such Person and its
consolidated  Subsidiaries  as of such  date,  less all  write-ups  (other  than
write-ups resulting from foreign currency translations and write-ups of tangible
assets  of a  going  concern  business  made  within  twelve  months  after  the
acquisition  of such  business)  subsequent to the  Conversion  Date in the book
value of any asset owned by such Person or a Subsidiary of such Person.

         "Coverage  Ratio  Incurrence  Condition"  would be met at any specified
time only if the Company (or its Successor, as the case may be) would be able to
incur $1.00 of additional  Indebtedness  at such  specified time pursuant to the
Consolidated Interest Coverage Ratio test set forth Section A-1 of Annex A.

         "Disqualified Capital Stock" means any Capital Stock of a Person or any
of its  Subsidiaries  that, by its terms, by the terms of any agreement  related
thereto or by the terms of any security into which it is  convertible,  puttable
or  exchangeable,  is, or upon the happening of any event or the passage of time
would be,  required to be redeemed or  repurchased  by such Person or any to its
Subsidiaries,  whether or not at the option of the holder thereof, or matures or
is mandatorily  redeemable,  pursuant to a sinking fund obligation or otherwise,
in whole or in part, on or prior to the Maturity Date.

         "EBITDA"  for any period  means,  without  duplication,  the sum of the
amounts for such period of (i) Consolidated  Net Income,  plus (ii) in each case
to the extent  deducted in determining  Consolidated  Net Income for such period
(and without duplication), (A) Consolidated Income Tax Expense, (B) Consolidated
Amortization  Expense  (but only to the  extent  not  included  in  Consolidated
<PAGE>
Interest  Expense),  (C)  Consolidated  Depreciation  Expense,  (D) Consolidated
Interest  Expense,  (E) all other non-cash items reducing the  Consolidated  Net
Income  (excluding  any such  non-cash  charge  that  results in an accrual of a
reserve for cash  charges in any future  period) for such  period,  in each case
determined on a consolidated  basis in accordance  with GAAP,  plus (iii) in the
case of the  Company,  the Parent  share of  earnings  (loss) as  determined  in
accordance with the Marketing Agreement,  minus (iv) the aggregate amount of all
non-cash  items,  determined on a consolidated  basis,  to the extent such items
increased Consolidated Net Income for such period.

         "Existing  Indebtedness"  means all of the  Indebtedness of the Company
and its Restricted Subsidiaries that is outstanding on the Conversion Date, plus
additional promissory notes issued on the Subordinated Promissory Note issued to
Dean Foods in connection with the Acquisition.

         "Fair  Market  Value" of any asset or items means the fair market value
of such asset or items as determined in good faith by the Board of Directors and
evidenced by a Board Resolution.

         "incur" means,  with respect to any Indebtedness or Obligation,  incur,
create,  issue,  assume,  guarantee or otherwise  become  directly or indirectly
liable,  contingently  or  otherwise,  with  respect  to  such  Indebtedness  or
Obligation;  provided that (i) the Indebtedness of a Person existing at the time
such Person became a Restricted Subsidiary shall be deemed to have been incurred
by such  Restricted  Subsidiary and (ii) neither the accrual of interest nor the
accretion of accreted value shall be deemed to be an incurrence of Indebtedness.

         "Indebtedness"  of any Person at any date means,  without  duplication:
(i) all liabilities,  contingent or otherwise, of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
person  or only to a  portion  thereof);  (ii) all  obligations  of such  Person
evidenced by bonds,  debentures,  notes or other similar instruments;  (iii) all
obligations  of such  Person in respect  of  letters of credit or other  similar
instruments  (or  reimbursement  obligations  with  respect  thereto);  (iv) all
obligations  of such Person to pay the  deferred  and unpaid  purchase  price of
property or services,  except trade  payables and accrued  expenses  incurred by
such Person in the  ordinary  course of business in  connection  with  obtaining
goods, materials or services,  which payable is not overdue by more than 60 days
according to the original  terms of sale unless such payable is being  contested
in good faith;  (v) the maximum  fixed  redemption  or  repurchase  price of all
Disqualified   Capital  Stock  of  such  Person;   (vi)  all  Capitalized  Lease
Obligations of such Person;  (vii) all  Indebtedness of others secured by a Lien
on any asset of such Person, whether or not such Indebtedness is assumed by such
Person;  (viii) all  Indebtedness  of others  guaranteed  by such  Person to the
extent of such  guarantee;  provided  that  Indebtedness  of the  Company or its
Restricted  Subsidiaries  that is  guaranteed  by the  Company or the  Company's
Restricted  Subsidiaries  shall only be counted once in the  calculation  of the
amount of  Indebtedness  of the Company  and its  Restricted  Subsidiaries  on a
consolidated  basis; (ix) all Attributable  Indebtedness;  and (x) to the extent
not otherwise included in this definition,  Hedging  Obligations of such Person.
The amount of  Indebtedness  of any Person at any date shall be the  outstanding
balance at such date of all  unconditional  obligations as described  above, the
maximum  liability of such Person for any such  contingent  obligations  at such
date and, in the case of clause  (vii),  the lesser of (A) the Fair Market Value
of any asset subject to a Lien securing the  Indebtedness  of others on the date


<PAGE>
that the Lien  attaches  and (B) the  amount of the  Indebtedness  secured.  For
purposes of the preceding sentence,  the "maximum fixed redemption or repurchase
price" of any  Disqualified  Capital Stock that does not have a fixed redemption
or repurchase  price shall be  calculated  in accordance  with the terms of such
Disqualified  Capital Stock as if such Disqualified Capital Stock were purchased
or redeemed on any date on which Indebtedness shall be required to be determined
pursuant to this Agreement, and if such price is based upon, or measured by, the
fair market value of such Disqualified Capital Stock (or any equity security for
which it may be  exchanged  or  converted),  such  fair  market  value  shall be
determined  in good  faith  by the  Board of  Directors  of such  Person,  which
determination shall be evidenced by a Board Resolution.

         "Independent Financial Advisor" means an accounting, appraisal
or  investment  banking firm of nationally  recognized  standing that is, in the
reasonable  judgment of the Company's  Board of Directors,  qualified to perform
the task for which it has been engaged and  disinterested  and independent  with
respect to the Company and its Affiliates.

         "Investments" of any Person means (i) all investments by such Person in
any  other  Person  in the form of  loans,  advances  or  capital  contributions
(excluding  commission,  travel and similar  advances to officers and  employees
made  in  the  ordinary  course  of  business)  or  similar  credit   extensions
constituting  Indebtedness of such Person,  and any guarantee of Indebtedness of
any other Person,  (ii) all purchases (or other  acquisitions for consideration)
by such Person of  Indebtedness,  Capital Stock or other securities of any other
Person  and  (iii) all other  items  that  would be  classified  as  investments
(including without limitation purchases of assets outside the ordinary course of
business) on a balance sheet of such Person prepared in accordance with GAAP.

         "Lien" means, with respect to any asset or property, any mortgage, deed
of trust,  lien  (statutory or other),  pledge,  lease,  easement,  restriction,
covenant,  charge,  security interest or other encumbrance of any kind or nature
in  respect  of such  asset or  property,  whether  or not  filed,  recorded  or
otherwise  perfected under  applicable  law,  including  without  limitation any
conditional sale or other title retention agreement, and any lease in the nature
thereof,  any option or other agreement to sell, and any filing of, or agreement
to  give,  any  financing  statement  under  the  Uniform  Commercial  Code  (or
equivalent  statutes)  of any  jurisdiction  (other than  cautionary  filings in
respect of operating leases).

         "Moody's" means Moody's Investors Service, Inc., and its successors.

         "Non-Recourse  Purchase Money  Indebtedness"  means Indebtedness of the
Company  or any of its  Restricted  Subsidiaries  incurred  (a) to  finance  the
purchase  of any  assets of the  Company or any of its  Restricted  Subsidiaries
within 90 days of such  purchase,  (b) to the extent the amount of  Indebtedness
thereunder does not exceed 100% of the purchase cost of such assets,  (c) to the
extent the purchase  cost of such assets is or should be included in  "additions
to property, plant and equipment" in accordance with GAAP, and (d) to the extent
that such  Indebtedness  is non-recourse to the Company or any of its Restricted
Subsidiaries  or any of  their  respective  assets  other  than  the  assets  so
purchased.
<PAGE>

         "Opinion of Counsel"  means a written  opinion from legal counsel (such
counsel may be an  employee  of or counsel to the Company or the  Administrative
Agent) that complies with the requirements of this Agreement.

         "Parent Director" means any Person who, as a director, officer
or other designee of the Parent, serves as a director of the Company.

         "Payment Restriction" with respect to a Subsidiary of any Person, means
any encumbrance, restriction of limitation, whether by operation of the terms of
its charter or by reason of any agreement,  instrument, judgment, decree, order,
statute, rule or governmental regulation,  on the ability of (i) such Subsidiary
to (a) pay  dividends or make other  distributions  on its Capital Stock or make
payments on any obligation, liability or Indebtedness owed to such Person or any
other  Subsidiary  of such Person,  (b) make loans or advances to such Person or
any other  Subsidiary  or such Person,  (c) guarantee  any  Indebtedness  of the
Company or any  Restricted  Subsidiary or (d) transfer any of its  properties or
assets  to such  Person or any  other  Subsidiary  of such  Person  (other  than
customary  restrictions  on  transfers of property  subject to a Lien  permitted
under the Indenture) or (ii) such Person or any other  Subsidiary of such Person
to receive or retain any such  dividends,  distributions  or payments,  loans or
advances, guarantee, or transfer of properties or assets.

         "Permitted Indebtedness" means any of the following:

                  (i) Indebtedness of the Company and the related  guarantees of
         the  Subsidiary  Guarantors  under the  Senior  Credit  Facility  in an
         aggregate  principal  amount at any time  outstanding not to exceed (a)
         under the Term  Loan  Facilities,  $455.0  million,  less any  required
         permanent  repayments  actually  made  thereunder  (excluding  any such
         repayment  to  the  extent  refinanced  and  replaced  at the  time  of
         payment), and (b) under the Revolving Loan Facility, the greater of (x)
         $200.0  million  and (y) the sum of (A) 80% of the face  amount  of all
         accounts   receivable   owned  by  the  Company   and  its   Restricted
         Subsidiaries  and (B) 50% of the book value of all  inventory  owned by
         the Company and its Restricted Subsidiaries, in each case computed on a
         consolidated  basis in  accordance  with GAAP as of the end of the last
         fiscal  month  of  the  Company,  reduced  by  any  required  permanent
         repayments  actually  made (which are  accompanied  by a  corresponding
         permanent  commitment  reduction)  in  respect  of the  Revolving  Loan
         Facility (excluding any such repayment and commitment reductions to the
         extent refinanced and replaced at the time of payment);

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

                  (iii) Existing Indebtedness;

                  (iv) Indebtedness under Hedging Obligations, provided that (1)
         such  Hedging   Obligations  are  related  to  payment  obligations  on
         Permitted  Indebtedness or Indebtedness  otherwise permitted by Section
         A-1 of Annex A, and (2) the notional  principal  amount of such Hedging
         Obligations  at the time incurred does not exceed the principal  amount
         of such Indebtedness to which such Hedging Obligations relate;
<PAGE>

                  (v) Indebtedness of the Company to a Subsidiary  Guarantor and
         Indebtedness  of any  Subsidiary  Guarantor to the Company or any other
         Subsidiary  Guarantor;  provided,  however,  that upon  either  (1) the
         subsequent issuance (other than directors'  qualifying  shares),  sale,
         transfer or other  disposition  of any Capital Stock or any other event
         which  results  in  any  such  Subsidiary  Guarantor  ceasing  to  be a
         Subsidiary  Guarantor or (2) the transfer or other  disposition  of any
         such  Indebtedness  (except to the Company or a Subsidiary  Guarantor),
         the provisions of this clause (v) shall no longer be applicable to such
         Indebtedness and such Indebtedness shall be deemed, in each case, to be
         incurred and shall be treated as an incurrence  for purposes of Section
         A-1 of Annex A at the time the Subsidiary  Guarantor in question ceased
         to be a  Subsidiary  Guarantor  or the  time  such  transfer  or  other
         disposition occurred;

                  (vi)  Indebtedness  in respect of bid,  performance  or surety
         bonds or insurance of self-reinsurance obligations (including to secure
         worker's  compensation and other similar insurance coverage) issued for
         the  account  of  the  Company  in  the  ordinary  course  of  business
         consistent with past practice,  including  guarantees or obligations of
         the  Company  with  respect to letters of credit  supporting  such bid,
         performance or surety  obligations or such insurance or  self-insurance
         obligations  (in each  case  other  than for an  obligation  for  money
         borrowed);

                  (vii)  Indebtedness in respect of Non-Recourse  Purchase Money
         Indebtedness incurred by the Company or any Restricted Subsidiary;

                  (viii) Refinancing Indebtedness; and

                  (ix)  Indebtedness,   in  addition  to  Indebtedness  incurred
         pursuant to the foregoing clauses of this definition, with an aggregate
         principal face or stated amount (as applicable) at any time outstanding
         for all such  Indebtedness  incurred  pursuant  to this  clause  not in
         excess of $25.0 million.

         "Plan of  Liquidation"  with  respect to any Person,  means a plan that
provides  for,  contemplates  or  the  effectuation  of  which  is  preceded  or
accompanied  by (whether or not  substantially  contemporaneously,  in phases or
otherwise):  (i) the sale,  lease,  conveyance  or other  disposition  of all or
substantially  all of the assets of such Person otherwise than as an entirety or
substantially as an entirety;  and (ii) the distribution of all or substantially
all of the proceeds of such sale, lease, conveyance or other disposition and all
or  substantially  all of the  remaining  assets of such  Person to  holders  of
Capital Stock of such Person.

         "Refinancing  Indebtedness"  means  Indebtedness  of the  Company  or a
Restricted  Subsidiary issued in exchange for, or the proceeds from the issuance
and sale or disbursement of which are used substantially  concurrently to repay,
redeem, refund, refinance,  discharge or otherwise retire for value, in whole or
in part (collectively,  "repay"), or constituting an amendment,  modification or
supplement to or a deferral or renewal of  (collectively,  an "amendment"),  any
Indebtedness  of the  Company  or any  Restricted  Subsidiary  (the  "Refinanced
Indebtedness")  in a principal  amount not in excess of the principal  amount of


<PAGE>

the Refinanced  Indebtedness  (or, if such Refinancing  Indebtedness  refinances
Indebtedness  under a revolving  credit facility or other agreement  providing a
commitment for subsequent  borrowings,  with a maximum  commitment not to exceed
the maximum commitment under such revolving credit facility or other agreement),
plus the amount of accrued  but unpaid  interest  thereon  and the amount of any
reasonably   determined   prepayment   premium   necessary  to  accomplish  such
refinancing  and  such  reasonable  fees and  expenses  incurred  in  connection
therewith;  provided that: (i) the Refinancing Indebtedness is the obligation of
the same Person as that of the Refinanced  Indebtedness;  (ii) if the Refinanced
Indebtedness was subordinated to or pari passu with the Loan Indebtedness,  then
such  Refinancing  Indebtedness,  by its terms, is expressly pari passu with (in
the  case of  Refinanced  Indebtedness  that  was  pari  passu  with)  the  Loan
Indebtedness,  or  subordinate in right of payment to (in the case of Refinanced
Indebtedness  that was  subordinated  to) the Loan  Indebtedness at least to the
same extent as the Refinanced  Indebtedness;  (iii) the portion,  if any, of the
Refinancing Indebtedness that is scheduled to mature on or prior to the Maturity
Date has a  Weighted  Average  Life to  Maturity  at the time  such  Refinancing
Indebtedness  is incurred that is equal to or greater than the Weighted  Average
Life to Maturity of the portion of the Refinanced Indebtedness being repaid that
is  scheduled  to  mature  on or  prior  to the  Maturity  Date;  and  (iv)  the
Refinancing  Indebtedness  is secured only to the extent,  if at all, and by the
assets  (which  may  include   after-acquired   assets),   that  the  Refinanced
Indebtedness is secured.

         "Restricted  Debt Payment" means any purchase,  redemption,  defeasance
(including  without  limitation  in  substance  or  legal  defeasance)  or other
acquisition or retirement for value, directly or indirectly, by the Company or a
Restricted Subsidiary, prior to the scheduled maturity or prior to any scheduled
repayment of principal or sinking fund  payment,  as the case may be, in respect
of Subordinated Indebtedness.

         "Restricted  Investment"  means any  Investment  by the  Company or any
Restricted Subsidiary (other than investments in Cash Equivalents) in any Person
that  is  not  the  Company  or  a  Restricted  Subsidiary,   including  in  any
Unrestricted Subsidiary, but shall not include (i) Investments by the Company or
any  Restricted  Subsidiary in a Person,  if as a result of such  Investment (a)
such Person becomes a Restricted  Subsidiary of the Company that is engaged in a
Related Business or (b) such Person is merged,  consolidated or amalgamated with
or into,  or  transfers  or  conveys  substantially  all of its assets to, or is
liquidated  into, the Company or a Restricted  Subsidiary of the Company that is
engaged  in a  Related  Business;  (ii)  loans  by  the  Company  or  any of its
Restricted  Subsidiaries  to employees  of the Company or any of its  Restricted
Subsidiaries  the proceeds of which are applied to purchase Capital Stock of the
Parent in amount not to exceed $2.0  million at any time  outstanding;  or (iii)
demand loans for working  capital  purposes from the Company to the Parent,  not
exceeding $40.0 million at any time  outstanding,  which will be reduced to zero
for a period of not less than 15 consecutive days in each fiscal year.

         "Restricted  Payment"  means  with  respect  to  any  Person:  (i)  the
declaration or payment of any dividend (other than a dividend  declared and paid
(x) by a Wholly-Owned  Restricted Subsidiary to holders of its Capital Stock, or
(y) by a Subsidiary  (other than a  Wholly-Owned  Restricted  Subsidiary) to its
shareholders  on a pro rata  basis,  but  only to the  extent  of the  dividends


<PAGE>
actually  received by the Company or a Restricted  Subsidiary)  or the making of
any other  payment or  distribution  of cash,  securities  or other  property or
assets in respect of such Person's Capital Stock (except that a dividend payable
solely in Capital Stock (other than  Disqualified  Capital Stock) of such Person
shall not constitute a Restricted  Payment);  (ii) any payment on account of the
purchase,  redemption,  retirement  or other  acquisition  for  value of (A) the
Capital  Stock  of the  Company  or (B)  the  Capital  Stock  of any  Restricted
Subsidiary, or any other payment or distribution made in respect thereof, either
directly or indirectly (other than a payment solely in Capital Stock that is not
Disqualified  Capital  Stock,  and  excluding  any such  payment  to the  extent
actually  received  by  the  Company  or a  Restricted  Subsidiary);  (iii)  any
Restricted Investment; or (iv) any Restricted Debt Payment.

         "Restricted  Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.

         "S&P"  means  Standard & Poor's  Ratings  Services,  a division  of the
McGraw-Hill Companies, Inc., and its successors.

         "Sale and Leaseback  Transactions"  means with respect to any Person an
arrangement with any bank,  insurance  company or other lender or investor or to
which such  lender or  investor  is a party,  providing  for the leasing by such
Person of any  property or asset of such Person  which has been or is being sold
or  transferred  by such  Person to such  lender or investor or to any Person to
whom funds have been or are to be  advanced  by such  lender or  investor on the
security of such property or asset.

         "Senior  Subordinated  Indebtedness" of the Company means the Term Loan
and Term Notes and any other Indebtedness of the Company (including the Existing
Notes) that  specifically  provides that such Indebtedness is to rank pari passu
with the Term Loan and Term Notes in right of payment and is not subordinated by
its terms in right of payment to any  Indebtedness  or other  obligation  of the
Company which is not Senior Indebtedness.  "Senior Subordinated Indebtedness" of
any Guarantor has a correlative meaning.

         "Subsidiary"  of any Person means (i) any corporation of which at least
a majority of the  aggregate  voting power of all classes of the Voting Stock is
owned by such Person directly or through one or more other  Subsidiaries of such
Person  and (ii) any  entity  other than a  corporation  in which  such  Person,
directly or  indirectly,  owns at least a majority  of the Voting  Stock of such
entity  entitling  the holder  thereof to vote or otherwise  participate  in the
selection of the governing body,  partners,  managers or others that control the
management and policies of such entity. Unless otherwise specified, "Subsidiary"
means a Subsidiary of the Company.

         "Subsidiary  Guarantor" means each Restricted Subsidiary of the Company
and each other  Restricted  Subsidiary  who is  required  to become  pursuant to
Section 7.16 (or whom the Company  otherwise causes to become) a Guarantor under
the Agreement.

         "Unrestricted  Subsidiary" means (i) any Subsidiary that at the time of
determination  shall be  designated an  Unrestricted  Subsidiary by the Board of
Directors of the Company in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary.  The Board of Directors of the Company may designate


<PAGE>

any  Restricted  Subsidiary  to be an  Unrestricted  Subsidiary,  and  any  such
designation  shall be deemed to be a  Restricted  Investment  at the time of and
immediately upon such designation by the Company and its Restricted Subsidiaries
in the amount of the  Consolidated  Net Worth of such designated  Subsidiary and
its consolidated Subsidiaries at such time, provided that such designation shall
be permitted  only if (A) the Company and its Restricted  Subsidiaries  would be
able to make the Restricted  Investment deemed made pursuant to such designation
at such  time,  (B) no  portion  of the  Indebtedness  or any  other  obligation
(contingent or otherwise) of such Subsidiary (x) is Guaranteed by the Company or
any  Restricted  Subsidiary,  (y) is recourse  to the Company or any  Restricted
Subsidiary  or  (z)  subjects  any  property  or  asset  of the  Company  or any
Restricted Subsidiary, directly or indirectly, contingently or otherwise, to the
satisfaction  thereof and (C) no default or event of default with respect to any
Indebtedness of such Subsidiary  would permit any holder of any  Indebtedness of
the Company or any  Restricted  Subsidiary to declare such  Indebtedness  of the
Company or any Restricted Subsidiary due and payable prior to its maturity.  The
Board of Directors of the Company may designate any  Unrestricted  Subsidiary to
be a Restricted  Subsidiary,  and any such designation  shall be deemed to be an
incurrence by the Company and its Restricted  Subsidiaries  of the  Indebtedness
(if any) of such Subsidiary so designated for purposes of Section A-1 of Annex A
as of the date of such  designation,  provided  that such  designation  shall be
permitted only if immediately  after giving effect to such  designation  and the
incurrence  of any such  additional  Indebtedness  deemed to have been  incurred
thereby (x) the Company would meet the Coverage Ratio  Incurrence  Condition and
(y) no Default or Event of Default  shall have occurred and be  continuing.  Any
such  designation  by the  Board of  Directors  described  in the two  preceding
sentences shall be evidenced to the Administrative  Agent by the filing with the
Administrative  Agent of a certified copy of the Board Resolution  giving effect
to  such  designation  and  an  Officers'   Certificate   certifying  that  such
designation  complied  with the  foregoing  conditions  and  setting  forth  the
underlying calculations of such certificate.

         "Voting  Stock" with  respect to any Person,  means  securities  of any
class of Capital Stock of such Person  entitling the holders thereof (whether at
all times or only so long as no senior class of stock or other  relevant  equity
interest has voting power by reason of any  contingency) to vote in the election
of members of the board of directors of such Person.

         "Wholly-Owned  Restricted  Subsidiary" means a Restricted Subsidiary of
which 100% of the Capital  Stock  (except for  directors'  qualifying  shares or
certain  minority  interests  owned by other  Persons  solely  due to local  law
requirements that there be more than one stockholder,  but which interest is not
in excess of what is required for such purpose) is owned directly by the Company
or through one or more Wholly-Owned Restricted Subsidiaries.
<PAGE>


                             [Form of Initial Note]

                              AGRILINK FOODS, INC.
                       SENIOR SUBORDINATED PROMISSORY NOTE


                                                              New York, New York

$[      ]                                                     September 23, 1998


         FOR VALUE RECEIVED,  Agrilink Foods,  Inc., a New York corporation (the
"Company"), promises to pay to the order of [ ] (the "Payee"), on the Conversion
Date  (as  defined  in the  Senior  Subordinated  Credit  Agreement  dated as of
September  23,  1998  as the  same  may at any  time  be  amended,  modified  or
supplemented and in effect (the "Credit Agreement") between the Company, Pro-Fac
Cooperative,  Inc.,  the other  Guarantors  named  therein,  the  Lenders  named
therein, Warburg Dillon Read LLC, as Arranger and Syndication Agent, and UBS AG,
Stamford Branch, as Administrative  Agent),  the principal amount of [ ] Dollars
($[ ]).

         The  Company  also  promises to pay  interest  on the unpaid  principal
amount  hereof from the date  hereof  until paid in full at the rates and at the
times which shall be determined in accordance  with the provisions of the Credit
Agreement.

         This Note is issued  pursuant to and  entitled  to the  benefits of the
Credit  Agreement,  to  which  reference  is  hereby  made  for a more  complete
statement of the terms and  conditions  under which the Initial  Loan  evidenced
hereby  was made and is to be repaid.  Capitalized  terms  used  herein  without
definition shall have the meanings set forth in the Credit Agreement.

         All payments of principal and interest (other than  Subsequent  Initial
Notes issued in payment of PIK  Interest  Amounts) in respect of this Note shall
be made in lawful  money of the  United  States of  America in same day funds to
Payee at the office of UBS AG, Stamford Branch located at 677 Washington  Blvd.,
Stamford, CT 06901, or at such other place as shall be designated in writing for
such purpose in accordance with the terms of the Credit Agreement. Each of Payee
and any subsequent  holder of this Note agrees, by its acceptance  hereof,  that
before  disposing of this Note or any part hereof it will make a notation hereon
of all principal  payments  previously  made  hereunder and of the date to which
interest  hereon has been paid;  provided,  however,  that the failure to make a
notation of any payment  made on this Note shall not limit or  otherwise  affect


<PAGE>

the obligation of the Company hereunder with respect to payments of principal or
interest on this Note.

         Whenever  any  payment  on this Note shall be stated to be due on a day
which is not a Business Day,  such payment shall be made on the next  succeeding
Business Day and such extension of time shall be included in the  computation of
the payment of interest on this Note.

         This Note is subject to  mandatory  prepayment  as  provided in Section
2.05(a)(iii)(1),  (2) and (5) of the  Credit  Agreement  and  prepayment  at the
option of the  Company  as  provided  in  subsection  2.05(a)(i)  of the  Credit
Agreement.  The Company must make an offer to purchase this Note with certain of
the Net Asset Sale Proceeds of Asset Sales  pursuant to Section  2.05(a)(iii)(4)
of the  Credit  Agreement.  This Note may be repaid  on the  Conversion  Date by
conversion  of this Note into a Term Loan pursuant to Section 2.02 of the Credit
Agreement.

         This  Note  is   subordinated   in  right  of  payment  to  all  Senior
Indebtedness  of the Company as and to the extent  provided in Section 11 of the
Credit Agreement.

         The  obligations  of the Company under this Note are  guaranteed,  on a
senior  subordinated  basis,  by the  Guarantors as provided in Section 4 of the
Credit Agreement.  Attached hereto are endorsements of the Guarantors evidencing
the Guarantees.

         THE CREDIT  AGREEMENT  AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED  AND ENFORCED IN  ACCORDANCE  WITH,  THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.

         Upon the  occurrence of an Event of Default,  the unpaid balance of the
principal  amount of this Note,  together  with all accrued but unpaid  interest
thereon,  may  become,  or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.

         The terms of this Note are  subject  to  amendment  only in the  manner
provided in the Credit Agreement.

         No reference  herein to the Credit  Agreement  and no provision of this
Note or the  Credit  Agreement  shall  alter or  impair  the  obligation  of the
Company,  which is  absolute  and  unconditional,  to pay the  principal  of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.

         The  Company  promises  to pay all costs and  expenses,  including  all
attorneys'  fees,  all as  provided  in Section  10.03 of the Credit  Agreement,
incurred  in the  collection  and  enforcement  of this Note.  The  Company  and
endorsers of this Note hereby  consent to renewals and  extensions of time at or
after  the  maturity  hereof,   without  notice,  and  hereby  waive  diligence,
presentment,  protest,  demand and notice of every kind and,  to the full extent
permitted by law, the right to plead any statute of  limitations as a defense to
any demand hereunder.

         IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered  by its  duly  authorized  officer,  as of the day and year and at the
place first above written.



                                                     AGRILINK FOODS, INC.




                                                     By:
                                                          Name:
                                                          Title:


<PAGE>


                          TRANSACTIONS ON INITIAL NOTE



               Amount of          Outstanding
               Principal          Principal
               Paid               Balance             Notation
Date           This Date          This Date           Made By




<PAGE>


                       OPTION OF HOLDER TO ELECT PURCHASE


         If you wish to elect to have this Initial Note purchased by the Company
pursuant to Section 2.05(a)(iii)(4) of the Credit Agreement, check the box: [__]

         If you wish to elect to have only part of this Initial  Note  purchased
by the Company  pursuant  to Section  2.05(a)(iii)(4)  of the Credit  Agreement,
state the amount: $[ ]

Date:                  Your Signature:
                                                           (Sign exactly as
                                                           your name appears
                                                           on the other side
                                                           of this Initial Note)



Signature Guarantee:


<PAGE>


                                   GUARANTEES


         The Guarantors (as defined in the Senior  Subordinated Credit Agreement
(the  "Credit  Agreement")  referred to in the Note upon which this  notation is
endorsed and each hereinafter referred to as a "Guarantor") have unconditionally
guaranteed  on a senior  subordinated  basis (such  guarantee by each  Guarantor
being referred to herein as the "Guarantee") (i) the due and punctual payment of
the  principal  of, and the  interest on, the Notes,  subject to any  applicable
grace period,  whether at maturity,  by acceleration  or otherwise,  the due and
punctual payment of interest on the overdue  principal and interest,  if any, on
the Notes,  to the extent  lawful,  and the due and punctual  performance of all
other  Loan  Obligations  of the  Company  to the  holders  of the  Notes all in
accordance with the terms set forth in the Credit  Agreement and (ii) in case of
any  extension  of time of  payment or renewal of any Notes or any of such other
Loan  Obligations,  that  the same  will be  promptly  paid in full  when due or
performed in accordance  with the terms of the extension or renewal,  whether at
stated maturity, by acceleration or otherwise.

         The  obligations of each Guarantor to the holders of the Notes pursuant
to the  Guarantee  and the  Credit  Agreement  are  expressly  set forth and are
expressly  subordinated  and subject in right of payment to the prior payment in
full of all  Senior  Indebtedness  of such  Guarantor,  to the extent and in the
manner provided, in Section 11 of the Credit Agreement,  and reference is hereby
made to such Credit  Agreement for the precise  terms of the  Guarantee  therein
made.



                                GUARANTORS:



                                PRO-FAC COOPERATIVE, INC.




                                By:  /s/ Earl L. Powers
                                         Name:  Earl L. Powers
                                         Title: Vice President and
                                                Chief Financial Officer




                                LINDEN OAKS CORPORATION




                                By:  /s/ Timothy J. Benjamin
                                         Name:  Timothy J. Benjamin
                                         Title: President




                                KENNEDY ENDEAVORS INCORPORATED




                                By:  /s/ Earl Powers
                                         Name:  Earl Powers
                                         Title: Vice President and Secretary


<PAGE>


                                                                     Exhibit A-2

                               [Form of Term Note]

                              AGRILINK FOODS, INC.
                       SENIOR SUBORDINATED PROMISSORY NOTE


                                                              New York, New York
                                                            [            ], 1999

$[              ]


         FOR VALUE RECEIVED,  AGRILINK FOODS,  INC., a New York corporation (the
"Company"),  promises to pay to the order of [ ]  ("Payee"),  on  September [ ],
2006, [ ] Dollars ($[ ]).

         The  Company  also  promises to pay  interest  on the unpaid  principal
amount  hereof from the date  hereof  until paid in full at the rates and at the
times which shall be determined in accordance  with the provisions of the Senior
Subordinated Credit Agreement dated as of September 23, 1998, as the same may at
any time be  amended,  modified  or  supplemented  and in  effect  (the  "Credit
Agreement") between the Company,  Pro-Fac Cooperative,  Inc., as Guarantor,  the
other Guarantors named therein,  the Lenders named therein,  Warburg Dillon Read
LLC,  as  Arranger  and  Syndication  Agent,  and UBS AG,  Stamford  Branch,  as
Administrative Agent.

         This Note is issued  pursuant to and  entitled  to the  benefits of the
Credit Agreement to which reference is hereby made for a more complete statement
of the terms and conditions  under which the Term Loan evidenced hereby was made
and is to be repaid. Capitalized terms used herein without definition shall have
the meanings set forth in the Credit Agreement.

         All payments of  principal  and interest  (other than  Subsequent  Term
Notes issued in payment of PIK  Interest  Amounts) in respect of this Note shall
be made in lawful  money of the  United  States of  America in same day funds to
Payee at the office of UBS AG, Stamford Branch, located at 677 Washington Blvd.,
Stamford, CT 06901, or at such other place as shall be designated in writing for
such  purposes in  accordance  with the terms of the Credit  Agreement.  Each of
Payee and any subsequent holder of this Note agrees,  by its acceptance  hereof,
that  before  disposing  of this Note or any part hereof it will make a notation


<PAGE>

hereon of all principal  payments  previously  made hereunder and of the date to
which interest hereon has been paid; provided, however, that the failure to make
a notation of any payment made on this Note shall not limit or otherwise  affect
the obligation of the Company hereunder with respect to payments of principal or
interest on this Note.

         Whenever  any  payment  on this Note shall be stated to be due on a day
which is not a Business Day,  such payment shall be made on the next  succeeding
Business Day and such extension of time shall be included in the  computation of
the payment of interest on this Note.

         This Note is subject to  mandatory  prepayment  as  provided in Section
2.05(a)(iii)(5)  of the Credit  Agreement  and  prepayment  at the option of the
Company as provided in Section 2.05(a)(ii) of the Credit Agreement.  The Company
must make an offer to  purchase  this  Note in the event of a Change of  Control
pursuant to Section  2.05(a)(iii)(3) of the Credit Agreement and with certain of
the Net Asset Sale Proceeds of Asset Sales  pursuant to Section  2.05(a)(iii)(4)
of the Credit Agreement.

         This  Note  is   subordinated   in  right  of  payment  to  all  Senior
Indebtedness  of the Company as and to the extent  provided in Section 11 of the
Credit Agreement.

         The  obligations  of the Company under this Note are  guaranteed,  on a
senior  subordinated  basis,  by the  Guarantors as provided in Section 4 of the
Credit Agreement. Attached hereto are confirmations of the Guarantors evidencing
the Guarantees.

         THE CREDIT  AGREEMENT  AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED  AND ENFORCED IN  ACCORDANCE  WITH,  THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.

         Upon the  occurrence of an Event of Default,  the unpaid balance of the
principal  amount of this Note,  together  with all accrued but unpaid  interest
thereon,  may  become,  or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.

<PAGE>

         The terms of this Note are  subject  to  amendment  only in the  manner
provided in the Credit Agreement.

         No reference  herein to the Credit  Agreement  and no provision of this
Note or the  Credit  Agreement  shall  alter or  impair  the  obligation  of the
Company,  which is  absolute  and  unconditional,  to pay the  principal  of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.

         The  Company  promises  to  pay  all  costs  and  expenses,   including
reasonable  attorneys'  fees,  as  provided  in  Section  10.03  of  the  Credit
Agreement,  incurred in the collection and enforcement of this Note. The Company
and endorsers of this Note hereby waive diligence,  presentment, protest, demand
and notice of every kind and, to the full extent  permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.

         IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered  by its  duly  authorized  officer,  as of the day and year and at the
place first above written.



                                                AGRILINK FOODS, INC.



                                                By: /s/

                                                    Name:
                                                    Title:


<PAGE>



                            TRANSACTIONS ON TERM NOTE


                      Amount of         Outstanding
                      Principal         Principal
                      Paid              Balance            Notation
Date                  This Date         This Date          Made By




<PAGE>



                           CONVERSION OF TERM LOAN TO
                 FIXED RATE LOAN PURSUANT TO SECTION 2.03(a)(ii)



                         Outstanding    Outstanding
            Amount of    Converted      Unconverted
            Principal    Principal      Principal
            Converted    Balance        Balance        Notation
Date        This Date    This Date      This Date      Made By




<PAGE>


                       OPTION OF HOLDER TO ELECT PURCHASE


         If you wish to elect to have this Term Note  purchased  by the  Company
pursuant to Section  2.05(a)(iii)(3)  or Section  2.05(a)(iii)(4)  of the Credit
Agreement, check the appropriate box:

                  Section 2.05(a)(iii)(3)

                  Section 2.05(a)(iii)(4)

         If you wish to elect to have only part of this Term Note  purchased  by
the Company pursuant to Section  2.05(a)(iii)(3)  or Section  2.05(a)(iii)(4) of
the Credit Agreement, state the amount: $[ ].


Date:                Your Signature:
                                                            (Sign exactly as
                                                             your name appears
                                                             on the other side
                                                             of this Term Note)



Signature Guarantee:



<PAGE>


                                                     
                                   GUARANTEES


         The Guarantors (as defined in the Senior  Subordinated Credit Agreement
(the  "Credit  Agreement")  referred to in the Note upon which this  notation is
endorsed and each hereinafter referred to as a "Guarantor") have unconditionally
guaranteed  on a senior  subordinated  basis (such  guarantee by each  Guarantor
being referred to herein as the "Guarantee") (i) the due and punctual payment of
the  principal  of, and the  interest on, the Notes,  subject to any  applicable
grace period,  whether at maturity,  by acceleration  or otherwise,  the due and
punctual payment of interest on the overdue  principal and interest,  if any, on
the Notes,  to the extent  lawful,  and the due and punctual  performance of all
other  Loan  Obligations  of the  Company  to the  holders  of the  Notes all in
accordance with the terms set forth in the Credit  Agreement and (ii) in case of
any  extension  of time of  payment or renewal of any Notes or any of such other
Loan  Obligations,  that  the same  will be  promptly  paid in full  when due or
performed in accordance  with the terms of the extension or renewal,  whether at
stated maturity, by acceleration or otherwise.

         The  obligations of each Guarantor to the holders of the Notes pursuant
to the  Guarantee  and the  Credit  Agreement  are  expressly  set forth and are
expressly  subordinated  and subject in right of payment to the prior payment in
full of all  Senior  Indebtedness  of such  Guarantor,  to the extent and in the
manner provided, in Section 11 of the Credit Agreement,  and reference is hereby
made to such Credit  Agreement for the precise  terms of the  Guarantee  therein
made.


                                            GUARANTORS:


                                            PRO-FAC COOPERATIVE, INC.



                                            By:
                                                     Name:
                                                     Title:



                                            LINDEN OAKS CORPORATION



                                            By:
                                                     Name:
                                                     Title:



                                            KENNEDY ENDEAVORS INCORPORATED



                                            By:
                                                     Name:
                                                     Title:



<PAGE>
                                                                       Exhibit B

                          [Form of Notice of Borrowing]


Warburg Dillon Read LLC,
as Arranger and Syndication Agent
535 Madison Avenue
New York, New York  10022

UBS AG, Stamford Branch,
as Administrative Agent
677 Washington Boulevard
Stamford, Connecticut  06901

Attention:

Ladies and Gentlemen:

         The undersigned,  Agrilink Foods,  Inc. (the "Company"),  refers to the
Senior Subordinated Credit Agreement dated as of September 23, 1998, as amended,
supplemented  or restated from time to time (the "Credit  Agreement",  the terms
defined therein being used herein as therein defined) among the Company, Pro-Fac
Cooperative, Inc., as Guarantor, the other Guarantors named therein, the Lenders
named therein,  Warburg Dillon Read LLC, as Arranger and Syndication  Agent, and
UBS AG, Stamford Branch,  as  Administrative  Agent, and hereby gives you notice
pursuant to Section  2.01(b) of the Credit  Agreement that the Company wishes to
borrow under Section 2.01 of the Credit Agreement and, in that connection,  sets
forth  below  the   information   relating  to  such  borrowing  (the  "Proposed
Borrowing") as required by Section 2.01(b) of the Credit Agreement:

(i)      The date of the Proposed Borrowing,  being a Business Day, is September
         23, 1998.

(ii)     The aggregate amount of the Proposed Borrowing is $200,000,000.

                                                     Yours truly,



                                                     AGRILINK FOODS, INC.



                                                     By:

                                                          Name:
                                                          Title:
<PAGE>


                                                                       Exhibit C

                         [Form of Notice of Conversion]


         Pursuant to that certain Senior  Subordinated Credit Agreement dated as
of September  23, 1998, as amended,  supplemented  or restated from time to time
(the "Credit Agreement",  the terms defined therein being used herein as therein
defined) among Agrilink Foods, Inc. (the "Company"),  Pro-Fac Cooperative, Inc.,
as Guarantor,  the other  Guarantors  named therein,  the Lenders named therein,
Warburg Dillon Read LLC, as Arranger and Syndication  Agent and UBS AG, Stamford
Branch,  as  Administrative  Agent,  this  represents  the Company's  request to
convert $[ ] in principal  amount of presently  outstanding  Initial  Notes to a
Term Loan on the Conversion Date.



DATED: __________________



                                                     AGRILINK FOODS, INC.





                                            By:
                                                     Name:
                                                     Title:



<PAGE>


                                                                       Exhibit D



                         ADDITIONAL GUARANTOR SUPPLEMENT


                                                           ______________, 19___

UBS AG, Stamford Branch,  as  Administrative
Agent  for  the  Lenders  under  the  Credit
Agreement  dated as of  September  23, 1998,
among   Agrilink   Foods,    Inc.,   Pro-Fac
Marketing  Cooperative,   Inc.  and  certain
other  Guarantors,  Warburg Dillon Read LLC,
as Arranger and 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],   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 4  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 New York.

                                                     Very truly yours,

                                                     [NAME OF SUBSIDIARY]


                                                     By:
                                                     Name:
                                                     Title:



<PAGE>






                                                                       Exhibit E



                         [Form of Assignment Agreement]
                              ASSIGNMENT AGREEMENT


         This ASSIGNMENT AGREEMENT,  (this "Assignment Agreement") dated as of
[ ] is made between [ ] (the "Assignor") and [ ] (the "Assignee").

                                    RECITALS

         The Assignor is party to the Credit Agreement dated as of September 23,
1998 (as amended,  modified,  supplemented or renewed,  the "Credit  Agreement")
among  Agrilink  Foods,  Inc.  ("Borrower"),   Pro-Fac  Cooperative,   Inc.,  as
Guarantor,  the other  Guarantors  party thereto from time to time,  the Lenders
party thereto from time to time,  UBS AG,  Stamford  Branch,  as  Administrative
Agent,  and Warburg Dillon Read LLC, as Arranger and  Syndication  Agent.  Terms
defined in the Credit Agreement and not defined in this Assignment Agreement are
used herein as defined in the Credit Agreement.

         The Assignor wishes to assign to Assignee rights and obligations of the
Assignor  under the Credit  Agreement in respect of the  [Initial  Loan and Term
Loan Commitment][Term Loan] and the other rights and obligations of the Assignor
thereunder,  and the Assignee wishes to accept  assignment of such rights and to
assume such  obligations  from the  Assignor to be assigned to it and assumed by
it, in each case on the terms and subject to the  conditions of this  Assignment
Agreement.

         NOW,  THEREFORE,  in  consideration  of the  foregoing  and the  mutual
agreements contained herein, the parties hereto agree as follows:

         1. Assignment Agreement.

                  (a)  Subject to the terms and  conditions  of this  Assignment
         Agreement,  (i) the Assignor hereby sells,  transfers and assigns,  and
         (ii) the Assignee  hereby  purchases,  assumes and undertakes  from the
         Assignor,  without  recourse  and  without  representation  or warranty
         (except as provided in this Assignment Agreement),

                           (i)   Assignor's   [Initial   Loan  and   Term   Loan
                  Commitment][Term Loan] set forth on Annex 1 hereto;

                           (ii)  all  related  rights,  benefits,   obligations,
                  liabilities  and  indemnities  of the Assignor with respect to
                  such  [Initial  Loan  and  Term  Loan  Commitment][Term  Loan]
                  assigned  to the  Assignee  under and in  connection  with the
                  Credit Agreement and the other Loan Documents;

(all  of  the  foregoing   being  herein   called  the   "Assigned   Rights  and
Obligations").

                  (b) With effect on and after the Effective Date (as defined in
         Section  5  hereof),  the  Assignee  shall  be a  party  to the  Credit
         Agreement  and succeed to all of the rights and be obligated to perform
         all  of  the  obligations  of a  Lender  under  the  Credit  Agreement,
         including the requirements  concerning  confidentiality and the payment
         of  indemnification  for claims arising  following the Effective  Date,
         with a pro rata share as of the Effective Date of the [Initial Loan and
         Term Loan Commitment][Term  Loan] equal to the percentages set forth on
         Annex 1 hereto.  The Assignee agrees that it will perform in accordance
         with  their  terms  all of the  obligations  which by the  terms of the
         Credit Agreement are required to be performed by it as a Lender.  It is
         the intent of the parties hereto that (i) as of the Effective Date, the
         pro rata  share of the  Assignor  of the  [Initial  Loan and Term  Loan
         Commitment][Term  Loan]  shall be  reduced  by $[ ], as a result of the
         assignment  hereby to the  Assignee  and,  after  giving  effect to all
         assignments  hereunder  Assignor's  pro rata share of the [Initial Loan
         and Term Loan Commitment][Term Loan] shall be reduced to $[ ], and (ii)
         the  Assignor  shall  relinquish  its rights and be  released  from its
         obligations  under the Credit  Agreement to the extent such obligations
         have been assumed by the Assignee; provided, however, that the Assignor
         shall not relinquish its rights under Section 3 or Section 10.03 of the
         Credit Agreement or be relieved of its obligations  under Section 10.17
         of  the  Credit  Agreement  in  respect  of  the  Assigned  Rights  and
         Obligations  to the extent such rights  relate to the time prior to the
         Effective Date.

<PAGE>

                  (c) After giving effect to the assignments and assumptions set
         forth herein,  on the Effective  Date the Assignee's and the Assignor's
         outstanding  Commitment  and  Loans  will be as set  forth  on  Annex 2
         hereto.

         2. Payments.

         As consideration for the sale,  assignment and transfer contemplated in
Section 1 hereof,  the Assignee  shall pay to the Assignor on the Effective Date
in immediately available funds an amount in U.S. dollars equal to the amount set
forth on Annex 3 hereto,  representing  the principal  amount of all outstanding
and funded Loans and  participations  included  within the  Assigned  Rights and
Obligations.

         3. Reallocation of Payments.

         Any interest,  fees and other  payments  accrued to the Effective  Date
with respect to all of the Assigned Rights and Obligations of the Assignee shall
be for the  account  of the  Assignor.  Any  interest,  fees and other  payments
accrued on and after the Effective Date with respect to the Assigned  Rights and
Obligations of any Assignee  shall be for the account of each Assignee.  Each of
the Assignor and the Assignee,  severally, agrees that it will hold in trust for
the other party any  interest,  fees and other  amounts  which it may receive to
which the other party is entitled  pursuant to the  preceding  two sentences and
pay to the other  party any such  amounts  which it may  receive  promptly  upon
receipt.

         4. Independent Credit Decision.

         The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules  and Exhibits  thereto,  together with copies of the
most recent financial  statements  delivered on the Closing Date, and such other
documents and  information  as it has deemed  appropriate to make its own credit
and legal analysis and decision to enter into this Assignment Agreement; and (b)
agrees that it will,  independently and without reliance upon the Assignor,  the
Arranger,  the  Administrative  Agent  or any  other  Lender  and  based on such
documents and information as it shall deem appropriate at the time,  continue to


<PAGE>

make its own credit and legal decisions in taking or not taking action under the
Credit Agreement.

         5. Effective Date; Notices.

                  (a) As between the Assignor and the  Assignee,  the  effective
         date for this Assignment Agreement shall be [ ] (the "Effective Date");
         provided,  however,  that the following  conditions precedent have been
         satisfied on or before the Effective Date:

                           (i) this  Assignment  Agreement shall be executed and
                  delivered by the Assignor and the Assignee;

                           (ii) if required for an effective  assignment  of the
                  Assigned  Rights  and  Obligations  by  the  Assignor  to  the
                  Assignee  under  Section  10.07 of the Credit  Agreement,  the
                  consent of Borrower,  and the Administrative  Agent shall have
                  been duly obtained and shall be in full force and effect as of
                  the Effective Date; and

                           (iii)  the  Assignee  shall pay to the  Assignor  all
                  amounts  due to the  Assignor  from the  Assignee  under  this
                  Assignment Agreement.

                           (iv) the  information  in this  Assignment  Agreement
                  shall be recorded in the Register pursuant to Section 10.07(b)
                  of the Credit Agreement.

                  (b)  Promptly  following  the  execution  of  this  Assignment
         Agreement,  the Assignor  shall  deliver this  Assignment  Agreement to
         Borrower  and  the  Administrative  Agent,  for  acknowledgment  by the
         Administrative Agent.

                  6. Representations and Warranties.

                  (a) The Assignor  represents and warrants to the Assignee that
         (i) it is the legal and beneficial owner of the interest being assigned
         by it  hereunder  to the  Assignee  and that such  interest is free and
         clear of any lien or other  adverse  claim other than any lien or other
         adverse claim created by the  Assignee;  (ii) it is duly  organized and
         existing  and it has the full  power  and  authority  to take,  and has


<PAGE>

         taken,  all action  necessary  to execute and deliver  this  Assignment
         Agreement and any other documents  required or permitted to be executed
         or delivered by it in connection with this Assignment  Agreement and to
         fulfill its  obligations  hereunder;  (iii) no notices to, or consents,
         authorizations or approvals of, any Person are required (other than any
         already  given  or  obtained)  for  its  due  execution,  delivery  and
         performance of this Assignment Agreement, and apart from any agreements
         or undertakings or filings required by the Credit Agreement, no further
         action by, or notice to, or filing  with,  any Person is required of it
         for such execution,  delivery or performance;  and (iv) this Assignment
         Agreement has been duly  executed and  delivered by it and  constitutes
         the legal,  valid and binding  obligation of the Assignor,  enforceable
         against the Assignor in accordance with the terms hereof,  subject,  as
         to enforcement, to bankruptcy, insolvency,  moratorium,  reorganization
         and  other  laws  of  general  application  relating  to  or  affecting
         creditors' rights and to general equitable principles.

                  (b) The  Assignor  makes no  representation  or  warranty  and
         assumes no responsibility with respect to any statements, warranties or
         representations  made in or in connection with the Credit  Agreement or
         the  execution,   legality,  validity,   enforceability,   genuineness,
         sufficiency or value of the Credit Agreement or any other instrument or
         document   furnished   pursuant   thereto.   The   Assignor   makes  no
         representation   or  warranty  in  connection   with,  and  assumes  no
         responsibility  with respect to, the solvency,  financial  condition or
         statements  of  Borrower  or  any  Guarantor,  or  the  performance  or
         observance  by Borrower or any  Guarantor  of any of their  obligations
         under  the  Credit  Agreement  or  any  other  instrument  or  document
         furnished in connection therewith.

                  (c) The Assignee  represents and warrants to Assignor that (i)
         it is duly  organized  and existing and it has full power and authority
         to take,  and has taken,  all action  necessary  to execute and deliver
         this Assignment Agreement and any other documents required or permitted
         to be executed or delivered by it in  connection  with this  Assignment
         Agreement,  and to fulfill its obligations  hereunder;  (ii) no notices
         to, or  consents,  authorizations  or  approvals  of,  any  Person  are
         required  (other  than  any  already  given  or  obtained)  for its due
         execution,  delivery and performance of this Assignment Agreement;  and


                                       85
<PAGE>

         apart from any agreements or  undertakings  or filings  required by the
         Credit  Agreement,  no further action by, or notice to, or filing with,
         any  Person  is  required  of  it  for  such  execution,   delivery  or
         performance; (iii) this Assignment Agreement has been duly executed and
         delivered by it and constitutes the legal, valid and binding obligation
         of the Assignee,  enforceable  against the Assignee in accordance  with
         the  terms  hereof,   subject,   as  to  enforcement,   to  bankruptcy,
         insolvency,  moratorium,  reorganization  and  other  laws  of  general
         application  relating to or affecting  creditors' rights and to general
         equitable principles; and (iv) it is an Eligible Person.

         7. Further Assurances.

         The Assignor and the Assignee  each hereby agree to execute and deliver
such  other  instruments,  and take  such  other  action,  as  either  party may
reasonably  request in connection  with the  transactions  contemplated  by this
Assignment  Agreement,  including the delivery of any notices or other documents
or instruments to Borrower or the Administrative  Agent which may be required in
connection with the assignment and assumption contemplated hereby.

         8. Miscellaneous.

                  (a)  Any   amendment  or  waiver  of  any  provision  of  this
         Assignment  Agreement  shall be in writing  and  signed by the  parties
         hereto to be  affected  thereby.  No failure  or delay by either  party
         hereto in  exercising  any right,  power or privilege  hereunder  shall
         operate  as a waiver  thereof,  and any  waiver  of any  breach  of the
         provisions of this Assignment  Agreement shall be without  prejudice to
         any rights with respect to any other or further breach thereof.

                  (b) All  payments  made  hereunder  shall be made  without any
         set-off or counterclaim.

                  (c) The Assignor and the Assignee shall each pay its own costs
         and expenses incurred in connection with the negotiation,  preparation,
         execution and performance of this Assignment Agreement.



                                       86
<PAGE>

                  (d) This Assignment Agreement may be executed in any number of
         counterparts  and all of such  counterparts  taken  together  shall  be
         deemed to constitute one and the same instrument.

                  (e)  THIS  ASSIGNMENT  AGREEMENT  SHALL  BE  GOVERNED  BY  AND
         CONSTRUED  IN  ACCORDANCE  WITH THE LAW OF THE STATE OF NEW  YORK.  The
         Assignor and the Assignee each irrevocably  submit to the non-exclusive
         jurisdiction  of any State or Federal  court  sitting in New York,  New
         York over any suit, action or proceeding  arising out of or relating to
         this  Assignment  Agreement  and  irrevocably  agree that all claims in
         respect of such action or  proceeding  may be heard and  determined  in
         such New York State or  Federal  court.  Each party to this  Assignment
         Agreement  hereby  irrevocably  waives,  to the  fullest  extent it may
         effectively  do  so,  the  defense  of an  inconvenient  forum  to  the
         maintenance of such action or proceeding.

                  (f) THE  ASSIGNOR  AND THE  ASSIGNEE  EACH  HEREBY  KNOWINGLY,
         VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT IT MAY HAVE TO A TRIAL BY
         JURY IN RESPECT OF ANY  LITIGATION  BASED  HEREON,  OR ARISING  OUT OF,
         UNDER,  OR IN CONNECTION  WITH THIS  ASSIGNMENT  AGREEMENT,  THE CREDIT
         AGREEMENT,  ANY RELATED DOCUMENT OR AGREEMENT OR ANY COURSE OF CONDUCT,
         COURSE OF DEALING OR STATEMENT (WHETHER ORAL OR WRITTEN).

                                             [Signature Page Follows]



<PAGE>



         IN WITNESS  WHEREOF,  the Assignor  and the  Assignee  have caused this
Assignment  Agreement  to be executed  and  delivered  by their duly  authorized
officers as of the date first above written.



                                            [ASSIGNOR]




                                            By:


                                                     Name:


                                                     Title:




                                            [ASSIGNEE]




                                            By:


                                                     Name:


                                                     Title:





<PAGE>



                                                                         ANNEX 1



Assigned Initial Loan and Term Loan      $
Commitment:

Assigned Term Loan:                      $






<PAGE>


                                                                         ANNEX 2



Immediately
Before                     [Initial Loan]        [Term Loan
Effective Date:              [Term Loan]        Commitment]

Assignor:                     $                   $
Assignee:                     $                   $
On and After
Effective Date:
Assignor:                     $                   $
Assignee:                     $                   $


<PAGE>


                                                                         ANNEX 3



                               AMOUNT (IN DOLLARS)